Exhibit 10.1

Execution Version

CREDIT AGREEMENT

among

NMH HOLDINGS, LLC,

NATIONAL MENTOR HOLDINGS, INC.,

as Borrower,

The Several Lenders from Time to Time Parties Hereto,

and

BARCLAYS BANK PLC,

as Administrative Agent

Dated as of January 31, 2014

GOLDMAN SACHS BANK USA,

as Syndication Agent

JEFFERIES FINANCE LLC and

UBS SECURITIES LLC,

as Co-Documentation Agents

BARCLAYS BANK PLC

GOLDMAN SACHS BANK USA

JEFFERIES FINANCE LLC

UBS SECURITIES LLC,

as Joint Lead Arrangers and Joint Bookrunners

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TABLE OF CONTENTS

 

          Page   SECTION 1    DEFINITIONS   

1.1

  

Defined Terms

     1   

1.2

  

Other Definitional Provisions

     46    SECTION 2    AMOUNT AND TERMS OF COMMITMENTS   

2.1

  

Tranche B Term Commitments

     47   

2.2

  

Procedure for Tranche B Term Loan Borrowings

     47   

2.3

  

Repayment of Tranche B Term Loans

     48   

2.4

  

Revolving Commitments

     48   

2.5

  

Procedure for Revolving Loan Borrowing

     48   

2.6

  

Swingline Commitment

     49   

2.7

  

Procedure for Swingline Borrowing; Refunding of Swingline Loans

     49   

2.8

  

Commitment Fees, Etc

     50   

2.9

  

Termination or Reduction of Commitments

     51   

2.10

  

Optional Prepayments

     51   

2.11

  

Mandatory Prepayments

     57   

2.12

  

Conversion and Continuation Options

     60   

2.13

  

Limitations on Eurodollar Tranches

     60   

2.14

  

Interest Rates and Payment Dates

     60   

2.15

  

Computation of Interest and Fees

     61   

2.16

  

Inability to Determine Interest Rate

     61   

2.17

  

Pro Rata Treatment and Payments

     62   

2.18

  

Requirements of Law

     63   

2.19

  

Taxes

     64   

2.20

  

Indemnity

     67   

2.21

  

Change of Lending Office

     67   

2.22

  

Replacement of Lenders

     67   

2.23

  

Limitation on Additional Amounts, Etc

     68   

2.24

  

Extensions of Term Loans and Revolving Commitments

     68   

 

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          Page  

2.25

  

Incremental Credit Extensions

     71   

2.26

  

Defaulting Lenders

     74   

2.27

  

Reserved

     76   

2.28

  

Refinancing Amendments

     76    SECTION 3    LETTERS OF CREDIT   

3.1

  

Letters of Credit

     77   

3.2

  

Procedure for Issuance of Letter of Credit

     78   

3.3

  

Fees and Other Charges

     78   

3.4

  

L/C Participations

     78   

3.5

  

Reimbursement Obligation of the Borrower

     79   

3.6

  

Obligations Absolute

     80   

3.7

  

Letter of Credit Payments

     80   

3.8

  

Applications

     80   

3.9

  

Obligations of Certain Issuing Lenders

     80    SECTION 4    REPRESENTATIONS AND WARRANTIES   

4.1

  

Financial Condition

     81   

4.2

  

No Change

     81   

4.3

  

Existence; Compliance with Law

     81   

4.4

  

Power; Authorization; Enforceable Obligations

     81   

4.5

  

No Legal Bar

     82   

4.6

  

Litigation

     82   

4.7

  

No Default

     82   

4.8

  

Ownership of Property; Liens

     82   

4.9

  

Licenses; Intellectual Property

     82   

4.10

  

Taxes

     83   

4.11

  

Federal Regulations

     83   

4.12

  

Labor Matters

     83   

4.13

  

ERISA

     83   

4.14

  

Investment Company Act

     84   

4.15

  

Subsidiaries

     84   

 

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          Page  

4.16

  

Use of Proceeds

     84   

4.17

  

Environmental Matters

     84   

4.18

  

Accuracy of Information, Etc

     85   

4.19

  

Security Documents

     85   

4.20

  

Solvency

     86   

4.21

  

Regulation H

     86   

4.22

  

OFAC; USA PATRIOT ACT; FCPA

     86    SECTION 5    CONDITIONS PRECEDENT   

5.1

  

Conditions to Initial Extension of Credit

     86   

5.2

  

Conditions to Each Extension of Credit

     88    SECTION 6    AFFIRMATIVE COVENANTS   

6.1

  

Financial Statements

     89   

6.2

  

Certificates; Other Information

     90   

6.3

  

Payment of Taxes

     91   

6.4

  

Maintenance of Existence; Compliance

     91   

6.5

  

Maintenance of Property; Insurance

     91   

6.6

  

Inspection of Property; Books and Records; Discussions

     92   

6.7

  

Notices

     92   

6.8

  

Environmental Laws

     93   

6.9

  

Additional Collateral, Etc

     93   

6.10

  

Initial Mortgages

     96   

6.11

  

Designation of Subsidiaries

     96    SECTION 7    NEGATIVE COVENANTS   

7.1

  

Financial Condition Covenant

     97   

7.2

  

Indebtedness

     98   

7.3

  

Liens

     101   

7.4

  

Fundamental Changes

     105   

7.5

  

Disposition of Property

     106   

 

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          Page  

7.6

  

Restricted Payments

     108   

7.7

  

Swap Agreements

     110   

7.8

  

Investments

     111   

7.9

  

Optional Prepayments and Modifications of Certain Junior Debt Instruments

     114   

7.10

  

Transactions with Affiliates

     114   

7.11

  

Sales and Leasebacks

     114   

7.12

  

Changes in Fiscal Periods

     115   

7.13

  

Negative Pledge Clauses

     115   

7.14

  

Clauses Restricting Subsidiary Distributions

     115   

7.15

  

Lines of Business

     116   

7.16

  

Insurance Subsidiary Investments

     116   

7.17

  

Insurance Subsidiary

     116   

7.18

  

Limitations on Institutional L/C Collateral Account

     116    SECTION 8    EVENTS OF DEFAULT    SECTION 9    THE AGENTS   

9.1

  

Appointment and Authority

     121   

9.2

  

Rights as a Lender

     121   

9.3

  

Exculpatory Provisions

     121   

9.4

  

Reliance by Agent

     122   

9.5

  

Delegation of Duties

     122   

9.6

  

Resignation of Agent

     123   

9.7

  

Non-Reliance on Agent and Other Lenders

     124   

9.8

  

Withholding Tax

     124   

9.9

  

No Fiduciary Duties, Etc

     124   

9.10

  

Enforcement

     125   

9.11

  

Collateral and Guaranty Matters

     125   

9.12

  

Indemnity; Damage Waiver

     126   

 

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          Page   SECTION 10    MISCELLANEOUS   

10.1

  

Amendments and Waivers

     127   

10.2

  

Notices

     130   

10.3

  

No Waiver; Cumulative Remedies

     131   

10.4

  

Survival of Representations and Warranties

     131   

10.5

  

Payment of Expenses

     131   

10.6

  

Successors and Assigns; Participations and Assignments

     133   

10.7

  

Adjustments; Set-off

     138   

10.8

  

Counterparts

     140   

10.9

  

Severability

     140   

10.10

  

Integration

     140   

10.11

  

GOVERNING LAW

     140   

10.12

  

Submission to Jurisdiction; Waivers

     140   

10.13

  

Acknowledgements

     141   

10.14

  

Releases of Guarantees and Liens

     141   

10.15

  

Confidentiality

     141   

10.16

  

WAIVERS OF JURY TRIAL

     142   

10.17

  

USA PATRIOT ACT

     142   

10.18

  

Replacement of Holdings

     142   

10.19

  

Mortgaged Property Acknowledgment

     142   

10.20

  

Intercreditor Agreement Governs

     143   

 

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SCHEDULES:

 

1.1A   Commitments 4.4   Consents, Authorizations, Filings and Notices 4.6  
Litigation 4.8   Initial Mortgaged Property 4.15   Organizational Structure 4.19
  UCC Filing Jurisdictions 7.2(d)   Existing Indebtedness 7.3(f)   Existing
Liens 7.8(g)   Existing Investments 7.10   Transactions with Affiliates

EXHIBITS:

 

A   Form of Assignment and Assumption B   Form of Guarantee and Security
Agreement C   Form of Exemption Certificate D   Form of Legal Opinion of
Kirkland & Ellis LLP E   Form of Reinvestment Notice F   Form of Compliance
Certificate G   Form of Affiliated Lender Assignment and Assumption H-1   Form
of Term Loan Borrowing Notice H-2   Form of Revolving Loan Borrowing Notice H-3
  Form of Swingline Borrowing Request H-4   Form of L/C Extension Request H-5  
Form of Interest Election Request H-6   Form of Prepayment Notice I-1   Form of
First Lien Intercreditor Agreement I-2   Form of Junior Lien Intercreditor
Agreement J   Form of Acceptance and Prepayment Notice K   Form of Discount
Range Prepayment Notice L   Form of Discount Range Prepayment Offer M   Form of
Specified Discount Prepayment Notice N   Form of Specified Discount Prepayment
Response O   Form of Solicited Discounted Prepayment Notice P   Form of
Solicited Discounted Prepayment Offer Q   Form of Solvency Certificate

 

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CREDIT AGREEMENT, dated as of January 31, 2014, among NMH Holdings, LLC, a
Delaware limited liability company, National MENTOR Holdings, Inc., a Delaware
corporation (the “Borrower”), the several banks and other financial institutions
or entities from time to time parties to this Agreement (the “Lenders”) and
Barclays Bank PLC, as administrative agent.

NOW, THEREFORE, in consideration of the premises and the agreements hereinafter
set forth, the parties hereto hereby agree as follows:

SECTION 1

DEFINITIONS

1.1 Defined Terms. As used in this Agreement, the terms listed in this
Section 1.1 shall have the respective meanings set forth in this Section 1.1.

“ABR”: for any day, a rate per annum (rounded upwards, if necessary, to the next
1/16 of 1%) equal to the greater of (a) the Prime Rate in effect on such day,
(b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%; and
(c) the Eurodollar Rate for an Interest Period of one-month beginning on such
day (or if such day is not a Business Day, on the immediately preceding Business
Day) plus 100 basis points; provided that, with respect to the Initial Tranche B
Term Loans only, the ABR shall be deemed to be not less than 2.00% per annum.

“ABR Loans”: Loans the rate of interest applicable to which is based upon the
ABR.

“Acceptable Discount”: as defined in Section 2.10(c)(iv)(B).

“Acceptable Prepayment Amount”: as defined in Section 2.10(c)(iv)(C).

“Acceptance and Prepayment Notice”: the Acceptance and Prepayment Notice to be
submitted by the Loan Party or Subsidiary to the Auction Agent substantially in
the form of Exhibit J in accordance with the terms of Section 2.10(c).

“Acceptance Date”: as defined in Section 2.10(c)(iv)(B).

“Accepting Lenders”: as defined in Section 10.1.

“Acquired EBITDA”: with respect to any Acquired Entity or Business or any
Converted Restricted Subsidiary (any of the foregoing, a “Pro Forma Entity”) for
any period, the amount for such period of Consolidated EBITDA of such Pro Forma
Entity (determined as if references to the Borrower and the Restricted
Subsidiaries in the definition of Consolidated EBITDA were references to such
Pro Forma Entity and its Subsidiaries (except to the extent that such
Subsidiaries will not constitute Restricted Subsidiaries immediately after
giving effect to such acquisition or conversion)), all as determined on a
consolidated basis for such Pro Forma Entity.

“Acquired Entity or Business”: as set forth in the definition of the term
“Consolidated EBITDA”.

“Acquisition”: any acquisition (x) of all or substantially all of the assets or
a division, unit, product line or line of business of another Person (or, in
each case, any substantial part for which financial statements or other
customary financial information is available), (y) which results in owning more
than 50% of the Capital Stock of any other Person or (z) of additional equity
interests of any Restricted Subsidiary not then held by the Borrower or any
other Restricted Subsidiary.

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“Additional Lender”: as defined in Section 2.25.

“Additional Debt”: debt (including, as applicable, Registered Equivalent Notes),
in each case issued or incurred by the Borrower or any of its Restricted
Subsidiaries after the Closing Date that the covenants and events of default and
other terms of which (other than maturity, fees, discounts, interest rate,
redemption terms and redemption premiums, which shall be determined in good
faith by the Borrower) shall be on market terms at the time of issuance (as
determined in good faith by the Borrower) of the Additional Debt.

“Additional Refinancing Lender”: at any time, any bank, financial institution or
other institutional lender or investor (other than any such bank, financial
institution or other institutional lender or investor that is a Lender at such
time) that agrees to provide any portion of Credit Agreement Refinancing
Indebtedness pursuant to a Refinancing Amendment in accordance with
Section 2.28.

“Additional Term Notes”: first priority senior secured loans or notes and/or
junior lien secured loans or notes and/or unsecured loans or notes, in each case
issued pursuant to an indenture, note purchase agreement or other agreement and
in lieu of the incurrence of a portion of the Incremental Tranche B Term Loans;
provided that (a) such Additional Term Notes rank pari passu or junior in right
of payment and (if secured) of security with the Term Loans hereunder, (b) the
Additional Term Notes have a final maturity date that is on or after the then
existing Latest Maturity Date with respect to the Term Loans and have a Weighted
Average Life to Maturity equal to or longer than the remaining Weighted Average
Life to Maturity of the then existing Term Loans (without giving effect to
nominal amortization for periods where amortization has been eliminated as a
result of a prepayment of the applicable Term Loans), (c) the covenants and
events of default and other terms of which (other than maturity, fees,
discounts, interest rate, redemption terms and redemption premiums, which shall
be determined in good faith by the Borrower) shall be on market terms at the
time of issuance (as determined in good faith by the Borrower) of the Additional
Term Notes, (d) the obligations in respect thereof shall not be secured by liens
on the assets of Holdings, the Borrower and its Restricted Subsidiaries, other
than assets constituting Collateral, (e) no Restricted Subsidiary is a borrower
or a guarantor with respect to such Indebtedness unless such Restricted
Subsidiary is a Loan Party which shall have previously or substantially
concurrently guaranteed or borrowed, as applicable, the Obligations, (f) if such
Additional Term Notes are secured, all security therefor shall be granted
pursuant to documentation that is not more restrictive than the Security
Documents taken as a whole in any material respect (as determined by the
Borrower) and the representative for such Additional Term Notes shall enter into
a customary intercreditor agreement with the Administrative Agent substantially
consistent with the terms set forth in the First Lien Intercreditor Agreement or
the Junior Lien Intercreditor Agreement, as applicable, and (g) immediately
after giving effect to the incurrence of such Additional Term Notes on a Pro
Forma Basis, the Consolidated First Lien Leverage Ratio shall not be greater
than 4.50 to 1.00 as of the Applicable Date of Determination; provided, that any
such Indebtedness, whether secured or unsecured, shall be deemed to be
Consolidated First Lien Debt for purposes of this calculation.

“Administrative Agent”: Barclays Bank PLC, as the administrative agent for the
Lenders under this Agreement and the other Loan Documents, together with any of
its successors.

“Affected Class”: as defined in Section 10.1.

“Affiliate”: as to any Person, any other Person that, directly or indirectly, is
in control of, is controlled by, or is under common control with, such Person.
For purposes of this definition, “control” of a Person means the power, directly
or indirectly to direct or cause the direction of the management and policies of
such Person, whether through the ability to exercise voting power, by contract
or otherwise. Jefferies LLC and its Affiliates shall be deemed to be Affiliates
of Jefferies Finance LLC.

 

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“Affiliated Lender Assignment and Assumption”: as defined in Section 10.6(g).

“Agents”: the collective reference to the Joint Lead Arrangers, the Joint
Bookrunners, the Syndication Agent, the Co-Documentation Agents and the
Administrative Agent.

“AHYDO Catch-Up Payment”: any payment with respect to any obligations of the
Borrower or any Restricted Subsidiary, including subordinated debt obligations,
in each case to avoid the application of Code Section 163(e)(5) thereto.

“Applicable Margin”: for each Type of Loan, the rate per annum set forth under
the relevant column heading below:

 

     ABR Loans     Eurodollar Loans  

Revolving Loans and Swingline Loans

     2.75 %      3.75 % 

Tranche B Term Loans

     2.75 %      3.75 % 

; provided, that after an Initial Public Offering, the Applicable Margin for
each Type of Loan shall be decreased by 0.50% per annum from the rates set forth
above after the first date on which the Consolidated Leverage Ratio is less than
or equal to 5.00 to 1.00, such decrease to become effective as of the first
Business Day immediately following the first date on which a Compliance
Certificate is delivered pursuant to Section 6.2(b) setting forth such
calculation.

“Applicable Date of Determination”: the last day of the most recently ended
fiscal quarter for which financial statements are available pursuant to
Section 6.1(a) or (b), as applicable, or, if such date occurs prior to the date
on which financial statements are available pursuant to Section 6.1(a) or (b),
as applicable, the last day of the most recently ended fiscal quarter for which
financial statements were delivered under Section 6.1(a) or (b).

“Applicable Discount”: as defined in Section 2.10(c)(iii)(B).

“Application”: an application, in such customary form as the Issuing Lender may
specify from time to time, requesting such Issuing Lender to open a Letter of
Credit.

“Approved Fund”: as defined in Section 10.6(b).

“Asset Sale”: any Disposition of property or series of related Dispositions of
property, excluding (i) any such Disposition permitted by Section 7.5 (other
than clauses (e), (h) or (o) thereof), (ii) any Sale Leaseback Transaction,
(iii) equity issuances by Holdings or a Parent Entity and (iv) other
Dispositions to the extent that the Net Cash Proceeds to the Loan Parties of all
such other Dispositions do not exceed $5,000,000 in the aggregate in any fiscal
year.

“Assignee”: as defined in Section 10.6(b).

“Assignment and Assumption”: an Assignment and Assumption, substantially in the
form of Exhibit A.

“Auction Agent”: (a) the Administrative Agent or (b) any other financial
institution or advisor employed by the Borrower (whether or not an Affiliate of
the Administrative Agent) to act as an arranger in connection with any
Discounted Loan Prepayment pursuant to Section 2.10(c)(i); provided that the
Borrower shall not designate the Administrative Agent as the Auction Agent
without the written consent of the Administrative Agent (it being understood
that the Administrative Agent shall be under no obligation to agree to act as
the Auction Agent).

 

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“Available Amount”: as of any date of determination (the “Reference Date”), an
amount determined on a cumulative basis equal to the sum of (without
duplication):

(a) $15,000,000; plus

(b) an amount (which shall not be less than zero) equal to 50% of Consolidated
Net Income for the period from the first day of the fiscal quarter of the
Borrower during which the Closing Date occurred to and including the last day of
the most recently ended fiscal quarter of the Borrower prior to the Reference
Date for which internal consolidated financial statements of the Borrower are
available (or, in the case such Consolidated Net Income for such period is in
deficit, minus 100% of such deficit); plus

(c) the cumulative amount of (A) any capital contributions in respect of
Permitted Capital Stock (other than any Cure Amount) made in cash by any Person
to Holdings after the Closing Date, (B) any Net Cash Proceeds of any issuance of
Permitted Capital Stock of Holdings or any Parent Entity (other than any Cure
Amount) to any person and (C) 100% of the aggregate Net Cash Proceeds (other
than any Cure Amount) and the fair market value (as determined in good faith by
the Borrower) of marketable securities or other property contributed to the
Permitted Capital Stock of Holdings after the Closing Date by any Person, in
each case, minus, amounts used to incur Indebtedness pursuant to
Section 7.2(ee), amounts used to fund Restricted Payments pursuant to
Section 7.6(b) or (j) and amounts used to fund Investments pursuant to
Section 7.8(kk); plus

(d) the aggregate amount received by Holdings or any Restricted Subsidiary after
the Closing Date from cash (or Cash Equivalents) dividends and distributions
made by any Unrestricted Subsidiary or any Joint Venture and interests, returns
of principal, repayments and similar payments made by any Unrestricted
Subsidiary or Joint Venture in respect of Investments made by the Borrower or
any Restricted Subsidiary to any Unrestricted Subsidiary or Joint Venture, and
the Net Cash Proceeds in connection with the sale, transfer or other disposition
of assets or the Capital Stock of any Unrestricted Subsidiary or Joint Venture
of the Borrower to any Person (other than a Restricted Subsidiary) after the
Closing Date; plus

(e) in the event that the Borrower redesignates any Unrestricted Subsidiary as a
Restricted Subsidiary after the Closing Date (which, for purposes hereof, shall
be deemed to also include (A) the merger, consolidation, liquidation or similar
amalgamation of any Unrestricted Subsidiary into the Borrower or any Restricted
Subsidiary, so long as the Borrower or such Restricted Subsidiary is the
surviving Person, and (B) the transfer of all or substantially all of the assets
of an Unrestricted Subsidiary to the Borrower or any Restricted Subsidiary), the
fair market value (as determined in good faith by the Borrower) of the
Investment in such Unrestricted Subsidiary at the time of such redesignation,
combination or transfer (or of the assets transferred or comerged, as
applicable); plus

(f) the aggregate amount of Retained Declined Proceeds; plus

(g) the fair market value of all Permitted Capital Stock of Holdings or the
Borrower issued upon conversion or exchange of Indebtedness or any Capital Stock
of Holdings or the Borrower or any of its Restricted Subsidiaries that is not
Permitted Capital Stock after the Closing Date; plus

(h) to the extent not otherwise included, the aggregate amount of cash Returns
to the Borrower or any Restricted Subsidiary in respect of Investments made
pursuant to Section 7.8 in reliance on the Available Amount; minus

(i) the aggregate amount of (A) Restricted Payments made using the Available
Amount pursuant to Section 7.6(n), (B) Investments made using the Available
Amount pursuant to Section 7.8(cc) and (C) prepayments, redemptions,
acquisitions, retirements, cancellations, terminations and repurchases of
Indebtedness made using the Available Amount pursuant to Section 7.9(B), in each
case during the period from and including the Business Day immediately following
the Closing Date through and including the Reference Date (without taking
account of the intended usage of the Available Amount on such Reference Date).

 

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“Available Revolving Commitment”: as to any Revolving Lender at any time, an
amount equal to the excess, if any, of (a) such Lender’s Revolving Commitment
then in effect over (b) such Lender’s Revolving Extensions of Credit then
outstanding.

“Barclays”: Barclays Bank PLC.

“Benefitted Lender”: as defined in Section 10.7(a).

“Board”: the Board of Governors of the Federal Reserve System of the United
States (or any successor).

“Borrower”: as defined in the preamble hereto.

“Borrower Offer of Specified Discount Prepayment”: the offer by the Borrower to
make a voluntary prepayment of Term Loans at a Specified Discount to par
pursuant to Section 2.10(c).

“Borrower Solicitation of Discounted Prepayment Offers”: the solicitation by the
Borrower of offers for, and the subsequent acceptance, if any, by a Lender of, a
voluntary prepayment of Term Loans at a discount to par pursuant to
Section 2.10(c).

“Borrower Solicitation of Discount Range Prepayment Offers”: the solicitation by
the Borrower of offers for, and the corresponding acceptance by a Lender of, a
voluntary prepayment of Loans at a specified range of discounts to par pursuant
to Section 2.10(c).

“Borrowing Date”: any Business Day specified by the Borrower as a date on which
the Borrower requests the relevant Lenders to make Loans hereunder.

“Borrowing Notice”: means a request by the Borrower for a Borrowing which, if in
writing, shall be substantially in the form of Exhibit H-1, H-2 or H-3, as
applicable.

“Business”: as defined in Section 4.17(b).

“Business Day”: a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close,
provided, that with respect to notices and determinations in connection with,
and payments of principal and interest on, Eurodollar Loans, such day is also a
day for trading by and between banks in Dollar deposits in the interbank
eurodollar market.

“Capital Expenditures”: for any period, with respect to any Person, the
aggregate of all expenditures (whether paid in cash or other consideration,
financed by the incurrence of Indebtedness or accrued as a liability) by such
Person and its Restricted Subsidiaries during such period that are additions to
property, plant and equipment for the acquisition, rental, lease, purchase,
construction, replacement, repair or use of any property, the value of which
should be capitalized under GAAP and reflected as additions to property, plant
and equipment on a consolidated balance sheet of such Person and its Restricted
Subsidiaries (including, without limitation, the aggregate principal amount of
Capital Lease Obligations incurred during such period).

 

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“Capital Lease Obligations”: as to any Person, the obligations of such Person to
pay rent or other amounts under any lease of (or other arrangement conveying the
right to use) real or personal property, or a combination thereof, to the extent
such obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP and, for the purposes of
this Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with GAAP.

“Capital Stock”: any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.

“Cash Equivalents”: (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition;
(b) certificates of deposit, time deposits, eurodollar time deposits or
overnight bank deposits having maturities of one year or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at least A-1 by Standard & Poor’s Ratings Services (“S&P”) or P-1 by Moody’s
Investors Service, Inc. (“Moody’s”), or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within one year from the date of acquisition; (d) repurchase obligations of any
Lender or of any commercial bank satisfying the requirements of clause (b) of
this definition, having a term of not more than thirty (30) days, with respect
to securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody’s; (f) securities with maturities of one year or less from
the date of acquisition backed by standby letters of credit issued by any Lender
or any commercial bank satisfying the requirements of clause (b) of this
definition; (g) money market mutual or similar funds that invest substantially
in assets satisfying the requirements of clauses (a) through (1) of this
definition; (h) money market funds that (i) comply with the criteria set forth
in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended, (ii) are
rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least
$5,000,000,000; or (i) other short-term investments utilized by Foreign
Subsidiaries in accordance with the normal investment practices for cash
management in investments of a type analogous to the foregoing.

“Cash Management Obligations”: any obligations owed by Holdings, the Borrower or
any of its Restricted Subsidiaries (other than Excluded Swap Obligations of any
Guarantor) to any Lender or any Affiliate of a Lender (or was a Lender or
Affiliate thereof at the time any such arrangements were entered into) or Bank
of America, N.A. or any affiliate of Bank of America, N.A. in respect of any
overdraft and other liabilities arising from treasury, depository and cash
management services (including but not limited to purchase cards), or any
automated clearing house transfers of funds and designated by Holdings or the
Borrower as being secured under the Security Documents.

“CFC”: a “controlled foreign corporation within the meaning of Section 957 of
the Code.

 

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“Change of Control”: shall mean (a) the board of directors of Holdings or, after
the consummation of an Initial Public Offering, the Public Company, shall cease
to consist of a majority of Continuing Directors, (b) Holdings shall cease to
own, directly or indirectly, 100% of the Borrower on a fully diluted basis
except as permitted by Section 7.4, (c) the sale, lease or transfer, in one or a
series of related transactions, of all or substantially all of the assets of the
Borrower and its Subsidiaries, taken as a whole, to any Person other than a
Permitted Holder or (d) the Borrower becomes aware of (by way of a report or any
other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written
notice or otherwise) the acquisition by any Person or group (within the meaning
of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor
provision), including any group acting for the purpose of acquiring, holding or
disposing of securities (within the meaning of Rule 13d-5(b)(1) under the
Exchange Act), other than the Permitted Holders, in a single transaction or in a
related series of transactions, by way of merger, consolidation or other
business combination or purchase of beneficial ownership (within the meaning of
Rule 13d-3 under the Exchange Act, or any successor provision) of 50% or more of
the total voting power of the Voting Stock of the Borrower or any of its direct
or indirect parent companies holding directly or indirectly 50% or more of the
total voting power of the Voting Stock of the Borrower.

“Change in Law”: (a) the adoption of any rule, regulation, treaty or other law
after the Closing Date, (b) any change in any Requirement of Law or in the
interpretation or application thereof by any Governmental Authority after the
Closing Date or (c) compliance by any Lender or Issuing Bank (or, for purposes
of Section 2.18(b), by such Lender’s holding company, if any) with any written
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the Closing Date; provided, that
notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street
Reform and Consumer Protection Act and all rules, regulations, guidelines or
directives thereunder or issued in connection therewith and (ii) 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, shall be deemed to be a “Change in Law”,
regardless of the date enacted, adopted or issued.

“Class” when used in reference to any Loan or borrowing, refers to whether such
Loan, or the Loans comprising such borrowing, are Revolving Loans, Term Loans,
Incremental Term Loans, Incremental Revolving Loans, Refinancing Term Loans,
Refinancing Revolving Loans, Extended Term Loans or Extended Revolving Loans;
when used in reference to any Commitment, refers to whether such Commitment is a
Tranche B Term Commitment, Revolving Commitment, Incremental Term Commitment,
Incremental Revolving Commitment, Extended Revolving Commitment, Refinancing
Term Commitment and Refinancing Revolving Commitment; and when used in reference
to any Lender, refers to whether such Lender has a Loan or Commitment with
respect to a particular Class. Incremental Term Loans, Extended Term Loans and
Refinancing Term Loans (together with the respective Commitments in respect
thereof) shall, at the election of the Borrower, be construed to be in different
Classes. Incremental Revolving Loans, Extended Revolving Loans and Refinancing
Revolving Loans (together with the respective Commitments in respect thereof)
that have different terms shall be construed to be in different Classes.

“Closing Costs”: non-recurring out-of-pocket costs, fees and expenses, including
attorneys’ fees, investment banking fees and sponsor fees, in each case incurred
and paid by the Sponsor or any of the Loan Parties in connection with the
Transactions.

“Closing Date”: the date on which the conditions precedent set forth in
Section 5.1 shall have been satisfied (or waived by the Agents and the Lenders
in accordance herewith) and the initial Loans have been made.

“Code”: the Internal Revenue Code of 1986, as amended from time to time.

 

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“Co-Documentation Agents”: Jefferies Finance LLC and UBS Securities LLC, in
their capacity as Co-Documentation Agents hereunder.

“Collateral”: all property of the Loan Parties (other than Excluded Property),
now owned or hereafter acquired, upon which a Lien is purported to be created by
any Security Document.

“Commitment”: as to any Lender, the sum of the Tranche B Term Commitment and the
Revolving Commitment of such Lender.

“Commitment Fee Rate”: a rate per annum equal to 1/2 of 1%.

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

“Commonly Controlled Entity”: an entity, whether or not incorporated, that is
under common control with the Borrower within the meaning of Section 4001 of
ERISA or is part of a group of entities that includes the Borrower and that is
treated as a single employer under Section 414 of the Code.

“Compliance Certificate”: a certificate duly executed by a Responsible Officer
substantially in the form of Exhibit F.

“Conduit Lender”: any special purpose corporation organized and administered by
any Lender for the purpose of making Loans otherwise required to be made by such
Lender and designated by such Lender in a written instrument; provided, that the
designation by any Lender of a Conduit Lender shall not relieve the designating
Lender of any of its obligations to fund a Loan under this Agreement if, for any
reason, its Conduit Lender fails to fund any such Loan, and the designating
Lender (and not the Conduit Lender) shall have the sole right and responsibility
to deliver all consents and waivers required or requested under this Agreement
with respect to its Conduit Lender, and provided further, that no Conduit Lender
shall (a) be entitled to receive any greater amount pursuant to Section 2.18,
2.19, 2.20 or 10.5 than the designating Lender would have been entitled to
receive in respect of the extensions of credit made by such Conduit Lender or
(b) be deemed to have any Commitment.

“Consolidated Current Assets”: at any date, all amounts (other than cash and
Cash Equivalents, deferred income taxes and debts due from Affiliates) that
would, in conformity with GAAP, be set forth opposite the caption “total current
assets” (or any like caption) on a consolidated balance sheet of the Borrower
and its Restricted Subsidiaries at such date.

“Consolidated Current Liabilities”: at any date, all amounts that would, in
conformity with GAAP, be set forth opposite the caption “total current
liabilities” (or any like caption) on a consolidated balance sheet of the
Borrower and its Restricted Subsidiaries at such date, but excluding (a) the
current portion of any Funded Debt (including accrued but unpaid interest) of
the Borrower and its Restricted Subsidiaries, (b) the current portion of current
and deferred income taxes, (c) without duplication of clause (a) above, all
Indebtedness consisting of Revolving Loans or Swingline Loans or Revolving L/C
Exposure or Institutional L/C Exposure to the extent otherwise included therein
and (d) deferred revenue.

“Consolidated EBITDA”: for any period, Consolidated Net Income for such period
plus, without duplication and to the extent already deducted (and not added
back) in arriving at such Consolidated Net Income (other than with respect to
clause (g) or (r) below), the sum of (i) (to the extent attributable to the
Borrower and its Restricted Subsidiaries): (a) income tax expense (and franchise
taxes in the nature of income taxes) and foreign withholding tax expense for
such period and any state single business unitary or similar tax,
(b) consolidated interest expense and, to the extent not reflected in
consolidated interest

 

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expense, amortization or write-off of deferred financing costs, debt discount
and debt issuance costs and commissions, discounts and other fees and charges
associated with Indebtedness (including the Loans) and any losses on hedging
obligations or other derivative instruments entered into for the purpose of
hedging interest rate risk, (c) depreciation and amortization expense,
(d) amortization of intangibles (including, but not limited to, goodwill) and
organization costs, (e) Non-Cash Charges (as defined below), (f) Management Fees
paid in cash or accrued during such period to the extent permitted to be paid
hereunder, (g) proceeds of business interruption insurance received during such
period, (h) expenses incurred to the extent covered by indemnification or
refunding provisions in any Permitted Acquisition document, any document
pertaining to any acquisition consummated prior to the Closing Date, or any
insurance to the extent reimbursed (or reasonably expected to be reimbursed
within three hundred and sixty (360) days of the incurrence thereof),
(i) Permitted Start-Up Losses, (j) expenses incurred in connection with the
issuance of stock options, warrants or other Permitted Capital Stock by
Borrower, Holdings or any direct or indirect parent company of Holdings to
employees of Borrower and its Restricted Subsidiaries and any costs or expenses
incurred by the Borrower and its Restricted Subsidiaries pursuant to any
management equity plan or stock option plan or any management or employee
benefit plan or agreement or any stock subscription or shareholder agreement,
(k) any Transaction Bonuses, (l) unusual or non-recurring losses or charges,
severance costs and relocation costs, (m) any deductions attributable to
minority interests (excluding dividends and other distributions paid in cash to
the holders of such minority interests), (n) any expenses or charges related to
any debt or equity offering, Investment, acquisition, disposition,
recapitalization or Indebtedness (whether or not successful), including such
fees, expenses or charges related to this Agreement, the offering of any
Additional Debt, Additional Term Notes, Refinancing Notes, Permitted
Refinancings or any other Transaction and in connection with any actual or
proposed registration of any securities (debt or equity) or any amendments,
modifications, waivers, forbearances or restructurings or refinancings of any of
the foregoing, (o) expenses related to executive employment agreements, stay
bonuses, transaction costs, benefits and payroll taxes paid to or on behalf of
employees of the relevant seller pertaining to any acquisition or investment
permitted hereunder or consummated prior to the Closing Date who are no longer
employed by Holdings or its Restricted Subsidiaries not to exceed $1,000,000 for
the four fiscal quarters most recently ended, (p) charges in respect of early
retirement of Indebtedness, restructuring costs, integration costs, lease
run-off expenses or other business optimization expenses, costs associated with
establishing new facilities or reserves, consolidation or discontinuance or
closure of any operations, employees and/or management (including costs incurred
to implement such restructuring), and transaction fees and expenses, including
any expense relating to enhanced accounting functions, (q) any net loss from
disposed or discontinued operations, (r) cash receipts (or any netting
arrangements resulting in reduced cash expenditures) not representing
Consolidated EBITDA or Consolidated Net Income in any period to the extent
non-cash gains relating to such income were deducted in the calculation of
Consolidated EBITDA pursuant to clause (a) below for any previous period and not
added back, (s) the amount of management, monitoring, consulting and advisory
fees (including termination fees) and related indemnities and expenses paid or
accrued in such period to the Sponsor or any other Permitted Holder or any of
their Affiliates to the extent permitted under Section 7.10, (t) the amount of
cost savings, operating expense reductions, other operating improvements and
initiatives and synergies, which are reasonably identifiable and projected by
the Borrower in good faith to be reasonably anticipated to be realizable within
eighteen (18) months of the date thereof (which will be added to Consolidated
EBITDA as so projected until fully realized and calculated on a pro forma basis
as though such cost savings, operating expense reductions, other operating
improvements and initiatives and synergies had been realized on the first day of
such period), net of the amount of actual benefits realized during such period
from such actions, (u) any net loss included in the consolidated financial
statements due to the application of Financial Accounting Standards No. 160
“Non-controlling Interests in Consolidated Financial Statements” (“FAS 160”)
(Accounting Standards Codification Topic 810), (v) realized foreign exchange
losses resulting from the impact of foreign currency changes on the valuation of
assets or liabilities on the balance sheet of the Borrower and its Restricted
Subsidiaries, (w) net realized losses from Swap Obligations or embedded
derivatives that require similar accounting treatment and the application

 

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of Accounting Standard Codification Topic 815 and related pronouncements and
(x) retention, severance, recruiting, relocation and signing bonuses and
expenses and (ii) the income of any Unrestricted Subsidiary to the extent any
such income is actually received by the Borrower or any Restricted Subsidiary
and minus (a) without duplication and to the extent included in the statement of
such Consolidated Net Income for such period, the sum of (i) any unusual or
non-recurring income or gains, (ii) income tax credits (to the extent not netted
from income tax expense), (iii) any other non-cash income and (iv) any interest
income and gains on hedging or other derivative instruments entered into for the
purpose of hedging interest rate risk, and (b) any cash payments made during
such period in respect of Non-Cash Charges described in clause (e) which cash
payments are made subsequent to the fiscal quarter in which the relevant
Non-Cash Charges were reflected as a charge in the statement of Consolidated Net
Income, but only to the extent that such cash payments do not exceed such
Non-Cash Charges, all as determined on a consolidated basis. In addition,
Consolidated EBITDA shall be calculated without giving effect to (w) any gains
or losses from Asset Sales, (x) any gain or loss recognized in determining
Consolidated Net Income for such period in respect of post-retirement benefits
as a result of the application of FASB 106 and (y) any gain or loss recognized
in determining Consolidated Net Income for such period resulting from Earnout
Obligations. Furthermore, (A) there shall be included in determining
Consolidated EBITDA for any period, without duplication, (I) Acquired EBITDA of
any Person, property, business or asset acquired (other than in the ordinary
course of business) by, or contributed to, the Borrower or any Restricted
Subsidiary during such period (but not the Acquired EBITDA of any related
Person, property, business or assets to the extent not so acquired), to the
extent not subsequently sold, transferred or otherwise disposed of by the
Borrower or such Restricted Subsidiary (each such Person, property, business or
asset acquired or received and not subsequently so disposed of, an “Acquired
Entity or Business”) and (II) the Acquired EBITDA of any Unrestricted Subsidiary
that is converted into a Restricted Subsidiary during such period (each, a
“Converted Restricted Subsidiary”), based on the actual Acquired EBITDA of such
Acquired Entity or Business or Converted Restricted Subsidiary for such period
(including the portion thereof occurring prior to such acquisition or
conversion) and the pro forma adjustments made pursuant to the definition of
“Pro Forma Basis”, if any, applicable thereto and (B) there shall be excluded in
determining Consolidated EBITDA for any period (I) the Disposed EBITDA of any
Person, property, business or asset sold, transferred or otherwise disposed of,
closed or classified as discontinued operations (in each case, other than in the
ordinary course of business) by the Borrower or any Restricted Subsidiary during
such period (each such Person, property, business or asset so sold or disposed
of, a “Sold Entity or Business”) and (II) the Disposed EBITDA of any Restricted
Subsidiary that is converted into an Unrestricted Subsidiary during such period
(each, a “Converted Unrestricted Subsidiary”), based on the actual Disposed
EBITDA of such Sold Entity or Business or Converted Unrestricted Subsidiary for
such period (including the portion thereof occurring prior to such sale,
transfer or disposition or conversion).

For the purpose of the definition of Consolidated EBITDA, “Non-Cash Charges”
means (a) any impairment charge or asset write-off related to intangible assets,
long-lived assets, and investments in debt and equity securities pursuant to
GAAP, (b) all losses from investments recorded using the equity method,
(c) stock-based awards compensation expense, and (d) other non-cash charges.

Unless otherwise provided herein, Consolidated EBITDA shall be calculated with
respect to the Borrower and its Restricted Subsidiaries.

“Consolidated First Lien Debt”: at any date of determination, (a) Consolidated
Total Debt on such day less, without duplication, (b) the sum of (i) all
Indebtedness secured by a Lien that is junior in priority to the Lien securing
the Loans and (ii) any unsecured Indebtedness.

“Consolidated First Lien Leverage Ratio”: as at the end of any fiscal quarter,
the ratio of (a) Consolidated First Lien Debt of the Borrower and its Restricted
Subsidiaries on such day to (b) Consolidated EBITDA for the most recently
completed four fiscal quarters of the Borrower and its Restricted Subsidiaries
for which financial statements have been furnished pursuant to Section 6.1.

 

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“Consolidated Interest Expense”: for any period, total cash interest expense
(including that attributable to Capital Lease Obligations), net of cash interest
income, of the Borrower and its Restricted Subsidiaries for such period with
respect to all outstanding Indebtedness of the Borrower and its Restricted
Subsidiaries (including all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers’ acceptance financing and net
costs under Swap Agreements in respect of interest rates to the extent such net
costs are allocable to such period in accordance with GAAP); provided, however,
that (a) Consolidated Interest Expense shall be determined excluding (to the
extent otherwise included therein) all non-recurring cash interest expense
consisting of liquidated damages for failure to timely comply with registration
rights obligations and financing fees, as calculated on a consolidated basis in
accordance with GAAP and (b) for the avoidance of doubt, all interest expense of
any Unrestricted Subsidiary and any Converted Unrestricted Subsidiary shall be
excluded from Consolidated Interest Expense for such period; provided that when
determining Consolidated Interest Expense of the Borrower in respect of any
period ending prior to the first anniversary of the Closing Date, Consolidated
Interest Expense shall be calculated by multiplying the aggregate Consolidated
Interest Expense accrued since the Closing Date by 365 and then dividing such
product by the number of days from and including the Closing Date to and
including the last day of such period.

“Consolidated Leverage Ratio”: as at the end of any fiscal quarter, the ratio of
(a) Consolidated Total Debt of the Borrower and its Restricted Subsidiaries on
such day to (b) Consolidated EBITDA for the most recently completed four fiscal
quarters of the Borrower and its Restricted Subsidiaries for which financial
statements have been furnished pursuant to Section 6.1.

