Exhibit 10.1

CREDIT AGREEMENT

dated as of

June 12, 2015

among

MOLINA HEALTHCARE, INC.,

as the Borrower

THE SUBSIDIARIES OF THE BORROWER IDENTIFIED HEREIN,

as the Guarantors

THE LENDERS FROM TIME TO TIME PARTY HERETO,

SUNTRUST BANK,

as Administrative Agent, Swingline Lender and Issuing Bank

and

UBS SECURITIES LLC,

BANK OF AMERICA, N.A.,

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Co-Syndication Agents,

SUNTRUST ROBINSON HUMPHREY, INC.,

UBS SECURITIES LLC,

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

and

WELLS FARGO SECURITIES, LLC

as Joint Lead Arrangers and Joint Bookrunners

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TABLE OF CONTENTS

 

          Page  

ARTICLE I DEFINITIONS; CONSTRUCTION

     1   

Section 1.1.

  

Definitions

     1   

Section 1.2.

  

Classifications of Loans and Borrowings

     29   

Section 1.3.

  

Accounting Terms and Determination

     29   

Section 1.4.

  

Terms Generally

     30   

Section 1.5.

  

Letter of Credit Amounts

     30   

Section 1.6.

  

Times of Day

     30   

ARTICLE II AMOUNT AND TERMS OF THE COMMITMENTS

     30   

Section 2.1.

  

General Description of Facilities

     30   

Section 2.2.

  

Revolving Loans

     31   

Section 2.3.

  

Procedure for Revolving Borrowings

     31   

Section 2.4.

  

Swingline Commitment

     31   

Section 2.5.

  

Reserved

     33   

Section 2.6.

  

Funding of Borrowings

     33   

Section 2.7.

  

Interest Elections

     33   

Section 2.8.

  

Optional Reduction and Termination of Commitments

     34   

Section 2.9.

  

Repayment of Loans

     35   

Section 2.10.

  

Evidence of Indebtedness

     35   

Section 2.11.

  

Optional Prepayments

     36   

Section 2.12.

  

Mandatory Prepayments

     36   

Section 2.13.

  

Interest on Loans

     36   

Section 2.14.

  

Fees

     37   

Section 2.15.

  

Computation of Interest and Fees

     38   

Section 2.16.

  

Inability to Determine Interest Rates

     38   

Section 2.17.

  

Illegality

     39   

Section 2.18.

  

Increased Costs

     39   

Section 2.19.

  

Funding Indemnity

     40   

Section 2.20.

  

Taxes

     41   

Section 2.21.

  

Payments Generally; Pro Rata Treatment; Sharing of Set-offs

     45   

Section 2.22.

  

Letters of Credit

     46   

Section 2.23.

  

Increase of Commitments; Additional Lenders

     51   

Section 2.24.

  

Mitigation of Obligations

     53   

Section 2.25.

  

Replacement of Lenders

     53   

Section 2.26.

  

Reallocation and Cash Collateralization of Defaulting Lender Commitment

     54   

ARTICLE III CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT

     55   

Section 3.1

  

Conditions To Effectiveness

     55   

Section 3.2.

  

Each Credit Event

     56   

Section 3.3

  

Delivery of Documents

     57   

ARTICLE IV REPRESENTATIONS AND WARRANTIES

     57   

Section 4.1.

  

Existence; Power

     57   

Section 4.2.

  

Organizational Power; Authorization

     58   

Section 4.3.

  

Governmental Approvals; No Conflicts

     58   

Section 4.4.

  

Financial Statements

     58   

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Section 4.5.

Litigation and Environmental Matters

  58   

Section 4.6.

Compliance with Laws and Agreements

  59   

Section 4.7.

No Default

  59   

Section 4.8.

Investment Company Act, Etc.

  59   

Section 4.9.

Taxes

  60   

Section 4.10.

Margin Regulations

  60   

Section 4.11.

ERISA

  60   

Section 4.12.

Ownership of Property

  60   

Section 4.13.

Disclosure

  61   

Section 4.14.

Labor Relations

  61   

Section 4.15.

Subsidiaries

  61   

Section 4.16.

Solvency

  61   

Section 4.17.

Reserved

  62   

Section 4.18.

Licensing and Accreditation.

  62   

Section 4.19.

Anti-Corruption Laws and Sanctions

  62   

Section 4.20.

Subordination of Subordinated Debt

  63   

Section 4.21.

Medicare and Medicaid Notices and Filings Related to Business

  63   

ARTICLE V AFFIRMATIVE COVENANTS

  63   

Section 5.1.

Financial Statements and Other Information

  63   

Section 5.2.

Notices of Material Events

  65   

Section 5.3.

Existence; Conduct of Business

  66   

Section 5.4.

Compliance with Laws, Etc.

  67   

Section 5.5.

Payment of Obligations

  67   

Section 5.6.

Books and Records

  67   

Section 5.7.

Visitation, Inspection, Etc.

  67   

Section 5.8.

Maintenance of Properties; Insurance

  67   

Section 5.9.

Use of Proceeds; Margin Regulations

  67   

Section 5.10.

Additional Subsidiaries; Guarantees

  68   

Section 5.11.

Material Licenses

  68   

ARTICLE VI FINANCIAL COVENANTS

  68   

Section 6.1.

Consolidated Net Leverage Ratio

  68   

Section 6.2.

Consolidated Interest Coverage Ratio

  69   

Section 6.3.

Statutory Net Worth

  69   

ARTICLE VII NEGATIVE COVENANTS

  69   

Section 7.1.

Indebtedness and Preferred Equity

  69   

Section 7.2.

Negative Pledge

  71   

Section 7.3.

Fundamental Changes

  72   

Section 7.4.

Investments, Loans, Etc.

  72   

Section 7.5.

Restricted Payments

  73   

Section 7.6.

Sale of Assets

  73   

Section 7.7.

Transactions with Affiliates

  73   

Section 7.8.

Restrictive Agreements

  73   

Section 7.9.

Reserved

  74   

Section 7.10.

Hedging Transactions

  74   

Section 7.11.

Reserved

  74   

Section 7.12.

Amendment to Organization Documents

  74   

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Section 7.13.

Amendments and Prepayments of Other Indebtedness

  74   

Section 7.14.

Accounting Changes

  75   

Section 7.15.

Government Regulation

  75   

Section 7.16.

Ownership of Subsidiaries

  75   

ARTICLE VIII EVENTS OF DEFAULT

  76   

Section 8.1.

Events of Default

  76   

Section 8.2.

Application of Funds

  79   

ARTICLE IX THE ADMINISTRATIVE AGENT

  80   

Section 9.1.

Appointment of Administrative Agent

  80   

Section 9.2.

Nature of Duties of Administrative Agent

  80   

Section 9.3.

Lack of Reliance on the Administrative Agent

  81   

Section 9.4.

Certain Rights of the Administrative Agent

  81   

Section 9.5.

Reliance by Administrative Agent

  82   

Section 9.6.

The Administrative Agent in its Individual Capacity

  82   

Section 9.7.

Successor Administrative Agent

  82   

Section 9.8.

Withholding Tax

  83   

Section 9.9.

Administrative Agent May File Proofs of Claim

  83   

Section 9.10.

Authorization to Execute Other Loan Documents

  84   

Section 9.11.

Guaranty Matters

  84   

Section 9.12.

Documentation Agent; Syndication Agent

  84   

Section 9.13.

Right to Enforce Guarantee

  84   

Section 9.13.

Hedging Obligations and Bank Product Obligations

  84   

ARTICLE X GUARANTY

  85   

Section 10.1.

The Guaranty

  85   

Section 10.2.

Obligations Unconditional

  85   

Section 10.3.

Reinstatement

  86   

Section 10.4.

Certain Additional Waivers

  86   

Section 10.5.

Remedies

  86   

Section 10.6.

Rights of Contribution

  87   

Section 10.7.

Guarantee of Payment; Continuing Guarantee

  87   

Section 10.8.

Keepwell

  87   

ARTICLE XI MISCELLANEOUS

  87   

Section 11.1.

Notices

  87   

Section 11.2.

Waiver; Amendments

  90   

Section 11.3.

Expenses; Indemnification

  92   

Section 11.4.

Successors and Assigns

  93   

Section 11.5.

Governing Law; Jurisdiction; Consent to Service of Process

  97   

Section 11.6.

WAIVER OF JURY TRIAL

  98   

Section 11.7.

Right of Setoff

  98   

Section 11.8.

Counterparts; Integration

  99   

Section 11.9.

Survival

  99   

Section 11.10.

Severability

  99   

Section 11.11.

Confidentiality

  99   

Section 11.12.

Interest Rate Limitation

  100   

Section 11.13.

Waiver of Effect of Corporate Seal

  100   

Section 11.14.

Patriot Act

  100   

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Section 11.15.

No Advisory or Fiduciary Responsibility

  101   

Section 11.16.

Electronic Execution of Assignments and Certain Other Documents

  101   

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Schedules

Schedule I

-

Commitment Amounts

Schedule 4.15

-

Loan Parties and Subsidiaries

Schedule 7.1

-

Outstanding Indebtedness

Schedule 7.2

-

Existing Liens

Schedule 7.4

-

Existing Investments

Exhibits

Exhibit 2.3

-

Form of Notice of Revolving Borrowing

Exhibit 2.4

-

Form of Notice of Swingline Borrowing

Exhibit 2.7

-

Form of Notice of Conversion/Continuation

Exhibit 2.10

-

Form of Note

Exhibits 2.20 (1-4)

-

Forms of U.S. Tax Compliance Certificates

Exhibit 5.1

-

Form of Compliance Certificate

Exhibit 5.10

-

Form of Guarantor Joinder Agreement

Exhibit 11.4

-

Form of Assignment and Acceptance

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CREDIT AGREEMENT

THIS CREDIT AGREEMENT (this “Agreement”) is made and entered into as of June 12,
2015, by and among MOLINA HEALTHCARE, INC., a Delaware corporation (the
“Borrower”), the Guarantors (defined herein), the Lenders (defined herein), and
SUNTRUST BANK, in its capacity as administrative agent for the Lenders (the
“Administrative Agent”), as issuing bank (the “Issuing Bank”) and as swingline
lender (the “Swingline Lender”).

W I T N E S S E T H:

WHEREAS, the Borrower has requested that the Lenders establish a $250 million
revolving credit facility in favor of the Borrower;

WHEREAS, subject to the terms and conditions of this Agreement, the Lenders, the
Issuing Bank and the Swingline Lender to the extent of their respective
Commitments as defined herein, are willing severally to establish the requested
revolving credit facility, letter of credit subfacility and the swingline
subfacility in favor of the Borrower;

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the Borrower, the Lenders, the Administrative Agent, the Issuing Bank
and the Swingline Lender agree as follows:

ARTICLE I

DEFINITIONS; CONSTRUCTION

Section 1.1. Definitions. In addition to the other terms defined herein, the
following terms used herein shall have the meanings herein specified (to be
equally applicable to both the singular and plural forms of the terms defined):

“2020 Convertible Notes” shall mean those certain 1.125% Cash Convertible Senior
Notes due 2020 issued pursuant to that certain Indenture dated as of
February 15, 2013 by and among the Borrower and U.S. Bank National Association
as Trustee.

“2044 Convertible Notes” shall mean those certain 1.625% Convertible Senior
Notes due 2044 issued pursuant to that certain Indenture dated as of
September 5, 2014 by and among the Borrower and U.S. Bank National Association
as Trustee.

“Acquisition” shall mean (a) any Investment by the Borrower or any of its
Subsidiaries in any other Person pursuant to which such Person shall become a
Subsidiary or shall be merged with the Borrower or any of its Subsidiaries or
(b) any acquisition by the Borrower or any of its Subsidiaries of the assets of
any Person (other than a Subsidiary) that constitute all or a substantial
portion of the assets of such Person or a division or business unit of such
Person.

“Additional Lender” shall have the meaning set forth in Section 2.23.

“Additional Letters of Credit” shall have the meaning set forth in
Section 7.1(g).

“Adjusted LIBOR” shall mean, with respect to each Interest Period for a
Eurodollar Loan, (i) the rate per annum equal to the London interbank offered
rate for deposits in U.S. Dollars

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appearing on Reuters screen page LIBOR 01 (or on any successor or substitute
page of such service or any successor to such service, or such other
commercially available source providing such quotations as may be designated by
the Administrative Agent from time to time) at approximately11:00 A.M. (London
time) two (2) Business Days prior to the first day of such Interest Period, with
a maturity comparable to such Interest Period, divided by (ii) a percentage
equal to 100% minus the then stated maximum rate of all reserve requirements
(including any marginal, emergency, supplemental, special or other reserves and
without benefit of credits for proration, exceptions or offsets that may be
available from time to time) applicable to any member bank of the Federal
Reserve System in respect of Eurocurrency liabilities as defined in Regulation D
(or any successor category of liabilities under Regulation D); provided, that if
the rate referred to in clause (i) above is not available at any such time for
any reason, then the rate referred to in clause (i) shall instead be the
interest rate per annum, as determined by the Administrative Agent, to be the
arithmetic average of the rates per annum at which deposits in U.S. Dollars in
an amount equal to the amount of such Eurodollar Loan are offered by major banks
in the London interbank market to the Administrative Agent at approximately
11:00 A.M. (London time), two (2) Business Days prior to the first day of such
Interest Period. Notwithstanding anything to the contrary in the foregoing, if
the Adjusted LIBOR is less than zero, such rate shall be deemed to be zero for
purposes of this Agreement.

“Administrative Agent” shall mean SunTrust Bank in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.

“Administrative Questionnaire” shall mean, with respect to each Lender, an
administrative questionnaire in the form provided by the Administrative Agent
and submitted to the Administrative Agent duly completed by such Lender.

“Affiliate” shall mean, as to any Person, any other Person that directly, or
indirectly through one or more intermediaries, Controls, is Controlled by, or is
under common Control with, such Person. For the purposes of this definition,
“Control” shall mean the power, directly or indirectly, either to (i) vote 5% or
more of the securities having ordinary voting power for the election of
directors (or persons performing similar functions) of a Person or (ii) direct
or cause the direction of the management and policies of a Person, whether
through the ability to exercise voting power, by control or otherwise. The terms
“Controlling”, “Controlled by”, and “under common Control with” have the
meanings correlative thereto.

“Aggregate Revolving Commitments” shall mean the Revolving Commitments of all
the Lenders at any time outstanding. On the Closing Date, the aggregate amount
of the Aggregate Revolving Commitments is $250,000,000.

“Agreement” shall mean this Credit Agreement.

“Anti-Corruption Laws” shall mean all laws, rules, and regulations of any
jurisdiction applicable to the Company or its Subsidiaries from time to time
concerning or relating to bribery or corruption.

“Anti-Kickback Statute” shall mean the Anti-kickback Statute as set forth in
Section 1320a-7b of Title 42 of the United States Code, as amended, and any
statute succeeding thereto.

“Applicable Lending Office” shall mean, for each Lender and for each Type of
Loan, the “Lending Office” of such Lender (or an Affiliate of such Lender)
designated for such Type of Loan in the Administrative Questionnaire submitted
by such Lender or such other office of such Lender (or an

 

2

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Affiliate of such Lender) as such Lender may from time to time specify to the
Administrative Agent and the Borrower as the office by which its Loans of such
Type are to be made and maintained.

“Applicable Margin” shall mean, as of any date, with respect to interest on all
Revolving Loans outstanding on any date or the letter of credit fee, as the case
may be, a percentage per annum determined by reference to the applicable
Consolidated Leverage Ratio in effect on such date as set forth in the table
below; provided, that a change in the Applicable Margin resulting from a change
in the Consolidated Leverage Ratio shall be effective on the second Business Day
after which the Borrower delivers each of the financial statements required by
Section 5.1(a) and (b) and the Compliance Certificate required by
Section 5.1(c); provided further, that if at any time the Borrower shall have
failed to deliver such financial statements and such Compliance Certificate when
so required, the Applicable Margin shall be at Level 1 as set forth in the table
below until the second Business Day after which such financial statements and
Compliance Certificate are delivered, at which time the Applicable Margin shall
be determined as provided above. Notwithstanding the foregoing, the Applicable
Margin from the Closing Date until the second Business Day after which the
financial statements and Compliance Certificate for the Fiscal Quarter ending
September 30, 2015 are required to be delivered shall be at Level 3 as set forth
in the table below. In the event that any financial statement or Compliance
Certificate delivered hereunder is shown to be inaccurate (regardless of whether
this Agreement or the Commitments are in effect when such inaccuracy is
discovered), and such inaccuracy, if corrected, would have led to the
application of a higher Applicable Margin based upon the pricing grid set forth
in the table below (the “Accurate Applicable Margin”) for any period that such
financial statement or Compliance Certificate covered, then (i) the Borrower
shall immediately deliver to the Administrative Agent a correct financial
statement or Compliance Certificate, as the case may be, for such period,
(ii) the Applicable Margin shall be adjusted such that after giving effect to
the corrected financial statements or Compliance Certificate, as the case may
be, the Applicable Margin shall be reset to the Accurate Applicable Margin based
upon the pricing grid set forth in the table below for such period and (iii) the
Borrower shall immediately pay to the Administrative Agent, for the account of
the Lenders, the accrued additional interest owing as a result of such Accurate
Applicable Margin for such period. The provisions of this definition shall not
limit the rights of the Administrative Agent and the Lenders with respect to
Section 2.13(c) or Article VIII.

 

Level    Consolidated Leverage Ratio    Eurodollar
Loans and
Letter of Credit
Fee    

Base Rate

Loans

   

Commitment

Fee

  1    >3.50:1.00      2.50 %      1.50 %      0.375 %  2    <3.50:1.00 but
>3.00:1.00      2.25 %      1.25 %      0.375 %  3    <3.00:1.00 but >2.50:1.00
     2.00 %      1.00 %      0.375 %  4    <2.50:1.00 but >2.00:1.00      1.75
%      0.75 %      0.25 %  5    <2.00:1.00      1.50 %      0.50 %      0.25 % 

“Approved Fund” shall mean any Person (other than a natural Person) that is (or
will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business and that is administered or managed by (i) a Lender, (ii) an Affiliate
of a Lender or (iii) an entity or an Affiliate of an entity that administers or
manages a Lender.

 

3

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“Arrangers” shall mean SunTrust Robinson Humphrey, Inc., UBS Securities LLC,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities
LLC, each in their capacities as joint lead arrangers and joint bookrunners.

“Asset Sale” shall mean the sale, transfer, license, lease or other disposition
of any property by the Borrower or any Subsidiary, including any sale and
leaseback transaction and any sale, assignment, transfer or other disposal, with
or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith, but excluding (a) the sale of inventory in the
ordinary course of business; (b) the sale or disposition for fair market value
of obsolete or worn out property or other property not necessary for operations
of the Borrower and its Subsidiaries disposed of in the ordinary course of
business; (c) the disposition of property (including the cancellation of
Indebtedness permitted by Section 7.4(d)) to the Borrower or any Subsidiary;
provided, that if the transferor of such property is a Loan Party then the
transferee thereof must be a Loan Party; (d) the disposition of accounts
receivable in connection with the collection or compromise thereof;
(e) licenses, sublicenses, leases or subleases granted to others in the ordinary
course of business or not interfering in any material respect with the business
of the Borrower or any Subsidiary; (f) the sale or disposition of Permitted
Investments for fair market value in the ordinary course of business and (g) the
disposition of shares of Capital Stock of any Subsidiary in order to qualify
members of the governing body of such Subsidiary if required by applicable Law.

“Assignment and Acceptance” shall mean an assignment and acceptance entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by Section 11.4(b)) and accepted by the Administrative Agent, in the
form of Exhibit 11.4 attached hereto or any other form approved by the
Administrative Agent.

“Audited Financial Statements” shall mean the audited consolidated balance sheet
of the Borrower and its Subsidiaries for the fiscal year ended December 31,
2014, and the related consolidated statements of income or operations,
shareholders’ equity and cash flows of the Borrower and its Subsidiaries for
such fiscal year, including the notes thereto.

“Availability Period” shall mean the period from the Closing Date to but
excluding the Revolving Commitment Termination Date.

“Bank Product Amount” shall have the meaning set forth in the definition of
“Bank Product Provider”.

“Bank Product Obligations” shall mean, collectively, all obligations and other
liabilities of any Loan Party to any Bank Product Provider arising with respect
to any Bank Products.

“Bank Product Provider” shall mean any Person that (a) (i) at the time it
provides any Bank Products to any Loan Party, is a Lender or an Affiliate of a
Lender or (ii) has provided any Bank Products to any Loan Party that exist on
the Closing Date, and such Person is a Lender or an Affiliate of a Lender on the
Closing Date and (b) except when the Bank Product Provider is SunTrust Bank and
its Affiliates, has provided prior written notice to the Administrative Agent
which has been acknowledged by the Borrower of (x) the existence of such Bank
Product, (y) the maximum dollar amount of obligations arising thereunder (the
“Bank Product Amount”) and (z) the methodology to be used by such parties in
determining the obligations under such Bank Product from time to time. In no
event shall any Bank Product Provider acting in such capacity be deemed a Lender
for purposes hereof to the extent of and as to Bank Products except that each
reference to the term “Lender” in Article IX and Section 11.4 shall be

 

4

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deemed to include such Bank Product Provider and in no event shall the approval
of any such person in its capacity as Bank Product Provider be required in
connection with the release or termination of any security interest or Lien of
the Administrative Agent. The Bank Product Amount may be changed from time to
time upon written notice to the Administrative Agent by the applicable Bank
Product Provider. The Bank Product Amount may not be increased, and no new
agreements for Bank Products may be established at any time that a Default or
Event of Default exists.

“Bank Products” shall mean any of the following services provided to any Loan
Party by any Bank Product Provider: (a) any treasury or other cash management
services, including deposit accounts, automated clearing house (ACH) origination
and other funds transfer, depository (including cash vault and check deposit),
zero balance accounts and sweeps, return items processing, controlled
disbursement accounts, positive pay, lockboxes and lockbox accounts, account
reconciliation and information reporting, payables outsourcing, payroll
processing, trade finance services, investment accounts and securities accounts,
and (b) card services, including credit card (including purchasing card and
commercial card), prepaid cards, including payroll, stored value and gift cards,
merchant services processing, and debit card services.

“Base Rate” shall mean the highest of (a) the rate which the Administrative
Agent announces from time to time as its prime lending rate, as in effect from
time to time, (b) the Federal Funds rate, as in effect from time to time, plus
one-half of one percent ( 1⁄2%) per annum and (c) a rate per annum equal to
Adjusted LIBOR for a term of one month plus one percent (1.00%) per annum (any
changes in such rates to be effective as of the date of any change in such
rate). The Administrative Agent’s prime lending rate is a reference rate and
does not necessarily represent the lowest or best rate actually charged to any
customer. The Administrative Agent may make commercial loans or other loans at
rates of interest at, above, or below the Administrative Agent’s prime lending
rate.

“Borrower” shall have the meaning set forth in the introductory paragraph
hereof.

“Borrowing” shall mean a borrowing consisting of (a) Loans of the same Class and
Type, made, converted or continued on the same date and in the case of
Eurodollar Loans, as to which a single Interest Period is in effect, or (b) a
Swingline Loan.

“Business Day” shall mean any day other than (a) a Saturday, Sunday or other day
on which commercial banks in Atlanta, Georgia or New York, New York are
authorized or required by Law to close and (b) if such day relates to a
Borrowing of, a payment or prepayment of principal or interest on, a conversion
of or into, or an Interest Period for, a Eurodollar Loan or a notice with
respect to any of the foregoing, any day on which banks are not open for
dealings in dollar deposits in the London interbank market.

“Capital Expenditures” shall mean for any period, without duplication, (a) the
additions to property, plant and equipment and other capital expenditures of the
Borrower and its Subsidiaries that are (or would be) set forth on a consolidated
statement of cash flows of the Borrower for such period and (b) Capital Lease
Obligations incurred by the Borrower and its Subsidiaries during such period.

“Capital Lease Obligations” of any Person shall mean all obligations of such
Person to pay rent or other amounts under any lease (or other arrangement
conveying the right to use) of real or personal property, or a combination
thereof, which obligations are required to be classified and accounted for as
capital leases on a balance sheet of such Person, and the amount of such
obligations shall be the capitalized amount thereof.

 

5

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“Capital Stock” shall mean all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of
how designated) of or in a corporation, partnership, limited liability company
or equivalent entity whether voting or nonvoting, including common stock,
preferred stock or any other “equity security” (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the SEC under the
Securities Exchange Act of 1934).

“Cash Collateralize” shall mean, in respect of any obligations, to provide and
pledge (as a first priority perfected security interest) cash collateral for
such obligations in Dollars, to the Administrative Agent pursuant to
documentation in form and substance, reasonably satisfactory to the
Administrative Agent (and “Cash Collateralization” and “Cash Collateral” have a
corresponding meaning).

“Change in Control” shall mean the occurrence of one or more of the following
events: (a) any sale, lease, exchange or other transfer (in a single transaction
or a series of related transactions) of all or substantially all of the assets
of the Borrower to any Person or “group” (within the meaning of the Securities
Exchange Act of 1934 and the rules of the SEC thereunder in effect on the date
hereof), (b) the acquisition of ownership, directly or indirectly, beneficially
or of record, by any Person or “group” (within the meaning of the Securities
Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the
date hereof), other than the Molina Family, of 30% or more of the outstanding
shares of the voting stock of the Borrower, (c) the acquisition of ownership,
directly or indirectly, beneficially or of record, by the Molina Family of 50%
or more of the outstanding shares of the voting stock of the Borrower,
(d) during any period of 24 consecutive months, a majority of the members of the
board of directors or other equivalent governing body of the Borrower cease to
be composed of individuals who are Continuing Directors or (e) the occurrence of
a fundamental change (or any comparable term) under, and as defined in, any
agreement, document or instrument governing or otherwise relating to the 2020
Convertible Notes, the 2044 Convertible Notes or any other Material Indebtedness
(other than Permitted Subordinated Debt).

“Change in Law” shall mean (a) the adoption of any applicable Law after the date
of this Agreement, (b) any change in any applicable Law after the date of this
Agreement, or (c) compliance by any Lender (or its Applicable Lending Office) or
the Issuing Bank (or for purposes of Section 2.18(b), by the Parent Company of
such Lender or the Issuing Bank, if applicable) with any request, guideline or
directive (whether or not having the force of law) of any Governmental Authority
made or issued after the date of this Agreement. Notwithstanding anything herein
to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection
Act, and all requests, rules, guidelines and directives promulgated thereunder,
and (y) all requests, rules, guidelines or directives promulgated by the Bank
for International Settlements, the Basel Committee on Banking Supervision (or
any successor or similar authority) or the United States or foreign regulatory
authorities, in each case pursuant to Basel III, in each case, are deemed to
have been introduced or adopted after the date hereof, regardless of the date
enacted or adopted.

“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline
Loans and when used in reference to any Commitment, refers to whether such
Commitment is a Revolving Commitment or a Swingline Commitment.

“Closing Date” shall mean the date hereof.

 

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“CMS” shall mean the Centers for Medicare & Medicaid Services or any successor
or predecessor thereof.

“Code” shall mean the Internal Revenue Code of 1986, as amended and in effect
from time to time.

“Commitment” shall mean a Revolving Commitment, a Swingline Commitment or an
Incremental Term Loan Commitment or any combination thereof (as the context
shall permit or require).

“Commitment Fee” shall have the meaning set forth in Section 2.14(b).

“Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.

“Company Action Level” means the Company Action Level risk-based capital
threshold, as defined by NAIC, or in any state that has not adopted the NAIC
definition, as defined by the appropriate state Governmental Authority, the HMO
Model Act or comparable act applicable to an HMO Subsidiary or an Insurance
Subsidiary.

“Compliance Certificate” shall mean a certificate from the principal executive
officer or the principal financial officer of the Borrower in the form of, and
containing the certifications set forth in, the certificate attached hereto as
Exhibit 5.1.

“Connection Income Taxes” shall mean Other Connection Taxes that are imposed on
or measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

“Consolidated Adjusted EBITDA” shall mean, for the Borrower and its Subsidiaries
for any period, determined on a consolidated basis, an amount equal to the sum
of (a) Consolidated Net Income for such period plus (b) to the extent deducted
in determining Consolidated Net Income for such period, without duplication,
(i) Consolidated Interest Expense for such period, (ii) income tax expense for
such period (other than any income tax, including any portion of Health
Insurance Providers Fee imposed by Section 9010 of the Patient Protection and
Affordable Care Act (“ACA”, as amended by Section 1095 of the ACA and by
Section 1406 of the Health Care and Education Reconciliation Act of 2010), which
is subject to indemnification or reimbursement from any Person other than the
Borrower or any of its Subsidiaries), (iii) depreciation and amortization for
such period, (iv) non-cash charges associated with stock-based compensation
expenses pursuant to the financial reporting guidance of the Financial
Accounting Standards Board concerning stock-based compensation as in effect from
time to time, (v) any costs and synergies directly attributable to any Permitted
Acquisition that occurred during such period (calculated on a basis that is
consistent with Regulation SX under the Securities Act of 1933) which are
reflective of actual or reasonably anticipated and factually supportable
synergies and cost savings expected to be realized or achieved in the twelve
months following such Permitted Acquisition; provided, however, that for
purposes of calculating Consolidated Adjusted EBITDA for any period, any such
adjustments made pursuant to this clause (v) shall not increase Consolidated
Adjusted EBITDA by more than 10% of Consolidated Adjusted EBITDA for such period
as calculated before giving effect to any such adjustments and (vi) other
extraordinary or non-recurring non-cash expenses (including any expenses as a
result of any premium deficiency reserve related to any health plan operated by
the Borrower or any of its Subsidiaries) minus to the extent added in
Consolidated Net Income, any extraordinary or non-recurring non-cash income
(including as a result of any premium deficiency reserve related to any health
plan operated by the Borrower or any of its Subsidiaries).

 

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“Consolidated Interest Coverage Ratio” shall mean, as of any date, the ratio of
(a) Consolidated Adjusted EBITDA to (b) Consolidated Interest Expense in each
case measured as of the last day of the most recently ended four consecutive
Fiscal Quarters for which financial statements are required to have been
delivered pursuant to Section 5.1(a) or (b).

“Consolidated Interest Expense” shall mean, for the Borrower and its
Subsidiaries for any period determined on a consolidated basis, the sum of
(a) total interest expense, including without limitation, (i) non-cash interest
expense with respect to the 2020 Convertible Notes and the 2044 Convertible
Notes and (ii) the interest component of any payments in respect of Capital
Lease Obligations capitalized or expensed during such period (whether or not
actually paid during such period) plus (b) the net amount payable (or minus the
net amount receivable) with respect to Hedging Transactions during such period
(whether or not actually paid or received during such period).

“Consolidated Leverage Ratio” shall mean, as of any date, the ratio of
(a) Consolidated Total Debt as of such date to (b) Consolidated Adjusted EBITDA,
in each case measured as of the last day of the most recently ended four
consecutive Fiscal Quarters for which financial statements are required to have
been delivered pursuant to Section 5.1(a) or (b).

“Consolidated Net Income” shall mean, for the Borrower and its Subsidiaries for
any period determined on a consolidated basis, the net income (or loss) of the
Borrower and its Subsidiaries for such period but excluding therefrom (to the
extent otherwise included therein) (a) any extraordinary gains or losses,
(b) any gains attributable to write-ups of assets and (c) any equity interest of
the Borrower or any Subsidiary of the Borrower in the unremitted earnings of any
Person that is not a Subsidiary.

“Consolidated Net Leverage Ratio” shall mean, as of any date, the ratio of
(a) Consolidated Total Debt as of such date minus up to $250 million of
Qualified Cash to (b) Consolidated Adjusted EBITDA, in each case measured as of
the last day of the most recently ended four consecutive Fiscal Quarters for
which financial statements are required to have been delivered pursuant to
Section 5.1(a) or (b).

“Consolidated Total Assets” shall mean, as any date of determination, the total
assets of the Borrower and its Subsidiaries calculated in accordance with GAAP
on a consolidated basis as of the last day of the most recent fiscal quarter
preceding such date of determination for which financial statements of the
Borrower have been delivered pursuant to Section 5.1(a) or (b) (or, prior to the
delivery of such financial statements, based on the Interim Financial
Statements).

“Consolidated Total Debt” shall mean, as of any date, all Indebtedness of the
Borrower and its Subsidiaries measured on a consolidated basis as of such date,
but excluding Indebtedness of the type described in subsection (i) of the
definition thereto.

“Contract Provider” shall mean any Person or any employee, agent or
subcontractor of such Person who provides professional health care services
under or pursuant to any contract or other arrangement with the Borrower or any
Subsidiary.

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

 

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“Continuing Director” shall mean, with respect to any period, any individuals
(A) who were members of the board of directors or other equivalent governing
body of the Borrower on the first day of such period, (B) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (A) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body, or (C) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (A) and
(B) above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body.

“Debtor Relief Laws” shall mean the Bankruptcy Code of the United States of
America, and all other liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect.

“Default” shall mean any condition or event that, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.

“Default Interest” shall have the meaning set forth in Section 2.13(c).

“Defaulting Lender” shall mean, subject to Section 2.26(b), at any time, any
Lender as to which the Administrative Agent has notified the Borrower that
(a) such Lender has failed for three (3) or more Business Days to comply with
its obligations under this Agreement to make a Loan (unless such Lender notifies
the Administrative Agent and the Borrower in writing that such failure is the
result of such Lender’s determination that one or more conditions precedent to
funding (each of which conditions precedent, together with any applicable
default, shall be specifically identified in such writing) has not been
satisfied) and/or to make a payment to the Issuing Bank in respect of a Letter
of Credit or to the Swingline Lender in respect of a Swingline Loan (each a
“funding obligation”), (b) such Lender has notified the Administrative Agent or
the Borrower, or has stated publicly, that it will not comply with any such
funding obligation hereunder (unless such writing or public statement relates to
such Lender’s obligation to fund a Loan hereunder and states that such position
is based on such Lender’s determination that a condition precedent to funding
(which condition precedent, together with any applicable default, shall be
specifically identified in such writing or public statement) cannot be
satisfied), (c) such Lender has, for three (3) or more Business Days, failed to
confirm in writing to the Administrative Agent, in response to a written request
of the Administrative Agent, that it will comply with its funding obligations
hereunder, or (d) a Lender Insolvency Event has occurred and is continuing with
respect to such Lender. The Administrative Agent will promptly send to all
parties hereto a copy of any notice to the Borrower provided for in this
definition.

“Dollar(s)” and the sign “$” shall mean lawful money of the United States of
America.

“Domestic Subsidiary” shall mean any Subsidiary that is organized under the laws
of any political subdivision of the United States.

“Environmental Laws” shall mean all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by or with any Governmental Authority, relating in
any way to the environment, preservation or reclamation of natural resources,
the management, Release or threatened Release of any Hazardous Material or to
health and safety matters.

 

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“Environmental Liability” shall mean any liability, contingent or otherwise
(including any liability for damages, costs of environmental investigation and
remediation, costs of administrative oversight, fines, natural resource damages,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) any actual or alleged violation of
any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) any actual or
alleged exposure to any Hazardous Materials, (d) the Release or threatened
Release of any Hazardous Materials or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.

“ERISA Affiliate” shall mean any trade or business (whether or not
incorporated), which, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for the purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.

“ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the failure of any
Plan to meet the minimum funding standard applicable to the Plan for a plan year
under Section 412 of the Code or Section 302 of ERISA, whether or not waived;
(c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA
of an application for a waiver of the minimum funding standard with respect to
any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of
any liability under Title IV of ERISA with respect to the termination of any
Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a
plan administrator appointed by the PBGC of any notice relating to an intention
to terminate any Plan or Plans or to appoint a trustee to administer any Plan;
(f) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.

“Eurodollar” when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, bears interest at a rate
determined by reference to the Adjusted LIBOR.

“Event of Default” shall have the meaning set forth in Article VIII.

“Excluded Swap Obligation” shall mean, with respect to any Guarantor, any Swap
Obligation if, and to the extent that, all or a portion of the Guaranty of such
Guarantor of, or the grant by such Guarantor of a security interest to secure,
such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the
Commodity Exchange Act or any rule, regulation or order of the Commodity Futures
Trading Commission (or the application or official interpretation of any
thereof) by virtue of such Guarantor’s failure for any reason to constitute an
“eligible contract participant” as defined in the Commodity Exchange Act and the
regulations thereunder at the time the Guaranty of such Guarantor, or the grant
by such Guarantor of a security interest, becomes effective with respect to such
Swap Obligation; provided that, for the avoidance of doubt, in determining
whether any Guarantor is an

 

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“eligible contract participant” under the Commodity Exchange Act, the keepwell
agreement set forth in Section 10.8 shall be taken into account. If a Swap
Obligation arises under a Master Agreement governing more than one Hedging
Transaction, such exclusion shall apply only to the portion of such Swap
Obligation that is attributable to Hedging Transactions for which such Guaranty
or security interest is or becomes excluded in accordance with the first
sentence of this definition.

“Excluded Taxes” shall mean any of the following Taxes imposed on or with
respect to a Recipient or required to be withheld or deducted from a payment to
a Recipient, (a) Taxes imposed on or measured by net income (however
denominated), franchise Taxes, and branch profits Taxes, in each case,
(i) imposed as a result of such Recipient being organized under the Laws of, or
having its principal office or, in the case of any Lender, its Applicable
Lending Office in the jurisdiction imposing such Tax (or any political
subdivision thereof) or (ii) that are Other Connection Taxes (b) in the case of
a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for
the account of such Lender with respect to an applicable interest in a Loan or
Commitment pursuant to a Law in effect on the date on which (i) such Lender
acquires such interest in the Loan or Commitment (other than pursuant to an
assignment request by the Borrower under Section 2.25) or (ii) such Lender
changes its lending office, except in each case to the extent that, pursuant to
Section 2.20, amounts with respect to such Taxes were payable either to such
Lender’s assignor immediately before such Lender became a party hereto or to
such Lender immediately before it changed its lending office, (c) Taxes
attributable to such Recipient’s failure to comply with Section 2.20(g) and
(d) any U.S. federal withholding Taxes imposed under FATCA.

“Exclusion Event” shall mean an event or related events resulting in the
exclusion of the Borrower or any of its Subsidiaries from participation in any
Medical Reimbursement Program.

“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of
this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or
future regulations or official interpretations thereof and any agreements
entered into pursuant to Section 1471(b)(1) of the Code.

“Federal Funds Rate” shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the next 1/100th of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with member banks of the
Federal Reserve System arranged by Federal funds brokers, as published by the
Federal Reserve Bank of New York on the next succeeding Business Day or if such
rate is not so published for any Business Day, the Federal Funds Rate for such
day shall be the average rounded upwards, if necessary, to the next 1/100th of
1% of the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by the Administrative Agent. Notwithstanding anything to the contrary
in the foregoing, if the Federal Funds Rate is less than zero, such rate shall
be deemed to be zero for purposes of this Agreement.

“Fee Letter” shall mean that certain fee letter, dated as of June 5, 2015
executed by SunTrust Robinson Humphrey, Inc. and SunTrust Bank and accepted by
Borrower.

“Fiscal Quarter” shall mean any fiscal quarter of the Borrower.

“Fiscal Year” shall mean any fiscal year of the Borrower.

 

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“Foreign Lender” shall mean (a) if the Borrower is a U.S. Person, a Lender that
is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender
that is resident or organized under the laws of a jurisdiction other than that
in which the Borrower is resident for tax purposes.

“Foreign Subsidiary” shall mean any Subsidiary that is not a Domestic
Subsidiary.

“GAAP” shall mean generally accepted accounting principles in the United States
applied on a consistent basis and subject to the terms of Section 1.3.

“Governmental Authority” shall mean the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).

“Guarantee” of or by any Person (the “guarantor”) shall mean any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly and
including any obligation, direct or indirect, of the guarantor (i) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (ii) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (iii) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (iv) as an account party in respect of any
letter of credit or letter of guaranty issued in support of such Indebtedness or
obligation; provided, that the term “Guarantee” shall not include endorsements
for collection or deposit in the ordinary course of business. The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Guarantee is made or,
if not so stated or determinable, the maximum reasonably anticipated liability
in respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith. The term “Guarantee” used as a verb has
a corresponding meaning.

“Guarantor Joinder Agreement” shall mean a joinder agreement substantially in
the form of Exhibit 5.10 executed and delivered by a Subsidiary in accordance
with the provisions of Section 5.10 or any other documents as the Administrative
Agent shall deem appropriate for such purpose.

“Guarantors” shall mean, collectively, (a) Molina Information Systems, LLC,
d/b/a Molina Medicaid Solutions and Molina Medical Management, Inc., (b) each
Person that joins as a Guarantor pursuant to Section 5.10 or otherwise, (c) with
respect to (i) any Hedging Obligations between any Loan Party (other than the
Borrower) and any Lender-Related Hedge Provider that are permitted to be
incurred pursuant to Section 7.10 and any Bank Product Obligations owing by any
Loan Party (other than the Borrower), the Borrower and (ii) the payment and
performance by each Specified Loan Party of its obligations under its Guaranty
with respect to all Swap Obligations, the Borrower, and (d) the successors and
permitted assigns of the foregoing.

“Guaranty” shall mean the Guaranty made by the Guarantors in favor of the
Administrative Agent, for the benefit of the holders of the Obligations,
pursuant to Article X.

 

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“Hazardous Materials” shall mean all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.

“Hedging Obligations” of any Person shall mean any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired under (a) any and all Hedging Transactions,
(b) any and all cancellations, buy backs, reversals, terminations or assignments
of any Hedging Transactions and (c) any and all renewals, extensions and
modifications of any Hedging Transactions and any and all substitutions for any
Hedging Transactions.

“Hedging Transaction” of any Person shall mean (a) any transaction (including an
agreement with respect to any such transaction) now existing or hereafter
entered into by such Person that is a rate swap transaction, swap option, basis
swap, forward rate transaction, commodity swap, commodity option, equity or
equity index swap or option, bond option, interest rate option, foreign exchange
transaction, cap transaction, floor transaction, collar transaction, currency
swap transaction, cross-currency rate swap transaction, currency option, spot
transaction, credit protection transaction, credit swap, credit default swap,
credit default option, total return swap, credit spread transaction, repurchase
transaction, reverse repurchase transaction, buy/sell-back transaction,
securities lending transaction, or any other similar transaction (including any
option with respect to any of these transactions) or any combination thereof,
whether or not any such transaction is governed by or subject to any master
agreement and (b) any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed by,
any form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement (any such master agreement, together
with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.

“HHS” shall mean the United States Department of Health and Human Services and
any successor thereof.

“HIPAA” shall mean the Health Insurance Portability and Accountability Act of
1996, Pub. L. 104-191, Aug. 21, 1996, 110 Stat. 1936, and regulations
promulgated pursuant thereto.

“HITECH Act” shall mean the Health Information Technology for Economic and
Clinical Health Act, Title XIII of Division A and Title IV of Division B of the
American Recovery and Reinvestment Act of 2009 (ARRA), Pub. L. 111-5, Feb. 17,
2009, and regulations promulgated pursuant thereto.

“HMO” shall mean any health maintenance organization or managed care
organization, including without limitation any organized delivery system or
utilization review organization, any Person doing business as a health
maintenance organization or managed care organization, or any Person required to
qualify or be licensed as a health maintenance organization or managed care
organization under applicable law (including HMO Regulations).

“HMO Business” shall mean the business of operating an HMO or other similar
regulated entity or business.

 

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“HMO Event” shall mean (i) any non-compliance by the Borrower or any of its HMO
Subsidiaries with any of the material terms and provisions of the HMO
Regulations pertaining to its fiscal soundness, solvency or financial conditions
that is materially adverse to the Borrower and its Subsidiaries taken as a
whole; or (ii) the assertion in writing, after the date hereof, by any HMO
Regulator that it intends to take administrative action against the Borrower or
any of its HMO Subsidiaries to revoke or modify in a manner materially adverse
to the Borrower and its Subsidiaries, taken as a whole, any material license,
material charter or material permit or to enforce the fiscal soundness, solvency
or financial provisions or requirements of the HMO Regulations against the
Borrower or any or its HMO Subsidiaries.

“HMO Regulations” shall mean all laws, rules, regulations, directives and
administrative orders applicable under Federal or state law to any HMO
Subsidiary, including Part 422 of Chapter IV of Title 42 of the Code of Federal
Regulations and Subchapter XI of Chapter 6A of Title 42 of the United Stated
Code Annotated (and any regulations, orders and directives promulgated or issued
pursuant thereto, including Part 417 of Chapter IV of Title 42 of the Code of
Federal Regulations).

“HMO Regulator” shall mean any Person charged with the administration, oversight
or enforcement of any HMO Regulation, whether primarily, secondarily or jointly.

“HMO Subsidiary” shall mean any Subsidiary that is designated as an HMO
Subsidiary on Schedule 4.15 and any other existing or future Domestic Subsidiary
that shall become capitalized or licensed as an HMO, shall conduct HMO Business
or shall provide managed care services.

“Incremental Term Loan” shall have the meaning set forth in Section 2.23.

“Incremental Term Loan Commitment” shall mean, with respect to Persons
identified as an “Incremental Term Loan Lender” in the applicable supplement or
joinder in form and substance satisfactory to the Administrative Agent, together
with their respective successors and assigns, the commitment of such Person to
make the Incremental Term Loan hereunder pursuant to such supplement or joinder;
provided that, at any time after the funding of the Incremental Term Loan,
determination of “Required Lenders” shall include the outstanding principal
amount of the Incremental Term Loan.

“Indebtedness” of any Person shall mean, without duplication (a) all obligations
of such Person for borrowed money, (b) all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments, (c) all obligations of
such Person in respect of the deferred purchase price of property or services
(other than trade payables incurred in the ordinary course of business;
provided, that for purposes of Section 8.1(g), trade payables overdue by more
than 120 days shall be included in this definition except to the extent that any
of such trade payables are being disputed in good faith and by appropriate
measures), (d) all obligations of such Person under any conditional sale or
other title retention agreement(s) relating to property acquired by such Person,
(e) all Capital Lease Obligations of such Person, (f) all obligations,
contingent or otherwise, of such Person in respect of letters of credit,
acceptances or similar extensions of credit, (g) all obligations of such Person,
contingent or otherwise, to purchase, redeem, retire or otherwise acquire for
value any Capital Stock of such Person, (h) Off-Balance Sheet Liabilities,
(i) the Hedge Termination Value of all Hedging Obligations, (j) all Guarantees
of such Person of the type of Indebtedness described in clauses (a) through
(i) above and (k) all Indebtedness of a third party secured by any Lien on
property owned by such Person, whether or not such Indebtedness has been assumed
by such Person. The Indebtedness of any Person shall include the Indebtedness of
any

 

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partnership or joint venture in which such Person is a general partner or a
joint venturer, except to the extent that the terms of such Indebtedness provide
that such Person is not liable therefor.

“Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on
or with respect to any payment made by or on account of any obligation of any
Loan Party under any Loan Document and (b) to the extent not otherwise described
in (a), Other Taxes.

“Insurance Subsidiary” shall mean any Subsidiary that is engaged in the
insurance business, assumes financial risk and that is regulated by the relevant
Governmental Authority.

“Interest Period” shall mean with respect to any Eurodollar Borrowing, a period
of one, two, three or six months (in each case, subject to availability);
provided, that:

(a) the initial Interest Period for such Borrowing shall commence on the date of
such Borrowing (including the date of any conversion from a Borrowing of another
Type), and each Interest Period occurring thereafter in respect of such
Borrowing shall commence on the day on which the next preceding Interest Period
expires;

(b) if any Interest Period would otherwise end on a day other than a Business
Day, such Interest Period shall be extended to the next succeeding Business Day,
unless such Business Day falls in another calendar month, in which case such
Interest Period would end on the next preceding Business Day;

(c) any Interest Period which begins on the last Business Day of a calendar
month or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period shall end on the last Business
Day of such calendar month; and

(d) no Interest Period may extend beyond the Revolving Commitment Termination
Date.

“Interim Financial Statements” shall mean the unaudited consolidated financial
statements of the Borrower and its Subsidiaries for the fiscal quarter ending
March 31, 2015, including balance sheets and statements of income or operations,
shareholders’ equity and cash flows.

“Investments” shall mean, as to any Person, any direct or indirect acquisition
or investment by such Person, whether by means of (a) purchase or other
acquisition of any Capital Stock of another Person, (b) a loan, advance, other
evidence of indebtedness or capital contribution to, Guarantee or assumption of
debt of, or purchase or other acquisition of any other indebtedness or equity
participation or interest in, another Person, or (c) an Acquisition. For
purposes of covenant compliance, the amount of any Investment shall be the
amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.

“IRS” shall mean the United States Internal Revenue Service.

“Issuer Documents” shall mean with respect to any Letter of Credit, the Letter
of Credit Application, and any other document, agreement and instrument entered
into by the Issuing Bank and any Borrower (or any Subsidiary) or in favor of the
Issuing Bank and relating to such Letter of Credit.

 

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“Issuing Bank” shall mean SunTrust Bank in its capacity as the issuer of Letters
of Credit hereunder, or any successor issuer of Letters of Credit.

“Laws” or “Law” shall mean, collectively, all international, foreign, federal,
state and local statutes, treaties, rules, guidelines, regulations, ordinances,
codes and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

“LC Commitment” shall mean that portion of the Aggregate Revolving Commitments
that may be used by the Borrower for the issuance of Letters of Credit in an
aggregate face amount not to exceed $75,000,000.

“LC Disbursement” shall mean a payment made by the Issuing Bank pursuant to a
Letter of Credit.

“LC Documents” shall mean all applications, agreements and instruments relating
to the Letters of Credit but excluding the Letters of Credit.

“LC Exposure” shall mean, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time, plus (b) the aggregate
amount of all LC Disbursements that have not been reimbursed by or on behalf of
the Borrower at such time. The LC Exposure of any Lender shall be its Pro Rata
Share of the total LC Exposure at such time. For all purposes of this Agreement,
if on any date of determination a Letter of Credit has expired by its terms but
any amount may still be drawn thereunder by reason of the operation of Rule 3.14
of the International Standby Practices 1998, such Letter of Credit shall be
deemed to be “outstanding” in the amount so remaining available to be drawn.

“Lender Insolvency Event” shall mean that (a) a Lender or its Parent Company is
insolvent, or is generally unable to pay its debts as they become due, or admits
in writing its inability to pay its debts as they become due, or makes a general
assignment for the benefit of its creditors, (b) a Lender or its Parent Company
is the subject of a bankruptcy, insolvency, reorganization, liquidation or
similar proceeding, or a receiver, trustee, conservator, custodian or the like
has been appointed for such Lender or its Parent Company, or such Lender or its
Parent Company has taken any action in furtherance of or indicating its consent
to or acquiescence in any such proceeding or appointment, or (c) a Lender or its
Parent Company has been adjudicated as, or determined by any Governmental
Authority having regulatory authority over such Person or its assets to be,
insolvent; provided that, for the avoidance of doubt, a Lender Insolvency
Event shall not be deemed to have occurred solely by virtue of the ownership or
acquisition of any equity interest in or control of a Lender or a Parent Company
thereof by a Governmental Authority or an instrumentality thereof.

“Lender-Related Hedge Provider” shall mean any Person that, (a) (i) at the time
it enters into a Hedging Transaction with any Loan Party, is a Lender or an
Affiliate of a Lender or (ii) has entered into a Hedging Transaction with any
Loan Party that exists on the Closing Date, and such Person is a Lender or an
Affiliate of a Lender on the Closing Date and (b) except when the Lender-Related
Hedge Provider is SunTrust Bank and its Affiliates, has provided prior written
notice to the Administrative Agent which has been acknowledged by the Borrower
of (x) the existence of such Hedging Transaction, and (y) the methodology to be
used by such parties in determining the obligations under such Hedging
Transaction from time to time. In no event shall any Lender-Related Hedge
Provider acting in such

 

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capacity be deemed a Lender for purposes hereof to the extent of and as to
Hedging Obligations except that each reference to the term “Lender” in Article
IX and Section 11.4 shall be deemed to include such Lender-Related Hedge
Provider. In no event shall the approval of any such Person in its capacity as
Lender-Related Hedge Provider be required in connection with the release or
termination of any security interest or Lien of the Administrative Agent. No new
Hedging Transactions may be established at any time that a Default or Event of
Default exists.

“Lenders” shall mean each of the Persons identified as a “Lender” on the
signature pages hereto and each Additional Lender that joins this Agreement
pursuant to Section 2.23 and their successors and assigns and shall include,
where appropriate, the Swingline Lender.

“Letter of Credit” shall mean any stand-by letter of credit issued pursuant to
Section 2.22 by the Issuing Bank for the account of the Borrower or any
Subsidiary pursuant to the LC Commitment.

“Letter of Credit Application” shall mean an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by Issuing Bank.

“Letter of Credit Fee” shall have the meaning set forth in Section 2.14(c).

“Lien” shall mean any mortgage, pledge, security interest, lien (statutory or
otherwise), charge, encumbrance, hypothecation, assignment, deposit arrangement,
or other arrangement having the practical effect of any of the foregoing or any
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement and any capital lease having the same economic effect as any
of the foregoing).

“Loan Documents” shall mean, collectively, this Agreement, the LC Documents, the
Fee Letter, all Notices of Borrowing, all Notices of Conversion/Continuation,
all Compliance Certificates, all Issuer Documents, any promissory notes issued
hereunder and any and all other instruments, agreements, documents and writings
executed in connection with any of the foregoing.

“Loan Parties” shall mean, collectively, the Borrower and each Guarantor.

“Loans” shall mean all Revolving Loans, Swingline Loans and Incremental Term
Loans (if any) in the aggregate or any of them, as the context shall require.

“Master Agreement” shall have the meaning set forth in the definition of
“Hedging Transaction.”

“Material Adverse Effect” shall mean, with respect to any event, act, condition
or occurrence of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), whether
singularly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences whether or not related,
resulting in a material adverse change in, or a material adverse effect on,
(a) the business, results of operations, financial condition, assets,
liabilities or prospects of the Borrower and its Subsidiaries taken as a whole,
(b) the ability of the Loan Parties to perform any of their respective
obligations under the Loan Documents, (c) the rights and remedies of the
Administrative Agent, the Issuing Bank, Swingline Lender, and the Lenders under
any of the Loan Documents or (d) the legality, validity or enforceability of any
of the Loan Documents.

 

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“Material Contract” means any Contractual Obligation of the Borrower or any
Subsidiary if the revenues of the Borrower and its Subsidiaries attributable to
such Contractual Obligation exceed five percent (5%) of the total revenues of
the Borrower and its Subsidiaries on a consolidated basis for the period of the
four fiscal quarters most recently ended for which the Borrower has delivered
financial statements pursuant to Section 5.1(a) or (b).

“Material Domestic Subsidiary” shall mean any subsidiary of the Borrower (other
than an HMO Subsidiary or Insurance Subsidiary) which, as of the most recent
fiscal quarter for which the Borrower has delivered financial statements
pursuant to Section 5.1(a) or (b), has (a) revenues in excess of $10,000,000 for
the period of the four fiscal quarters most recently ended or (b) total assets
with an aggregate fair market value in excess of $10,000,000. Notwithstanding
the foregoing, Molina Healthcare Data Center, Inc., a New Mexico corporation
(“Data Center”) shall not be a Material Domestic Subsidiary so long as Data
Center has any amounts subject to tax recapture as a result of its participation
in the U.S. federal government’s New Market Tax Credit Program.

“Material Indebtedness” shall mean any Indebtedness (other than the Loans and
Letters of Credit) and Hedging Obligations of the Borrower or any of its
Subsidiaries, individually or in an aggregate committed or outstanding principal
amount exceeding $30,000,000. For purposes of determining the amount of
attributed Indebtedness from Hedging Obligations, the “principal amount” of any
Hedging Obligations at any time shall be the Net Mark-to-Market Exposure of such
Hedging Obligations.

“Material License” shall mean (i) as to any Person, any license, permit
authorization or consent from a Governmental Authority or other Person and any
registration, notice of filing with a Governmental Authority or other Person
which if not obtained, held or made would have a Material Adverse Effect, and
(ii) as to any other Person who is a party to this Agreement or any of the other
Loan Documents, any license, permit, authorization or consent from a
Governmental Authority or other Person and any registration, notice or filing
with a Governmental Authority or other Person that is necessary for the
execution or performance by such party, or the validity or enforceability
against such party, of this Agreement or such other Loan Document.

“Medicaid” shall mean that means-tested entitlement program under Title XIX of
the Social Security Act, which provides Federal grants to States for medical
assistance based on specific eligibility criteria, as set forth at Section 1396,
et seq. of Title 42 of the United States Code, as amended, and any statute
succeeding thereto.

“Medicaid Regulations” shall mean (a) all Federal statutes (whether set forth in
Title XIX of the Social Security Act or elsewhere) affecting the medical
assistance program established by Title XIX of the Social Security Act and any
statues succeeding thereto, (b) all applicable provisions of all Federal rules,
regulations, manuals and orders of all Governmental Authorities promulgated
pursuant to or in connection with the statues described in clause (a) above and
all Federal administrative, reimbursement and other guidelines of all
Governmental Authorities having the force of law promulgated pursuant to or in
connection with the statues described in clause (a) above, (c) all state
statutes and plans for medical assistance enacted in connection with the
statutes and provisions described in clauses (a) and (b) above, and (d) all
applicable provisions of all rules, regulations, manuals and orders of all
Governmental Authorities promulgated pursuant to or in connection with the
statutes described in clause (c) above and all state administrative,
reimbursement and other guidelines of all Governmental Authorities having the
force of law promulgated pursuant to or in connection with the statutes
described

 

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in clause (b) above, in each case as may be amended, supplemented or otherwise
modified from time to time.

“Medical Reimbursement Programs” shall mean, collectively, the Medicare,
Medicaid and TRICARE programs and any other health care program operated by or
financed in whole or in part by any foreign or domestic Federal, state or local
government and any other non-government funded thirty-party payor programs to
which the Borrower or any Subsidiary is subject.

“Medicare” shall mean that government-sponsored entitlement program under Title
XVIII of the Social Security Act, which provides for a health insurance system
for eligible elderly and disabled individuals, as set forth at Section 1395, et
seq. of Title 42 of the United States Code, as amended, and any statute
succeeding thereto.

“Medicare Regulations” shall mean, collectively, (a) all Federal statues
(whether set forth in Title XVIII of the Social Security Act or elsewhere)
affecting the health insurance program for the aged and disabled established by
Title XVIII of the Social Security Act and any statues succeeding thereto and
(b) all applicable provisions of all rules, regulations, manuals and orders and
administrative, reimbursement and other guidelines having the force of law of
all Governmental Authorities (including CMS, the OIG, HHS or any person
succeeding to the functions of any of the foregoing) promulgated pursuant to or
in connection with any of the foregoing having the force of law, as each may be
amended, supplemented or otherwise modified from time to time.

“Molina Family” means, collectively, (a) Joseph M. Molina, Mary Martha
Bernadett, John C. Molina, Janet M. Watt or Josephine Molina, (b) the spouse and
lineal descendants and spouses of lineal descendants of any Person named in
clause (a), (c) the estates and legal representatives of any Person named in
clauses (a) or (b), and/or (d) trusts established for the benefit of any Person
named in clauses (a) or (b) and controlled by any Person named in clauses (a) or
(b).

“Moody’s” shall mean Moody’s Investors Service, Inc.

“Multiemployer Plan” shall mean any employee benefit plan of the type described
in Section 4001(a)(3) of ERISA to which the Borrower makes or is obligated to
make contributions or with respect to which Borrower has any liability
(including on account of an ERISA Affiliate).

“NAIC” shall mean the National Association of Insurance Commissioners.

“Net Mark-to-Market Exposure” of any Person shall mean, as of any date of
determination with respect to any Hedging Obligation, the excess (if any) of all
unrealized losses over all unrealized profits of such Person arising from such
Hedging Obligation. “Unrealized losses” shall mean the fair market value of the
cost to such Person of replacing the Hedging Transaction giving rise to such
Hedging Obligation as of the date of determination (assuming the Hedging
Transaction were to be terminated as of that date), and “unrealized profits”
means the fair market value of the gain to such Person of replacing such Hedging
Transaction as of the date of determination (assuming such Hedging Transaction
were to be terminated as of that date).

“Non-Defaulting Lender” shall mean, at any time, a Lender that is not a
Defaulting Lender.

“Note” shall have the meaning set forth in Section 2.10(b).

 

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“Notices of Borrowing” shall mean, collectively, the Notices of Revolving
Borrowing and the Notices of Swingline Borrowing.

“Notice of Conversion/Continuation” shall mean the notice given by the Borrower
to the Administrative Agent in respect of the conversion or continuation of an
outstanding Borrowing as provided in Section 2.7(b).

“Notice of Revolving Borrowing” shall have the meaning set forth in Section 2.3.

“Notice of Swingline Borrowing” shall have the meaning set forth in Section 2.4.

“Obligations” shall mean, collectively, (a) all amounts owing by the Loan
Parties to the Administrative Agent, the Issuing Bank, any Lender (including the
Swingline Lender) or the Arrangers pursuant to or in connection with this
Agreement or any other Loan Document or otherwise with respect to any Loan or
Letter of Credit including without limitation, all principal, interest
(including any interest accruing after the filing of any petition in bankruptcy
or the commencement of any insolvency, reorganization or like proceeding
relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), all reimbursement
obligations, fees, expenses, indemnification and reimbursement payments, costs
and expenses (including all fees and expenses of counsel to the Administrative
Agent, the Issuing Bank and any Lender (including the Swingline Lender) incurred
pursuant to this Agreement or any other Loan Document), whether direct or
indirect, absolute or contingent, liquidated or unliquidated, now existing or
hereafter arising hereunder or thereunder, (b) all Hedging Obligations owed by
any Loan Party to any Lender-Related Hedge Provider permitted by Section 7.10,
and (c) all Bank Product Obligations, together with all renewals, extensions,
modifications or refinancings of any of the foregoing; provided, that
“Obligations” of a Guarantor shall exclude any Excluded Swap Obligations of such
Guarantor.

“OFAC” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets
Control.

“Off-Balance Sheet Liabilities” of any Person shall mean (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability of such Person under any sale
and leaseback transactions, including (x) the sale and leaseback of the Molina
Center located in Long Beach California, and the Ohio health plan office
building located in Columbus, Ohio and (y) any other sale and leaseback
transactions, whether or not such transactions create a liability on the balance
sheet of such Person, (iii) any Synthetic Lease Obligation or (iv) any
obligation arising with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the balance sheet of such Person.

“OIG” shall mean the Office of Inspector General of HHS and any successor
thereof.

“Organization Documents” shall mean, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority

 

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in the jurisdiction of its formation or organization and, if applicable, any
certificate or articles of formation or organization of such entity.

“OSHA” shall mean the Occupational Safety and Health Act of 1970, as amended
from time to time, and any successor statute.

“Other Connection Taxes” shall mean, with respect to any Recipient, Taxes
imposed as a result of a present or former connection between such Recipient and
the jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” shall mean all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 2.25).

“Parent Company” shall mean, with respect to a Lender, the bank holding company
(as defined in Regulation Y), if any, of such Lender, and/or any Person owning,
beneficially or of record, directly or indirectly, a majority of the shares of
such Lender.

“Participant” shall have the meaning set forth in Section 11.4(d).

“Participant Register” shall have the meaning set forth in Section 11.4(e).

“Payment Office” shall mean the office of the Administrative Agent located at
303 Peachtree Street, N.E., Atlanta, Georgia 30308, or such other location as to
which the Administrative Agent shall have given written notice to the Borrower
and the other Lenders.

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA, and any successor entity performing similar functions.

“Permitted Acquisition” shall mean an Investment consisting of an Acquisition by
the Borrower or any Subsidiary, provided that (a) no Default or Event of Default
shall have occurred and be continuing or would result from such Acquisition,
(b) the property acquired (or the property of the Person acquired) in such
Acquisition is used or useful in the same or a similar line of business as the
Borrower and its Subsidiaries were engaged in on the Closing Date (or any
reasonable extensions or expansions thereof), (c) in the case of an Acquisition
of the Capital Stock of another Person, the board of directors (or other
comparable governing body) of such other Person shall have duly approved such
Acquisition, (d) the Borrower shall have delivered to the Administrative Agent a
Pro Forma Compliance Certificate demonstrating that after giving effect to such
Acquisition on a Pro Forma Basis, the Loan Parties would be in compliance with
the financial covenants set forth in Article VI recomputed as of the end of the
period of the four Fiscal Quarters most recently ended for which the Borrower
has delivered financial statements pursuant to Section 5.1(a) or (b), (e) the
representations and warranties made by the Loan Parties in each Loan Document
shall be true and correct in all material respects at and as if made as of the
date of such Acquisition (after giving effect thereto) and (f) if such
transaction involves the purchase of an interest in a partnership between any
Loan Party as a general partner and entities unaffiliated with the

 

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Borrower as the other partners, such transaction shall be effected by having
such equity interest acquired by a corporate holding company directly or
indirectly wholly-owned by such Loan Party newly formed for the sole purpose of
effecting such transaction.

“Permitted Encumbrances” shall mean:

(a) Liens imposed by Law for taxes not yet due or which are being contested in
good faith by appropriate proceedings diligently conducted and with respect to
which adequate reserves are being maintained in accordance with GAAP;

(b) statutory Liens of landlords, carriers, warehousemen, mechanics, materialmen
and other Liens imposed by Law in the ordinary course of business for amounts
not yet due or which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves are being maintained in
accordance with GAAP;

(c) pledges and deposits made in the ordinary course of business in compliance
with workers’ compensation, unemployment insurance and other social security
Laws or regulations;

(d) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;

(e) judgment and attachment liens not giving rise to a Default or an Event of
Default or Liens created by or existing from any litigation or legal proceeding
that are currently being contested in good faith by appropriate proceedings and
with respect to which adequate reserves are being maintained in accordance with
GAAP;

(f) customary rights of set-off, revocation, refund or chargeback under deposit
agreements or under the Uniform Commercial Code or common law of banks or other
financial institutions where Borrower or any of its Subsidiaries maintains
deposits (other than deposits intended as cash collateral) in the ordinary
course of business; and

(g) easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by Law or arising in the ordinary course of business that
do not secure any monetary obligations and do not materially detract from the
value of the affected property or materially interfere with the ordinary conduct
of business of the Borrower and its Subsidiaries taken as a whole;

(h) provided, that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.

“Permitted Investments” shall mean:

(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States (or by any agency thereof
to the extent such obligations are backed by the full faith and credit of the
United States), in each case maturing within one year from the date of
acquisition thereof;

 

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(b) commercial paper having the highest rating, at the time of acquisition
thereof, of S&P or Moody’s and in either case maturing within six months from
the date of acquisition thereof;

(c) certificates of deposit, bankers’ acceptances and time deposits maturing
within 180 days of the date of acquisition thereof issued or guaranteed by or
placed with, and money market deposit accounts issued or offered by, any
domestic office of any commercial bank organized under the Laws of the United
States or any state thereof which has a combined capital and surplus and
undivided profits of not less than $500,000,000;

(d) fully collateralized repurchase agreements with a term of not more than 30
days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria described in clause (c) above;

(e) mutual funds investing solely in any one or more of the Permitted
Investments described in clauses (a) through (d) above;

(f) investments by an HMO Subsidiary or Insurance Subsidiary in all cases of the
types and in the amounts (i) that qualify as “Admitted Assets” (or the
substantive equivalent thereof under the laws of the relevant jurisdiction) as
determined by such HMO Subsidiary or Insurance Subsidiary’s Primary Regulator,
(ii) in the case of jurisdictions outside the United States, assets that are
permissible investments for such HMO Subsidiary or Insurance Subsidiary pursuant
to the regulatory regime administrated by the Primary Regulator and (iii) that
at the time such investment was made qualified as “Admitted Assets” (or the
substantive equivalent thereof under the laws of the relevant jurisdiction) as
determined by such HMO Subsidiary or Insurance Subsidiary’s Primary Regulator at
such time, but no longer qualify as “Admitted Assets” (or the substantive
equivalent thereof under the laws of the relevant jurisdiction), provided that
the aggregate value of Investments permitted to be outstanding at any one time
in reliance on this clause (iii) shall not exceed an amount equal to 10% of the
aggregate total fair market value of all “Admitted Assets” (or the substantive
equivalent thereof under the laws of the relevant jurisdiction) as determined by
such HMO Subsidiary or Insurance Subsidiary’s Primary Regulator, in each case
measured as of the most recently completed fiscal quarter for which financial
statements prepared in accordance with statutory accounting standards are
available; and

(g) investments made in accordance with the Borrower’s Investment Policy dated
as of September 2, 2014, which has been disclosed to the Agent.

“Permitted Subordinated Debt” shall mean any Indebtedness of the Borrower or any
Subsidiary evidenced by the Subordinated Debt Documents or otherwise on terms
and (including without limitation subordination provisions) acceptable to the
Administrative Agent and the Required Lenders.

“Person” shall mean any individual, partnership, firm, corporation, association,
joint venture, limited liability company, trust or other entity, or any
Governmental Authority.

“Plan” shall mean any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

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“Primary Regulator” shall mean the state regulator having primary jurisdiction
over the relevant HMO Subsidiary or Insurance Subsidiary.

“Pro Forma Basis” shall mean, for purposes of calculating compliance with
respect to any Asset Sale, Recovery Event, Acquisition, Restricted Payment or
incurrence of Indebtedness, or any other transaction subject to calculation on a
“Pro Forma Basis” as indicated herein, that such transaction shall be deemed to
have occurred as of the first day of the period of four Fiscal Quarters most
recently ended for which the Borrower has delivered financial statements
pursuant to Section 5.1(a) or (b). For purposes of any such calculation in
respect of any Acquisition, (a) any Indebtedness incurred or assumed in
connection with such transaction that is not retired in connection with such
transaction (i) shall be deemed to have been incurred as of the first day of the
applicable period and (ii) if such Indebtedness has a floating or formula rate,
shall have an implied rate of interest for the applicable period for purposes of
this definition determined by utilizing the rate which is or would be in effect
with respect to such Indebtedness as at the relevant date of determination,
(b) income statement items (whether positive or negative) and Capital
Expenditures attributable to the Person or property acquired shall be included
beginning as of the first day of the applicable period and (c) no adjustments
for unrealized synergies shall be included.

“Pro Forma Compliance Certificate” shall mean a certificate of a Responsible
Officer of the Borrower containing reasonably detailed calculations of the
financial covenants set forth in Article VI recomputed as of the end of the
period of the four fiscal quarters most recently ended for which the Borrower
has delivered financial statements pursuant to Section 5.1(a) or (b) after
giving effect to the applicable transaction on a Pro Forma Basis.

“Pro Rata Share” shall mean (a) with respect to any Commitment of any Lender at
any time, a percentage, the numerator of which shall be such Lender’s Commitment
(or if such Commitments have been terminated or expired or the Loans have been
declared to be due and payable, such Lender’s Revolving Credit Exposure), and
the denominator of which shall be the sum of such Commitments of all Lenders (or
if such Commitments have been terminated or expired or the Loans have been
declared to be due and payable, all Revolving Credit Exposure of all Lenders)
and (b) with respect to all Commitments of any Lender at any time, the numerator
of which shall be the sum of such Lender’s Revolving Commitment (or if such
Revolving Commitments have been terminated or expired or the Loans have been
declared to be due and payable, such Lender’s Revolving Credit Exposure) and the
denominator of which shall be the sum of all Lenders’ Revolving Commitments (or
if such Revolving Commitments have been terminated or expired or the Loans have
been declared to be due and payable, all Revolving Credit Exposure of all
Lenders funded under such Commitments).

“Qualified Cash” shall mean cash or Permitted Investments of the Borrower (a) in
excess of $50,000,000, (b) that does not appear (or would not be required to
appear) as “restricted” on a consolidated balance sheet of the Borrower and
(c) that is not subject to a Lien (other than Liens of the type described in
Sections 7.2(a) and (i)).

“Qualified ECP Guarantor” shall mean, in respect of any Swap Obligation, each
Loan Party that has total assets exceeding $10,000,000 at the time the relevant
Guaranty or grant of the relevant security interest becomes effective with
respect to such Swap Obligation or such other Loan Party as constitutes an
“eligible contract participant” under the Commodity Exchange Act or any
regulations promulgated thereunder and can cause another Person to qualify as an
“eligible contract participant” at such time by entering into a keepwell under
Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

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“Recipient” shall mean (a) the Administrative Agent, (b) any Lender and (c) any
Issuing Bank as applicable.

“Recovery Event” shall mean any loss of, damage to or destruction of, or any
condemnation or other taking for public use of, any property of the Borrower or
any Subsidiary.

“Regulation D” shall mean Regulation D of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time, and any
successor regulations.

“Regulation T” shall mean Regulation T of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time, and any
successor regulations.

“Regulation U” shall mean Regulation U of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time, and any
successor regulations.

“Regulation X” shall mean Regulation X of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time, and any
successor regulations.

“Regulation Y” shall mean Regulation Y of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time, and any
successor regulations.

“Related Parties” shall mean, with respect to any specified Person, such
Person’s Affiliates and the respective managers, administrators, trustees,
partners, directors, officers, employees, agents, advisors or other
representatives of such Person and such Person’s Affiliates.

“Release” shall mean any release, spill, emission, leaking, dumping, injection,
pouring, deposit, disposal, discharge, dispersal, leaching or migration into the
environment (including ambient air, surface water, groundwater, land surface or
subsurface strata) or within any building, structure, facility or fixture.

“Required Lenders” shall mean, at any time, Lenders holding more than 50% of the
aggregate outstanding Revolving Commitments at such time or if the Lenders have
no Commitments outstanding, then Lenders holding more than 50% of the Revolving
Credit Exposure; provided that to the extent that any Lender is a Defaulting
Lender, such Defaulting Lender and all of its Revolving Commitments and
Revolving Credit Exposure shall be excluded for purposes of determining Required
Lenders.

“Responsible Officer” shall mean, with respect to any Person, any of the
president, the chief executive officer, the chief operating officer, the chief
financial officer, the chief accounting officer, the chief legal officer, the
treasurer or a vice president of such Person or such other representative of
such Person as may be designated in writing by any one of the foregoing with the
consent of the Administrative Agent; and, with respect to the financial
covenants only, the chief financial officer, the chief accounting officer or the
treasurer of such Person.

“Restricted Payment” shall mean any dividend or other distribution (whether in
cash, securities or other property) with respect to any Capital Stock of any
Person, or any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, defeasance, acquisition, cancellation or termination of
any such Capital Stock or on account of any return of capital to such Person’s
stockholders, partners or members (or the

 

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equivalent Person thereof), or any option, warrant or other right to acquire any
such dividend or other distribution or payment.

“Revolving Commitment” shall mean, with respect to each Lender, the commitment
of such Lender to make Revolving Loans to the Borrower and to acquire
participations in Letters of Credit and Swingline Loans in an aggregate
principal amount not exceeding the amount set forth with respect to such Lender
on Schedule I, as such schedule may be amended pursuant to Section 2.23, or in
the case of a Person becoming a Lender after the Closing Date, the amount of the
assigned “Revolving Commitment” as provided in the Assignment and Acceptance
executed by such Person as an assignee, or the joinder executed by such Person,
in each case as such commitment may subsequently be increased or decreased
pursuant to terms hereof.

“Revolving Commitment Termination Date” shall mean the earliest of (i) June 12,
2020, (ii) the date on which the Revolving Commitments are terminated pursuant
to Section 2.8 and (iii) the date on which all amounts outstanding under this
Agreement have been declared or have automatically become due and payable
(whether by acceleration or otherwise).

“Revolving Credit Exposure” shall mean, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender’s Revolving Loans, LC
Exposure and Swingline Exposure.

“Revolving Loan” shall mean a loan made by a Lender (other than the Swingline
Lender) to the Borrower under its Revolving Commitment, which may either be a
Base Rate Loan or a Eurodollar Loan.

“S&P” shall mean McGraw Hill Financial, Inc. and any successor thereto.

“Sanctioned Country” shall mean, at any time, a country or territory that is, or
whose government is, the subject or target of any Sanctions.

“Sanctioned Person” shall mean, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by OFAC, the U.S.
Department of State, the United Nations Security Council, the European Union or
any EU member state, (b) any Person located, organized or resident in a
Sanctioned Country or (c) any Person controlled by any such Person.

“Sanctions” shall mean economic or financial sanctions or trade embargoes
administered or enforced from time to time by (a) the U.S. government, including
those administered by OFAC or the U.S. Department of State or (b) the United
Nations Security Council, the European Union or Her Majesty’s Treasury of the
United Kingdom.

“SAP” shall mean, (i) with respect to each HMO Subsidiary, the statutory
accounting principles and procedures prescribed or permitted by applicable HMO
Regulations for such HMO Subsidiary, applied on a consistent basis as
interpreted by the state in which the applicable HMO Subsidiary operates and
(ii) with respect to each Insurance Subsidiary, the statutory accounting
principles and procedures prescribed or permitted by the applicable Insurance
Regulations for such Insurance Subsidiary, applied on a consistent basis, as
interpreted by the state in which the applicable Insurance Subsidiary operates.