“Consolidated Net Income”: for any period, the consolidated net income (or loss)
of the Borrower and its Restricted Subsidiaries, determined on a consolidated
basis in accordance with GAAP excluding (except with respect to clause (s) which
shall be included), without duplication, (a) any extraordinary, exceptional,
unusual or nonrecurring gain, loss, charge or expense, or any charges, expenses
or reserves in respect of any restructuring, redundancy or severance expenses or
any Non-Cash Charges for such period, (b) the cumulative effect of a change in
accounting principles during such period, to the extent included in such net
income (loss), (c) Closing Costs and any amortization thereof thereafter,
(d) any fees, costs and expenses (including allocated internal costs and
expenses) incurred during such period, or any amortization thereof for such
period, in connection with any actual or proposed acquisition, investment, asset
disposition, recapitalization, dividend, distribution, issuance or repayment of
Indebtedness, issuance of equity interests, refinancing transaction or amendment
or modification of any debt instrument (in each case, including any such
transaction consummated prior to the Closing Date and any such transaction not
completed or initiated) and any charges or non-recurring merger costs incurred
during such period as a result of any such transaction, (e) the after-tax effect
of any income (or loss) for such period attributable to the early extinguishment
of Indebtedness, (f) the income (or deficit) of any Person accrued prior to the
date it becomes a Restricted Subsidiary of Borrower or is merged into or
consolidated with Borrower or any of its Restricted Subsidiaries (other than for
purposes of calculating Consolidated Leverage Ratio and Consolidated First Lien
Leverage Ratio hereunder, as set forth in the definition of Consolidated
EBITDA), (g) the income (or deficit) of any Person (other than a Restricted
Subsidiary of the Borrower) in which the Borrower or any of its Restricted
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Restricted Subsidiary in the
form of dividends or similar distributions, (h) any net gain (or loss) realized
upon the sale or other disposition of any asset or disposed operations of the
Borrower or any Restricted Subsidiaries (including pursuant to any Sale
Leaseback Transaction which is not sold or otherwise disposed of in the ordinary
course of business), (i) any (x) non-cash compensation charge or expense arising
from any grant of stock, stock options or other equity based awards and any
non-cash deemed finance charges in respect of any pension liabilities or other

 

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provisions or on the re-valuation of any benefit plan obligation and (y) income
(loss) attributable to deferred compensation plans or trusts shall be excluded,
(j) all deferred financing costs written off or amortized and premiums paid or
other expenses incurred directly in connection with any early extinguishment of
Indebtedness and any net gain (loss) from any write-off or forgiveness of
Indebtedness, (k) any unrealized gains or losses in respect of Swap Obligations
or any ineffectiveness recognized in earnings related to qualifying hedge
transactions or the fair value of changes therein recognized in earnings for
derivatives that do not qualify as hedge transactions, in each case, in respect
of Swap Obligations, (l) any unrealized foreign currency transaction gains or
losses in respect of obligations of any Person denominated in a currency other
than the functional currency of such Person and any unrealized foreign exchange
gains or losses relating to translation of assets and liabilities denominated in
foreign currencies, (m) any unrealized foreign currency translation or
transaction gains or losses in respect of Indebtedness or other obligations of
the Borrower or any Restricted Subsidiary owing to the Borrower or any
Restricted Subsidiary, (n) any purchase accounting effects including, but not
limited to, adjustments to inventory, property and equipment, software and other
intangible assets and deferred revenue in component amounts required or
permitted by GAAP and related authoritative pronouncements (including the
effects of such adjustments pushed down to the Borrower and the Restricted
Subsidiaries), as a result of any consummated acquisition, or the amortization
or write-off of any amounts thereof (including any write-off of in process
research and development), (o) any goodwill or other asset impairment charge or
write-off or write-down, (p) any after-tax effect of income (loss) from the
early retirement, extinguishment or cancellation of Indebtedness or Swap
Obligations or other derivative instruments shall be excluded, (q) accruals and
reserves that are established within twelve months after the Closing Date that
are so required to be established as a result of the Transactions in accordance
with GAAP, shall be excluded, (r) any net unrealized gains and losses resulting
from Swap Obligations or embedded derivatives that require similar accounting
treatment and the application of Accounting Standards Codification Topic 815 and
related pronouncements shall be excluded, (s) proceeds from any business
interruption insurance to the extent not already included in Consolidated Net
Income shall be included, (t) the amount of any expense to the extent a
corresponding amount is received in cash by the Borrower and the Restricted
Subsidiaries from a Person other than the Borrower or any Restricted
Subsidiaries, provided such payment has not been included in determining
Consolidated Net Income (it being understood that if the amounts received in
cash under any such agreement in any period exceed the amount of expense in
respect of such period, such excess amounts received may be carried forward and
applied against expense in future periods), (u) gains and losses on the sale,
exchange or other disposition of assets outside the ordinary course of business
or abandonment of assets and from discontinued operations and (v) cash and
non-cash charges, paid or accrued, and gains resulting from the application of
Financial Accounting Standards No. 141R (Accounting Standards Codification
Topic 805) (including with respect to earn-outs incurred by the Borrower or any
of its Restricted Subsidiaries). There also shall be excluded from Consolidated
Net Income for any period (without duplication of the foregoing) the purchase
accounting effects of adjustments to property and equipment, other intangible
assets, deferred revenue, lease contracts and debt line items required or
permitted by GAAP and related authoritative pronouncements (including the
effects of such adjustments pushed down to the Borrower and its Restricted
Subsidiaries), as a result of any acquisition consummated prior to the Closing
Date, any Permitted Acquisitions, or the amortization or write-off of any
amounts thereof.

In addition, to the extent not already included in the Consolidated Net Income
of such Person and its Restricted Subsidiaries, notwithstanding anything to the
contrary in the foregoing, Consolidated Net Income shall exclude (i) any
expenses and charges that are reimbursed by indemnification or other
reimbursement provisions, or so long as the Borrower has made a determination
that there exists reasonable evidence that such amount will in fact be
indemnified or reimbursed (and such amount is in fact reimbursed within three
hundred and sixty-five (365) days of the date of such charge or payment (with a
deduction for any amount so added back to the extent not so reimbursed within
such three hundred and sixty-five (365) days)), in connection with any
investment or any sale, conveyance, transfer or other disposition

 

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of assets permitted hereunder, (ii) to the extent covered by insurance and
actually reimbursed, or, so long as the Borrower has made a determination that
there exists reasonable evidence that such amount will in fact be reimbursed by
the insurer and such amount is (A) not denied by the applicable carrier in
writing within three hundred and sixty-five (365) days and (B) in fact
reimbursed within three hundred and sixty-five (365) days of the date of such
evidence (with a deduction for any amount so added back to the extent not so
reimbursed within three hundred and sixty-five (365) days), expenses with
respect to liability or casualty events or business interruption and (iii) any
expenses and charges to the extent paid for, or so long as the Borrower has made
a determination that there exists reasonable evidence that such amount will in
fact be reimbursed by (and such amount is in fact reimbursed within three
hundred and sixty-five (365) days of the date of such payment (with a deduction
for any amount so added back to the extent not so reimbursed within three
hundred and sixty-five (365) days)), any third party other than such Person or
any of its Restricted Subsidiaries.

“Consolidated Total Debt”: at any date, the excess of (a) the aggregate
principal amount of all Indebtedness of the Borrower and its Restricted
Subsidiaries at such date, determined on a consolidated basis, to the extent
consisting of any Indebtedness for borrowed money, Capital Lease Obligations or
debt obligations evidenced by bonds, debentures or notes and, for the avoidance
of doubt, excluding any undrawn letters of credit, any Earnout Obligation, and
any changes in GAAP which would classify any operating leases in accordance with
GAAP in effect as of the Closing Date as Capital Lease Obligations, required to
be reflected on a consolidated balance sheet of the Borrower in accordance with
GAAP minus (b) the aggregate amount of unrestricted cash, cash that
collateralizes Institutional L/C Exposure or Revolving L/C Exposure and Cash
Equivalents of the Borrower and its Restricted Subsidiaries at such date
required to be reflected on a consolidated balance sheet of the Borrower in
accordance with GAAP; provided that, if a Defeasance is consummated, the Senior
Notes or any other defeased debt shall not be included in determining
Consolidated Total Debt.

“Consolidated Working Capital”: at any date, the excess (or deficit) (which may
be a negative number) of Consolidated Current Assets on such date over
Consolidated Current Liabilities on such date; provided that Consolidated
Working Capital shall be calculated without giving effect to (i) any assets or
liabilities acquired or assumed in any Permitted Acquisition or other
Investment, (ii) as a result of the reclassification of items from short-term to
long-term and vice-versa or (iii) non-cash current assets and current
liabilities.

“Continuing Directors” means the directors of Holdings on the Closing Date,
after giving effect to the Transactions, and each other director of Holdings (or
the Public Company after an Initial Public Offering) if, (a) such other
director’s nomination for election to the board of directors of Holdings (or the
Public Company after an Initial Public Offering) is recommended by at least a
majority of the then Continuing Directors, (b) such other director’s nomination
for election to the board of directors of Holdings (or the Public Company after
an Initial Public Offering) is recommended, directly or indirectly, by any of
the Permitted Holders or any of their respective Affiliates, or (c) such other
director receives the vote, directly or indirectly, of any of the Permitted
Holders or any of their respective Affiliates in his or her election by the
shareholders of Holdings (or the Public Company after an Initial Public
Offering).

“Contractual Obligation”: 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.

“Converted Restricted Subsidiary” has the meaning set forth in the definition of
Consolidated EBITDA.

 

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“Converted Unrestricted Subsidiary” has the meaning set forth in the definition
of Consolidated EBITDA.

“Credit Agreement Refinancing Indebtedness”: (a) Permitted First Priority
Refinancing Debt, (b) Permitted Second Priority Refinancing Debt, (c) Permitted
Unsecured Refinancing Debt or (d) other Indebtedness incurred pursuant to a
Refinancing Amendment, in each case, issued, incurred or otherwise obtained
(including by means of the extension or renewal of existing Indebtedness) in
exchange for, or to extend, renew, replace, repurchase, retire or refinance, in
whole or part, existing Term Loans and Revolving Loans (or Revolving
Commitments), or any then-existing Credit Agreement Refinancing Indebtedness
(“Refinanced Debt”); provided that (i) such Indebtedness has a maturity no
earlier, and, in the case of Refinancing Term Loans, a Weighted Average Life to
Maturity equal to or greater, than the Refinanced Debt (without giving effect to
any prepayments or changes to amortization), (ii) such Indebtedness shall not
have a greater principal amount than the principal amount of the Refinanced Debt
plus accrued interest, fees, premiums (if any) and penalties thereon and fees
and expenses associated with the refinancing plus an amount equal to any
existing commitments thereunder plus any Term Loans and/or Revolving Commitments
plus other Indebtedness that could otherwise be (A) incurred hereunder (subject
to a dollar for dollar usage of any basket (other than any basket that provides
for Credit Agreement Refinancing Indebtedness) set forth in Section 7.2) and
(B) if such Indebtedness is secured, subject to a dollar for dollar usage of any
basket (other than any basket that provides for Liens on Credit Agreement
Refinancing Indebtedness) set forth in Section 7.2, plus premiums and accrued
and unpaid interest, fees and expenses in respect thereof plus other reasonable
costs, fees and expenses (including upfront fees and original issue discount)
incurred in connection with such Credit Agreement Refinancing Indebtedness,
(iii) the terms and conditions of such Indebtedness (except as otherwise
provided in clause (ii) above and with respect to pricing, premiums, fees, rate
floors and optional prepayment or redemption terms) reflect market terms and
conditions at the time of incurrence or issuance of such Credit Agreement
Refinancing Indebtedness, (iv) such Indebtedness shall rank pari passu or junior
in right of payment and (if secured) of security with the Term Loans hereunder,
(v) the obligations in respect of such Indebtedness may not be secured by liens
on the assets of Holdings, the Borrower and its Restricted Subsidiaries, other
than assets constituting Collateral and may be guaranteed solely by the
Guarantors, (vi) if such Indebtedness is secured, the representative for such
Indebtedness shall enter into a customary intercreditor agreement with the
Administrative Agent substantially consistent with the terms set forth in the
First Lien Intercreditor Agreement or the Junior Lien Intercreditor Agreement,
as applicable and (vii) such Refinanced Debt shall be repaid, repurchased,
retired, defeased or satisfied and discharged, all accrued interest, fees,
premiums (if any) and penalties in connection therewith shall be paid, and all
commitments thereunder terminated, on the date such Credit Agreement Refinancing
Indebtedness is issued, incurred or obtained.

“Credit Increase”: as defined in Section 2.25(a).

“Cumulative Excess Cash Flow”: as of any date, an amount equal to the excess, if
any, of (a) the sum of Excess Cash Flow for each fiscal year of the Borrower
ended on or after September 30, 2015, prior to such date for which audited
financial statements have been delivered pursuant to Section 6.1(a), over
(b) the sum, with respect to each such fiscal year for which Excess Cash Flow is
included in clause (a), of (i) the aggregate principal amount of all prepayments
of Revolving Loans and Swingline Loans made during such fiscal year (or such
shorter period) to the extent accompanying permitted optional reductions of the
Revolving Commitments and (ii) the amount of cash used for all optional
prepayments of Term Loans made during such fiscal year (or such shorter period);
provided that such excess of (a) over (b) shall not be less than zero for any
such fiscal year.

“Cure Amount”: as defined in Section 8.

“Cure Expiration Date”: as defined in Section 8.

 

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“Cure Right”: as defined in Section 8.

“Debt Fund Affiliate”: any Person that is organized primarily for the purpose of
making debt investments in one or more companies and is a bona fide and
diversified investment fund.

“Declined Proceeds”: as defined in Section 2.11(f).

“Default”: any of the events specified in Section 8, whether or not any
requirement for the giving of notice, the lapse of time, or both, as set forth
therein, has been satisfied.

“Defaulting Lender”: any Lender that (a) has failed to fund any portion of its
Loans or participations in Letters of Credit or Swingline Loans required to be
funded by it hereunder within one (1) Business Day of the date required to be
funded by it hereunder, (b) has notified the Administrative Agent, the Issuing
Lender, the Swingline Lender, any Lender and/or Borrower in writing that it does
not intend to comply with any of its funding obligations under this Agreement or
has made a public statement to the effect that it does not intend to comply with
its funding obligations under this Agreement or under other agreements in which
it commits to extend credit, (c) has failed, within three (3) Business Days
after request by the Administrative Agent, to confirm that it will comply with
the terms of this Agreement relating to its obligations to fund prospective
Loans and participations in then outstanding Letters of Credit and Swingline
Loans, (d) has otherwise failed to pay over to the Administrative Agent or any
other Lender any other amount required to be paid by it hereunder within three
(3) Business Days of the date when due, unless the subject of a good faith
dispute, or (e) in the case of a Lender that has a Commitment, Revolving L/C
Exposure (or participations in Letters of Credit hereunder) or Swingline
Exposure outstanding at such time, shall take, or is the Subsidiary of any
person that has taken, any action or be (or is) the subject of any action or
proceeding of a type described in Section 8(f) (or any comparable proceeding
initiated by a regulatory authority having jurisdiction over such Lender or such
person); provided, that (1) with respect to (a), (b) or (c), to the extent such
Lender is making a good faith claim that it has no obligation to fund because
the conditions to borrowing have not been met, then such Lender shall not be
considered a Defaulting Lender and (2) as of any date of determination, the
determination of whether any Lender is a Defaulting Lender hereunder shall not
take into account, and shall not otherwise impair, any amounts funded by such
Lender which have been assigned by such Lender to a Conduit Lender pursuant to
Section 10.6(f).

“Defeasance”: a covenant defeasance in respect of the Senior Notes Indenture
pursuant to Article 8 of the Senior Notes Indenture or any similar covenant
defeasance in respect of other Indebtedness.

“Designated Non-Cash Consideration”: the fair market value (as determined in
good faith by the Borrower) of non-cash consideration received by the Borrower
or one of its Restricted Subsidiaries in connection with a Disposition that is
so designated as Designated Non-Cash Consideration pursuant to an officer’s
certificate, setting forth the basis of such valuation, less the amount of cash
or Cash Equivalents received in connection with a subsequent payment,
redemption, retirement, sale or other disposition of such Designated Non-Cash
Consideration. A particular item of Designated Non-Cash Consideration will no
longer be considered to be outstanding when and to the extent it has been paid,
redeemed or otherwise retired or sold or otherwise disposed of in compliance
with Section 7.5.

“Discount Prepayment Accepting Lender”: as defined in Section 2.10(c)(ii)(B).

“Discount Range”: as defined in Section 2.10(c)(iii)(A).

“Discount Range Prepayment Amount”: as defined in Section 2.10(c)(iii)(A).

 

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“Discount Range Prepayment Notice”: a written notice of a Borrower Solicitation
of Discount Range Prepayment Offers made pursuant to Section 2.10(c)(iii)
substantially in the form of Exhibit K.

“Discount Range Prepayment Offer”: the irrevocable written offer by a Lender,
substantially in the form of Exhibit L, submitted in response to an invitation
to submit offers following the Auction Agent’s receipt of a Discount Range
Prepayment Notice.

“Discount Range Prepayment Response Date”: as defined in
Section 2.10(c)(iii)(A).

“Discount Range Proration”: as defined in Section 2.10(c)(iii)(C).

“Discounted Loan Prepayment”: as defined in Section 2.10(c)(i).

“Discounted Prepayment Determination Date”: as defined in
Section 2.10(c)(iv)(C).

“Discounted Prepayment Effective Date”: in the case of any Borrower Offer of
Specified Discount Prepayment, Borrower Solicitation of Discount Range
Prepayment Offer or Borrower Solicitation of Discounted Prepayment Offer, five
(5) Business Days following the respective Specified Discount Prepayment
Response Date, Discount Range Prepayment Response Date or Solicited Discounted
Prepayment Response Date, as applicable, in accordance with
Section 2.10(c)(ii)(A), Section 2.10(c)(iii)(A), or 2.10(c)(iv)(A),
respectively, unless a different period is agreed to between the Borrower and
the Auction Agent acting in their reasonable discretion.

“Disposed EBITDA”: with respect to any Sold Entity or Business for any period,
the amount for such period of Consolidated EBITDA of such Sold Entity or
Business (determined as if references to the Borrower and the Restricted
Subsidiaries in the definition of Consolidated EBITDA were references to such
Sold Entity or Business and its Restricted Subsidiaries), which may be negative,
all as determined on a consolidated basis for such Sold Entity or Business.

“Disposition”: with respect to any property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof. The
terms “Dispose” and “Disposed of” shall have correlative meanings.

“Disqualified Lender” as defined in Section 10.6(b)(ii)(E).

“Dollars” and “$”: dollars in lawful currency of the United States.

“Domestic Foreign Holding Company”: any Domestic Subsidiary of the Borrower the
primary assets of which are (a) equity interests (including, for this purpose,
any debt or other instrument treated as equity for U.S. federal income tax
purposes) in one or more (x) Foreign Subsidiaries and (y) other Subsidiaries of
the Borrower that own no material assets other than equity interests (including,
for this purpose, any debt or other instrument treated as equity for U.S.
federal income tax purposes) in one or more Foreign Subsidiaries or
(b) intercompany accounts, cash, Cash Equivalents and debt of one or more
Foreign Subsidiaries.

“Domestic Subsidiary”: any Restricted Subsidiary of the Borrower incorporated or
organized in the United States, any State or the District of Columbia, but
excluding any Domestic Foreign Holding Company.

“Earnout Obligations”: those payment obligations of the Borrower and its
Restricted Subsidiaries to former owners of businesses which were acquired by
the Borrower or one of its Restricted Subsidiaries pursuant to an acquisition
which are in the nature of deferred purchase price to the extent such payment
obligations are required to be set forth on a balance sheet prepared in
accordance with GAAP.

 

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“ECF Percentage”: 50%; provided that the ECF Percentage shall be 25% in respect
of such fiscal year if the Consolidated First Lien Leverage Ratio as of the last
day of such fiscal year is less than or equal to 3.50 to 1.00 but greater than
2.75 to 1.00 on the last day thereof; provided further that the ECF Percentage
shall be 0% in respect of such fiscal year if the Consolidated First Lien
Leverage Ratio as of the last day of such fiscal year is less than or equal to
2.75 to 1.00.

“Electing Guarantor”: any Excluded Subsidiary that, at the option, and in the
sole discretion, of the Borrower has been designated a Subsidiary Loan Party, it
being understood that the Borrower may undesignate any such Subsidiary.

“Environmental Laws”: any and all foreign, Federal, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees,
requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of the environment or of human health
as affected by exposure to harmful or deleterious substances, as now or may at
any time hereafter be in effect.

“ERISA”: the Employee Retirement Income Security Act of 1974, as amended from
time to time.

“Eurodollar Loans”: Loans the rate of interest applicable to which is based upon
the Eurodollar Rate.

“Eurodollar Rate”: means, for any Interest Period, the rate per annum equal to
(i) the rate appearing on Reuters Screen LIBOR01 Page (or on any successor or
substitute page of such service or any successor to or substitute for such
service, as determined by the Administrative Agent from time to time for
purposes of providing quotations of interest rates applicable to Dollar deposits
in London or other applicable interbank market) at approximately 11:00 a.m.,
London time, two (2) Business Days prior to the commencement of such Interest
Period, for Dollar deposits (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period or (ii) if such published
rate is not available at such time for any reason, then the “Eurocurrency Rate”
for such Interest Period shall be the rate per annum determined by the
Administrative Agent to be the rate at which deposits in Dollars for delivery on
the first day of such Interest Period in same day funds in the approximate
amount of the Eurodollar Loans being made, continued or converted by the
Administrative Agent and with a term equivalent to such Interest Period would be
offered by the Administrative Agent to major banks in the London interbank
market at their request at approximately 11:00 a.m. (London time) two
(2) Business Days prior to the commencement of such Interest Period; provided
that, with respect to the Initial Tranche B Term Loans only, the Eurodollar Rate
shall be deemed to be not less than 1.00% per annum.

“Eurodollar Tranche”: the collective reference to Eurodollar Loans under a
particular Facility the then current Interest Periods with respect to all of
which begin on the same date and end on the same later date (whether or not such
Loans shall originally have been made on the same day).

“Event of Default”: any of the events specified in Section 8, provided that any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

“Excess Cash Flow”: for any period, (a) Consolidated Net Income for such period,
plus (b) if there was a net decrease in Consolidated Working Capital during such
period, the amount of such net decrease, plus (c) an amount equal to the amount
of non-cash charges to the extent deducted in arriving at

 

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such Consolidated Net Income, plus (d) non-cash losses from asset sales for such
period (other than from sales in the ordinary course of business) to the extent
deducted in arriving at such Consolidated Net Income, minus (e) regularly
scheduled payments and mandatory prepayments of the principal of any
Indebtedness during such period (other than any such payments and prepayments of
principal of Indebtedness made with the proceeds of any issuance of Capital
Stock or other Indebtedness incurred by the Borrower or any of its Restricted
Subsidiaries), but only to the extent (other than with respect to the Mortgage
Facility) that any such prepaid amounts cannot by their terms be reborrowed or
redrawn and do not occur in connection with a refinancing of all or any portion
of such Indebtedness for such period, minus (f) without duplication of amounts
deducted pursuant to clause (o) below in prior fiscal years, Capital
Expenditures (other than Capital Expenditures financed with Indebtedness
permitted hereunder (other than Revolving Loans or Swingline Loans) and other
Excluded Capital Expenditures) permitted to be made during such period, minus
(g) without duplication of amounts deducted pursuant to clause (o) below in
prior fiscal years, the cash portion of consideration for Permitted Acquisitions
and other Investments permitted hereunder (other than consideration for
Permitted Acquisitions and other Investments financed with Indebtedness (other
than Revolving Loans or Swingline Loans) or issuances of Capital Stock permitted
hereunder) for such period or payable within ninety (90) days of the end of such
period (provided that amounts so deducted shall not be deducted in any
subsequent period), minus (h) non-cash gains from asset sales for such period
(other than from sales in the ordinary course of business) to the extent
included in arriving at such Consolidated Net Income, minus (i) if there was a
net increase in Consolidated Working Capital during such period the amount of
such net increase, minus (j) an amount equal to the amount of all non-cash
credits included in arriving at such Consolidated Net Income and cash charges
included in clauses (a) through (e) of the definition of Consolidated Net
Income, minus (k) cash payments by the Borrower and its Restricted Subsidiaries
during such period in respect of long-term liabilities of the Borrower and its
Restricted Subsidiaries other than Indebtedness (other than cash payments in
respect of claims offset by receivables from insurance companies), minus (l) the
amount of cash Restricted Payments paid during such period pursuant to
Section 7.6(b), (c), (e), (h), (i), (j), (l), (m), (n) or (p) or to the extent
such Restricted Payments were financed with internally generated cash flow of
the Borrower and its Restricted Subsidiaries or with the proceeds of Revolving
Loans or Swingline Loans, minus (m) the aggregate amount of expenditures
actually made by the Borrower and its Restricted Subsidiaries in cash during
such period (including expenditures for the payment of financing fees) to the
extent that such expenditures are not expensed during such period, except to the
extent financed with the proceeds of Indebtedness (other than Revolving Loans or
Swingline Loans) or Capital Stock of Holdings, the Borrower or its Restricted
Subsidiaries, minus (n) the aggregate amount of any premium, make-whole or
penalty payments actually paid in cash by the Borrower and its Restricted
Subsidiaries during such period that are required to be made in connection with
any prepayment of Indebtedness, minus (o) without duplication of amounts
deducted from Excess Cash Flow in prior periods, the aggregate consideration
(excluding any such consideration intended to be financed with Indebtedness
(other than Revolving Loans or Swingline Loans) or issuances of Capital Stock)
required to be paid in cash by the Borrower or any of its Restricted
Subsidiaries pursuant to contracts (the “Contract Consideration”) entered into
prior to or during such period relating to Permitted Acquisitions or Capital
Expenditures to be consummated or made during the period of two consecutive
fiscal quarters of the Borrower following the end of such period, minus (p) any
amounts of income or cash or cash equivalents distributed with the Post-Acute
Specialty Rehabilitation Services segment or business in the year that the SRS
Distribution is consummated, provided that to the extent the aggregate amount of
internally generated cash and proceeds of Revolving Loans or Swingline Loans
actually utilized to finance such Permitted Acquisitions during such period of
two consecutive fiscal quarters is less than the Contract Consideration, the
amount of such shortfall shall be added to the calculation of Excess Cash Flow
at the end of such period of two consecutive fiscal quarters, plus (p) without
duplication, an amount equal to all cash amounts received during such period but
excluded in arriving at such Consolidated Net Income pursuant to any of clauses
(a) through (e) of the definition of Consolidated Net Income, minus (q) cash
payments made during such period in respect of Earnout Obligations, to the
extent such Earnout Obligations were not deducted in calculating Excess Cash
Flow for such period or any

 

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prior period, minus (r) voluntary prepayments of Indebtedness other than the
Term Loans or Revolving Loans (in the case of revolving loans (including
swingline loans), to the extent accompanied by permanent reduction in
commitments), minus (s) cash payments in respect of non-cash charges added back
in a prior period minus (t) without duplication, an amount equal to all charges
or expenses incurred during such period but excluded in arriving at such
Consolidated Net Income pursuant to the definition of Consolidated Net Income.

“Excess Cash Flow Application Date”: as defined in Section 2.11(c).

“Exchange Act”: the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the SEC promulgated thereunder.

“Excluded Capital Expenditures”: all Capital Expenditures:

(a) made to restore, replace or rebuild property to the condition of such
property immediately prior to any damage, loss, destruction or condemnation of
such property, to the extent such expenditure is made with, or subsequently
reimbursed out of, insurance proceeds, indemnity payments, condemnation awards
(or payments in lieu of) or damage recovery proceeds relating to any such
damage, loss, destruction or condemnation;

(b) constituting reinvestment of proceeds (to the extent permitted herein) from
Asset Sales, Sale Leaseback Transactions and Recovery Events;

(c) made by Borrower or any of its Restricted Subsidiaries as a tenant in
leasehold improvements, to the extent reimbursed by the landlords; or

(d) made with the Net Cash Proceeds (Not Otherwise Applied) of an issuance after
the Closing Date of Capital Stock of Borrower, Holdings or a direct or indirect
parent company of Holdings.

“Excluded Information”: information regarding the Borrower, the Sponsor, their
respective affiliates not known to such Lender and that may be material to a
decision by such Lender to participate in any prepayment pursuant to
Section 2.10(c) or assignment pursuant to Section 10.6(g) (including material
non-public information).

“Excluded Property”: has the meaning set forth in the Security Documents.

“Excluded Subsidiary”: any Subsidiary of the Borrower that is (a) a Domestic
Foreign Holding Company or any direct or indirect Domestic Subsidiary of a
Foreign Subsidiary or any CFC; (b) a direct or indirect Foreign Subsidiary;
(c) a Joint Venture or Non-Wholly-Owned Subsidiary; (d) an Immaterial
Subsidiary; (e) an Unrestricted Subsidiary; (f) an Insurance Subsidiary or other
special purpose entity; (g) a Non-Profit Entity; (h) prohibited by applicable
Requirement of Law or Contractual Obligation from guaranteeing or granting Liens
to secure any of the Secured Obligations or with respect to which any consent,
approval, license or authorization from any Governmental Authority would be
required for the provision of any such guaranty (but in the case of such
guaranty being prohibited due to a Contractual Obligation, such Contractual
Obligation shall have been in place at the Closing Date or at the time such
Subsidiary became a Restricted Subsidiary and was not created in contemplation
of or in connection with such Person becoming a Restricted Subsidiary); provided
that each such Domestic Restricted Subsidiary shall cease to be an Excluded
Subsidiary solely pursuant to this clause (h) if such consent, approval, license
or authorization has been obtained; (i) with respect to which the Borrower and
the Administrative Agent reasonably agree that the burden or cost or other
consequences of providing a guaranty of the

 

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Secured Obligations are excessive in relation to the benefits to the Lenders;
(j) a Domestic Restricted Subsidiary acquired pursuant to an Acquisition
financed with secured Indebtedness permitted to be incurred under Section 7.2(g)
and each Domestic Restricted Subsidiary that is a Subsidiary thereof to the
extent such secured Indebtedness prohibits such Domestic Restricted Subsidiary
from becoming a Guarantor; provided that each such Domestic Restricted
Subsidiary shall cease to be an Excluded Subsidiary solely pursuant to this
clause (j) if such secured Indebtedness is repaid or becomes unsecured, if such
Domestic Restricted Subsidiary ceases to Guarantee such secured Indebtedness or
such prohibition no longer exists, as applicable; (k) a direct or indirect
Subsidiary of an Excluded Subsidiary; (l) a Subsidiary, acquired after the
Closing Date that does not have the legal capacity to provide a guarantee of the
Secured Obligations (provided that the lack of such legal capacity does not
arise from any action or omission of Borrower or any other Loan Party); or
(m) any Subsidiary with respect to which the providing of a guarantee of the
Secured Obligations, in the reasonable judgment of the Borrower, could
reasonably be expected to result in adverse tax consequences, in each case other
than any Electing Guarantor for so long as such entity is an Electing Guarantor.

“Excluded Swap Obligation”: with respect to any Guarantor, any Swap Obligation
if, and to the extent that, all or a portion of the guarantee of such Guarantor
of, or the grant by such Guarantor of a security interest pursuant to the
Security Documents to secure, such Swap Obligation (or any guarantee thereof) is
or becomes illegal or unlawful 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 at the time the guarantee
of such Guarantor or the grant of such security interest would otherwise have
become effective with respect to such related Swap Obligation but for such
Guarantor’s failure to constitute an “eligible contract participant” at such
time.

“Excluded Taxes”: as defined in Section 2.19(a).

“Existing Credit Agreement”: the Credit Agreement dated as of February 9, 2011,
as amended prior to the date hereof, among the Borrower, NMH Holdings, LLC, the
lenders party thereto, UBS AG Stamford Branch, as administrative agent, and the
joint lead arrangers, joint bookrunners, co-documentation agents and syndication
agent referred to therein.

“Extended Revolving Commitment”: as defined in Section 2.24(a)(i).

“Extended Revolving Loans”: as defined in Section 2.24(a)(i).

“Extended Revolving Loan Lender”: as defined in Section 2.24.

“Extended Revolving Maturity Date”: as defined in Section 2.24.

“Extended Term Loans”: as defined in Section 2.24.

“Extended Term Maturity Date”: as defined in Section 2.24.

“Extending Lenders”: as defined in Section 2.24.

“Extending Revolving Lender”: as defined in Section 2.24.

“Extending Term Lender”: as defined in Section 2.24.

“Extension”: as defined in Section 2.24.

 

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“Extension Amendment”: an amendment to this Agreement in form reasonably
satisfactory to the Borrower executed by each of (a) the Borrower and (b) each
Extending Revolving Lender and Extending Term Lender, as the case may be, in
connection with any Extension.

“Extension Offer”: as defined in Section 2.24.

“Facility”: each of, as the context may require, (a) the Tranche B Term
Commitments and the Initial Tranche B Term Loans made thereunder (the “Tranche B
Term Facility”), (b) the Incremental Term Loans, (c) Refinancing Term Loans,
(d) Extended Term Loans and (e) the Revolving Commitments and the extensions of
credit made thereunder (the “Revolving Facility”).

“FATCA”: Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively
comparable), any current or future regulations or official interpretations
thereof and any agreements entered into pursuant to Section 1471(b)(1) of the
Code.

“FCPA”: the Foreign Corrupt Practices Act of 1977, as amended from time to time,
and the rules and regulations thereunder.

“Federal Funds Effective Rate”: for any day, the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent, from three
federal funds brokers of recognized standing selected by it.

“Fee Payment Date”: the last Business Day of each March, June, September and
December and (b) the last day of the Revolving Commitment Period or any earlier
date on which the Revolving Commitments are terminated and there is no remaining
Revolving Extension of Credit (in the case of fees payable in respect of the
Revolving Facility or any Revolving Extension of Credit).

“Financial Performance Covenant”: as defined in Section 8.

“Financing Transactions”: the execution, delivery and performance by each Loan
Party of the Loan Documents to which it is to be a party, the borrowing of
Loans, the use of proceeds thereof and the issuance of Letters of Credit.

“First Lien Intercreditor Agreement”: a first lien intercreditor agreement among
the Administrative Agent, the Borrower and one or more Senior Representatives
for holders of Permitted First Priority Refinancing Debt substantially
consistent with the terms set forth on Exhibit I-1 annexed hereto together with
(A) any immaterial changes and (B) material changes thereto in light of
prevailing market conditions, which material changes shall be posted to the
Lenders not less than five (5) Business Days before execution thereof and, if
the Required Lenders shall not have objected to such changes within five
(5) Business Days after posting, then the Required Lenders shall be deemed to
have agreed that the Administrative Agent’s entry into such intercreditor
agreement (with such changes) is reasonable and to have consented to such
intercreditor agreement (with such changes) and to the Administrative Agent’s
execution thereof.

“First Lien Senior Secured Notes” means Additional Term Notes, Unrestricted
Additional Term Notes or Refinancing Notes, in each case that is not
subordinated in right of payment to the Initial Term Loans and the Initial
Revolving Loans and is secured by a Lien except by a Lien that is junior to the
Lien securing the Obligations.

 

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“Flood Determination”: as defined in Section 6.9(b).

“Flood Insurance Laws”: collectively, (i) the National Flood Insurance Act of
1968 as now or hereafter in effect or any successor statute thereto, (ii) the
Flood Disaster Protection Act of 1973 as now or hereafter in effect or any
successor statute thereto, (iii) the National Flood Insurance Reform Act of 1994
as now or hereafter in effect or any successor statute thereto and (iv) the
Flood Insurance Reform Act of 2004 as now or hereafter in effect or any
successor statute thereto.

“Foreign Disposition”: as defined in Section 2.11(e).

“Foreign Prepayment Event”: as defined in Section 2.11(e).

“Foreign Subsidiary”: any Restricted Subsidiary of the Borrower that is not a
Domestic Subsidiary.

“Funded Debt”: as to any Person, all Indebtedness of such Person that matures
more than one year from the date of its creation or matures within one year from
such date but is renewable or extendible, at the option of such Person, to a
date more than one year from such date or arises under a revolving credit or
similar agreement that obligates the lender or lenders to extend credit during a
period of more than one year from such date, including all current maturities
and current sinking fund payments in respect of such Indebtedness whether or not
required to be paid within one year from the date of its creation and, in the
case of the Borrower, Indebtedness in respect of the Loans.

“Funding Office”: the office of the Administrative Agent specified in
Section 10.2 or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrower and
the Lenders.

“GAAP”: generally accepted accounting principles in the United States as in
effect from time to time. Anything in this Agreement to the contrary
notwithstanding, any obligation of a Person under a lease (whether existing now
or entered into in the future) that is not (or would not be) required to be
classified and accounted for as a capital lease on the balance sheet of such
Person under GAAP as in effect at the time such lease is entered into shall not
be treated as a capital lease solely as a result of (x) the adoption of any
changes in, or (y) changes in the application of, GAAP after such lease is
entered into.

“Governmental Authority”: any nation or government, any state or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative functions of or pertaining to government,
any securities exchange and any self-regulatory organization (including the
National Association of Insurance Commissioners).

“Group Members”: the collective reference to Holdings, the Borrower and their
respective Restricted Subsidiaries.

“Guarantee and Security Agreement”: the Guarantee and Security Agreement to be
entered into by the Borrower, the Guarantors and the Administrative Agent,
substantially in the form of Exhibit B.

“Guarantee Obligation”: as to any Person (the “guaranteeing person”), any
obligation, including a reimbursement, counterindemnity or similar obligation,
of the guaranteeing person that guarantees or in effect guarantees, or which is
given to induce the creation of a separate obligation by another Person
(including any bank under any letter of credit) that guarantees or in effect
guarantees, any Indebtedness, leases, dividends or other obligations (the
“primary obligations”) of any other third Person (the “primary

 

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obligor”) in any manner, whether directly or indirectly, including any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person’s maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in good
faith.

“Guarantors”: the collective reference to Holdings and the Subsidiary
Guarantors.

“Holdings”: NMH Holdings, LLC, a Delaware limited liability company, and any
successor thereto, whether by merger or conversion.

“Identified Participating Lenders”: as defined in Section 2.10(c)(iii)(C).

“Identified Qualifying Lenders”: as defined in Section 2.10(c)(iv)(C).

“Immaterial Subsidiary”: at any date of determination, any Domestic Restricted
Subsidiary of the Borrower that has been designated by the Borrower in writing
to the Administrative Agent as an “Immaterial Subsidiary” for purposes of this
Agreement; provided that (a) for purposes of this Agreement, at no time shall
the consolidated total assets of all Immaterial Subsidiaries as of the last day
of the then most recent fiscal year of the Borrower for which financial
statements have been delivered equal or exceed 10% of the Total Assets of the
Borrower and the Restricted Subsidiaries at such date, determined on a Pro Forma
Basis, (b) at any time and from time to time, the Borrower may designate any
Restricted Subsidiary as a new Immaterial Subsidiary so long as, after giving
effect to such designation, the consolidated assets and consolidated revenues of
all Immaterial Subsidiaries do not exceed the limits set forth in clause
(a) above at such time of designation and (c) if, as of the date the financial
statements for any fiscal year of the Borrower are delivered or required to be
delivered pursuant to Section 6.1(a), the consolidated assets or revenues of all
Restricted Subsidiaries so designated by the Borrower as “Immaterial
Subsidiaries” shall have, as of the last day of such fiscal year, exceeded the
limits set forth in clause (a) above, then within forty-five (45) days (or such
later date as agreed by the Administrative Agent in its reasonable discretion)
after the date such financial statements are so delivered (or so required to be
delivered), the Borrower shall redesignate one or more Immaterial Subsidiaries,
in each case in a written notice to the Administrative Agent, such that, as a
result thereof, the consolidated assets and revenues of all Restricted
Subsidiaries that are still designated as “Immaterial Subsidiaries” do not
exceed such limits. Upon any such Restricted Subsidiary ceasing to be an
Immaterial Subsidiary pursuant to the preceding sentence, such Restricted
Subsidiary, to the extent not otherwise qualifying as an Excluded Subsidiary,
shall comply with Section 6.9, to the extent applicable.

“Incremental Equivalent Debt”: as defined in Section 2.25(a).

 

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“Incremental Facility Amendment”: as defined in Section 2.25.

“Incremental Loans”: collectively, the Incremental Revolving Loans and the
Incremental Term Loans.

“Incremental Revolving Commitment”: with respect to each Lender, the commitment,
if any, of such Lender to make an Incremental Revolving Loan under any
Incremental Facility Amendment with respect thereto, expressed as an amount
representing the maximum principal amount of the Incremental Revolving Loans to
be made by such Lender under such Incremental Facility Amendment, as such
commitment may be (a) reduced pursuant to Section 2.9 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.6.

“Incremental Revolving Lender”: each Lender that has an Incremental Revolving
Commitment or that holds Incremental Revolving Extensions of Credit.

“Incremental Revolving Loan”: a Loan made under an Incremental Revolving
Facility.

“Incremental Revolving Extensions of Credit”: as to any Incremental Revolving
Lender at any time, an amount equal to the aggregate principal amount of all
Incremental Revolving Loans held by such Lender then outstanding.

“Incremental Term Commitment”: with respect to each Lender, the commitment, if
any, of such Lender to make an Incremental Term Loan under any Incremental
Facility Amendment with respect thereto, expressed as an amount representing the
maximum principal amount of the Incremental Term Loans to be made by such Lender
under such Incremental Facility Amendment, as such commitment may be (a) reduced
from time to time pursuant to Section 2.9 and (b) reduced or increased from time
to time pursuant to assignments by or to such Lender pursuant to Section 10.6.

“Incremental Term Maturity Date”: the maturity date of any Incremental Tranche B
Term Loans and/or Incremental Equivalent Debt, as applicable, which date shall
not be earlier than the Tranche B Maturity Date.

“Incremental Tranche B Term Loans”: as defined in Section 2.25(a).

“Indebtedness”: of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
(i) trade payables, deferred revenues and accrued expenses incurred in the
ordinary course of such Person’s business, (ii) Earnout Obligations and
(iii) liabilities resulting from application of FASB 150 (other than for Capital
Stock referred to in clause (g) below)), (c) all obligations of such Person
evidenced by notes, bonds, debentures or other similar instruments, (d) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property),
(e) the principal portion of all Capital Lease Obligations of such Person,
(f) all outstanding reimbursement obligations of such Person as an account party
or applicant under or in respect of acceptances, letters of credit, surety bonds
or similar arrangements, (g) the liquidation value of all mandatorily redeemable
preferred Capital Stock of such Person issued to parties other than Holdings or
its Subsidiaries, if the scheduled redemption date is prior to the scheduled
maturity date of the Initial Tranche B Term Loans (except as a result of an
Initial Public Offering, Change of Control or Asset Sale so long as any rights
of the holders thereof upon the occurrence of an Initial Public Offering, Change
of Control or Asset Sale shall be subject to the prior repayment in full of the
Loans that are accrued and owing), (h) all Guarantee Obligations of such Person
in

 

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respect of obligations of the kind referred to in clauses (a) through (g) above,
(i) all obligations of the kind referred to in clauses (a) through (h) above
secured by (or for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including
accounts and contract rights) owned by such Person, whether or not such Person
has assumed or become liable for the payment of such obligation, and (j) for the
purposes of Section 8(e) only, the amount of all obligations of such Person in
respect of Swap Agreements (determined, for this purpose, in respect of any Swap
Agreement, based on the maximum aggregate amount, giving effect to any netting
agreements, that such Person would be required to pay if such Swap Agreement
were terminated at the time); provided, however, that for purposes of
calculating Consolidated Leverage Ratio and Consolidated First Lien Leverage
Ratio, (A) intercompany Indebtedness and (B) obligations constituting
non-recourse Indebtedness shall be excluded; provided, further, that (i) the
amount of Indebtedness which is limited or non-recourse to such Person or for
which recourse is limited to an identified asset shall be equal to the lesser of
(1) the amount of such Indebtedness and (2) the fair market value of such asset
as at the date of determination, (ii) amounts which are reserved by such Person
for payment of insurance premiums due within twelve months of such date shall
not constitute Indebtedness and (iii) Indebtedness shall not include obligations
with respect to (1) deferred compensation, (2) liabilities associated with
customer prepayments and deposits and any obligations under ERISA and other
accrued obligations in the ordinary course of business, (3) obligations under
employment agreements and (4) deferred revenue and deferred tax liabilities.
Notwithstanding the foregoing, the term “Indebtedness” shall not include
contingent post-closing purchase price adjustments, non-compete or consulting
obligations or earn-outs to which the seller in an Acquisition or Investment may
become entitled. The Indebtedness of any Person shall include the Indebtedness
of any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person’s ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness expressly provide that such Person is
not liable therefor.