 

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“SEC” shall mean the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

“Social Security Act” shall mean the Social Security Act of 1965 as set forth in
Title 42 of the United States Code, as amended, and any successor statute
thereto, as interpreted by the rules and regulations issued thereunder, in each
case as in effect from time to time. References of section of the Social
Security Act shall be construed to refer to any successor sections.

“Solvent” shall mean, with respect to any Person on a particular date, that on
such date (a) the fair value of the property of such Person is greater than the
total amount of liabilities, including subordinated and contingent liabilities,
of such Person; (b) the present fair saleable value of the assets of such Person
is not less than the amount that will be required to pay the probable liability
of such Person on its debts and liabilities, including subordinated and
contingent liabilities as they become absolute and matured; (c) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person’s ability to pay as such debts and liabilities mature;
(d) such Person is not engaged in a business or transaction, and is not about to
engage in a business or transaction, for which such Person’s property would
constitute an unreasonably small capital; (e) such Person is able to pay its
debts and other liabilities, contingent obligations and other commitments as
they mature in the ordinary course of business and (f) such Person does not
intend, in any transaction, to hinder, delay or defraud either present or future
creditors or any other person to which such Person is or will become, through
such transaction, indebted. The amount of contingent liabilities (such as
litigation, guaranties and pension plan liabilities) at any time shall be
computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that would reasonably be expected to
become an actual or matured liability.

“Specified Loan Party” shall mean each Loan Party that is, at the time on which
the relevant Guarantee or grant of the relevant security interest under the Loan
Documents by such Loan Party becomes effective with respect to a Swap
Obligation, a corporation, partnership, proprietorship, organization, trust or
other entity that would not be an “eligible contract participant” under the
Commodity Exchange Act at such time but for the effect of Section 10.8.

“Statutory Net Worth” shall mean, with respect to any HMO Subsidiary or any
Insurance Subsidiary, as of the end of any fiscal year, the difference between
(a) total admitted assets and (b) total liabilities, in each case as calculated
according to the applicable state’s interpretation of SAP in the applicable
jurisdiction as most recently reported to the applicable jurisdiction for such
fiscal year.

“Subordinated Debt Documents” shall mean all indentures, agreements, notes,
guaranties and other material agreements governing or evidencing any Permitted
Subordinated Debt and all other material documents relating thereto.

“Subsidiary” shall mean, with respect to any Person (the “parent”), any
corporation, partnership, joint venture, limited liability company, association
or other entity the accounts of which would be consolidated with those of the
parent in the parent’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, (a) of which
securities or other ownership interests representing more than 50% of the equity
or more than 50% of the ordinary voting power, or in the case of a partnership,
more than 50% of the general partnership interests are, as of such date, owned,
controlled or held, or (b) that is, as of such date, otherwise controlled, by
the parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent. Unless otherwise indicated, all references to
“Subsidiary” hereunder shall mean a Subsidiary of the Borrower.

 

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“SunTrust” shall mean SunTrust Bank and its successors.

“Swap Obligations” shall mean with respect to any Guarantor any obligation to
pay or perform under any agreement, contract or transaction that constitutes a
“swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

“Swingline Commitment” shall mean the commitment of the Swingline Lender to make
Swingline Loans in an aggregate principal amount at any time outstanding not to
exceed $15,000,000.

“Swingline Exposure” shall mean, with respect to each Lender, the principal
amount of the Swingline Loans in which such Lender is legally obligated either
to make a Base Rate Loan or to purchase a participation in accordance with
Section 2.4, which shall equal such Lender’s Pro Rata Share of all outstanding
Swingline Loans.

“Swingline Lender” shall mean SunTrust Bank in its capacity as provider of
Swingline Loans, or any successor swingline lender hereunder.

“Swingline Loan” shall mean a loan made to the Borrower by the Swingline Lender
under the Swingline Commitment.

“Synthetic Lease” shall mean a lease transaction under which the parties intend
that (i) the lease will be treated as an “operating lease” by the lessee
pursuant to Accounting Standards Codification Sections 840-10 and 840-20, as
amended and (ii) the lessee will be entitled to various tax and other benefits
ordinarily available to owners (as opposed to lessees) of like property.

“Synthetic Lease Obligations” shall mean, with respect to any Person, the sum of
(i) all remaining rental obligations of such Person as lessee under Synthetic
Leases which are attributable to principal and, without duplication, (ii) all
rental and purchase price payment obligations of such Person under such
Synthetic Leases assuming such Person exercises the option to purchase the lease
property at the end of the lease term.

“Taxes” shall mean all present or future taxes, levies, imposts, duties,
deductions, withholdings (including backup withholding), assessments, fees or
other charges imposed by any Governmental Authority, including any interest,
additions to tax, or penalties applicable thereto.

“Trading with the Enemy Act” shall mean the Trading with the Enemy Act of the
United States of America (50 U.S.C. App. §§ 1 et seq.), as amended and in effect
from time to time.

“TRICARE” shall mean the United States Department of Defense health care
programs for active duty military, active duty service families, retirees and
their families and other beneficiaries, including TRICARE Prime and TRICARE
Standard, and any successor or predecessor thereof.

“Type”, when used in reference to a Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBOR or the Base Rate.

“United States” or “U.S.” shall mean the United States of America.

 

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“U.S. Person” shall mean any Person that is a “United States person” as defined
in Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” shall have the meaning set forth in
Section 2.20(g).

“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.

“Withholding Agent” shall mean any Loan Party and the Administrative Agent.

Section 1.2. Classifications of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g. a “Revolving
Loan”) or by Type (e.g. a “Eurodollar Loan” or “Base Rate Loan”) or by Class and
Type (e.g. “Revolving Eurodollar Loan”). Borrowings also may be classified and
referred to by Class (e.g. “Revolving Borrowing”) or by Type (e.g. “Eurodollar
Borrowing”) or by Class and Type (e.g. “Revolving Eurodollar Borrowing”).

Section 1.3. Accounting Terms and Determination.

(a) Unless otherwise defined or specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered hereunder shall be
prepared, in accordance with GAAP as in effect from time to time, applied on a
basis consistent with the most recent audited consolidated financial statement
of the Borrower delivered pursuant to Section 5.1(a); provided, that if the
Borrower notifies the Administrative Agent that the Borrower wishes to amend any
covenant in Article VI to eliminate the effect of any change in GAAP on the
operation of such covenant (or if the Administrative Agent notifies the Borrower
that the Required Lenders wish to amend Article VI for such purpose), then the
Borrower’s compliance with such covenant shall be determined on the basis of
GAAP in effect immediately before the relevant change in GAAP became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Lenders.

(b) Notwithstanding any other provision contained herein, all terms of an
accounting or financial nature used herein shall be construed, and all
computations of amounts and ratios referred to herein shall be made, without
giving effect to any election under Accounting Standards Codification
Section 825-10 (or any other Financial Accounting Standard having a similar
result or effect) to value any Indebtedness or other liabilities of any Loan
Party or any Subsidiary of any Loan Party at “fair value”, as defined therein.
Without limiting the foregoing, leases shall continue to be classified and
accounted for on a basis consistent with that reflected in the Audited Financial
Statements for all purposes of this Agreement, notwithstanding any change in
GAAP relating thereto, unless the parties hereto shall enter into a mutually
acceptable amendment addressing such changes, as provided for above.

(c) Notwithstanding the above, the parties hereto acknowledge and agree that all
calculations of the financial covenants in Article VI (including for purposes of
determining the Applicable Rate and any transaction that by the terms of this
Agreement requires that any financial covenant contained in Article VI be
calculated on a Pro Forma Basis) shall be made

 

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on a Pro Forma Basis with respect to any Asset Sale, Recovery Event, an increase
in the Revolving Commitments and/or establishment of an Incremental Term Loan,
or Acquisition occurring during such period.

Section 1.4. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”. In
the computation of periods of time from a specified date to a later specified
date, the word “from” means “from and including” and the word “to” means “to but
excluding”. Unless the context requires otherwise (i) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as it was
originally executed or as it may from time to time be amended, restated,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (ii) any reference
herein to any Person shall be construed to include such Person’s successors and
permitted assigns, (iii) the words “hereof”, “herein” and “hereunder” and words
of similar import shall be construed to refer to this Agreement as a whole and
not to any particular provision hereof, (iv) all references to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles,
Sections, Exhibits and Schedules to this Agreement and (v) all references to a
specific time shall be construed to refer to the time in the city and state of
the Administrative Agent’s principal office, unless otherwise indicated.

Section 1.5. Letter of Credit Amounts. Unless otherwise specified herein, the
amount of a Letter of Credit at any time shall be deemed to be the stated amount
of such Letter of Credit in effect at such time; provided, however, that with
respect to any Letter of Credit that, by its terms or the terms of any Issuer
Document related thereto, provides for one or more automatic increases in the
stated amount thereof, the amount of such Letter of Credit shall be deemed to be
the maximum stated amount of such Letter of Credit after giving effect to all
such increases, whether or not such maximum stated amount is in effect at such
time.

Section 1.6. Times of Day. Unless otherwise specified, all references herein to
times of day shall be references to Eastern time (daylight or standard, as
applicable).

ARTICLE II

AMOUNT AND TERMS OF THE COMMITMENTS

Section 2.1. General Description of Facilities. Subject to and upon the terms
and conditions herein set forth, (i) the Lenders hereby establish in favor of
the Borrower a revolving credit facility pursuant to which each Lender severally
agrees (to the extent of such Lender’s Revolving Commitment) to make Revolving
Loans to the Borrower in accordance with Section 2.2, (ii) the Issuing Bank may
issue Letters of Credit in accordance with Section 2.22, (iii) the Swingline
Lender may make Swingline Loans in accordance with Section 2.4 and (iv) each
Lender agrees to purchase a participation interest in the Letters of Credit and
the Swingline

 

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Loans pursuant to the terms and conditions hereof; provided, that in no event
shall the aggregate principal amount of all outstanding Revolving Loans,
Swingline Loans and outstanding LC Exposure exceed the Aggregate Revolving
Commitments in effect from time to time.

Section 2.2. Revolving Loans. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make Revolving Loans, ratably in
proportion to its Pro Rata Share of the Revolving Commitments, to the Borrower,
from time to time during the Availability Period, in an aggregate principal
amount outstanding at any time that will not result in (a) such Lender’s
Revolving Credit Exposure exceeding such Lender’s Revolving Commitment or
(b) the aggregate Revolving Credit Exposures of all Lenders exceeding the
Aggregate Revolving Commitments. During the Availability Period, the Borrower
shall be entitled to borrow, prepay and reborrow Revolving Loans in accordance
with the terms and conditions of this Agreement; provided, that the Borrower may
not borrow or reborrow should there exist a Default or Event of Default.

Section 2.3. Procedure for Revolving Borrowings. The Borrower shall give the
Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) of each Revolving Borrowing substantially in the form of Exhibit 2.3 (a
“Notice of Revolving Borrowing”) (x) prior to 11:00 a.m. on the requested date
of each Base Rate Borrowing and (y) prior to 11:00 a.m. three (3) Business Days
prior to the requested date of each Eurodollar Borrowing. Each Notice of
Revolving Borrowing shall be irrevocable and shall specify: (i) the aggregate
principal amount of such Borrowing, (ii) the date of such Borrowing (which shall
be a Business Day), (iii) the Type of such Revolving Loan comprising such
Borrowing and (iv) in the case of a Eurodollar Borrowing, the duration of the
initial Interest Period applicable thereto (subject to the provisions of the
definition of Interest Period). Each Revolving Borrowing shall consist of Base
Rate Loans or Eurodollar Loans or a combination thereof, as the Borrower may
request. The aggregate principal amount of each Eurodollar Borrowing shall be
not less than $5,000,000 or a larger multiple of $1,000,000, and the aggregate
principal amount of each Base Rate Borrowing shall not be less than $1,000,000
or a larger multiple of $100,000; provided, that Base Rate Loans made pursuant
to Section 2.4 or Section 2.22(d) may be made in lesser amounts as provided
therein. At no time shall the total number of Eurodollar Borrowings outstanding
at any time exceed six. Promptly following the receipt of a Notice of Revolving
Borrowing in accordance herewith, the Administrative Agent shall advise each
Lender of the details thereof and the amount of such Lender’s Revolving Loan to
be made as part of the requested Revolving Borrowing.

Section 2.4. Swingline Commitment.

(a) Subject to the terms and conditions set forth herein, the Swingline Lender
may, in its sole discretion, make Swingline Loans to the Borrower, from time to
time during the Availability Period, in an aggregate principal amount
outstanding at any time not to exceed the lesser of (i) the Swingline Commitment
then in effect and (ii) the difference between the Aggregate Revolving
Commitments and the aggregate Revolving Credit Exposures of all Lenders;
provided, that the Swingline Lender shall not be required to make a Swingline
Loan to refinance an outstanding Swingline Loan. The Borrower shall be entitled
to borrow, repay and reborrow Swingline Loans in accordance with the terms and
conditions of this Agreement.

(b) The Borrower shall give the Administrative Agent written notice (or
telephonic notice promptly confirmed in writing) of each Swingline Borrowing
substantially in the form of

 

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Exhibit 2.4 attached hereto (“Notice of Swingline Borrowing”) prior to 10:00
a.m. on the requested date of each Swingline Borrowing. Each Notice of Swingline
Borrowing shall be irrevocable and shall specify: (i) the principal amount of
such Swingline Loan, (ii) the date of such Swingline Loan (which shall be a
Business Day) and (iii) the account of the Borrower to which the proceeds of
such Swingline Loan should be credited. The Administrative Agent will promptly
advise the Swingline Lender of each Notice of Swingline Borrowing. The aggregate
principal amount of each Swingline Loan shall not be less than $100,000 or a
larger multiple of $50,000, or such other minimum amounts agreed to by the
Swingline Lender and the Borrower. The Swingline Lender will make the proceeds
of each Swingline Loan available to the Borrower in Dollars in immediately
available funds at the account specified by the Borrower in the applicable
Notice of Swingline Borrowing not later than 1:00 p.m. on the requested date of
such Swingline Loan.

(c) The Swingline Lender, at any time and from time to time in its sole
discretion, may, on behalf of the Borrower (which hereby irrevocably authorizes
and directs the Swingline Lender to act on its behalf), give a Notice of
Revolving Borrowing to the Administrative Agent requesting the Lenders
(including the Swingline Lender) to make Base Rate Loans in an amount equal to
the unpaid principal amount of any Swingline Loan. Each Lender will make the
proceeds of its Base Rate Loan included in such Borrowing available to the
Administrative Agent for the account of the Swingline Lender in accordance with
Section 2.6, and such proceeds will be used solely for the repayment of such
Swingline Loan.

(d) If for any reason a Base Rate Borrowing may not be (as determined in the
sole discretion of the Administrative Agent), or is not, made in accordance with
the foregoing provisions, then each Lender (other than the Swingline Lender)
shall purchase an undivided participating interest in such Swingline Loan in an
amount equal to its Pro Rata Share thereof on the date that such Base Rate
Borrowing should have occurred. On the date of such required purchase, each
Lender shall promptly transfer, in immediately available funds, the amount of
its participating interest to the Administrative Agent for the account of the
Swingline Lender.

(e) Each Lender’s obligation to make a Base Rate Loan pursuant to Section 2.4(c)
or to purchase the participating interests pursuant to Section 2.4(d) shall be
absolute and unconditional and shall not be affected by any circumstance,
including without limitation (i) any setoff, counterclaim, recoupment, defense
or other right that such Lender or any other Person may have or claim against
the Swingline Lender, the Borrower or any other Person for any reason
whatsoever, (ii) the existence of a Default or an Event of Default or the
termination of any Lender’s Revolving Commitment, (iii) the existence (or
alleged existence) of any event or condition which has had or could reasonably
be expected to have a Material Adverse Effect, (iv) any breach of this Agreement
or any other Loan Document by any Loan Party, the Administrative Agent or any
Lender or (v) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing. If such amount is not in fact made
available to the Swingline Lender by any Lender, the Swingline Lender shall be
entitled to recover such amount on demand from such Lender, together with
accrued interest thereon for each day from the date of demand thereof (i) at the
Federal Funds Rate until the second Business Day after such demand and (ii) at
the Base Rate at all times thereafter. Until such time as such Lender makes its
required payment, the Swingline Lender shall be deemed to continue to have
outstanding Swingline Loans in the amount of the unpaid participation for all
purposes of the Loan Documents. In addition, such Lender shall be deemed to have
assigned

 

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any and all payments made of principal and interest on its Loans and any other
amounts due to it hereunder, to the Swingline Lender to fund the amount of such
Lender’s participation interest in such Swingline Loans that such Lender failed
to fund pursuant to this Section 2.4, until such amount has been purchased in
full.

Section 2.5. Reserved.

Section 2.6. Funding of Borrowings.

(a) Each Lender will make available each Revolving Loan to be made by it
hereunder on the proposed date thereof by wire transfer in immediately available
funds by 2:00 p.m. to the Administrative Agent at the Payment Office; provided,
that the Swingline Loans will be made as set forth in Section 2.4. The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts that it receives, in like funds by the close of business
on such proposed date, to an account maintained by the Borrower with the
Administrative Agent or at the Borrower’s option, by effecting a wire transfer
of such amounts to an account designated by the Borrower to the Administrative
Agent.

(b) Unless the Administrative Agent shall have been notified by any Lender prior
to 1:00 p.m. on the date of a Borrowing in which such Lender is to participate
that such Lender will not make available to the Administrative Agent such
Lender’s share of such Borrowing, the Administrative Agent may assume that such
Lender has made such amount available to the Administrative Agent on such date,
and the Administrative Agent, in reliance on such assumption, may make available
to the Borrower on such date a corresponding amount. If such corresponding
amount is not in fact made available to the Administrative Agent by such Lender
on the date of such Borrowing, the Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest at the Federal Funds Rate until the second Business Day after such
demand and thereafter at the Base Rate. If such Lender does not pay such
corresponding amount forthwith upon the Administrative Agent’s demand therefor,
the Administrative Agent shall promptly notify the Borrower, and the Borrower
shall immediately pay such corresponding amount to the Administrative Agent
together with interest at the rate specified for such Borrowing. Nothing in this
subsection shall be deemed to relieve any Lender from its obligation to fund its
Pro Rata Share of any Borrowing hereunder or to prejudice any rights which the
Borrower may have against any Lender as a result of any default by such Lender
hereunder.

(c) All Revolving Borrowings shall be made by the Lenders on the basis of their
respective Pro Rata Shares. No Lender shall be responsible for any default by
any other Lender in its obligations hereunder, and each Lender shall be
obligated to make its Loans provided to be made by it hereunder, regardless of
the failure of any other Lender to make its Loans hereunder.

Section 2.7. Interest Elections.

(a) Each Borrowing initially shall be of the Type specified in the applicable
Notice of Borrowing. Thereafter, the Borrower may elect to convert such
Borrowing into a different Type or to continue such Borrowing, all as provided
in this Section 2.7. The Borrower may elect different options with respect to
different portions of the affected Borrowing, in which

 

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case each such portion shall be allocated ratably among the Lenders holding
Loans comprising such Borrowing, and the Loans comprising each such portion
shall be considered a separate Borrowing.

(b) To make an election pursuant to this Section 2.7, the Borrower shall give
the Administrative Agent prior written notice (or telephonic notice promptly
confirmed in writing) of each Borrowing that is to be converted or continued, as
the case may be, substantially in the form of Exhibit 2.7 attached hereto (a
“Notice of Conversion/Continuation”) (x) prior to 10:00 a.m. one (1) Business
Day prior to the requested date of a conversion into a Base Rate Borrowing and
(y) prior to 11:00 a.m. three (3) Business Days prior to a continuation of or
conversion into a Eurodollar Borrowing. Each such Notice of
Conversion/Continuation shall be irrevocable and shall specify (i) the Borrowing
to which such Notice of Conversion/Continuation applies and if different options
are being elected with respect to different portions thereof, the portions
thereof that are to be allocated to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (iii) and (iv) shall be
specified for each resulting Borrowing); (ii) the effective date of the election
made pursuant to such Notice of Conversion/Continuation, which shall be a
Business Day; (iii) whether the resulting Borrowing is to be a Base Rate
Borrowing or a Eurodollar Borrowing; and (iv) if the resulting Borrowing is to
be a Eurodollar Borrowing, the Interest Period applicable thereto after giving
effect to such election, which shall be a period contemplated by the definition
of “Interest Period”. If any such Notice of Conversion/Continuation requests a
Eurodollar Borrowing but does not specify an Interest Period, the Borrower shall
be deemed to have selected an Interest Period of one month. The principal amount
of any resulting Borrowing shall satisfy the minimum borrowing amount for
Eurodollar Borrowings and Base Rate Borrowings set forth in Section 2.3.

(c) If, on the expiration of any Interest Period in respect of any Eurodollar
Borrowing, the Borrower shall have failed to deliver a Notice of
Conversion/Continuation, then, unless such Borrowing is repaid as provided
herein, the Borrower shall be deemed to have elected to convert such Borrowing
to a Base Rate Borrowing. No Borrowing may be converted into, or continued as, a
Eurodollar Borrowing if a Default or an Event of Default exists, unless the
Administrative Agent and each of the Lenders shall have otherwise consented in
writing. No conversion of any Eurodollar Loans shall be permitted except on the
last day of the Interest Period in respect thereof.

(d) Upon receipt of any Notice of Conversion/Continuation, the Administrative
Agent shall promptly notify each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.

Section 2.8. Optional Reduction and Termination of Commitments.

(a) Unless previously terminated, all Revolving Commitments, Swingline
Commitments and LC Commitments shall terminate on the Revolving Commitment
Termination Date.

(b) Upon at least three (3) Business Days’ prior written notice (or telephonic
notice promptly confirmed in writing) to the Administrative Agent (which notice
shall be irrevocable),

 

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the Borrower may reduce the Aggregate Revolving Commitments in part or terminate
the Aggregate Revolving Commitments in whole; provided, that (i) any partial
reduction shall apply to reduce proportionately and permanently the Revolving
Commitment of each Lender, (ii) any partial reduction pursuant to this
Section 2.8 shall be in an amount of at least $5,000,000 and any larger multiple
of $1,000,000, and (iii) no such reduction shall be permitted which would reduce
the Aggregate Revolving Commitments to an amount less than the aggregate
outstanding Revolving Credit Exposure of all Lenders. Any such reduction in the
Aggregate Revolving Commitments below the principal amount of the Swingline
Commitment and the LC Commitment shall result in a dollar-for-dollar reduction
in the Swingline Commitment and the LC Commitment.

Section 2.9. Repayment of Loans.

The outstanding principal amount of all Revolving Loans and Swingline Loans
shall be due and payable (together with accrued and unpaid interest thereon) on
the Revolving Commitment Termination Date.

Section 2.10. Evidence of Indebtedness.

(a) Each Lender shall maintain in accordance with its usual practice appropriate
records evidencing the Indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender from time to time, including the amounts of
principal and interest payable thereon and paid to such Lender from time to time
under this Agreement. The Administrative Agent shall maintain appropriate
records in which shall be recorded (i) the Revolving Commitment of each Lender,
(ii) the amount of each Loan made hereunder by each Lender, the Class and Type
thereof and, in the case of each Eurodollar Loan, the Interest Period applicable
thereto, (iii) the date of each continuation thereof pursuant to Section 2.7,
(iv) the date of each conversion of all or a portion thereof to another Type
pursuant to Section 2.7, (v) the date and amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder in respect of such Loans and (vi) both the date and amount of any sum
received by the Administrative Agent hereunder from the Borrower in respect of
the Loans and each Lender’s Pro Rata Share thereof. The entries made in such
records shall be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, that the failure or
delay of any Lender or the Administrative Agent in maintaining or making entries
into any such record or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Loans (both principal and unpaid accrued
interest) of such Lender in accordance with the terms of this Agreement.

(b) This Agreement evidences the obligation of the Borrower to repay the Loans
and is being executed as a “noteless” credit agreement. However, at the request
of any Lender (including the Swingline Lender) at any time, the Borrower agrees
that it will prepare, execute and deliver to such Lender a promissory note
payable to the order of such Lender in the form of Exhibit 2.10 (a “Note”).
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment permitted hereunder) be
represented by one or more promissory notes in such form payable to the order of
the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).

 

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Section 2.11. Optional Prepayments. The Borrower shall have the right at any
time and from time to time to prepay any Borrowing, in whole or in part, without
premium or penalty, by giving irrevocable written notice (or telephonic notice
promptly confirmed in writing) to the Administrative Agent no later than (i) in
the case of prepayment of any Eurodollar Borrowing, 11:00 a.m. not less than
three (3) Business Days prior to any such prepayment, (ii) in the case of any
prepayment of any Base Rate Borrowing, 11:00 a.m. not less than one Business Day
prior to the date of such prepayment, and (iii) in the case of Swingline
Borrowings, 11:00 a.m. on the date of such prepayment. Each such notice shall be
irrevocable and shall specify the proposed date of such prepayment and the
principal amount of each Borrowing or portion thereof to be prepaid. Upon
receipt of any such notice, the Administrative Agent shall promptly notify each
affected Lender of the contents thereof and of such Lender’s Pro Rata Share of
any such prepayment. If such notice is given, the aggregate amount specified in
such notice shall be due and payable on the date designated in such notice,
together with accrued interest to such date on the amount so prepaid in
accordance with Section 2.13(d); provided, that if a Eurodollar Borrowing is
prepaid on a date other than the last day of an Interest Period applicable
thereto, the Borrower shall also pay all amounts required pursuant to
Section 2.19. Each partial prepayment of any Loan (other than a Swingline Loan)
shall be in an amount that would be permitted in the case of an advance of a
Revolving Borrowing of the same Type pursuant to Section 2.3 or in the case of a
Swingline Loan pursuant to Section 2.4. Each prepayment of a Borrowing shall be
applied ratably to the Loans comprising such Borrowing.

Section 2.12. Mandatory Prepayments. If at any time the Revolving Credit
Exposure of all Lenders exceeds the Aggregate Revolving Commitments, as reduced
pursuant to Section 2.8 or otherwise, the Borrower shall immediately repay
Swingline Loans and Revolving Loans in an amount equal to such excess, together
with all accrued and unpaid interest on such excess amount and any amounts due
under Section 2.19. Each prepayment shall be applied first to the Swingline
Loans to the full extent thereof, second to the Base Rate Loans to the full
extent thereof, and finally to Eurodollar Loans to the full extent thereof. If
after giving effect to prepayment of all Swingline Loans and Revolving Loans,
the Revolving Credit Exposure of all Lenders exceeds the Aggregate Revolving
Commitments, the Borrower shall Cash Collateralize its reimbursement obligations
with respect to all Letters of Credit in an amount equal to such excess plus any
accrued and unpaid fees thereon.

Section 2.13. Interest on Loans.

(a) The Borrower shall pay interest on (i) each Base Rate Loan at the Base Rate
plus the Applicable Margin in effect from time to time and (ii) each Eurodollar
Loan at the Adjusted LIBOR for the applicable Interest Period in effect for such
Loan plus the Applicable Margin in effect from time to time.

(b) The Borrower shall pay interest on each Swingline Loan at the Base Rate plus
the Applicable Margin in effect from time to time.

(i) Notwithstanding clauses (a) and (b) above, if an Event of Default has
occurred and is continuing, at the option of the Required Lenders, or
automatically in the case of an Event of Default under Sections 8.1(a), (h) or
(i), the Borrower shall pay interest (“Default Interest”) with respect to all
Eurodollar Loans at the rate per annum equal to two percent (2.00%) above the
otherwise applicable interest rate for such Eurodollar Loans for the
then-current Interest Period until the last day of such Interest

 

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Period, and thereafter, and with respect to all Base Rate Loans and all other
Obligations hereunder (other than Loans), at the rate per annum equal to two
percent (2.00%) above the otherwise applicable interest rate for Base Rate
Loans.

(ii) Interest on the principal amount of all Loans shall accrue from and
including the date such Loans are made to but excluding the date of any
repayment thereof. Interest on all outstanding Base Rate Loans and Swingline
Loans shall be payable quarterly in arrears on the last day of each March, June,
September and December and on the Revolving Commitment Termination Date.
Interest on all outstanding Eurodollar Loans shall be payable on the last day of
each Interest Period applicable thereto, and, in the case of any Eurodollar
Loans having an Interest Period in excess of three months, on each day which
occurs every three months after the initial date of such Interest Period, and on
the Revolving Commitment Termination Date. Interest on any Loan which is
converted into a Loan of another Type or which is repaid or prepaid shall be
payable on the date of such conversion or on the date of any such repayment or
prepayment (on the amount repaid or prepaid) thereof. All Default Interest shall
be payable on demand.

(iii) The Administrative Agent shall determine each interest rate applicable to
the Loans hereunder and shall promptly notify the Borrower and the Lenders of
such rate in writing (or by telephone, promptly confirmed in writing). Any such
determination shall be conclusive and binding for all purposes, absent manifest
error.

Section 2.14. Fees.

(a) The Borrower shall pay to the Administrative Agent for its own account fees
in the amounts and at the times previously agreed upon in writing by the
Borrower and the Administrative Agent.

(b) The Borrower agrees to pay to the Administrative Agent for the account of
each Lender a commitment fee (the “Commitment Fee”), which shall accrue at the
Applicable Margin on the daily amount of the unused Revolving Commitment of such
Lender during the Availability Period. For purposes of computing the Commitment
Fee with respect to the Revolving Commitments, the Revolving Commitment of each
Lender shall be deemed used to the extent of the outstanding Revolving Loans and
LC Exposure, but not Swingline Exposure, of such Lender.

(c) The Borrower agrees to pay (i) to the Administrative Agent, for the account
of each Lender, a letter of credit fee with respect to its participation in each
Letter of Credit (the “Letter of Credit Fee”), which shall accrue at a rate per
annum equal to the Applicable Margin then in effect on the average daily amount
of such Lender’s LC Exposure attributable to such Letter of Credit during the
period from and including the date of issuance of such Letter of Credit to but
excluding the date on which such Letter of Credit expires or is drawn in full
(such Letter of Credit Fee shall continue to accrue on any LC Exposure that
remains outstanding after the Revolving Commitment Termination Date) and (ii) to
the Issuing Bank for its own account a fronting fee, which shall accrue at the
rate set forth in the Fee Letter on the average daily amount of the LC Exposure
during the Availability Period (or until the date that such Letter of Credit is
irrevocably cancelled, whichever is later), as well as the Issuing Bank’s
standard fees

 

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with respect to issuance, amendment, renewal or extension of any Letter of
Credit or processing of drawings thereunder. Notwithstanding the foregoing, if
the Default Interest has been imposed pursuant to Section 2.13(c), the rate per
annum used to calculate the letter of credit fee pursuant to clause (i) above
shall automatically be increased by two percent (2.00%).

(d) The Borrower shall pay on the Closing Date to the Administrative Agent and
its affiliates all fees in the Fee Letter that are due and payable on the
Closing Date. The Borrower shall pay on the Closing Date to the Lenders all
upfront fees previously agreed in writing.

(e) Accrued fees under paragraphs (b) and (c) above shall be payable quarterly
in arrears on the last day of each March, June, September and December,
commencing on the first such date to occur after the Closing Date and on the
Revolving Commitment Termination Date (and if later, the date the Loans and LC
Exposure shall be repaid in their entirety); provided further, that any such
fees accruing after the Revolving Commitment Termination Date shall be payable
on demand.

(f) Anything herein to the contrary notwithstanding, during such period as a
Lender is a Defaulting Lender, such Defaulting Lender will not be entitled to
Commitment Fees during such period pursuant to Section 2.14(b) or Letter of
Credit Fees accruing during such period pursuant to Section 2.14(c) (without
prejudice to the rights of the Lenders other than Defaulting Lenders in respect
of such fees), provided that (a) to the extent that a portion of the LC Exposure
of such Defaulting Lender is reallocated to the Non-Defaulting Lenders pursuant
to Section 2.26, such fees that would have accrued for the benefit of such
Defaulting Lender will instead accrue for the benefit of and be payable to such
Non-Defaulting Lenders, pro rata in accordance with their respective Revolving
Commitments and (b) to the extent any portion of such LC Exposure cannot be so
reallocated, such fees will instead accrue for the benefit of and be payable to
the Issuing Bank. The pro rata payment provisions of Section 2.21 shall
automatically be deemed adjusted to reflect the provisions of this subsection
(f).

Section 2.15. Computation of Interest and Fees.

All computations of interest and fees hereunder shall be computed on the basis
of a year of 360 days and paid for the actual number of days elapsed (including
the first day but excluding the last day). Each determination by the
Administrative Agent of an interest rate or fee hereunder shall be made in good
faith and, except for manifest error, shall be final, conclusive and binding for
all purposes.

Section 2.16. Inability to Determine Interest Rates. If prior to the
commencement of any Interest Period for any Eurodollar Borrowing,

(a) the Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower absent manifest error) that, by reason
of circumstances affecting the relevant interbank market, adequate means do not
exist for ascertaining the Adjusted LIBOR for such Interest Period, or

(b) the Administrative Agent shall have received notice from the Required
Lenders that the Adjusted LIBOR does not adequately and fairly reflect the cost
to such Lenders (or

 

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Lender, as the case may be) of making, funding or maintaining their (or its, as
the case may be) Eurodollar Loans for such Interest Period,

the Administrative Agent shall give written notice (or telephonic notice,
promptly confirmed in writing) to the Borrower and to the Lenders as soon as
practicable thereafter. Until the Administrative Agent shall notify the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, (A) the obligations of the Lenders to make Eurodollar Loans or to
continue or convert outstanding Loans as or into Eurodollar Loans shall be
suspended and (B) all such affected Loans shall be converted into Base Rate
Loans on the last day of the then current Interest Period applicable thereto
unless the Borrower prepays such Loans in accordance with this Agreement. Unless
the Borrower notifies the Administrative Agent at least one Business Day before
the date of any Eurodollar Borrowing for which a Notice of Revolving Borrowing
or Notice of Conversion/Continuation has previously been given that it elects
not to borrow on such date, then such Revolving Borrowing shall be made as a
Base Rate Borrowing.

Section 2.17. Illegality. If any Change in Law shall make it unlawful or
impossible for any Lender to make, maintain or fund any Eurodollar Loan and such
Lender shall so notify the Administrative Agent, the Administrative Agent shall
promptly give notice thereof to the Borrower and the other Lenders, whereupon
until such Lender notifies the Administrative Agent and the Borrower that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Lender to make Eurodollar Loans, or to continue or convert outstanding
Loans as or into Eurodollar Loans, shall be suspended. In the case of the making
of a Eurodollar Borrowing, such Lender’s Revolving Loan shall be made as a Base
Rate Loan as part of the same Revolving Borrowing and, with respect to
Eurodollar Loans, for the same Interest Period, and if the affected Eurodollar
Loan is then outstanding, such Loan shall be converted to a Base Rate Loan
immediately, and, in the case of a Loan that is a Eurodollar Loan, either (i) on
the last day of the then current Interest Period applicable to such Eurodollar
Loan if such Lender may lawfully continue to maintain such Loan to such date or
(ii) immediately if such Lender shall determine that it may not lawfully
continue to maintain such Eurodollar Loan to such date. Notwithstanding the
foregoing, the affected Lender shall, prior to giving such notice to the
Administrative Agent, designate a different Applicable Lending Office if such
designation would avoid the need for giving such notice and if such designation
would not otherwise be disadvantageous to such Lender in the good faith exercise
of its discretion.

Section 2.18. Increased Costs.

(a) If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement that is not otherwise included in
the determination of the Adjusted LIBOR hereunder against assets of, deposits
with or for the account of, or credit extended or participated in by, any Lender
(except any such reserve requirement reflected in the Adjusted LIBOR) or the
Issuing Bank;

(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes,
(B) Taxes described in clauses (b) through (d) of the definition of Excluded
Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto; or

 

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(iii) impose on any Lender or on the Issuing Bank or the eurodollar interbank
market any other condition, cost or expense affecting this Agreement or any
Eurodollar Loans made by such Lender or any Letter of Credit or any
participation therein;

and the result of either of the foregoing is to increase the cost to such Lender
of making, converting into, continuing or maintaining a Eurodollar Loan or of
maintaining its obligation to make any such Loan or to increase the cost to such
Lender or the Issuing Bank of participating in or issuing any Letter of Credit
(or of maintaining its obligation to participate in any Letter of Credit) or to
reduce the amount received or receivable by such Lender or the Issuing Bank
hereunder (whether of principal, interest or any other amount), then the
Borrower shall promptly pay, upon written notice from and demand by such Lender
on the Borrower (with a copy of such notice and demand to the Administrative
Agent), to the Administrative Agent for the account of such Lender, within five
(5) Business Days after the date of such notice and demand, additional amount or
amounts sufficient to compensate such Lender or the Issuing Bank, as the case
may be, for such additional costs incurred or reduction suffered.

(b) If any Lender or the Issuing Bank shall have determined that on or after the
date of this Agreement any Change in Law regarding capital or liquidity
requirements has or would have the effect of reducing the rate of return on such
Lender’s or the Issuing Bank’s capital (or on the capital of the Parent Company
of such Lender or Issuing Bank) as a consequence of its obligations hereunder or
under or in respect of any Letter of Credit to a level below that which such
Lender, the Issuing Bank or the Parent Company of such Lender or Issuing Bank
could have achieved but for such Change in Law (taking into consideration such
Lender’s or the Issuing Bank’s policies or the policies of the Parent Company of
such Lender or Issuing Bank with respect to capital adequacy) then, from time to
time, within five (5) Business Days after receipt by the Borrower of written
demand by such Lender (with a copy thereof to the Administrative Agent), the
Borrower shall pay to such Lender such additional amounts as will compensate
such Lender, the Issuing Bank or the Parent Company of such Lender or the
Issuing Bank for any such reduction suffered.

(c) A certificate of a Lender or the Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender, the Issuing Bank or the Parent
Company of such Lender or the Issuing Bank, as the case may be, specified in
paragraph (a) or (b) of this Section 2.18 shall be delivered to the Borrower
(with a copy to the Administrative Agent) and shall be conclusive, absent
manifest error. The Borrower shall pay any such Lender or the Issuing Bank, as
the case may be, such amount or amounts within five (5) Business Days after
receipt thereof.

(d) Failure or delay on the part of any Lender or the Issuing Bank to demand
compensation pursuant to this Section 2.18 shall not constitute a waiver of such
Lender’s or the Issuing Bank’s right to demand such compensation.

Section 2.19. Funding Indemnity. In the event of (a) the payment of any
principal of a Eurodollar Loan other than on the last day of the Interest Period
applicable thereto (including as a result of an Event of Default), (b) the
conversion or continuation of a Eurodollar Loan other than on the last day of
the Interest Period applicable thereto, or (c) the failure by the Borrower to
borrow, prepay, convert or continue any Eurodollar Loan on the date specified in
any applicable notice (regardless of whether such notice is withdrawn or
revoked), then, in any such event, the

 

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Borrower shall compensate each Lender, within five (5) Business Days after
written demand from such Lender, for any loss, cost or expense attributable to
such event. In the case of a Eurodollar Loan, such loss, cost or expense shall
be deemed to include an amount determined by such Lender to be the excess, if
any, of (A) the amount of interest that would have accrued on the principal
amount of such Eurodollar Loan if such event had not occurred at the Adjusted
LIBOR applicable to such Eurodollar Loan for the period from the date of such
event to the last day of the then current Interest Period therefor (or in the
case of a failure to borrow, convert or continue, for the period that would have
been the Interest Period for such Eurodollar Loan) over (B) the amount of
interest that would accrue on the principal amount of such Eurodollar Loan for
the same period if the Adjusted LIBOR were set on the date such Eurodollar Loan
was prepaid or converted or the date on which the Borrower failed to borrow,
convert or continue such Eurodollar Loan. A certificate as to any additional
amount payable under this Section 2.19 submitted to the Borrower by any Lender
(with a copy to the Administrative Agent) shall be conclusive, absent manifest
error.

Section 2.20. Taxes.

(a) For purposes of this Section 2.20, the term “Lender” includes any Issuing
Bank and the term “applicable Law” includes FATCA.

(b) Any and all payments by or on account of any obligation of any Loan Party
under any Loan Document shall be made without deduction or withholding for any
Taxes, except as required by applicable Law. If any applicable Law (as
determined in the good faith discretion of an applicable Withholding Agent)
requires the deduction or withholding of any Tax from any such payment by a
Withholding Agent, then the applicable Withholding Agent shall be entitled to
make such deduction or withholding and shall timely pay the full amount deducted
or withheld to the relevant Governmental Authority in accordance with applicable
Law and, if such Tax is an Indemnified Tax, then the sum payable by the
applicable Loan Party shall be increased as necessary so that after making such
deduction or withholding (including such deductions and withholdings applicable
to additional sums payable under this Section 2.20) the applicable Recipient
shall receive an amount equal to the sum it would have received had no such
deduction or withholding been made.

(c) In addition, the Loan Parties shall timely pay to the relevant Governmental
Authority in accordance with applicable Law, or at the option of the
Administrative Agent timely reimburse it for the payment of, any Other Taxes.

(d) The Loan Parties shall jointly and severally indemnify each Recipient,
within ten (10) Business Days after demand therefor, for the full amount of any
Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section 2.20) payable or paid by such
Recipient or required to be withheld or deducted from a payment to such
Recipient and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender (with a copy
to the Administrative Agent), or by the Administrative Agent on its own behalf
or on behalf of a Lender, shall be conclusive absent manifest error.

 

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(e) Each Lender shall severally indemnify the Administrative Agent, within ten
(10) Business Days after demand therefor, for (i) any Indemnified Taxes
attributable to such Lender (but only to the extent that any Loan Party has not
already indemnified the Administrative Agent for such Indemnified Taxes and
without limiting the obligation of the Loan Parties to do so), (ii) any Taxes
attributable to such Lender’s failure to comply with the provisions of
Section 11.4(e) relating to the maintenance of a Participant Register and
(iii) any Excluded Taxes attributable to such Lender, in each case, that are
payable or paid by the Administrative Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this clause (e).

(f) As soon as practicable after any payment of Taxes by any Loan Party to a
Governmental Authority pursuant to this Section 2.20(f), such Loan Party shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

(g) (i) Any Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under any Loan Document shall
deliver to the Borrower and the Administrative Agent, at the time or times
reasonably requested by the Borrower or the Administrative Agent, such properly
completed and executed documentation reasonably requested by the Borrower or the
Administrative Agent as will permit such payments to be made without withholding
or at a reduced rate of withholding. In addition, any Lender, if reasonably
requested by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable Law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 2.20(g)(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in the Lender’s reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.

(ii) Without limiting the generality of the foregoing, in the event that the
Borrower is a U.S. Person,

(A) any Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), executed

 

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copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal
backup withholding tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), whichever of the following is applicable:

(1) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “interest” article of such tax treaty and (y) with respect to
any other applicable payments under any Loan Document, IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “business profits” or “other income” article of such tax treaty;

(2) executed originals of IRS Form W-8ECI,

(3) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit 2.20-1 to the effect that such Foreign
Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a
“10 percent shareholder” of the Borrower within the meaning of
Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance
Certificate”) and (y) executed originals of IRS Form W-8BEN; or

(4) to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a
U.S. Tax Compliance Certificate substantially in the form of Exhibit 2.20-2 or
Exhibit 2.20-3, IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
U.S. Tax Compliance Certificate substantially in the form of Exhibit 2.20-4 on
behalf of each such direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), executed originals of any other form prescribed by applicable Law as a
basis for claiming exemption from or a reduction in U.S. federal withholding

 

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Tax, duly completed, together with such supplementary documentation as may be
prescribed by applicable Law to permit the Borrower or the Administrative Agent
to determine the withholding or deduction required to be made; and

(D) if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the Administrative Agent such documentation prescribed by applicable Law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Lender has complied with such Lender’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment. Solely for purposes of this
clause (D), “FATCA” shall include any amendments made to FATCA after the date of
this Agreement.

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower and the Administrative
Agent in writing of its legal inability to do so.

(h) If any Recipient determines, in its sole discretion, that it has received a
refund of any Taxes as to which it has been indemnified pursuant to this
Section 2.20 (including by the payment of additional amounts pursuant to this
Section 2.20), it shall pay to the indemnifying party an amount equal to such
refund (but only to the extent of indemnity payments made under this Section
with respect to the Taxes giving rise to such refund), net of all out-of-pocket
expenses (including Taxes) of such indemnified party and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund). Such indemnifying party, upon the request of such indemnified
party, shall repay to such indemnified party the amount paid over pursuant to
this paragraph (g) (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) in the event that such indemnified party is
required to repay such refund to such Governmental Authority. Notwithstanding
anything to the contrary in this paragraph (g), in no event will the indemnified
party be required to pay any amount to an indemnifying party pursuant to this
paragraph (g) the payment of which would place the indemnified party in a less
favorable net after-Tax position than the indemnified party would have been in
if the Tax subject to indemnification and giving rise to such refund had not
been deducted, withheld or otherwise imposed and the indemnification payments or
additional amounts with respect to such Tax had never been paid. This paragraph
shall not be construed to require any indemnified party to make available its
Tax returns (or any other information relating to its Taxes that it deems
confidential) to the indemnifying party or any other Person.

 

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Section 2.21. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

(a) The Borrower shall make each payment required to be made by it hereunder
(whether of principal, interest, fees or reimbursement of LC Disbursements, or
of amounts payable under Sections 2.18, 2.19 or 2.20, or otherwise) prior to
12:00 noon on the date when due, in immediately available funds, free and clear
of any defenses, rights of set-off, counterclaim, or withholding or deduction of
taxes. Any amounts received after such time on any date may, in the discretion
of the Administrative Agent, be deemed to have been received on the next
succeeding Business Day for purposes of calculating interest thereon. All such
payments shall be made to the Administrative Agent at the Payment Office, except
payments to be made directly to the Issuing Bank or Swingline Lender as
expressly provided herein and except that payments pursuant to Sections 2.18,
2.19 and 2.20 and 11.3 shall be made directly to the Persons entitled thereto.
The Administrative Agent shall distribute any such payments received by it for
the account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be made payable for the period of such extension. All payments
hereunder shall be made in Dollars.

(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be
applied: first, to Administrative Agent’s fees and reimbursable expenses then
due and payable pursuant to any of the Loan Documents; second, to all
reimbursable expenses of the Lenders and all fees and reimbursable expenses of
the Issuing Bank then due and payable pursuant to any of the Loan Documents, pro
rata to the Lenders and the Issuing Bank based on their respective pro rata
shares of such fees and expenses; third, to interest and fees then due and
payable hereunder, pro rata to the Lenders based on their respective pro rata
shares of such interest and fees; and fourth, to the payment of principal of the
Loans and unreimbursed LC Disbursements then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of principal and
unreimbursed LC Disbursements then due to such parties.

(c) If any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or participations in LC Disbursements or Swingline Loans that would
result in such Lender receiving payment of a greater proportion of the aggregate
amount of its Revolving Credit Exposure and accrued interest and fees thereon
than the proportion received by any other Lender with respect to its Revolving
Credit Exposure, then the Lender receiving such greater proportion shall
purchase (for cash at face value) participations in the Revolving Credit
Exposure of other Lenders to the extent necessary so that the benefit of all
such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective
Revolving Credit Exposure; provided, that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the

 

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assignment of or sale of a participation in any of its Revolving Credit Exposure
to any assignee or participant, other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable Law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.

(d) Unless the Administrative Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Administrative Agent for
the account of the Lenders or the Issuing Bank hereunder that the Borrower will
not make such payment, the Administrative Agent may assume that the Borrower has
made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders or the Issuing Bank, as the case may
be, the amount or amounts due. In such event, if the Borrower has not in fact
made such payment, then each of the Lenders or the Issuing Bank, as the case may
be, severally agrees to repay to the Administrative Agent forthwith on demand
the amount so distributed to such Lender or Issuing Bank with interest thereon,
for each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation.

(e) Notwithstanding anything herein to the contrary, any amount paid by the
Borrower for the account of a Defaulting Lender under this Agreement (whether on
account of principal, interest, fees, reimbursement of LC Disbursements,
indemnity payments or other amounts) will be retained by the Administrative
Agent in a segregated non-interest bearing account until the Revolving
Commitment Termination Date at which time the funds in such account will be
applied by the Administrative Agent, to the fullest extent permitted by Law, in
the following order of priority: first to the payment of any amounts owing by
such Defaulting Lender to the Administrative Agent under this Agreement, second
to the payment of any amounts owing by such Defaulting Lender to the Issuing
Bank and the Swingline Lender under this Agreement, third to the payment of
interest due and payable to the Lenders hereunder that are not Defaulting
Lenders, ratably among them in accordance with the amounts of such interest then
due and payable to them, fourth to the payment of fees then due and payable to
the Lenders hereunder that are not Defaulting Lenders, ratably among them in
accordance with the amounts of such fees then due and payable to them, fifth to
pay principal and unreimbursed LC Disbursements then due and payable to the
Lenders hereunder that are not Defaulting Lenders, ratably in accordance with
the amounts thereof then due and payable to them, sixth to the ratable payment
of other amounts then due and payable to the Lenders hereunder that are not
Defaulting Lenders, and seventh to pay amounts owing under this Agreement to
such Defaulting Lender or as a court of competent jurisdiction may otherwise
direct.

Section 2.22. Letters of Credit.

(a) During the Availability Period, the Issuing Bank, in reliance upon the
agreements of the other Lenders pursuant to Section 2.22(d) and 2.22(e), may, in
its sole discretion, issue, at the request of the Borrower, Letters of Credit
for the account of the Borrower or any Subsidiary on the terms and conditions
hereinafter set forth; provided, that (i) each Letter of Credit shall expire on
the earlier of (A) the date one year after the date of issuance of such

 

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Letter of Credit (or in the case of any renewal or extension thereof, one year
after such renewal or extension) and (B) the date that is twelve months after
the Revolving Commitment Termination Date; (ii) each Letter of Credit shall be
in a stated amount of at least $25,000; and (iii) the Borrower may not request
any Letter of Credit, if, after giving effect to such issuance (A) the aggregate
LC Exposure would exceed the LC Commitment or (B) the aggregate Revolving Credit
Exposure of all Lenders would exceed the Aggregate Revolving Commitments. Each
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Issuing Bank without recourse a participation in each Letter
of Credit equal to such Lender’s Pro Rata Share of the aggregate amount
available to be drawn under such Letter of Credit on the date of issuance with
respect to all other Letters of Credit. Each issuance of a Letter of Credit
shall be deemed to utilize the Revolving Commitment of each Lender by an amount
equal to the amount of such participation.

(b) To request the issuance of a Letter of Credit (or any amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall give the
Issuing Bank and the Administrative Agent irrevocable written notice (which may
be in the form of a duly completed Letter of Credit Application) at least three
(3) Business Days prior to the requested date of such issuance specifying the
date (which shall be a Business Day) such Letter of Credit is to be issued (or
amended, extended or renewed, as the case may be), the expiration date of such
Letter of Credit, the amount of such Letter of Credit, the name and address of
the beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit. In addition to the
satisfaction of the conditions in Article III, the issuance of such Letter of
Credit (or any amendment which increases the amount of such Letter of Credit)
will be subject to the further conditions that such Letter of Credit shall be in
such form and contain such terms as the Issuing Bank shall approve and that the
Borrower shall have executed and delivered any Issuer Documents as the Issuing
Bank shall require; provided, that in the event of any conflict between such
applications, agreements or instruments and this Agreement, the terms of this
Agreement shall control.

(c) At least two (2) Business Days prior to the issuance of any Letter of
Credit, the Issuing Bank will confirm with the Administrative Agent (by
telephone or in writing) that the Administrative Agent has received such notice
and if not, the Issuing Bank will provide the Administrative Agent with a copy
thereof. Unless the Issuing Bank has received notice from the Administrative
Agent on or before 5:00 p.m. the Business Day immediately preceding the date the
Issuing Bank is to issue the requested Letter of Credit (1) directing the
Issuing Bank not to issue the Letter of Credit because such issuance is not then
permitted hereunder because of the limitations set forth in Section 2.22(a) or
that one or more conditions specified in Article III are not then satisfied,
then, subject to the terms and conditions hereof, the Issuing Bank shall, on the
requested date, issue such Letter of Credit in accordance with the Issuing
Bank’s usual and customary business practices.

(d) The Issuing Bank shall examine all documents purporting to represent a
demand for payment under a Letter of Credit promptly following its receipt
thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent
of such demand for payment and whether the Issuing Bank has made or will make a
LC Disbursement thereunder; provided, that any failure to give or delay in
giving such notice shall not relieve the Borrower of its obligation to reimburse
the Issuing Bank and the Lenders with respect to such LC Disbursement. The
Borrower shall be irrevocably and unconditionally obligated to reimburse the
Issuing Bank for

 

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any LC Disbursements paid by the Issuing Bank in respect of such drawing,
without presentment, demand or other formalities of any kind. Unless the
Borrower shall have notified the Issuing Bank and the Administrative Agent prior
to 11:00 a.m. on the Business Day immediately prior to the date on which such
drawing is honored that the Borrower intends to reimburse the Issuing Bank for
the amount of such drawing in funds other than from the proceeds of Revolving
Loans, the Borrower shall be deemed to have timely given a Notice of Revolving
Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate
Borrowing on the date on which such drawing is honored in an exact amount due to
the Issuing Bank; provided, that for purposes solely of such Borrowing, the
conditions precedent set forth in Section 3.2 hereof shall not be applicable.
The Administrative Agent shall notify the Lenders of such Borrowing in
accordance with Section 2.3, and each Lender shall make the proceeds of its Base
Rate Loan included in such Borrowing available to the Administrative Agent for
the account of the Issuing Bank in accordance with Section 2.6. The proceeds of
such Borrowing shall be applied directly by the Administrative Agent to
reimburse the Issuing Bank for such LC Disbursement.

(e) If for any reason a Base Rate Borrowing may not be (as determined in the
sole discretion of the Administrative Agent), or is not, made in accordance with
the foregoing provisions, then each Lender (other than the Issuing Bank) shall
be obligated to fund the participation that such Lender purchased pursuant to
subsection (a) in an amount equal to its Pro Rata Share of such LC Disbursement
on and as of the date which such Base Rate Borrowing should have occurred. Each
Lender’s obligation to fund its participation shall be absolute and
unconditional and shall not be affected by any circumstance, including without
limitation (i) any setoff, counterclaim, recoupment, defense or other right that
such Lender or any other Person may have against the Issuing Bank or any other
Person for any reason whatsoever, (ii) the existence of a Default or an Event of
Default or the termination of the Aggregate Revolving Commitments, (iii) any
adverse change in the condition (financial or otherwise) of the Borrower or any
of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any
other Lender, (v) any amendment, renewal or extension of any Letter of Credit or
(vi) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing. On the date that such participation is required
to be funded, each Lender shall promptly transfer, in immediately available
funds, the amount of its participation to the Administrative Agent for the
account of the Issuing Bank. Whenever, at any time after the Issuing Bank has
received from any such Lender the funds for its participation in a LC
Disbursement, the Issuing Bank (or the Administrative Agent on its behalf)
receives any payment on account thereof, the Administrative Agent or the Issuing
Bank, as the case may be, will distribute to such Lender its Pro Rata Share of
such payment; provided, that if such payment is required to be returned for any
reason to the Borrower or to a trustee, receiver, liquidator, custodian or
similar official in any bankruptcy proceeding, such Lender will return to the
Administrative Agent or the Issuing Bank any portion thereof previously
distributed by the Administrative Agent or the Issuing Bank to it.

(f) To the extent that any Lender shall fail to pay any amount required to be
paid pursuant to paragraphs (d) or (e) of this Section on the due date therefor,
such Lender shall pay interest to the Issuing Bank (through the Administrative
Agent) on such amount from such due date to the date such payment is made at a
rate per annum equal to the Federal Funds Rate; provided, that if such Lender
shall fail to make such payment to the Issuing Bank within three

 

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(3) Business Days of such due date, then, retroactively to the due date, such
Lender shall be obligated to pay interest on such amount at the rate set forth
in Section 2.13(c).

(g) If (i) any Event of Default shall occur and be continuing on the Business
Day that the Borrower receives notice from the Administrative Agent or the
Required Lenders demanding that its reimbursement obligations with respect to
the Letters of Credit be Cash Collateralized pursuant to this paragraph, (ii) as
of the Revolving Commitment Termination Date, any LC Exposure remains
outstanding for any reason or (iii) the Borrower shall be required to provide
Cash Collateral pursuant to any other section of this Agreement, then, the
Borrower shall deposit in an account with the Administrative Agent, in the name
of the Administrative Agent and for the benefit of the Issuing Bank and the
Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all
Lenders as of such date plus any accrued and unpaid fees thereon; provided, that
such obligation to Cash Collateralize the reimbursement obligations of the
Borrower with respect to the Letters of Credit shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or notice of any kind, upon the occurrence of any Event of Default with
respect to the Borrower described in clause (h) or (i) of Section 8.1. Such
deposit shall be held by the Administrative Agent as Cash Collateral for the
payment and performance of the obligations of the Borrower under this Agreement.
The Administrative Agent shall have exclusive dominion and control, including
the exclusive right of withdrawal, over such account. The Borrower agrees to
execute any documents and/or certificates to effectuate the intent of this
paragraph. Other than any interest earned on the investment of such deposits,
which investments shall be made at the option and sole discretion of the
Administrative Agent and at the Borrower’s risk and expense, such deposits shall
not bear interest. Interest and profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall be applied by the
Administrative Agent to reimburse the Issuing Bank for LC Disbursements for
which it had not been reimbursed and to the extent so applied, shall be held for
the satisfaction of the reimbursement obligations of the Borrower for the LC
Exposure at such time or, if the maturity of the Loans has been accelerated,
with the consent of the Required Lenders, be applied to satisfy other
obligations of the Borrower under this Agreement and the other Loan Documents.
If the Borrower is required to Cash Collateralize its reimbursement obligations
with respect to the Letters of Credit as a result of the occurrence of an Event
of Default, such cash collateral so posted (to the extent not so applied as
aforesaid) shall be returned to the Borrower within three (3) Business Days
after all Events of Default have been cured or waived.

(h) Upon the request of any Lender, but no more frequently than quarterly, the
Issuing Bank shall deliver (through the Administrative Agent) to each Lender and
the Borrower a report describing the aggregate Letters of Credit then
outstanding. Upon the request of any Lender from time to time, the Issuing Bank
shall deliver to such Lender any other information reasonably requested by such
Lender with respect to each Letter of Credit then outstanding.

(i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be
absolute, unconditional and irrevocable and shall be performed strictly in
accordance with the terms of this Agreement under all circumstances whatsoever
and irrespective of any of the following circumstances:

(i) Any lack of validity or enforceability of any Letter of Credit or this
Agreement;

 

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(ii) The existence of any claim, set-off, defense or other right which the
Borrower or any Subsidiary or Affiliate of the Borrower may have at any time
against a beneficiary or any transferee of any Letter of Credit (or any Persons
or entities for whom any such beneficiary or transferee may be acting), any
Lender (including the Issuing Bank) or any other Person, whether in connection
with this Agreement or the Letter of Credit or any document related hereto or
thereto or any unrelated transaction;

(iii) Any draft or other document presented under a Letter of Credit proving to
be forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect;

(iv) Payment by the Issuing Bank under a Letter of Credit against presentation
of a draft or other document to the Issuing Bank that does not comply with the
terms of such Letter of Credit;

(v) Any other event or circumstance whatsoever, whether or not similar to any of
the foregoing, that might, but for the provisions of this Section 2.22,
constitute a legal or equitable discharge of, or provide a right of setoff
against, the Borrower’s obligations hereunder; or

(vi) The existence of a Default or an Event of Default.

Neither the Administrative Agent, the Issuing Bank, the Lenders nor any Related
Party of any of the foregoing shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to above), or any error, omission, interruption, loss
or delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to
make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the Issuing Bank;
provided, that the foregoing shall not be construed to excuse the Issuing Bank
from liability to the Borrower to the extent of any actual direct damages (as
opposed to special, indirect (including claims for lost profits or other
consequential damages), or punitive damages, claims in respect of which are
hereby waived by the Borrower to the extent permitted by applicable Law)
suffered by the Borrower that are caused by the Issuing Bank’s failure to
exercise due care when determining whether drafts or other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree, that in the absence of gross negligence or willful misconduct
on the part of the Issuing Bank (as finally determined by a court of competent
jurisdiction), the Issuing Bank shall be deemed to have exercised due care in
each such determination. In furtherance of the foregoing and without limiting
the generality thereof, the parties agree that, with respect to documents
presented that appear on their face to be in substantial compliance with the
terms of a Letter of Credit, the Issuing Bank may, in its sole discretion,
either accept and make payment upon such documents without responsibility for
further investigation, regardless of any notice or information to the contrary,
or refuse to accept and make payment upon such documents if such documents are
not in strict compliance with the terms of such Letter of Credit.

(j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when
a Letter of Credit is issued and subject to applicable Laws, (i) each standby
Letter of Credit shall

 

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be governed by the “International Standby Practices 1998” (ISP98) (or such later
revision as may be published by the Institute of International Banking Law &
Practice on any date any Letter of Credit may be issued), (ii) each documentary
Letter of Credit shall be governed by the Uniform Customs and Practices for
Documentary Credits (2007 Revision), International Chamber of Commerce
Publication No. 600 (or such later revision as may be published by the
International Chamber of Commerce on any date any Letter of Credit may be
issued) and (iii) the Borrower shall specify the foregoing in each Letter of
Credit Application submitted for the issuance of a Letter of Credit.

(k) Conflict with Issuer Documents. In the event of any conflict between the
terms hereof and the terms of any Issuer Document, the terms hereof shall
control.

(l) Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of
Credit issued or outstanding hereunder is in support of any obligations of, or
is for the account of, a Subsidiary, the Borrower shall be obligated to
reimburse the Issuing Bank hereunder for any and all drawings under such Letter
of Credit. The Borrower hereby acknowledges that the issuance of Letters of
Credit for the account of Subsidiaries inures to the benefit of the Borrower,
and that the Borrower’s business derives substantial benefits from the
businesses of such Subsidiaries.

Section 2.23. Increase of Commitments; Additional Lenders.

The Borrower may from time to time, upon at least five days’ prior written
notice to the Administrative Agent (who shall promptly provide a copy of such
notice to each Lender), propose to increase the Aggregate Revolving Commitments
or to establish one or more new term loans (each, an “Incremental Term Loan”);
provided, that:

(a) the aggregate amount of all increases in the Aggregate Revolving Commitments
plus the aggregate initial principal amount of all Incremental Term Loans shall
not exceed $100,000,000 during the term of this Agreement;

(b) any increase in the Aggregate Revolving Commitments or establishment of an
Incremental Term Loan shall be in a minimum principal amount of $15,000,000 and
in integral multiples of $1,000,000 in excess thereof;

(c) no Default or Event of Default shall exist and be continuing at the time of
any increase in the Aggregate Revolving Commitments or establishment of an
Incremental Term Loan;

(d) the conditions set forth in Section 3.2 shall be satisfied as of the date of
any increase in the Aggregate Revolving Commitments or establishment of any
Incremental Term Loan;

(e) the Borrower shall have provided to the Administrative Agent a Pro Forma
Compliance Certificate, in form an detail reasonably acceptable to the
Administrative Agent, demonstrating compliance with the financial covenants in
Article VI recomputed as of the end of the period of the four Fiscal Quarters
most recently ended for which the Borrower has

 

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delivered financial statements pursuant to Section 5.1(a) or (b), after giving
effect to such increase or Incremental Term Loan on a Pro Forma Basis;

(f) the Administrative Agent shall have received all documents (including
resolutions of the board of directors of the Loan Parties and opinions of
counsel to the Loan Parties) it may reasonably request relating to such increase
in the Aggregate Revolving Commitments or such establishment of such Incremental
Term Loan, all in form and substance satisfactory to the Administrative Agent;

(g) with respect to any Incremental Term Loan, (i) the final maturity date shall
be no earlier than (x) the Revolving Commitment Termination Date or (y) the
maturity date for any then-existing Incremental Term Loan and (ii) the weighted
average life to maturity of such Incremental Term Loan shall not be shorter than
the weighted average life to maturity of any then-existing Incremental Term
Loan;

(h) any increase in the Aggregate Revolving Commitments under this Section 2.23
shall have terms identical to those for the Revolving Loans under this
Agreement, except for (i) upfront fees payable to the Lenders providing
commitments for such increase and (ii) arrangement fees payable to the Arrangers
or their Affiliates in connection with the establishment of such increase in the
Aggregate Revolving Commitments;

(i) no Lender shall have any obligation to increase its Revolving Commitment or
provide any Incremental Term Loan Commitment, and any decision by a Lender to
increase its Revolving Commitment or provide any Incremental Term Loan
Commitment shall be made in its sole discretion independently from any other
Lender;

(j) the Borrower may designate a bank or other financial institution that is not
already a Lender to provide all or any portion of any increase in the Aggregate
Revolving Commitments or an Incremental Term Loan Commitment, so long as
(i) such Person (an “Additional Lender”) becomes a party to this Agreement
pursuant to a lender joinder agreement or other document in form and substance
satisfactory to the Administrative Agent that has been executed by the Borrower
and such Additional Lender, (ii) any such Person proposed by the Borrower to
become an Additional Lender must be reasonably acceptable to the Administrative
Agent and, if such Additional Lender is to provide a Revolving Commitment, each
of the Issuing Bank and the Swingline Lender;

(k) any increase in the Aggregate Revolving Commitments or establishment of an
Incremental Term Loan shall be pursuant to a commitment agreement, joinder
agreement or other document in form and substance reasonably acceptable to the
Administrative Agent, and upon the effectiveness of such commitment agreement,
joinder agreement or other document pursuant to the terms thereof, the
Commitments, as applicable, shall automatically be increased by the amount of
the Commitments added through such commitment agreement, joinder agreement or
other document and Schedule I shall automatically be deemed amended to reflect
the Commitments of all Lenders after giving effect to the addition of such
Commitments; and

(l) with respect to any increase in the Aggregate Revolving Commitments,
(i) each Lender providing a portion of the increase shall make Revolving Loans,
the proceeds of which shall be applied by the Administrative Agent to prepay
Revolving Loans of the existing Lenders, in an amount necessary such that after
giving effect thereto each Lender will hold its

 

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Pro Rata Share of outstanding Revolving Loans (such payments to existing Lenders
shall be subject to Section 2.19), and (ii) effective upon such increase, the
amount of the participations held by each Lender in each Letter of Credit and
each Swingline Loan then outstanding shall be adjusted automatically such that,
after giving effect to such adjustments, the Lenders shall hold participations
in each such Letter of Credit or such Swingline Loan in proportion to their
respective Revolving Commitments.

Section 2.24. Mitigation of Obligations. If any Lender requests compensation
under Section 2.18, or if the Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.20, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the sole judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable under
Section 2.18 or Section 2.20, as the case may be, in the future and (ii) would
not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay
all costs and expenses incurred by any Lender in connection with such
designation or assignment.

Section 2.25. Replacement of Lenders. If (a) any Lender requests compensation
under Section 2.18, (b) the Borrower is required to pay any additional amount to
any Lender or any Governmental Authority of the account of any Lender pursuant
to Section 2.20, (c) any Lender notifies the Borrower and Administrative Agent
that it is unable to fund Eurodollar Loans pursuant to Sections 2.16 or 2.17,
(d) a Lender (a “Non-Consenting Lender”) does not consent to a proposed change,
waiver, discharge or termination with respect to any Loan Document that has been
approved by the Required Lenders as provided in Section 11.2(b) but requires
unanimous consent of all Lender or all the Lenders directly affected thereby (as
applicable) or (e) if any Lender is a Defaulting Lender, then the Borrower may,
at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions set forth in
Section 11.4(b) all its interests, rights and obligations under this Agreement
and the related Loan Documents to an assignee that shall assume such obligations
(which assignee may be another Lender); provided, that (i) the Borrower shall
have received the prior written consent of the Administrative Agent, which
consent shall not be unreasonably withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal amount of all Loans owed
to it, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder, from the assignee (in the case of such outstanding principal and
accrued interest) and from the Borrower (in the case of all other amounts),
(iii) in the case of a claim for compensation under Section 2.18 or payments
required to be made pursuant to Section 2.20, such assignment will result in a
reduction in such compensation or payments, (iv) such assignment does not
conflict with applicable Law and (v) in the case of any such assignment
resulting from a Non-Consenting Lender’s failure to consent to a proposed
change, waiver, discharge or termination with respect to any Loan Document, the
applicable assignee consents to the proposed change, waiver, discharge or
termination; provided that the failure by such Non-Consenting Lender to execute
and deliver an Assignment and Acceptance shall not impair the validity of the
removal of such Non-Consenting Lender and the mandatory assignment of such
Non-Consenting Lender’s Commitments and outstanding Loans pursuant to this
Section 2.25 shall nevertheless be effective without the execution by such
Non-Consenting Lender of an Assignment and Acceptance. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.

 

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Section 2.26. Reallocation and Cash Collateralization of Defaulting Lender
Commitment.

(a) If a Revolving Lender becomes, and during the period it remains, a
Defaulting Lender, the following provisions shall apply, notwithstanding
anything to the contrary in this Agreement:

(i) the LC Exposure and Swingline Exposure of such Defaulting Lender will,
subject to the limitation in the first proviso below, automatically be
reallocated (effective on the day such Revolving Lender becomes a Defaulting
Lender) among the Non-Defaulting Lenders pro rata in accordance with their
respective Revolving Commitments (calculated as if the Defaulting Lender’s
Revolving Commitment was reduced to zero and each Non-Defaulting Lender’s
Revolving Commitment had been increased proportionately); provided that (A) the
sum of each Non-Defaulting Lender’s total Revolving Credit Exposure may not in
any event exceed the Revolving Commitment of such Non-Defaulting Lender as in
effect at the time of such reallocation and (B) neither such reallocation nor
any payment by a Non-Defaulting Lender pursuant thereto will constitute a waiver
or release of any claim the Borrower, the Administrative Agent, the Issuing
Bank, the Swingline Lender or any other Lender may have against such Defaulting
Lender or cause such Defaulting Lender to be a Non-Defaulting Lender; and

(ii) to the extent that any portion (the “unreallocated portion”) of the LC
Exposure and Swingline Exposure of any Defaulting Lender cannot be reallocated
pursuant to clause (i) because of the limitation described in clause (a)(i)(A),
the Borrower will, not later than ten (10) Business Days after demand by the
Administrative Agent (at the direction of the Issuing Bank and/or the Swingline
Lender), (A) Cash Collateralize the obligations of the Defaulting Lender to the
Issuing Bank or Swingline Lender in respect of such LC Exposure or Swingline
Exposure, as the case may be, in an amount at least equal to the aggregate
amount of the unreallocated portion of the LC Exposure and Swingline Exposure of
such Defaulting Lender, (B) in the case of such Swingline Exposure, prepay
and/or Cash Collateralize in full the unreallocated portion thereof, or (C) make
other arrangements satisfactory to the Administrative Agent, the Issuing Bank
and the Swingline Lender in their sole discretion to protect them against the
risk of non-payment by such Defaulting Lender.

(b) If the Borrower, the Administrative Agent, the Issuing Bank and the
Swingline Lender agree in writing in their discretion that any Defaulting Lender
has ceased to be a Defaulting Lender, the Administrative Agent will so notify
the parties hereto, whereupon as of the effective date specified in such notice
and subject to any conditions set forth therein, the LC Exposure and the
Swingline Exposure of the other Lenders shall be readjusted to reflect the
inclusion of such Lender’s Commitment, and such Lender will purchase at par such
portion of outstanding Revolving Loans of the other Lenders and/or make such
other adjustments as the Administrative Agent may determine to be necessary to
cause the Revolving Credit Exposure of the Lenders to be on a pro rata basis in
accordance with their respective Revolving Commitments, whereupon such Lender
will cease to be a Defaulting Lender and will be a Non-Defaulting Lender (and
such Revolving Credit Exposure of each Lender will automatically be

 

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adjusted on a prospective basis to reflect the foregoing). If any cash
collateral has been posted with respect to the LC Exposure or Swingline Exposure
of such Defaulting Lender, the Administrative Agent will promptly return such
cash collateral to the Borrower; provided that no adjustments will be made
retroactively with respect to fees accrued or payments made by or on behalf of
the Borrower while such Lender was a Defaulting Lender; and provided, further,
that except to the extent otherwise expressly agreed by the affected parties, no
change hereunder from Defaulting Lender to Non-Defaulting Lender will constitute
a waiver or release of any claim of any party hereunder arising from such
Lender’s having been a Defaulting Lender.

ARTICLE III

CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT

Section 3.1. Conditions To Effectiveness. This Agreement and the obligations of
the Lenders (including the Swingline Lender) to make Loans and the obligation of
the Issuing Bank to issue any Letter of Credit hereunder shall be effective upon
satisfaction of the following conditions precedent in each case in form and
substance satisfactory to the Administrative Agent and each Lender:

(a) Loan Documents. Receipt by the Administrative Agent of a counterpart of this
Agreement and the other Loan Documents signed by or on behalf of each party
hereto or thereto or written evidence satisfactory to the Administrative Agent
(which may include telecopy transmission of such signed signature page) that
such party has signed a counterpart of this Agreement and the other Loan
Documents to which such party is a party.

(b) Organization Documents; Resolutions and Certificates. Receipt by the
Administrative Agent of:

(i) a certificate of the secretary or assistant secretary of each Loan Party,
attaching and certifying copies of such Loan Party’s Organization Documents and
resolutions of its board of directors (or equivalent governing body),
authorizing the execution, delivery and performance of the Loan Documents to
which it is a party and certifying the name, title and true signature of each
officer of such Loan Party executing the Loan Documents to which it is a party;
and

(ii) certified copies of the articles or certificate of incorporation,
certificate of organization or limited partnership, or other registered
organizational documents of each Loan Party, together with certificates of good
standing or existence, as may be available from the secretary of state of the
jurisdiction of organization of such Loan Party and each other jurisdiction
where such Loan Party is required to be qualified to do business as a foreign
corporation.

(c) Opinions of Counsel. Favorable written opinions of counsel to the Loan
Parties addressed to the Administrative Agent, the Issuing Bank and each of the
Lenders, and covering such matters relating to the Loan Parties, the Loan
Documents and the transactions contemplated therein in form and substance
satisfactory to the Administrative Agent.

 

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(d) Officer’s Closing Certificate. A certificate, dated the Closing Date and
signed by a Responsible Officer of the Borrower, certifying that after giving
effect to the funding of any Revolving Loans on the Closing Date, the conditions
specified in Sections 3.2(a) and (b) are satisfied as of the Closing Date.

(e) Required Consents and Approvals. The Administrative Agent shall have
received evidence that all approvals, consents, exemptions, authorizations, or
other actions by, or notices to, or filings with, any Governmental Authority in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document have been
obtained.

(f) Patriot Act; Anti-Money Laundering Laws. The provision by the Loan Parties
of all documentation and other information that the Administrative Agent or such
Lender requests in order to comply with its ongoing obligations under applicable
“know your customer” and anti-money laundering rules and regulations, including
the Patriot Act.

(g) Fees and Expenses. The Administrative Agent shall have received payment of
all fees, expenses and other amounts due and payable on or prior to the Closing
Date, including without limitation reimbursement or payment of all out-of-pocket
expenses of the Administrative Agent and the Arrangers (including reasonable
fees, charges and disbursements of counsel to the Administrative Agent) required
to be reimbursed or paid by the Borrower hereunder, under any other Loan
Document and under any agreement with the Administrative Agent or the Arrangers.

Without limiting the generality of the provisions of Section 3.1, for purposes
of determining compliance with the conditions specified in this Section 3.1,
each Lender that has signed this Credit Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the Closing Date specifying its objection
thereto.

Section 3.2. Each Credit Event. The obligation of each Lender to make a Loan on
the occasion of any Borrowing and of the Issuing Bank to issue, amend, renew or
extend any Letter of Credit is subject to the satisfaction of the following
conditions:

(a) at the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default or Event of Default shall exist;

(b) at the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, all representations and warranties of each Loan Party set forth in
the Loan Documents shall be true and correct in all material respects (other
than those representations and warranties that are expressly qualified by a
Material Adverse Effect or other materiality, in which case such representations
and warranties shall be true and correct in all respects), except to the extent
that such representations and warranties specifically refer to an earlier date,
in which case they shall be true and correct in all material respects (other
than those representations and warranties that

 

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are expressly qualified by a Material Adverse Effect or other materiality, in
which case such representations and warranties shall be true and correct in all
respects) as of such earlier date;

(c) the Borrower shall have delivered the required Notice of Borrowing; and

(d) if any Revolving Lender is a Defaulting Lender at the time of any request by
the Borrower of a Borrowing of a Swingline Loan or the issuance, amendment,
renewal or extension of a Letter of Credit, as applicable, set forth in this
Section 3.2, the Issuing Bank will not be required to issue, amend or increase
any Letter of Credit and the Swingline Lender will not be required to make any
Swingline Loans, unless they are satisfied that 100% of the related LC Exposure
and Swingline Exposure is fully covered or eliminated pursuant to Section 2.26.