“Initial Mortgaged Properties”: the real properties identified as Initial
Mortgaged Properties on Schedule 4.8.

“Initial Public Offering”: the initial public offering of the common stock of
the Public Company.

“Initial Revolving Commitments” means the Revolving Commitments of the Revolving
Lenders as of the Closing Date.

“Initial Revolving Loan” means a Revolving Loan made by a Lender to a Borrower
in respect of an Initial Revolving Commitment pursuant to Section 2.01(b).

“Initial Term Loans”: the Term Loans made on the Closing Date pursuant to clause
(a) of Section 2.1.

“Initial Tranche B Term Loan”: a Tranche B Term Loan made pursuant to a Tranche
B Term Commitment on the Closing Date.

“Insolvency”: with respect to any Multiemployer Plan, the condition that such
Plan is insolvent within the meaning of Section 4245 of ERISA.

“Insolvent”: pertaining to a condition of Insolvency.

“Institutional L/C Collateral Account”: a blocked account maintained at the
Issuing Lender of Institutional Letters of Credit under its sole dominion and
control that has been funded with the proceeds of cash from the Borrower.

 

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“Institutional L/C Collateral Account Agreement”: an agreement among, and in
form and substance satisfactory to, the Issuing Lender of Institutional Letters
of Credit, the Administrative Agent and Borrower, which shall provide for, among
other things, the administration of the Institutional L/C Collateral Account and
the granting and perfection of the Issuing Lender’s Lien on the Institutional
L/C Collateral Account, the amounts therein, and the proceeds and products
thereof.

“Institutional L/C Disbursement”: any payment made by an Issuing Lender pursuant
to an Institutional Letter of Credit.

“Institutional L/C Exposure”: at any time an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding
Institutional Letters of Credit and (b) the aggregate amount of Institutional
L/C Disbursements that have not then been reimbursed by or on behalf of the
Borrower.

“Institutional L/C Period”: the period from the Closing Date to the Tranche B
Maturity Date.

“Institutional Letters of Credit”: at any time, Letters of Credit designated as
Institutional Letters of Credit in an amount equal to the lesser of (a) 97% of
the amount of funds deposited in the Institutional L/C Collateral Account at
such time and (b) the aggregate then undrawn and unexpired amount of such then
outstanding Letters of Credit at such time. Letters of Credit will from time to
time be deemed to be Institutional Letters of Credit or Revolving Letters of
Credit in accordance with Section 3.1(c).

“Institutional Letter of Credit Fee Letter”: the fee letter dated the Closing
Date, among the Borrower and Barclays, as the issuing lender for the
Institutional Letters of Credit.

“Insurance Subsidiary”: any Subsidiary of the Borrower engaged solely in the
general liability, professional liability, health and benefits and workers
compensation and such other insurance business as may be approved by the
Administrative Agent in its reasonable discretion, for the underwriting of
insurance policies for the Borrower and its Subsidiaries and the respective
employees, officers or directors thereof. Notwithstanding anything else herein
to the contrary, no Insurance Subsidiary shall be required to become a
Subsidiary Guarantor hereunder.

“Intellectual Property”: the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including copyrights,
copyright licenses, patents, patent licenses, trademarks, trademark licenses,
technology, know-how and processes, and all rights to sue at law or in equity
for any infringement or other impairment thereof, including the right to receive
all proceeds and damages therefrom.

“Interest Payment Date”: (a) as to any ABR Loan, the last Business Day of each
March, June, September and December to occur while such Loan is outstanding and
the final maturity date of such Loan, (b) as to any Eurodollar Loan having an
Interest Period of three months or less, the last Business Day of such Interest
Period, (c) as to any Eurodollar Loan having an Interest Period longer than
three months, each day that is three months, or a whole multiple thereof, after
the first Business Day of such Interest Period and the last Business Day of such
Interest Period, and (d) as to any Loan (other than any Revolving Loan that is
an ABR Loan and any Swingline Loan), the date of any repayment or prepayment
made in respect thereof.

“Interest Period”: as to any Eurodollar Loan, (a) initially, the period
commencing on the borrowing or conversion date, as the case may be, with respect
to such Eurodollar Loan and ending one, two, three or six (or, if agreed to by
all Lenders under the relevant Facility, twelve) months thereafter, as selected
by the Borrower in its notice of borrowing or notice of conversion, as the case
may be, given with

 

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respect thereto; and (b) thereafter, each period commencing on the last day of
the next preceding Interest Period applicable to such Eurodollar Loan and ending
one, two, three or six (or, if agreed to by all Lenders under the relevant
Facility, twelve) months thereafter, as selected by the Borrower by irrevocable
notice to the Administrative Agent not later than 12:00 Noon, New York City
time, on the date that is three (3) Business Days prior to the last day of the
then current Interest Period with respect thereto; provided that, all of the
foregoing provisions relating to Interest Periods are subject to the following:

(a) if any Interest Period would otherwise end on a day that is not a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
unless the result of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period shall end on the
immediately preceding Business Day;

(b) the Borrower may not select an Interest Period under a particular Facility
that would extend beyond the Revolving Termination Date or beyond the date final
payment is due on the Tranche B Term Loans, as applicable;

(c) any Interest Period that 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
a calendar month; and

(d) the Borrower shall select Interest Periods so as not to require a payment or
prepayment of any Eurodollar Loan during an Interest Period for such Loan.

“Investment”: (i) any purchase or other acquisition by the Borrower or any of
the Restricted Subsidiaries of, or of a beneficial interest in, any Capital
Stock or Indebtedness of any other Person (including any Restricted Subsidiary),
(ii) any loan or advance (by way of guaranty or otherwise) constituting
Indebtedness of such other Person, including any partnership or joint venture
interest in such other Person (other than accounts receivable and trade credit)
or (iii) the purchase or other acquisition (in one transaction or a series of
transactions) of all or substantially all of the property and assets or business
of another Person or assets constituting a business unit, line of business or
division of such Person; provided that, in the event that any Investment is made
by the Borrower or any Restricted Subsidiary in any Person through substantially
concurrent interim transfers of any amount through any other Restricted
Subsidiaries, then such other substantially concurrent interim transfers shall
be disregarded for purposes of Section 7.8. The amount of any Investment
outstanding as of any time shall be the original cost of such Investment (which,
in the case of any Investment constituting the contribution of an asset or
property, shall be based on the Borrower’s good faith estimate of the fair
market value of such asset or property at the time such Investment is made) plus
the cost of all additions thereto, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment, less all Returns received by the Borrower or any Restricted
Subsidiary in respect thereof.

“Issuing Lender”: Barclays, or any affiliate thereof or, in the case of a
Revolving Letter of Credit, any other Lender approved by the Administrative
Agent, subject to such Lender’s written consent to become an “Issuing Lender”
hereunder.

“Joint Bookrunners”: Barclays Bank PLC, Goldman Sachs Bank USA, Jefferies
Finance LLC and UBS Securities LLC.

“Joint Lead Arrangers”: Barclays Bank PLC, Goldman Sachs Bank USA, Jefferies
Finance LLC and UBS Securities LLC.

 

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“Joint Venture”: a joint venture, partnership or similar arrangement, whether in
corporate, partnership or other legal form.

“Junior Lien Intercreditor Agreement”: a “junior lien” intercreditor agreement
among the Administrative Agent, the Borrower and one or more Senior
Representatives for holders of Permitted Second Priority Refinancing Debt
substantially consistent with the terms set forth on Exhibit I-2 annexed hereto
together with (A) any immaterial changes and (B) material changes thereto in
light of prevailing market conditions, which material changes shall be posted to
the Lenders not less than five (5) Business Days before execution thereof and,
if the Required Lenders shall not have objected to such changes within five
(5) Business Days after posting, then the Required Lenders shall be deemed to
have agreed that the Administrative Agent’s entry into such intercreditor
agreement (with such changes) is reasonable and to have consented to such
intercreditor agreement (with such changes) and to the Administrative Agent’s
execution thereof (it being understood that junior Liens are not required to be
pari passu with other junior Liens, and that Indebtedness secured by junior
Liens may secured by Liens that are pari passu with, or junior in priority to,
other Liens that are junior to the Liens securing the Obligations).

“Latest Maturity Date”: at any date of determination, the latest maturity date
applicable to any Loan or Commitment hereunder at such time, including the
latest maturity date of any Incremental Term Loan, Incremental Revolving
Commitment, Incremental Revolving Loan, Extended Term Loan, Extended Revolving
Commitment, Extended Revolving Loan, Refinancing Term Loan, any Refinancing Term
Commitment, any Refinancing Revolving Loan or any Refinancing Revolving
Commitment, in each case as extended from time to time.

“Latest Tranche B Maturity Date”: the later of the Tranche B Maturity Date or
any Incremental Term Maturity Date or any Extended Term Maturity Date, as
applicable.

“Lenders”: as defined in the preamble hereto; provided that unless the context
otherwise requires, each reference herein to the Lenders shall be deemed to
include the Swingline Lender, any Conduit Lender and any Issuing Lender.

“Letters of Credit”: as defined in Section 3.1(a).

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

“Loan”: any loan made by any Lender pursuant to this Agreement.

“Loan Documents”: this Agreement, the Security Documents, the Notes, except for
purposes of Section 10.1, the Institutional L/C Collateral Account Agreement and
Institutional Letter of Credit Fee Letter and any amendment, waiver, supplement
or other modification to any of the foregoing.

“Loan Modification Offer”: as defined in Section 10.1.

“Loan Parties”: each Group Member that is a party to a Loan Document.

“Majority Facility Lenders”: (a) with respect to the Tranche B Term Facility,
the holders of more than 50% of the aggregate unpaid principal amount of the
Tranche B Term Loans; (b) with respect to the Revolving Facility, the holders of
more than 50% of the Total Revolving Commitments (or, if the Revolving
Commitments have terminated, the holders of more than 50% of the Total Revolving
Extensions

 

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of Credit); and (c) with respect to the Incremental Term Loans, the holders of
more than 50% of the aggregate unpaid principal amount of the Incremental Term
Loans; provided that the Tranche B Term Loans, the Incremental Term Loans, the
Revolving Commitments and the Revolving Extensions of Credit of any Defaulting
Lender shall be excluded for the purposes of making a determination of Majority
Facility Lenders.

“Managed Care Plans”: all health maintenance organizations, preferred provider
organizations, individual practice associations, competitive medical plans and
similar arrangements.

“Management Agreement”: the amended and restated management agreement dated
February 9, 2011, between the Sponsor and the Borrower, as amended, modified,
supplemented or replaced.

“Management Fees”: as defined in Section 7.10.

“Management Stockholders”: the members of management of the Borrower or its
Subsidiaries who are investors in Holdings or any direct or indirect parent
thereof.

“Material Adverse Effect”: a material adverse effect on (a) the business,
property, operations or financial condition of the Borrower and its Subsidiaries
taken as a whole, (b) the validity or enforceability of this Agreement, the
Notes, Section 2 of the Guarantee and Security Agreement, or, taken as a whole,
any of the other Loan Documents, or (c) the rights or remedies of the
Administrative Agent or the Lenders under this Agreement, the Notes or, taken as
whole, the other Loan Documents.

“Materials of Environmental Concern”: any gasoline or petroleum (including crude
oil or any fraction thereof) or petroleum products or any hazardous or toxic
substances, materials or wastes, defined or regulated as such in or under any
Environmental Law, including asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.

“Minimum Extension Condition”: as defined in Section 2.25.

“Minority Investments”: as defined in Section 7.8.

“Moody’s”: as defined in the definition of “Cash Equivalents”.

“Mortgage Facility”: any facility entered into by the Borrower or any Subsidiary
the proceeds of which are secured by real properties described in such Facility
(such real properties, the “Mortgage Facility Properties”).

“Mortgaged Properties”: the real properties and leasehold interests, if any, of
any Loan Party as to which the Administrative Agent for the benefit of the
Lenders shall be granted a Lien pursuant to the Mortgages.

“Mortgages”: all fee mortgages, leasehold mortgages, if any, mortgage deeds,
deeds of trust, deeds to secure debt, and other similar instruments, executed or
to be executed by any Loan Party (i) which provide the Administrative Agent, for
the benefit of the Lenders, a Lien on the Initial Mortgaged Properties and
(ii) pursuant to Section 6.9(b), as amended, restated, modified, extended or
supplemented from time to time.

“Multiemployer Plan”: a Plan that is a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA.

 

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“Net Cash Proceeds”: (a) in connection with any Asset Sale, Sale Leaseback
Transaction or any Recovery Event, the proceeds thereof in the form of cash and
Cash Equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or purchase
price adjustment receivable or otherwise, but only as and when received), net of
attorneys’ fees, accountants’ fees, investment banking fees, amounts required to
be applied to the repayment of Indebtedness (including, without limitation,
principal, interest, premium and penalties, if any) secured by a Lien expressly
permitted hereunder on any asset that is the subject of such Asset Sale, Sale
Leaseback Transaction or Recovery Event (other than any Lien pursuant to a
Security Document) and other related fees and expenses actually incurred in
connection therewith and net of taxes paid or reasonably estimated to be payable
as a result thereof and net of (i) any reasonable reserves established in
connection therewith, (ii) reasonable holdbacks, (iii) reasonable indemnity
obligations relating thereto, (iv) in the case of any Disposition or casualty or
condemnation or similar proceeding by a Non-Wholly Owned Restricted Subsidiary,
the pro rata portion of the Net Cash Proceeds thereof (calculated without regard
to this clause (iv)) attributable to minority interests and not available for
distribution to or for the account of the Borrower or a wholly-owned Restricted
Subsidiary as a result thereof and (v) any funded escrow established pursuant to
the documents evidencing any such sale or disposition to secure any
indemnification obligations or adjustments to the purchase price associated with
any such sale or disposition until such time as the funds are released back to
the Borrower or such Restricted Subsidiary pursuant to such escrow agreement and
(b) in connection with any issuance or sale of Capital Stock or any incurrence
of Indebtedness, the cash proceeds received from such issuance or incurrence,
net of attorneys’ fees, investment banking fees, accountants’ fees, underwriting
discounts and commissions and other related fees and expenses actually incurred
in connection therewith.

“Non-Bank Tax Certificate”: as defined in Section 2.19(d).

“Non-Consenting Lender”: as defined in Section 2.22(b).

“Non-Debt Fund Affiliate”: an Affiliate of the Borrower that is not a Debt Fund
Affiliate or a Purchasing Borrower Party.

“Non-Excluded Taxes”: as defined in Section 2.19(a).

“Non-Indemnifiable Taxes”: as defined in Section 2.19(a).

“Non-Profit Entities”: each of REM New Jersey Properties Inc., a New Jersey
corporation, Network Angels, Inc., a Massachusetts not for profit entity, The
Mentor Network Charitable Foundation, a Massachusetts not for profit entity, and
any entity duly acquired or formed and organized by Holdings or any Subsidiary
as a not-for-profit entity under applicable state law in furtherance of the
business needs of Holdings and its Subsidiaries.

“Non-U.S. Lender”: as defined in Section 2.19(d).

“Non-Wholly-Owned Subsidiary”: any Domestic Subsidiary (other than a Non-Profit
Entity or an Insurance Subsidiary) that is not a Wholly-Owned Subsidiary.

“Notes”: the collective reference to any promissory note evidencing Loans.

“Not Otherwise Applied”: with reference to any amount of Net Cash Proceeds of
any transaction or event, that such amount (a) was not required to be applied to
prepay the Loans pursuant to Section 2.11, and (b) was not previously applied in
determining the permissibility of a transaction under the Loan Documents where
such permissibility was (or may have been or concurrently will be) contingent on
receipt of such amount or utilization of such amount for a specified purpose.
The Borrower shall promptly notify the Administrative Agent of any application
of such amount as contemplated by (b) above.

 

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“Obligations”: the unpaid principal of and interest on (including interest
accruing after the maturity of the Loans and Reimbursement Obligations and
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) the Loans and all other obligations and
liabilities of the Borrower to the Administrative Agent or to any Lender whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, this Agreement, any other Loan Document, the Letters of Credit or any
other document made, delivered or given in connection herewith or therewith,
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including all fees, charges and disbursements of
counsel to the Administrative Agent or to any Lender that are required to be
paid by the Borrower pursuant hereto) or otherwise, but excluding Excluded Swap
Obligations.

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

“Offered Amount”: as defined in Section 2.10(c)(iv)(A).

“Offered Discount”: as defined in Section 2.10(c)(iv)(A).

“Organizational Documents” of any Person means the charter, memorandum and
articles of association, articles or certificate of organization or
incorporation and bylaws or other organizational or governing or constitutive
documents of such Person.

“Other Applicable Indebtedness”: as defined in Section 2.11(b).

“Other Connection Taxes” means, with respect to the Administrative Agent or any
Lender, Taxes imposed as a result of a present or former connection between the
Administrative Agent or such Lender and the jurisdiction imposing such Tax
(other than connections arising from the Administrative Agent or such Lender
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”: any and all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies (including any
interest, additions to tax or penalties applicable thereto) arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.

“Parent Entity” means any Person of which Holdings at any time is or becomes a
subsidiary on or after the Closing Date and any holding companies established by
any Permitted Holder for purposes of holding its investment in any Parent
Entity.

“Participant”: as defined in Section 10.6(c).

“Participating Lender”: as defined in Section 2.10(c)(iii)(B).

“Patriot Act”: the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law
October 26, 2001).

 

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“PBGC”: the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (or any successor).

“Permitted Acquisition”: an Acquisition by the Borrower or a Subsidiary, subject
to the fulfillment of the following conditions:

(a) in the case of an acquisition of Capital Stock of any entity by the Borrower
or a Guarantor, such entity shall become a party to the Guarantee and Security
Agreement and its Capital Stock shall be pledged to the extent required by the
terms of Section 6.9 except to the extent that the portion of the fair market
value of the consideration for such Acquisition that is attributable to
Investments in such entities (whether or not such entities become Subsidiaries)
that do not become Subsidiary Guarantors as a result of such Acquisition is
treated, at the time of such Acquisition, as Investments in such entities made
pursuant to Section 7.8 and are permitted to be made thereunder at such time (it
being understood that the foregoing is intended to allow an Excluded Subsidiary
that becomes a Subsidiary as a result of such Acquisition, to not become a
Subsidiary Guarantor as otherwise required by this clause (a), if the conditions
of this clause (a) are satisfied);

(b) the Acquisition must not be of a hostile nature and the Target must be
engaged primarily in a business that complies with Section 7.15; and

(c) as of the date of execution of an agreement in respect of such Acquisition,
no Event of Default shall have occurred and be continuing or would result from
such Acquisition.

“Permitted Amendments”: as defined in Section 10.1.

“Permitted Capital Stock”: (a) common stock of Holdings and (b) any preferred
stock of Holdings (or any equity security of Holdings that is convertible into
or exchangeable for any preferred stock of Holdings), so long as the terms of
any such preferred stock or equity security of Holdings (i) do not provide any
collateral security, (ii) do not provide any guaranty or other support by the
Borrower or any Subsidiaries of the Borrower, (iii) do not contain any mandatory
put, redemption, repayment, sinking fund or other similar provision occurring
before the eighth anniversary of the Closing Date (other than as a result of a
change of control or similar event that, in each case, is no less favorable to
the Loan Parties and the Lenders than the change of control event applicable to
the Senior Notes), (iv) do not require the cash payment of dividends or
interest, (v) do not contain any financial maintenance covenants, and (vi) to
the extent any such preferred stock or equity security does not otherwise comply
with clauses (b)(i) through (iv) hereof, such preferred stock or equity security
is otherwise reasonably satisfactory to Administrative Agent.

“Permitted Disposition”: (i) any sale or discount of past due accounts
receivable in the ordinary course of business; (ii) (x) any lease as lessor or
license as licensor of isolated parcels of real property or isolated items of
personal property (including Intellectual Property) in the ordinary course of
business and (y) any grant of options to purchase, lease or acquire isolated
parcels of real property or isolated items of personal property (including
Intellectual Property) in the ordinary course of business; (iii) any sale or
exchange of isolated specific items of equipment, so long as the purpose of each
sale or exchange is to acquire (and results within three hundred and sixty-five
(365) days of such sale or exchange in the acquisition of) replacement items of
equipment which are, in the reasonable business judgment of the Borrower and its
Restricted Subsidiaries, the functional equivalent of the item of equipment so
sold or exchanged and provided Administrative Agent has at all times after such
acquisition a perfected Lien in the replacement property with the same priority
or better than the equipment being sold or exchanged; and (iv) any Permitted SRS
Distribution.

 

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“Permitted First Priority Refinancing Debt”: any secured Indebtedness (including
any Registered Equivalent Notes) incurred by the Borrower or any other Loan
Party in the form of one or more tranches of loans or one or more series of
senior secured notes; provided that (i) such Indebtedness is secured by the
Collateral on a pari passu basis (but without regard to the control of remedies)
with the Obligations and is not secured by any property or assets of Holdings,
the Borrower or any Restricted Subsidiary other than the Collateral, (ii) such
Indebtedness is not at any time guaranteed by any Subsidiaries other than
Subsidiaries that are Guarantors, (iii) such Indebtedness does not mature on or
prior to the date that is the Latest Tranche B Maturity Date at the time such
Indebtedness is incurred or issued and (iv) a Senior Representative acting on
behalf of the holders of such Indebtedness shall have become party to an
intercreditor agreement with the Administrative Agent substantially consistent
with the terms set forth in the First Lien Intercreditor Agreement, which shall
be entered into or shall be amended prior to or concurrently with the first
issuance of Permitted First Priority Refinancing Debt in accordance with the
terms thereof to provide for the sharing of the Collateral on a pari passu basis
among the holders of the Secured Obligations and the holders of such Permitted
First Priority Refinancing Debt. Permitted First Priority Refinancing Debt will
include any Registered Equivalent Notes issued in exchange therefor.

“Permitted Holders”: each of (i) the Sponsor and (ii) the Management
Stockholders; provided that if the Management Stockholders own, directly or
indirectly, beneficially or of record more than 10% of the outstanding voting
Capital Stock of Holdings in the aggregate, the Management Stockholders shall be
treated as Permitted Holders of only 10% of the outstanding voting Capital Stock
of Holdings at such time.

“Permitted Liens”: Liens permitted by Section 7.3.

“Permitted Other Debt Condition”: such applicable debt that does not mature or
have scheduled amortization payments of principal and is not subject to
mandatory redemption, repurchase, prepayment (except (x) customary asset sale,
casualty, condemnation or change of control or similar event provisions that
provide for the prior repayment in full of the Loans and all other Obligations
or (y) AHYDO Catch-Up Payments) or sinking fund obligations, in each case prior
to the Latest Tranche B Maturity Date at the time such Indebtedness is incurred.

“Permitted Refinancing” means modifications, replacements, restructurings,
refinancings, refundings, renewals, amendments, restatements or extensions of
all or any portion of Indebtedness (including any type of debt facility or debt
security); provided that (a) the amount of such Indebtedness is not increased
(unless the additional amount is permitted pursuant to another provision of
Section 7.2) at the time of such refinancing, refunding, renewal or extension
except by an amount equal to the existing unutilized commitments thereunder,
accrued but unpaid interest thereon and a premium or penalties paid, and fees
and expenses reasonably incurred, in connection with such refinancing,
refunding, restructuring, renewal or extension (including any fees and original
issue discount incurred in respect of such resulting Indebtedness), (b) the
direct and contingent obligors of such Indebtedness shall not be expanded as a
result of or in connection with such refinancing, refunding, restructuring,
renewal or extension (other than to the extent (i) any such additional obligors
are or will become a Loan Party, (ii) none of such obligors on the Indebtedness
being modified, replaced, refinanced refunded, restructured, renewed or extended
are Loan Parties or (iii) as otherwise permitted by Section 7.2), (c) to the
extent such Indebtedness being so refinanced, refunded, renewed or extended is
subordinated in right of payment and/or in right of Lien to any of the
Obligations, such refinancing, refunding, renewal or extension is subordinated
in right of payment and/or in right of Lien (or, in the case of Lien
subordination, not secured) to such Obligations on terms (taken as a whole) at
least as favorable to the Lenders as those contained in the documentation
governing the Indebtedness being so modified, refinanced, refunded, renewed or
extended (as determined in good faith by the Borrower) or otherwise reasonably
acceptable to the Administrative Agent, and (d) other than with respect to
Indebtedness under Sections 7.2(e) or (g), such refinancing, refunding, renewal
or extension has a final maturity date equal to or later than the final maturity
date of, the Indebtedness being refinanced, refunded, renewed or extended.

 

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“Permitted Seller Debt”: Indebtedness of Holdings, the Borrower or any of their
Restricted Subsidiaries issued to a seller as a consideration for a Permitted
Acquisition.

“Permitted Second Priority Refinancing Debt”: secured Indebtedness (including
any Registered Equivalent Notes) incurred by the Borrower in the form of one or
more series of second lien (or other junior lien) secured notes or second lien
(or other junior lien) secured loans (or revolving commitments in respect
thereof); provided that (i) such Indebtedness is secured by the Collateral on a
second priority (or other junior priority) basis to the liens securing the
Obligations and the obligations in respect of any Permitted First Priority
Refinancing Debt and is not secured by any property or assets of Holdings, the
Borrower or any Restricted Subsidiary other than the Collateral, (ii) such
Indebtedness may be secured by a Lien on the Collateral that is junior to the
Liens securing the Obligations and the obligations in respect of any Permitted
First Priority Refinancing Debt, notwithstanding any provision to the contrary
contained in the definition of “Credit Agreement Refinancing Indebtedness,”
(iii) a Representative acting on behalf of the holders of such Indebtedness
shall have become party to a Junior Lien Intercreditor Agreement, and (iv) such
Indebtedness meets the Permitted Other Debt Condition. Permitted Second Priority
Refinancing Debt will include any Registered Equivalent Notes issued in exchange
therefor.

“Permitted Senior Unsecured Debt”: the collective reference to the Senior Notes
and any Indebtedness incurred in reliance upon Section 7.2(ii) or (jj) that is
not secured.

“Permitted SRS Distribution”: an SRS Distribution (i) if the Consolidated
Leverage Ratio, determined on a Pro Forma Basis as of the last day of the most
recent fiscal quarter for which financial statements are available (including
any repayment of Indebtedness in connection with such SRS Distribution), shall
not exceed 4.00 to 1.00, (ii) both before and after giving effect to the SRS
Distribution, no Default or Event of Default shall have occurred or be
continuing, and (iii) after giving effect to the SRS Distribution, substantially
all of the liabilities primarily relating to the Post-Acute Specialty
Rehabilitation Services segment or business of the Borrower and its Subsidiaries
are assumed by the Person whose equity interests are being distributed (or the
Borrower and its Subsidiaries are indemnified for such liabilities).

“Permitted Start-Up Losses”: in respect of any period, any loss for such period
directly attributable to the operations of a separately identifiable business
unit of a Loan Party or an Acquired Entity or Business which business unit
commenced operations or Acquired Entity or Business was acquired within 18
months prior to the last day of such period; provided that the aggregate amount
of all such losses (for all such business units) that are treated as Permitted
Start-Up Losses for any period of four consecutive fiscal quarters shall not
exceed $12,000,000.

“Permitted Unsecured Refinancing Debt”: unsecured Indebtedness (including any
Registered Equivalent Notes) incurred by the Borrower in the form of one or more
series of senior unsecured notes or loans; provided that (i) such Indebtedness
constitutes Credit Agreement Refinancing Indebtedness and (ii) meets the
Permitted Other Debt Condition.

“Person”: an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.

“Plan”: at a particular time, any employee benefit plan that is covered by ERISA
and in respect of which the Borrower or a Commonly Controlled Entity is (or, if
such plan were terminated at such time, would under Section 4069 of ERISA be
deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

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“Prepayment Trigger”: as defined in Section 2.11(b).

“Prime Rate”: for any day, a rate per annum that is equal to the corporate base
rate of interest established by the Administrative Agent from time to time; each
change in the Prime Rate shall be effective on the date such change is
effective. The corporate base rate is not necessarily the lowest rate charged by
the Administrative Agent to its customers.

“Pro Forma Basis”: with respect to the calculation of the Consolidated First
Lien Leverage Ratio, the Consolidated Leverage Ratio, the amount of Consolidated
EBITDA or Total Assets or any other financial test or ratio hereunder, for
purposes of determining the permissibility of asset sales, prepayments required
pursuant to Section 2.11(b) and Section 2.11(c), the Applicable Margin and the
commitment fees payable pursuant to Section 2.8, and for any other specified
purpose hereunder, and for purposes of determining compliance with the covenant
under Section 7.1, in each case as of any date, that such calculation shall give
pro forma effect to the Transactions and all Specified Transactions (with any
such incurrence of Indebtedness being deemed to be amortized over the applicable
testing period in accordance with its terms) (and the application of the
proceeds from any such asset sale or debt incurrence) that have occurred during
the relevant testing period for which such financial test or ratio is being
calculated and, during the period immediately following the Applicable Date of
Determination therefor and prior to or simultaneously with the event for which
the calculation of any such ratio on such date of determination is made,
including pro forma adjustments arising out of events which are attributable to
the Transactions or the proposed Specified Transaction, including giving effect
to those specified in accordance with the definition of “Consolidated EBITDA,”
in each case as certified on behalf of the Borrower by a Responsible Officer of
the Borrower, using, for purposes of determining such compliance with a
financial test or ratio (including any incurrence test), the historical
financial statements of all entities, divisions or lines or assets so acquired
or sold and the consolidated financial statements of the Borrower and/or any of
its Restricted Subsidiaries, calculated as if the Transactions or such Specified
Transaction, and all other Specified Transactions that have been consummated
during the relevant period, and any Indebtedness incurred or repaid in
connection therewith, had been consummated (and the change in Consolidated
EBITDA resulting therefrom) and incurred or repaid at the beginning of such
period and Total Assets shall be calculated after giving effect thereto.

Whenever pro forma effect is to be given to the Transactions or a Specified
Transaction, the pro forma calculations shall be made in good faith by a
Responsible Officer of the Borrower (including adjustments for costs and charges
arising out of the Transactions or the proposed Specified Transaction and the
“run-rate” cost savings and synergies resulting from the Transactions or such
Specified Transaction that have been or are reasonably anticipated to be
realizable (“run-rate” means the full recurring benefit for a test period that
is associated with any action taken or expected to be taken or for which a plan
for realization has been established (including any savings expected to result
from the elimination of a public target’s compliance costs with public company
requirements), net of the amount of actual benefits realized during such test
period from such actions), and any such adjustments included in the initial pro
forma calculations shall continue to apply to subsequent calculations of such
financial ratios or tests, including during any subsequent test periods in which
the effects thereof are expected to be realizable); provided that (i) such
synergies are reasonably identifiable and projected by the Borrower in good
faith to result from actions either taken or expected to be taken within
eighteen (18) months after the end of the test period in which the Transactions
or the Specified Transaction occurred and, in each case, certified by a
Responsible Officer of the Borrower and (ii) no amounts shall be added pursuant
to this paragraph to the extent duplicative of any amounts that are otherwise
added back in computing Consolidated EBITDA for such test period.

 

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If any Indebtedness bears a floating rate of interest and is being given pro
forma effect, the interest on such Indebtedness shall be calculated as if the
rate in effect on the date of the event for which the calculation is made had
been the applicable rate for the entire test period (taking into account any
interest hedging arrangements applicable to such Indebtedness). Interest on a
Capital Lease Obligation shall be deemed to accrue at an interest rate
reasonably determined by a Responsible Officer of the Borrower to be the rate of
interest implicit in such Capital Lease Obligation in accordance with GAAP.
Interest on Indebtedness that may optionally be determined at an interest rate
based upon a factor of a prime or similar rate, a eurocurrency interbank offered
rate, or other rate, shall be determined to have been based upon the rate
actually chosen, or if none, then based upon such optional rate chosen as the
Borrower or the applicable Restricted Subsidiary may designate.

“Pro Forma Financial Statements”: as defined in Section 4.1(a).

“Projections”: as defined in Section 6.2(c).

“Properties”: as defined in Section 4.17(a).

“Proposed Change”: as defined in Section 2.22(b).

“Public Company”: after the completion of an Initial Public Offering, the Person
whose Capital Stock is subject to an effective registration statement filed with
the SEC or the equivalent registration documents filed with the equivalent
authority in the applicable foreign jurisdiction, as applicable (such Person
being only either Borrower, Holdings or a corporation or other legal entity
which then owns, directly or indirectly, 100% of the outstanding Capital Stock
of Borrower).

“Purchasing Borrower Party”: the Borrower or any Subsidiary of the Borrower that
becomes an Assignees or Participant pursuant to Section 10.6(g).

“Qualifying Lender”: as defined in Section 2.10(c)(iv)(C).

“Recovery Event”: any settlement of or payment in respect of any property or
casualty insurance claim or any condemnation proceeding relating to any asset of
any Loan Party, in excess of $10,000,000 in the aggregate for all such amounts
in any fiscal year.

“Refinanced Debt”: as set forth in the definition of “Credit Agreement
Refinancing Indebtedness”.

“Refinancing”: as defined in Section 5.1(b).

“Refinancing Amendment”: an amendment to this Agreement executed by each of
(a) the Borrower, (b) the Administrative Agent, (c) each Additional Refinancing
Lender and (d) each Lender that agrees to provide any portion of Refinancing
Term Loans or Refinancing Revolving Commitments incurred pursuant thereto, in
accordance with Section 2.28.

“Refinancing Notes”: means Permitted First Priority Refinancing Debt, Permitted
Second Priority Refinancing Debt and Permitted Unsecured Refinancing Debt.

“Refinancing Revolving Commitments”: one or more classes of Revolving
Commitments hereunder that result from a Refinancing Amendment.

 

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“Refinancing Revolving Loans”: one or more classes of Revolving Commitments
hereunder that result from a Refinancing Amendment.

“Refinancing Term Commitments”: one or more classes of Term Commitments
hereunder that are established to fund Refinancing Term Loans of the applicable
Refinancing Class hereunder pursuant to a Refinancing Amendment.

“Refinancing Term Loans”: one or more classes of Term Loans hereunder that
result from a Refinancing Amendment.

“Refunded Swingline Loans”: as defined in Section 2.7(b).

“Register”: as defined in Section 10.6(b).

“Registered Equivalent Notes”: with respect to any notes originally issued in a
Rule 144A or other private placement transaction under the Securities Act,
substantially identical notes (having the same guarantees) issued in a
dollar-for-dollar exchange therefor pursuant to an exchange offer registered
with the SEC.

“Regulation H”: Regulation H of the Board as in effect from time to time.

“Regulation S-X”: Regulation S-X under the Securities Exchange Act of 1934.

“Regulation U”: Regulation U of the Board as in effect from time to time.

“Reimbursement Obligation”: the obligation of the Borrower to reimburse the
applicable Issuing Lender pursuant to Section 3.5 for amounts drawn under any
Letter of Credit.

“Reinvestment Deferred Amount”: with respect to any Reinvestment Event, the
aggregate Net Cash Proceeds received by any Group Member in connection therewith
that are not applied to prepay the Tranche B Term Loans pursuant to
Section 2.11(b) as a result of the delivery of a Reinvestment Notice.

“Reinvestment Event”: any Asset Sale, Sale Leaseback Transaction or Recovery
Event in respect of which the Borrower has delivered a Reinvestment Notice.

“Reinvestment Notice”: a written notice executed by a Responsible Officer
stating that (a) in connection with a Reinvestment Event constituting an Asset
Sale, no Event of Default has occurred and is continuing and (b) the Borrower
(directly or indirectly through a Subsidiary) intends and expects to use all or
a specified portion of the Net Cash Proceeds of an Asset Sale, Sale Leaseback
Transaction or Recovery Event to acquire, develop, upgrade or repair assets
useful in its business or in connection with a Permitted Acquisition, Investment
or Capital Expenditure; provided, however, that to the extent that any such Net
Cash Proceeds in excess of $5,000,000 are received in respect of assets
constituting Collateral, such Net Cash Proceeds shall be used to acquire or
repair assets that constitute Collateral or to make a Permitted Acquisition of
or Investment in assets that become Collateral.

“Reinvestment Prepayment Amount”: with respect to any Reinvestment Event, the
Reinvestment Deferred Amount relating thereto less any amount expended prior to
the relevant Reinvestment Prepayment Date in connection with Capital
Expenditures, a Permitted Acquisition or other Investments permitted under
Section 7.8 or to acquire, develop, upgrade or repair assets to be used in
Holdings’, the Borrower’s or any Subsidiary’s business (subject to the proviso
to the definition of the term “Reinvestment Notice”).

 

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“Reinvestment Prepayment Date”: with respect to any Reinvestment Event, the
earlier of (a)(i) the date occurring three hundred and sixty-five (365) days
after receipt of the Net Cash Proceeds from such Reinvestment Event or (ii) if
within such three hundred and sixty-five (365) day period the Borrower (directly
or indirectly through a Subsidiary) enter into a legally binding commitment to
reinvest such proceeds, the later of (x) the date occurring one hundred and
eighty (180) days after the date of such commitment or (y) the date occurring
three hundred and sixty-five (365) days after receipt of such Net Cash Proceeds
and (b) the date on which the Borrower shall have determined not to, or shall
have otherwise permanently ceased to, acquire or repair assets to be used and
useful in the Borrower’s or any Subsidiary’s business or to use them in
connection with a Permitted Acquisition or Investment with all or any portion of
the relevant Reinvestment Deferred Amount.

“Related Parties”: with respect to any Person, such Person’s Affiliates and the
partners, directors, officers, employees, agents and advisors of such person and
of such person’s Affiliates.

“Reorganization”: with respect to any Multiemployer Plan, the condition that
such plan is in reorganization within the meaning of Section 4241 of ERISA.

“Replacement Tranche B Term Loans”: as defined in Section 10.1.

“Reportable Event”: any of the events set forth in Section 4043(c) of ERISA,
other than those events as to which the thirty (30) day notice period is waived
by applicable regulations under Section 4043 of ERISA.

“Representative”: with respect to any series of Secured Incremental Notes,
Credit Agreement Refinancing Indebtedness, any Indebtedness in respect of a
Permitted Refinancing thereof, or any other Indebtedness that may from time to
time become subject to an intercreditor agreement, the Person designated as
“Representative” by the holders of such Indebtedness for purposes of the Loan
Documents.

“Repricing Premium” means, in connection with a Repricing Transaction, a premium
(expressed as a percentage of the principal amount of such Initial Tranche B
Term Loans to be prepaid) equal to the amount set forth below:

(a) on or prior to the six month anniversary of the Closing Date, 1.0%;

(b) thereafter, 0%.

“Repricing Transaction”: (i) any prepayment the Initial Tranche B Term Loans
using proceeds of a substantially concurrent incurrence of syndicated term loan
facility Indebtedness by the Borrower (other than any Indebtedness incurred in
connection with a Change of Control or a full refinancing of the Initial Tranche
B Term Loans in connection with an Acquisition or Restricted Payment) for which
the interest rate payable thereon on the date of such prepayment is lower than
the Eurodollar Rate on the date of such prepayment plus the Applicable Margin
with respect to the Initial Tranche B Term Loans and (ii) any repricing of the
Initial Tranche B Term Loans pursuant to an amendment thereto (other than any
Indebtedness incurred in connection with a Change of Control or a full
refinancing of the Initial Tranche B Term Loans in connection with an
Acquisition or Restricted Payment ) resulting in the interest rate payable
thereon on the date of such amendment being lower than the Eurodollar Rate on
the date immediately prior to such amendment plus the Applicable Margin with
respect to the Initial Tranche B Term Loans.

“Required Lenders”: at any time, the holders of more than 50% of (a) until the
Closing Date, the Commitments then in effect and (b) thereafter, the sum of
(i) the aggregate unpaid principal amount of the Tranche B Term Loans,
Incremental Term Loans, Refinancing Term Loans and Extended Term Loans then
outstanding and (ii) the Total Revolving Commitments then in effect or, if the
Revolving Commitments have been terminated, the Total Revolving Extensions of
Credit then outstanding.

 

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“Requirement of Law”: as to any Person, the Certificate of Incorporation and
By-Laws or other organizational or governing documents of such Person, and any
law, treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.

“Responsible Officer”: the chief executive officer, president, vice president,
chief financial officer, treasurer or the senior vice president of finance of
Holdings or the Borrower, but in any event, with respect to financial matters,
the chief financial officer, treasurer or senior vice president of finance of
Holdings or the Borrower.

“Restricted Payments”: as defined in Section 7.6.

“Restricted Subsidiary”: any Subsidiary of the Borrower other than an
Unrestricted Subsidiary.

“Retained Declined Proceeds”: as defined in Section 2.11(f).

“Return” means, with respect to any Investment, any dividend, distribution,
interest, fee, premium, return of capital, repayment of principal, income,
profit (from a disposition or otherwise) and any other amount received or
realized in respect thereof.

“Revolving Commitment”: as to any Lender, the obligation of such Lender, if any,
to make Revolving Loans and participate in Swingline Loans and Revolving Letters
of Credit in an aggregate principal and/or face amount not to exceed the amount
set forth under the heading “Revolving Commitment” opposite such Lender’s name
on Schedule 1.1A or in the Assignment and Assumption pursuant to which such
Lender became a party hereto, as the same may be changed from time to time
pursuant to the terms hereof. The original amount of the Revolving Commitments
is $100,000,000.

“Revolving Commitment Increase”: as defined in Section 2.25.

“Revolving Commitment Period”: the period from and including the Closing Date to
the Revolving Termination Date.

“Revolving Extensions of Credit”: as to any Revolving Lender at any time, an
amount equal to the sum without duplication of (a) the aggregate principal
amount of all Revolving Loans held by such Lender then outstanding, (b) such
Lender’s Revolving Percentage of the Revolving L/C Exposure at such time and
(c) such Lender’s Revolving Percentage of the aggregate principal amount of
Swingline Loans then outstanding.

“Revolving Facility”: as defined in the definition of “Facility”.

“Revolving L/C Commitment”: $25,000,000.

“Revolving L/C Disbursement”: any payment made by an Issuing Lender pursuant to
a Revolving Letter of Credit.

“Revolving L/C Exposure”: at any time, an amount equal to the sum of (a) the
aggregate undrawn and unexpired amount of the then outstanding Revolving Letters
of Credit and (b) the aggregate amount of Revolving L/C Disbursements that have
not then been reimbursed by or on behalf of the Borrower.