Each Borrowing and each issuance, amendment, extension or renewal of any Letter
of Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section 3.2.

Section 3.3. Delivery of Documents. All of the Loan Documents, certificates,
legal opinions and other documents and papers referred to in this Article III,
unless otherwise specified, shall be delivered to the Administrative Agent for
the account of each of the Lenders and in sufficient counterparts or copies for
each of the Lenders and shall be in form and substance satisfactory in all
respects to the Administrative Agent.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Administrative Agent and each Lender
as follows:

Section 4.1. Existence; Power. The Borrower and each of its Subsidiaries (a) is
duly organized, validly existing and in good standing as a corporation,
partnership or limited liability company under the Laws of the jurisdiction of
its organization, (b) has all requisite power and authority to carry on its
business as now conducted, (c) is duly qualified to do business, and is in good
standing, in each jurisdiction where such qualification is required, except
where a failure to be so qualified could not reasonably be expected to result in
a Material Adverse Effect, (d) have obtained and maintain in good standing
without restriction all required licenses, permits, authorizations,
registrations, approvals and certificates of authority of each Governmental
Authority necessary to the conduct of their business, (e) to the extent prudent
and customary in the industry in which it is engaged, have obtained and maintain
in good standing without restriction, accreditation from all applicable
recognized accrediting agencies, (f) have implemented and maintain a compliance
program designed to provide effective internal controls to promote adherence to
and to prevent and detect material violations of Laws applicable to the Borrower
and any of its Subsidiaries, including any applicable HMO Regulations, Medicaid
Regulations and Medicare Regulations and (g) have implemented and maintain
policies consistent with HIPAA and the HITECH Act on or before the date that any
provision thereof becomes applicable to the Borrower or any Subsidiary; except
in each case referred to in clauses (d) – (g) hereof to the extent that failure
to do so could not reasonably be expected to have a Material Adverse Effect.

 

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Section 4.2. Organizational Power; Authorization. The execution, delivery and
performance by each Loan Party of the Loan Documents to which it is a party are
within such Loan Party’s organizational powers and have been duly authorized by
all necessary organizational, and if required, shareholder, partner or member,
action. This Agreement has been duly executed and delivered by each Loan Party,
and constitutes, and each other Loan Document to which any Loan Party is party,
when executed and delivered by such Loan Party, will constitute a legal, valid
and binding obligation of each Loan Party, enforceable against such Loan Party,
in accordance with their respective terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting the enforcement of creditors’ rights generally and by general
principles of equity.

Section 4.3. Governmental Approvals; No Conflicts. The execution, delivery and
performance by each Loan Party of this Agreement, and by each Loan Party of the
other Loan Documents to which it is a party (a) do not require any consent or
approval of, registration or filing with, or any action by, any Governmental
Authority, except those as have been obtained or made and are in full force and
effect, (b) will not violate the Organization Documents of any Loan Party or any
Law applicable to the Borrower or any of its Subsidiaries or any judgment, order
or ruling of any Governmental Authority, (c) will not violate or result in a
default under any indenture, agreement or other instrument binding on the
Borrower or any of its Subsidiaries or any of its assets or give rise to a right
thereunder to require any payment to be made by the Borrower or any of its
Subsidiaries, (d) will not result in the creation or imposition of any Lien on
any asset of the Borrower or any of its Subsidiaries, except Liens (if any)
created under the Loan Documents, (e) will not result in a suspension or
revocation of, or limitation on, any material certificate of authority, license,
permit, authorization or other approval applicable to the business, operations
or properties of the Borrower or any Subsidiary to the extent such suspension,
revocation or limitation is material to the business of the Borrower and its
Subsidiaries, taken as a whole, or material adversely affect the ability of the
Borrower and its Subsidiaries, taken as a whole, to participate in, or contract
with, any material Medical Reimbursement Program.

Section 4.4. Financial Statements. The Borrower has furnished to each Lender
(a) the Audited Financial Statements and (b) the Interim Financial Statements.
Such financial statements fairly present the consolidated financial condition of
the Borrower and its Subsidiaries as of such dates and the consolidated results
of operations for such periods in conformity with GAAP consistently applied,
subject to year end audit adjustments and the absence of footnotes in the case
of the statements referred to in clause (b). The financial statements delivered
pursuant to Section 5.1(a) and (b) have been prepared in accordance with GAAP
and present fairly (on the basis disclosed in the footnotes to such financial
statements) the consolidated financial condition, results of operations and cash
flows of the Borrower and its Subsidiaries as of the dates thereof and for the
periods covered thereby. Since the date of the Audited Financial Statements,
there have been no changes with respect to the Borrower and its Subsidiaries
which have had or could reasonably be expected to have, singly or in the
aggregate, a Material Adverse Effect.

Section 4.5. Litigation and Environmental Matters.

(a) No litigation, investigation or proceeding of or before any arbitrators or
Governmental Authorities is pending against or, to the knowledge of any
Responsible Officer of the Loan Parties, threatened against or affecting the
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to which there is a reasonable possibility of an adverse determination that
could reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect or (ii) which in any manner draws into question the
validity or enforceability of this Agreement or any other Loan Document.

(b) Neither the Borrower nor any of its Subsidiaries (i) has failed to comply
with any Environmental Law or to obtain, maintain or comply with any permit,
license or other approval required under any Environmental Law, (ii) has become
subject to any Environmental Liability, (iii) has received notice of any claim
with respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.

(c) To the knowledge of the Responsible Officers of the Borrower, none of the
Borrower or any Subsidiary, nor any of their current respective officers,
directors, or employees, have engaged (and no Responsible Officer of a Loan
Party has received written notice from a Contract Provider that such Contract
Provider has engaged) in any activities that constitute prohibited acts of fraud
under Medicare Regulations or Medicaid Regulations where such activities have
resulted, or the Borrower has reasonably determined in good faith it could
reasonably be expected to result, in a Material Adverse Effect and the Borrower
has not taken action within a reasonable period of time after discovery of such
activities, to suspend or remove such persons from responsibilities relating to
such activities or to ensure that such activities are no longer reasonably
expected to result in a Material Adverse Effect.

Section 4.6. Compliance with Laws and Agreements. The Borrower and each
Subsidiary is in compliance (and no Responsible Officer of any Loan Party has
received notice from a Contract Provider that such Contract Provider is not in
compliance) with (a) all material Laws and all judgments, decrees and orders of
any Governmental Authority and (b) all indentures, agreements or other
instruments binding upon it or its properties, except where non-compliance,
either individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect. Without limiting the foregoing, current
billing policies, arrangements, protocols and instructions of each of the
Borrower and its Subsidiaries comply in all material respects with requirements
of the Medical Reimbursement Programs and are currently administered by properly
trained personnel.

Section 4.7. No Default.

(a) Neither the Borrower nor any Subsidiary is in default under or with respect
to any Contractual Obligation that could reasonably be expected to have a
Material Adverse Effect.

(b) No Default has occurred and is continuing.

Section 4.8. Investment Company Act, Etc.

(a) Neither the Borrower nor any of its Subsidiaries is an “investment company”
or is “controlled” by an “investment company”, as such terms are defined in, or
subject to regulation under, the Investment Company Act of 1940, as amended.

 

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(b) Neither the Borrower nor any of its Subsidiaries (other than any HMO
Subsidiary or Insurance Subsidiary) is subject to any other regulatory scheme
limiting its ability to incur debt or requiring any approval or consent from or
registration or filing with, any Governmental Authority in connection therewith.

Section 4.9. Taxes. The Borrower and its Subsidiaries and each other Person for
whose taxes the Borrower or any Subsidiary could become liable have timely filed
or caused to be filed all federal, state and other material tax returns required
to be filed by them, and have paid all federal, state and other material taxes,
assessments made against it or its property and all other taxes, fees or other
charges imposed on it or any of its property by any Governmental Authority,
except where the same are currently being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary, as the case may be,
has set aside on its books adequate reserves in accordance with GAAP. The
charges, accruals and reserves on the books of the Borrower and its Subsidiaries
in respect of such taxes are adequate, and no tax liabilities that could be
materially in excess of the amount so provided are anticipated.

Section 4.10. Margin Regulations. None of the proceeds of any of the Loans or
Letters of Credit will be used, directly or indirectly, for “purchasing” or
“carrying” any “margin stock” with the respective meanings of each of such terms
under Regulation U or for any purpose that violates the provisions of the
Regulation T, U or X. Neither the Borrower nor its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying “margin stock.”

Section 4.11. ERISA. No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed the fair market
value of the assets of such Plan, and the present value of all accumulated
benefit obligations of all underfunded Plans (based on the assumptions used for
purposes of Statement of Financial Standards No. 87) did not, as of the date of
the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of all such underfunded Plans.

Section 4.12. Ownership of Property.

(a) Each of the Borrower and its Subsidiaries has good title to, or valid
leasehold interests in, all of its real and personal property material to the
operation of its business, including all such properties reflected in the
Audited Financial Statements or the most recent audited consolidated balance
sheet of the Borrower delivered pursuant to Section 5.1(a) or purported to have
been acquired by the Borrower or any Subsidiary after said date (except as sold
or otherwise disposed of in the ordinary course of business), in each case free
and clear of Liens not permitted by this Agreement. All leases that individually
or in the aggregate are material to the business or operations of the Borrower
and its Subsidiaries are valid and subsisting and are in full force.

 

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(b) Each of the Borrower and its Subsidiaries owns, or is licensed, or otherwise
has the right, to use, all patents, trademarks, service marks, trade names,
copyrights and other intellectual property material to its business, and the use
thereof by the Borrower and its Subsidiaries does not infringe in any material
respect on the rights of any other Person.

(c) The properties of the Borrower and its Subsidiaries are insured with
financially sound and reputable insurance companies which are not Affiliates of
the Borrower, in such amounts with such deductibles and covering such risks as
are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower or any applicable Subsidiary
operates.

Section 4.13. Disclosure. Each Loan Party has disclosed to the Lenders all
agreements, instruments, and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to any of them,
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. None of the reports (including without limitation
all reports that any Loan Party is required to file with the SEC), financial
statements, certificates or other information furnished by or on behalf of any
Loan Party to the Administrative Agent or any Lender in connection with the
negotiation or syndication of this Agreement or any other Loan Document or
delivered hereunder or thereunder (as modified or supplemented by any other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, taken as a
whole, in light of the circumstances under which they were made, not misleading;
provided, that, with respect to projected financial information, the Borrower
represents only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time.

Section 4.14. Labor Relations. All payments due from the Borrower or any of its
Subsidiaries pursuant to the provisions of any collective bargaining agreement
have been paid or accrued as a liability on the books of the Borrower or any
such Subsidiary, except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.

Section 4.15. Subsidiaries. Schedule 4.15 sets forth (a) the name of, the
ownership interest of each Loan Party in, the jurisdiction of incorporation or
organization of, and the type of, each Subsidiary and identifies each Subsidiary
that is a Loan Party, in each case as of the Closing Date and (b) whether such
Subsidiary is an Insurance Subsidiary or HMO Subsidiary. All issued and
outstanding Capital Stock of the Borrower and each of its Subsidiaries is duly
authorized and validly issued, fully paid, non-assessable, as applicable, and
free and clear of all Liens other than those in favor of the Administrative
Agent, for the benefit of the holders of the Obligations. All such securities
were issued in compliance with all applicable state and federal Laws concerning
the issuance of securities. As of the Closing Date, all of the issued and
outstanding Capital Stock of each of the Subsidiaries is owned by the Persons
and in the amounts set forth on Schedule 4.15. Except as set forth on Schedule
4.15, there are no pre-emptive or other outstanding rights, options, warrants,
conversion rights or other similar agreements or understandings for the purchase
or acquisition of any Capital Stock of the Borrower or any of its Subsidiaries.

Section 4.16. Solvency. After giving effect to the execution and delivery of the
Loan Documents, the making of the Loans under this Agreement, the Borrower is
Solvent and the Loan Parties are Solvent on a consolidated basis.

 

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Section 4.17. Reserved.

Section 4.18. Licensing and Accreditation. Except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect, each of the
Borrower and the Subsidiaries, and to the knowledge of the Responsible Officers
of the Loan Parties, each Contract Provider (i) has obtained (or been duly
assigned) all required certificates of need or determinations of need as
required by the relevant state Governmental Authority for the acquisition,
construction, expansion of, investment in or operation of its businesses as
currently operated; (ii) has obtained and maintains accreditation from one or
more generally recognized accreditation agencies where such accreditation is
customary in the industry in which it is engaged; (iii) in the case of each HMO
Subsidiary, has entered into and maintains in good standing its contract with
CMS or such other agreement to be able to provide managed health care services
to Medicare or Medicaid; and (iv) has taken all necessary action to obtain,
preserve and maintain each certificate of authority, license, permit,
authorization and other approval of any Governmental Authority required for the
conduct of its business and material to the business of the Borrower and its
Subsidiaries taken as a whole, and all of such certificates, licenses, permits,
authorizations or approvals are in full force and effect and have not been
revoked or suspended or otherwise limited, including action to obtain, preserve
and maintain with respect to each HMO Subsidiary all certificates of authority,
licenses, permits, authorizations and other approvals required under the HMO
Regulations or other regulations issued by the applicable Governmental
Authority, including approvals required to ensure that such HMO Subsidiary and
Insurance Subsidiary is eligible for all reimbursements available under the HMO
Regulations or other regulations issued by the applicable Governmental
Authority, and all of such certificates, licenses, permits, authorizations or
approvals are in full force and effect and have not been revoked or suspended or
otherwise limited. To the knowledge of the Responsible Officers of the Loan
Parties, each Contract Provider is duly licensed (where license is required) by
each state or state agency or commission, or any other Governmental Authority
having jurisdiction over the provisions of such services by such Person in the
locations in which the Loan Parties conduct business, required to enable such
Person to provide the professional services provided by such Person and
otherwise as is necessary to enable the Loan Parties to operate as currently
operated and as presently contemplated to be operated except to the extent that
the failure to do so could not reasonably be expected to have a Material Adverse
Effect. To the knowledge of the Responsible Officers of the Loan Parties, all
such required licenses are in full force and effect on the date hereof and have
not been revoked or suspended or otherwise limited except to the extent that the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.

Section 4.19. Anti-Corruption Laws and Sanctions. The Borrower has implemented
and maintains in effect policies and procedures designed to ensure compliance in
all material respects by the Borrower, its Subsidiaries and their respective
directors, officers, employees and agents with Anti-Corruption Laws, and the
Borrower, its Subsidiaries and their respective directors, officers and
employees and to the knowledge of the Borrower its agents, are in compliance
with Anti-Corruption Laws. None of (a) the Borrower, any Subsidiary or any of
their respective directors, officers or employees, or (b) to the knowledge of
the Borrower, any agent of the Borrower or any Subsidiary that will act in any
capacity in connection with or benefit from the credit facilities established
hereby, is a Sanctioned Person. No Borrowing or Letter of Credit, use of
proceeds or other Transactions will violate Anti-Corruption Laws or applicable
Sanctions.

 

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Section 4.20. Subordination of Subordinated Debt. This Agreement, and all
amendments, modifications, extensions, renewals, refinancings and refundings
hereof, constitute the “Senior Credit Agreement” within the meaning of the
applicable Subordinated Debt Document; this Agreement, together with each of the
other Loan Documents and all amendments, modifications, extensions, renewals,
refinancings and refundings hereof and thereof, constitute “Senior Loan
Documents” within the meaning of the applicable Subordinated Debt Document; and
the Revolving Loans and all other Obligations of the Borrower to the Lenders and
the Administrative Agent under this Agreement and all other Loan Documents, and
all amendments, modifications, extensions, renewals, refinancings or refundings
of any of the foregoing, constitute “Senior Indebtedness” of the Borrower within
the meaning of the applicable Subordinated Debt Document, and the holders
thereof from time to time shall be entitled to all of the rights of a holder of
“Senior Indebtedness” pursuant to the applicable Subordinated Debt Document.

Section 4.21. Medicare and Medicaid Notices and Filings Related to Business.
Except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect, each of the Borrower and the HMO Subsidiaries has
timely filed (a) all reports and other filings required to be filed in
connection with the Medicare and Medicaid programs in which they participate,
and all such reports and filings are true and complete in all material respects,
and (b) all material reports, data and other information required by any other
Governmental Authority with authority to regulate it or its business or
operations in any manner. Except to the extent any such action could not
reasonably be expected to result in a Material Adverse Effect, (i) there are no
claims, actions, proceedings or appeals pending (and none of the Borrower or any
Subsidiary has made any filing that would result in any claims, actions,
proceedings or appeals) before any Governmental Authority with respect to any
Medicare or Medicaid reports or claims filed by the Borrower or any Subsidiary
on or before the date hereof, or with respect to any adjustments, denials,
recoupments or disallowances by any intermediary, carrier, other insurer,
commission, board or agency in connection with any cost reports or claims, and
(ii) no validation review, survey, inspection, audit, investigation or program
integrity review related to the Borrower or any Subsidiary has been conducted by
any Governmental Authority or government contractor in connection with Medicare
or Medicaid, and no such reviews are scheduled, pending or, to the knowledge of
the Borrower, threatened against or affecting the Borrower or any Subsidiary.

ARTICLE V

AFFIRMATIVE COVENANTS

Each Loan Party covenants and agrees that so long as any Lender has a Commitment
hereunder, any Obligation remains unpaid or outstanding, or any Letter of Credit
shall remain outstanding, such Loan Party shall and shall cause each Subsidiary
to:

Section 5.1. Financial Statements and Other Information. Deliver to the
Administrative Agent and each Lender:

(a) as soon as available and in any event within 90 days after the end of each
Fiscal Year, a copy of the annual audited report for such Fiscal Year for the
Borrower and its Subsidiaries, containing a consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of such Fiscal Year and the related
consolidated statements of income or operations,

 

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changes in stockholders’ equity and cash flows (together with all footnotes
thereto) of the Borrower and its Subsidiaries for such Fiscal Year, setting
forth in each case in comparative form the figures for the previous Fiscal Year,
all in reasonable detail and reported on by independent public accountants of
nationally recognized standing (without a “going concern” or like qualification,
exception or explanation and without any qualification or exception as to scope
of such audit) to the effect that such financial statements present fairly in
all material respects the financial condition and the results of operations of
the Borrower and its Subsidiaries for such Fiscal Year on a consolidated basis
in accordance with GAAP and that the examination by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards;

(b) as soon as available and in any event within 45 days after the end of each
Fiscal Quarter, beginning with the fiscal quarter ending September 30, 2015, an
unaudited consolidated balance sheet of the Borrower and its Subsidiaries as of
the end of such Fiscal Quarter and the related unaudited consolidated statements
of income or operations, changes in stockholders’ equity and cash flows of the
Borrower and its Subsidiaries for such Fiscal Quarter and the then elapsed
portion of such Fiscal Year, setting forth in each case in comparative form the
figures for the corresponding quarter and the corresponding portion of
Borrower’s previous Fiscal Year, all in reasonable detail and prepared in
accordance with GAAP, such consolidated statements to be certified by the chief
executive officer, chief financial officer, treasurer or controller of the
Borrower as presenting fairly the financial condition, results of operations,
stockholders’ equity and cash flows of the Borrower and its Subsidiaries in
accordance with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes;

(c) concurrently with the delivery of the financial statements referred to in
clauses (a) and (b) above, a Compliance Certificate signed by the principal
executive officer or the principal financial officer of the Borrower
(i) certifying as to whether there exists a Default or Event of Default on the
date of such certificate, and if a Default or an Event of Default then exists,
(ii) setting forth in reasonable detail calculations demonstrating compliance
with the financial covenants set forth in Article VI, (iii) certifying that as
of the date thereof, all representations and warranties of each Loan Party set
forth in the Loan Documents are true and correct in all material respects (other
than those representations and warranties that are expressly qualified by a
Material Adverse Effect or other materiality, in which case such representations
and warranties are true and correct in all respects), except to the extent that
such representations and warranties specifically refer to an earlier date, in
which case they are true and correct in all material respects (other than those
representations and warranties that are expressly qualified by a Material
Adverse Effect or other materiality, in which case such representations and
warranties shall be true and correct in all respects) as of such earlier date,
(iv) stating whether any change in GAAP or the application thereof has occurred
since the date of the Audited Financial Statements, and if any change has
occurred, specifying the effect of such change on the financial statements
accompanying such Compliance Certificate and (v) specifying any change in the
identity of the Subsidiaries as of the end of such Fiscal Year or Fiscal Quarter
from the Subsidiaries identified to the Lenders on the Closing Date or as of the
most recent Fiscal Year or Fiscal Quarter, as the case may be;

(d) as soon as available and in any event within 60 days after the end of the
Fiscal Year, a pro forma budget for the succeeding Fiscal Year, containing
(i) an income statement, balance sheet and statement of cash flow of the
Borrower and its Subsidiaries and (ii) a

 

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statement of cash flow of the Borrower only, in each case, such statements shall
be broken out on a quarterly basis for such succeeding Fiscal Year;

(e) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed with the SEC, or
with any national securities exchange, or distributed by the Borrower to its
shareholders generally, as the case may be;

(f) as soon as available and in any event within 15 days of the required date
for delivery to the applicable state after the end of each fiscal year of the
Borrower, annual financial statements of each HMO Subsidiary and Insurance
Subsidiary as filed with the applicable HMO Regulator;

(g) as soon as available and in any event within 15 days of the required date
for delivery to the applicable state after the end of each fiscal quarter of the
Borrower, quarterly financial statements of each HMO Subsidiary and Insurance
Subsidiary as filed with the applicable HMO Regulator; and

(h) promptly following any request therefor, such other information regarding
the results of operations, business affairs and financial condition of the
Borrower or any Subsidiary as the Administrative Agent or any Lender may
reasonably request.

If at any time the Borrower is required to file periodic reports under
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as
amended, Borrower may satisfy its obligation to deliver the financial statements
referred to in clauses (a) and (b) above by delivering such financial statements
by electronic mail to such e-mail addresses as the Administrative Agent and
Lenders shall have provided to Borrower from time to time.

Section 5.2. Notices of Material Events. Furnish to the Administrative Agent and
each Lender prompt written notice of the following:

(a) the occurrence of any Default or Event of Default;

(b) the filing or commencement of, or any material development in, any action,
suit, investigation or proceeding by or before any arbitrator or Governmental
Authority against or, to the knowledge of the Borrower, affecting the Borrower
or any Subsidiary which, if adversely determined, could reasonably be expected
to result in a Material Adverse Effect;

(c) the occurrence of any event or any other development by which the Borrower
or any of its Subsidiaries (i) fails to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) becomes subject to any Environmental
Liability, (iii) receives notice of any claim with respect to any Environmental
Liability, or (iv) becomes aware of any basis for any Environmental Liability
and in each of the preceding clauses, which individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect;

(d) the occurrence of any ERISA Event that alone, or together with any other
ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower and its Subsidiaries in an aggregate amount exceeding
$30,000,000;

 

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(e) any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect;

(f) not later than five (5) Business Days after receipt of official written
notice, any development that has resulted in, or could reasonably be expected to
result in, an Exclusion Event, including any notice by the OIG of exclusion or
proposed exclusion of the Borrower or any Subsidiary from any Medical
Reimbursement Program in which it participates, and any other development that
has resulted in, or could reasonably be expected to result in, a Material
Adverse Effect;

(g) not later than five (5) Business Days after receipt of official written
notice, commencement of any material non-routine audit or investigation of the
Borrower or any Subsidiary by any regulatory authority, including any
Governmental Authority or HMO Regulator, and commencement of any proceeding or
other action against the Borrower or any Subsidiary, in each case, that could
reasonably be expected to result in a suspension, revocation or termination of
any contract of the Borrower or any Subsidiary with respect to a Medical
Reimbursement Program to the extent such suspension, revocation or termination
is material to the Borrower and its Subsidiaries taken as a whole; and

(h) receipt by the Borrower or any Subsidiary of (i) any notice of suspension or
forfeiture of any material certificate of authority or similar license of any
HMO Subsidiary to the extent such suspension or forfeiture is material to the
Borrower and its Subsidiaries, taken as a whole and (ii) to the extent permitted
by law, rule or regulation, any other material notice of deficiency, compliance
order or adverse report issued by any regulatory authority, including any HMO
Regulator, or private insurance company pursuant to a provider agreement that,
if not promptly complied with or cured, could reasonably be expected to result
in the suspension or forfeiture of any certification, license, permit,
authorization or other approval necessary for such HMO Subsidiary to carry on
its business as then conducted or in the termination of any insurance or
reimbursement program then available to any HMO Subsidiary, in each case to the
extent such suspension, termination or forfeiture is material to the Borrower
and its Subsidiaries, taken as a whole.

Each notice delivered under this Section 5.2 shall be accompanied by a written
statement of a Responsible Officer setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.

Section 5.3. Existence; Conduct of Business.

(a) Do or cause to be done all things necessary to preserve, renew and maintain
in full force and effect its legal existence and its respective rights,
licenses, permits, privileges, franchises, patents, copyrights, trademarks and
trade names material to the conduct of its business; provided, that nothing in
this Section 5.3 shall prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 7.3; and

(b) Engage in the business of the type conducted by the Borrower and its
Subsidiaries on the date hereof and businesses reasonably related thereto.

 

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Section 5.4. Compliance with Laws, Etc. Comply with all Laws applicable to its
business and properties, including without limitation, all Environmental Laws,
ERISA, Titles XVIII and XIX of the Social Security Act, Medicare Regulations,
Medicaid Regulations, the Anti-Kickback Statute, self-referral law requirements,
including the requirements of the Stark Law, HMO Regulations, HIPAA, the HITECH
Act, and OSHA, except where the failure to do so, either individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

Section 5.5. Payment of Obligations. Pay and discharge at or before maturity,
all of its obligations and liabilities (including without limitation all taxes,
assessments and other governmental charges, levies and all other claims that
could result in a statutory Lien) before the same shall become delinquent or in
default, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has
set aside on its books adequate reserves with respect thereto in accordance with
GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect.

Section 5.6. Books and Records. Keep proper books of record and account in which
full, true and correct entries shall be made of all dealings and transactions in
relation to its business and activities to the extent necessary to prepare the
consolidated financial statements of the Borrower and its Subsidiaries in
conformity with GAAP.

Section 5.7. Visitation, Inspection, Etc. Permit any representative of the
Administrative Agent or any Lender, to visit and inspect its properties, to
examine its books and records and to make copies and take extracts therefrom,
and to discuss its affairs, finances and accounts with any of its officers and
with its independent certified public accountants, all at such reasonable times
and as often as the Administrative Agent or any Lender may reasonably request
after reasonable prior notice to the Borrower; provided, if a Default or an
Event of Default has occurred and is continuing, no prior notice shall be
required.

Section 5.8. Maintenance of Properties; Insurance.

(a) Keep and maintain all property material to the conduct of its business in
good working order and condition, ordinary wear and tear excepted; and

(b) Maintain with financially sound and reputable insurance companies not
Affiliates of the Borrower, insurance with respect to its properties and
business, and the properties and business of its Subsidiaries, against loss,
damage and risk of the kinds customarily insured against by companies in the
same or similar businesses operating in the same or similar locations.

Section 5.9. Use of Proceeds; Margin Regulations. Use the proceeds of all Loans
to finance working capital needs, Permitted Acquisitions, capital expenditures
and for other general corporate purposes of the Borrower and its Subsidiaries.
No part of the proceeds of any Loan will be used, whether directly or
indirectly, for any purpose that would violate any rule or regulation of the
Board of Governors of the Federal Reserve System, including Regulations T, U or
X. All Letters of Credit will be used for general corporate purposes.

 

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The Borrower will not request any Borrowing or Letter of Credit, and the
Borrower shall not use, and the Borrower shall ensure that its Subsidiaries and
its or their respective directors, officers, employees and agents shall not use,
the proceeds of any Borrowing or Letter of Credit (i) in furtherance of an
offer, payment, promise to pay, or authorization of the payment or giving of
money, or anything else of value, to any Person in violation of any
Anti-Corruption Laws, (ii) for the purpose of funding, financing or facilitating
any activities, business or transaction of or with any Sanctioned Person, or in
any Sanctioned Country or (iii) in any manner that would result in the violation
of any Sanctions applicable to any party hereto.

Section 5.10. Additional Subsidiaries; Guarantees. If any Subsidiary is
acquired, formed or becomes a Material Domestic Subsidiary after the Closing
Date, promptly notify the Administrative Agent and the Lenders thereof and,
within thirty (30) Business Days (or such longer period approved by the
Administrative Agent in its sole discretion) after any such Subsidiary is
acquired or formed, if such Subsidiary is a Material Domestic Subsidiary (other
than any Subsidiary which is required by Law to maintain levels of solvency, or
capital, or net assets that would not be achieved if it provided a full and
unconditional guaranty of the Obligations), cause such Subsidiary to become a
Guarantor. A Subsidiary shall become an additional Guarantor by executing and
delivering to the Administrative Agent a Guarantor Joinder Agreement in form and
substance reasonably satisfactory to the Administrative Agent, accompanied by
(a) all other Loan Documents related thereto, (b) certified copies of
Organization Documents, appropriate authorizing resolutions of the board of
directors of such Subsidiaries, and opinions of counsel comparable to those
delivered pursuant to Section 3.1(c), and (c) such other documents as the
Administrative Agent may reasonably request. Notwithstanding the foregoing, upon
the guarantee by any Subsidiary of any Indebtedness incurred pursuant to
Section 7.1(k), concurrently with the provision of such guarantee, to the extent
such Subsidiary is not a Guarantor hereunder, cause such Subsidiary to become a
Guarantor by complying with this Section 5.10.

Section 5.11. Material Licenses. Obtain and maintain all Material Licenses for
each Subsidiary.

ARTICLE VI

FINANCIAL COVENANTS

Each Loan Party covenants and agrees that so long as any Lender has a Commitment
hereunder, any Obligation remains unpaid or outstanding, or any Letter of Credit
shall remain outstanding, no Loan Party shall, nor shall it permit any
Subsidiary to, directly or indirectly:

Section 6.1. Consolidated Net Leverage Ratio. Permit the Consolidated Leverage
Net Ratio as of the end of each Fiscal Quarter, commencing with the Fiscal
Quarter ending September 30, 2015, to be greater than:

 

Fiscal Quarter

   Consolidated Net Leverage Ratio  

Each Fiscal Quarter ending on or prior to September 30, 2016

     4.00:1.00   

Each Fiscal Quarter ending after September 30, 2016

     3.50:1.00   

 

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Section 6.2. Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio as of the end of each Fiscal Quarter, commencing with
the Fiscal Quarter ending September 30, 2015, to be less than 3.50:1.00.

Section 6.3. Statutory Net Worth Ratio. Permit as of the end of each Fiscal Year
for the Borrower:

(a) with respect to HMO Subsidiaries and Insurance Subsidiaries operating in a
state in which such HMO Subsidiary or Insurance Subsidiary, as applicable, is
required to maintain a Company Action Level, the ratio of Statutory Net Worth to
Company Action Level risk-based capital of such HMO Subsidiary or Insurance
Subsidiary to be at a level of less than 1.05:1.00 and

(b) with respect to all other HMO Subsidiaries and Insurance Subsidiaries, the
ratio of Statutory Net Worth to the state’s statutory net worth requirement for
such HMO Subsidiary or Insurance Subsidiary to be at a level of less than
1.05:1.00; provided that in no event shall the amount required pursuant to this
clause (b) be greater than the amount which would be required if clause (a) were
applicable to such HMO Subsidiary or Insurance Subsidiary.

ARTICLE VII

NEGATIVE COVENANTS

Each Loan Party covenants and agrees that so long as any Lender has a Commitment
hereunder, any Obligation remains unpaid or outstanding, or any Letter of Credit
shall remain outstanding, no Loan Party shall, nor shall it permit any
Subsidiary to, directly or indirectly:

Section 7.1. Indebtedness and Preferred Equity. Create, incur, assume or suffer
to exist any Indebtedness, except:

(a) Indebtedness created pursuant to the Loan Documents;

(b) Indebtedness of the Borrower or any Subsidiary existing on the date hereof
and set forth on Schedule 7.1 and extensions, renewals and replacements of any
such Indebtedness that do not increase the outstanding principal amount thereof
(immediately prior to giving effect to such extension, renewal or replacement)
or shorten the maturity or the weighted average life thereof;

(c) Indebtedness of the Borrower or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets,
including Capital Lease Obligations; provided, that such Indebtedness is
incurred prior to or within 90 days after such acquisition or the completion of
such construction or improvements or extensions, renewals, and replacements of
any such Indebtedness that do not increase the outstanding principal amount
thereof (immediately prior to giving effect to such extension, renewal or
replacement) or shorten the maturity or the weighted average life thereof;
provided further, that the aggregate principal amount of such Indebtedness does
not exceed at any time outstanding, the greater of (i) $150,000,000 and
(ii) 3.0% of the value of Consolidated Total Assets;

 

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(d) Indebtedness of the Borrower owing to any Subsidiary and of any Subsidiary
owing to the Borrower or any other Subsidiary; provided, that any such
Indebtedness that is owed by a Subsidiary that is not a Loan Party shall be
subject to Section 7.4;

(e) Guarantees by the Borrower of Indebtedness of any Subsidiary and by any
Subsidiary of Indebtedness of the Borrower or any other Subsidiary; provided,
that Guarantees by any Loan Party of Indebtedness of any Subsidiary that is not
a Loan Party shall be subject to Section 7.4;

(f) Hedging Obligations permitted by Section 7.10;

(g) Indebtedness under letters of credit not issued under this Agreement in an
aggregate amount not to exceed, at the time of incurrence of any such
Indebtedness, $150,000,000 (the “Additional Letters of Credit”);

(h) the 2020 Convertible Notes and the 2044 Convertible Notes;

(i) Indebtedness of Persons acquired in Permitted Acquisitions (the “Acquired
Indebtedness”) in an aggregate amount not to exceed $75,000,000 at the time of
incurrence of any such Acquired Indebtedness, provided that such Acquired
Indebtedness (i) shall exist prior to the applicable Permitted Acquisition and
shall not have been incurred in anticipation of the applicable Permitted
Acquisition, (ii) neither the Borrower nor any of its Subsidiaries that was not
an obligor with respect to such Indebtedness prior to such Person becoming a
Subsidiary of the Borrower shall become an obligor for such Indebtedness and
(iii) such Indebtedness shall not be secured by a Lien on any Property of the
Borrower or any Subsidiary that did not secure such Indebtedness prior to such
Person becoming a Subsidiary of the Borrower;

(j) other secured Indebtedness of the Borrower and its Subsidiaries, provided
that, (i) no Default or Event of Default shall have occurred and be continuing
or result from the incurrence of such Indebtedness, (ii) the documents governing
such secured Indebtedness shall not contain covenants (including quantitative
covenants and financial covenants) which are more restrictive than the covenants
contained in this agreement, (iii) the final maturity date, any mandatory
prepayment or mandatory redemption of such secured Indebtedness shall be no
earlier than ninety-one (91) days after the Revolving Commitment Termination
Date or the latest maturity date applicable to any Incremental Term Loan,
(iv) the weighted average life to maturity of such secured Indebtedness shall
not be shorter than the weighted average life to maturity of any Incremental
Term Loan outstanding as of the time of the issuance thereof and (v) the
aggregate principal amount of such Indebtedness shall not exceed, at the time of
incurrence of any such Indebtedness, the greater of (A) $75,000,000 and (B) 2.5%
of the value of Consolidated Total Assets; and

(k) Permitted Subordinated Debt and unsecured Indebtedness of the Borrower and
its Subsidiaries, provided that (i) after giving effect thereto on a Pro Forma
Basis the Borrower and its Subsidiaries are in compliance with the financial
covenants as set forth in Article VI recomputed as of the end of the period of
the four Fiscal Quarters most recently ended for which the Borrower has
delivered financial statements pursuant to Section 5.1(a) or (b), (ii) no
Default or Event of Default shall have occurred and be continuing or result from
the incurrence of such Indebtedness, (iii) the documents governing such
unsecured Indebtedness shall not contain covenants (including quantitative
covenants and financial covenants) which are more

 

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restricted than the covenants contained in this agreement, (iv) the final
maturity date, any mandatory prepayment or mandatory redemption of such
unsecured Indebtedness shall be no earlier than ninety-one (91) days after the
Revolving Commitment Termination Date or the latest maturity date applicable to
any Incremental Term Loan and (v) the weighted average life to maturity of such
unsecured Indebtedness shall not be shorter than the weighted average life to
maturity of any Incremental Term Loan outstanding as of the time of the issuance
thereof.

Section 7.2. Negative Pledge. Create, incur, assume or suffer to exist any Lien
on any of its assets or property now owned or hereafter acquired or, except:

(a) Liens securing the Obligations pursuant to the Loan Documents (if any);

(b) Permitted Encumbrances;

(c) any Liens on any property or assets of the Borrower or its Subsidiaries
existing on the Closing Date set forth on Schedule 7.2; provided, that such Lien
shall not apply to any other property or asset of the Borrower or any
Subsidiary;

(d) purchase money Liens upon or in any fixed or capital assets to secure the
purchase price or the cost of construction or improvement of such fixed or
capital assets or to secure Indebtedness incurred solely for the purpose of
financing the acquisition, construction or improvement of such fixed or capital
assets (including Liens securing any Capital Lease Obligations); provided, that
(i) such Lien secured Indebtedness permitted by Section 7.1(c), (ii) such Lien
attaches to such asset concurrently or within 90 days after the acquisition,
improvement or completion of the construction thereof, (iii) such Lien does not
extend to any other asset; and (iv) the Indebtedness secured thereby does not
exceed the cost of acquiring, constructing or improving such fixed or capital
assets;

(e) extensions, renewals, or replacements of any Lien referred to in paragraphs
(a) through (d) of this Section 7.2; provided, that the principal amount of the
Indebtedness secured thereby is not increased and that any such extension,
renewal or replacement is limited to the assets originally encumbered thereby;

(f) Liens securing Acquired Indebtedness permitted under Section 7.1(i),
provided that (i) such Liens do not at any time encumber any property other than
property of the Person acquired in the applicable Permitted Acquisition at the
time of such Permitted Acquisition and (ii) such Liens shall exist prior to the
applicable Permitted Acquisition and shall not be incurred in anticipation of
the applicable Permitted Acquisition;

(g) Liens securing Indebtedness permitted by Section 7.1(j);

(h) Liens in cash and Permitted Investments securing the reimbursement and
related obligations under Additional Letters of Credit; and

(i) normal and customary rights of setoff upon deposits of cash in favor of
banks or other depository institutions.

 

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Section 7.3. Fundamental Changes.

(a) Merge into or consolidate into any other Person, or permit any other Person
to merge into or consolidate with it, or sell, lease, transfer or otherwise
dispose of (in a single transaction or a series of transactions) all or
substantially all of its assets (in each case, whether now owned or hereafter
acquired) or any line of business or all or substantially all of the stock of
any of its Subsidiaries (in each case, whether now owned or hereafter acquired)
or liquidate or dissolve; provided, that if at the time thereof and immediately
after giving effect thereto, no Default or Event of Default shall have occurred
and be continuing, (i) the Borrower or any Subsidiary may merge with a Person
pursuant to a Permitted Acquisition if the Borrower (or such Subsidiary if the
Borrower is not a party to such merger) is the surviving Person, (ii) any
Subsidiary may merge into another Subsidiary, provided, that if any party to
such merger is a Guarantor, the Guarantor shall be the surviving Person,
(iii) any Subsidiary may sell, transfer, lease or otherwise dispose of all or
substantially all of its assets to any Loan Party, (iv) any Subsidiary (other
than a Guarantor) may liquidate or dissolve if the Borrower determines in good
faith that such liquidation or dissolution is in the best interests of the
Borrower and is not materially disadvantageous to the Lenders and (v) any HMO
Subsidiary and Insurance Subsidiary may merge with any other HMO Subsidiary,
Insurance Subsidiary or Subsidiary of an HMO Subsidiary or Insurance Subsidiary;
provided that (x) its assets are all disposed of pursuant to Section 2.12(a) and
(y) any such merger involving a Person that is not a wholly-owned Subsidiary
immediately prior to such merger shall not be permitted unless also permitted by
Section 7.4.

(b) Engage in any business other than businesses of the type conducted by the
Borrower and its Subsidiaries on the date hereof and businesses reasonably
related thereto.

Section 7.4. Investments, Loans, Etc. Make any Investment, except:

(a) Investments (other than Permitted Investments) existing on the date hereof
and set forth on Schedule 7.4 (including Investments in Subsidiaries);

(b) Permitted Investments;

(c) Investments in any Person that is a Loan Party prior to giving effect to
such Investment;

(d) Investments by any Subsidiary that is not a Loan Party in any other
Subsidiary that is not a Loan Party;

(e) Guarantees by Borrower or any Subsidiary constituting Indebtedness permitted
by Section 7.1;

(f) Hedging Transactions permitted by Section 7.10;

(g) Permitted Acquisitions;

(h) Investments in any HMO Subsidiary or Insurance Subsidiary (i) reasonably
related to causing such HMO Subsidiary or Insurance Subsidiary to comply with
(A) minimum

 

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statutory capital requirements applicable to such HMO Subsidiary or Insurance
Subsidiary or (B) the minimum amount of capital required to be maintained under
Material Contracts applicable to such HMO Subsidiary or Insurance Subsidiary or
(ii) in connection with a Permitted Acquisition, but solely to extent necessary
for such HMO Subsidiary or Insurance Subsidiary to consummate such Permitted
Acquisition;

(i) Guarantees of Contractual Obligations of any HMO Subsidiary or Excluded
Subsidiary entered into in the ordinary course of business; and

(j) other Investments which in the aggregate do not exceed the greater of
(i) $60,000,000 or (ii) 2.0% of Consolidated Total Assets at any time
outstanding.

Section 7.5. Restricted Payments. Declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, except for (a) dividends payable
by the Borrower solely in shares of any class of its common stock,
(b) Restricted Payments made by any Subsidiary to Persons that own Capital Stock
in such Subsidiary, on a pro rata basis according to their respective holdings
of the type of Capital Stock in respect of which such Restricted Payment is
being made with any other shareholders if such Subsidiary is not wholly owned by
the Borrower and other wholly owned Subsidiaries, (c) any Restricted Payment, so
long as, at the time of such Restricted Payment (i) no Default or Event of
Default has occurred and is continuing and (ii) after giving effect to such
Restricted Payment on a Pro Forma Basis (x) the Loan Parties would be in
compliance with the financial covenants set forth in Article VI recomputed as of
the end of the period of the four Fiscal Quarters most recently ended for which
the Borrower has delivered financial statements pursuant to Section 5.1(a) or
(b) and (y) the Consolidated Net Leverage Ratio recomputed as of the end of the
period of the four Fiscal Quarters most recently ended for which the Borrower
has delivered financial statements pursuant to Section 5.1(a) or (b) shall be
less than 2.50:1.00 and (d) any other Restricted Payment, so long as, at the
time of such Restricted Payment (i) no Default or Event of Default has occurred
and is continuing and (ii) the aggregate amount of all Restricted Payments made
pursuant to this clause (d) shall not to exceed $250,000,000 in the aggregate
during the term of this Agreement.

Section 7.6. Sale of Assets. Make any Asset Sale, except the sale or other
disposition of such assets that (i) have consideration of at least 75% of which
is cash or Permitted Investments, (ii) such consideration, at the time such
Asset Sale is agreed to, is at least equal to the fair market value of the
assets being sold, transferred, leased or disposed of at the time such Asset
Sale is agreed to, and (iii) the fair market value of all assets sold,
transferred, leased or disposed pursuant to this Section 7.6 shall not exceed
the greater of (x) $60,000,000 and (y) 2.0% of Consolidated Total Assets.

Section 7.7. Transactions with Affiliates. Sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) in the ordinary course of business at prices and on terms
and conditions not less favorable to the Borrower or such Subsidiary than could
be obtained on an arm’s-length basis from unrelated third parties,
(b) transactions between or among the Loan Parties and (c) any Restricted
Payment permitted by Section 7.5.

Section 7.8. Restrictive Agreements. Enter into, incur or permit to exist any
agreement (other than any Contractual Obligation binding

 

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on any HMO Subsidiary or Insurance Subsidiary) that prohibits, restricts or
imposes any condition upon (a) the ability of the Borrower or any Subsidiary to
create, incur or permit any Lien upon any of its assets or properties, whether
now owned or hereafter acquired, or (b) the ability of any Subsidiary to pay
dividends or other distributions with respect to its Capital Stock, to make or
repay loans or advances to the Borrower or any other Subsidiary, to Guarantee
Indebtedness of the Borrower or any other Subsidiary or to transfer any of its
property or assets to the Borrower or any Subsidiary of the Borrower; provided,
that (i) the foregoing shall not apply to restrictions or conditions imposed by
Law or by this Agreement or any other Loan Document, (ii) the foregoing shall
not apply to customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is sold and such
sale is permitted hereunder, (iii) clause (a) shall not apply to restrictions or
conditions imposed by any agreement relating to secured Indebtedness or Capital
Lease Obligations permitted by this Agreement so long as such restrictions and
conditions apply only to the property or assets securing such Indebtedness and
(iv) clause (a) shall not apply to customary provision in leases restricting the
assignment thereof.

Section 7.9. Reserved.

Section 7.10. Hedging Transactions. Enter into any Hedging Transaction, other
than Hedging Transactions entered into in the ordinary course of business to
hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in
the conduct of its business or the management of its liabilities. Solely for the
avoidance of doubt, the Borrower acknowledges that a Hedging Transaction entered
into for speculative purposes or of a speculative nature (which shall be deemed
to include any Hedging Transaction under which the Borrower or any of the
Subsidiaries is or may become obliged to make any payment (i) in connection with
the purchase by any third party of any Capital Stock or any Indebtedness or
(ii) as a result of changes in the market value of any Capital Stock or any
Indebtedness) is not a Hedging Transaction entered into in the ordinary course
of business to hedge or mitigate risks.

Section 7.11. Reserved.

Section 7.12. Amendment to Organization Documents. Amend, modify or waive any of
its rights in a manner materially adverse to the Lenders or any Loan Party under
its Organization Documents.

Section 7.13. Amendments and Prepayment of Other Indebtedness.

(a) The Borrower will not, and will not permit any of its Subsidiaries to
prepay, redeem, repurchase or otherwise acquire for value any Indebtedness
(other than the 2020 Convertible Notes and the 2044 Convertible Notes) other
than payments of principal, interest or other payments on any Permitted
Subordinated Debt to the extent permitted by the subordination provisions of the
Subordinated Debt Documents.

(b) The Borrower will not, and will not permit any of its Subsidiaries to make
any payment (including any payment at maturity), exchange or redemption of the
2020 Convertible Notes or the 2044 Convertible Notes, unless (i) prior to and
after any such repayment or redemption on a Pro Forma Basis, the Borrower has
Qualified Cash and availability under the

 

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Revolving Commitments in an aggregate amount equal to at least $150,000,000, and
(ii) before and after giving effect to any such repayment or redemption, no
Default or Event of Default shall have occurred and be continuing.

(c) The Borrower will not, and will not permit any of its Subsidiaries to, agree
to or permit any amendment, modification or waiver of any provision of any
Indebtedness if as amended, modified or waived, such Indebtedness would not be
permitted under Section 7.01.

(d) The Borrower will not, and will not permit any of its Subsidiaries to, agree
to or permit any amendment, modification or waiver of any provision of any
Subordinated Debt Document if the effect of such amendment, modification or
waiver is to (i) increase the yield on such Permitted Subordinated Debt or
change (to earlier dates) the dates upon which principal and interest are due
thereon, (ii) alter the redemption, prepayment or subordination provisions
thereof, (iii) alter the covenants and events of default in a manner that would
make such provisions more onerous or restrictive to the Borrower or any such
Subsidiary or (iv) otherwise increase the obligations of the Borrower or any
Subsidiary in respect of such Permitted Subordinated Debt or confer additional
rights upon the holders thereof which individually or in the aggregate would be
adverse to the Borrower or any of its Subsidiaries or to the Administrative
Agent or the Lenders.

Section 7.14. Accounting Changes. Make any significant change in accounting
treatment or reporting practices, except as required or permitted by GAAP, or
change the Fiscal Year of the Borrower or of any of its Subsidiaries, except to
change the fiscal year of a Subsidiary to conform its fiscal year to that of the
Borrower.

Section 7.15. Government Regulation. The Borrower will not, and will not permit
any of its Subsidiaries to, (a) be or become subject at any time to any law,
regulation or list of any Governmental Authority of the United States
(including, without limitation, the OFAC list) that prohibits or limits the
Lenders or the Administrative Agent from making any advance or extension of
credit to the Borrower or from otherwise conducting business with the Loan
Parties, or (b) fail to provide documentary and other evidence of the identity
of the Loan Parties as may be requested by the Lenders or the Administrative
Agent at any time to enable the Lenders or the Administrative Agent to verify
the identity of the Loan Parties or to comply with any applicable law or
regulation, including, without limitation, Section 326 of the Patriot Act at 31
U.S.C. Section 5318.

Section 7.16. Ownership of Subsidiaries. Notwithstanding any other provisions of
this Agreement to the contrary, the Borrower will not, and will not permit any
of the Subsidiaries to permit any Person (other than the Borrower or any wholly
owned Subsidiary) to own any Capital Stock of any Subsidiary, except to qualify
directors if required by applicable Law.

 

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ARTICLE VIII

EVENTS OF DEFAULT

Section 8.1. Events of Default. If any of the following events (each an “Event
of Default”) shall occur:

(a) any Loan Party shall fail to pay any principal of any Loan or of any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment or otherwise; or

(b) any Loan Party shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount payable under clause (a) of this Section 8.1
or an amount related to a Bank Product Obligation) payable under this Agreement
or any other Loan Document, when and as the same shall become due and payable,
and such failure shall continue unremedied for a period of three (3) Business
Days; or

(c) any representation or warranty made or deemed made by or on behalf of the
Borrower or any Subsidiary in or in connection with this Agreement or any other
Loan Document (including the Schedules attached thereto) and any amendments or
modifications hereof or waivers hereunder, or in any certificate, report,
financial statement or other document submitted to the Administrative Agent or
the Lenders by any Loan Party or any representative of any Loan Party pursuant
to or in connection with this Agreement or any other Loan Document shall prove
to be incorrect in any material respect (other than a representation or warranty
that is expressly qualified by a Material Adverse Effect or materiality, in
which case such representation or warranty shall prove to be incorrect in all
respects) when made or deemed made or submitted; or

(d) any Loan Party shall fail to observe or perform any covenant or agreement
contained in Section 5.1, 5.2, 5.3, 5.7, 5.8, 5.9 or 5.10 or Articles VI or VII;
provided that, solely with respect to compliance with Section 6.3 as of the end
of any Fiscal Year, if, in connection with the filing by a Subsidiary of a
statutory financial statement with any Governmental Authority as required by
Law, the Borrower or any Subsidiary discovers that such Subsidiary was not in
compliance with Section 6.3 as of the end of such Fiscal Year, then the Borrower
will not be in default of Section 6.3 if the Borrower demonstrates to the
Administrative Agent’s reasonable satisfaction that the Borrower has cured all
such violations within 5 days after the date on which the Borrower or such
Subsidiary has filed its statutory financial statements with such Governmental
Authority; or

(e) any Loan Party shall fail to observe or perform any covenant or agreement
contained in this Agreement (other than those referred to in clauses (a),
(b) and (d) above) or any other Loan Document, and such failure shall remain
unremedied for 30 days after the earlier of (i) any officer of any Loan Party
becomes aware of such failure, or (ii) notice thereof shall have been given to
any Loan Party by the Administrative Agent or any Lender; or

(f) the subordination provisions of the documents evidencing or governing any
subordinated Indebtedness shall, in whole or in part, terminate, cease to be
effective or cease to

 

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be legally valid, binding and enforceable against any holder of the applicable
subordinated Indebtedness; or

(g) the Borrower or any Subsidiary (whether as primary obligor or as guarantor
or other surety) shall fail to pay any principal of, or premium or interest on,
any Material Indebtedness that is outstanding, when and as the same shall become
due and payable (whether at scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
evidencing or governing such Indebtedness; or any other event shall occur or
condition shall exist under any agreement or instrument relating to such
Indebtedness and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event or
condition is to accelerate, or permit the acceleration of, the maturity of such
Indebtedness; or any such Indebtedness shall be declared to be due and payable,
or required to be prepaid or redeemed (other than by a regularly scheduled
required prepayment or redemption), purchased or defeased, or any offer to
prepay, redeem, purchase or defease such Indebtedness shall be required to be
made, in each case prior to the stated maturity thereof; or

(h) the Borrower or any Subsidiary shall (i) commence a voluntary case or other
proceeding or file any petition seeking liquidation, reorganization or other
relief under any federal, state or foreign bankruptcy, insolvency or other
similar Law now or hereafter in effect or seeking the appointment of a
custodian, trustee, receiver, liquidator or other similar official of it or any
substantial part of its property, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in clause (i) of this Section 8.1, (iii) apply for or consent to the appointment
of a custodian, trustee, receiver, liquidator or other similar official for the
Borrower or any such Subsidiary or for a substantial part of its assets,
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit
of creditors or (vi) take any action for the purpose of effecting any of the
foregoing; or

(i) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Borrower or any Subsidiary or its debts, or any substantial part
of its assets, under any federal, state or foreign bankruptcy, insolvency or
other similar Law now or hereafter in effect or (ii) the appointment of a
custodian, trustee, receiver, liquidator or other similar official for the
Borrower or any Subsidiary or for a substantial part of its assets, and in any
such case, such proceeding or petition shall remain undismissed for a period of
60 days or an order or decree approving or ordering any of the foregoing shall
be entered; or

(j) the Borrower or any Subsidiary shall become unable to pay or shall admit in
writing its inability to pay its debts as they become due; or

(k) an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with other ERISA Events that have occurred, could
reasonably be expected to result in liability to the Borrower and the
Subsidiaries in an aggregate amount exceeding $30,000,000; or

(l) any judgment or order for the payment of money in excess of $30,000,000,
individually or in the aggregate, shall be rendered against the Borrower or any
Subsidiary, and

 

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either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be a period of 30 consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or

(m) any non-monetary judgment or order shall be rendered against the Borrower or
any Subsidiary that could reasonably be expected to have a Material Adverse
Effect, and there shall be a period of 30 consecutive days during which a stay
of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or

(n) a Change in Control shall occur or exist; or

(o) any default or event of default (after giving effect to any grace period)
shall have occurred and be continuing under the Subordinated Debt Documents or
any Subordinated Debt Document shall cease to be in full force and effect or the
validity or enforceability thereof is disaffirmed by or on behalf of any
subordinated lender party thereto, or any Obligations fail to constitute “Senior
Indebtedness” for purposes of the applicable Subordinated Debt Document, or all
or any part of the Permitted Subordinated Debt is accelerated, is declared to be
due and payable is required to be prepaid or redeemed, in each case prior to the
stated maturity thereof; or

(p) any Loan Document, at any time after its execution and delivery and for any
reason other than as expressly permitted hereunder or thereunder or satisfaction
in full of all the Obligations, ceases to be in full force and effect or ceases
to give the Administrative Agent any material part of the Liens purported to be
created thereby; or any Loan Party or any other Person contests in any manner
the validity or enforceability of any Loan Document; or any Loan Party denies
that it has any or further liability or obligation under any Loan Document, or
purports to revoke, terminate or rescind any Loan Document;

(q) any HMO Event has occurred and has remain unremedied for a period of 60 days
following the occurrence thereof (or such shorter period of time, if any, as the
HMO Regulator shall have imposed for the cure of such HMO Event); or

(r) an Exclusion Event shall have occurred and could reasonably be expected to
result in a Material Adverse Effect.

then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Section 8.1) and at any time thereafter
during the continuance of such event, the Administrative Agent may, and upon the
written request of the Required Lenders shall, by notice to the Borrower, take
any or all of the following actions, at the same or different times:
(i) terminate the Commitments, whereupon the Commitment of each Lender shall
terminate immediately, (ii) declare the principal of and any accrued interest on
the Loans, and all other Obligations owing hereunder, to be, whereupon the same
shall become, due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower,
(iii) exercise all remedies contained in any other Loan Document, and
(iv) exercise any other remedies available at Law or in equity; and that, if an
Event of Default specified in either clause (h) or (i) shall occur, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon, and all fees, and all other
Obligations shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower.

 

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Section 8.2. Application of Funds.

After the exercise of remedies provided for in Section 8.1 (or immediately after
an Event of Default specified in either clause (h) or (i) of Section 8.1), any
amounts received on account of the Obligations shall be applied by the
Administrative Agent in the following order:

(a) first, to the fees and other reimbursable expenses of the Administrative
Agent and the Issuing Bank then due and payable pursuant to any of the Loan
Documents, until the same shall have been paid in full;

(b) second, to all reimbursable expenses, if any, of the Lenders then due and
payable pursuant to any of the Loan Documents, until the same shall have been
paid in full;

(c) third, to the fees due and payable under Sections 2.14(b) and (c) of this
Agreement and interest then due and payable under the terms of this Agreement,
until the same shall have been paid in full;

(d) fourth, to the aggregate outstanding principal amount of the Revolving
Loans, the LC Exposure, the Net Mark-to-Market Exposure (to the extent included
in the Obligations) and the Bank Product Obligations of the Borrower and its
Subsidiaries, until the same shall have been paid in full, allocated pro rata
among any Lender, any Lender-Related Hedge Provider and any Bank Product
Provider, based on their respective Pro Rata Shares of the aggregate amount of
such Revolving Loans, LC Exposure, Net Mark-to-Market Exposure (to the extent
included in the Obligations) and Bank Product Obligations;

(e) fifth, to additional cash collateral for the aggregate amount of all
outstanding Letters of Credit until the aggregate amount of all cash collateral
held by the Administrative Agent pursuant to this Agreement is equal to 102% of
the LC Exposure after giving effect to the foregoing clause fifth; and

(f) to the extent any proceeds remain, to the Borrower or other parties lawfully
entitled thereto.

All amounts allocated to the Lenders pursuant to the foregoing clauses second
through fourth as a result of amounts owed to the Lenders under the Loan
Documents shall be allocated among, and distributed to, the Lenders pro rata
based on their respective Pro Rata Shares; provided, that all amounts allocated
to that portion of the LC Exposure comprised of the aggregate undrawn amount of
all outstanding Letters of Credit pursuant to clause fourth and fifth shall be
distributed to the Administrative Agent, rather than to the Lenders, and held by
the Administrative Agent in an account in the name of the Administrative Agent
for the benefit of the Issuing Bank and the Revolving Loan Lenders as cash
collateral for the LC Exposure, such account to be administered in accordance
with Section 2.22(g).

Excluded Swap Obligations with respect to any Guarantor shall not be paid with
amounts received from such Guarantor or its assets, but appropriate adjustments
shall be made with respect to payments from other Loan Parties to preserve the
allocation to Obligations otherwise set forth above in this Section.

Notwithstanding the foregoing, Hedging Obligations and Bank Product Obligations
may be excluded from the application described above without any liability to
the Administrative Agent, if the

 

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Administrative Agent has not received written notice, together with such
supporting documentation as the Administrative Agent may request, from the
applicable Lender-Related Hedge Provider or Bank Product Provider. Each
Lender-Related Hedge Provider and Bank Product Provider not a party to this
Agreement that has given the notice contemplated by the preceding sentence
shall, by such notice, be deemed to have acknowledged and accepted the
appointment of the Administrative Agent pursuant to the terms of Article IX for
itself and its Affiliates as if a “Lender” party hereto.

ARTICLE IX

THE ADMINISTRATIVE AGENT

Section 9.1. Appointment of Administrative Agent.

(a) Each Lender irrevocably appoints SunTrust Bank as the Administrative Agent
and authorizes it to take such actions on its behalf and to exercise such powers
as are delegated to the Administrative Agent under this Agreement and the other
Loan Documents, together with all such actions and powers that are reasonably
incidental thereto. The Administrative Agent may perform any of its duties
hereunder or under the other Loan Documents by or through any one or more
sub-agents or attorneys-in-fact appointed by the Administrative Agent. The
Administrative Agent and any such sub-agent or attorney-in-fact may perform any
and all of its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions set forth in this Article
shall apply to any such sub-agent, attorney-in-fact or Related Party and shall
apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as the
Administrative Agent.

(b) The Issuing Bank shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith until such
time and except for so long as the Administrative Agent may agree at the request
of the Required Lenders to act for the Issuing Bank with respect thereto;
provided that the Issuing Bank shall have all the benefits and immunities
(i) provided to the Administrative Agent in this Article with respect to any
acts taken or omissions suffered by the Issuing Bank in connection with Letters
of Credit issued by it or proposed to be issued by it and the application and
agreements for letters of credit pertaining to the Letters of Credit as fully as
if the term “Administrative Agent” as used in this Article included the Issuing
Bank with respect to such acts or omissions and (ii) as additionally provided in
this Agreement with respect to the Issuing Bank.

Section 9.2. Nature of Duties of Administrative Agent. The Administrative Agent
shall not have any duties or obligations except those expressly set forth in
this Agreement and the other Loan Documents. Without limiting the generality of
the foregoing, (a) the Administrative Agent shall not be subject to any
fiduciary or other implied duties, regardless of whether a Default or an Event
of Default has occurred and is continuing, (b) the Administrative Agent shall
not have any duty to take any discretionary action or exercise any discretionary
powers, except those discretionary rights and powers expressly contemplated by
the Loan Documents that the Administrative Agent is required to exercise in
writing by the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances

 

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as provided in Section 11.2), provided that the Administrative Agent shall not
be required to take any action that, in its opinion or the opinion of its
counsel, may expose the Administrative Agent to liability or that is contrary to
any Loan Document or applicable law, including for the avoidance of doubt any
action that may be in violation of the automatic stay under any Debtor Relief
Law or that may effect a forfeiture, modification or termination of property of
a Defaulting Lender in violation of any Debtor Relief Law, and (c) except as
expressly set forth in the Loan Documents, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to the Borrower or any of its Subsidiaries that is
communicated to or obtained by the Administrative Agent or any of its Affiliates
in any capacity. The Administrative Agent shall not be liable for any action
taken or not taken by it, its sub-agents or its attorneys-in-fact with the
consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 11.2) or in the absence of its own gross negligence or
willful misconduct. The Administrative Agent shall not be responsible for the
negligence or misconduct of any sub-agents or attorneys-in-fact selected by it
with reasonable care. The Administrative Agent shall not be deemed to have
knowledge of any Default or Event of Default unless and until written notice
thereof (which notice shall include an express reference to such event being a
“Default” or “Event of Default” hereunder) is given to the Administrative Agent
by the Borrower or any Lender, and the Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with any Loan Document,
(ii) the contents of any certificate, report or other document delivered
hereunder or thereunder or in connection herewith or therewith, (iii) the
performance or observance of any of the covenants, agreements, or other terms
and conditions set forth in any Loan Document, (iv) the validity,
enforceability, effectiveness or genuineness of any Loan Document or any other
agreement, instrument or document, or (v) the satisfaction of any condition set
forth in Article III or elsewhere in any Loan Document, other than to confirm
receipt of items expressly required to be delivered to the Administrative Agent.
The Administrative Agent may consult with legal counsel (including counsel for
the Borrower) concerning all matters pertaining to such duties.

Section 9.3. Lack of Reliance on the Administrative Agent. Each of the Lenders,
the Swingline Lender and the Issuing Bank acknowledges that it has,
independently and without reliance upon the Administrative Agent, the Issuing
Bank or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each of the Lenders, the Swingline Lender and the Issuing Bank also
acknowledges that it will, independently and without reliance upon the
Administrative Agent, the Issuing Bank or any other Lender and based on such
documents and information as it has deemed appropriate, continue to make its own
decisions in taking or not taking any action under or based on this Agreement,
any related agreement or any document furnished hereunder or thereunder.

Section 9.4. Certain Rights of the Administrative Agent. If the Administrative
Agent shall request instructions from the Required Lenders with respect to any
action or actions (including the failure to act) in connection with this
Agreement, the Administrative Agent shall be entitled to refrain from such act
or taking such act unless and until it shall have received instructions from
such Lenders, and the Administrative Agent shall not incur liability to any
Person by reason of so refraining. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent acting or refraining from acting hereunder in
accordance with the instructions of the Required Lenders where required by the
terms of this Agreement.

 

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Section 9.5. Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message, posting or other distribution)
believed by it to be genuine and to have been signed, sent or made by the proper
Person. The Administrative Agent may also rely upon any statement made to it
orally or by telephone and believed by it to be made by the proper Person and
shall not incur any liability for relying thereon. The Administrative Agent may
consult with legal counsel (including counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or not taken by it in accordance with the advice of such
counsel, accountants or experts.

Section 9.6. The Administrative Agent in its Individual Capacity. The bank
serving as the Administrative Agent shall have the same rights and powers under
this Agreement and any other Loan Document in its capacity as a Lender as any
other Lender and may exercise or refrain from exercising the same as though it
were not the Administrative Agent; and the terms “Lenders”, “Required Lenders”,
or any similar terms shall, unless the context clearly otherwise indicates,
include the Administrative Agent in its individual capacity. The bank acting as
the Administrative Agent and its Affiliates may accept deposits from, lend money
to, and generally engage in any kind of business with the Borrower or any
Subsidiary or Affiliate of the Borrower as if it were not the Administrative
Agent hereunder.

Section 9.7. Successor Administrative Agent.

(a) The Administrative Agent may resign at any time by giving notice thereof to
the Lenders and the Borrower. Upon any such resignation, the Required Lenders
shall have the right to appoint a successor Administrative Agent, subject to
approval by the Borrower provided that no Default or Event of Default shall
exist at such time. If no successor Administrative Agent shall have been so
appointed, and shall have accepted such appointment within 30 days after the
retiring Administrative Agent gives notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent which shall be a commercial bank organized under the laws
of the United States or any state thereof or a bank which maintains an office in
the United States.

(b) Upon the acceptance of its appointment as the Administrative Agent hereunder
by a successor, such successor Administrative Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations under this Agreement and the other
Loan Documents. If, within 45 days after written notice is given of the retiring
Administrative Agent’s resignation under this Section, no successor
Administrative Agent shall have been appointed and shall have accepted such
appointment, then on such 45th day (i) the retiring Administrative Agent’s
resignation shall become effective, (ii) the retiring Administrative Agent shall
thereupon be discharged from its duties and obligations under the Loan Documents
and (iii) the Required Lenders shall thereafter perform all duties of the
retiring Administrative Agent under the Loan Documents until such time as the
Required Lenders appoint a successor Administrative Agent as provided above.
After any retiring Administrative Agent’s resignation hereunder, the provisions
of this Article shall continue in effect for the benefit of such retiring
Administrative Agent and its representatives

 

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and agents in respect of any actions taken or not taken by any of them while it
was serving as the Administrative Agent.

(c) In addition to the foregoing, if a Lender becomes, and during the period it
remains, a Defaulting Lender, and if any Default has arisen from a failure of
the Borrower to comply with Section 2.26(b), then the Issuing Bank and the
Swingline Lender may, upon prior written notice to the Borrower and the
Administrative Agent, resign as Issuing Bank or as Swingline Lender, as the case
may be, effective at the close of business Atlanta, Georgia time on a date
specified in such notice (which date may not be less than five (5) Business Days
after the date of such notice).

Section 9.8. Withholding Tax. To the extent required by any applicable law, the
Administrative Agent may withhold from any interest payment to any Lender an
amount equivalent to any applicable withholding tax. If the Internal Revenue
Service or any authority of the United States or any other jurisdiction asserts
a claim that the Administrative Agent did not properly withhold tax from amounts
paid to or for the account of any Lender (because the appropriate form was not
delivered or was not properly executed, or because such Lender failed to notify
the Administrative Agent of a change in circumstances that rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason), such Lender shall indemnify the Administrative Agent (to the extent
that the Administrative Agent has not already been reimbursed by the Borrower
and without limiting the obligation of the Borrower to do so) fully for all
amounts paid, directly or indirectly, by the Administrative Agent as tax or
otherwise, including penalties and interest, together with all expenses
incurred, including legal expenses, allocated staff costs and any out of pocket
expenses.

Section 9.9. Administrative Agent May File Proofs of Claim.

(a) In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to any Loan Party, the Administrative Agent
(irrespective of whether the principal of any Loan or any Revolving Credit
Exposure shall then be due and payable as herein expressed or by declaration or
otherwise and irrespective of whether the Administrative Agent shall have made
any demand on the Borrower) shall be entitled and empowered, by intervention in
such proceeding or otherwise:

(i) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans or Revolving Credit Exposure and all
other Obligations that are owing and unpaid and to file such other documents as
may be necessary or advisable in order to have the claims of the Lenders, the
Issuing Bank and the Administrative Agent (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Lenders,
the Issuing Bank and the Administrative Agent and its agents and counsel and all
other amounts due the Lenders, the Issuing Bank and the Administrative Agent
under Section 10.3) allowed in such judicial proceeding; and

(ii) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

 

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(b) Any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the Issuing Bank to make such payments to the Administrative
Agent and, if the Administrative Agent shall consent to the making of such
payments directly to the Lenders and the Issuing Bank, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under Section 11.3.

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender or the
Issuing Bank any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.

Section 9.10. Authorization to Execute Other Loan Documents. Each Lender hereby
authorizes the Administrative Agent to execute on behalf of all Lenders all Loan
Documents (including, without limitation, any subordination agreements) other
than this Agreement.

Section 9.11. Guaranty Matters. The Lenders irrevocably authorize the
Administrative Agent, at its option and in its discretion to release any Loan
Party from its obligations under the applicable Loan Documents if such Person
ceases to be a Subsidiary as a result of a transaction permitted hereunder. Upon
request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release any Loan
Party from its obligations under the applicable Loan Documents pursuant to this
Section. In each case as specified in this Section, the Administrative Agent is
authorized, at the Borrower’s expense, to execute and deliver to the applicable
Loan Party such documents as such Loan Party may reasonably request to release
such Loan Party from its obligations under the applicable Loan Documents, in
accordance with the terms of the Loan Documents and this Section.

Section 9.12. Documentation Agent; Syndication Agent. Each party hereto hereby
agrees that any Person designated as a Documentation Agent, Syndication Agent,
Arranger or Bookrunner shall have no duties or obligations under any Loan
Documents to any Lender or any Loan Party, except in its capacity, as
applicable, as the Administrative Agent, a Lender, the Swingline Lender or the
Issuing Bank.

Section 9.13. Right to Enforce Guarantee. Anything contained in any of the Loan
Documents to the contrary notwithstanding, the Borrower, the Administrative
Agent and each Lender hereby agree that no Lender shall have any right
individually to enforce the Guaranty, it being understood and agreed that all
powers, rights and remedies hereunder may be exercised solely by the
Administrative Agent.

Section 9.14. Hedging Obligations and Bank Product Obligations. No Bank Product
Provider or Lender-Related Hedge Provider that obtains the benefits of
Section 8.2 by virtue of the provisions hereof or of any other Loan Document
shall have any right to notice of any action or to consent to, direct or object
to any action hereunder or under any other Loan Document other than in its
capacity as a Lender and, in such case, only to the extent expressly provided in
the Loan Documents. Notwithstanding any

 

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other provision of this Article to the contrary, the Administrative Agent shall
not be required to verify the payment of, or that other satisfactory
arrangements have been made with respect to, Bank Product Obligations and
Hedging Obligations unless the Administrative Agent has received written notice
of such Obligations, together with such supporting documentation as the
Administrative Agent may request, from the applicable Bank Product Provider or
Lender-Related Hedge Provider, as the case may be.

ARTICLE X

THE GUARANTY

Section 10.1. The Guaranty. Each of the Guarantors hereby jointly and severally
guarantees to the Administrative Agent, each Lender, each Affiliate of a Lender
that enters into Bank Products or a Hedging Transaction with the Borrower or any
Subsidiary, and each other holder of the Obligations as hereinafter provided, as
primary obligor and not as surety, the prompt payment of the Obligations in full
when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise) strictly in
accordance with the terms thereof. The Guarantors hereby further agree that if
any of the Obligations is not paid in full when due (whether at stated maturity,
as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise), the Guarantors will, jointly and severally,
promptly pay the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) in accordance with the terms of such extension
or renewal.

Notwithstanding any provision to the contrary contained herein or in any other
of the Loan Documents or the other documents relating to the Obligations, the
obligations of each Guarantor under this Agreement and the other Loan Documents
shall not exceed an aggregate amount equal to the largest amount that would not
render such obligations subject to avoidance under applicable Debtor Relief
Laws.

Section 10.2. Obligations Unconditional. The obligations of the Guarantors under
Section 10.1 are joint and several, absolute and unconditional, irrespective of
the value, genuineness, validity, regularity or enforceability of any of the
Loan Documents or other documents relating to the Obligations, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Obligations, and, to the fullest extent permitted by
applicable Law, irrespective of any other circumstance whatsoever which might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 10.2 that the obligations of the
Guarantors hereunder shall be absolute and unconditional under any and all
circumstances. Each Guarantor agrees that such Guarantor shall have no right of
subrogation, indemnity, reimbursement or contribution against the Borrower or
any other Guarantor for amounts paid under this Article X until such time as the
Obligations have been paid in full and the Commitments have expired or
terminated. Without limiting the generality of the foregoing, it is agreed that,
to the fullest extent permitted by Law, the occurrence of any one or more of the
following shall not alter or impair the liability of any Guarantor hereunder,
which shall remain absolute and unconditional as described above:

(a) at any time or from time to time, without notice to any Guarantor, the time
for any performance of or compliance with any of the Obligations shall be
extended, or such performance or compliance shall be waived;

 

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(b) any of the acts mentioned in any of the provisions of any of the Loan
Documents or any other document relating to the Obligations shall be done or
omitted;

(c) the maturity of any of the Obligations shall be accelerated, or any of the
Obligations shall be modified, supplemented or amended in any respect, or any
right under any of the Loan Documents or any other document relating to the
Obligations shall be waived or any other guarantee of any of the Obligations or
any security therefor shall be released, impaired or exchanged in whole or in
part or otherwise dealt with;

(d) any Lien granted to, or in favor of, the Administrative Agent or any other
holder of the Obligations as security for any of the Obligations shall fail to
attach or be perfected; or

(e) any of the Obligations shall be determined to be void or voidable (including
for the benefit of any creditor of any Guarantor) or shall be subordinated to
the claims of any Person (including any creditor of any Guarantor).

With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever and any requirement that the Administrative Agent or any other holder
of the Obligations exhaust any right, power or remedy or proceed against any
Person under any of the Loan Documents or any other document relating to the
Obligations or against any other Person under any other guarantee of, or
security for, any of the Obligations.

Section 10.3. Reinstatement. The obligations of each Guarantor under this
Article X shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of any Person in respect of the Obligations
is rescinded or must be otherwise restored by any holder of any of the
Obligations, whether as a result of any Debtor Relief Law or otherwise, and each
Guarantor agrees that it will indemnify the Administrative Agent and each other
holder of the Obligations on demand for all reasonable costs and expenses
(including the fees, charges and disbursements of counsel) incurred by the
Administrative Agent or such holder of the Obligations in connection with such
rescission or restoration, including any such costs and expenses incurred in
defending against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any Debtor Relief Law.

Section 10.4. Certain Additional Waivers. Each Guarantor agrees that such
Guarantor shall have no right of recourse to security for the Obligations,
except through the exercise of rights of subrogation pursuant to Section 10.2
and through the exercise of rights of contribution pursuant to Section 10.6.

Section 10.5. Remedies. The Guarantors agree that, to the fullest extent
permitted by Law, as between the Guarantors, on the one hand, and the
Administrative Agent and the other holders of the Obligations, on the other
hand, the Obligations may be declared to be forthwith due and payable as
specified in Section 9.02 (and shall be deemed to have become automatically due
and payable in the circumstances specified in Section 9.02) for purposes of
Section 10.1 notwithstanding any stay, injunction or other prohibition
preventing such declaration (or preventing the Obligations from becoming
automatically due and payable) as against any other Person and that, in the
event of such declaration (or the Obligations being deemed to have become
automatically due and payable), the Obligations (whether or not due and payable
by any other Person) shall forthwith become due and payable by the Guarantors
for purposes of Section 10.1.

 

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Section 10.6. Rights of Contribution. The Guarantors agree among themselves
that, in connection with payments made hereunder, each Guarantor shall have
contribution rights against the other Guarantors as permitted under applicable
Law. Such contribution rights shall be subordinate and subject in right of
payment to the obligations of such Guarantors under the Loan Documents and no
Guarantor shall exercise such rights of contribution until the Obligations have
been paid in full and the Commitments have terminated.

Section 10.7. Guarantee of Payment; Continuing Guarantee. The guarantee in this
Article X is a guaranty of payment and not of collection, is a continuing
guarantee, and shall apply to the Obligations whenever arising.