 

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“Revolving L/C Participants”: in respect of any Revolving Letter of Credit, the
collective reference to all the Revolving Lenders other than the Issuing Lender
in respect of such Revolving Letter of Credit.

“Revolving Lender”: each Lender that has a Revolving Commitment or that holds
Revolving Extensions of Credit.

“Revolving Letter of Credit”: at any time, any Letter of Credit that is not an
Institutional Letter of Credit.

“Revolving Loans”: as defined in Section 2.4(a) and, unless the context
otherwise requires, any Incremental Revolving Loan, Refinancing Revolving Loan
or Extended Revolving Loan.

“Revolving Percentage”: as to any Revolving Lender at any time, the percentage
which such Lender’s Revolving Commitment then constitutes of the Total Revolving
Commitments or, at any time after the Revolving Commitments shall have expired
or terminated, the percentage which the aggregate principal amount of such
Lender’s Revolving Loans then outstanding constitutes of the aggregate principal
amount of the Revolving Loans then outstanding, provided, that, in the event
that the Revolving Loans are paid in full prior to the reduction to zero of the
Total Revolving Extensions of Credit, the Revolving Percentages shall be
determined in a manner designed to ensure that the other outstanding Revolving
Extensions of Credit shall be held by the Revolving Lenders on a comparable
basis.

“Revolving Termination Date”: January 31, 2019, as may be extended to any
Extended Revolving Termination Date; provided, however, that if the Senior Notes
are not refinanced in full on or prior to the date that is three (3) months
prior to February 15, 2018, the “Revolving Termination Date” shall be
November 15, 2017.

“S&P”: as defined in the definition of “Cash Equivalents”.

“Sale Leaseback Transaction”: as defined in Section 7.11.

“SEC”: the Securities and Exchange Commission, any successor thereto and any
analogous Governmental Authority.

“Secured Incremental Notes”: as defined in Section 2.25.

“Secured Obligations” means collectively the Obligations, the Specified Swap
Obligations and the Cash Management Obligations.

“Securities Act”: the Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.

“Security Documents”: the collective reference to the Guarantee and Security
Agreement, the Mortgages and all other security documents hereafter delivered to
the Administrative Agent granting a Lien on any property of any Person to secure
the obligations and liabilities of any Loan Party under any Loan Document.

 

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“Senior Note Indenture”: the Indenture entered into by the Borrower and certain
of its Subsidiaries in connection with the issuance of the Senior Notes,
together with all instruments and other agreements entered into by the Borrower
or such Subsidiaries in connection therewith.

“Senior Notes”: the $250,000,000 aggregate principal amount of senior notes of
the Borrower issued on February 9, 2011 pursuant to the Senior Note Indenture.

“Senior Representative”: with respect to any series of Permitted First Priority
Refinancing Debt or Permitted Second Priority Refinancing Debt, the trustee,
administrative agent, collateral agent, security agent or similar agent under
the indenture or agreement pursuant to which such Indebtedness is issued,
incurred or otherwise obtained, as the case may be, and each of their successors
in such capacities.

“Single Employer Plan”: any Plan that is covered by Title IV of ERISA, but that
is not a Multiemployer Plan.

“Sold Entity or Business”: as set forth in the definition of the term
“Consolidated EBITDA”.

“Solicited Discount Proration”: as defined in Section 2.10(c)(iv)(C).

“Solicited Discounted Prepayment Amount”: as defined in Section 2.10(c)(iv)(A).

“Solicited Discounted Prepayment Notice”: a written notice of Borrower Offer of
Solicited Discount Prepayment made pursuant to Section 2.10(c) substantially in
the form of Exhibit O.

“Solicited Discounted Prepayment Offer”: an irrevocable, written offer submitted
by a responding Lender made pursuant to Section 2.10(c)(iv)(A) substantially in
the form of Exhibit P.

“Solicited Discounted Prepayment Response Date”: as defined in
Section 2.10(c)(iv)(A).

“Solvent”: when used with respect to any Person, means that, as of any date of
determination, (a) the amount of the “fair value” of the assets of such Person
on a going concern basis will, as of such date, exceed the amount of all
“liabilities of such Person, contingent or otherwise”, as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value (on a going concern basis) of the assets of such Person will, as
of such date, be greater than the amount that will be required to pay the
probable liability of such Person on its debts as such debts become absolute and
matured, (c) such Person will not have, as of such date, an unreasonably small
amount of capital with which to conduct its business, and (d) such Person will
be able to pay its debts as they mature in the ordinary course of business. The
amount of contingent liabilities at any time shall be computed as the amount
that can reasonably be expected to become an actual or matured liability. For
purposes of this definition, (i) “debt” means liability on a “claim”, and
(ii) “claim” means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or
(y) right to an equitable remedy for breach of performance if such breach gives
rise to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.

“Specified Discount”: as defined in Section 2.10(c)(ii)(A).

“Specified Discount Prepayment Amount”: as defined in Section 2.10(c)(ii)(A).

 

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“Specified Discount Prepayment Notice”: a written notice of Borrower Offer of
Specified Discount Prepayment made pursuant to Section 2.10(c) substantially in
the form of Exhibit M.

“Specified Discount Prepayment Response”: the irrevocable written response by
each Lender, substantially in the form of Exhibit N to a Specified Discount
Prepayment Notice.

“Specified Discount Prepayment Response Date”: as defined in
Section 2.10(c)(ii)(A).

“Specified Discount Proration”: as defined in Section 2.10(c)(ii)(C).

“Specified Swap Agreement”: any Swap Agreement entered into by the Borrower and
any Lender or affiliate thereof (or was a Lender or an Affiliate of a Lender at
the time such Swap Agreement was entered into).

“Specified Swap Obligations”: with respect to any Person, any and all
obligations of such Person, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor), under any and
all Specified Swap Agreements; provided that, for purposes of determining any
obligations of any Guarantor under the Guarantee and Security Agreement, the
definition of “Specified Swap Obligations” shall not create any guarantee by
such Guarantor of (or any grant of security interest by any Guarantor to
support, if such grant of security interest would be illegal as described in the
definition of “Excluded Swap Obligation”) any Excluded Swap Obligations of such
Guarantor.

“Specified Transaction”: any (a) disposition of all or substantially all the
assets of or all the Capital Stock of any Restricted Subsidiary of the Borrower
or of any product line, business unit, line of business or division of the
Borrower or any of the Restricted Subsidiaries of the Borrower for which
historical financial statements are available, (b) Permitted Acquisitions,
(c) Investment that results in a Person becoming a Restricted Subsidiary of the
Borrower, (d) designation of any Restricted Subsidiary as an Unrestricted
Subsidiary, or of any Unrestricted Subsidiary as a Restricted Subsidiary or
(e) the proposed incurrence of Indebtedness or making of a Restricted Payment or
payment in respect of Indebtedness in respect of which compliance with any
financial ratio is by the terms of this Agreement required to be calculated on a
Pro Forma Basis.

“Sponsor”: Vestar Capital Partners V, L.P. and its Affiliates.

“SRS Distribution”: one or more dividends or distributions to the equity holders
of Holdings by the Borrower and Holdings (and any of its Subsidiaries) of equity
interests in or assets of one or more Subsidiaries of Holdings substantially all
of whose assets are comprised of assets of the Post-Acute Specialty
Rehabilitation Services segment or business of the Borrower and its
Subsidiaries.

“Submitted Amount”: as defined in Section 2.10(c)(iii)(A).

“Submitted Discount”: as defined in Section 2.10(c)(iii)(A).

“Subsidiary”: as to any Person, a corporation, partnership, limited liability
company or other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such corporation,
partnership or other entity are at the time owned by such Person. Unless
otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in
this Agreement shall refer to a Restricted Subsidiary or Subsidiaries of the
Borrower. Notwithstanding anything else herein to the contrary, the definition
of Subsidiary shall not include Non-Profit Entities.

 

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“Subsidiary Guarantor”: each direct or indirect Restricted Subsidiary of the
Borrower, other than an Excluded Subsidiary (unless any such Excluded Subsidiary
actually complies with all applicable provisions of the Loan Documents,
including Section 6.9, that are applicable to Subsidiary Guarantors), that
executes the Guarantee and Security Agreement or a supplement thereto.

“Swap Agreement”: any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by
reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions; provided that no phantom stock or similar
plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of the Borrower or any of
its Subsidiaries shall be a “Swap Agreement”.

“Swap Obligation”: with respect to any Person, 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”: the obligation of the Swingline Lender to make Swingline
Loans pursuant to Section 2.6 in an aggregate principal amount at any one time
outstanding not to exceed $30,000,000.

“Swingline Exposure”: an obligation to make a Revolving Loan pursuant to
Section 2.7(b).

“Swingline Lender”: Barclays, in its capacity as the lender of Swingline Loans.

“Swingline Loans”: as defined in Section 2.6(a).

“Swingline Participation Amount”: as defined in Section 2.7(c).

“Syndication Agent”: Goldman Sachs Bank USA, in its capacity as Syndication
Agent hereunder.

“Target”: any Person or any division or line of business of a Person, more than
50.1% of the outstanding Capital Stock or all or substantially all of the assets
(or any substantial part for which financial statements or other customary
financial information is available) of which (together with any existing owned
interests or assets), are proposed to be acquired by the Borrower or any of the
Restricted Subsidiaries in connection with a Permitted Acquisition.

“Taxes”: as defined in Section 2.19(a).

“Term Commitment”: means, a Tranche B Term Loan Commitment, an Incremental Term
Commitment or a Refinancing Term Commitment.

“Term Loans”: the Initial Tranche B Term Loans and, unless the context otherwise
requires, any Incremental Term Loan, Refinancing Term Loan or Extended Term
Loan.

“Third Party Payor Programs”: all third party payor programs in which the
Borrower and its Subsidiaries currently or in the future may participate,
including, without limitation, Medicare, Medicaid, Blue Cross and/or Blue
Shield, Managed Care Plans, other private insurance programs and employee
assistance programs.

 

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“Total Assets”: at any date, the total amount of assets of the Borrower and its
consolidated subsidiaries as of the end of the month immediately preceding such
date.

“Total Revolving Commitments”: at any time, the aggregate amount of the
Revolving Commitments, the Incremental Revolving Commitments, the Refinancing
Revolving Commitments and the Extended Revolving Commitments of the Lenders then
in effect.

“Total Revolving Extensions of Credit”: at any time, the aggregate amount of the
Revolving Extensions of Credit of the Revolving Lenders, the Incremental
Revolving Extensions of Credit of the Incremental Revolving Lenders, the
Refinancing Revolving Extensions of Credit of the Refinancing Revolving Lenders
and the Extended Revolving Extensions of Credit of the Extended Revolving
Lenders outstanding at such time.

“Tranche B Maturity Date”: January 31, 2021, as may be extended to any Extended
Term Maturity Date; provided, however, that if the Senior Notes are not
refinanced in full on or prior to the date that is three (3) months prior to
February 15, 2018, the “Tranche B Maturity Date” shall be November 15, 2017.

“Tranche B Term Commitment”: as to any Lender, the obligation of such Lender, if
any, to make a Tranche B Term Loan to the Borrower on the Closing Date in a
principal amount not to exceed the amount set forth under the heading “Tranche B
Term Commitment” opposite such Lender’s name on Schedule 1.1A, as the same may
be reduced pursuant to the terms hereof. The original aggregate amount of the
Tranche B Term Commitments is $600,000,000.

“Tranche B Term Facility”: set forth in the definition of “Facility”.

“Tranche B Term Lender”: each Lender that has a Tranche B Term Commitment or
holds a Tranche B Term Loan.

“Tranche B Term Loan”: a Loan made pursuant to a Tranche B Term Commitment.

“Transaction Bonuses”: any bonuses payable to any officer or employee of
Holdings or any of its Subsidiaries (including any Person who becomes an officer
or employee of any Group Member in connection with a Permitted Acquisition) in
connection with any Permitted Acquisition in an aggregate amount not exceeding
$10,000,000 in any four fiscal quarter period most recently ended.

“Transactions”: the payment of the Closing Costs, the Refinancing, the Financing
Transactions and the other transactions contemplated thereby.

“Transferee”: any Assignee or Participant.

“Type”: as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.

“United States”: the United States of America.

“Unrestricted Additional Term Notes”: first priority senior secured loans or
notes and/or junior lien secured loans or notes and/or unsecured loans or notes,
in each case issued pursuant to an indenture, note purchase agreement or other
agreement and in lieu of the incurrence of Unrestricted Incremental

 

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First Lien Indebtedness; provided that (a) such Unrestricted Additional Term
Notes rank pari passu or junior in right of payment and (if secured) of security
with the corresponding Class of Term Loans of the Borrower and Commitments
hereunder, (b) the Unrestricted Additional Term Notes have a final maturity date
that is on or after the then existing Latest Tranche B Maturity Date with
respect to the Term Loans of the corresponding Class and a Weighted Average Life
to Maturity (without giving effect to nominal amortization for periods where
amortization has been eliminated as a result of a prepayment of the applicable
Term Loans) equal to or longer than the remaining Weighted Average Life to
Maturity of the corresponding Class of the then existing Term Loans (without
giving effect to nominal amortization for periods where amortization has been
eliminated as a result of a prepayment of the applicable Term Loans), (c) the
covenants, events of default and other terms of which (other than maturity,
fees, discounts, interest rate, redemption terms and redemption premiums, which
shall be determined in good faith by the Borrower) of such Unrestricted
Additional Term Notes, shall be on market terms at the time of issuance (as
determined in good faith by the Borrower) of the Unrestricted Additional Term
Notes, (d) no Restricted Subsidiary is a borrower or a guarantor with respect to
such Indebtedness unless such Restricted Subsidiary is a Loan Party which shall
have previously or substantially concurrently guaranteed or borrowed the
Obligations and (e) if such Unrestricted Additional Term Notes are secured,
(i) the obligations in respect thereof shall not be secured by liens on the
assets of the Borrower and the Restricted Subsidiaries, other than assets
constituting Collateral, (ii) all security therefor shall be granted pursuant to
documentation that is not more restrictive than the Security Documents in any
material respect or, if the Liens are pari passu with the Obligations, pursuant
to amendments to the Security Documents reasonably acceptable to the
Administrative Agent, in each case taken as a whole (as determined by the
Borrower) and (iii) it shall be subject to a customary intercreditor agreement
with the Administrative Agent substantially consistent with the terms set forth
in the First Lien Intercreditor Agreement or the Junior Lien Intercreditor
Agreement, as applicable (it being understood that the Borrower may redesignate
any such Indebtedness originally designated as Unrestricted Additional Term
Notes as Additional Term Notes if at the time of such redesignation, the
Borrower would be permitted to incur the aggregate principal amount of
Indebtedness being so redesignated in accordance with the definition thereof
(for purpose of clarity, with any such redesignation having the effect of
increasing such Borrower’s ability to incur Unrestricted Incremental First Lien
Indebtedness as of the date of such redesignation by the amount of such
Indebtedness so redesignated)).

“Unrestricted Incremental First Lien Indebtedness”: as defined in Section 2.25.

“Unsecured Incremental Notes”: as defined in Section 2.25(a).

“Unrestricted Subsidiary”: (a) any Subsidiary of an Unrestricted Subsidiary and
(b) any Subsidiary of the Borrower designated by the board of directors of the
Borrower as an Unrestricted Subsidiary pursuant to Section 6.11 subsequent to
the Closing Date.

“Voting Stock”: of any Person as of any date, the Capital Stock of such Person
that is at the time entitled to vote in the election of the board of directors
of such Person.

“Weighted Average Life to Maturity”: when applied to any Indebtedness at any
date, the number of years obtained by dividing: (a) the sum of the products
obtained by multiplying (i) the amount of each then remaining installment,
sinking fund, serial maturity or other required payments of principal, including
payment at final maturity, in respect thereof, by (ii) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment; by (b) the then outstanding principal amount of such
Indebtedness.

 

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“Wholly-Owned Subsidiary”: as to any Person, any other Person all of the Capital
Stock of which (other than directors’ qualifying shares required by law) is
owned by such Person directly and/or through other Wholly Owned Subsidiaries.

“Wholly-Owned Subsidiary Guarantor”: any Subsidiary Guarantor that is a
Wholly-Owned Subsidiary of the Borrower.

1.2 Other Definitional Provisions.

(a) Unless otherwise specified therein, all terms defined in this Agreement
shall have the defined meanings when used in the other Loan Documents or any
certificate or other document made or delivered pursuant hereto or thereto.

(b) As used herein and in the other Loan Documents, and any certificate or other
document made or delivered pursuant hereto or thereto, (i) accounting terms
relating to any Group Member not defined in Section 1.1 and accounting terms
partly defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP as in effect from time to time
(provided that in the event that any Accounting Change (as defined below) shall
occur and such change results in a change in the method of calculation of
financial covenants, standards or terms in this Agreement, then Holdings, the
Borrower and the Administrative Agent agree to enter into good faith
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Change with the desired result that the
criteria for evaluating Holdings’, the Borrower’s and the Subsidiaries’
consolidated financial condition shall be the same after such Accounting Change
as if such Accounting Change had not been made and until such time as such an
amendment shall have been executed and delivered by Holdings, the Borrower, the
Administrative Agent and the Required Lenders, all financial ratios, covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Change had not occurred (“Accounting Change”
refers to any change in accounting principles required by the promulgation of
any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC)), (ii) the words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”, (iii) the
word “incur” shall be construed to mean incur, create, issue, assume, become
liable in respect of or suffer to exist (and the words “incurred” and
“incurrence” shall have correlative meanings), (iv) the words “asset” and
“property” shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
Capital Stock, securities, revenues, accounts, leasehold interests and contract
rights, (v) references to agreements or other Contractual Obligations shall,
unless otherwise specified, be deemed to refer to such agreements or Contractual
Obligations as amended, supplemented, restated or otherwise modified from time
to time and (vi) the word “knowledge” when used with respect to any Loan Party
shall be deemed to be a reference to the knowledge of any Responsible Officer.

(c) Notwithstanding anything in this Agreement to the contrary, any change in
GAAP or the application or interpretation thereof that would require operating
leases to be treated similarly as a capital lease shall not be given effect in
the definitions of Indebtedness or Liens or any related definitions or in the
computation of any financial ratio or requirement.

(d) With respect to any period during which the Transactions or any Specified
Transaction occurs, for purposes of determining the prepayments required
pursuant to Section 2.11 and the Applicable Margin in respect of such period,
calculation of the Consolidated First Lien Leverage Ratio, Consolidated EBITDA,
Total Assets and the Consolidated Leverage Ratio or for any other purpose
hereunder, with respect to such period shall be made on a Pro Forma Basis.

 

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(e) All certifications to be made hereunder by an officer or representative of a
Loan Party shall be made by such a Person in his or her capacity solely as an
officer or a representative of such Loan Party, on such Loan Party’s behalf and
not in such Person’s individual capacity.

(f) In the event that any Lien, Investment, Indebtedness (whether at the time of
incurrence or upon application of all or a portion of the proceeds thereof),
Disposition, Restricted Payment, Affiliate transaction, restrictive agreement or
prepayment of Indebtedness meets the criteria of one or more than one of the
categories of transactions then permitted pursuant to any clause of such
Sections in Section 7, such transaction (or portion thereof) at any time shall
be permitted under one or more of such clauses as determined by the Borrower in
its sole discretion at such time.

(g) The words “hereof”, “herein” and “hereunder” and words of similar import,
when used in this Agreement, shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified.

(h) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

SECTION 2

AMOUNT AND TERMS OF COMMITMENTS

2.1 Tranche B Term Commitments.

(a) Subject to the terms and conditions hereof, each Tranche B Term Lender with
a Tranche B Term Commitment severally agrees to make an Initial Tranche B Term
Loan to the Borrower on the Closing Date in a principal amount equal to its
Tranche B Term Commitment.

(b) [Reserved].

(c) Tranche B Term Loans may from time to time be Eurodollar Loans or ABR Loans,
as determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.2 and 2.12.

2.2 Procedure for Tranche B Term Loan Borrowings. The Borrower shall give the
Administrative Agent notice substantially in the form of Exhibit H-1 (which
notice must be received by the Administrative Agent prior to 2:00 P.M., New York
City time, one (1) Business Day prior to the anticipated Closing Date (or such
later time as is reasonably acceptable to the Administrative Agent) or, in the
case of Tranche B Term Loans to be made as Eurodollar Loans, three (3) Business
Days prior to the anticipated Closing Date) requesting that the Tranche B Term
Lenders make the Tranche B Term Loans to be made on the Closing Date. Upon
receipt of any such notice the Administrative Agent shall promptly notify each
applicable Lender thereof. Not later than 1:00 P.M., New York City time, on the
Closing Date each Tranche B Term Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately available
funds equal to its new term loan being made as a Tranche B Term Loan on the
Closing Date. The Administrative Agent shall credit the account of the Borrower
on the books of such office of the Administrative Agent with the aggregate of
the amounts of Tranche B Term Loans made available on the Closing Date to the
Administrative Agent by the Tranche B Term Lenders in immediately available
funds.

 

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2.3 Repayment of Tranche B Term Loans. The Borrower shall repay the Tranche B
Term Loans in installments on each March 31, June 30, September 30 and
December 31 of each year, commencing with June 30, 2014 and ending on the
Tranche B Maturity Date, in an aggregate principal amount equal to (i) in the
case of each such installment due prior to the Tranche B Maturity Date, 0.25% of
the aggregate principal amount of Tranche B Term Loans made on the Closing Date
and (ii) in the case of the installment due on the Tranche B Maturity Date, the
entire remaining balance of the Tranche B Term Loans; provided that any such
installment may be reduced as a result of a prepayment in accordance with
Section 2.17(b).

2.4 Revolving Commitments.

(a) Subject to the terms and conditions hereof, each Revolving Lender severally
agrees to make revolving credit loans (“Revolving Loans”) to the Borrower from
time to time during the Revolving Commitment Period in an aggregate principal
amount at any one time outstanding which, when added to such Lender’s Revolving
Percentage of the sum of (i) the Revolving L/C Exposure at such time and,
(ii) the aggregate principal amount of the Swingline Loans then outstanding,
does not exceed the amount of such Lender’s Revolving Commitment. During the
Revolving Commitment Period the Borrower may use the Revolving Commitments by
borrowing, prepaying the Revolving Loans in whole or in part, and reborrowing,
all in accordance with the terms and conditions hereof. The Revolving Loans may
from time to time be Eurodollar Loans or ABR Loans, as determined by the
Borrower and notified to the Administrative Agent in accordance with Sections
2.5 and 2.12.

(b) The Borrower shall repay all outstanding Revolving Loans on the Revolving
Termination Date.

2.5 Procedure for Revolving Loan Borrowing. The Borrower may borrow under the
Revolving Commitments during the Revolving Commitment Period on any Business
Day, provided that the Borrower shall give the Administrative Agent irrevocable
notice, substantially in the form of Exhibit H-2 (which notice must be received
by the Administrative Agent prior to (a) 12:00 Noon, New York City time, three
(3) Business Days prior to the requested Borrowing Date, in the case of
Eurodollar Loans, or (b) 11:00 A.M., New York City time, on or prior to the same
day as the requested Borrowing Date, in the case of ABR Loans), specifying
(i) the amount and Type of Revolving Loans to be borrowed, (ii) the requested
Borrowing Date and (iii) in the case of Eurodollar Loans, the respective amounts
of each such Type of Loan and the respective lengths of the initial Interest
Period therefor. Each borrowing under the Revolving Commitments shall be in an
amount equal to (x) in the case of ABR Loans, $500,000 or a whole multiple of
$100,000 over such amount (or, if the then aggregate Available Revolving
Commitments of all Lenders are less than $500,000, such lesser amount) and
(y) in the case of Eurodollar Loans, $1,000,000 or a whole multiple of $100,000
in excess thereof; provided, that the Swingline Lender may request, on behalf of
the Borrower, borrowings under the Revolving Commitments that are ABR Loans in
other amounts pursuant to Section 2.7. Upon receipt of any such notice from the
Borrower, the Administrative Agent shall promptly notify each Revolving Lender
thereof. Each Revolving Lender will make the amount of its pro rata share of
each borrowing available to the Administrative Agent for the account of the
Borrower at the Funding Office prior to 1:00 P.M, New York City time, on the
Borrowing Date requested by the Borrower in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the Borrower
by the Administrative Agent crediting the account of the Borrower on the books
of such office with the aggregate of the amounts made available to the
Administrative Agent by the Revolving Lenders and in like funds as received by
the Administrative Agent.

 

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2.6 Swingline Commitment.

(a) Subject to the terms and conditions hereof, the Swingline Lender agrees to
make a portion of the credit otherwise available to the Borrower under the
Revolving Commitments from time to time during the Revolving Commitment Period
by making swing line loans (“Swingline Loans”) to the Borrower; provided that
(i) the aggregate principal amount of Swingline Loans outstanding at any time
shall not exceed the Swingline Commitment then in effect (notwithstanding that
the Swingline Loans outstanding at any time, when aggregated with the Swingline
Lender’s other outstanding Revolving Loans, may exceed the Swingline Commitment
then in effect) and (ii) the Borrower shall not request, and the Swingline
Lender shall not make, any Swingline Loan if, after giving effect to the making
of such Swingline Loan, the aggregate amount of the Available Revolving
Commitments would be less than zero. During the Revolving Commitment Period, the
Borrower may use the Swingline Commitment by borrowing, repaying and
reborrowing, all in accordance with the terms and conditions hereof. Swingline
Loans shall be ABR Loans only.

(b) The Borrower shall repay to the Swingline Lender the then unpaid principal
amount of each Swingline Loan on the earlier of the Revolving Termination Date
and the first date after such Swingline Loan is made that is the fifteenth
(15th) or last day of a calendar month and is at least ten (10) days after such
Swingline Loan is made; provided that on each date that a Revolving Loan is
borrowed, the Borrower shall repay all Swingline Loans then outstanding.

2.7 Procedure for Swingline Borrowing; Refunding of Swingline Loans.

(a) Whenever the Borrower desires that the Swingline Lender make Swingline Loans
it shall give the Swingline Lender irrevocable telephonic notice confirmed
promptly in writing, substantially in the form of Exhibit H-3 (which telephonic
notice must be received by the Swingline Lender not later than 1:00 P.M., New
York City time, on the proposed Borrowing Date), specifying (i) the amount to be
borrowed and (ii) the requested Borrowing Date (which shall be a Business Day
during the Revolving Commitment Period). Each borrowing under the Swingline
Commitment shall be in an amount equal to $100,000 or a whole multiple of
$100,000 in excess thereof. Not later than 3:00 P.M., New York City time, on the
Borrowing Date specified in a notice in respect of Swingline Loans, the
Swingline Lender shall make available to the Administrative Agent at the Funding
Office an amount in immediately available funds equal to the amount of the
Swingline Loan to be made by the Swingline Lender. The Administrative Agent
shall make the proceeds of such Swingline Loan available to the Borrower on such
Borrowing Date by depositing such proceeds in the account of the Borrower with
the Administrative Agent on such Borrowing Date in immediately available funds.

(b) The Swingline Lender, at any time and from time to time in its sole and
absolute discretion may, on behalf of the Borrower (which hereby irrevocably
directs the Swingline Lender to act on its behalf), by written notice given no
later than 10:00 A.M., New York City time, on any Business Day request each
Revolving Lender to make, and each Revolving Lender hereby agrees to make, a
Revolving Loan, in an amount equal to such Revolving Lender’s Revolving
Percentage of the aggregate amount of the Swingline Loans (the “Refunded
Swingline Loans”) outstanding on the date of such notice, to repay the Swingline
Lender. Each Revolving Lender shall make the amount of such Revolving Loan
available to the Administrative Agent at the Funding Office in immediately
available funds, upon receipt of notice as provided above. The proceeds of such
Revolving Loans shall be immediately made available by the Administrative Agent
to the Swingline Lender for application by the Swingline Lender to the repayment
of the Refunded Swingline Loans. The Borrower irrevocably authorizes the
Swingline Lender to charge the Borrower’s accounts with the Administrative
Agent, if any (up to the amount available in each such account), in order to
immediately pay the amount of such Refunded Swingline Loans to the extent
amounts received from the Revolving Lenders are not sufficient to repay in full
such Refunded Swingline Loans, on a weekly basis or as otherwise determined by
the Administrative Agent.

 

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(c) If prior to the time a Revolving Loan would have otherwise been made
pursuant to Section 2.7(b), one of the events described in Section 8(f) shall
have occurred and be continuing with respect to the Borrower or if for any other
reason, as determined by the Swingline Lender in its sole discretion, Revolving
Loans may not be made as contemplated by Section 2.7(b), each Revolving Lender
shall, on the date such Revolving Loan was to have been made pursuant to the
notice referred to in Section 2.7(b), purchase for cash an undivided
participating interest in the then outstanding Swingline Loans by paying to the
Swingline Lender an amount (the “Swingline Participation Amount”) equal to
(i) such Revolving Lender’s Revolving Percentage times (ii) the sum of the
aggregate principal amount of Swingline Loans then outstanding that were to have
been repaid with such Revolving Loans.

(d) Whenever, at any time after the Swingline Lender has received from any
Revolving Lender such Lender’s Swingline Participation Amount, the Swingline
Lender receives any payment on account of the Swingline Loans, the Swingline
Lender will distribute to such Lender its Swingline Participation Amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender’s participating interest was outstanding and
funded and, in the case of principal and interest payments, to reflect such
Lender’s pro rata portion of such payment if such payment is not sufficient to
pay the principal of and interest on all Swingline Loans then due); provided,
however, that in the event that such payment received by the Swingline Lender is
required to be returned, such Revolving Lender will return to the Swingline
Lender any portion thereof previously distributed to it by the Swingline Lender.

(e) Each Revolving Lender’s obligation to make the Loans referred to in Section
2.7(b) and to purchase participating interests pursuant to Section 2.7(c) shall
be absolute and unconditional and shall not be affected by any circumstance,
including (i) any setoff, counterclaim, recoupment, defense or other right that
such Revolving Lender or the Borrower may have against the Swingline Lender, the
Borrower or any other Person for any reason whatsoever, (ii) the occurrence or
continuance of a Default or an Event of Default or the failure to satisfy any of
the other conditions specified in Section 5, (iii) any adverse change in the
condition (financial or otherwise) of the Borrower, (iv) any breach of this
Agreement or any other Loan Document by the Borrower, any other Loan Party or
any other Revolving Lender or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing; provided that a
Revolving Lender shall not be required to make a Loan referred to in
Section 2.7(b) or to purchase a participation in a Swingline Loan pursuant to
Section 2.7(c) if (x) a Default shall have occurred and was continuing at the
time such Swingline Loan was made and (y) such Revolving Lender shall have
notified the Swingline Lender in writing, not less than one (1) Business Day
before such Swingline Loan was made, that such Default has occurred and that
such Revolving Lender will not refund or participate in any Swingline Loans made
while such Default exists.

2.8 Commitment Fees, Etc. The Borrower agrees to pay to the Administrative Agent
for the account of each Revolving Lender a commitment fee for the period from
and including the Closing Date to but excluding the last day of the Revolving
Commitment Period, computed at the Commitment Fee Rate on the average daily
amount of the Available Revolving Commitment of such Lender; provided, however,
solely for purposes of this calculation, an amount equal to such Lender’s
Revolving Percentage of the Swingline Loans then outstanding shall not be deemed
to reduce such Lender’s Available Revolving Commitment) during the period for
which payment is made, payable quarterly in arrears on each Fee Payment Date,
commencing on the first such date to occur after the Closing Date.

 

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2.9 Termination or Reduction of Commitments.

(a) The Borrower shall have the right, upon not less than three (3) Business
Days’ notice to the Administrative Agent (which may be conditional), to
terminate the Revolving Commitments or, from time to time, to reduce the amount
of the Revolving Commitments; provided that no such termination or reduction of
Revolving Commitments shall be permitted if, after giving effect thereto and to
any prepayments of the Revolving Loans and Swingline Loans made on the effective
date thereof, the Total Revolving Extensions of Credit would exceed the Total
Revolving Commitments. Any such reduction shall be in an amount equal to
$1,000,000, or a whole multiple thereof, and shall reduce permanently the
Revolving Commitments.

(b) The Tranche B Term Commitments shall terminate upon funding thereof on the
Closing Date. Unless previously terminated, the Revolving Commitments shall
terminate on the Revolving Termination Date.

2.10 Optional Prepayments.

(a) The Borrower may at any time and from time to time prepay the Loans, in
whole or in part, accompanied by the Repricing Premium (if applicable), upon
notice (which may be conditional) substantially in the form of Exhibit H-6
delivered to the Administrative Agent no later than 12:00 Noon, New York City
time, three (3) Business Days prior thereto, in the case of Eurodollar Loans,
and no later than 12:00 Noon, New York City time, one (1) Business Day prior
thereto, in the case of ABR Loans (or on the same day in the case of Swingline
Loans), which notice shall specify the date and amount of prepayment and whether
the prepayment is of Eurodollar Loans or ABR Loans; provided, that if a
Eurodollar Loan is prepaid on any day other than the last day of the Interest
Period applicable thereto, the Borrower shall also pay any amounts owing
pursuant to Section 2.20. Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof. If any such notice is
given, the amount specified in such notice shall be due and payable on the date
specified therein (subject to any conditions contained therein), together with
(except in the case of Revolving Loans that are ABR Loans and Swingline Loans)
accrued interest to such date on the amount prepaid. Partial prepayments of
Tranche B Term Loans and Revolving Loans shall be in an aggregate principal
amount of $1,000,000 or a whole multiple thereof. Partial prepayments of
Swingline Loans shall be in an aggregate principal amount of $100,000 or a whole
multiple thereof. Notwithstanding anything to the contrary in this Agreement,
after any Extension, the Borrower may prepay any borrowing of any Class of
non-extended Term Loans pursuant to which the related Extension Offer was made
without any obligation to prepay the corresponding Extended Term Loans.

(b) [Reserved].

(c) Notwithstanding anything in this Agreement or in any other Loan Document to
the contrary, so long as (A) no Event of Default has occurred and is continuing
and (B) no proceeds of Revolving Loans are used therefore, the Loan Parties and
their respective Subsidiaries may prepay the outstanding Term Loans (which
shall, for the avoidance of doubt, be automatically and permanently canceled
immediately upon acquisition by the Borrower) (or any Loan Party or Subsidiary
of any Loan Party purchases any Term Loans, such Term Loans shall be immediately
cancelled) on the following basis:

(i) Any Loan Party or any of its Subsidiaries shall have the right to make a
voluntary prepayment of Loans at a discount to par pursuant to a Borrower Offer
of Specified Discount Prepayment, Borrower Solicitation of Discount Range
Prepayment Offers or Borrower Solicitation of Discounted Prepayment Offers (any
such prepayment, the “Discounted Loan Prepayment”), in each case made in
accordance with this Section 2.10(c).

 

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(ii) (A) Any Loan Party or any of its Subsidiaries may from time to time offer
to make a Discounted Loan Prepayment by providing the Auction Agent five
(5) Business Days’ notice substantially in the form of a Specified Discount
Prepayment Notice; provided that (I) any such offer shall be made available, at
the sole discretion of the Loan Party or such Subsidiary, to (x) each Lender
and/or (y) each Lender with respect to any class of Loans on an individual
tranche basis, (II) any such offer shall specify the aggregate principal amount
offered to be prepaid (the “Specified Discount Prepayment Amount”) with respect
to each applicable tranche, the tranche or tranches of Loans subject to such
offer and the specific percentage discount to par (the “Specified Discount”) of
such Loans to be prepaid (it being understood that different Specified Discounts
and/or Specified Discount Prepayment Amounts may be offered with respect to
different tranches of Loans and, in such event, each such offer will be treated
as a separate offer pursuant to the terms of this Section), (III) the Specified
Discount Prepayment Amount shall be in an aggregate amount not less than
$5,000,000 and whole increments of $1,000,000 in excess thereof and (IV) subject
to subsection (x) below, each such offer shall remain outstanding through the
Specified Discount Prepayment Response Date. The Auction Agent will promptly
provide each relevant Lender with a copy of such Specified Discount Prepayment
Notice and a form of the Specified Discount Prepayment Response to be completed
and returned by each such Lender to the Auction Agent (or its delegate) by no
later than 5:00 p.m. on the third (3rd) Business Day after the date of delivery
of such notice to such Lenders (which date may be extended upon notice by the
applicable Loan Party or the Subsidiary to the Auction Agent) (the “Specified
Discount Prepayment Response Date”).

(B) Each Lender receiving such offer shall notify the Auction Agent (or its
delegate) by the Specified Discount Prepayment Response Date whether or not it
agrees to accept a prepayment of any of its applicable then outstanding Loans at
the Specified Discount and, if so (such accepting Lender, a “Discount Prepayment
Accepting Lender”), the amount and the tranches of such Lender’s Loans to be
prepaid at such offered discount. Each acceptance of a Discounted Loan
Prepayment by a Discount Prepayment Accepting Lender shall be irrevocable. Any
Lender whose Specified Discount Prepayment Response is not received by the
Auction Agent by the Specified Discount Prepayment Response Date shall be deemed
to have declined to accept the applicable Borrower Offer of Specified Discount
Prepayment.

(C) If there is at least one Discount Prepayment Accepting Lender, the relevant
Loan Party or Subsidiary will make a prepayment of outstanding Loans pursuant to
this paragraph (ii) to each Discount Prepayment Accepting Lender on the
Discounted Prepayment Effective Date in accordance with the respective
outstanding amount and tranches of Loans specified in such Lender’s Specified
Discount Prepayment Response given pursuant to subsection (B) above; provided
that, if the aggregate principal amount of Loans accepted for prepayment by all
Discount Prepayment Accepting Lenders exceeds the Specified Discount Prepayment
Amount, such prepayment shall be made pro rata among the Discount Prepayment
Accepting Lenders in accordance with the respective principal amounts accepted
to be prepaid by each such Discount Prepayment Accepting Lender and the Auction
Agent (with the consent of such Loan Party or such Subsidiary and subject to
rounding requirements of the Auction Agent made in its reasonable discretion)
will calculate such proration (the “Specified Discount Proration”). The Auction
Agent shall promptly, and in any case within three (3) Business Days following
the Specified Discount Prepayment Response Date, notify (I) the relevant Loan
Party or Subsidiary of the respective Lenders’ responses to such offer, the
Discounted Prepayment Effective Date and the aggregate principal amount of the
Discounted Loan Prepayment and the tranches to be prepaid, (II) each Lender of
the Discounted Prepayment Effective Date,

 

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and the aggregate principal amount and the tranches of Loans to be prepaid at
the Specified Discount on such date and (III) each Discount Prepayment Accepting
Lender of the Specified Discount Proration, if any, and confirmation of the
principal amount, tranche and Type of Loans of such Lender to be prepaid at the
Specified Discount on such date. Each determination by the Auction Agent of the
amounts stated in the foregoing notices to the Loan Party and such Lenders shall
be conclusive and binding for all purposes absent manifest error. The payment
amount specified in such notice to the Loan Party or Subsidiary shall be due and
payable by such Loan Party on the Discounted Prepayment Effective Date in
accordance with subsection (vi) below (subject to subsection (x)) below).

(iii) (A) Any Loan Party or any of its Subsidiaries may from time to time
solicit Discount Range Prepayment Offers by providing the Auction Agent with
five (5) Business Days’ notice in the form of a Discount Range Prepayment
Notice; provided that (I) any such solicitation shall be extended, at the sole
discretion of such Loan Party or such Subsidiary, to (x) each Lender and/or
(y) each Lender with respect to any class of Loans on an individual tranche
basis, (II) any such notice shall specify the maximum aggregate principal amount
of the relevant Loans (the “Discount Range Prepayment Amount”), the tranche or
tranches of Loans subject to such offer and the maximum and minimum percentage
discounts to par (the “Discount Range”) of the principal amount of such Loans
with respect to each relevant tranche of Loans willing to be prepaid by such
Loan Party or such Subsidiary (it being understood that different Discount
Ranges and/or Discount Range Prepayment Amounts may be offered with respect to
different tranches of Loans and, in such event, each such offer will be treated
as a separate offer pursuant to the terms of this Section), (III) the Discount
Range Prepayment Amount shall be in an aggregate amount not less than $5,000,000
and whole increments of $1,000,000 in excess thereof and (IV) subject to
subsection (x) below, each such solicitation by any Loan Party or any of its
Subsidiaries shall remain outstanding through the Discount Range Prepayment
Response Date. The Auction Agent will promptly provide each Appropriate Lender
with a copy of such Discount Range Prepayment Notice and a form of the Discount
Range Prepayment Offer to be submitted by a responding Lender to the Auction
Agent (or its delegate) by no later than 5:00 p.m. on the third (3rd) Business
Day after the date of delivery of such notice to such Lenders (which date may be
extended by notice from the Loan Party or Subsidiary to the Auction Agent) (the
“Discount Range Prepayment Response Date”). Each Lender’s Discount Range
Prepayment Offer shall be irrevocable and shall specify one or more (but no more
than three for any Lender) discounts to par within the Discount Range (the
“Submitted Discount”) at which such Lender is willing to allow prepayment of any
or all of its then outstanding Loans of the applicable tranche or tranches and
the maximum aggregate principal amount and tranches of such Lender’s Loans (the
“Submitted Amount”) such Lender is willing to have prepaid at the Submitted
Discount. Any Lender whose Discount Range Prepayment Offer is not received by
the Auction Agent by the Discount Range Prepayment Response Date shall be deemed
to have declined to accept a Discounted Loan Prepayment of any of its Loans at
any discount to their par value within the Discount Range.

(B) The Auction Agent shall review all Discount Range Prepayment Offers received
on or before the applicable Discount Range Prepayment Response Date and shall
determine (with the consent of such Loan Party or such Subsidiary and subject to
rounding requirements of the Auction Agent made in its sole reasonable
discretion) the Applicable Discount and Loans to be prepaid at such Applicable
Discount in accordance with this subsection (B). The relevant Loan Party or
Subsidiary agrees to accept on the Discount Range Prepayment Response Date all
Discount Range Prepayment Offers received by the Auction Agent within the
Discount Range by the Discount Range Prepayment Response Date, in the order from
the Submitted Discount that is the largest discount

 

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to par to the Submitted Discount that is the smallest discount to par, up to and
including the Submitted Discount that is the smallest discount to par within the
Discount Range (such Submitted Discount that is the smallest discount to par
within the Discount Range being referred to as the “Applicable Discount”) which
yields a Discounted Loan Prepayment in an aggregate principal amount equal to
the lower of (I) the Discount Range Prepayment Amount and (II) the sum of all
Submitted Amounts. Each Lender that has submitted a Discount Range Prepayment
Offer to accept prepayment at a discount to par that is larger than or equal to
the Applicable Discount shall be deemed to have irrevocably consented to
prepayment of Loans equal to its Submitted Amount (subject to any required
proration pursuant to the following subsection (C)) at the Applicable Discount
(each such Lender, a “Participating Lender”).