Section 10.8. Keepwell. Each Qualified ECP Guarantor hereby jointly and
severally absolutely, unconditionally and irrevocably undertakes to provide such
funds or other support as may be needed from time to time by each Specified Loan
Party to honor all of such Specified Loan Party’s obligations under this
Agreement and the other Loan Documents in respect of Swap Obligations (provided,
however, that each Qualified ECP Guarantor shall only be liable under this
Section 10.8 for the maximum amount of such liability that can be hereby
incurred without rendering its obligations under this Section 10.8 or otherwise
under this Agreement voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer, and not for any greater amount). The
obligations of each Qualified ECP Guarantor under this Section 10.8 shall remain
in full force and effect until the Obligations have been indefeasibly paid and
performed in full. Each Qualified ECP Guarantor intends that this Section 10.8
constitute, and this Section 10.8 shall be deemed to constitute, a “keepwell,
support, or other agreement” for the benefit of each Specified Loan Party for
all purposes of Section la(18)(A)(v)(II) of the Commodity Exchange Act.

ARTICLE XI

MISCELLANEOUS

Section 11.1. Notices.

(a) Written Notices. Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other
communications to any party herein to be effective shall be in writing and shall
be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

 

To any Loan Party: Molina Healthcare, Inc. 200 Oceangate, Suite 100 Long Beach,
CA 90802-4137 Attention: Joe White, Chief Accounting Officer Facsimile: (562)
499-0612 Email: joseph.white@molinahealthcare.com To the Administrative Agent:
SunTrust Bank 303 Peachtree Street, N.E. Atlanta, Georgia 30308 Attention: Mary
Beth Coke

 

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Facsimile: (404) 926-5173 Email: marybeth.coke@suntrust.com With copies (for
information purposes only) to: SunTrust Bank Agency Services 303 Peachtree
Street, N.E./25th Floor Atlanta, Georgia 30308 Attention: Mr. Doug Weltz
Facsimile: (404) 495-2170 Email:agency.services@suntrust.com To the Issuing
Bank: SunTrust Bank 25 Park Place, N.E./Mail Code 3706 Atlanta, Georgia 30303
Attention: Standby Letter of Credit Dept. Facsimile: (404) 588-8129 To the
Swingline Lender: SunTrust Bank Agency Services 303 Peachtree Street, N.E./25th
Floor Atlanta, Georgia 30308 Attention: Mr. Doug Weltz Facsimile: (404) 495-2170
To any other Lender: To the address or facsimile number, set forth in the
Administrative Questionnaire or the Assignment and Acceptance executed by such
Lender.

Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All such notices
and other communications shall be effective upon actual receipt by the relevant
Person or, if delivered by overnight courier service, upon the first Business
Day after the date deposited with such courier service for overnight (next-day)
delivery or, if sent by telecopy, upon transmittal in legible form by facsimile
machine or, if mailed, upon the third Business Day after the date deposited into
the mail or, if delivered by hand, upon delivery; provided that notices
delivered to the Administrative Agent, the Issuing Bank or the Swingline Lender
shall not be effective until actually received by such Person at its address
specified in this Section.

Any agreement of the Administrative Agent, the Issuing Bank and the Lenders
herein to receive certain notices by telephone or facsimile is solely for the
convenience and at the request of the Borrower. The Administrative Agent, the
Issuing Bank and the Lenders shall be entitled to rely on the authority of any
Person purporting to be a Person authorized by the Borrower to give such notice
and the Administrative Agent, the Issuing Bank and the Lenders shall not have
any liability to the Borrower or other Person on account of any action taken or
not taken by the Administrative Agent, the Issuing Bank and the Lenders in
reliance upon such telephonic or facsimile notice. The obligation of the
Borrower to repay the Loans and all other Obligations hereunder shall not be
affected in any way or to any extent by any failure of the Administrative Agent,
the Issuing Bank and the Lenders to receive written confirmation

 

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of any telephonic or facsimile notice or the receipt by the Administrative
Agent, the Issuing Bank and the Lenders of a confirmation which is at variance
with the terms understood by the Administrative Agent, the Issuing Bank and the
Lenders to be contained in any such telephonic or facsimile notice.

(b) Electronic Communications.

(i) Notices and other communications to the Lenders and the Issuing Bank
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by
Administrative Agent, provided that the foregoing shall not apply to notices to
any Lender or the Issuing Bank pursuant to Article II unless such Lender, the
Issuing Bank, as applicable, and Administrative Agent have agreed to receive
notices under such Section by electronic communication and have agreed to the
procedures governing such communications. Administrative Agent or Borrower may,
in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it;
provided that approval of such procedures may be limited to particular notices
or communications.

(ii) Unless Administrative Agent otherwise prescribes, (A) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement); provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient, and (B) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (C) of notification that such notice or communication is
available and identifying the website address therefor.

(iii) The Borrower agrees that the Administrative Agent may, but shall not be
obligated to, make Communications (as defined below) available to the Issuing
Bank and the other Lenders by posting the Communications on Debt Domain,
Intralinks, Syndtrak, ClearPar or a substantially similar Electronic System.

(iv) Any Electronic System used by the Administrative Agent is provided “as is”
and “as available.” The Agent Parties (as defined below) do not warrant the
adequacy of such Electronic Systems and expressly disclaim liability for errors
or omissions in the Communications. No warranty of any kind, express, implied or
statutory, including, without limitation, any warranty of merchantability,
fitness for a particular purpose, non-infringement of third-party rights or
freedom from viruses or other code defects, is made by any Agent Party in
connection with the Communications or any Electronic System. In no event shall
the Administrative Agent or any of its Related Parties (collectively, the “Agent
Parties”) have any liability to any Loan Party, any Lender, the Issuing Bank or
any other Person or entity for damages of any kind, including, without
limitation, direct or indirect, special, incidental or consequential damages,
losses or expenses (whether in tort, contract or otherwise) arising out of any
Loan Party’s or the Administrative Agent’s transmission of Communications
through an Electronic System. “Communications”

 

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means, collectively, any notice, demand, communication, information, document or
other material provided by or on behalf of any Loan Party pursuant to any Loan
Document or the transactions contemplated therein which is distributed by the
Administrative Agent, any Lender or the Issuing Bank by means of electronic
communications pursuant to this Section, including through an Electronic System.

Section 11.2. Waiver; Amendments.

(a) No failure or delay by the Administrative Agent, the Issuing Bank or any
Lender in exercising any right or power hereunder or any other Loan Document,
and no course of dealing between any Loan Party and the Administrative Agent or
any Lender, shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power or any abandonment or discontinuance of
steps to enforce such right or power, preclude any other or further exercise
thereof or the exercise of any other right or power hereunder or thereunder. The
rights and remedies of the Administrative Agent, the Issuing Bank and the
Lenders hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies provided by Law. No waiver of any provision
of this Agreement or any other Loan Document or consent to any departure by any
Loan Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section 11.2, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
the issuance of a Letter of Credit shall not be construed as a waiver of any
Default or Event of Default, regardless of whether the Administrative Agent, any
Lender or the Issuing Bank may have had notice or knowledge of such Default or
Event of Default at the time.

(b) No amendment or waiver of any provision of this Agreement or the other Loan
Documents (other than the Fee Letter), nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Borrower and the Required Lenders or the Borrower and
the Administrative Agent with the consent of the Required Lenders and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, that

(i) no amendment or waiver shall:

(A) increase the Commitment of any Lender without the written consent of such
Lender;

(B) reduce the principal amount of any Loan or LC Disbursement or reduce the
rate of interest thereon, or reduce any fees payable hereunder, without the
written consent of each Lender affected thereby;

(C) postpone the date fixed for any payment of any principal of, or interest on,
any Loan or LC Disbursement or interest thereon or any fees hereunder or reduce
the amount of, waive or excuse any such payment, or postpone the scheduled date
for the termination or reduction of any Commitment, without the written consent
of each Lender affected thereby;

 

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(D) change Section 2.21(b) or (c) in a manner that would alter the pro rata
sharing of payments required thereby or change the provisions of Section 8.2,
without the written consent of each Lender;

(E) change any of the provisions of this Section 11.2 or the definition of
“Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders which are required to waive, amend or modify any rights
hereunder or make any determination or grant any consent hereunder, without the
consent of each Lender;

(F) release the Borrower without the consent of each Lender, or, release all or
substantially all of the Guarantors or limit the liability of all or
substantially all of the Guarantors under any Guaranty, without the written
consent of each Lender; or

(G) release all or substantially all collateral (if any) securing any of the
Obligations, without the written consent of each Lender;

provided further, that no such agreement shall amend, modify or otherwise affect
the rights, duties or obligations of the Administrative Agent, the Swingline
Lender or the Issuing Bank without the prior written consent of such Person.
Notwithstanding anything to the contrary herein, (i) no Defaulting Lender shall
have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that (x) the Commitment of such Lender may not be increased or
extended, (y) amounts payable to such Lender hereunder may not be permanently
reduced without the consent of such Lender (other than reductions in fees and
interest in which such reduction does not disproportionately affect such Lender)
and (z) any waiver, amendment or modification requiring the consent of all
Lenders or each affected Lender that by its terms affects any Defaulting Lender
disproportionately adversely relative to other affected Lenders shall require
the consent of such Defaulting Lender; (ii) this Agreement may be amended and
restated without the consent of any Lender (but with the consent of the Borrower
and the Administrative Agent) if, upon giving effect to such amendment and
restatement, such Lender shall no longer be a party to this Agreement (as so
amended and restated), the Commitments of such Lender shall have terminated (but
such Lender shall continue to be entitled to the benefits of Sections 2.18,
2.19, 2.20 and 11.3), such Lender shall have no other commitment or other
obligation hereunder and shall have been paid in full all principal, interest
and other amounts owing to it or accrued for its account under this Agreement;
(iii) each Lender is entitled to vote as such Lender sees fit on any bankruptcy
reorganization plan that affects the Loans, and each Lender acknowledges that
the provisions of Section 1126(c) of the Bankruptcy Code of the United States
supersedes the unanimous consent provisions set forth herein; and (iv) the
Required Lenders shall determine whether or not to allow a Loan Party to use
cash collateral in the context of a bankruptcy or insolvency proceeding and such
determination shall be binding on all of the Lenders.

The Lenders hereby authorize the Administrative Agent to enter into, and the
Lenders agree that this Agreement and the other Loan Documents shall be amended
by, any agreement implementing an increase in the Aggregate Revolving
Commitments or the establishment of an Incremental Term Loan to the extent the
Administrative Agent and the Borrower deem necessary in order to increase the
Aggregate Revolving Commitments or establish the applicable Incremental Term
Loan and to effect such other changes agreed by the Borrower and the Persons
providing such Incremental Term Loan and approved by the Administrative Agent;
provided, however, that any such agreement shall not affect any change

 

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described in Section 11.2(b) without the consent of each Person required to
consent to such change under such clause (it being agreed, however, that any
increase in the Aggregate Revolving Commitments or establishment of any
Incremental Term Loan will not, of itself, be deemed to effect any of the
changes described in Section 11.2(b) and that modifications to the definitions
of “Commitments”, “Loans” and “Required Lenders” or other provisions relating to
voting provisions to provide the Persons providing the applicable Incremental
Term Loan with the benefit of such provisions will not, by themselves, be deemed
to effect any of the changes described in Section 11.2(b)). The Administrative
Agent shall promptly notify each Lender as to the effectiveness of each
agreement implementing an increase in the Aggregate Revolving Commitments or
establishing an Incremental Term Loan.

Section 11.3. Expenses; Indemnification.

(a) The Borrower shall pay (i) all reasonable, out-of-pocket costs and expenses
of the Administrative Agent, the Arrangers and their Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent, the Arrangers and their Affiliates, in connection with the syndication of
the credit facilities provided for herein, the preparation and administration of
the Loan Documents and any amendments, modifications or waivers thereof (whether
or not the transactions contemplated in this Agreement or any other Loan
Document shall be consummated), including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent, the Arrangers and their
Affiliates, (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Bank in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket costs and expenses (including, without limitation, the reasonable
fees, charges and disbursements of outside counsel and the allocated cost of
inside counsel) incurred by the Administrative Agent, the Arrangers, the Issuing
Bank or any Lender in connection with the enforcement or protection of its
rights in connection with this Agreement and the other Loan Documents, including
its rights under this Section 11.3, or in connection with the Loans made or any
Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit.

(b) The Borrower shall indemnify the Administrative Agent (and any sub-agent
thereof), the Arrangers, each Lender and the Issuing Bank, and each Related
Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities, penalties and related expenses (including
the fees, charges and disbursements of any counsel for any Indemnitee), and
shall indemnify and hold harmless each Indemnitee from all fees and time charges
and disbursements for attorneys who may be employees of any Indemnitee, incurred
by any Indemnitee or asserted against any Indemnitee by any third party or by
the Borrower or any other Loan Party arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or
thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the
proceeds therefrom (including any refusal by the Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or Release of Hazardous

 

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Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any actual or alleged Environmental Liability related in
any way to the Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by the Borrower or any other Loan Party, and
regardless of whether any Indemnitee is a party thereto, provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities, penalties or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted (x) from the gross negligence or willful misconduct of
such Indemnitee (including any Related Party of such Indemnitee) or (y) solely
from a claim brought by the Borrower or any other Loan Party against an
Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or
under any other Loan Document. This Section 11.3(b) shall not apply with respect
to Taxes other than any Taxes that represent losses, claims, damages, etc.
arising from any non-Tax claim.

(c) To the extent that the Borrower fails to pay any amount required to be paid
to the Administrative Agent, the Issuing Bank or the Swingline Lender under
clauses (a) or (b) hereof, each Lender severally agrees to pay to the
Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may
be, such Lender’s Pro Rata Share (determined as of the time that the
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided, that the unreimbursed expense or indemnified payment, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent, the Issuing Bank or the Swingline Lender in
its capacity as such.

(d) To the extent permitted by applicable Law, each Loan Party shall not assert,
and hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to actual
or direct damages) arising out of, in connection with or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the transactions
contemplated therein, any Loan or any Letter of Credit or the use of proceeds
thereof.

(e) All amounts due under this Section 11.3 shall be payable promptly after
written demand therefor.

Section 11.4. Successors and Assigns.

(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
the Administrative Agent and each Lender, and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an assignee in
accordance with the provisions of clause (b) of this Section, (ii) by way of
participation in accordance with the provisions of clause (d) of this Section or
(iii) by way of pledge or assignment of a security interest subject to the
restrictions of clause (f) of this Section (and any other attempted assignment
or transfer by any party hereto shall be null and void). Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby,

 

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Participants to the extent provided in clause (d) of this Section and, to the
extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

(b) Any Lender may at any time assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitments, Loans, and other Revolving Credit Exposure at the time owing
to it); provided that any such assignment shall be subject to the following
conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitments, Loans and other Revolving Credit Exposure at the time
owing to it or in the case of an assignment to a Lender, an Affiliate of a
Lender or an Approved Fund, no minimum amount need be assigned; and

(B) in any case not described in paragraph (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Loans and
Revolving Credit Exposure outstanding thereunder) or, if the applicable
Commitment is not then in effect, the principal outstanding balance of the Loans
and Revolving Credit Exposure of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Administrative Agent or, if “Trade Date”
is specified in the Assignment and Acceptance, as of the Trade Date) shall not
be less than $5,000,000 with respect to Revolving Loans and in minimum
increments of $1,000,000, unless each of the Administrative Agent and, so long
as no Event of Default has occurred and is continuing, the Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed).

(ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans, other Revolving
Credit Exposure or the Commitments assigned.

(iii) Required Consents. No consent shall be required for any assignment except
to the extent required by paragraph (b)(i)(B) of this Section and, in addition:

(A) the consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (x) an Event of Default has occurred and is
continuing at the time of such assignment or (y) such assignment is to a Lender,
an Affiliate of a Lender or an Approved Fund;

(B) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for (x) assignments to a Person that is
not a Lender with a Commitment or an Affiliate of a Lender or an Approved Fund
and (y) assignments by Defaulting Lenders; and

 

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(C) the consent of the Issuing Bank (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment that increases the
obligation of the assignee to participate in exposure under one or more Letters
of Credit (whether or not then outstanding), and the consent of the Swingline
Lender (such consent not to be unreasonably withheld or delayed) shall be
required for any assignment in respect of the Revolving Commitments.

(iv) Assignment and Acceptance. The parties to each assignment shall deliver to
the Administrative Agent (A) a duly executed Assignment and Acceptance, (B) a
processing and recordation fee of $3,500, (C) an Administrative Questionnaire
unless the assignee is already a Lender and (D) the documents required under
Section 2.20 if such assignee is a Foreign Lender.

(v) No Assignment to Certain Persons. No such assignment shall be made to
(A) the Borrower or any of the Borrower’s Affiliates or Subsidiaries or (B) to
any Defaulting Lender or any of its Subsidiaries, or any Person who, upon
becoming a Lender hereunder, would constitute any of the foregoing Persons
described in this clause (B).

(vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to clause (c) of this Section 11.4, from and after the effective date specified
in each Assignment and Acceptance, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Acceptance, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 2.18, 2.19, 2.20 and 11.3 with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this paragraph shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with clause (d) of this Section 11.4.
If the consent of the Borrower to an assignment is required hereunder (including
a consent to an assignment which does not meet the minimum assignment thresholds
specified above), the Borrower shall be deemed to have given its consent five
Business Days after the date notice thereof has actually been delivered by the
assigning Lender (through the Administrative Agent) to the Borrower, unless such
consent is expressly refused by the Borrower prior to such fifth Business Day.

(c) The Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at one of its offices in Atlanta, Georgia a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts (and stated interest) of the Loans and Revolving Credit
Exposure owing to, each Lender pursuant to the terms hereof from time to time
(the “Register”). The entries in the Register shall be conclusive absent
manifest error, and the Borrower, the Administrative Agent and the Lenders shall
treat each Person whose

 

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name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower and any Lender at any reasonable time and from
time to time upon reasonable prior notice.

(d) Any Lender may at any time, without the consent of, or notice to, the
Borrower, the Administrative Agent, the Swingline Lender or the Issuing Bank
sell participations to any Person (other than a natural person, the Borrower or
any of the Borrower’s Affiliates or Subsidiaries or a Defaulting Lender) (each,
a “Participant”) in all or a portion of such Lender’s rights and/or obligations
under this Agreement (including all or a portion of its Commitment and/or the
Loans owing to it); provided that (i) such Lender’s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Administrative Agent, the Lenders, the Issuing Bank
and the Swingline Lender shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement.

(e) Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver with respect to the following to the
extent affecting such Participant: (i) increase the Commitment of any Lender
without the written consent of such Lender, (ii) reduce the principal amount of
any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce
any fees payable hereunder, without the written consent of each Lender affected
thereby, (iii) postpone the date fixed for any payment of any principal of, or
interest on, any Loan or LC Disbursement or interest thereon or any fees
hereunder or reduce the amount of, waive or excuse any such payment, or postpone
the scheduled date for the termination or reduction of any Commitment, without
the written consent of each Lender affected thereby, (iv) change Section 2.21(b)
or (c) in a manner that would alter the pro rata sharing of payments required
thereby, without the written consent of each Lender, (v) change any of the
provisions of this Section 11.4 or the definition of “Required Lenders” or any
other provision hereof specifying the number or percentage of Lenders which are
required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the consent of each
Lender, (vi) release any Guarantor or limit the liability of any such Guarantor
under any Guaranty without the written consent of each Lender except to the
extent such release is expressly provided under the terms of this Agreement or
(vii) release all or substantially all collateral (if any) securing any of the
Obligations. The Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.18, 2.19, and 2.20 (subject to the requirements and
limitations therein, including the requirements under Section 2.20(g) (it being
understood that the documentation required under Section 2.20(g) shall be
delivered to the participating Lender)) to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section 11.4; provided that such Participant (A) agrees to be subject to
the provisions of Sections 2.24 and 2.25 as if it were an assignee under
paragraph (b) of this Section 11.4; and (B) shall not be entitled to receive any
greater payment under Sections 2.18 or 2.20, with respect to any participation,
than its participating Lender would have been entitled to receive, except to the
extent such entitlement to receive a greater payment results from a Change in
Law that occurs after the Participant acquired the applicable participation.
Each Lender that sells a participation

 

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agrees, at the Borrower’s request and expense, to use reasonable efforts to
cooperate with Borrower to effectuate the provision of Section 2.25 with respect
to any Participant. To the extent permitted by Law, each Participant also shall
be entitled to the benefits of Section 11.7 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.21 as though it were a
Lender. Each Lender that sells a participation shall, acting solely for this
purpose as a non-fiduciary agent of the Borrower, maintain a register on which
it enters the name and address of each Participant and the principal amounts
(and stated interest) of each Participant’s interest in the Loans or other
obligations under the Loan Documents (the “Participant Register”); provided that
no Lender shall have any obligation to disclose all or any portion of the
Participant Register (including the identity of any Participant or any
information relating to a Participant’s interest in any commitments, loans,
letters of credit or its other obligations under any Loan Document) to any
Person except to the extent that such disclosure is necessary to establish that
such commitment, loan, letter of credit or other obligation is in registered
form under Section 5f.103-1(c) of the United States Treasury Regulations. The
entries in the Participant Register shall be conclusive absent manifest error,
and such Lender shall treat each Person whose name is recorded in the
Participant Register as the owner of such participation for all purposes of this
Agreement notwithstanding any notice to the contrary. For the avoidance of
doubt, the Administrative Agent (in its capacity as Administrative Agent) shall
have no responsibility for maintaining a Participant Register.

(f) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

Section 11.5. Governing Law; Jurisdiction; Consent to Service of Process.

(a) This Agreement and the other Loan Documents and any claims, controversy,
dispute or cause of action (whether in contract or tort or otherwise) based
upon, arising out of or relating to this Agreement or any other Loan Document
(except, as to any other Loan Document, as expressly set forth therein) and the
transactions contemplated hereby and thereby shall be construed in accordance
with and be governed by the Law (without giving effect to the conflict of law
principles thereof) of the State of New York.

(b) Each Loan Party hereby irrevocably and unconditionally submits, for itself
and its property, to the exclusive jurisdiction of the United States District
Court of the Southern District of New York, and of the Supreme Court of the
State of New York sitting in New York County and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document or the transactions contemplated hereby or
thereby, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
District Court or New York state court or, to the extent permitted by applicable
Law, such Federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided

 

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by Law. Nothing in this Agreement or any other Loan Document shall affect any
right that the Administrative Agent, the Issuing Bank or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
any other Loan Document against any Loan Party or its properties in the courts
of any jurisdiction.

(c) Each Loan Party irrevocably and unconditionally waives any objection which
it may now or hereafter have to the laying of venue of any such suit, action or
proceeding described in paragraph (b) of this Section 11.5 and brought in any
court referred to in paragraph (b) of this Section 11.5. Each of the parties
hereto irrevocably waives, to the fullest extent permitted by applicable Law,
the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

(d) Each party to this Agreement irrevocably consents to the service of process
in the manner provided for notices in Section 11.1. Nothing in this Agreement or
in any other Loan Document will affect the right of any party hereto to serve
process in any other manner permitted by Law.

Section 11.6. WAIVER OF JURY TRIAL. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.

Section 11.7. Right of Setoff. In addition to any rights now or hereafter
granted under applicable Law and not by way of limitation of any such rights,
each Lender and the Issuing Bank shall have the right, at any time or from time
to time upon the occurrence and during the continuance of an Event of Default,
without prior notice to the Borrower, any such notice being expressly waived by
the Borrower to the extent permitted by applicable Law, to set off and apply
against all deposits (general or special, time or demand, provisional or final)
of the Borrower at any time held or other obligations at any time owing by such
Lender and the Issuing Bank to or for the credit or the account of the Borrower
against any and all Obligations held by such Lender or the Issuing Bank, as the
case may be, irrespective of whether such Lender or the Issuing Bank shall have
made demand hereunder and although such Obligations may be unmatured. Each
Lender and the Issuing Bank agree promptly to notify the Administrative Agent
and the Borrower after any such set-off and any application made by such Lender
and the Issuing Bank, as the case may be; provided, that the failure to give
such notice shall not affect the validity of such set-off and application. Each
Lender and the Issuing Bank agrees to apply all amounts collected from any such
set-off to the Obligations before applying such amounts to any other
Indebtedness or other obligations owed by the Borrower and any of its
Subsidiaries to such Lender or Issuing Bank. Notwithstanding the provisions of
this Section 11.7, if at any time any Lender, the Issuing Bank or any of their
respective Affiliates maintains one or more deposit accounts for

 

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the Borrower or any other Loan Party into which Medicare and/or Medicaid
receivables are deposited, such Person shall waive the right of setoff set forth
herein.

Section 11.8. Counterparts; Integration. This Agreement may be executed by one
or more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. This Agreement, the Fee
Letter, the other Loan Documents, and any separate letter agreement(s) relating
to any fees payable to the Administrative Agent and its Affiliates constitute
the entire agreement among the parties hereto and thereto and their affiliates
regarding the subject matters hereof and thereof and supersede all prior
agreements and understandings, oral or written, regarding such subject matters.
Delivery of an executed counterpart of a signature page of this Agreement and
any other Loan Document by facsimile transmission or by any other electronic
imaging means (including .pdf), shall be effective as delivery of a manually
executed counterpart of this Agreement or such other Loan Document.

Section 11.9. Survival. All covenants, agreements, representations and
warranties made by any Loan Party herein, in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the
making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Administrative Agent, the Issuing Bank or any Lender may have had
notice or knowledge of any Default or Event of Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.18, 2.19, 2.20, and 11.3 and Article IX shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof. All representations and warranties made
herein, in the Loan Documents, in the certificates, reports, notices, and other
documents delivered pursuant to this Agreement shall survive the execution and
delivery of this Agreement and the other Loan Documents, and the making of the
Loans and the issuance of the Letters of Credit.

Section 11.10. Severability. Any provision of this Agreement or any other Loan
Document held to be illegal, invalid or unenforceable in any jurisdiction,
shall, as to such jurisdiction, be ineffective to the extent of such illegality,
invalidity or unenforceability without affecting the legality, validity or
enforceability of the remaining provisions hereof or thereof; and the
illegality, invalidity or unenforceability of a particular provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.

Section 11.11. Confidentiality. Each of the Administrative Agent, the Issuing
Bank and the Lenders agrees to take normal and reasonable precautions to
maintain the confidentiality of any information relating to the Borrower or any
of its Subsidiaries or any of their respective businesses, to the extent
designated in writing as confidential and provided to it by the Borrower or any
Subsidiary, other than any such information that is available to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis
prior to disclosure by the Borrower or any of its Subsidiaries, except that such
information may be disclosed (i) to any Related

 

99

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Party of the Administrative Agent, the Issuing Bank or any such Lender including
without limitation accountants, legal counsel and other advisors, (ii) to the
extent required by applicable Laws or regulations or by any subpoena or similar
legal process, (iii) to the extent requested by any regulatory agency or
authority purporting to have jurisdiction over it (including any self-regulatory
authority such as the National Association of Insurance Commissioners), (iv) to
the extent that such information becomes publicly available other than as a
result of a breach of this Section 11.11, or which becomes available to the
Administrative Agent, the Issuing Bank, any Lender or any Related Party of any
of the foregoing on a non-confidential basis from a source other than the
Borrower, (v) in connection with the exercise of any remedy hereunder or under
any other Loan Documents or any suit, action or proceeding relating to this
Agreement or any other Loan Documents or the enforcement of rights hereunder or
thereunder, (vii) subject to an agreement containing provisions substantially
the same as those of this Section 11.11, to (A) any assignee of or Participant
in, or any prospective assignee of or Participant in, any of its rights or
obligations under this Agreement, or (B) any actual or prospective party (or its
Related Parties) to any swap or derivative or similar transaction under which
payments are to be made by reference to the Borrower and its obligations, this
Agreement or payments hereunder, (viii) any rating agency, (ix) the CUSIP
Service Bureau or any similar organization, or (x) with the consent of the
Borrower. Any Person required to maintain the confidentiality of any information
as provided for in this Section 11.11 shall be considered to have complied with
its obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such information as such Person would accord its
own confidential information.

Section 11.12. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which may be treated as interest on such
Loan under applicable Law (collectively, the “Charges”), shall exceed the
maximum lawful rate of interest (the “Maximum Rate”) which may be contracted
for, charged, taken, received or reserved by a Lender holding such Loan in
accordance with applicable Law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section 11.12 shall be cumulated and the
interest and Charges payable to such Lender in respect of other Loans or periods
shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Rate to
the date of repayment (to the extent permitted by applicable Law), shall have
been received by such Lender.

Section 11.13. Waiver of Effect of Corporate Seal. Each Loan Party represents
and warrants to the Administrative Agent and the Lenders that neither it nor any
other Loan Party is required to affix its corporate seal to this Agreement or
any other Loan Document pursuant to any Law, agrees that this Agreement is
delivered by Borrower under seal and waives any shortening of the statute of
limitations that may result from not affixing the corporate seal to this
Agreement or such other Loan Documents.

Section 11.14. Patriot Act. The Administrative Agent and each Lender hereby
notifies the Loan Parties that, pursuant to the requirements of the Patriot Act,
it is required to obtain, verify and record information that identifies each
Loan Party, which information includes the name and address of such Loan Party
and other information that will allow such Lender or the Administrative Agent,
as applicable, to identify such Loan Party in accordance with the Patriot Act.

 

100

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Section 11.15. No Advisory or Fiduciary Responsibility. In connection with all
aspects of each transaction contemplated hereby (including in connection with
any amendment, waiver or other modification hereof or of any other Loan
Document), Borrower and each other Loan Party acknowledges and agrees and
acknowledges its Affiliates’ understanding that that: (i) (A) the services
regarding this Agreement provided by the Administrative Agent, the Arrangers
and/or the Lenders are arm’s-length commercial transactions between Borrower,
each other Loan Party and their respective Affiliates, on the one hand, and the
Administrative Agent, the Arrangers and the Lenders, on the other hand, (B) each
of Borrower and the other Loan Parties have consulted their own legal,
accounting, regulatory and tax advisors to the extent they have deemed
appropriate, and (C) Borrower and each other Loan Party is capable of evaluating
and understanding, and understands and accepts, the terms, risks and conditions
of the transactions contemplated hereby and by the other Loan Documents;
(ii) (A) each of the Administrative Agent, the Arrangers and the Lenders is and
has been acting solely as a principal and, except as expressly agreed in writing
by the relevant parties, has not been, is not, and will not be acting as an
advisor, agent or fiduciary, for Borrower, any other Loan Party, or any of their
respective Affiliates, or any other Person and (B) none of the Administrative
Agent, the Arrangers and any Lender has any obligation to Borrower, any other
Loan Party or any of their Affiliates with respect to the transaction
contemplated hereby except those obligations expressly set forth herein and in
the other Loan Documents; and (iii) the Administrative Agent, the Arrangers, the
Lenders and their respective Affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of Borrower, the
other Loan Parties and their respective Affiliates, and each of the
Administrative Agent, the Arrangers and the Lenders has no obligation to
disclose any of such interests to Borrower, any other Loan Party of any of their
respective Affiliates. To the fullest extent permitted by Law, each of Borrower
and the other Loan Parties hereby waive and release any claims that it may have
against the Administrative Agent, the Arrangers and each Lender with respect to
any breach or alleged breach of agency or fiduciary duty in connection with any
aspect of any transaction contemplated hereby.

Section 11.16. Electronic Execution of Assignments and Certain Other Documents.
The words “execution,” “signed,” “signature,” and words of like import in any
Assignment and Acceptance or in any amendment or other modification hereof
(including waivers and consents) shall be deemed to include electronic
signatures or the keeping of records in electronic form, each of which shall be
of the same legal effect, validity or enforceability as a manually executed
signature or the use of a paper-based recordkeeping system, as the case may be,
to the extent and as provided for in any applicable Law, including the Federal
Electronic Signatures in Global and National Commerce Act, the New York State
Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act.

[SIGNATURE PAGES FOLLOW]

 

101

--------------------------------------------------------------------------------

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

 

BORROWER: MOLINA HEALTHCARE, INC., a Delaware corporation By:

/s/ John C Molina

Name: John C. Molina Title: Chief Financial Officer GUARANTORS: MOLINA
INFORMATION SYSTEMS, LLC, a California limited liability company By:

/s/ John C Molina

Name: John C. Molina Title: Chief Financial Officer MOLINA MEDICAL MANAGEMENT,
INC., a California corporation By:

/s/ Jeff D. Barlow

Name: Jeff D. Barlow Title: Secretary

--------------------------------------------------------------------------------

ADMINISTRATIVE SUNTRUST BANK, AGENT: as Administrative Agent By:

/s/ Mary E. Coke

Name: Mary E. Coke Title: Vice President

--------------------------------------------------------------------------------

LENDERS: SUNTRUST BANK, as the Issuing Bank, as Swingline Lender and as a Lender
By:

/s/ Mary E. Coke

Name: Mary E. Coke Title: Vice President BANK OF AMERICA, N.A. By:

/s/ Joseph L. Corah

Name: Joseph L. Corah Title: Director WELLS FARGO BANK, NATIONAL ASSOCIATION.
By:

/s/ Matthew Olson

Name: Matthew Olson Title: Vice President BOKF, N.A dba BANK OF ALBUQUERQUE By:

/s/ Chas Gilmore II

Name: Chas Gilmore II Title: AVP, Healthcare Banking EAST WEST BANK By:

/s/ May Kwong

Name: May Kwong Title: First Vice President, Portfolio Manager MUFG UNION BANK,
N.A. By:

/s/ Teuta Ghilaga

Name: Teuta Ghilaga Title: Director

--------------------------------------------------------------------------------

UBS AG, STAMFORD BRANCH By:

/s/ Darlene Arias

Name: Darlene Arias Title: Director By:

/s/ Craig Pearson

Name: Craig Pearson Title: Associate Director U.S. BANK NATIONAL ASSOCIATION By:

/s/ David C. Mruk

Name: David C. Mruk Title: Senior Vice President

--------------------------------------------------------------------------------

Schedule I

COMMITMENT AMOUNTS

 

Lenders

   Revolving
Commitment      Revolving
Commitment
Percentage  

SunTrust Bank

   $ 60,000,000.00         24.000000000 % 

Bank of America, N.A.

   $ 38,000,000.00         15.200000000 % 

UBS AG, Stamford Branch

   $ 38,000,000.00         15.200000000 % 

Wells Fargo Bank, National Association

   $ 38,000,000.00         15.200000000 % 

MUFG Union Bank, N.A.

   $ 31,000,000.00         12.400000000 % 

U.S. Bank National Association

   $ 15,000,000.00         6.000000000 % 

BOKF, N.A. dba Bank of Albuquerque

   $ 15,000,000.00         6.000000000 % 

East West Bank

   $ 15,000,000.00         6.000000000 %    

 

 

    

 

 

 

Total

$ 250,000,000.00      100.000000000 %    

 

 

    

 

 

 

--------------------------------------------------------------------------------

Schedule 4.15

Subsidiaries

 

Name of entity

  

Ownership
interest of

each Loan

Party in each
Subsidiary

  

Jurisdiction of
incorporation

or organization

   Type of entity   

All of the issued and
outstanding Capital Stock
(owned by the Persons
and in the amounts set

forth below) as of the
Closing Date

   Insurance Subsidiary
or HMO Subsidiary   

Preemptive or other

outstanding rights, options,
warrants, conversion

rights or other similar
agreements or

understandings for the

purchase or acquisition of

any Capital Stock

Borrower:

Molina Healthcare, Inc.

   N/A    Delaware    Corporation    N/A    N/A   

1. $550MIL 1.125% Notes; $301.551MIL 1.625% Notes1

 

2. Shares issuable under our 2002 and 2011 Equity Incentive Plans

Subsidiaries:

                 

Molina Medical Management, Inc.

   100% by Borrower    California    Corporation    100 shares issued to
Borrower    N/A    None

Molina Information Systems, LLC

   100% by Borrower    California    Limited
Liability
Company    100% membership    N/A    None

 

1  Concurrent with the issuance of the 1.125% Notes, we entered into privately
negotiated hedge transactions (collectively, the 1.125% Call Option) and warrant
transactions (collectively, the 1.125% Warrants) with certain of the initial
purchasers of the 1.125% Notes. The 1.125% Call Option, which is indexed to our
common stock, is a derivative asset that requires mark-to-market accounting
treatment due to cash settlement features until the 1.125% Call Option settles
or expires. We also issued 13,490,236 warrants with a strike price
of $53.8475 per share. The number of warrants and the strike price are subject
to adjustment under certain circumstances.

--------------------------------------------------------------------------------

Name of entity

  

Ownership
interest of

each Loan

Party in each
Subsidiary

  

Jurisdiction of
incorporation

or organization

   Type of entity   

All of the issued and
outstanding Capital Stock
(owned by the Persons
and in the amounts set

forth below) as of the
Closing Date

   Insurance Subsidiary
or HMO Subsidiary   

Preemptive or other

outstanding rights, options,
warrants, conversion

rights or other similar
agreements or

understandings for the

purchase or acquisition of

any Capital Stock

Molina Healthcare of California Partner Plan, Inc.

   100% by Borrower    California    Corporation    100 shares issued to:
Borrower    HMO    None

Molina Healthcare of Ohio, Inc.

   100% by Borrower    Ohio    Corporation    1,500 shares issued to: Borrower
   HMO &
Insurance    None

Molina Healthcare of Florida, Inc.

   100% by Borrower    Florida    Corporation    100 shares issued to: Borrower
   HMO &
Insurance    None

Molina Healthcare of Maryland, Inc.

   100% by Borrower    Maryland    Corporation    100 shares issued to: Borrower
   N/A    None

Molina Healthcare of Utah, Inc.

   100% by Borrower    Utah    Corporation    100,000 shares issued to: Borrower
   HMO &
Insurance    None

Molina Healthcare of Illinois, Inc.

   100% by Borrower    Illinois    Corporation    100 shares issued to: Borrower
   HMO &
Insurance    None

Molina Healthcare of Michigan, Inc.

   100% by Borrower    Michigan    Corporation   

129,000 Class A shares and 30,000 Class B shares

issued to: Borrower

   HMO &
Insurance    None

Molina Youth Academy

   100% by Borrower    California    Non-profit
public benefit
corporation    100% of membership issued to: Borrower    N/A    None

Molina Hospital Management, Inc.

   100% by Borrower    California    Corporation    100 shares issued to:
Borrower    N/A    None

 

-2-

--------------------------------------------------------------------------------

Name of entity

  

Ownership
interest of

each Loan

Party in each
Subsidiary

  

Jurisdiction of
incorporation

or organization

   Type of entity   

All of the issued and
outstanding Capital Stock
(owned by the Persons
and in the amounts set

forth below) as of the
Closing Date

   Insurance Subsidiary
or HMO Subsidiary   

Preemptive or other

outstanding rights, options,
warrants, conversion

rights or other similar
agreements or

understandings for the

purchase or acquisition of

any Capital Stock

Molina Healthcare of California, Inc.