(C) Subject to subsection (x) below, if there is at least one Participating
Lender, the relevant Loan Party or Subsidiary will prepay the respective
outstanding Loans of each Participating Lender on the Discounted Prepayment
Effective Date in the aggregate principal amount and of the tranches specified
in such Lender’s Discount Range Prepayment Offer at the Applicable Discount;
provided that if the Submitted Amount by all Participating Lenders offered at a
discount to par greater than the Applicable Discount exceeds the Discount Range
Prepayment Amount, prepayment of the principal amount of the relevant Loans for
those Participating Lenders whose Submitted Discount is a discount to par
greater than or equal to the Applicable Discount (the “Identified Participating
Lenders”) shall be made pro rata among the Identified Participating Lenders in
accordance with the Submitted Amount of each such Identified Participating
Lender and the Auction Agent (with the consent of such Loan Party or such
Subsidiary and subject to rounding requirements of the Auction Agent made in its
sole reasonable discretion) will calculate such proration (the “Discount Range
Proration”). The Auction Agent shall promptly, and in any case within five
(5) Business Days following the Discount Range Prepayment Response Date, notify
(I) the relevant Loan Party or Subsidiary of the respective Lenders’ responses
to such solicitation, the Discounted Prepayment Effective Date, the Applicable
Discount, and the aggregate principal amount of the Discounted Loan Prepayment
and the tranches to be prepaid, (II) each Lender of the Discounted Prepayment
Effective Date, the Applicable Discount, and the aggregate principal amount and
tranches of Loans to be prepaid at the Applicable Discount on such date, (III)
each Participating Lender of the aggregate principal amount and tranches of such
Lender to be prepaid at the Applicable Discount on such date, and (IV) if
applicable, each Identified Participating Lender of the Discount Range
Proration. Each determination by the Auction Agent of the amounts stated in the
foregoing notices to the relevant Loan Party or Subsidiary and Lenders shall be
conclusive and binding for all purposes absent manifest error. The payment
amount specified in such notice to the Loan Party or Subsidiary shall be due and
payable by such Loan Party on the Discounted Prepayment Effective Date in
accordance with subsection (vi) below (subject to subsection (x) below).

(iv) (A) Any Loan Party or any of its Subsidiaries may from time to time solicit
offers for discounted prepayments by providing the Auction Agent with five
(5) Business Days’ notice in substantially the form of a Solicited Discounted
Prepayment Notice in the form of Exhibit O; provided that (I) any such
solicitation shall be extended, at the sole discretion of such Loan Party or
such Subsidiary, to (x) each Lender and/or (y) each Lender with respect to any
class of Loans on an individual tranche basis, (II) any such notice shall
specify the maximum aggregate amount of the Loans (the “Solicited Discounted
Prepayment Amount”) and the tranche or tranches of Loans the Loan Party or
Subsidiary is willing to prepay at a discount (it being understood that
different Solicited Discounted Prepayment Amounts may be offered with respect to
different

 

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tranches of Loans and, in such event, each such offer will be treated as
separate offer pursuant to the terms of this Section), (III) the Solicited
Discounted Prepayment Amount shall be in an aggregate amount not less than
$5,000,000 and whole increments of $1,000,000 in excess thereof and (IV) subject
to subsection (x) below, each such solicitation by any Loan Party or any of its
Subsidiaries shall remain outstanding through the Solicited Discounted
Prepayment Response Date. The Auction Agent will promptly provide each
Appropriate Lender with a copy of such Solicited Discounted Prepayment Notice
and a form of the Solicited Discounted Prepayment Offer in the form of Exhibit P
to be submitted by a responding Lender to the Auction Agent (or its delegate) by
no later than 5:00 p.m., on the third (3rd) Business Day after the date of
delivery of such notice to such Lenders (which date may be extended upon notice
from the Loan Party or Subsidiary to the Auction Agent) (the “Solicited
Discounted Prepayment Response Date”). Each Lender’s Solicited Discounted
Prepayment Offer shall (x) be irrevocable, (y) remain outstanding until the
Acceptance Date, and (z) specify both one or more (but no more than three)
discounts to par (the “Offered Discount”) at which such Lender is willing to
allow prepayment of its then outstanding Loan and the maximum aggregate
principal amount and tranches of such Loans (the “Offered Amount”) such Lender
is willing to have prepaid at the Offered Discount. Any Lender whose Solicited
Discounted Prepayment Offer is not received by the Auction Agent by the
Solicited Discounted Prepayment Response Date shall be deemed to have declined
prepayment of any of its Loans at any discount.

(B) The Auction Agent shall promptly provide the relevant Loan Party or
Subsidiary with a copy of all Solicited Discounted Prepayment Offers received on
or before the Solicited Discounted Prepayment Response Date. Such Loan Party or
such Subsidiary shall review all such Solicited Discounted Prepayment Offers and
select the largest of the Offered Discounts specified by the relevant responding
Lenders in the Solicited Discounted Prepayment Offers that is acceptable to the
Loan Party or Subsidiary in its sole discretion (the “Acceptable Discount”), if
any. If the Loan Party or Subsidiary elects, in its sole discretion, to accept
any Offered Discount as the Acceptable Discount, in no event later than by the
third (3rd) Business Day after the date of receipt by such Loan Party or such
Subsidiary from the Auction Agent of a copy of all Solicited Discounted
Prepayment Offers pursuant to the first sentence of this subsection (B) (the
“Acceptance Date”), the Loan Party or Subsidiary may submit an Acceptance and
Prepayment Notice to the Auction Agent setting forth the Acceptable Discount. If
the Auction Agent shall fail to receive an Acceptance and Prepayment Notice in
the form of Exhibit J from the Loan Party or Subsidiary by the Acceptance Date,
such Loan Party or such Subsidiary shall be deemed to have rejected all
Solicited Discounted Prepayment Offers.

(C) Based upon the Acceptable Discount and the Solicited Discounted Prepayment
Offers received by Auction Agent by the Solicited Discounted Prepayment Response
Date, within three (3) Business Days after receipt of an Acceptance and
Prepayment Notice (the “Discounted Prepayment Determination Date”), the Auction
Agent will determine (with the consent of such Loan Party or such Subsidiary and
subject to rounding requirements of the Auction Agent made in its sole
reasonable discretion) the aggregate principal amount and the tranches of Loans
(the “Acceptable Prepayment Amount”) to be prepaid by the relevant Loan Party or
Subsidiary at the Acceptable Discount in accordance with this
Section 2.10(c)(iv). If the Loan Party or Subsidiary elects to accept any
Acceptable Discount, then the Loan Party or Subsidiary agrees to accept all
Solicited Discounted Prepayment Offers received by Auction Agent by the
Solicited Discounted Prepayment Response Date, in the order from largest Offered
Discount to smallest Offered Discount, up to and including the Acceptable
Discount. Each Lender that has submitted a Solicited Discounted Prepayment Offer
with an Offered Discount that is greater

 

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than or equal to the Acceptable Discount shall be deemed to have irrevocably
consented to prepayment of Loans equal to its Offered Amount (subject to any
required pro-rata reduction pursuant to the following sentence) at the
Acceptable Discount (each such Lender, a “Qualifying Lender”). The Loan Party or
Subsidiary may prepay outstanding Loans pursuant to this subsection (iv) to each
Qualifying Lender in the aggregate principal amount and of the tranches
specified in such Lender’s Solicited Discounted Prepayment Offer at the
Acceptable Discount; provided that if the aggregate Offered Amount by all
Qualifying Lenders whose Offered Discount is greater than or equal to the
Acceptable Discount exceeds the Solicited Discounted Prepayment Amount,
prepayment of the principal amount of the Loans for those Qualifying Lenders
whose Offered Discount is greater than or equal to the Acceptable Discount (the
“Identified Qualifying Lenders”) shall be made pro rata among the Identified
Qualifying Lenders in accordance with the Offered Amount of each such Identified
Qualifying Lender and the Auction Agent (with the consent of such Loan Party or
such Subsidiary and subject to rounding requirements of the Auction Agent made
in its sole reasonable discretion) will calculate such proration (the “Solicited
Discount Proration”). On or prior to the Discounted Prepayment Determination
Date, the Auction Agent shall promptly notify (I) the relevant Loan Party or
Subsidiary of the Discounted Prepayment Effective Date and Acceptable Prepayment
Amount comprising the Discounted Loan Prepayment and the tranches to be prepaid,
(II) each Lender of the Discounted Prepayment Effective Date, the Acceptable
Discount, and the Acceptable Prepayment Amount of all Loans and the tranches to
be prepaid at the Applicable Discount on such date, (III) each Qualifying Lender
of the aggregate principal amount and the tranches of such Lender to be prepaid
at the Acceptable Discount on such date, and (IV) if applicable, each Identified
Qualifying Lender of the Solicited Discount Proration. Each determination by the
Auction Agent of the amounts stated in the foregoing notices to such Loan Party
or such Subsidiary and Lenders shall be conclusive and binding for all purposes
absent manifest error. The payment amount specified in such notice to such Loan
Party or such Subsidiary shall be due and payable by such Loan Party or such
Subsidiary on the Discounted Prepayment Effective Date in accordance with
subsection (vi) below (subject to subsection (x) below).

(v) In connection with any Discounted Loan Prepayment, the Loan Parties and the
Lenders acknowledge and agree that the Auction Agent may require as a condition
to any Discounted Loan Prepayment, the payment of customary and documented fees
and out-of-pocket expenses from a Loan Party or Subsidiary in connection
therewith.

(vi) If any Loan is prepaid in accordance with paragraphs (ii) through
(iv) above, a Loan Party or Subsidiary shall prepay such Loans on the Discounted
Prepayment Effective Date without premium or penalty. The relevant Loan Party or
Subsidiary shall make such prepayment to the Administrative Agent, for the
account of the Discount Prepayment Accepting Lenders, Participating Lenders, or
Qualifying Lenders, as applicable, at the Administrative Agent’s Office in
immediately available funds not later than 1:00 p.m. on the Discounted
Prepayment Effective Date and all such prepayments shall be applied to the
remaining principal installments of the relevant tranche of Loans on a pro rata
basis across such installments. The Loans so prepaid shall be accompanied by all
accrued and unpaid interest on the par principal amount so prepaid up to, but
not including, the Discounted Prepayment Effective Date. Each prepayment of the
outstanding Loans pursuant to this Section 2.10(c) shall be paid to the Discount
Prepayment Accepting Lenders, Participating Lenders, or Qualifying Lenders, as
applicable, and shall be applied to the relevant Loans of such Lenders in
accordance with their respective pro rata share. The aggregate principal amount
of the tranches and installments of the relevant Loans outstanding shall be
deemed reduced by the full par value of the aggregate principal amount of the
tranches of Loans

 

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prepaid on the Discounted Prepayment Effective Date in any Discounted Loan
Prepayment. In connection with each prepayment pursuant to this Section 2.10(c),
each relevant Loan Party and Lender shall render customary “big boy” letters to
each other and the Auction Agent regarding Excluded Information.

(vii) To the extent not expressly provided for herein, each Discounted Loan
Prepayment (which for the avoidance of doubt, shall not include any open market
purchases of Loans or Commitments otherwise permitted by the terms hereof) shall
be consummated pursuant to procedures consistent with the provisions in this
Section 2.10(c) or as otherwise established by the Auction Agent acting in its
reasonable discretion and as reasonably agreed by the Borrower.

(viii) Notwithstanding anything in any Loan Document to the contrary, for
purposes of this Section 2.10(c), to the extent the Administrative Agent is the
Auction Agent, each notice or other communication required to be delivered or
otherwise provided to the Auction Agent (or its delegate) shall be deemed to
have been given upon the Auction Agent’s (or its delegate’s) actual receipt
during normal business hours of such notice or communication; provided that any
notice or communication actually received outside of normal business hours shall
be deemed to have been given as of the opening of business on the next Business
Day.

(ix) Each of the Loan Parties and the Lenders acknowledge and agree that the
Auction Agent may perform any and all of its duties under this Section 2.10(c)
by itself or through any Affiliate of the Auction Agent and expressly consents
to any such delegation of duties by the Auction Agent to such Affiliate and the
performance of such delegated duties by such Affiliate. The exculpatory
provisions pursuant to this Agreement shall apply to each Affiliate of the
Auction Agent and its respective activities in connection with any Discounted
Loan Prepayment provided for in this Section 2.10(c) as well as activities of
the Auction Agent.

(x) Each Loan Party and any of its Subsidiaries shall have the right, by written
notice to the Auction Agent, to revoke or modify its offer to make a Discounted
Loan Prepayment and rescind the applicable Specified Discount Prepayment Notice,
Discount Range Prepayment Notice or Solicited Discounted Prepayment Notice
therefor at its discretion at any time on or prior to the applicable Specified
Discount Prepayment Response Date.

(xi) Any failure by such Loan Party or such Subsidiary to make any prepayment to
a Lender, pursuant to this Section 2.10(c) shall not constitute a Default or
Event of Default under Section 8 or otherwise.

(xii) To the extent the Auction Agent is required to deliver notices or
communicate such other information to the Lenders pursuant to this
Section 2.10(c), the Auction Agent will work with the Administrative Agent (and
the Administrative Agent will cooperate with the Auction Agent) in order to
procure the delivery of such notices and/or the communication of such
information to the applicable Lenders.

(xiii) Nothing in this Section 2.10(c) shall require the Loan Parties or any of
their Subsidiaries to undertake any Discounted Loan Prepayment.

2.11 Mandatory Prepayments.

(a) If Indebtedness shall be issued or incurred by any Loan Party (i) not
permitted to be incurred or issued pursuant to Section 7.2 or (ii) that is
intended to constitute Credit Agreement Refinancing Indebtedness in respect of
the Term Loans, an amount equal to 100% of the Net Cash Proceeds

 

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thereof shall be applied as soon as practicable but in any event within five
(5) Business Days after such issuance or incurrence toward the prepayment of the
Term Loans on a pro rata basis (except, as to Term Loans made pursuant to an
Incremental Facility Amendment or a Refinancing Amendment, as otherwise set
forth in such Incremental Facility Amendment or a Refinancing Amendment, or as
to a Replacement Tranche B Term Loan) as set forth in Section 2.11(d); provided,
that all prepayments under this Section 2.11(a) shall be accompanied by the
Repricing Premium, if applicable.

(b) Subject to clause (e) below, if on any date any Loan Party shall receive Net
Cash Proceeds from any Asset Sale or Recovery Event, then, unless a Reinvestment
Notice shall be delivered in respect thereof, such Net Cash Proceeds shall be
applied as soon as practicable but in any event within ten (10) days after the
date of receipt thereof toward the prepayment of the Tranche B Term Loans as set
forth in Section 2.11(d) on a pro rata basis (except, as to Term Loans made
pursuant to an Incremental Facility Amendment or a Refinancing Amendment, as
otherwise set forth in such Incremental Facility Amendment or a Refinancing
Amendment, or as to a Replacement Tranche B Term Loan); provided that,
notwithstanding the foregoing, on each Reinvestment Prepayment Date, an amount
equal to the Reinvestment Prepayment Amount with respect to the relevant
Reinvestment Event shall be applied toward the prepayment of the Tranche B Term
Loans as set forth in Section 2.11(d); provided, further, that with respect to
any prepayment event referenced in this paragraph (b), (i) the Borrower shall
not be obligated to make any prepayment otherwise required by this paragraph
(b) unless and until the aggregate amount of Net Cash Proceeds from all such
Asset Sale and Recovery Events, after giving effect to the reinvestment rights
set forth herein, exceeds $5,000,000 (the “Prepayment Trigger”) in any fiscal
year of the Borrower, but then from all such Net Cash Proceeds (excluding
amounts below the Prepayment Trigger) and (ii) the Borrower may use a portion of
such Net Cash Proceeds to prepay or repurchase First Lien Senior Secured Notes
or any other Indebtedness secured by the Collateral on a pari passu basis with
the Liens securing the Obligations (the “Other Applicable Indebtedness”) to the
extent required pursuant to the terms of the documentation governing such Other
Applicable Indebtedness, in which case, the amount of prepayment required to be
made with respect to such Net Cash Proceeds pursuant to this Section 2.11(b)
shall be deemed to be the amount equal to the product of (x) the amount of such
Net Cash Proceeds multiplied by (y) a fraction, the numerator of which is the
outstanding principal amount of Term Loans required to be prepaid pursuant to
this paragraph (b) and the denominator of which is the sum of the outstanding
principal amount of such Other Applicable Indebtedness required to be prepaid
pursuant to the terms of the documents governing such Other Applicable
Indebtedness and the outstanding principal amount of Term Loans required to be
prepaid pursuant to this paragraph.

(c) Subject to clause (e) below, if, for any fiscal year of the Borrower
commencing with the fiscal year ending September 30, 2015, there shall be Excess
Cash Flow, the Borrower shall, on the relevant Excess Cash Flow Application
Date, apply an amount equal to (i) the ECF Percentage of such Excess Cash Flow
less (ii) the aggregate principal amount of all prepayments of Revolving Loans
and Swingline Loans made during such fiscal year to the extent accompanying
permitted optional reductions of the Revolving Commitments and the aggregate
amount of cash used for all optional prepayments of Term Loans made during such
fiscal year, toward the prepayment of the Term Loans as set forth in
Section 2.11(d) on a pro rata basis (except, as to term Loans made pursuant to
an Incremental Facility Amendment or a Refinancing Amendment, as otherwise set
forth in such Incremental Facility Amendment or a Refinancing Amendment, or as
to a Replacement Tranche B Term Loan\). Each such prepayment shall be made on a
date (an “Excess Cash Flow Application Date”) no later than five (5) Business
Days after the earlier of (i) the date on which the financial statements of the
Borrower referred to in Section 6.1(a), for the fiscal year with respect to
which such prepayment is made, are required to be delivered to the Lenders and
(ii) the date such financial statements are actually delivered.

(d) The application of any prepayment of Tranche B Term Loans pursuant to
Section 2.11 shall be made, first, to ABR Loans and, second, to Eurodollar
Loans; provided that, if such application

 

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would be inconsistent with Section 2.17(b), then Section 2.17(b) shall apply.
Each prepayment of Tranche B Term Loans under this Section 2.11 shall be
accompanied by accrued interest to the date of such prepayment on the amount
prepaid and by any amounts payable pursuant to Section 2.20.

(e) Notwithstanding any other provisions of this Section 2.11, (i) to the extent
that any of or all the Net Cash Proceeds of any Disposition by a Foreign
Subsidiary or Domestic Foreign Holding Company giving rise to a prepayment
pursuant to Section 2.11(b) (a “Foreign Disposition”), the Net Cash Proceeds of
any such prepayment event pursuant to Section 2.11(b) from a Foreign Subsidiary
(a “Foreign Prepayment Event”), or Excess Cash Flow would be (x) prohibited or
delayed by applicable local law, (y) restricted by applicable organizational or
constitutive documents or any agreement or (z) subject to other onerous
organizational or administrative impediments, from being repatriated to the
United States, the portion of such Net Cash Proceeds or Excess Cash Flow so
affected will not be required to be applied to repay Term Loans as provided in
Section 2.11(b) or (c), as the case may be, and instead, such amounts may be
retained by the applicable Foreign Subsidiary or Domestic Foreign Holding
Company (the Borrower hereby agrees to use commercially reasonable efforts (as
determined in the Borrower’s reasonable business judgment) to otherwise cause
the applicable Foreign Subsidiary to within one year following the date on which
the respective payment would otherwise have been required, promptly take all
actions reasonably required by the applicable local law, applicable
organizational or constitutive impediment or other impediment to permit such
repatriation), and if within one year following the date on which the respective
payment would otherwise have been required, such repatriation of any such
affected Net Cash Proceeds or Excess Cash Flow is permitted under the applicable
law, applicable organizational or constitutive impediment or other impediment,
such repatriation will be promptly effect and such repatriated Net Cash Proceeds
or Excess Cash Flow will be promptly (and in any event not later than five
(5) Business Days after such repatriation could be made) applied (net of
additional taxes, costs and expenses payable or reserved against as a result
thereof) (whether or not repatriation actually occurs) to the repayment of the
Term Loans pursuant to this Section 2.11 to the extent provided herein and
(ii) to the extent that Borrower has determined in good faith that repatriation
of any of or all the Net Cash Proceeds of any Foreign Disposition, any Foreign
Prepayment Event or Excess Cash Flow would have an adverse tax cost consequence
with respect to such Net Cash Proceeds or Excess Cash Flow (which for the
avoidance of doubt, includes, but is not limited to, any prepayment whereby
doing so Holdings, the Borrower, any Restricted Subsidiary or any of their
respective affiliates and/or equity partners would incur a tax liability,
including a tax dividend, deemed dividend pursuant to Code Section 956 or a
withholding tax), the Net Cash Proceeds or Excess Cash Flow so affected may be
retained by the applicable Foreign Subsidiary or Domestic Foreign Holding
Company. The non-application of any prepayment amounts as a consequence of the
foregoing provisions will not, for the avoidance of doubt, constitute a Default
or an Event of Default.

(f) In connection with (i) any optional prepayment of borrowings hereunder, the
Borrower making the prepayment or (ii) any mandatory prepayment of borrowings
hereunder, the Borrower making the prepayment shall, in each case, subject to
the provisions of this paragraph and paragraph (d) of this Section, select the
borrowing or borrowings to be prepaid and shall specify such selection in the
notice of such prepayment. The Administrative Agent will promptly notify each
Lender holding the applicable Class of Term Loans of the contents of the
Borrower’s prepayment notice and of such Lender’s pro rata share of the
prepayment. Each such Term Loan Lender may reject all (but not less than all) of
its pro rata share of any mandatory prepayment (such declined amounts, the
“Declined Proceeds”) of Term Loans required to be made pursuant to clause (b) or
(c) of this Section 2.11 by providing notice to the Administrative Agent at or
prior to the time of such prepayment; provided that for the avoidance of doubt,
no Lender may reject any prepayment made with the proceeds of Credit Agreement
Refinancing Indebtedness. Any Declined Proceeds remaining thereafter shall be
retained by the Borrower (“Retained Declined Proceeds”).

(g) Notwithstanding anything herein to the contrary, the Lenders holding any
Initial Term Loans shall always be entitled to pro rata payment in respect of
such Initial Term Loans.

 

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2.12 Conversion and Continuation Options.

(a) The Borrower may elect from time to time to convert Eurodollar Loans to ABR
Loans by giving the Administrative Agent prior irrevocable notice of such
election no later than 12:00 Noon, New York City time, on the Business Day
preceding the proposed conversion date, provided that any such conversion of
Eurodollar Loans may only be made on the last day of an Interest Period with
respect thereto. The Borrower may elect from time to time to convert ABR Loans
to Eurodollar Loans by giving the Administrative Agent prior irrevocable notice
of such election substantially in the form of Exhibit H-5 no later than 12:00
Noon, New York City time, on the third (3rd) Business Day preceding the proposed
conversion date (which notice shall specify the length of the initial Interest
Period therefor), provided that no ABR Loan under a particular Facility may be
converted into a Eurodollar Loan in excess of one month when any Event of
Default has occurred and is continuing and the Administrative Agent or the
Majority Facility Lenders in respect of such Facility have determined in its or
their sole discretion not to permit such conversions. Upon receipt of any such
notice the Administrative Agent shall promptly notify each relevant Lender
thereof.

(b) Any Eurodollar Loan may be continued as such upon the expiration of the then
current Interest Period with respect thereto by the Borrower giving irrevocable
notice to the Administrative Agent, in accordance with the applicable provisions
of the term “Interest Period” set forth in Section 1.1, of the length of the
next Interest Period to be applicable to such Loans, provided that no Eurodollar
Loan in excess of one month under a particular Facility may be continued as such
when any Event of Default has occurred and is continuing and the Administrative
Agent has or the Majority Facility Lenders in respect of such Facility have
determined in its or their sole discretion not to permit such continuations, and
provided, further. that (i) if the Borrower shall fail to give any required
notice as described above in this paragraph or (ii) if such continuation is not
permitted pursuant to the preceding proviso such Loans shall be automatically
converted to ABR Loans on the last day of such then expiring Interest Period.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each relevant Lender thereof.

2.13 Limitations on Eurodollar Tranches. Notwithstanding anything to the
contrary in this Agreement, all borrowings, conversions and continuations of
Eurodollar Loans and all selections of Interest Periods shall be in such amounts
and be made pursuant to such elections so that, (a) after giving effect thereto,
the aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $1,000,000 or a whole multiple of $100,000
in excess thereof and (b) no more than twelve Eurodollar Tranches shall be
outstanding at any one time.

2.14 Interest Rates and Payment Dates.

(a) Each Eurodollar Loan shall bear interest for each day during each Interest
Period with respect thereto at a rate per annum equal to the Eurodollar Rate
determined for such day plus the Applicable Margin.

(b) Each ABR Loan, including any Swingline Loan, shall bear interest at a rate
per annum equal to the ABR plus the Applicable Margin.

(c) (i) If all or a portion of the principal amount of any Loan or Reimbursement
Obligation shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to (x) in the case of the Loans, the rate that

 

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would otherwise be applicable thereto pursuant to the foregoing provisions of
this Section 2.14 plus 2%, (y) in the case of Reimbursement Obligations in
respect of a Revolving L/C Disbursement, the rate applicable to ABR Loans under
the Revolving Facility plus 2%, or (z) in the case of Reimbursement Obligations
in respect of an Institutional L/C Disbursement, the rate applicable to ABR
Loans under the Tranche B Term Facility plus 2% and (ii) if all or a portion of
any interest payable on any Loan or Reimbursement Obligation or any fee or other
amount payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear interest
at a rate per annum equal to the rate then applicable to ABR Loans under the
relevant Facility plus 2% (or, in the case of any such other amounts that do not
relate to a particular Facility, the rate then applicable to ABR Loans under the
Revolving Facility plus 2%), in each case, with respect to clauses (i) and
(ii) above, from the date of such non-payment until such amount is paid in full
(as well after as before judgment).

(d) Interest shall be payable in arrears on each Interest Payment Date, provided
that interest accruing pursuant to paragraph (c) of this Section 2.14 shall be
payable from time to time on demand.

2.15 Computation of Interest and Fees.

(a) Interest and fees payable pursuant hereto shall be calculated on the basis
of a three hundred and sixty- (360-) day year for the actual days elapsed,
except that, with respect to ABR Loans the rate of interest on which is
calculated on the basis of the Prime Rate, the interest thereon shall be
calculated on the basis of a three hundred and sixty five- (365-) (or three
hundred and sixty-six- (366-), as the case may be) day year for the actual days
elapsed. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of each determination of a Eurodollar Rate.
Any change in the interest rate on a Loan resulting from a change in the ABR or
the Eurocurrency Reserve Requirements shall become effective as of the opening
of business on the day on which such change becomes effective. The
Administrative Agent shall as soon as practicable notify the Borrower and the
relevant Lenders of the effective date and the amount of each such change in
interest rate.

(b) Each determination of an interest rate by the Administrative Agent pursuant
to any provision of this Agreement shall be conclusive and binding on the
Borrower and the Lenders in the absence of manifest error. The Administrative
Agent shall, at the request of the Borrower, deliver to the Borrower a statement
showing the quotations used by the Administrative Agent in determining any
interest rate pursuant to Section 2.14(a).

2.16 Inability to Determine Interest Rate. If prior to the first day of any
Interest Period:

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

(b) the Administrative Agent shall have received notice from the Majority
Facility Lenders in respect of the relevant Facility that the Eurodollar Rate
determined or to be determined for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such Interest
Period,

the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as ABR Loans,
(y) any Loans under the relevant Facility that were to have been converted on
the first day of such Interest

 

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Period to Eurodollar Loans shall be continued as ABR Loans and (z) any
outstanding Eurodollar Loans under the relevant Facility shall be converted, on
the last day of the then-current Interest Period, to ABR Loans. Until such
notice has been withdrawn by the Administrative Agent, no further Eurodollar
Loans under the relevant Facility shall be made or continued as such, nor shall
the Borrower have the right to convert Loans under the relevant Facility to
Eurodollar Loans.

2.17 Pro Rata Treatment and Payments.

(a) Each borrowing by the Borrower from the Lenders hereunder and any reduction
of the Commitments of the Lenders shall be made pro rata according to the
respective Tranche B Term Commitments or Revolving Commitments, as the case may
be, of the relevant Lenders. Each payment by the Borrower on account of
commitment fees hereunder shall be made pro rata according to the respective
Revolving Commitments of the relevant Lenders.

(b) Except as otherwise provided herein from time to time, each payment
(including each prepayment) by the Borrower on account of principal of and
interest on the Tranche B Term Loans shall be made (i) in the case of principal,
pro rata according to the respective outstanding principal amounts of the
Tranche B Term Loans then held by the Tranche B Term Lenders, and (ii) in the
case of interest, pro rata according to the respective amounts of accrued and
unpaid interest on the Tranche B Term Loans then due to the Tranche B Term
Lenders. The amount of each principal prepayment of the Tranche B Term Loans
shall be applied to reduce the then remaining installments of the Tranche B Term
Loans as directed by the Borrower by notice to the Administrative Agent. Amounts
prepaid on account of the Tranche B Term Loans may not be reborrowed.

(c) Except as otherwise provided herein from time to time, each payment
(including each prepayment) by the Borrower on account of principal of and
interest on the Revolving Loans shall be made (i) in the case of principal, pro
rata according to the respective outstanding principal amounts of the Revolving
Loans then held by the Revolving Lenders, and (ii) in the case of interest, pro
rata according to the respective amounts of accrued and unpaid interest on the
Revolving Loans then due to the Revolving Lenders.

(d) All payments (including prepayments) to be made by the Borrower hereunder,
whether on account of principal, interest, fees or otherwise, shall be made
without setoff or counterclaim and shall be made prior to 2:00 P.M., New York
City time, on the due date thereof to the Administrative Agent at the Funding
Office, in Dollars and in immediately available funds. The Administrative Agent
shall distribute such payments to the applicable Lenders (or, in the case of
amounts payable to them, to the Swingline Lender or Issuing Lender, or, in the
case of amounts payable to it, retained by the Administrative Agent) promptly
upon receipt in like funds as received. If any payment hereunder (other than
payments on the Eurodollar Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business
Day. If any payment on a Eurodollar Loan becomes due and payable on a day other
than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day unless the result of such extension would be to extend
such payment into another calendar month, in which event such payment shall be
made on the immediately preceding Business Day. In the case of any extension of
any payment of principal pursuant to the preceding two sentences, interest
thereon shall be payable at the then applicable rate during such extension.

(e) Unless the Administrative Agent shall have been notified in writing by any
Lender prior to a borrowing that such Lender will not make the amount that would
constitute its share of such borrowing available to the Administrative Agent,
the Administrative Agent may assume that such Lender is making such amount
available to the Administrative Agent, and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. If such amount is not made available to the Administrative Agent by the
required time on the Borrowing Date

 

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therefor, such Lender shall pay to the Administrative Agent, on demand, such
amount with interest thereon, at a rate equal to the greater of (i) the Federal
Funds Effective Rate and (ii) a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation, for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the
absence of manifest error. If such Lender’s share of such borrowing is not made
available to the Administrative Agent by such Lender within three (3) Business
Days after such Borrowing Date, the Administrative Agent shall also be entitled
to recover such amount with interest thereon at the rate per annum applicable to
ABR Loans under the relevant Facility, on demand, from the Borrower. If the
Borrower and such Lender shall pay such interest to the Administrative Agent for
the same or an overlapping period, the Administrative Agent shall promptly remit
to the Borrower the amount of such interest paid by the Borrower for such
period. If such Lender pays its share of the applicable borrowing to the
Administrative Agent, then the amount so paid shall constitute such Lender’s
Loan included in such borrowing. Any payment by the Borrower shall be without
prejudice to any claim the Borrower may have against a Lender that shall have
failed to make such payment to the Administrative Agent.

(f) Unless the Administrative Agent shall have been notified in writing by the
Borrower prior to the date of any payment due to be made by the Borrower
hereunder that the Borrower will not make such payment to the Administrative
Agent, the Administrative Agent may assume that the Borrower is making such
payment, and the Administrative Agent may, but shall not be required to, in
reliance upon such assumption, make available to the applicable Lenders their
respective pro rata shares of a corresponding amount. If such payment is not
made to the Administrative Agent by the Borrower within three (3) Business Days
after such due date, the Administrative Agent shall be entitled to recover, on
demand, from each Lender to which any amount which was made available pursuant
to the preceding sentence, such amount with interest thereon at the rate per
annum equal to the daily average Federal Funds Effective Rate. Nothing herein
shall be deemed to limit the rights of the Administrative Agent or any Lender
against the Borrower.

2.18 Requirements of Law.

(a) If any Change in Law shall:

(i) shall legally impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, deposits
or other liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by, any office of
such Lender that is not otherwise included in the determination of the
Eurodollar Rate; or

(ii) shall impose on such Lender any other condition;

and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable by such Lender hereunder
in respect thereof, then, in any such case, the Borrower shall promptly and in
any event within five (5) Business Days pay such Lender, upon its written
demand, any additional amounts necessary to compensate such Lender for such
increased cost or reduced amount receivable. If any Lender becomes entitled to
claim any additional amounts pursuant to this paragraph, it shall promptly
notify the Borrower (with a copy to the Administrative Agent) of the event by
reason of which it has become so entitled.

(b) If any Lender shall have determined that any Change in Law regarding capital
adequacy or liquidity requirements or in the interpretation or application
thereof or compliance by such Lender or any corporation controlling such Lender
with any request or directive regarding capital adequacy

 

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or liquidity requirements (whether or not having the force of law) from any
Governmental Authority made subsequent to the Closing Date shall have the effect
of reducing the rate of return on such Lender’s or such corporation’s capital 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 or such corporation could have
achieved but for such Change in Law (taking into consideration such Lender’s or
such corporation’s policies with respect to capital adequacy or liquidity
requirements) by an amount reasonably deemed by such Lender to be material and
to the extent reasonably determined such increase in capital to be allocable to
the existence of such Lender’s Commitments or participations in Letters of
Credit hereunder, then from time to time, after submission by such Lender to the
Borrower (with a copy to the Administrative Agent) of a written request
therefor, the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such corporation for such reduction.

(c) A certificate as to any additional amounts payable pursuant to this Section
submitted by any Lender to the Borrower (with a copy to the Administrative
Agent) with appropriate detail demonstrating how such amounts were derived shall
be conclusive in the absence of manifest error.

(d) This Section 2.18 shall not apply to taxes, which shall be governed by
Section 2.19.

2.19 Taxes.

(a) Unless required by a Requirement of Law, all payments made by any Loan Party
under any Loan Document shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings
(including any interest, additions to tax or penalties applicable thereto), now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority (“Taxes”), excluding (i) net income Taxes (however
denominated) and franchise Taxes (imposed in lieu of net income Taxes), in each
case, (x) imposed on the Administrative Agent or any Lender by the United States
of America, or by the jurisdiction (or any political subdivision thereof) under
the laws of which such recipient is organized or in which its principal lending
office is located, or in the case of any Lender, in which its applicable lending
office is located or (y) that are Other Connection Taxes and (ii) any branch
profits taxes imposed by the United States of America under Section 884 (a) of
the Code or any similar taxes, imposed by any jurisdiction described in
(i) (clauses (i) and (ii), the “Excluded Taxes”). If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or withholdings
(“Non-Excluded Taxes”) or Other Taxes are required by law to be withheld by an
applicable withholding agent from any amounts payable to the Administrative
Agent or any Lender hereunder, the amounts so payable to the Administrative
Agent or such Lender shall be increased by the applicable Loan Party to the
extent necessary to yield to the Administrative Agent or such Lender (after
payment of all Non-Excluded Taxes and Other Taxes) interest or any such other
amounts payable under the applicable Loan Document at the rates or in the
amounts specified therein, provided, however that a Loan Party shall not be
required to increase any such amounts payable to any recipient with respect to
any Non-Excluded Taxes (A) that are attributable to such recipient’s failure to
comply with the requirements of paragraph (d), (e) or (g) of this Section 2.19,
(B) that are United States federal withholding Taxes imposed on amounts payable
to such recipient pursuant to any Requirement of Law in effect at the time such
recipient becomes a party to this Agreement (or designates a new lending office
other than a designation pursuant to Section 2.21 at the request of the
Borrower), except to the extent that such recipient or its assignor (if any) was
entitled, at the time of designation of a new lending office or assignment, to
receive additional amounts from the Borrower with respect to such Non-Excluded
Taxes pursuant to this paragraph, or (C) that are United States federal
withholding Taxes that would not have been imposed but for a failure by such
recipient (or any financial institution through which any payment is made to
such recipient) to comply with the applicable requirements of FATCA (clauses
(A), (B) and (C), the “Non-Indemnifiable Taxes”). Nothing contained in this
Section 2.19(a) shall require the Administrative Agent or any Lender to make
available its tax returns (or any information relating to its Taxes which it
deems confidential) to the Borrower or any other Person.

 

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(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the Borrower,
as promptly as possible thereafter the Borrower shall send to the Administrative
Agent for its own account or for the account of the relevant Lender, as the case
may be, a certified copy of an original official receipt received by the Loan
Parties showing payment thereof. If any Loan Party fails to pay any Non-Excluded
Taxes or Other Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Administrative Agent and
the Lenders for any incremental taxes, interest, additions to tax and penalties,
and any reasonable expenses arising therefrom or in respect thereto that may
become payable by the Administrative Agent or any Lender as a result of any such
failure.

(d) Each Lender (or Transferee) that is not a “U.S. Person” as defined in
Section 7701(a)(30) of the Code (a “Non-U.S. Lender”) shall deliver to the
Borrower and the Administrative Agent (or, in the case of a Participant, to the
Lender from which the related participation shall have been purchased) two
(2) executed original copies of either U.S. Internal Revenue Service Form
W-8BEN, W-8ECI or W-8EXP, or, in the case of a Non-U.S. Lender claiming
exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of
the Code with respect to payments of “portfolio interest”, a certificate
substantially in the form of Exhibit C (a “Non-Bank Tax Certificate”) and a Form
W-8BEN, or any subsequent versions thereof or successors thereto, properly
completed and duly executed by such Non-U.S. Lender claiming complete exemption
from, or a reduced rate of, U.S. federal withholding tax on all applicable
payments by the Borrower under this Agreement and the other Loan Documents. Any
Non-U.S. Lender that is a partnership for U.S. federal income tax purposes or
otherwise not the beneficial owner (i.e., who has sold a participation) shall
deliver to the Borrower and the Administrative Agent two (2) executed original
copies of U.S. Internal Revenue Service Form W-8IMY, together with the
applicable Form W-8, Form W-9 and other required attachments, and, in the case
of any beneficial owner claiming the “portfolio interest” exemption, a Non-Bank
Tax Certificate (provided that, in the case of a Non-U.S. Lender that is a
partnership, any Non-Bank Tax Certificate may be provided by the Non-U.S. Lender
on behalf of the beneficial owner(s)). Any forms described above shall be
delivered by each Non-U.S. Lender on or before the date it becomes a party to
this Agreement (or, in the case of any Participant, on or before the date such
Participant purchases the related participation). In addition, each Non-U.S.
Lender shall promptly notify the Borrower of any change in circumstances which
would modify or render invalid any claimed exemption or reduction and shall
deliver such forms promptly upon the obsolescence, expiration or invalidity of
any form previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender
shall promptly notify the Borrower and the Administrative Agent at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to deliver.

(e) A Lender that is entitled to an exemption from or reduction of any
withholding tax other than U.S. federal withholding tax, with respect to
payments under any Loan Document shall deliver to the Borrower (with a copy to
the Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender’s judgment such completion, execution or submission would not materially
prejudice the legal position of such Lender.

 

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(f) If the Administrative Agent or any Lender determines, in its sole
discretion, exercised in good faith, that it has received a refund of any
Non-Excluded Taxes or Other Taxes as to which it has been indemnified by any
Loan Party or with respect to which any Loan Party has paid additional amounts
pursuant to this Section 2.19, it shall pay over such refund to the Borrower
(but only to the extent of indemnity payments made, or additional amounts paid,
by the Borrower under this Section 2.19 with respect to the Non-Excluded Taxes
or Other Taxes giving rise to such refund), net of all reasonable out-of-pocket
expenses of the Administrative Agent or such Lender (including any taxes imposed
on such refund) and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); provided, that the
Borrower, upon the request of the Administrative Agent or such Lender, agrees to
repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender in the event the Administrative Agent or
such Lender is required to repay such refund to such Governmental Authority but
only if such repayment is required because the initial refund was permitted in
error. Notwithstanding anything to the contrary in this paragraph (f), in no
event will the indemnified party be required to pay any amount to an
indemnifying party pursuant to this paragraph (f) 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 the
Administrative Agent or any Lender to make available its tax returns (or any
other information relating to its taxes which it deems confidential) to the Loan
Party or any other Person.

(g) At the times specified in Section 2.19(d), each Lender (or Transferee) that
is a “U.S. Person” within the meaning of Section 7701(a)(30) of the Code shall
deliver two properly completed and duly signed original copies of IRS Form W-9
or any successor form that such Lender is entitled to provide at such time, in
order to qualify for an exemption from United States backup withholding
requirements. If such Lender fails to deliver such forms, then the
Administrative Agent may, notwithstanding Section 2.19(a), deduct and withhold
from any applicable payment to such Lender or Transferee an amount equivalent to
the applicable backup withholding tax imposed by the Code.

(h) 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 or the Administrative
Agent to comply with its obligations under FATCA, 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.

(i) The agreements in this Section shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.

(j) For the avoidance of doubt, the term “Lender” shall, for purposes of this
Section 2.19, include any Swingline Lender, any Conduit Lender and any Issuing
Lender.

 

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2.20 Indemnity. The Borrower agrees to indemnify each Lender for, and to hold
each Lender harmless from, any loss or expense that such Lender may sustain or
incur as a consequence of (a) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has given
a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment of or conversion
from Eurodollar Loans after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day that is not the last day of an Interest
Period with respect thereto. Such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest that would have accrued on the
amount so prepaid, or not so borrowed, converted or continued, for the period
from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such Lender on such amount
by placing such amount on deposit for a comparable period with leading banks in
the interbank eurodollar market. A certificate as to any amounts payable
pursuant to this Section 2.20 submitted to the Borrower by any Lender which is
submitted within one hundred and eighty (180) days of the incurrence of any loss
or expense covered by this Section 2.20 with appropriate detail demonstrating
how such amounts were derived shall be conclusive in the absence of manifest
error. This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.

2.21 Change of Lending Office. Each Lender agrees that, upon the occurrence of
any event giving rise to the operation of Section 2.18 or 2.19(a) with respect
to such Lender, it will, if requested by the Borrower, use reasonable efforts
(subject to overall policy considerations of such Lender) to file any
certificate or document reasonably requested by the Borrower or designate
another lending office for any Loans affected by such event with the object of
eliminating or reducing amounts payable pursuant to Section 2.18 or 2.19(a);
provided that the making of such filing or such designation is made on terms
that, in the reasonable judgment of such Lender, cause such Lender and its
lending office(s) to suffer no economic, legal or regulatory disadvantage
(except to a de minimis extent), and provided, further, that nothing in this
Section 2.21 shall affect or postpone any of the obligations of the Borrower or
the rights of any Lender pursuant to Section 2.18 or 2.19(a).