   100% by Borrower    California    Corporation    5,000 shares issued to:
Borrower    HMO    None

Molina Healthcare Data Center, Inc.

   100% by Borrower    New Mexico    Corporation    100 shares issued to:
Borrower    N/A    None

Molina Healthcare of Georgia, Inc.

   100% by Borrower    Georgia    Corporation    100 shares issued to: Borrower
   HMO &
Insurance    None

Molina Healthcare of Mississippi, Inc.

   100% by Borrower    Mississippi    Corporation    100 shares issued to:
Borrower    N/A    None

Molina Healthcare of Washington, Inc.

   100% by Borrower    Washington    Corporation    100 shares issued to:
Borrower    HMO &
Insurance    None

Molina Healthcare of Virginia, Inc.

   100% by Borrower    Virginia    Corporation    100 shares issued to: Borrower
   N/A    None

Molina Healthcare of Wisconsin, Inc.

   100% by Borrower    Wisconsin    Corporation    100 shares issued to:
Borrower    HMO &
Insurance    None

Molina Healthcare of New Mexico, Inc.

   100% by Borrower    New Mexico    Corporation    14,561 shares issued to:
Borrower    HMO &
Insurance    None

Molina Healthcare of North Carolina, Inc.

   100% by Borrower    North Carolina    Corporation    100 shares issued to:
Borrower    N/A    None

 

-3-

--------------------------------------------------------------------------------

Name of entity

  

Ownership
interest of

each Loan

Party in each
Subsidiary

  

Jurisdiction of
incorporation

or organization

   Type of entity   

All of the issued and
outstanding Capital Stock
(owned by the Persons
and in the amounts set

forth below) as of the
Closing Date

   Insurance Subsidiary
or HMO Subsidiary   

Preemptive or other

outstanding rights, options,
warrants, conversion

rights or other similar
agreements or

understandings for the

purchase or acquisition of

any Capital Stock

Molina Healthcare of Iowa, Inc.

   100% by Borrower    Iowa    Corporation    100 shares issued to: Borrower   
N/A    None

Molina Health Plan Management, Inc.

   100% by Borrower    New York    Corporation    100 shares issued to: Borrower
   N/A    None

Molina Pathways, LLC

   100% by Borrower    Delaware    Limited
Liability
Company   

100% membership

interest issued to Borrower

   N/A    None

Molina Personal Care of Texas, Inc.

   100% Molina Pathways, LLC    Texas    Corporation   

100 shares issued to:

Molina Pathways, LLC

   N/A    None

Molina Pathways of Texas, Inc.

   100% Molina Pathways, LLC    Texas    Corporation   

100 shares issued to:

Molina Pathways, LLC

   N/A    None

Molina Personal Care of South Carolina, Inc.

   100% Molina Pathways, LLC    South Carolina    Corporation   

100 shares issued to:

Molina Pathways, LLC

   N/A    None

Molina Healthcare of South Carolina, Inc.

   100% by Borrower    South Carolina    Corporation    100 shares issued to:
Borrower    HMO &
Insurance    None

Molina Healthcare of Puerto Rico, Inc.

   100% by Borrower    Puerto Rico    Corporation    100 shares issued to:
Borrower    HMO &
Insurance    None

Molina Healthcare of Texas, Inc.

   100% by Borrower    Texas    Corporation    100 shares issued to: Borrower   
HMO &
Insurance    None

 

-4-

--------------------------------------------------------------------------------

Name of entity

  

Ownership
interest of

each Loan

Party in each
Subsidiary

  

Jurisdiction of
incorporation

or organization

   Type of entity   

All of the issued and
outstanding Capital Stock
(owned by the Persons

and in the amounts set

forth below) as of the

Closing Date

   Insurance Subsidiary
or HMO Subsidiary   

Preemptive or other

outstanding rights, options,
warrants, conversion

rights or other similar
agreements or

understandings for the

purchase or acquisition of

any Capital Stock

Molina Healthcare of Texas Insurance Company

   100% by Molina Healthcare of Texas, Inc.    Texas    Corporation    700,000
shares issued to: Molina Healthcare of Texas, Inc.    Insurance    None

Molina Healthcare of Arizona, Inc.

   100% by Borrower    Arizona    Corporation    100 shares issued to: Borrower
   N/A    None

Molina Healthcare of New York, Inc.

   100% by Borrower    New York    Corporation    100 shares issued to: Borrower
   N/A    None

Easy Care MSO, LLC

  

53.11% Class B voting percentage by Molina Medical Management, Inc.

 

50.23% participation percentage by Molina Medical Management, Inc.

   California    Limited
Liability
Company   

555,000 Class C Units

issued to: Molina Medical Management, Inc.;

250,000 Class C Units

issued to: Pezeshki Family Trust Dated March 1990, as amended;

40,000 Class C Units

issued to: Michelle Bui;

200,000 Class C Units

issued to: Patricia Paola Salas

 

Molina Medical Management, Inc. holds no

(zero) Class B Units

   N/A    None

 

-5-

--------------------------------------------------------------------------------

Name of entity

  

Ownership
interest of

each Loan

Party in each
Subsidiary

  

Jurisdiction of
incorporation

or organization

   Type of entity   

All of the issued and
outstanding Capital Stock
(owned by the Persons

and in the amounts set

forth below) as of the

Closing Date

   Insurance Subsidiary
or HMO Subsidiary   

Preemptive or other

outstanding rights, options,
warrants, conversion

rights or other similar
agreements or

understandings for the

purchase or acquisition of

any Capital Stock

BW MHM Holdings, LLC

   50% by Molina Hospital Management, Inc.    Delaware    Limited
Liability
Company   

1,000 Units

issued to: Molina Hospital Management, Inc.

 

1,000 Units issued to:

New Found Health LLC

   N/A    None

 

-6-

--------------------------------------------------------------------------------

Molina Healthcare, Inc.

Revolving Credit Agreement

Schedule 7.1 Outstanding Indebtedness

As of April 30, 2015

 

     ($ in thousands)  

Debt Description

   Short-term     Long-term     Total  

Convertible Notes - $550M 1.125%

   $ 550,000      $ —        $ 550,000   

Discount

   $ (108,097 )    $ —        $ (108,097 )    

 

 

   

 

 

   

 

 

 

1.125% Notes, carrying amount

$ 441,903    $ —      $ 441,903   

Convertible Notes - $125M 1.625%

$ —      $ 125,000    $ 125,000   

Discount

$ —      $ (13,296 )  $ (13,296 ) 

Premium

$ —      $ 526    $ 526   

Convertible Notes - $176.6M 1.625%

$ —      $ 176,551    $ 176,551   

Discount

$ —      $ (17,250 )  $ (17,250 )    

 

 

   

 

 

   

 

 

 

1.625% Notes, carrying amount

$ —      $ 271,531    $ 271,531   

Lease Financing Obligations (sale leaseback)

$ 399    $ 201,216    $ 201,615   

Capital Leases

$ 994    $ 791    $ 1,785   

Software Obligation

$ 2,683    $ 5,142    $ 7,826      

 

 

   

 

 

   

 

 

 

Total Debt

$ 445,980    $ 478,680    $ 924,660      

 

 

   

 

 

   

 

 

 

--------------------------------------------------------------------------------

Molina Healthcare, Inc. Consolidated Short Term and Long Term Debt Section of BS

Elizabeth Lau 5/20/15

                 4/30/15            Co           bals         

 

 

       

 

 

   

Short Term Debt Section of BS

#24120 Note Payable ST   01    convertible senior note—1.125%   (441,903,234 ) 
        

 

 

      (441,903,234 )          

 

 

    #24130 Financing Obligation ST   01    financing oblig (PT)—due 6th &
Pine—ST portion   26,438      01    financing oblig (MB)—due 6th & Pine—ST
portion   (425,366 )          

 

 

      (398,928 )          

 

 

    #24170 Capital Lease ST   01    Xerox capital lease-ST   (25,442 )    01   
Cisco capital lease-ST   (969,045 )          

 

 

      (994,487 )          

 

 

    Consolidated Balance   (443,296,649 )          

 

 

   

Long Term Debt Section of BS

#25110 Capital Lease LT   01    Xerox capital lease-LT   (44,668 )    01   
Cisco capital lease-LT   (746,030 )          

 

 

      (790,698 )          

 

 

    #27120 Note Payable LT   01    convertible senior note—$125M 1.625%  
(125,000,000 )    01    convertible senior note—$176.6M 1.625%   (176,551,000 ) 
        

 

 

      (301,551,000 )          

 

 

    #27130 Financing Obligation LT   01    financing oblig (Molina Ctr & Corp
Exchge)—due AGNL   (161,115,806 )    01    financing oblig (PT)—due 6th &
Pine—LT portion   (13,735,735 )    01    financing oblig (MB)—due 6th & Pine—LT
portion   (26,364,246 )          

 

 

      (201,215,787 )          

 

 

    #27800 Debt Discount   01    accretion of debt discount—$125M 1.625%  
13,295,924      01    accretion of debt discount—$176.6M 1.625%   17,250,013   
        

 

 

      30,545,937            

 

 

    #27810 Debt Premium   01    debt premium—$125M 1.625%   (525,994 )          

 

 

      (525,994 )          

 

 

    Consolidated Balance   (473,537,542 )          

 

 

    Total Debt   (916,834,191 )  22209 Accrd Admin   (2,683,495 )  WorldWide
Software License Obligation - ST 29150 Accrd Fees-LT   (5,142,089 )  WorldWide
Software License Obligation - LT   (924,659,775 ) 

--------------------------------------------------------------------------------

Schedule 7.2 – Existing Liens

 

1.

Molina Healthcare, Inc.

a.

 

California Secretary of State

  i.    UCC-1 filed July 19, 2007. Secured party: Cisco Systems Capital
Corporation   ii.    UCC-1 filed January 8, 2010. Secured party: Cisco Systems
Capital Corporation   iii.    UCC-1 filed July 22, 2011. Secured party: Cisco
Systems Capital Corporation   iv.    UCC-1 filed March 6, 2013. Secured party:
Xerox Financial Services   v.    UCC-1 filed September 16, 2014. Secured party:
Bank of the West b.   Delaware Secretary of State   i.    UCC-1 filed May 11,
2006. Secured party: Dell Financial Services, L.P.   ii.    UCC-1 filed August
25, 2009. Secured party: Cisco Systems Capital Corporation   iii.    UCC-1 filed
June 18, 2010. Secured party: U.S. Bancorp   iv.    UCC-1 filed August 5, 2010.
Secured party: U.S. Bancorp   v.    UCC-1 filed August 5, 2010. Secured party:
U.S. Bancorp   vi.    UCC-1 filed October 7, 2010. Secured party: U.S. Bancorp  
vii.    UCC-1 filed October 7, 2010. Secured party: U.S. Bancorp   viii.   
UCC-1 filed November 1, 2010. Secured party: U.S. Bancorp Business Equipment
Finance Group   ix.    UCC-1 filed November 1, 2010. Secured party: U.S. Bancorp
Business Equipment Finance Group   x.    UCC-1 filed January 4, 2011. Secured
party: Insight Investments, LLC and Bank of American Leasing & Capital, LLC  
xi.    UCC-1 filed January 31, 2011. Secured party: U.S. Bancorp Business
Equipment Finance Group   xii.    UCC-1 filed February 1, 2011. Secured party:
U.S. Bancorp Business Equipment Finance Group   xiii.    UCC-1 filed January 18,
2011. Secured party: Insight Investments, LLC and Bank of American Leasing &
Capital, LLC   xiv.    UCC-1 filed February 15, 2011. Secured party: U.S.
Bancorp Business Equipment Finance Group   xv.    UCC-1 filed February 15, 2011.
Secured party: U.S. Bancorp Business Equipment Finance Group   xvi.    UCC-1
filed February 16, 2011. Secured party: U.S. Bancorp Business Equipment Finance
Group   xvii.    UCC-1 filed March 10, 2011. Secured party: U.S. Bancorp
Business Equipment Finance Group   xviii.    UCC-1 filed August 30, 2011.
Secured party: U.S. Bank National Association   xix.    UCC-1 filed October 1,
2012. Secured party: Bank of the West

--------------------------------------------------------------------------------

  xx.    UCC-1 filed October 31, 2012. Secured party: U.S. Bank Equipment
Finance, a division of U.S. Bank National Association   xxi.    UCC-1 filed
January 24, 2013. Secured party: Kelley Imaging Systems   xxii.    UCC-1 filed
October 16, 2013. Secured party: Triquetra Funding LLC   xxiii.    UCC-1 filed
January 28, 2014. Secured party: Toshiba America Business Solutions, Inc.  
xxiv.    UCC-1 filed December 22, 2014. Secured party: Triquetra Funding LLC  
xxv.    UCC-1 filed March 24, 2015. Secured party: Kelley Imaging Systems c.  
Franklin County Ohio   i.    Notice of Lien filed September 12, 2012. Ohio
Department of Job and Family Services, Bureau of Unemployment Compensation Tax
($29.93)   ii.    Notice of Lien filed June 19, 2014. Ohio Department of Job and
Family Services, Bureau of Unemployment Compensation Tax ($342.08)   iii.   
Notice of Lien filed July 30, 2014. Ohio Department of Job and Family Services,
Bureau of Unemployment Compensation Tax ($814.03) 2.

Molina Information Systems, LLC

a.   City of Charleston, West Virginia   i.    Notice of Lien filed July 17,
2014. City of Charleston, Office of the City Collector ($2,798.32) 3.

Molina Healthcare of Washington, Inc.

a.   Snohomish County Washington   i.    Statement and Claim of Lien filed
February 7, 2013. Employment Security Department, State or Washington ($602.25)
4.

Molina Healthcare Data Center, Inc.

a.   New Mexico Secretary of State   i.    UCC-1 filed November 3, 2011. Secured
party: Wells Fargo Community Development Enterprises Round 6 Sub 9, LLC   ii.   
UCC-1 filed November 3, 2011. Secured party: California Urban Sub-CDE II, LLC  
iii.    UCC-1 filed November 3, 2011. Secured party: Finance New
Mexico-Investors Series VII, LLC   iv.    UCC-1 filed November 3, 2011. Secured
party: NNMF Sub-CDE XIV, LLC

--------------------------------------------------------------------------------

Molina Healthcare, Inc.

Revolving Credit Agreement

Schedule 7.4 Investments

As of April 30, 2015

($ in thousands)

   Common
Stock      APIC      Subtotal
Equity      Equity
Investment      Services
Agreement - Due
to (from) Parent     Total Subsidiary
Investment  

Molina Information Systems, LLC

   $ *       $ 131,250       $ 131,250       $ —         $ 543      $ 131,793   

Molina Healthcare of California and Molina Healthcare of California Partner
Plan, Inc.

     5         90,039         90,044         —           5,405        95,449   

Molina Healthcare of Florida, Inc.

     *         158,532         158,532         —           16,730        175,262
  

Molina Healthcare of Illinois, Inc.

     *         30,300         30,300         —           1,766        32,066   

Molina Healthcare of Michigan, Inc.

     159         64,404         64,563         —           60        64,623   

Molina Healthcare of New Mexico, Inc.

     15         136,381         136,395         —           4,246        140,641
  

Molina Healthcare of Ohio, Inc.

     2         90,889         90,890         —           1,882        92,772   

Molina Healthcare of South Carolina, Inc.

     *         94,021         94,021         —           2,057        96,078   

Molina Healthcare of Texas, Inc.

     *         165,046         165,046         —           1,894        166,941
  

Molina Healthcare of Utah, Inc.

     100         27,399         27,499         —           (299 )      27,200   

Molina Healthcare of Virginia, Inc.

     *         1,500         1,500         —           60        1,560   

Molina Healthcare of Washington, Inc.

     1,000         60,689         61,689         —           1,472        63,162
  

Molina Healthcare of Wisconsin, Inc.

     *         30,285         30,285         —           1,520        31,805   

Molina Healthcare of Georgia, Inc.

     *         3,000         3,000         —           11        3,011   

Molina Healthcare of Maryland, Inc.

     *         1,612         1,612         —           —          1,612   

Molina Healthcare of Puerto Rico, Inc.

     *         22,200         22,200         —           3,735        25,935   

Molina Healthcare Data Center, Inc.

     *         9,713         9,713         —           (485 )      9,228   

Molina Medical Management, Inc.

     *         46,371         46,371         —           461        46,832   

Molina Hospital Management, Inc.

     *         25,000         25,000         —           13,013        38,013   

March Vision (Non-controlling interest)

     *         —           —           3,700         —          3,700   

Easy Care MSO, LLC (Non-controlling interest)

     *         —           —           135         —          135      

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total Investments

$ 1,280    $ 1,188,630    $ 1,189,911    $ 3,835    $ 54,073    $ 1,247,819   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

* Initial capitalization of less than $1,000

--------------------------------------------------------------------------------

Exhibit 2.3

[FORM OF] NOTICE OF REVOLVING BORROWING

[Date]

SunTrust Bank

Agency Services

303 Peachtree Street, N.E. / 25th Floor

Atlanta, Georgia 30308

Attention: Doug Weltz

Facsimile: (404) 495-2170

To Whom It May Concern:

Reference is made to the Credit Agreement dated as of June 12, 2015 (as amended,
modified, supplemented, increased and extended from time to time, the “Credit
Agreement”), among the undersigned, as Borrower, the Guarantors identified
therein, the Lenders identified therein, and SunTrust Bank, as Administrative
Agent, Issuing Bank and Swingline Lender. Capitalized terms used herein but not
otherwise defined herein shall have the meanings provided in the Credit
Agreement. This notice constitutes a Notice of Revolving Borrowing. The Borrower
hereby requests a Borrowing of Revolving Loans under the Credit Agreement, and
in connection therewith the Borrower specifies the following information with
respect to the Borrowing of Revolving Loans requested hereby:

(A) Aggregate principal amount of Borrowing of Revolving Loans1:

(B) Date of Borrowing of Revolving Loans (which is a Business Day):

(C) Type of Revolving Loans comprising such Borrowing of Revolving Loans2:

(D) [If Eurodollar Loans] Interest Period3:

(E) Location and number of Borrower’s account to which proceeds of such
Borrowing of Revolving Loans are to be disbursed:

[SIGNATURE ON FOLLOWING PAGE]

 

1  In the case of a Borrowing of Eurodollar Loans, not less than $5,000,000 or a
larger multiple of $1,000,000; in the case of a Borrowing of Base Rate Loans,
not less than $1,000,000 or a larger multiple of $100,000.

2  Borrowing of Eurodollar Loans or Base Rate Loans.

3  Which must comply with the definition of “Interest Period” and end not later
than the Revolving Commitment Termination Date.

--------------------------------------------------------------------------------

The Borrower hereby represents and warrants that the conditions specified in
Section 3.2 of the Credit Agreement are satisfied.

 

Very truly yours,

MOLINA HEALTHCARE, INC.,

a Delaware corporation

By:   Name: Title:

--------------------------------------------------------------------------------

Exhibit 2.4

[FORM OF] NOTICE OF SWINGLINE BORROWING

[Date]

SunTrust Bank

Agency Services

303 Peachtree Street, N.E. / 25th Floor

Atlanta, Georgia 30308

Attention: Doug Weltz

Facsimile: (404) 495-2170

To Whom It May Concern:

Reference is made to the Credit Agreement dated as of June 12, 2015 (as amended,
modified, supplemented, increased and extended from time to time, the “Credit
Agreement”), among the undersigned, as Borrower, the Guarantors identified
therein, the Lenders identified therein, and SunTrust Bank, as Administrative
Agent, Issuing Bank and Swingline Lender. Capitalized terms used herein but not
otherwise defined herein shall have the meanings provided in the Credit
Agreement. This notice constitutes a Notice of Swingline Borrowing. The Borrower
hereby requests a Swingline Borrowing under the Credit Agreement, and in
connection therewith the Borrower specifies the following information with
respect to the Swingline Borrowing requested hereby:

(A) Aggregate principal amount of Swingline Loan1:

(B) Date of Swingline Loan (which is a Business Day):

(C) Account of the Borrower to which the proceeds of such Swingline Loan should
be credited:

[SIGNATURE ON FOLLOWING PAGE]

 

1  Not less than $100,000 or a larger multiple of $50,000.

--------------------------------------------------------------------------------

The Borrower hereby represents and warrants that the conditions specified in
Section 3.2 of the Credit Agreement are satisfied.

 

Very truly yours,

MOLINA HEALTHCARE, INC.,

a Delaware corporation

By:   Name: Title:

--------------------------------------------------------------------------------

Exhibit 2.7

[FORM OF] NOTICE OF CONVERSION/CONTINUATION

[Date]

SunTrust Bank

Agency Services

303 Peachtree Street, N.E. / 25th Floor

Atlanta, Georgia 30308

Attention: Doug Weltz

Facsimile: (404) 495-2170

To Whom It May Concern:

Reference is made to the Credit Agreement dated as of June 12, 2015 (as amended,
modified, supplemented, increased and extended from time to time, the “Credit
Agreement”), among the undersigned, as Borrower, the Guarantors identified
therein, the Lenders identified therein, and SunTrust Bank, as Administrative
Agent, Issuing Bank and Swingline Lender. Capitalized terms used herein but not
otherwise defined herein shall have the meanings provided in the Credit
Agreement. This notice constitutes a Notice of Conversion/Continuation. The
Borrower hereby requests a continuation or conversion under the Credit
Agreement, and in connection therewith the Borrower specifies the following
information with respect to the continuation or conversion requested hereby:

 

  (A) Aggregate principal amount of the Borrowing to be continued or converted1:

 

  (B) Date of continuation or conversion (which is a Business Day):

 

  (C) Type of Loans comprising such Borrowing2:

 

  (D) [If Eurodollar Loans] Interest Period3:

[SIGNATURE ON FOLLOWING PAGE]

 

1  In the case of a Borrowing of Eurodollar Loans, not less than $5,000,000 or a
larger multiple of $1,000,000; in the case of a Borrowing of Base Rate Loans,
not less than $1,000,000 or a larger multiple of $100,000.

2  Borrowing of Eurodollar Loans or Base Rate Loans.

3  Which must comply with the definition of “Interest Period” and end not later
than the Revolving Commitment Termination Date.

--------------------------------------------------------------------------------

The Borrower hereby represents and warrants that the conditions specified in
Section 3.2 of the Credit Agreement are satisfied.

 

Very truly yours,

MOLINA HEALTHCARE, INC.,

a Delaware corporation

By:   Name: Title:

--------------------------------------------------------------------------------

Exhibit 2.10

[FORM OF] NOTE

                     ,         

FOR VALUE RECEIVED, MOLINA HEALTHCARE, INC., a Delaware corporation (the
“Borrower”), hereby promises to pay to                                          
or registered assigns (the “Lender”), in accordance with the provisions of the
Credit Agreement (as hereinafter defined), the principal amount of each Loan
from time to time made by the Lender to the Borrower under the Credit Agreement
(as amended, modified, supplemented, increased and extended from time to time,
the “Credit Agreement”) dated as of June 12, 2015 among the Borrower, the
Guarantors identified therein, the Lenders identified therein and SunTrust Bank,
as Administrative Agent. Capitalized terms used herein and not defined herein
shall have the meanings assigned to such terms in the Credit Agreement.

The Borrower promises to pay interest on the unpaid principal amount of each
Loan from the date of such Loan until such principal amount is paid in full, at
such interest rates and at such times as provided in the Credit Agreement. All
payments of principal and interest shall be made to the Administrative Agent for
the account of the Lender in Dollars in immediately available funds at the
Payment Office. If any amount is not paid in full when due hereunder, such
unpaid amount shall bear interest, to be paid upon demand, from the due date
thereof until the date of actual payment (and before as well as after judgment)
computed at the per annum rate set forth in the Credit Agreement.

This Note is one of the Notes referred to in the Credit Agreement, is entitled
to the benefits thereof and may be prepaid in whole or in part subject to the
terms and conditions provided therein. Upon the occurrence and continuation of
one or more of the Events of Default, all amounts then remaining unpaid on this
Note shall become, or may be declared to be, immediately due and payable all as
provided in the Credit Agreement. Loans made by the Lender shall be evidenced by
one or more loan accounts or records maintained by the Lender in the ordinary
course of business. The Lender may also attach schedules to this Note and
endorse thereon the date, amount and maturity of its Loans and payments with
respect thereto.

The Borrower, for itself, its successors and assigns, hereby waives diligence,
presentment, protest and demand and notice of protest, demand, dishonor and
non-payment of this Note.

THIS NOTE AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN
CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS
NOTE AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE CONSTRUED IN ACCORDANCE
WITH AND BE GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF EXCEPT FOR SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW) OF THE STATE OF NEW YORK.

[SIGNATURE ON FOLLOWING PAGE]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed by its
duly authorized officer as of the day and year first above written.

 

MOLINA HEALTHCARE, INC.,

a Delaware corporation

By:   Name: Title:

--------------------------------------------------------------------------------

Exhibit 2.20-1

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement (as amended, modified,
supplemented, increased and extended from time to time, the “Credit Agreement”)
dated as of June 12, 2015 among Molina Healthcare, Inc., as the Borrower, the
Guarantors identified therein, the Lenders identified therein and SunTrust Bank,
as Administrative Agent, Swingline Lender and Issuing Bank.

Pursuant to the provisions of Section 2.20(g) of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of
which it is providing this certificate, (ii) it is not a bank within the meaning
of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder
of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and
(iv) it is not a controlled foreign corporation related to the Borrower as
described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with a
certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this
certificate, the undersigned agrees that (1) if the information provided on this
certificate changes, the undersigned shall promptly so inform the Borrower and
the Administrative Agent, and (2) the undersigned shall have at all times
furnished the Borrower and the Administrative Agent with a properly completed
and currently effective certificate in either the calendar year in which each
payment is to be made to the undersigned, or in either of the two calendar years
preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER] By:   Name:   Title:  

Date:                          , 201[  ]

--------------------------------------------------------------------------------

Exhibit 2.20-2

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement (as amended, modified,
supplemented, increased and extended from time to time, the “Credit Agreement”)
dated as of June 12, 2015 among Molina Healthcare, Inc., as the Borrower, the
Guarantors identified therein, the Lenders identified therein and SunTrust Bank,
as Administrative Agent, Swingline Lender and Issuing Bank.

Pursuant to the provisions of Section 2.20(g) of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the participation in respect of which it is providing this certificate,
(ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code,
(iii) it is not a ten percent shareholder of the Borrower within the meaning of
Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign
corporation related to the Borrower as described in Section 881(c)(3)(C) of the
Code.

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate
changes, the undersigned shall promptly so inform such Lender in writing, and
(2) the undersigned shall have at all times furnished such Lender with a
properly completed and currently effective certificate in either the calendar
year in which each payment is to be made to the undersigned, or in either of the
two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF PARTICIPANT] By:   Name:   Title:  

Date:                          , 201[  ]

--------------------------------------------------------------------------------

Exhibit 2.20-3

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement (as amended, modified,
supplemented, increased and extended from time to time, the “Credit Agreement”)
dated as of June 12, 2015 among Molina Healthcare, Inc., as the Borrower, the
Guarantors identified therein, the Lenders identified therein and SunTrust Bank,
as Administrative Agent, Swingline Lender and Issuing Bank.

Pursuant to the provisions of Section 2.20(g) of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the
participation in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such
participation, (iii) with respect to such participation, neither the undersigned
nor any of its direct or indirect partners/members is a bank extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of
its direct or indirect partners/members is a ten percent shareholder of the
Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of
its direct or indirect partners/members is a controlled foreign corporation
related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an
IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such
partner’s/member’s beneficial owners that is claiming the portfolio interest
exemption. By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform such Lender and (2) the undersigned shall have at all times furnished
such Lender with a properly completed and currently effective certificate in
either the calendar year in which each payment is to be made to the undersigned,
or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF PARTICIPANT] By:   Name:   Title:  

Date:                          , 201[  ]

--------------------------------------------------------------------------------

Exhibit 2.20-4

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Credit Agreement (as amended, modified,
supplemented, increased and extended from time to time, the “Credit Agreement”)
dated as of June 12, 2015 among Molina Healthcare, Inc., as the Borrower, the
Guarantors identified therein, the Lenders identified therein and SunTrust Bank,
as Administrative Agent, Swingline Lender and Issuing Bank.

Pursuant to the provisions of Section 2.20(g) of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the Loan(s)
(as well as any Note(s) evidencing such Loan(s)) in respect of which it is
providing this certificate, (ii) its direct or indirect partners/members are the
sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such
Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit
Agreement or any other Loan Document, neither the undersigned nor any of its
direct or indirect partners/members is a bank extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct
or indirect partners/members is a ten percent shareholder of the Borrower within
the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or
indirect partners/members is a controlled foreign corporation related to the
Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with IRS
Form W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption: (i) an IRS
Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from
each of such partner’s/member’s beneficial owners that is claiming the portfolio
interest exemption. By executing this certificate, the undersigned agrees that
(1) if the information provided on this certificate changes, the undersigned
shall promptly so inform the Borrower and the Administrative Agent, and (2) the
undersigned shall have at all times furnished the Borrower and the
Administrative Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER] By:   Name:   Title:  

Date:                          , 201[  ]

--------------------------------------------------------------------------------

Exhibit 5.1

[FORM OF] COMPLIANCE CERTIFICATE

In connection with the terms of that certain Credit Agreement, dated as of
June 12, 2015 (as amended, modified, supplemented, increased and extended from
time to time, the “Credit Agreement”), among MOLINA HEALTHCARE, INC., a Delaware
corporation (the “Borrower”), the Guarantors identified therein, the Lenders
identified therein and SunTrust Bank, as Administrative Agent, Issuing Bank and
Swingline Lender, the undersigned certifies that the following information is
true and correct, in all material respects, as of the date of this Compliance
Certificate for the Fiscal Quarter ended                          , 2015:

Capitalized terms used in this Compliance Certificate but not otherwise defined
herein shall have the same meanings provided in the Credit Agreement.

[Use the following paragraph 1 for fiscal year-end financial statements]

1. Attached hereto as Schedule 1 are the audited annual financial statements
required by Section 5.1(a) of the Credit Agreement for the Fiscal Year ending
[                ] together with the audit report of an independent certified
public accountant required by such section.

[Use the following paragraph 1 for fiscal quarter-end financial statements]

1. Attached hereto as Schedule 1 are the unaudited financial statements required
by Section 5.1(b) of the Credit Agreement for the Fiscal Quarter ending
[                         ,         ].

2. [No][A] Default or Event of Default has occurred and is continuing. [If a
Default or Event of Default then specify the details thereof and the action
which the Borrower has taken or proposes to take].

3. Set forth on Schedule 2 are detailed calculations demonstrating compliance
with the financial covenants set forth in Article VI of the Credit Agreement.

4. As of the date hereof, all representations and warranties of each Loan Party
set forth in the Loan Documents are true and correct in all material respects
(other than those representations and warranties that are expressly qualified by
a Material Adverse Effect or other materiality, in which case such
representations and warranties are true and correct in all respects), except to
the extent that such representations and warranties specifically refer to an
earlier date, in which case they are true and correct in all material respects
(other than those representations and warranties that are expressly qualified by
a Material Adverse Effect or other materiality, in which case such
representations and warranties are true and correct in all respects) as of such
earlier date.

5. There has been [no] change in GAAP or the application thereof since
[                    ]. [If any change in GAAP has occurred, please specify the
effect of such change on the financial statements accompanying this
certificate].

[SIGNATURE ON FOLLOWING PAGE]

--------------------------------------------------------------------------------

The foregoing is true and correct, in all material respects, as of the date
hereof.

Dated as of                          ,         .

 

MOLINA HEALTHCARE, INC.,

a Delaware corporation

By:   Name: Title:

--------------------------------------------------------------------------------

Exhibit 5.10

[FORM OF] GUARANTOR JOINDER AGREEMENT

THIS GUARANTOR JOINDER AGREEMENT (this “Agreement”) dated as of
                         ,         , is by and between                     , a
                     (the “New Subsidiary”), and SunTrust Bank, in its capacity
as Administrative Agent under the Credit Agreement dated as of June 12, 2015 (as
amended, modified, supplemented, increased and extended from time to time, the
“Credit Agreement”) by and among MOLINA HEALTHCARE, INC., a Delaware corporation
(the “Borrower”), the Guarantors identified therein, the Lenders identified
therein and SunTrust Bank, as Administrative Agent, Swingline Lender and Issuing
Bank. Capitalized terms used herein and not defined herein shall have the
meanings assigned to such terms in the Credit Agreement.

The Loan Parties are required by Section 5.10 of the Credit Agreement to cause
the New Subsidiary to become a “Guarantor”. Accordingly, the New Subsidiary
hereby agrees with the Administrative Agent as follows:

1. The New Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the New Subsidiary will be deemed to be a party to
the Credit Agreement and a “Guarantor” for all purposes of the Credit Agreement
and shall have all of the obligations of a Guarantor thereunder as if it had
executed the Credit Agreement. The New Subsidiary hereby ratifies, as of the
date hereof, and agrees to be bound by, all of the terms, provisions and
conditions applicable to the Guarantors contained in the Credit Agreement.
Without limiting the generality of the foregoing terms of this paragraph 1, the
New Subsidiary hereby, jointly and severally together with the other Guarantors,
guarantees to the Administrative Agent, each Lender, each Affiliate of a Lender
that enters into Bank Products or Hedging Transactions with the Borrower or any
Subsidiary, and each other holder of the Obligations, as provided in Article X
of the Credit Agreement, as primary obligor and not as surety, the prompt
payment of the Obligations in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration or otherwise) strictly in accordance with
the terms thereof.

2. The New Subsidiary hereby represents and warrants to the Administrative Agent
that the exact legal name and state of organization of the New Subsidiary is as
set forth on the signature pages hereto.

3. The address of the New Subsidiary for purposes of all notices and other
communications is the address set forth for any Loan Party in Section 11.1 of
the Credit Agreement.

4. The New Subsidiary hereby waives acceptance by the Administrative Agent and
the Lenders of the guaranty by the New Subsidiary under Article X of the Credit
Agreement.

5. This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts (including by telecopy), and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument.

6. This Agreement and any claims, controversy, dispute or cause of action
(whether in contract or tort or otherwise) based upon, arising out of or
relating to this Agreement and the transactions contemplated hereby shall be
construed in accordance with and be governed by the Law (without giving effect
to the conflict of law principles thereof except for Sections 5-1401 and 5-1402
of the New York General Obligations Law) of the State of New York.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly
executed by its authorized officers, and the Administrative Agent, for the
benefit of the holders of the Obligations, has caused the same to be accepted by
its authorized officer, as of the day and year first above written.

 

[NEW SUBSIDIARY],

a [                                         ]

By:   Name: Title:

 

Acknowledged and accepted:

SUNTRUST BANK, as Administrative Agent

By:   Name:

Title:

 

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Exhibit 11.4

[FORM OF] ASSIGNMENT AND ACCEPTANCE

This Assignment and Acceptance (the “Assignment and Acceptance”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended,
modified, supplemented, increased and extended from time, the “Credit
Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.
The Standard Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Acceptance as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below (including any letters of credit, guarantees, and swingline
loans included in such facilities) and (ii) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any other
right of the Assignor (in its capacity as a Lender) against any Person, whether
known or unknown, arising under or in connection with the Credit Agreement, any
other documents or instruments delivered pursuant thereto or the loan
transactions governed thereby or in any way based on or related to any of the
foregoing, including but not limited to contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause
(i) above (the rights and obligations sold and assigned pursuant to clauses
(i) and (ii) above being referred to herein collectively as the “Assigned
Interest”). Such sale and assignment is without recourse to the Assignor and,
except as expressly provided in this Assignment and Acceptance, without
representation or warranty by the Assignor.

 

1. Assignor:   2. Assignee:   [and is an Affiliate/Approved Fund of [identify
Lender]1] 3. Borrower: Molina Healthcare, Inc., a Delaware corporation 4.
Administrative Agent: SunTrust Bank, in its capacity as the administrative agent
under the Credit Agreement

 

1  Select if applicable.

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5.    Credit Agreement:    Credit Agreement dated as of June 12, 2015 among
Borrower, the Lenders party thereto, the Guarantors party thereto and SunTrust
Bank, as Administrative Agent, Issuing Bank and Swingline Lender. 6.    Assigned
Interest:   

 

Aggregate Amount of

Commitments/Loans for all Lenders2

 

Amount of Commitments/

Loans Assigned

 

Percentage Assigned of

Commitments/Loans3

$                       $                                   %
$                       $                                   %
$                       $                                   %

Effective Date:                          , 201   [TO BE INSERTED BY
ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF
TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Acceptance are hereby agreed to:

 

ASSIGNOR

[NAME OF ASSIGNOR]

By:       Title: ASSIGNEE

[NAME OF ASSIGNEE]

By:       Title:

 

2  Not to be less than $5,000,000 with respect to Revolving Loans and in minimum
increments of $1,000,000 unless agreed to by the Administrative Agent and the
Borrower.

3  Set forth, to at least nine (9) decimals, as a percentage of the
Commitment/Loans of all Lenders thereunder.

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[Consented to and]4 Accepted:

SUNTRUST BANK,

as Administrative Agent

By:   Title: [Consented to:]5

MOLINA HEALTHCARE, INC.,

a Delaware corporation

By:   Title:

 

4  To be added only if the consent of the Administrative Agent is required by
the terms of the Credit Agreement.

5  To be added only if the consent of the Borrower is required by the terms of
the Credit Agreement.

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ANNEX 1

STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT AND ACCEPTANCE

1. Representations and Warranties.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Acceptance and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of the
Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the
Borrower, any of its Domestic Subsidiaries or Affiliates or any other Person of
any of their respective obligations under any Loan Document.

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Acceptance and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it is
sophisticated with respect to decisions to acquire assets of the type
represented by the Assigned Interest and either it, or the Person exercising
discretion in making its decision to acquire the Assigned Interest, is
experienced in acquiring assets of such type, (v) it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 5.1(a) and (b) thereof, as applicable, and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Acceptance and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Administrative Agent, the
Assignor or any other Lender, and (vi) if it is a Foreign Lender, attached to
the Assignment and Acceptance is any documentation required to be delivered by
it pursuant to the terms of the Credit Agreement, duly completed and executed by
the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent, the Assignor or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and after the Effective Date.

3. General Provisions. This Assignment and Acceptance shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Acceptance may be executed in any number of
counterparts, which together shall constitute one

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instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Acceptance by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Acceptance. This Assignment
and Acceptance and any claims, controversy, dispute or cause of action (whether
in contract or tort or otherwise) based upon, arising out of or relating to this
Assignment and Acceptance and the transactions contemplated hereby shall be
construed in accordance with and be governed by the Law (without giving effect
to the conflict of law principles thereof except for Sections 5-1401 and 5-1402
of the New York General Obligations Law) of the State of New York.