2.22 Replacement of Lenders.

(a) The Borrower shall be permitted to replace any Lender that (A) requests
reimbursement for amounts owing pursuant to Section 2.18 or 2.19(a) or
(B) defaults in its obligation to make Loans hereunder, or is otherwise a
Defaulting Lender with a replacement financial institution; provided that
(i) such replacement does not conflict with any Requirement of Law, (ii) prior
to any such replacement, such Lender shall have taken no action under
Section 2.21 that has or will eliminate the continued need for payment of
amounts owing pursuant to Section 2.18 or 2.19(a), (iii) the replacement
financial institution shall purchase, at par, all Loans and other amounts owing
to such replaced Lender on or prior to the date of replacement (whether or not
then due), (iv) the Borrower shall be liable to such replaced Lender under
Section 2.20 if any Eurodollar Loan owing to such replaced Lender shall be
purchased other than on the last day of the Interest Period relating thereto,
(v) the replacement financial institution, if not already a Lender, shall be
reasonably satisfactory to the Administrative Agent, (vi) the replaced Lender
shall be obligated to make such replacement in accordance with the provisions of
Section 10.6 (provided that the Borrower shall be obligated to pay the
registration and processing fee referred to therein), (vii) until such time as
such replacement shall be consummated (and thereafter, to the extent related to
such earlier time), the Borrower shall pay all additional amounts (if any)
required pursuant to Section 2.18 or 2.19(a), as the case may be, (viii) any
such replacement shall not be deemed to be a waiver of any rights

 

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that the Borrower, the Administrative Agent or any other Lender shall have
against the replaced Lender, and (ix) in connection with the replacement of a
Lender pursuant to clause (A) above, such replacement results in a reduction of
the amounts owing pursuant to Section 2.18 or 2.19(a).

(b) If, in connection with any proposed amendment, modification, waiver or
termination pursuant to Section 10.1 (a “Proposed Change”) requiring the consent
of all affected Lenders, the consent of the Required Lenders is obtained, but
the consent of other Lenders whose consent is required is not obtained (any such
Lender whose consent is not obtained as described in this clause (b) being
referred to as a “Non-Consenting Lender”), then, at the Borrower’s request the
Administrative Agent, or a Person or Persons reasonably acceptable to the
Administrative Agent, to the extent the Administrative Agent’s consent would
otherwise be required in connection with an assignment of such Loans, shall have
the right (but shall have no obligation) to purchase from such Non-Consenting
Lenders, and such Non-Consenting Lenders agree that they shall, upon the
Borrower’s request, sell and assign to the Administrative Agent or such Person,
all of the Loans and Commitments of such Non-Consenting Lenders for an amount
equal to the principal balance of all Loans held by the Non-Consenting Lenders
and all accrued interest and fees with respect thereto through the date of sale,
such purchase and sale to be consummated at par pursuant to an Assignment and
Acceptance Agreement. Any such required sale and assignment shall be treated as
a prepayment for purposes of Section 2.20 and the Borrower shall be liable for
any amounts payable thereunder as a result of such sale and assignment. If the
Proposed Change constitutes a Repricing Transaction in respect of any Loans held
by such Non-Consenting Lender, the Borrower shall pay to such Non-Consenting
Lender the Repricing Premium (if any) as if the outstanding Loans of such
Non-Consenting Lender were prepaid or repriced in their entirety in connection
with a Repricing Transaction on the date of the consummation of such assignment.

2.23 Limitation on Additional Amounts, Etc. Notwithstanding anything to the
contrary contained in Sections 2.18 and 2.19 of this Agreement, unless the
Administrative Agent or a Lender gives notice to the Borrower that it is
obligated to pay an amount under any such Section within one hundred and eighty
(180) days after the later of (x) the date the Lender incurs the respective
increased costs, Non-Excluded Taxes, Other Taxes, loss, expense or liability,
reduction in amounts received or receivable or reduction in return on capital or
(y) the date such Lender has actual knowledge of its incurrence of the
respective increased costs, Non-Excluded Taxes, Other Taxes, loss, expense or
liability reductions in amounts received or receivable or reduction in return on
capital, then such Lender shall only be entitled to be compensated for such
amount by the Loan Parties pursuant to Sections 2.18 and 2.19, as the case may
be, to the extent the costs, Non-Excluded Taxes, Other Taxes, loss, expense or
liability, reduction in amounts received or receivable or reduction in return on
capital are incurred or suffered on or after the date which occurs one hundred
and eighty (180) days prior to such Lender giving notice to the Borrower that it
is obligated to pay the respective amounts pursuant to Sections 2.18 and 2.19,
as the case may be; provided, that if the circumstances giving rise to such
claim is retroactive, then such one hundred and eighty- (180-) day period
referred to above shall be extended to include the period of retroactive effect
thereof. This Section 2.23 shall have no applicability to any Section of this
Agreement other than Sections 2.18 and 2.19.

2.24 Extensions of Term Loans and Revolving Commitments.

(a) Notwithstanding anything to the contrary in this Agreement, pursuant to one
or more offers (each, an “Extension Offer”) made from time to time by (i) the
Borrower to all Lenders of Term Loans of the applicable Class with a like
maturity date or (ii) the Borrower to all Lenders with Revolving Commitments of
the applicable Class with a like maturity date, in each case on a pro rata basis
(based on the aggregate outstanding principal amount of the respective Term
Loans or Revolving Commitments with a like maturity date, as the case may be)
and offered on the same terms to each such Lender, the Borrower is hereby
permitted to consummate from time to time transactions with individual Lenders

 

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that accept the terms contained in such Extension Offers to extend the maturity
date of each such Lender’s Term Loans and/or Revolving Commitments (the
extension date of any such Extension (as defined below), the “Extended Revolving
Termination Date” or “Extended Term Maturity Date”, as applicable) and otherwise
modify the terms of such Term Loans and/or Revolving Commitments pursuant to the
terms of the relevant Extension Offer (including, without limitation, by
increasing the interest rate, premiums or fees payable in respect of such Term
Loans and/or Revolving Commitments (and related outstandings) and/or modifying
the amortization schedule, optional prepayment terms, required prepayment dates
and participation in prepayments in respect of such Lender’s Term Loans) (each,
an “Extension”, and each group of Term Loans or Revolving Commitments, as
applicable, in each case as so extended, as well as the Initial Term Loans and
the Initial Revolving Commitments (in each case not so extended), being a
separate Class; any Extended Term Loans shall constitute a separate Class of
Term Loans from the Class of Term Loans from which they were converted, and any
Extended Revolving Commitments shall constitute a separate Class of Revolving
Commitments from the Class of Revolving Commitments from which they were
converted), so long as the following terms are satisfied (or waived):

(i) except as to interest rates, fees, premiums, amortization, prepayments,
AHYDO Catch-Up Payments and final maturity (which shall be determined by the
Borrower and set forth in the relevant Extension Offer and which shall be no
earlier than the maturity date of the Class of Revolving Commitments for which
such Extension Offer was made), the Revolving Commitment of any Revolving Loan
Lender that agrees to an Extension with respect to such Revolving Commitment (an
“Extending Revolving Lender”) extended pursuant to an Extension (an “Extended
Revolving Commitment” and the loans made pursuant thereto, the “Extended
Revolving Loans”), and the related outstandings, shall have covenants, events of
default and guarantees, if not consistent with the terms of the Revolving
Commitments, which shall not be materially more restrictive to the Loan Parties
(as reasonably determined in good faith by the Borrower), when taken as a whole,
than the terms of the Revolving Commitment unless (x) the Revolving Lenders
receive the benefit of such more restrictive terms or (y) any such provisions
apply after the Revolving Termination Date (as determined in good faith by the
Borrower); provided that (1) the borrowing and repayment (except for
(A) payments of interest and fees at different rates on Extended Revolving
Commitments (and related outstandings), (B) repayments required upon the
maturity date of the non-extended Revolving Commitments and (C) repayments made
in connection with a permanent repayment and termination of commitments) of
Loans with respect to Extended Revolving Commitments after the applicable
Extension date shall be made on a pro rata basis or less with all other
Revolving Commitments, (2) all Letters of Credit shall be participated on a pro
rata basis or less by all Lenders with Revolving Commitments in accordance with
their percentage of the Revolving Commitments, (3) the permanent repayment of
Revolving Loans with respect to, and termination of, Extended Revolving
Commitments after the applicable Extension date shall be made on a pro rata
basis with all other Revolving Commitments, except that the Borrower shall be
permitted to permanently repay and terminate commitments of any such Class on a
non-pro rata basis as compared to any other Class with a later maturity date
than such Class, (4) assignments and participations of Extended Revolving
Commitments and Extended Revolving Loans shall be governed by the same
assignment and participation provisions applicable to Revolving Commitments and
Revolving Loans and (5) at no time shall there be Revolving Commitments
hereunder (including Extended Revolving Commitments and any Initial Revolving
Commitments) which have more than four different maturity dates,

(ii) except as to interest rates, fees, premiums, amortization, prepayments,
AHYDO Catch-Up Payments and final maturity (which shall, subject to the
immediately succeeding clauses (iii), (iv) and (v), be determined by the
Borrower and set forth in the relevant Extension Offer), the Term Loans of any
Term Lender that agrees to an Extension with respect to such Term Loans (an
“Extending Term Lender”, and together with Extending Revolving Lenders,
“Extending

 

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Lenders”) extended pursuant to any Extension (“Extended Term Loans”) shall have
covenants, events of default and guarantees, if not consistent with the terms of
the Term Loans, which shall not be materially more restrictive to the Loan
Parties (as reasonably determined in good faith by the Borrower), when taken as
a whole, than the terms of the Term Loans unless (x) the Lenders of the Term
Loans receive the benefit of such more restrictive terms or (y) any such
provisions apply after the Latest Tranche B Maturity Date),

(iii) the final maturity date of any Extended Term Loans shall be no earlier
than the Latest Tranche B Maturity Date of the Class of Term Loans for which
such Extension Offer was made and at no time shall the Term Loans (including
Extended Term Loans) have more than six different maturity dates,

(iv) the Weighted Average Life to Maturity of any Extended Term Loans shall be
no shorter than the remaining Weighted Average Life to Maturity of the Term
Loans extended thereby (without giving effect to amortization for periods where
amortization has been eliminated as a result of a prepayment of the applicable
Term Loans or amortization changes),

(v) if the aggregate principal amount of Term Loans (calculated on the face
amount thereof) or Revolving Commitments, as the case may be, in respect of
which Term Lenders or Revolving Lenders, as the case may be, shall have accepted
the relevant Extension Offer shall exceed the maximum aggregate principal amount
of Term Loans or Revolving Commitments, as the case may be, offered to be
extended by the Borrower pursuant to such Extension Offer, then the Term Loans
or Revolving Loans, as the case may be, of such Term Lenders or Revolving
Lenders, as the case may be, shall be extended ratably up to such maximum amount
based on the respective principal amounts (but not to exceed actual holdings of
record) with respect to which such Term Lenders or Revolving Lenders, as the
case may be, have accepted such Extension Offer,

(vi) all documentation in respect of such Extension shall be consistent with the
foregoing, and

(vii) any applicable Minimum Extension Condition shall be satisfied unless
waived by the Borrower.

(b) With respect to all Extensions consummated by the Borrower pursuant to this
Section 2.24, (i) such Extensions shall not constitute voluntary or mandatory
payments or prepayments for purposes of Section 2.10 or 2.11 and (ii) no
Extension Offer is required to be in any minimum amount or any minimum
increment, provided that the Borrower may at its election specify as a condition
(a “Minimum Extension Condition”) to consummating any such Extension that a
minimum amount (to be determined and specified in the relevant Extension Offer
in the Borrower’s sole discretion and may be waived by such Borrower) of Term
Loans or Revolving Commitments (as applicable) of any or all applicable Classes
be tendered. The Administrative Agent and the Lenders hereby consent to the
consummation of the transactions contemplated by this Section 2.24 (including,
for the avoidance of doubt, payment of any interest, fees or premium in respect
of any Extended Term Loans and/or Extended Revolving Commitments on such terms
as may be set forth in the relevant Extension Offer) and hereby waive the
requirements of any provision of this Agreement (including, without limitation,
any pro rata payment or amendment section) or any other Loan Document that may
otherwise prohibit or restrict any such Extension or any other transaction
contemplated by this Section 2.24.

(c) No consent of any Lender or any Agent shall be required to effectuate any
Extension, other than (i) the consent of each Lender agreeing to such Extension
with respect to one or more of

 

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its Term Loans and/or Revolving Commitments (or a portion thereof) and (ii) with
respect to any Extension of the Revolving Commitments, the consent of the
Issuing Lender. All Extended Term Loans, Extended Revolving Commitments and all
obligations in respect thereof shall be Obligations under this Agreement and the
other Loan Documents that are secured by the Collateral on a pari passu basis
with all other applicable Obligations under this Agreement and the other Loan
Documents. The Lenders hereby irrevocably authorize the Administrative Agent to
enter into amendments to this Agreement and the other Loan Documents with the
Borrower and other Loan Parties as may be necessary or advisable in order to
establish new Classes in respect of Revolving Commitments or Term Loans so
extended and such technical amendments as may be necessary, advisable or
appropriate in the reasonable opinion of the Administrative Agent and the
Borrower in connection with the establishment of such new Classes, in each case
on terms consistent with this Section 2.24. In addition, any such amendment
shall provide that, to the extent consented to by the Issuing Lender, (a) with
respect to any Letters of Credit the expiration date for which extend beyond the
maturity date for the non-extended Revolving Commitments, participations in such
Letters of Credit on such maturity date shall be reallocated from Lenders
holding Revolving Commitments to Lenders holding Extended Revolving Commitments
in accordance with the terms of such amendment (provided that such participation
interests shall, upon receipt thereof by the relevant Lenders holding Revolving
Commitments, be deemed to be participation interests in respect of such
Revolving Commitments and the terms of such participation interests (including,
without limitation, the commission applicable thereto) shall be adjusted
accordingly) and (b) limitations on drawings of Revolving Loans and issuances,
extensions and amendments to Letters of Credit shall be implemented giving
effect to the foregoing reallocation prior to such reallocation actually
occurring to ensure that sufficient Extended Revolving Commitments are available
to participate in any such Letters of Credit. Without limiting the foregoing, in
connection with any Extensions the respective Loan Parties shall (at their
expense) amend (and the Administrative Agent is hereby directed to amend) any
Mortgage that has a maturity date prior to the latest termination date of any
Extended Term Loans or Extended Revolving Commitments so that such maturity date
is extended to the latest termination date of any Extended Term Loans or
Extended Revolving Commitments (or such later date as may be advised by local
counsel to the Administrative Agent). No Lender shall be required to participate
in any Extension.

(d) In connection with any Extension, the Borrower shall provide the
Administrative Agent at least five (5) Business Days (or such shorter period as
may be agreed by the Administrative Agent) prior written notice thereof, and
shall agree to such procedures (to ensure reasonable administrative management
of the credit facilities hereunder after such Extension), if any, as may be
established by, or acceptable to, the Administrative Agent, in each case acting
reasonably to accomplish the purposes of this Section 2.24.

2.25 Incremental Credit Extensions.

(a) The Borrower may at any time or from time to time after the Closing Date (on
one or more occasions), by notice to the Administrative Agent (whereupon the
Administrative Agent shall promptly deliver a copy to each of the Lenders),
without having to seek consent from the Lenders, request (a) one or more
increases of the Tranche B Term Loans or one or more additional tranches of term
loans (the “Incremental Tranche B Term Loans”), (b) one or more increases in the
amount of the Revolving Commitments (each such increase, a “Revolving Commitment
Increase”) and (c) in lieu of Incremental Tranche B Term Loans and/or Revolving
Commitments Increases, issue pari passu or junior secured loans or notes
(“Secured Incremental Notes”) and/or unsecured loans or notes (“Unsecured
Incremental Notes” and together with any Secured Incremental Notes, “Incremental
Equivalent Debt”), together with any Incremental Tranche B Term Loans and any
Revolving Commitment Increase, referred to herein as a “Credit Increase”) or any
combination thereof in an aggregate amount not to exceed (x) $125,000,000 plus
(y) unlimited additional amounts; provided that solely with respect to this
clause (y), the Consolidated First Lien Leverage Ratio (determined on a Pro
Forma Basis after giving effect to such Credit Increase

 

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and any contemplated use of the proceeds thereof, including any prepayment of
Indebtedness and any potential Acquisition or Investment in connection
therewith, but assuming, solely for purpose of such calculation under this
Section 2.25 and not for any other purpose hereunder, at the time of incurrence
thereof (1) that a borrowing of the maximum amount of Incremental Loans
available thereunder after giving effect to such Incremental Commitments,
(2) that all Loans under such Incremental Commitments are Consolidated First
Lien Debt and (3) excluding, for purposes of clause (b) of Consolidated First
Lien Leverage Ratio, the cash proceeds from the borrowing of the proposed Credit
Increase) shall not exceed 4.50 to 1.00; provided, however, that at the option
of the Borrower any such unfunded Credit Increase may instead be tested at the
time of the initial funding thereof in lieu of testing at the time of entering
into such unfunded commitment plus (z) the amount of any voluntary prepayments
of Term Loans and voluntary reductions of Revolving Commitment to the extent
such voluntary prepayment or voluntary reduction is not funded with long term
indebtedness (including, for the avoidance of doubt, the proceeds of any Credit
Increase); provided further that upon the effectiveness of any Incremental
Amendment referred to below, no Event of Default shall exist and at the time
that any such Credit Increase is made (and immediately after giving effect
thereto); provided that if such Credit Increase is executed in connection with a
Permitted Acquisition or other permitted Investment, at the option of the
lenders providing such Credit Increase, the documentation relating thereto may
modify such restrictions consistent with customary “SunGard” provisions;
provided, further, that for the avoidance of doubt, the Incremental Tranche B
Term Loans, Revolving Commitment Increase and Incremental Equivalent Debt may be
incurred pursuant to clause (y) prior to the utilization of any amounts under
clauses (x) or (z) above even if incurred substantially contemporaneously
therewith and the amounts incurred pursuant to clauses (x) or (z) shall not be
included in the calculation of clause (y); provided further that any such
Indebtedness incurred pursuant to clauses (x) and (z) above are hereinafter
referred to as the “Unrestricted Incremental First Lien Indebtedness”; it being
understood and agreed that (I) the Borrower shall designate any such
Indebtedness as Unrestricted Incremental First Lien Indebtedness on or prior to
the date of such incurrence by notice to the Administrative Agent and (II) the
Borrower may redesignate any such Indebtedness originally designated as
Unrestricted Incremental First Lien Indebtedness if, at the time of such
redesignation, the Borrower would be permitted to incur under this
Section 2.25(a) the aggregate principal amount of Indebtedness being so
redesignated (for purposes of clarity, with any such redesignation having the
effect of increasing the Borrower’s ability to incur Unrestricted Incremental
First Lien Indebtedness as of the date of such redesignation by the amount of
such Indebtedness so redesignated)).

(b) Each Credit Increase shall be in an aggregate principal amount that is not
less than $5,000,000 (provided that such amount may be less than $5,000,000 on
no more than two occasions if such amount is not less than $1,000,000 on each
such occasion, and such amount may be a lesser amount if such amount represents
all remaining availability under the limit set forth above).

(c) (i) The Incremental Tranche B Term Loans may rank pari passu in right of
security with the Revolving Loans and the Tranche B Term Loans (it being
understood and agreed that any such Incremental Tranche B Term Loans may be
secured solely by the Collateral and may be guaranteed solely by the
Guarantors), (ii) the Secured Incremental Notes may rank pari passu or junior in
right of security with the Revolving Loans and the Tranche B Term Loans and
(iii) the Unsecured Incremental Notes shall be unsecured; provided with respect
to any Secured Incremental Notes, (x) such Secured Incremental Notes shall be
secured solely by the Collateral and (y) an intercreditor agreement shall be
entered into with the Representative of such providers of such Secured
Incremental Notes substantially consistent with the terms set forth in the First
Lien Intercreditor Agreement or the Junior Lien Intercreditor Agreement, as
applicable, and (ii) if guaranteed, shall be guaranteed solely by the
Guarantors.

(d) The Incremental Tranche B Term Loans or Incremental Equivalent Debt, as the
case may be, (i) shall not mature earlier than the Tranche B Maturity Date and
shall have a Weighted Average Life to Maturity (pursuant to such amortization
schedules as may be determined by the Borrower

 

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and the lenders thereof) that is no shorter than the then-remaining Weighted
Average Life to Maturity of the Tranche B Term Loans calculated without giving
effect to prepayments of any amortization thereof, (ii) except as set forth
above, all other terms of such Incremental Tranche B Term Loans if not
consistent with the terms of the existing Tranche B Term Loan Facility shall be
as agreed between the Borrower and the lenders providing such Credit Increase,
(iii) will accrue interest at rates determined by the Borrower and the lenders
providing such Credit Increase; provided that (with respect to any Incremental
Tranche B Term Loans incurred on a pari passu basis within 12 months of the
Closing Date), the all-in yield (which shall be determined by including interest
rate margins, original issue discount (based on a four-year average life to
maturity), upfront fees (which shall be deemed to constitute like amounts of
original issue discount) or LIBOR/ABR floors (but only to the extent an increase
in the interest rate floor in the Initial Tranche B Term Loans would cause an
increase in the interest rate then in effect thereunder, and in such case, the
interest rate floor (but not the interest rate margin) applicable to the Initial
Tranche B Term Loans shall be increased to the extent of such differential
between interest rate floors), but excluding arrangement, underwriting,
structuring, commitment, amendment or similar fees (regardless of whether paid
in whole or in part to any or all lenders) and other fees not paid generally to
all lenders of such indebtedness) applicable to any Incremental Tranche B Term
Loans will not be more than 0.50% higher than the corresponding all-in yield
(determined on the same basis) for the Initial Tranche B Term Loans, unless the
interest rate margins (or LIBOR/ABR floors) with respect to the Initial Tranche
B Term Loan is increased by an amount equal to the difference between the all-in
yield with respect to the Incremental Tranche B Term Loans and the corresponding
all-in yield on the Initial Tranche B Term Loans minus 0.50%.

(e) Incremental Tranche B Term Loans may be made, and Revolving Commitment
Increases may be provided, by any existing Lender or by any other bank or other
financial institution (any such other bank or other financial institution being
called an “Additional Lender”), provided that in the case of a Revolving
Commitment Increase, each Issuing Lender shall have consented (not to be
unreasonably withheld) to such Additional Lender’s providing such Revolving
Commitment Increases, if such consent would be required under Section 10.6 for
an assignment of Revolving Commitments to such Additional Lender. Commitments in
respect of Credit Increases (other than in connection with Incremental
Equivalent Debt) shall become Commitments (or in the case of a Revolving
Commitment Increase to be provided by an existing Revolving Lender, an increase
in such Lender’s applicable Revolving Commitment) under this Agreement pursuant
to an amendment (an “Incremental Facility Amendment”) to this Agreement and, as
appropriate, the other Loan Documents, executed by Holdings, the Borrower, each
Lender agreeing to provide such Commitment, if any, each Additional Lender, if
any and the Administrative Agent. An Incremental Amendment may, without the
consent of any other Lenders, effect such amendments to this Agreement and the
other Loan Documents as may be necessary or appropriate, in the reasonable
opinion of the Administrative Agent and the Borrower, to effect the provisions
and intent of this Section 2.25 and the application of the proceeds thereof. No
Lender shall be obligated to provide any Credit Increases, unless it so agrees.
Upon each increase in the Revolving Commitments pursuant to this Section 2.25,
the participations held by the Revolving Lenders in the Revolving L/C Exposure
and Swingline Loans immediately prior to such increase will be reallocated so as
to be held by the Revolving Lenders ratably in accordance with their respective
Revolving Percentages after giving effect to such Revolving Commitment Increase.
The Borrower may use the proceeds of each Credit Increase for any purpose not
prohibited by this Agreement unless otherwise agreed in connection with such
Credit Increase. Any Incremental Tranche B Term Loans, Revolving Commitment
Increase and Incremental Equivalent Debt made pursuant to this Section 2.25
shall be evidenced by one or more entries in the Register maintained by the
Administrative Agent. In connection with the foregoing, the extent reasonably
requested by the Lenders providing the Credit Increase, the Administrative Agent
shall receive board resolutions, officers’ certificates and/or reaffirmation
agreements consistent with those delivered on the Closing Date under
Section 5.1, and, to the extent required by Section 6.9, legal opinions
consistent with those delivered on the Closing Date (other than changes to such
legal opinions resulting from a change in law, change in fact or change to
counsel’s form of opinion reasonably satisfactory to the Administrative Agent).

 

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(f) This Section 2.25 shall supersede any provisions in Section 2.10,
Section 2.11, Section 2.17, Section 10.1 and Section 10.7 to the contrary. The
Administrative Agent and the Lenders hereby (i) agree that the minimum
borrowing, pro rata borrowing and pro rata payment requirements contained
elsewhere in this Agreement shall not apply to the incurrence of Indebtedness
expressly provided for in this Section 2.25 and (ii) waive the requirements of
any other provision of this Agreement or any other Loan Document that may
otherwise prohibit the incurrence of any Indebtedness expressly provided for by
this Section 2.25. Notwithstanding any other provision of any Loan Document, the
Loan Documents may be amended by the Administrative Agent and the Borrower, if
necessary or reasonably advisable, to provide for terms applicable to any
Incremental Tranche B Term Loans, Revolving Commitment Increase and Incremental
Equivalent Debt.

2.26 Defaulting Lenders. Notwithstanding any provision of this Agreement to the
contrary, if any Lender becomes a Defaulting Lender, then the following
provisions shall apply for so long as such Lender is a Defaulting Lender:

(a) The commitment fee under Section 2.8(a) shall cease to accrue on the
commitment of such Lender so long as it is a Defaulting Lender (except to the
extent it is payable to the Issuing Lender pursuant to clause (c)(v) below);

(b) If any Swingline Exposure or Revolving L/C Exposure exists at the time a
Lender becomes a Defaulting Lender then:

(i) all or any part of such Swingline Exposure and Revolving L/C Exposure shall
be re-allocated among the non-Defaulting Lenders in accordance with their
respective Revolving Percentages but only to the extent (x) the sum of all
non-Defaulting Lenders’ Revolving Loans plus such Defaulting Lender’s Swingline
Exposure and Revolving L/C Exposure does not exceed the total of all
non-Defaulting Lenders’ Revolving Commitments and (y) such reallocation does not
cause the Revolving Extensions of Credit of any non-Defaulting Lender to exceed
the Revolving Commitment of such non-Defaulting Lender;

(ii) if the reallocation with respect to Revolving L/C Exposure described in
clause (i) above cannot, or can only partially, be effected, Borrower shall
within five (5) Business Days following notice by the Administrative Agent (or
such longer period as Administrative Agent may agree), cash collateralize such
Defaulting Lender’s Revolving L/C Exposure (after giving effect to any partial
reallocation pursuant to clause (i) above) for so long as such Revolving L/C
Exposure is outstanding;

(iii) if any portion of such Defaulting Lender’s Revolving L/C Exposure is cash
collateralized pursuant to clause (ii) above or otherwise, at 105% of the face
amount thereof pursuant to terms reasonably satisfactory to the Issuing Lender,
Borrower shall not be required to pay the Letter of Credit participation fee
with respect to such portion of such Defaulting Lender’s Revolving L/C Exposure
so long as it is cash collateralized;

(iv) if any portion of such Defaulting Lender’s Revolving L/C Exposure is
reallocated to the non-Defaulting Lenders pursuant to clause (i) above, then the
Letter of Credit participation fee with respect to such portion shall be
allocated among the non-Defaulting Lenders in accordance with their Revolving
Percentages; or

(v) if any portion of such Defaulting Lender’s Revolving L/C Exposure is neither
cash collateralized nor reallocated pursuant to this Section 2.26(b), then,
without prejudice to any rights or remedies of the Issuing Lender or any Lender
hereunder, the Letter of Credit participation fee payable with respect to such
Defaulting Lender’s Revolving L/C Exposure shall be payable to the Issuing
Lender until such Revolving L/C Exposure is cash collateralized and/or
reallocated;

 

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(c) so long as any Lender is a Defaulting Lender, the Swingline Lender shall not
be required to fund any Swingline Loan and the Issuing Lender shall not be
required to issue, amend or increase any Letter of Credit, unless it is
satisfied that the related exposure will be 100% covered by the Revolving
Commitments of the non-Defaulting Lenders and/or cash collateralized in
accordance with Section 2.26, and participations in any such newly issued or
increased Letter of Credit or newly made Swingline Loan shall be allocated among
non-Defaulting Lenders in accordance with their respective Revolving Percentages
(and Defaulting Lenders shall not participate therein); and

(d) any amount payable to such Defaulting Lender hereunder may, in lieu of being
distributed to such Defaulting Lender, be retained by the Administrative Agent
in a segregated non-interest-bearing account and, subject to any applicable
Requirements of Law, be applied at such time or times as may be determined by
the Administrative Agent (i) first, to the payment of any amounts owing by such
Defaulting Lender to the Administrative Agent hereunder, (ii) second, pro rata,
to the payment of any amounts owing by such Defaulting Lender to the Issuing
Lender or Swingline Lender hereunder, (iii) third, to the funding of any Loan or
the funding or cash collateralization of any participation in any Swingline Loan
or Letter of Credit in respect of which such Defaulting Lender has failed to
fund its portion thereof as required by this Agreement, as determined by the
Administrative Agent, (iv) fourth, if so determined by the Administrative Agent
and Borrower, held in such account as cash collateral for future funding
obligations of the Defaulting Lender under this Agreement, (v) fifth, pro rata,
to the payment of any amounts owing to Borrower or the Lenders as a result of
any judgment of a court of competent jurisdiction obtained by Borrower or any
Lender against such Defaulting Lender as a result of such Defaulting Lender’s
breach of its obligations under this Agreement and (vi) sixth, to such
Defaulting Lender or as otherwise directed by a court of competent jurisdiction;
provided that if such payment is (x) a prepayment of the principal amount of any
Loans or Reimbursement Obligations which a Defaulting Lender has funded its
participation obligations and (y) made at a time when the conditions set forth
in Section 5.2 are satisfied, such payment shall be applied solely to prepay the
Loans of, and Reimbursement Obligations owed to, all non-Defaulting Lenders pro
rata prior to being applied to the prepayment of any Loans, or Reimbursement
Obligations owed to, any Defaulting Lender.

(e) In the event that the Administrative Agent, Borrower, the Issuing Lender or
the Swingline Lender, as the case may be, each agrees that a Defaulting Lender
has adequately remedied all matters that caused such Lender to be a Defaulting
Lender, then the Swingline Exposure and Revolving L/C Exposure of the Lenders
shall be readjusted to reflect the inclusion of such Lender’s Commitment and on
such date such Lender shall purchase at par such of the Loans of the other
Lenders as the Administrative Agent shall determine may be necessary in order
for such Lender to hold such Loans in accordance with its Revolving Percentage
and the Administrative Agent shall release any cash collateral previously
required by Section 2.26. The rights and remedies against a Defaulting Lender
under this Section 2.26 are in addition to other rights and remedies that
Borrower, the Administrative Agent, the Issuing Lender, the Swingline Lender and
the non-Defaulting Lenders may have against such Defaulting Lender. The
arrangements permitted or required by this Section 2.26 shall be permitted under
this Agreement, notwithstanding any limitation on Liens or the pro rata sharing
provisions or otherwise.

 

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2.27 Reserved.

2.28 Refinancing Amendments.

(a) On one or more occasions after the Closing Date, the Borrower may obtain,
from any Lender or Additional Refinancing Lender, Credit Agreement Refinancing
Indebtedness in respect of all or any portion of the Term Loans and the
Revolving Loans (or unused Revolving Commitments) then outstanding under this
Agreement (which for purposes of this Section 2.28(a) will be deemed to include
any then outstanding Refinancing Term Loans or Incremental Term Loans), in the
form of Refinancing Term Loans, Refinancing Term Commitments, Refinancing
Revolving Commitments or Refinancing Revolving Loans pursuant to a Refinancing
Amendment; provided that notwithstanding anything to the contrary in this
Section 2.28 or otherwise, (1) the borrowing and repayment (except for
(A) payments of interest and fees at different rates on Refinancing Revolving
Commitments (and related outstandings), (B) repayments required upon the
maturity date of the Refinancing Revolving Commitments and (C) repayment made in
connection with a permanent repayment and termination of commitments (subject to
clause (3) below)) of Loans with respect to Refinancing Revolving Commitments
after the date of obtaining any Refinancing Revolving Commitments shall be made
on a pro rata basis with all other Revolving Commitments, (2) all Swingline
Loans and Letters of Credit shall be participated on a pro rata basis by all
Lenders with Commitments in accordance with their percentage of the Revolving
Commitments, (3) the permanent repayment of Revolving Loans with respect to, and
termination of, Refinancing Revolving Commitments after the date of obtaining
any Refinancing Revolving Commitments shall be made on a pro rata basis with all
other Revolving Commitments, except that the Borrower shall be permitted to
permanently repay and terminate commitments of any such class on a better than a
pro rata basis as compared to any other class with a later maturity date than
such class and (4) assignments and participations of Refinancing Revolving
Commitments and Refinancing Revolving Loans shall be governed by the same
assignment and participation provisions applicable to Revolving Commitments and
Revolving Loans. For the avoidance of doubt, any prepayment in connection with a
Refinancing Amendment shall be accompanied by the Repricing Premium, if any is
applicable.

(b) Each issuance of Credit Agreement Refinancing Indebtedness under
Section 2.28(a) shall be in an aggregate principal amount that is (x) not less
than $10,000,000 and (y) an integral multiple of $1,000,000 in excess thereof.

(c) Each of the parties hereto hereby agrees that this Agreement and the other
Loan Documents may be amended pursuant to a Refinancing Amendment, without the
consent of any other Lenders, to the extent (but only to the extent) necessary
to (i) reflect the existence and terms of the Credit Agreement Refinancing
Indebtedness incurred pursuant thereto and (ii) make such other changes to this
Agreement and the other Loan Documents consistent with the provisions and intent
of Section 10.1 (without the consent of the Required Lenders called for therein)
and (iii) effect such other amendments to this Agreement and the other Loan
Documents as may be necessary or appropriate, in the reasonable opinion of the
Administrative Agent and the Borrower, to effect the provisions of this
Section 2.28, and the Required Lenders hereby expressly authorize the
Administrative Agent to enter into any such Refinancing Amendment.

(d) This Section 2.28 shall supersede any provisions in Section 2.10,
Section 2.11, Section 2.17, Section 10.1 and Section 10.7 to the contrary.

 

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SECTION 3

LETTERS OF CREDIT

3.1 Letters of Credit.

(a) Subject to the terms and conditions hereof, (a) each Issuing Lender agrees
to issue letters of credit (“Letters of Credit”) for the account of the Borrower
on any Business Day during the Revolving Commitment Period (in the case of a
Revolving Letter of Credit) or the Institutional L/C Period (in the case of an
Institutional Letter of Credit), in each case in such form as may be reasonably
approved from time to time by such Issuing Lender; provided that such Issuing
Lender shall have no obligation to issue any Letter of Credit if, after giving
effect to such issuance, (i) the Revolving L/C Exposure would exceed the
Revolving L/C Commitment, (ii) the Total Revolving Extensions of Credit would
exceed the Total Revolving Commitments, (iii) the amount of funds deposited in
the Institutional L/C Collateral Account at such time would not be at least 105%
of the Institutional L/C Exposure or (iv) any Institutional Letter of Credit
would be issued by an Issuing Lender other than Barclays or an affiliate
thereof. Each Letter of Credit shall (A) be denominated in Dollars and
(B) expire no later than the earlier of (x) the first anniversary of its date of
issuance and (y) the date that is five (5) Business Days prior to the Revolving
Termination Date (in the case of a Revolving Letter of Credit) or the Tranche B
Maturity Date (in the case of an Institutional Letter of Credit), provided that
any Letter of Credit with a one-year term may provide for the renewal thereof
for additional one-year periods (which shall in no event extend beyond the date
referred to in clause (y) above).

(b) [Reserved].

(c) For purposes hereof, (i) Letters of Credit shall at all times and from time
to time be deemed to be Institutional Letters of Credit in the amount specified
in the definition of Institutional Letters of Credit and be deemed to be
Revolving Letters of Credit only to the extent, and in an amount by which, the
aggregate amount of outstanding Letters of Credit exceeds such amount specified
in clause (a) of the definition of Institutional Letters of Credit,
(ii) drawings under any Letter of Credit shall be deemed to have been made under
the Revolving Letter of Credit for so long as, and to the extent that, there are
any undrawn Revolving Letters of Credit outstanding (and thereafter shall be
deemed to have been made under Institutional Letters of Credit) and (iii) any
Letter of Credit that expires or terminates will be deemed to be a Revolving
Letter of Credit, for so long as, and to the extent that, there are outstanding
Revolving Letters of Credit immediately prior to such expiration or termination;
provided, that, at any time during which an Event of Default shall have occurred
and be continuing, (A) Letters of Credit shall be deemed to be Revolving Letters
of Credit and Institutional Letters of Credit, (B) drawings under Letters of
Credit shall be deemed to have been made under Revolving Letters of Credit and
Institutional Letters of Credit and (C) any Letter of Credit that expires or
terminates shall be deemed to be a Revolving Letter of Credit and an
Institutional Letter of Credit, in each case pro rata based upon (1) the
Revolving L/C Exposure at the time such Event of Default occurred and (2) the
Institutional L/C Exposure at the time such Event of Default occurred. To the
extent necessary to implement the foregoing, the identification of a Letter of
Credit as a Revolving Letter of Credit or an Institutional Letter of Credit may
change from time to time and a portion of a Letter of Credit may be deemed to be
an Institutional Letter of Credit and the remainder be deemed to be a Revolving
Letter of Credit. Notwithstanding the foregoing, the entire face amount of any
Letter of Credit with an expiration date after the date that is five
(5) Business Days prior to the Revolving Termination Date or that is issued by
an Issuing Lender other than Barclays, or an affiliate thereof, shall at all
times be deemed to be an Institutional Letter of Credit.

(d) An Issuing Lender shall not at any time be obligated to issue any Letter of
Credit if such issuance would conflict with, or cause such Issuing Lender or any
Revolving Lender to exceed any limits imposed by, any applicable Requirement of
Law.

 

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3.2 Procedure for Issuance of Letter of Credit. The Borrower may from time to
time request that an Issuing Lender issue a Letter of Credit by delivering to
such Issuing Lender at its address for notices specified herein an Application
therefor, completed to the reasonable satisfaction of such Issuing Lender, and
such other certificates, documents and other papers and information as such
Issuing Lender may reasonably request including in the case of letters of credit
issued by Barclays Bank PLC, an LC Extension Request substantially in the form
of Exhibit H-4. Upon receipt of any Application, the applicable Issuing Lender
will process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three (3) Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed to by the
Issuing Lender and the Borrower. The applicable Issuing Lender shall furnish a
copy of such Letter of Credit to the Borrower and the Administrative Agent
promptly following the issuance thereof. The applicable Issuing Lender shall
promptly furnish to the Administrative Agent, which shall in turn promptly
furnish to the Lenders, notice of the issuance of each Letter of Credit
(including the amount thereof).

3.3 Fees and Other Charges.

(a) The Borrower will pay a participation fee on all outstanding Revolving
Letters of Credit at a per annum rate equal to the Applicable Margin then in
effect with respect to Eurodollar Loans under the Revolving Facility, shared
ratably among the Revolving Lenders and payable quarterly in arrears on each Fee
Payment Date after the issuance date. In addition, the Borrower shall pay to
each Issuing Lender for its own account a fronting fee of 0.125% per annum on
the face amount of each Revolving Letter of Credit issued by such Issuing Lender
payable quarterly in arrears on each Fee Payment Date after the issuance date.
In addition the following fees will also be charged: an issuance fee of $500.00
per Revolving Letter of Credit, drawing fees of $250.00 per draw, amendment fees
of $200.00 per amendment and $250.00 for renewals on each anniversary of a
“evergreen” Revolving Letter of Credit.

(b) In addition to the foregoing fees, the Borrower reimburse each Issuing
Lender for its reasonable and documented out-of-pocket costs and expenses
incurred in connection with, issuing, negotiating, effecting payment under,
amending or otherwise administering any Letter of Credit issued by such Issuing
Lender.

3.4 L/C Participations. Each Issuing Lender irrevocably agrees to grant and
hereby grants to each Revolving L/C Participant, and, to induce each Issuing
Lender to issue Revolving Letters of Credit, each Revolving L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
such Issuing Lender, on the terms and conditions set forth below, for such
Revolving L/C Participant’s own account and risk an undivided interest equal to
such Revolving L/C Participant’s Revolving Percentage in such Issuing Lender’s
obligations and rights under and in respect of each Revolving Letter of Credit
and the amount of each draft paid by such Issuing Lender thereunder. Each
Revolving L/C Participant agrees with each Issuing Lender that, if a draft is
paid under any Revolving Letter of Credit issued by such Issuing Lender for
which the Issuing Lender is not reimbursed in full by the Borrower in accordance
with the terms of this Agreement, such Revolving L/C Participant shall pay to
such Issuing Lender upon demand at such Issuing Lender’s address for notices
specified herein an amount equal to such Revolving L/C Participant’s Revolving
Percentage of the amount of such draft, or any part thereof, that is not so
reimbursed. Each Revolving L/C Participant’s obligation to pay such amount shall

 

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be absolute and unconditional and shall not be affected by any circumstance,
including (i) any setoff, counterclaim, recoupment, defense or other right that
such Revolving L/C Participant may have against the Issuing Lender, the Borrower
or any other Person for any reason whatsoever, (ii) the occurrence or
continuance of a Default or an Event of Default or the failure to satisfy any of
the other conditions specified in Section 5, (iii) any adverse change in the
condition (financial or otherwise) of the Borrower, (iv) any breach of this
Agreement or any other Loan Document by the Borrower, any other Loan Party or
any other Revolving L/C Participant or (v) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing. If any amount
required to be paid by any Revolving L/C Participant to an Issuing Lender
pursuant to this Section 3.4 in respect of any unreimbursed portion of any
payment made by such Issuing Lender under any Revolving Letter of Credit is paid
to such Issuing Lender within three (3) Business Days after the date such
payment is due, such Revolving L/C Participant shall pay to such Issuing Lender
on demand an amount equal to the product of (A) such amount, times (B) the daily
average Federal Funds Effective Rate during the period from and including the
date such payment is required to the date on which such payment is immediately
available to such Issuing Lender, times (C) a fraction the numerator of which is
the number of days that elapse during such period and the denominator of which
is 360. If any such amount required to be paid by any Revolving L/C Participant
pursuant to this Section 3.4 is not made available to the applicable Issuing
Lender by such Revolving L/C Participant within three (3) Business Days after
the date such payment is due, such Issuing Lender shall be entitled to recover
from such Revolving L/C Participant, on demand, such amount with interest
thereon calculated from such due date at the rate per annum applicable to ABR
Loans under the Revolving Facility. A certificate of the applicable Issuing
Lender submitted to any Revolving L/C Participant with respect to any amounts
owing under this Section 3.4 shall be conclusive in the absence of manifest
error. Whenever, at any time after an Issuing Lender has made payment under any
Revolving Letter of Credit and has received from any Revolving L/C Participant
its pro rata share of such payment in accordance with this Section 3.4, such
Issuing Lender receives any payment related to such Revolving Letter of Credit
(whether directly from the Borrower or otherwise, including proceeds of
collateral applied thereto by such Issuing Lender), or any payment of interest
on account thereof, such Issuing Lender will distribute to such Revolving L/C
Participant its pro rata share thereof; provided, however, that in the event
that any such payment received by such Issuing Lender shall be required to be
returned by such Issuing Lender, such Revolving L/C Participant shall return to
such Issuing Lender the portion thereof previously distributed by such Issuing
Lender to it.

3.5 Reimbursement Obligation of the Borrower. If any draft is paid under any
Letter of Credit, the Borrower shall reimburse the applicable Issuing Lender
with respect to such draft paid by the Issuing Lender for the amount of (a) the
draft so paid and (b) any taxes, fees, charges or other costs or expenses
incurred by such Issuing Lender in connection with such payment, not later than
10:00 A.M., New York City time, on (i) the Business Day that the Borrower
receives notice of such draft, if such notice is received on such day prior to
1:00 P.M., New York City time, or (ii) if clause (i) above does not apply, the
Business Day immediately following the day that the Borrower receives such
notice. Each such payment shall be made to the applicable Issuing Lender at its
address for notices referred to herein in Dollars and in immediately available
funds. If any draft is paid under any Letter of Credit, then, unless the
Borrower shall reimburse the applicable Issuing Lender in full on the same day
that such draft is paid, the unpaid amount thereof shall bear interest for each
day from and including the date on which such draft is paid to but excluding the
date that the Borrower makes reimbursement in full, at (a) in the case of a
Revolving L/C Disbursement, the rate per annum then applicable to ABR Loans
under the Revolving Facility and (b) in the case of an Institutional L/C
Disbursement, the rate per annum then applicable to ABR Loans under the Tranche
B Term Facility (determined without regard to whether the Tranche B Term
Facility is in effect); provided that, if the Borrower does not make
reimbursement in full on or prior to the second (2nd) Business Day following the
date of the applicable drawing, then Section 2.14(c) shall apply; provided that,
with respect to Institutional Letters of Credit, the Borrower may authorize the
Issuing Lender to draw such payment from the Institutional L/C Collateral
Account. If the Issuing Lender with

 

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respect to an Institutional Letter of Credit shall not have received from the
Borrower the payment required to be made by this Section 3.5 with respect to any
Institutional Letter of Credit within the time specified in this Section, such
Issuing Lender will promptly notify the Administrative Agent of the unreimbursed
amount of an Institutional L/C Disbursement. In each such event, the Borrower
hereby authorizes and directs the Issuing Lender with respect to an
Institutional Letter of Credit to withdraw from the Institutional L/C Collateral
Account an amount equal to such unreimbursed amount. The Administrative Agent
shall promptly upon request advise the Issuing Lender with respect to an
Institutional Letter of Credit of the aggregate amount of any such permitted
withdrawal, and such Issuing Lender shall promptly advise the Administrative
Agent of the amount of any such reimbursement it shall effect with the proceeds
of any such withdrawal. Any amounts received by the Administrative Agent
thereafter pursuant to this Section 3.5 in respect of an unreimbursed amount of
an Institutional L/C Disbursement under an Institutional Letter of Credit will
be promptly remitted by the Administrative Agent to the Institutional Collateral
Account (it being understood that, thereafter, such amounts will be available to
reimburse the Issuing Lender with respect to an Institutional Letter of Credit
in accordance with this Section 3.5).

3.6 Obligations Absolute. The Borrower’s obligations under this Section 3 shall
be absolute and unconditional under any and all circumstances and irrespective
of any setoff, counterclaim or defense to payment that the Borrower may have or
have had against any Issuing Lender, any beneficiary of a Letter of Credit or
any other Person. The Borrower also agrees with each Issuing Lender that such
Issuing Lender shall not be responsible for, and the Borrower’s Reimbursement
Obligations under Section 3.5 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Borrower against any beneficiary of such Letter of
Credit or any such transferee. An Issuing Lender shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Issuing Lender. The Borrower agrees
that any action taken or omitted by an Issuing Lender under or in connection
with any Letter of Credit or the related drafts or documents, if done in the
absence of gross negligence, bad faith or willful misconduct, shall be binding
on the Borrower and shall not result in any liability of such Issuing Lender to
the Borrower.

3.7 Letter of Credit Payments. If any draft shall be presented for payment under
any Letter of Credit, the applicable Issuing Lender shall promptly notify the
Borrower and the Administrative Agent of the date and amount thereof. The
responsibility of an Issuing Lender to the Borrower in connection with any draft
presented for payment under any Letter of Credit issued by such Issuing Lender
shall, in addition to any payment obligation expressly provided for in such
Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment
are substantially in conformity with such Letter of Credit.

3.8 Applications. To the extent that any provision of any Application related to
any Letter of Credit is inconsistent with the provisions of this Section 3, the
provisions of this Section 3 shall apply.

3.9 Obligations of Certain Issuing Lenders. Each Issuing Lender that is not the
same Person as the Person serving as the Administrative Agent shall notify the
Administrative Agent of (a) the amount and expiration date of each Letter of
Credit issued by such Issuing Lender prior to the date of issuance thereof,
(b) any amendment or modification of any such Letter of Credit prior to the time
of such amendment or modification and (c) any termination, surrender,
cancellation or expiry of any such Letter of Credit promptly upon the occurrence
thereof.

 

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SECTION 4

REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent and the Lenders to enter into this Agreement
and to make the Loans and issue or participate in the Letters of Credit,
Holdings and the Borrower hereby jointly and severally represent and warrant to
the Administrative Agent and each Lender that:

4.1 Financial Condition.

(a) The unaudited pro forma consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at September 30, 2013, and unaudited pro forma
statement of operations of the Borrower and its consolidated Subsidiaries for
the twelve-month period then ended (including the notes thereto) (the “Pro Forma
Financial Statements”), copies of which have heretofore been furnished to each
Lender, have been prepared giving effect to the Transactions and all other
transactions that would be required to be given pro forma effect by Regulation
S-X (and such other adjustments as have been agreed to by the Joint
Bookrunners), as if such transactions had occurred on September 30, 2013 (in the
case of such unaudited pro forma balance sheet) or at the beginning of such
twelve-month period (in the case of such unaudited statement of operations). The
Pro Forma Financial Statements have been prepared in good faith by the Borrower,
and present fairly in all material respects on a pro forma basis the estimated
financial position and results of operations of the Borrower and its
consolidated Subsidiaries as at September 30, 2013, and for such period then
ended, assuming that such transactions had actually occurred at such date or at
the beginning of such period, as the case may be.

(b) The audited consolidated balance sheets of the Borrower and its Subsidiaries
as at September 30, 2012 and September 30, 2013, and the related consolidated
statements of income and of cash flows for the fiscal years ended on such dates,
reported on by and accompanied by an unqualified report from Deloitte & Touche,
LLP, as the case may be, present fairly in all material respects the
consolidated financial condition of the Borrower and its Subsidiaries as at such
date, and the consolidated results of its operations and its consolidated cash
flows for the respective fiscal years then ended. All such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by the aforementioned firm of accountants and disclosed
therein).

4.2 No Change. Since the Closing Date, there has been no development or event
that has had or would reasonably be expected to have a Material Adverse Effect.

4.3 Existence; Compliance with Law. Each Group Member (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the power and authority, and the legal right, to own and
operate its property, to lease the property it operates as lessee and to conduct
the business in which it is currently engaged, (c) is duly qualified as a
foreign corporation or other organization and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification except to the extent that
the failure to comply therewith would not, in the aggregate, reasonably be
expected to have a Material Adverse Effect and (d) is in compliance with all
Requirements of Law, except to the extent that the failure to comply therewith
would not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.

4.4 Power; Authorization; Enforceable Obligations. Each Loan Party has the power
and authority, and the legal right, to make, deliver and perform the Loan
Documents to which it is a party and, in the case of the Borrower, to obtain
extensions of credit hereunder. Each Loan Party has taken all necessary

 

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organizational action to authorize the execution, delivery and performance of
the Loan Documents to which it is a party and, in the case of the Borrower, to
authorize the extensions of credit on the terms and conditions of this
Agreement. No material consent or authorization of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other Person is
required in connection with the Transactions, except (i) consents,
authorizations, filings and notices described in Schedule 4.4, which consents,
authorizations, filings and notices have been obtained or made and are in full
force and effect and (ii) the filings referred to in Section 4.19. Each Loan
Document has been duly executed and delivered on behalf of each Loan Party
thereto. This Agreement constitutes, and each other Loan Document upon execution
will constitute, a legal, valid and binding obligation of each Loan Party
thereto, enforceable against each such Loan Party in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law) and an implied covenant of good faith and fair dealing.

4.5 No Legal Bar. The Transactions will not violate any material Requirement of
Law or any material Contractual Obligation of any Group Member and will not
result in, or require, the creation or imposition of any Lien on any of their
respective properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation (other than the Liens created by the Security Documents).

4.6 Litigation. Except as set forth on Schedule 4.6, no litigation, or to the
knowledge of Holdings or Borrower, no investigation or proceeding of or before
any arbitrator or Governmental Authority is pending or, to the best knowledge of
Holdings or the Borrower, threatened by or against any Group Member or against
any of their respective properties or revenues (a) with respect to any of the
Loan Documents or any of the transactions contemplated hereby or thereby and
(b) that would reasonably be expected to have a Material Adverse Effect.

4.7 No Default. No Default or Event of Default has occurred and is continuing.

4.8 Ownership of Property; Liens. Each Group Member has marketable title to, or
a valid leasehold interest in, all its real property, and marketable title to,
or a valid leasehold interest in, all its material other property, and none of
such property is subject to any Lien except as permitted by Section 7.3. As of
the Closing Date, set forth on Schedule 4.8 is a complete and correct list of
all real property with a fair market value of more than $1,000,000 as reasonably
determined in good faith by the Borrower (including street address) (other than
condominiums or co-ops) located in the United States and owned by any Group
Member. The real properties designated on Schedule 4.8 as “Initial Mortgaged
Properties” constitute all real properties (other than condominiums or co-ops)
located in the United States and owned in fee by any Loan Party (a) with a fair
market value of more than $1,000,000 as reasonably determined in good faith by
the Borrower, (b) for which the Flood Determination delivered pursuant to
Section 6.10 indicates that such real property is not located in a Special Flood
Hazard Area, (c) which, as of the Closing Date, is not being actively marketed
for sale by the Borrower or the applicable Group Member and (d) which is not a
Mortgage Facility Property.

4.9 Licenses; Intellectual Property. Except as in the aggregate would not
reasonably be expected to have a Material Adverse Effect, each Group Member has
all necessary licenses, permits, franchises, rights to participate in, or the
benefit of valid agreements to participate in material Third Party Payor
Programs and other rights necessary for the conduct of its business and for the
intended use of its properties and assets to the extent necessary to ensure no
material interruption in cash flow. Each Group Member owns, or is licensed to
use, all Intellectual Property necessary for the conduct of its business as
currently conducted except to the extent that a failure would not reasonably be
expected to have a Material Adverse Effect. No material claim has been asserted
and is pending by any Person against a Group Member challenging or questioning
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the Group Members or the validity or effectiveness of any such Intellectual
Property, nor does Holdings or the Borrower have knowledge of any valid basis
for any such claim. Except as would not reasonably be expected to result in a
Material Adverse Effect, the use of Intellectual Property by each Group Member
does not infringe on the rights of any Person in any material respect.

4.10 Taxes. Except for any failure, lien, filing or claim, as applicable, that
would not be reasonably expected to, individually or in the aggregate, result in
a Material Adverse Effect: (i) each Group Member has, and with respect to any
taxable period during which the Borrower or any of its Subsidiaries is a member
of a consolidated, unitary, combined or similar tax group in which NMH Holdings,
Inc. (or any direct or indirect parent of NMH Holdings, Inc.) is the common
parent, NMH Holdings, Inc. (or such direct or indirect parent of NMH Holdings,
Inc.) has, filed or caused to be filed all tax returns that are required to be
filed and has paid all taxes (including any interest, additions to tax or
penalties applicable thereto) due and payable (whether or not shown on a tax
return) and any assessments made against it or any of its property and all other
taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any tax the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the relevant Group Member); (ii) no tax Lien has been filed (other than
Permitted Liens); and (iii) no claim is being asserted with respect to any such
tax, fee or other charge.

4.11 Federal Regulations. No part of the proceeds of any Loans, and no other
extensions of credit hereunder, will be used (a) for “buying” or “carrying” any
“margin stock” within the respective meanings of each of the quoted terms under
Regulation U as now and from time to time hereafter in effect or (b) for any
purpose that violates the provisions of the Regulations of the Board.

4.12 Labor Matters. Except as, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect: (a) there are no strikes or other
labor disputes against any Group Member pending or, to the knowledge of Holdings
or the Borrower, threatened; (b) hours worked by and payment made to employees
of each Group Member have not been in violation of the Fair Labor Standards Act
or any other applicable Requirement of Law dealing with such matters; and
(c) all payments due from any Group Member on account of employee health and
welfare insurance have been paid or accrued as a liability on the books of the
relevant Group Member.

4.13 ERISA. Except as would not reasonably be expected to have a Material
Adverse Effect, (i) neither a Reportable Event nor a failure to satisfy the
minimum funding standard (within the meaning of Section 412 of the Code or
Section 302 of ERISA) has occurred during the five-year period prior to the date
on which this representation is made or deemed made with respect to any Plan,
and each Plan during such five-year period has complied in all material respects
with the applicable provisions of ERISA and the Code, (ii) no termination of a
Single Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan
has arisen, during such five-year period and (iii) the present value of all
accrued benefits under each Single Employer Plan (based on those assumptions
used to fund such Plans) did not, as of the last annual valuation date prior to
the date on which this representation is made or deemed made, exceed the value
of the assets of such Plan allocable to such accrued benefits by a material
amount. To the best of the Borrower’s knowledge, neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result
in a material liability under ERISA, and to the best of the Borrower’s
knowledge, neither the Borrower nor any Commonly Controlled Entity would become
subject to any material liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or Insolvent which would reasonably be expected to result in a
Material Adverse Effect.

 

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4.14 Investment Company Act. No Loan Party is an “investment company”, or a
company “controlled” by an “investment company”, required to be regulated within
the meaning of the Investment Company Act of 1940, as amended.

4.15 Subsidiaries. Attached hereto as Schedule 4.15 is an organization chart of
each Loan Party and its Subsidiaries as of the Closing Date. As of the Closing
Date, there are no outstanding subscriptions, options, warrants, calls, rights
or other agreements or commitments (other than stock options granted to
employees or directors and directors’ qualifying shares) of any nature relating
to any Capital Stock of the Borrower or any Restricted Subsidiary, except as
created by the Loan Documents.

4.16 Use of Proceeds. The proceeds of the Initial Tranche B Term Loans shall be
used only for the Refinancing, to cash collateralize certain Letters of Credit,
the payment of Closing Costs and up to $40,000,000 may be used to redeem Senior
Notes. The proceeds of the Revolving Loans and the Swingline Loans, and the
Letters of Credit, shall be used for working capital and general corporate
purposes of any Group Member (including Permitted Acquisitions and other lawful
purposes).

4.17 Environmental Matters. Except as, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect:

(a) the facilities and properties owned, leased or operated by any Group Member
(the “Properties”) do not contain, and have not previously contained, any
Materials of Environmental Concern in amounts or concentrations or under
circumstances that constitute or constituted a violation of, or could reasonably
be expected to give rise to liability under, any applicable Environmental Law;

(b) no Group Member has received any notice of any violation, alleged violation,
non-compliance, liability or potential liability regarding environmental matters
or compliance with Environmental Laws with regard to any of the Properties or
the business operated by any Group Member (the “Business”), nor does Holdings or
the Borrower have knowledge or reason to believe that any such notice will be
received or is being threatened;

(c) Materials of Environmental Concern have not been transported or disposed of
from the Properties in violation of, or in a manner or to a location that would
reasonably be expected to give rise to liability under, any Environmental Law,
nor have any Materials of Environmental Concern been generated, treated, stored
or disposed of at, on or under any of the Properties in violation of, or in a
manner that would reasonably be expected to give rise to liability under, any
applicable Environmental Law;

(d) with respect to any liability arising under any Environmental Law, no
judicial proceeding or governmental or administrative action is pending or, to
the best knowledge of Holdings and the Borrower, threatened, to which any Group
Member is or will be named as a party with respect to the Properties or the
Business, nor are there any consent decrees or other decrees, consent orders,
administrative orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the Properties or the
Business;

(e) there has been no release or threat of release of Materials of Environmental
Concern at or from the Properties, or arising from or related to the operations
of any Group Member in connection with the Properties or otherwise in connection
with the Business, in violation of or in amounts or in a manner that would
reasonably be expected to give rise to liability under Environmental Laws;

(f) the Properties and all operations at the Properties are in compliance, and
within all applicable statute-of-limitations periods have been in compliance,
with all applicable Environmental Laws, and there is no contamination at, under
or about the Properties or violation of any Environmental Law with respect to
the Properties or the Business; and

(g) no Group Member has assumed, contractually or by operation of law, any
liability of any other Person under Environmental Laws.

 

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4.18 Accuracy of Information, Etc. No written factual information with respect
to any Group Member contained in this Agreement, any other Loan Document or any
other factual document, certificate or statement (other than (i) any
projections, pro formas, budgets, estimates or other information of a forward
looking nature with respect to any Group Member, (ii) information of a general
economic nature or industry data or (iii) third party industry data which the
Borrower has not independently verified and as to which the Borrower makes no
representation) furnished by or by Persons directed on behalf of any Loan Party
to the Administrative Agent or the Lenders, or any of them, for use in
connection with the transactions contemplated by this Agreement or the other
Loan Documents, when taken as a whole, contained as of the date such statement,
information, document or certificate was so furnished, any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements contained herein or therein not materially misleading in light of the
circumstances under which such statements are made and after giving effect to
any supplements thereof. The projections and pro forma financial information
contained in the materials referenced above were, and the projections hereafter
delivered, when delivered, will be, based upon good faith estimates and
assumptions believed by management of each Loan Party to be reasonable at the
time made and no Loan Party knows as of the Closing Date any fact making such
estimates and assumptions no longer true in any material respects, it being
recognized by the Administrative Agent and the Lenders that such financial
information as it relates to future events is not to be viewed as fact, such
financial information is subject to significant uncertainties and contingencies,
many of which are beyond the control of the Group Members, no assurance can be
given that any particular projections will be realized and that actual results
during the period or periods covered by such financial information may differ
from the projected results set forth therein by a material amount.

4.19 Security Documents.

(a) The Guarantee and Security Agreement is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, legal, valid and
enforceable (subject to the effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other similar laws affecting creditors’ rights)
security interests in the Collateral described therein and proceeds thereof. In
the case of the Pledged Stock as defined and described in the Guarantee and
Security Agreement, when stock certificates representing such Pledged Stock are
delivered to the Administrative Agent together with the necessary endorsements,
and in the case of the other Collateral described in the any of the Security
Documents, when financing statements and other filings specified on
Schedule 4.19 in appropriate form are filed in the offices specified on Schedule
4.19, the Guarantee and Security Agreement shall constitute a fully perfected
Lien on, and security interest in, all right, title and interest of the Loan
Parties in such Collateral and the proceeds thereof, as security for their
respective Obligations (as defined in the Guarantee and Security Agreement) to
the extent a Lien on such Collateral (other than the Pledged Stock) can be
perfected pursuant to such financing statements and such other filings, in each
case prior and superior in right to any other Person (except, in the case of
Collateral other than Pledged Stock, Permitted Liens).

(b) Each of the Mortgages is effective to create in favor of the Administrative
Agent, for the benefit of the Lenders, a legal, valid and enforceable (subject
to the effect of bankruptcy, insolvency, reorganization, receivership,
moratorium and other similar laws affecting creditors’ rights) Lien on the
Mortgaged Properties described therein and proceeds thereof, and when the
Mortgages are filed in the appropriate recording offices, each such Mortgage
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in the Mortgaged Properties and the
proceeds

 

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thereof, as security for the Obligations (as defined in the relevant Mortgage),
in each case prior and superior in right to any other Person (except that the
security interest created in such real property and the Mortgaged Property may
be subject to Permitted Liens).

4.20 Solvency. On the Closing Date, the Loan Parties on a consolidated basis
are, and after giving effect to the Transactions and the incurrence of all
Indebtedness and obligations being incurred in connection therewith will be,
Solvent.

4.21 Regulation H. No Mortgage encumbers improved real property that is located
in an area that has been identified by the Secretary of Housing and Urban
Development as a “Special Flood Hazard Area” and in which flood insurance has
been made available under the National Flood Insurance Act of 1968, unless flood
insurance has been obtained to the extent required in order to satisfy all
applicable Requirements of Law in order for a Mortgage to be obtained thereon.

4.22 OFAC; USA PATRIOT ACT; FCPA.

(a) To the extent applicable, each of Holdings and its Restricted Subsidiaries
is in compliance, in all material respects, with (i) the Trading with the Enemy
Act, as amended, and each of the foreign assets control regulations of the
United States Treasury Department (31 CFR Subtitle B, Chapter V, as amended) and
any other enabling legislation or executive order relating thereto and (ii) the
USA PATRIOT Act.

(b) No part of the proceeds of the Loans will be used for any payments to any
governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper
advantage, in violation of the FCPA.

SECTION 5

CONDITIONS PRECEDENT

5.1 Conditions to Initial Extension of Credit. The effectiveness of this
Agreement and the agreement of each Lender to make the initial extension of
credit requested to be made by it is subject to the satisfaction or waiver,
prior to or concurrently with the making of such extension of credit on the
Closing Date, of the following conditions precedent:

(a) Credit Agreement; Security Documents. The Administrative Agent shall have
received (i) this Agreement executed and delivered by the Administrative Agent,
Holdings, the Borrower and each Lender, (ii) the Guarantee and Security
Agreement, executed and delivered by Holdings, the Borrower and each Subsidiary
Guarantor, and (iii) an Acknowledgement and Consent in the form attached to the
Guarantee and Security Agreement, executed and delivered by each Issuer (as
defined therein), if any, that is not a Loan Party.

(b) Refinancing. The Borrower shall have repaid in full all loans outstanding
under the Existing Credit Agreement and all accrued and unpaid interest, fees
and other amounts owing thereunder, the termination of all commitments to extend
credit thereunder and the release of all Liens securing obligations thereunder
(the “Refinancing”). As of the Closing Date, the Borrower shall have outstanding
no indebtedness for borrowed money other than (i) the Obligations, (ii) the
Senior Notes and (iii) other Indebtedness permitted hereunder.

 

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(c) Financial Statements. The Joint Bookrunners and the Lenders shall have
received the audited consolidated balance sheet and related statements of
income, stockholders’ equity and cash flows of the Borrower for the fiscal year
ended September 30, 2013, which financial statements shall be prepared in
accordance with GAAP.

(d) Pro Forma Financial Statements. The Joint Bookrunners and the Lenders shall
have received the Pro Forma Financial Statements.

(e) Ratings. The Facilities shall have received a rating from both Moody’s and
S&P.

(f) Lien Searches, Etc. The Administrative Agent shall have received the results
of a recent lien search in each of the jurisdictions where the Loan Parties are
organized or where assets of the Loan Parties are located, and such search shall
reveal no Liens on any of the assets of the Loan Parties except for
(x) Permitted Liens, (y) Liens that will be discharged on or prior to the
Closing Date pursuant to documentation reasonably satisfactory to the
Administrative Agent and (z) Liens with respect to any property listed on
Schedule 5.1(f), in which case the Borrower shall have one hundred and eighty
(180) days after the Closing Date to file such releases (subject to extensions
granted by the Agent from time to time in its reasonable discretion).

(g) Insurance. The Administrative Agent shall have received insurance
certificates satisfying the requirements of Section 5.2 of the Guarantee and
Security Agreement.

(h) Fees. The Lenders and the Administrative Agent shall have received all fees
required to be paid, and all expenses for which invoices have been presented
(including the reasonable fees and expenses of legal counsel), on or before the
Closing Date. All such amounts will be paid with proceeds of Loans made on the
Closing Date and will be reflected in the funding instructions given by the
Borrower to the Administrative Agent on or before the Closing Date.

(i) Evidence of Authority. The Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its counsel may
reasonably request relating to the organization, existence and good standing of
each Loan Party, the authorization of the Transactions and any other legal
matters relating to the Loan Parties, the Loan Documents or the Transactions,
all in form and substance reasonably satisfactory to the Administrative Agent
and its counsel.

(j) Legal Opinions. The Administrative Agent shall have received the following
executed legal opinions:

(i) the legal opinion of Kirkland & Ellis LLP, counsel to Holdings, the Borrower
and its Subsidiaries, substantially in the form of Exhibit D; and

(ii) the legal opinion of special counsel to Holdings, the Borrower and its
Subsidiaries in each of Minnesota and West Virginia.

(k) Pledged Stock; Stock Powers; Pledged Notes. The Administrative Agent shall
have received (i) the certificates representing the shares of Capital Stock
pledged pursuant to the Guarantee and Security Agreement, together with an
undated stock power for each such certificate executed in blank by a duly
authorized officer of the pledgor thereof and (ii) each promissory note (if any)
pledged to the Administrative Agent pursuant to the Guarantee and Security
Agreement endorsed (without recourse) in blank (or accompanied by an executed
transfer form in blank) by the pledgor thereof.

 

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(l) Filings, Registrations and Recordings. The Administrative Agent shall have
received each document (including any Uniform Commercial Code financing
statement) required by the Security Documents or under law or reasonably
requested by the Administrative Agent to be filed, registered or recorded in
order to create in favor of the Administrative Agent, for the benefit of the
Lenders, a perfected Lien on the Collateral described therein, prior and
superior in right to any other Person (other than with respect to Liens
expressly permitted by Section 7.3), and each such document shall be in proper
form for filing, registration or recordation; provided that no pledge shall be
required of more than 65% of the Capital Stock of a first-tier Foreign
Subsidiary or a first-tier Domestic Foreign Holding Company to the extent such
pledge is required pursuant to the Security Documents.

(m) Solvency Certificate. The Administrative Agent and the Lenders shall have
received a solvency certificate in the form attached hereto as Exhibit Q signed
by the chief financial officer of the Borrower dated as of the Closing Date with
respect to the Borrower and its consolidated Subsidiaries, taken as a whole,
certifying that the Borrower and its consolidated Subsidiaries, taken as a
whole, are Solvent as of the Closing Date, both before and immediately after
giving effect to the Transactions.

(n) Material Adverse Change. Since September 30, 2013, there shall not have
occurred any change, effect, occurrence or development that is materially
adverse to the business, assets, liabilities, financial condition, operations or
results of operations of the Borrower and its Subsidiaries, taken as a whole.
The Administrative Agent shall have received a certificate signed by a
Responsible Officer of the Borrower to the foregoing effect.

(o) Institutional L/C Collateral Account. The Borrower shall have established
the Institutional L/C Collateral Account, and the Borrower and the Issuing
Lender shall have entered into the Institutional L/C Collateral Account
Agreement.

5.2 Conditions to Each Extension of Credit. Subject to any exceptions granted
pursuant to any Lenders providing extensions of credit pursuant to Section 2.25,
the agreement of each Lender to make any extension of credit requested to be
made by it on any date (including its initial extension of credit) is subject to
the satisfaction or waiver of the following conditions precedent:

(a) Representations and Warranties. Each of the representations and warranties
made by any Loan Party in or pursuant to the Loan Documents shall be true and
correct in all material respects on and as of such date as if made on and as of
such date (other than representations and warranties which speak only as of a
certain date, which representations and warranties shall be made only on such
date).

(b) No Default. No Default or Event of Default shall have occurred and be
continuing on such date or after giving effect to the extensions of credit
requested to be made on such date.

(c) Notice. Other than with respect to Loans issued pursuant to Section 2.25,
the Administrative Agent and, if applicable, the applicable Issuing Lender,
shall have received a Borrowing Notice or a notice requesting the issuance of a
Letter of Credit (or the amendment, renewal or replacement thereof) in
accordance with the requirements of Section 2.2, Section 2.5, Section 2.7 or
Section 3.2, as applicable.

Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.

 

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SECTION 6

AFFIRMATIVE COVENANTS

Holdings and the Borrower hereby jointly and severally agree that, so long as
any of the Commitments remain in effect, any Letter of Credit remains
outstanding or any Loan or other amount is owing to any Lender or the
Administrative Agent hereunder (other than contingent indemnification
obligations), each of Holdings and the Borrower shall and shall cause each of
its Restricted Subsidiaries to:

6.1 Financial Statements. Furnish to the Administrative Agent (and the
Administrative Agent shall promptly furnish to the Lenders, by posting to
Intralinks or otherwise):

(a) within ninety (90) days after the end of each fiscal year of the Borrower
(commencing with the fiscal year ended September 30, 2014), a copy of the
audited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related audited consolidated
statements of income and of cash flows for such year, setting forth in each case
in comparative form the figures for the previous year, reported on without a
“going concern” or like qualification or exception (provided, that (i) a
qualification or exception may be included in any audit report to the extent
such qualification is made solely as a result of the maturity of any of the
Obligations or any other Indebtedness maturing within fifteen (15) months and
(ii) an exception or explanatory paragraph, but not a qualification, solely with
respect to, or resulting solely from, potential inability to satisfy the
covenant under Section 7.1 on a future date or in a future period), or
qualification arising out of the scope of the audit, by Deloitte & Touche, LLP
or other independent certified public accountants of nationally recognized
standing;

(b) not later than forty-five (45) days after the end of each of the first three
quarterly periods of each fiscal year of the Borrower, the unaudited
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at the end of such quarter and the related unaudited consolidated statements of
income and of cash flows for such quarter and the portion of the fiscal year
through the end of such quarter, setting forth in each case in comparative form
the figures for the same quarter in the previous year, certified by a
Responsible Officer as being fairly stated in all material respects (subject to
normal year-end audit adjustments and the absence of footnotes);

(c) [reserved]; and

(d) simultaneously with the delivery of each set of consolidated financial
statements referred to in Section 6.1(a) and Section 6.1(b) above, the related
consolidating financial statements reflecting the adjustments necessary to
eliminate the accounts of Unrestricted Subsidiaries (if any) (which may be in
footnote form only) from such consolidated financial statements.

All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP.
With regard to interim financial statements, such interim financial statements
will not include all of the information and footnotes required by GAAP for
complete financial statements. However, all adjustments (consisting of normal,
recurring accrual) considered necessary for a fair presentation will be included
therein.

Notwithstanding the foregoing, the obligations in paragraphs (a) and (b) of this
Section 6.1 may be satisfied with respect to financial information of the
Borrower and its consolidated Subsidiaries by furnishing the Borrower’s Form
10-K or 10-Q, as applicable, filed with the SEC; provided that such Form 10-K or
10-Q contains or is accompanied by the items required by such paragraphs.

 

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6.2 Certificates; Other Information. Furnish to the Administrative Agent (and
the Administrative Agent shall promptly furnish to the Lenders, by posting to
Intralinks or otherwise):

(a) If reasonably requested by the Administrative Agent, concurrently with the
delivery of the financial statements referred to in Section 6.1(a), a
certificate of the independent certified public accountants reporting on such
financial statements stating that in making the examination necessary therefor
no knowledge was obtained of any Default or Event of Default, except as
specified in such certificate (provided that such certificate shall not be
required if, after exercising commercially reasonable efforts to do so, Holdings
or the Borrower are unable to obtain such certificate);

(b) concurrently with the delivery of any financial statements pursuant to
Section 6.1(a) and (b), (i) a Compliance Certificate containing all information
and calculations required by the form of such certificate attached as Exhibit F,
including during any fiscal quarter during which the covenant contained in
Section 7.1 is in effect, those necessary for determining compliance by each
Group Member with the provisions of Section 7.1 (including detail with respect
to any calculation of Consolidated EBITDA) as of the last day of the fiscal
quarter or fiscal year of Holdings, as the case may be, and (ii) to the extent
not previously disclosed to the Administrative Agent, a description of any
change in the jurisdiction of organization of any Loan Party and a list of any
applications or registrations of Intellectual Property filed in the name of, or
acquired by, any Loan Party since the date of the most recent report delivered
pursuant to this clause (ii) (or, in the case of the first such report so
delivered, since the Closing Date);

(c) commencing with the fiscal year ended September 30, 2014, no later than
ninety (90) days after the end of each fiscal year of the Borrower and its
Restricted Subsidiaries, a consolidated budget for the following fiscal year
including a detailed projected consolidated balance sheet of the Borrower and
its consolidated Restricted Subsidiaries for the following fiscal year, the
related consolidated statements of projected cash flow and projected income and
a description of the underlying assumptions applicable thereto (collectively,
the “Projections”), it being understood and agreed that any financial or
business projections furnished by any Loan Party (i)(A) are subject to
significant uncertainties and contingencies, which may be beyond the control of
the Loan Parties, (B) no assurance is given by the Loan Parties that the results
or forecast in any such projections will be realized and (C) the actual results
may differ from the forecast results set forth in such projections and such
differences may be material and (ii) are not a guarantee of performance;

(d) no later than ten (10) Business Days after the effectiveness thereof, copies
of any final amendment, supplement, waiver or other modification with respect to
any Indebtedness, agreement or document referred to in Section 7.9;

(e) within five (5) Business Days after the same are sent, copies of all
financial statements and reports that Holdings or the Borrower sends to the
holders of any class of its debt securities (other than the Lenders) or public
equity securities and, within five (5) Business Days after the same are filed,
copies of all financial statements and reports that Holdings or the Borrower may
make to, or file with, the SEC;

(f) at or prior to the date that any prepayment is required to be made pursuant
to Section 2.11 (or any Reinvestment Notice is delivered thereunder), a
certificate of a Responsible Officer setting forth a reasonably detailed
calculation of the amount of such required prepayment (or the relevant
Reinvestment Deferred Amount, as applicable); and

(g) promptly, such additional financial and other information concerning a Group
Member as the Administrative Agent on behalf of any Lender may from time to time
reasonably request,

 

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provided that none of Holdings, the Borrower nor any Restricted Subsidiary will
be required to disclose or permit the inspection or discussion of, any document,
information or other matter (i) that constitutes trade secrets or proprietary
information, (ii) in respect of which disclosure to the Administrative Agent or
any Lender (or their representatives or contractors) is prohibited by law,
fiduciary duty or any binding agreement or (iii) that is subject to attorney
client or similar privilege or constitutes attorney work product.

All financial statements and other documents, reports, proxy statements or other
materials required to be delivered pursuant to Section 6.1 or this Section 6.2
may be delivered electronically and, if so delivered, shall be deemed to have
been delivered on the date (i) such financial statements and/or other documents
are posted on the SEC’s website on the Internet at www.sec.gov, (ii) on which
the Borrower posts such documents, or provide a link thereto, on the Borrower’s
website or (iii) on which such documents are posted on the Borrower’s behalf on
an Internet or Intranet website, if any, to which the Administrative Agent and
each Lender has access (whether a commercial third-party website or a website
sponsored by the Administrative Agent), provided that the Borrower shall notify
(which notification may be by facsimile or electronic transmission (including
Adobe pdf copy)) the Administrative Agent of the posting of any such documents
on any website. Each Lender shall be solely responsible for timely accessing
posted documents or requesting delivery of paper copies of such documents from
the Administrative Agent and maintaining its copies of such documents. In the
event that the date for any delivery required hereby or any other Loan Document
is not a Business Day, then the date for such delivery shall be deemed to fall
on the next Business Day.

6.3 Payment of Taxes. Pay, discharge or otherwise satisfy at or before maturity
or before they become delinquent, as the case may be, all its tax obligations of
whatever nature (including any interest, additions to tax or penalties
applicable thereto), except where (i) the amount or validity thereof is being
contested in good faith by appropriate proceedings and reserves in conformity
with GAAP with respect thereto have been provided on the books of the relevant
Group Member or (ii) the failure to pay would not reasonably be expected to,
individually or in the aggregate, result in a Material Adverse Effect.

6.4 Maintenance of Existence; Compliance. (a)(i) Preserve, renew and keep in
full force and effect its organizational existence and (ii) take all reasonable
action to maintain all rights, privileges and franchises necessary or desirable
in the normal conduct of its business, except, in each case, as otherwise
permitted by Section 7.4 and except (other than in respect of clause (i) above
with respect to any Loan Party), to the extent that failure to do so would not
reasonably be expected to have a Material Adverse Effect; and (b) comply with
all Requirements of Law except to the extent that failure to comply therewith
would not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.

6.5 Maintenance of Property; Insurance. (a) Keep all material property useful
and necessary in its business in good working order and condition, ordinary wear
and tear and damage by casualty excepted and except where the failure to do so
would not reasonably be expected to result in a Material Adverse Effect,
(b) maintain with financially sound and reputable insurance companies insurance
(or pursuant to self-insurance to the extent commercially reasonable) in at
least such amounts and against at least such risks as are determinate in the
reasonable good faith judgment of a Responsible Officer of the Borrower to be
prudent; and (c) provide that each casualty or property insurance policy or
general liability policy maintained or required to be maintained by any Loan
Party shall (i) name the Administrative Agent, on behalf of the Lenders, as loss
payee pursuant to a so-called “standard mortgagee clause” or “Lender’s loss
payable endorsement”, with respect to property coverage of such Loan Party, and
shall name the Administrative Agent on behalf of the Lenders as an additional
insured, with respect to general liability coverage, (ii) provide that no action
of any Loan Party or any Subsidiary or any other Person shall void any such
policy as to the Administrative Agent or the Lenders, (iii) use commercially
reasonable efforts to see that such certificates provide that the insurers shall
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Agent of any proposed cancellation in accordance with the policy provisions and
that the Administrative Agent or the Lenders will have the opportunity to
correct any deficiencies justifying such proposed cancellation and (iv) cause
any Insurance Subsidiary to (A) conduct its insurance business in compliance
with all applicable insurance laws, rules, regulations and orders and using
sound actuarial principles and (B) maintain usual and customary stop-loss
coverage and excess coverage reinsurance for individual claims. The insurance
premiums and other expenses charged by any Insurance Subsidiary to the Borrower
and its Subsidiaries shall be reasonable and customary. The Borrower will
provide the Administrative Agent (A) copies of any outside actuarial reports
prepared with respect to any projection, valuation or appraisal of any Insurance
Subsidiary promptly after receipt thereof and (B) once each year promptly after
receipt thereof, an actuarial opinion with respect to any Insurance Subsidiary
from a recognized actuarial firm reasonably satisfactory to the Administrative
Agent; and (e) if any portion of any Mortgaged Property is located in an area
identified by the Federal Emergency Management Agency (or any successor agency)
as a Special Flood Hazard Area with respect to which flood insurance has been
made available under the National Flood Insurance Act of 1968 (as now or
hereafter in effect or any successor act thereto), either (x) cause the
applicable Mortgage to be released in accordance with Section 9.11 hereof or
(y) (A) maintain, or cause to be maintained, with a financially sound and
reputable insurer, flood insurance in an amount and otherwise sufficient to
comply with all applicable rules and regulations promulgated pursuant to the
Flood Insurance Laws and (B) deliver to the Administrative Agent evidence of
such compliance in form and substance reasonably acceptable to the
Administrative Agent.

6.6 Inspection of Property; Books and Records; Discussions. (a) Keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP in all material respects shall be made of all material
dealings and transactions in relation to its business and activities, and
(b) permit representatives of the Administrative Agent to visit and inspect any
of its properties and examine and make abstracts from any of its books and
records (other than materials protected by the attorney-client privilege and
materials which such person may not disclose without violation of a
confidentiality obligation binding upon it) at any reasonable time during normal
business hours (and upon reasonable notice unless an Event of Default exists)
and as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of the Group Members
with officers and employees of the Group Members and with their independent
certified public accountants (provided the Borrower is given an opportunity to
be present at such meetings); provided, that so long as no Event of Default is
continuing, the Borrower shall not be required to pay or reimburse the expenses
(to the extent otherwise required to do so hereunder) of the Administrative
Agent of more than one such visit and inspection during any fiscal year.
Notwithstanding anything to the contrary in this Section 6.6, neither the
Borrower nor any Restricted Subsidiary will be required to disclose or permit
the inspection or discussion of, any document, information or other matter
(i) that constitutes trade secrets or proprietary information, (ii) in respect
of which disclosure to the Administrative Agent or any Lender (or their
representatives or contractors) is prohibited by law, fiduciary duty or any
binding agreement or (iii) that is subject to attorney client or similar
privilege or constitutes attorney work product.

6.7 Notices. Promptly after knowledge thereof, give notice to the Administrative
Agent and the Administrative Agent shall furnish to the Lenders by posting to
Intralinks or otherwise of:

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

(b) any litigation, investigation or proceeding affecting any Group Member that
could reasonably be expected to result in a Material Adverse Effect;

(c) the following events, as soon as possible and in any event within thirty
(30) days after any Responsible Officer of the Borrower knows or has reason to
know thereof if such event or events could reasonably be expected to result in a
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Event with respect to any Plan, a failure to make any required contribution to a
Single Employer or Multiemployer Plan, the creation of any Lien in favor of the
PBGC or a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or
the taking of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the withdrawal from,
or the termination, Reorganization or Insolvency of, any Single Employer or
Multiemployer Plan; and

(d) any development or event that has had or would reasonably be expected to
have a Material Adverse Effect.

Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the relevant Group Member proposes to take with
respect thereto.

6.8 Environmental Laws.

(a) Comply in all material respects with, and ensure compliance in all material
respects by all tenants and subtenants, if any, at the Properties with, all
applicable Environmental Laws, and obtain and comply in all material respects
with and maintain, and ensure that all tenants and subtenants obtain and comply
in all material respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws, except in each case, to the extent that any such failure to do so would
not reasonably be expected to have a Material Adverse Effect. This clause
(a) shall be deemed not breached by a noncompliance with the foregoing if, upon
learning of such noncompliance, any affected Group Member promptly undertakes
reasonable efforts to eliminate such noncompliance, and such noncompliance and
the elimination thereof, in the aggregate with any other noncompliance with any
of the foregoing and the elimination thereof, could not reasonably be expected
to have a Material Adverse Effect.

(b) Conduct and complete all material investigations, studies, sampling and
testing, and all material remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws, except in each case, to the extent that any such failure to do so would
not reasonably be expected to have a Material Adverse Effect. This clause
(b) shall be deemed not breached by a failure to comply with such an order or
directive if any affected Group Member timely challenges in good faith such
order or directive in a manner consistent with all applicable Environmental Laws
and pursues such challenge diligently, and the pendency and pursuit of such
challenge, in the aggregate with the pendency and pursuit of any other such
challenges, could not reasonably be expected to have a Material Adverse Effect.

6.9 Additional Collateral, Etc.

(a) With respect to any personal property or Intellectual Property acquired
after the Closing Date by any Loan Party (other than any property located
outside of the U.S., any motor vehicles, leasehold interests, or any tangible
personal property evidenced by a title certificate or any other property
expressly excluded by the Security Documents) that constitutes “Collateral”
under the Guarantee and Security Agreement as to which the Administrative Agent,
for the benefit of the Lenders, does not have a perfected Lien, except as
otherwise provided for in this Section 6.9 or in the Guarantee and Security
Agreement such Loan Party shall, except as otherwise provided in the Guarantee
and Security Agreement and in any event subject to the limitations set forth
therein, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Security Agreement or such other documents as
the Administrative Agent reasonably deems necessary under U.S. law to grant to
the Administrative

 

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Agent, for the benefit of the Lenders, a security interest in such property,
subject to Liens permitted under Section 7.3, and (ii) take all actions as the
Administrative Agent reasonably deems necessary under U.S. law to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first priority
security interest in such property, including the filing of Uniform Commercial
Code financing statements in such jurisdictions as may be reasonably required by
the Guarantee and Security Agreement or by law or as may be reasonably requested
by the Administrative Agent, other than foreign collateral documents.

(b) With respect to any fee interest in any real property having a fair market
value as of the date of acquisition thereof (together with improvements thereof)
of at least $1,000,000 acquired after the Closing Date by any Loan Party (other
than any such real property subject or to be subject to a Lien permitted by
Section 7.3 or would result in a violation of Regulation H), within ninety
(90) days after such acquisition (or such longer period as agreed by the
Administrative Agent), execute and deliver (x) other than with respect to any
such real property for which the Flood Determination required pursuant to this
paragraph indicates that such real property is located in a Special Flood Hazard
Area, a first priority mortgage or deed of trust in a form substantially similar
to the Mortgages and reasonably satisfactory to the Administrative Agent, in
favor of the Administrative Agent, for the benefit of the Lenders, covering such
real property and recorded by a nationally recognized title insurance company,
(y) a completed Federal Emergency Management Agency life-of-loan Standard Flood
Hazard Determination (a “Flood Determination”) with respect to each such
property and (z) a title search dated contemporaneous with the delivery of such
Mortgage conducted by a title insurance company which reflects that such
Mortgaged Property is owned in fee by the Loan Party identified as the
mortgagor, trustor or grantor in the applicable Mortgage, free and clear of all
Liens other than Permitted Liens.

(c) With respect to any new Subsidiary (other than an Excluded Subsidiary)
created or acquired after the Closing Date by any Loan Party or any Subsidiary
of a Loan Party ceases to be an Unrestricted Subsidiary, promptly (i) execute
and deliver to the Administrative Agent such amendments to the Guarantee and
Security Agreement as the Administrative Agent reasonably deems necessary to
grant to the Administrative Agent, for the benefit of the Lenders, a perfected
first priority security interest under U.S. law subject to Liens permitted
pursuant to Section 7.3 in the Capital Stock of such new Restricted Subsidiary
that is directly owned by any Loan Party (provided, such security interest shall
be limited (A) in the case of a Foreign Subsidiary or a first-tier Domestic
Foreign Holding Company, to 65% of such Capital Stock in such Subsidiary, (B) in
the case of any Subsidiary of a Foreign Subsidiary or a Domestic Foreign Holding
Company, to 0% of such Capital Stock in such Subsidiary, (C) in the case of any
Insurance Subsidiary, to the lesser of the amount of such Insurance Subsidiary’s
Capital Stock which can be pledged pursuant to the applicable law governing such
Insurance Subsidiary or if such Insurance Subsidiary is a Foreign Subsidiary,
the amount which is required to be otherwise pledged hereunder and (D) in the
case of any Non-Profit Entity formed after the Closing Date, to the amount of
such entity’s Capital Stock that can be pledged pursuant to the applicable law
or regulations governing such entity), (ii) deliver to the Administrative Agent
the certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
relevant Loan Party, (iii) cause such new Subsidiary (unless such Subsidiary is
an Excluded Subsidiary) (A) to become a party to the Guarantee and Security
Agreement, (B) subject to the provisions and limitations set forth in the
Guarantee and Security Agreement, to take such actions as the Administrative
Agent reasonably deems necessary to grant to the Administrative Agent for the
benefit of the Lenders a perfected first priority security interest under U.S.
law subject to the Liens permitted under Section 7.3 in the Collateral described
in the Guarantee and Security Agreement with respect to such new Subsidiary,
including the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Security Agreement or by
law or as may be reasonably requested by the Administrative Agent (other than
foreign Collateral documents) and (C) to deliver to the Administrative Agent a
certificate of such Subsidiary, substantially in the form of Exhibit C or in
such other form as may be acceptable to the Administrative Agent, with
appropriate insertions and attachments, and (iv) if reasonably requested by the

 

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Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance consistent with those delivered on the Closing Date or otherwise, and
from counsel, reasonably satisfactory to the Administrative Agent; provided that
(1) Holdings and the Borrower shall not be required to take, or cause any
Subsidiary to take, the actions required by this paragraph (c) with respect to
any such new Subsidiary prior to the delivery of financial statements delivered
pursuant to Section 6.1(a) or (b) for the fiscal quarter of the Borrower during
which such new Subsidiary was created or acquired unless (x) the aggregate
amount of Investments made by the Group Members in all such new Subsidiaries
exceeds $20,000,000 prior to the end of such fiscal quarter or (y) a Default has
occurred and is continuing and (2) Holdings and the Borrower shall not be
required to provide the legal opinions required by this paragraph (c) if the
applicable new Subsidiary (on a consolidated basis), together with all other new
Subsidiaries acquired or created in the same transaction or series of related
transactions accounts for less than 2.5% of the assets, revenues or Consolidated
EBITDA of the Borrower, in each case on a Pro Forma Basis as of the end of and
for the four fiscal quarters most recently ended for which financial statements
have been delivered under Section 6.1(a) or (b), as though such Subsidiary had
become a Subsidiary at the beginning of such period.

(d) If, at any time, (x) (i) a Restricted Subsidiary is designated as an
Unrestricted Subsidiary or an Immaterial Subsidiary in accordance with this
Agreement or otherwise meets the criteria of an Excluded Subsidiary or (ii) an
Electing Guarantor has been re-designated (at the option, and in the sole
discretion, of the Borrower in accordance with Section 6.10(b) as an Excluded
Subsidiary, the Administrative Agent shall release such Subsidiary from any
Subsidiary Guaranty and all Security Documents to which it may be a party and to
the extent Capital Stock held by such Restricted Subsidiary was pledged (or
otherwise secured) as Collateral, such pledge (or other security) shall be
released and, upon the request of any Loan Party, any certificates in respect
thereof shall be promptly returned to the applicable Loan Party or (y) adverse
tax consequences could (in the good faith determination of the Borrower in
consultation with the Administrative Agent) result (i) from any Security
Document executed and delivered by any Subsidiary of the Borrower that is a
Foreign Subsidiary or any Domestic Foreign Holding Company, the Administrative
Agent shall release such Restricted Subsidiary from any such Security Document,
or (ii) from any Lien granted under any Loan Document in respect of the Capital
Stock in any Foreign Subsidiary or Domestic Foreign Holding Company, such Lien
shall be released. Notwithstanding the foregoing, in no event shall Capital
Stock of any Unrestricted Subsidiary or any of such Unrestricted Subsidiary’s
assets constitute Collateral, and the Administrative Agent shall take all
actions required hereunder and under the other Loan Documents to effect the
foregoing in accordance with the terms of the Loan Documents.

(e) Notwithstanding anything in this Agreement or any Security Document to the
contrary: (i) the Administrative Agent shall not take, and the Loan Parties
shall not be required to grant, a security interest in any Excluded Property;
(ii) any security interest required to be granted or any action required to be
taken, including to perfect such security interest, shall be subject to the same
exceptions and limitations as those set forth in the applicable Security
Documents; (iii) no Loan Party shall be required, nor shall the Administrative
Agent be authorized to perfect any pledges, charges, assignments, security
interests and mortgages in any Collateral by any means other than (A) filings
pursuant to the Uniform Commercial Code in the office of the secretary of state
(or similar central filing office) of the relevant State(s) and filings in the
applicable real estate records with respect to mortgaged properties or any
fixtures relating to the Mortgages, (B) filings in United States government
offices with respect to Intellectual Property as expressly required by the Loan
Documents, (C) delivery to the Administrative Agent to be held in its possession
of all Collateral consisting of intercompany notes in an amount individually in
excess of $5,000,000, stock certificates of the Borrower and its Restricted
Subsidiaries and other Instruments issued to any Loan Party in an amount
individually in excess of $5,000,000, or (D) mortgages in respect of the
Mortgages; (iv) no Loan Party or any Domestic Restricted Subsidiary shall be
required to take any action outside the United States to perfect any security
interest in the Collateral (including the

 

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execution of any agreement, document or other instrument governed by the law of
any jurisdiction other than the United States of America, any State thereof or
the District of Columbia); (v) no Loan Party shall have any obligation under any
Loan Document to enter into any landlord, bailee or warehousemen waiver,
estoppel or consent or any other document of similar effect; and (vi) in no
event shall any Loan Party be required to take any action to perfect the
security interest granted under the Security Documents in Collateral consisting
of (A) cash or Cash Equivalents, (B) entering into any deposit account control
agreement or securities account control agreement with respect to any deposit
account or securities account (including securities entitlements and related
assets credited thereto) or (C) other assets requiring perfection through the
implementation of control agreements or perfection by “control” (other (i) than
possession by the Administrative Agent to the extent expressly required under
the Security Documents and (ii) with respect to the Institutional L/C Collateral
Account in favor of the Institutional L/C Issuer) in each case under this clause
(vi), except, in each case, to the extent such perfection may be achieved by the
filing of a Uniform Commercial Code financing statement.

(f) The Administrative Agent shall not obtain or perfect a security interest in
any assets of any Loan Party as to which the Administrative Agent shall
determine, in its reasonable discretion, that the cost of obtaining or
perfecting such security interest is excessive in relation to the benefit to the
Lenders of the security afforded thereby (such comparison to be determined in a
manner consistent with any such determination made in connection with the
Closing Date) or would otherwise violate applicable law.

(g) Notwithstanding anything in this Agreement or any Security Document to the
contrary, the Administrative Agent may, in its sole discretion, grant extensions
of time for the satisfaction of any of the requirements under Section 6.9 in
respect of any particular Collateral or any particular Subsidiary if it
determines that the satisfaction thereof with respect to such Collateral or such
Subsidiary cannot be accomplished without undue expense or unreasonable effort
or due to factors beyond the control of Holdings and the Restricted Subsidiaries
by the time or times at which it would otherwise be required to be satisfied
under this Agreement or any Security Document.

6.10 Initial Mortgages. Deliver to the Administrative Agent on or before the
date which is one hundred and eighty (180) days after the Closing Date (which
period may be extended by the Administrative Agent from time to time in its
reasonable discretion), (i) a Mortgage in favor of (consistent with the Security
Documents and otherwise reasonably satisfactory in form and substance to) the
Administrative Agent in respect of each of the Initial Mortgaged Properties,
executed by the record owner of such Initial Mortgaged Property and recorded by
a nationally recognized title insurance company, (ii) with respect to each
Initial Mortgaged Property, a Flood Determination indicating that such Initial
Mortgaged Property is not located in a Special Flood Hazard Area and (iii) with
respect to each owned real property listed on Schedule 4.8 which is not
identified as an Initial Mortgaged Property solely by virtue of its being
located in a Special Flood Hazard Area, a Flood Determination indicating that
such Initial Mortgaged Property (or a portion thereof) is located in a Special
Flood Hazard Area

6.11 Designation of Subsidiaries.

(a) The Borrower may designate (or re-designate) any Restricted Subsidiary
(other than the Borrower) as an Unrestricted Subsidiary or any Unrestricted
Subsidiary as a Restricted Subsidiary; provided that immediately before and
after such designation, no Event of Default shall have occurred and be
continuing. The designation of any Subsidiary as an Unrestricted Subsidiary
after the Closing Date in accordance with this Section 6.10 shall constitute an
Investment by the Borrower or the relevant Restricted Subsidiary, as applicable,
therein at the date of designation in an amount equal to the fair market value
(as determined in good faith by the relevant Borrower) of the Investments held
by the Borrower and/or the applicable Restricted Subsidiaries in such
Unrestricted Subsidiary immediately prior to such

 

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designation. Upon any such designation (but without duplication of any amount
reducing such Investment in such Unrestricted Subsidiary pursuant to the
definition of “Investment”), the Borrower and/or the applicable Restricted
Subsidiaries shall receive a credit against the applicable clause in Section 7.8
that was utilized for the Investment in such Unrestricted Subsidiary for all
Returns in respect of such Investment. The designation of any Unrestricted
Subsidiary as a Restricted Subsidiary in accordance with this Section 6.10 shall
constitute the incurrence by such Restricted Subsidiary at the time of
designation of any Indebtedness or Liens of such Restricted Subsidiary
outstanding at such time (to the extent assumed).

(b) The Borrower may designate (or re-designate) any Restricted Subsidiary that
is an Excluded Subsidiary as an Electing Guarantor. The Borrower may designate
(or re-designate) any Electing Guarantor as an Excluded Subsidiary; provided
that (i) after giving effect to such release, such Restricted Subsidiary shall
not be a guarantor of the Senior Notes, any Credit Agreement Refinancing
Indebtedness, any Additional Term Notes, any Unrestricted Additional Term Notes
or any Additional Debt, (ii) such redesignation shall constitute an Investment
by the Borrower or the relevant Restricted Subsidiary, as applicable, therein at
the date of designation in an amount equal to the to the fair market value (as
determined in good faith by the Borrower) of the Investments held by the
Borrower and/or the applicable Restricted Subsidiaries in such Electing
Guarantor immediately prior to such re-designation and such Investments shall
otherwise be permitted hereunder and (iii) any Indebtedness or Liens of such
Restricted Subsidiary (after giving effect to such release) shall be deemed to
be incurred at the time of such release by such Electing Guarantor and such
incurrence shall otherwise be permitted hereunder.

SECTION 7

NEGATIVE COVENANTS

Holdings and the Borrower hereby jointly and severally agree that, so long as
any of the Commitments remain in effect, any Letter of Credit remains
outstanding or any Loan or other amount is owing to any Lender or the
Administrative Agent (other than contingent indemnity obligations surviving
after the termination of this Agreement) hereunder, each of Holdings and the
Borrower shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly:

7.1 Financial Condition Covenant. With respect to the Revolving Facility only,
except with the consent of the Majority Facility Lenders in respect of the
Revolving Facility, permit the Consolidated First Lien Leverage Ratio calculated
as at the last day of any fiscal quarter of the Borrower for which financial
statements of the Borrower were required to have been delivered to the
Administrative Agent pursuant to Section 6.1 (commencing with the second full
fiscal quarter after the Closing Date) ending during any period set forth below
to exceed the ratio set forth below opposite such fiscal period during which
such last day occurs:

 

Fiscal Quarter Ending    Consolidated
First Lien Leverage Ratio June 30, 2014 - December 31, 2016    5.50 to 1.00
March 31, 2017 and thereafter    5.00 to 1.00

Notwithstanding the foregoing, this Section 7.1 shall be in effect (and shall
only be in effect) when the sum of the aggregate principal amount of Revolving
Loans, Revolving L/C Disbursements and outstanding Letters of Credit as of the
last day of the most recent fiscal quarter of the Borrower for which financial
statements were required to have been furnished to the Administrative Agent
pursuant to Section 6.1, is greater than 30% of the Revolving Commitments.

 

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7.2 Indebtedness. Create, issue, incur, assume, or become liable in respect of
any Indebtedness, except:

(a) Indebtedness of any Loan Party pursuant to any Loan Document;

(b) Indebtedness of (i) the Borrower to any Restricted Subsidiary and of any
Subsidiary Guarantor to the Borrower or any other Restricted Subsidiary and
(ii) of any Subsidiary that is not a Guarantor to (x) the Borrower or any
Subsidiary Guarantor to the extent not in violation of Section 7.8 or (y) any
other Subsidiary that is not a Guarantor; provided that any such Indebtedness of
a Loan Party shall be subordinated to the Obligations (other than the Specified
Swap Agreements and Cash Management Obligations) on terms reasonably
satisfactory to the Administrative Agent;

(c) Guarantee Obligations incurred in the ordinary course of business by
Holdings or any of the Restricted Subsidiaries of Indebtedness and other
obligations of any Subsidiary Guarantor;

(d) Indebtedness outstanding on the Closing Date and listed on Schedule 7.2(d)
and any Permitted Refinancing in respect of any such Indebtedness;

(e) Indebtedness (including, without limitation, Capital Lease Obligations,
including those incurred pursuant to Sale Leaseback Transactions) secured by
Liens permitted by Section 7.3(g) (or Section 7.3(w), in the case of a Sale
Leaseback Transaction), and any Permitted Refinancing in respect of such
Indebtedness, in an aggregate principal amount not to exceed the greater of
(x) $25,000,000 and (y) 2.0% of Total Assets at any one time outstanding;

(f) (i) Indebtedness of the Borrower in respect of the Senior Notes in an
aggregate principal amount not to exceed $250,000,000 and (ii) any Permitted
Refinancing and/or Permitted First Priority Refinancing Debt or Permitted Second
Priority Refinancing Debt in respect of any such Indebtedness and, in each case,
Guarantee Obligations of Holdings and any Subsidiary Guarantor in respect of
such Indebtedness; provided, that immediately after giving effect to the
incurrence of any Permitted First Priority Refinancing Debt on a Pro Forma
Basis, the Consolidated First Lien Leverage Ratio shall not be greater than 4.50
to 1.00 as of the Applicable Date of Determination;

(g) (a) Indebtedness of (1) any Person acquired or assumed in connection with an
Acquisition or permitted Investment or any assets acquired in connection
therewith and (2) any Unrestricted Subsidiary that is redesignated as a
Restricted Subsidiary (it being acknowledged that (x) a Person that becomes a
direct or indirect Restricted Subsidiary of the Borrower as a result of an
Acquisition or permitted Investment may remain liable with respect to
Indebtedness existing on the date of such acquisition and (y) an Unrestricted
Subsidiary that is redesignated as a Restricted Subsidiary may remain liable
with respect to Indebtedness existing on the date of such redesignation);
provided that (A) such Indebtedness is not created in anticipation of such
acquisition or redesignation and (B) the aggregate principal amount of such
Indebtedness incurred under this clause (g) does not exceed (I) the greater of
(x) $50,000,000 at any time outstanding (minus any amounts used pursuant to
Section 7.2(hh) and (y) 5% of Total Assets plus (II) unlimited additional
Indebtedness if, for purposes of this clause (II), immediately after giving
effect to such Acquisition, permitted Investment or redesignation, as the case
may be, and the assumption of such Indebtedness, the Consolidated Leverage Ratio
computed on a Pro Forma Basis as of the Applicable Date of Determination is
either (x) not greater than 6.50 to 1.00 or (y) not greater than such
Consolidated Leverage Ratio immediately prior to the consummation of such
Acquisition, permitted Investment or redesignation and the assumption of such
Indebtedness; and (b) any Permitted Refinancing thereof;

 

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(h) any other Indebtedness of the Borrower or any of its Restricted Subsidiaries
in an aggregate amount not exceeding the greater of $50,000,000 and 5% of Total
Assets at any one time outstanding; provided, however, in no event shall any
Indebtedness of Restricted Subsidiaries which are not Guarantors exceed
$50,000,000;

(i) Indebtedness of Holdings to the Borrower to the extent the related advance
would be permitted to be made as a Restricted Payment hereunder (it being
understood that any such advance shall be deemed to be and shall count as a
Restricted Payment for purposes of Section 7.6);

(j) obligations in respect of letters of credit issued in the ordinary course of
business and of performance, surety, statutory or appeal bonds or with respect
to worker’s compensation claims or other bonds permitted under Section 7.3;

(k) Indebtedness incurred in the ordinary course of business in respect of
netting services, overdraft protections and otherwise in connection with deposit
accounts;

(l) Indebtedness of any Loan Party (other than Holdings) consisting of
promissory notes or similar obligations issued by such Loan Party relating to
licenses to be acquired in connection with a Permitted Acquisition that cannot
be transferred to such Loan Party prior to or concurrently with the consummation
of such Permitted Acquisition not exceeding $50,000,000 at any one time
outstanding;

(m) Indebtedness consisting of promissory notes issued by the Borrower to
officers, directors and employees of Holdings, the Borrower or any Restricted
Subsidiary of the Borrower to purchase or redeem Capital Stock of Holdings or
any of its direct or indirect parent companies to the extent permitted
hereunder;

(n) Indebtedness under Swap Agreements permitted pursuant to Section 7.7 and
Cash Management Obligations;

(o) Indebtedness of the Borrower that may be deemed to exist under any
acquisition agreement pertaining to acquisitions consummated prior to the
Closing Date;

(p) Indebtedness that is outstanding on the Closing Date but that is repaid on
the Closing Date pursuant to the Refinancing;

(q) Indebtedness consisting of Sale Leaseback Transactions permitted by
Section 7.11;

(r) Subordinated Indebtedness incurred pursuant to Section 10.6(b);

(s) Indebtedness representing deferred compensation or similar arrangements to
employees of the Borrower and its Restricted Subsidiaries incurred in the
ordinary course of business;

(t) Indebtedness of the Borrower or a Subsidiary Guarantor supported by a Letter
of Credit; provided, however, that (i) the aggregate principal amount of any
such Indebtedness does not at any time exceed the amount available to be drawn
under such Letter of Credit, and (ii) such Indebtedness matures at least five
(5) Business Days prior to the scheduled expiry date of such Letter of Credit;

(u) Indebtedness of Holdings and the Borrower or any Subsidiary Guarantor under
the Mortgage Facility and any Permitted Refinancing in respect of any such
Indebtedness; provided that the aggregate amount of Indebtedness outstanding and
incurred pursuant to this clause (v) does not at any one time exceed $6,000,000;

 

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(v) Indebtedness consisting of (i) Earnout Obligations and (ii) other
obligations of Holdings, the Borrower or its Restricted Subsidiaries under
deferred compensation or other similar arrangements incurred by such Person in
connection with the Transaction and Permitted Acquisitions or any other
Investment expressly permitted hereunder;

(w) Indebtedness of Excluded Subsidiaries that are Restricted Subsidiaries or
Restricted Subsidiaries thereof to finance working capital and general corporate
purposes not exceeding the greater of (x) $25,000,000 and (y) 2.0% of Total
Assets at any one time outstanding;

(x) accretion or amortization of original issue discount and accretion of
interest paid in kind, in each case in respect of Indebtedness otherwise
permitted by this Section 7.2;

(y) Indebtedness owed to any Person providing property, casualty, business
interruption or liability insurance to Holdings, the Borrower or any of their
Restricted Subsidiaries, provided that such Indebtedness is incurred to finance
insurance premiums in respect of such insurance;

(z) Permitted Seller Debt and any Permitted Refinancing in respect thereof in an
aggregate principal amount not exceeding the greater of (i) $25,000,000 and
(ii) 2.0% of Total Assets at any one time outstanding;

(aa) Indebtedness incurred by Holdings, Borrower or any of their Restricted
Subsidiaries arising from agreements providing for indemnification, adjustment
of purchase price or similar obligations, or from guaranties or letters of
credit, surety bonds or performance bonds securing the performance of the
Borrower or any such Restricted Subsidiary pursuant to such agreements, in
connection with Permitted Acquisitions, other permitted Investments or permitted
dispositions of any business, assets or Subsidiary of the Borrower or any of
their Restricted Subsidiaries;

(bb) guaranties by Holdings, the Borrower or any Restricted Subsidiary of
Indebtedness of the Borrower or any other Subsidiary of Holdings otherwise
permitted to be incurred pursuant to this Section 7.2; provided that guarantees
by any Loan Party of Indebtedness of any Foreign Subsidiary are permitted under
Section 7.8;

(cc) any Incremental Equivalent Debt;

(dd) Credit Agreement Refinancing Indebtedness and any Permitted Refinancing
thereof;

(ee) Indebtedness incurred by the Borrower or any Subsidiary Guarantor in an
amount equal to 100% of the Net Cash Proceeds received by Holdings since
immediately after the Closing Date from the issuance or sale of Permitted
Capital Stock of Holdings plus cash contributed to the capital of Holdings (in
each case, other than (i) proceeds of sales of Capital Stock to Holdings or any
of its Subsidiaries or (ii) any Cure Amount) to the extent such Net Cash
Proceeds or cash have been contributed to the Borrower;

(ff) to the extent constituting Indebtedness, Guarantees in the ordinary course
of business of the obligations of suppliers, customers, franchisees and
licensees of the Borrower and its Restricted Subsidiaries;

 

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(gg) performance Guarantees of the Borrower and its Restricted Subsidiaries
primarily guaranteeing performance of Contractual Obligations of the Borrower or
Restricted Subsidiaries to a third party and not primarily for the purpose of
guaranteeing payment of Indebtedness;

(hh) obligations in respect of letters of support, guarantees or similar
obligations issued, made or incurred for the benefit of any Subsidiary of the
Borrower to the extent required by law or in connection with any statutory
filing or the delivery of audit opinions performed in jurisdictions other than
within the United States;

(ii) Additional Term Notes, Unrestricted Additional Term Notes and Refinancing
Notes and (b) any Permitted Refinancings of any of the foregoing; and

(jj) (a) Additional Debt of the Borrower or any Guarantor in an aggregate amount
not to exceed (1) the greater of $50,000,000 and (y) 5% of Total Assets
outstanding at any time (minus any amounts used pursuant to
Section 7.2(g)(B)(I)) plus (2) unlimited Additional Debt if, for purposes of
this clause (2) immediately before and after giving effect to each such
incurrence and the application of the proceeds therefrom, (A) no Event of
Default has occurred and is continuing or would result therefrom, subject to
customary “SunGard” provisions and (B) the Consolidated Leverage Ratio computed
on a Pro Forma Basis as of the Applicable Date of Determination shall not be
greater than 6.50 to 1.00; provided that if such Additional Debt is incurred in
connection with a Permitted Acquisition, an Acquisition or a permitted
Investment, (x) such Consolidated Leverage Ratio shall not be greater than 6.50
to 1.00 or (y) such Consolidated Leverage Ratio shall not be greater than the
Consolidated Leverage Ratio immediately prior to the consummation of such
Permitted Acquisition, Acquisition or permitted Investment and the incurrence of
such Indebtedness.

For purposes of determining compliance with this Section 7.2, in the event that
an item of Indebtedness (or any portion thereof) at any time meets the criteria
of more than one of the categories described above in this Section 7.2 or is
entitled to be incurred pursuant to this Section 7.2, the Borrower, in its sole
discretion, may classify or reclassify (or later divide, classify or reclassify)
such item of Indebtedness (or any portion thereof) and shall only be required to
include the amount and type of such Indebtedness in one of the above clauses.
Accrual of interest or dividends, the accretion of accreted value, the accretion
or amortization of original issue discount and the payment of interest, premium,
fees or expenses, in the form of additional Indebtedness or preferred stock
shall not be deemed to be an incurrence of Indebtedness for purposes of this
Section 7.2.

For purposes of determining compliance with any restriction on the incurrence of
Indebtedness, the principal amount of Indebtedness denominated in a foreign
currency shall be calculated based on the relevant currency exchange rate in
effect on the date such Indebtedness was incurred, in the case of term debt, or
first committed, in the case of revolving credit debt; provided that if such
Indebtedness is incurred to extend, replace, refund, refinance, renew or defease
other Indebtedness denominated in a foreign currency, and such extension,
replacement, refunding, refinancing, renewal or defeasance would cause the
applicable restriction to be exceeded if calculated at the relevant currency
exchange rate in effect on the date of such extension, replacement, refunding,
refinancing, renewal or defeasance, such restriction shall be deemed not to have
been exceeded so long as the principal amount of such refinancing Indebtedness
does not exceed the principal amount of such Indebtedness being extended,
replaced, refunded, refinanced, renewed or defeased, plus the amount of any
premium paid, and fees and expenses incurred, in connection with such extension,
replacement, refunding refinancing, renewal or defeasance (including any fees
and original issue discount incurred in respect of such resulting Indebtedness).

7.3 Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, whether now owned or hereafter acquired, except:

(a) Liens for taxes, assessments, charges or other governmental levies not
overdue for a period of more than sixty (60) days or that are being contested in
good faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Borrower or its Subsidiaries,
as the case may be, in conformity with GAAP or such amounts are not otherwise
required to be paid under Section 6.3;

 

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(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business that are not overdue for a
period of more than sixty (60) days or that are being contested in good faith by
appropriate proceedings, so long as reserves or other appropriate provisions, if
any, as shall be required by GAAP shall have been made for any such contested
amounts;

(c) pledges or deposits in connection with workers’ compensation, unemployment
insurance and other social security legislation and deposits securing liability
insurance carriers under insurance or self insurance arrangements;

(d) deposits to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, contractual or warranty
obligation, surety and appeal bonds, performance bonds and other obligations of
a like nature, in each case incurred in the ordinary course of business;

(e) easements, rights-of-way, restrictions and other similar encumbrances that,
in the aggregate, do not in any case materially detract from the value of the
property subject thereto or materially interfere with the ordinary conduct of
the business of the Borrower or any of its Restricted Subsidiaries;

(f) Liens in existence on the Closing Date listed on Schedule 7.3(f), securing
Indebtedness permitted by Section 7.2(d), provided that no such Lien is spread
to cover any additional property after the Closing Date and that the amount of
Indebtedness secured thereby is not increased;

(g) Liens securing Indebtedness of the Borrower or any of its Restricted
Subsidiaries incurred pursuant to Section 7.2(e) solely to finance the
acquisition, development, construction, restoration, replacement, rebuilding,
maintenance, upgrade or improvement of new equipment, fixed or capital assets or
real property or the repair or improvement thereof or the refinancing of real
property, provided that (i) such Liens and the Indebtedness secured thereby
shall be created within two hundred and seventy (270) days after the
acquisition, construction, repair or improvement of such new equipment, fixed
assets or real property or improvements thereto and (ii) such Liens do not at
any time encumber any property other than the equipment, fixed assets or real
property (or the real property improved by such improvements) financed by such
Indebtedness;

(h) Liens created pursuant to the Security Documents;

(i) contractual or statutory Liens of landlords and Liens of suppliers
(including sellers of goods) and other Liens imposed by law or pursuant to
customary reservations or retentions of title arising in the ordinary course of
business;

(j) rights of setoff or bankers’ liens upon deposits of cash in favor of banks
or other depository institutions whether arising by contract or operation of
law, incurred in the ordinary course of business so long as such deposits are
not intended to be collateral for any obligations;

 

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(k) Liens attaching solely to cash earnest money deposits in connection with any
letter of intent or purchase agreement in connection with a Permitted
Acquisition or Investment;

(l) Liens arising from precautionary UCC financing statements regarding
operating leases not constituting Indebtedness or consignments;

(m) Liens securing Indebtedness permitted hereunder on property or assets
acquired pursuant to a Permitted Acquisition or permitted Investment, or on
property or assets of a Restricted Subsidiary of the Borrower in existence at
the time such Subsidiary is acquired pursuant to a Permitted Acquisition or
permitted Investment, provided that (A) such Lien was not created in
contemplation of such acquisition or such Person becoming a Restricted
Subsidiary and (B) such Lien does not extend to or cover any other assets or
property (other than the proceeds or products thereof and other than
after-acquired property subject to a Lien securing Indebtedness and other
obligations incurred prior to such time and which Indebtedness and other
obligations are permitted hereunder that require or include, pursuant to their
terms at such time, a pledge of after-acquired property, it being understood
that such requirement shall not be permitted to apply to any property to which
such requirement would not have applied but for such acquisition);

(n) Liens on insurance policies and the proceeds thereof securing the financing
of the premiums with respect thereto;

(o) Liens encumbering customary initial deposits and margin deposits, and
similar Liens and margin deposits, and similar Liens attaching to commodity
trading accounts or other brokerage accounts, in each case incurred in the
ordinary course of business;

(p) Liens incurred in connection with the purchase or shipping of goods or
assets on the related goods or assets and proceeds thereof in favor of the
seller or shipper of such goods or assets;

(q) Liens in favor of customs and revenues authorities which secure payment of
customs duties in connection with the importation of goods;

(r) Liens arising out of judgments or awards not constituting an Event of
Default under Section 8(h) and notices of lis pendens and associated rights
related to litigation being contested in good faith by appropriate proceedings
and for which adequate reserves have been made;

(s) any interest or title of a licensor, sublicensor, lessor or sublessor under
any license or lease agreement in the ordinary course of business not
interfering with the business of the Borrower or any of its Restricted
Subsidiaries;

(t) licenses, sublicenses, leases or subleases granted to third Persons in the
ordinary course of business not interfering in any material respect with the
business of the Borrower or any of its Restricted Subsidiaries;

(u) Liens which arise under Article 2 and Article 4 of the UCC on items in
collection and documents and proceeds related thereto;

(v) Liens not otherwise permitted by this Section 7.3 so long as the aggregate
outstanding principal amount of the obligations secured thereby does not exceed
the greater of (x) $50,000,000 and (y) 5% of Total Assets at any one time
outstanding;

 

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(w) Liens on assets subject to a Sale Leaseback Transaction securing Capital
Lease Obligations incurred pursuant to such Sale Leaseback Transaction;

(x) Liens (i) on cash advances in favor of the seller of any property to be
acquired in an Investment permitted pursuant to Section 7.8(g) or (y) to be
applied against the purchase price for such Investment, or (ii) consisting of an
agreement to Dispose of any property in a Disposition permitted under
Section 7.5, in each case, solely to the extent such Investment or Disposition,
as the case may be, would have been permitted on the date of the creation of
such Lien;

(y) ground leases in respect of real property on which facilities owned or
leased by the Borrower or any of its Restricted Subsidiaries are located;

(z) Liens on the real estate and related assets financed pursuant to the
Mortgage Facility securing Indebtedness under the Mortgage Facility permitted to
be incurred pursuant to Section 7.2(u);

(aa) zoning, building codes and other land use laws regulating the use or
occupancy of real property or the activities conducted thereon which are imposed
by any Governmental Authority having jurisdiction over such real property and
are not violated by the current use or occupancy of such real property or
materially interfere with the ordinary conduct of the business of the Borrower
or any of its Restricted Subsidiaries thereon;

(bb) Liens securing repurchase obligations under Cash Equivalents;

(cc) Liens securing the Institutional Letters of Credit;

(dd) Liens on assets of non-Guarantors to secure Indebtedness under
Section 7.2(h) and/or (w);

(ee) Liens on the equity interest of Unrestricted Subsidiaries;

(ff) Liens in favor of any Loan Party; provided that any such Liens on any
assets of a Loan Party are subordinated to the Liens securing the Obligations;

(gg) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for the sale of goods entered into in the ordinary course
of business;

(hh) pledges or deposits of cash and Cash Equivalents securing deductibles,
self-insurance, co-payment, co-insurance, retentions or other similar
obligations to providers of property, casualty or liability insurance in the
ordinary course of business; and

(ii) Liens securing Permitted First Priority Refinancing Debt and Permitted
Second Priority Refinancing Debt;

(jj) In the case of Non-Wholly-Owned Subsidiaries, Liens securing put and call
arrangements;

(kk) Liens securing Swap Agreements and Cash Management Obligations;

(ll) Liens securing Secured Incremental Notes and any Incremental Loans;

 

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(mm) Liens securing any Permitted Refinancing; provided that such Liens are
otherwise permitted under this Section 7.3 and secure Indebtedness otherwise
permitted by Section 7.2;

(nn) Liens on Collateral securing (i) obligations of any of the Loan Parties in
respect of Indebtedness and related obligations permitted by Section 7.2(cc),
Section 7.2(dd) and/or Section 7.2(ii) and (ii) any Permitted First Priority
Refinancing Debt or Permitted Second Priority Refinancing Debt relating thereto;

(oo) Liens securing obligations (other than obligations representing
Indebtedness for borrowed money) under operating, reciprocal easement or similar
agreements entered into in the ordinary course of business of the Borrower and
its Subsidiaries;

(pp) utility and similar deposits in the ordinary course of business;

(qq) purchase options, call and similar rights of, and restrictions for the
benefit of, a third party with respect to Capital Stock held by the Borrower or
any Restricted Subsidiary in Joint Ventures;

(rr) Liens disclosed as exceptions to coverage in the final title policies and
endorsements issued to the Administrative Agent with respect to any real
properties subject to a Mortgage;

(ss) Liens on assets of any Restricted Subsidiary that is not a Loan Party to
the extent such Liens secure Indebtedness of such Restricted Subsidiary
permitted by Section 7.2; and

(tt) Liens securing Additional Debt incurred pursuant to Section 7.2(jj);
provided that if the Liens are secured by Collateral, then such Liens shall be
second or junior liens and the representative for such Permitted Refinancings
and Additional Debt shall enter into a customary intercreditor agreement with
the Administrative Agent substantially consistent with the terms set forth in
the First Lien Intercreditor Agreement or the Junior Lien Intercreditor
Agreement, as applicable.

7.4 Fundamental Changes. Enter into any merger, consolidation or amalgamation,
or liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or Dispose of all or substantially all of its property or
business, except that:

(a) any Restricted Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower (provided that the Borrower shall be the continuing or
surviving corporation) or with or into any other Restricted Subsidiary (provided
that when a Restricted Subsidiary that is not a Subsidiary Guarantor is merging
or consolidating with a Subsidiary Guarantor, the Subsidiary Guarantor shall be
the continuing or surviving corporation);

(b) any Restricted Subsidiary of the Borrower may Dispose of all or
substantially all of its assets (upon voluntary liquidation or otherwise) (i) to
the Borrower or any other Restricted Subsidiary (upon voluntary liquidation or
otherwise) (provided that when a Subsidiary that is a Subsidiary Guarantor is so
Disposing of all or substantially of its assets to another Subsidiary, such
other Subsidiary must be a Subsidiary Guarantor) or (ii) pursuant to a
Disposition permitted by Section 7.5;

(c) any Restricted Subsidiary of the Borrower may liquidate or dissolve or
change its legal form if the Borrower determines in good faith that such action
is in the best interests of the Borrower and its Restricted Subsidiaries and is
not disadvantageous to the Lenders in any material respect;

 

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(d) any Investment expressly permitted by Section 7.8 may be structured as a
merger, consolidation or amalgamation; and

(e) Holdings may change its legal form to a corporation if (i) Holdings
determines in good faith that such action is in its best interest and not
disadvantageous to the Lenders in any material respect and (ii) prior notice of
such change is given to the Administrative Agent.

(f) in connection with an Initial Public Offering, (i) Holding may merge into
the Borrower and (ii) the Borrower may merge into Holdings.

7.5 Disposition of Property. Dispose of any of its property, whether now owned
or hereafter acquired, or, in the case of any Restricted Subsidiary, issue or
sell any shares of such Restricted Subsidiary’s Capital Stock to any Person,
except:

(a) the Disposition of obsolete or worn out property or of property no longer
used or useful in the conduct of the Borrower and its Restricted Subsidiaries,
in each case in the ordinary course of business;

(b) the Disposition of Cash Equivalents and sale of inventory in the ordinary
course of business;

(c) Dispositions permitted by Section 7.4(a), clause (i) of Section 7.4(b) and
Section 7.4(c);

(d) the sale or issuance of any Restricted Subsidiary’s Capital Stock to the
Borrower or any Wholly-Owned Subsidiary;

(e) the Disposition for market value of property; provided that if such
Disposition, together with all related Dispositions, involves assets with a
value in excess of $10,000,000, not less than 75% of the total consideration
(other than (A) the assumption by the transferee of Indebtedness or other
liabilities contingent or otherwise of the Borrower or any of its Restricted
Subsidiaries and the valid release of the Borrower or such Restricted
Subsidiary, by all applicable creditors in writing, from all liability on such
Indebtedness or other liability in connection with such Disposition,
(B) securities, notes or other obligations received by the Borrower or any of
its Restricted Subsidiaries from the transferee that are converted by the
Borrower or any of its Restricted Subsidiaries into cash or Cash Equivalents
within one hundred and eighty (180) days following the closing of such
Disposition, (C) Indebtedness of any Restricted Subsidiary that is no longer a
Restricted Subsidiary as a result of such Disposition, to the extent that the
Borrower and each other Restricted Subsidiary are released from any Guarantee of
payment of such Indebtedness in connection with such Disposition and (D) in
connection with an asset swap, all of which shall be deemed “cash”) received is
cash or Cash Equivalents or Designated Non-Cash Consideration to the extent that
all Designated Non-Cash Consideration at such time does not exceed the greater
of (x) $25,000,000 and (y) 2.0% of Total Assets as of the Applicable Date of
Determination (with the fair market value of each item of Designated Non-Cash
Consideration being measured at the time received and without giving effect to
subsequent changes in value) and all of the consideration received is at least
equal to the fair market value of the assets sold, transferred or otherwise
disposed of); and provided, further, that any liabilities that, if not assumed
by the transferee with respect to the applicable Disposition, would have been
deducted in calculating the Net Cash Proceeds from such Disposition but that are
assumed by the transferee with respect to the applicable Disposition and for
which the Borrower and all of the Restricted Subsidiaries shall have been
validly released by all applicable creditors in writing, shall be treated as
cash consideration;

 

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(f) (a) any of the Borrower and its Restricted Subsidiaries may transfer assets
to the Borrower or any Subsidiary Guarantor and (b) any Excluded Subsidiary may
transfer assets to any other Excluded Subsidiary;

(g) any of the Borrower and its Restricted Subsidiaries shall be permitted to
make Permitted Dispositions;

(h) any of the Borrower and its Restricted Subsidiaries shall be permitted to
sell or otherwise dispose of property and other assets pursuant to Sale
Leaseback Transactions permitted under Section 7.11;

(i) sale or like-kind exchanges of existing assets for similar replacement
assets, so long as the receipt of the replacement assets in such sale or
exchange occurs promptly following the transfer thereof; provided that to the
extent the assets that were subject to, and exchanged in connection with, such
sale or like-kind exchange constituted Collateral, assets acquired in connection
therewith shall constitute Collateral;

(j) any of the Borrower and its Restricted Subsidiaries shall be permitted to
dispose of the Capital Stock or debt of an Unrestricted Subsidiary for fair
market value;

(k) condemnations and casualty events, so long as the Recovery Event is applied
in accordance with Section 2.11(b);

(l) issue Capital Stock to qualify directors of the board of directors (or
similar governing body) of any Subsidiary of the Borrower where required by
applicable law; and

(m) the unwinding of any Swap Agreement or Cash Management Agreement;

(n) the lapse or abandonment in the commercially reasonable business judgment of
the Borrower or its Restricted Subsidiaries of any registrations or applications
for registration of any immaterial Intellectual Property rights;

(o) Disposition of Investments in (i) Joint Ventures to the extent required by,
or made pursuant to customary buy/sell arrangements between, the joint venture
parties set forth in joint venture arrangements and similar binding agreements
or (ii) Non-Wholly Owned Subsidiaries under put and call arrangements;

(p) Dispositions of non-core or obsolete assets acquired in connection with an
acquisition or permitted Investment;

(q) Dispositions constituting Investments permitted under Section 7.8 or
permitted Restricted Payments under Section 7.6;

(r) Dispositions to a non-Loan Party to the extent that it is otherwise a
permitted Investment;

(s) the incurrence of Liens permitted hereunder;

(t) de minimis amounts of equipment provided to employees;

 

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(u) the Borrower and any Restricted Subsidiary may (i) terminate or otherwise
collapse its cost sharing agreements with the Borrower or any Subsidiary and
settle any crossing payments in connection therewith, (ii) convert any
intercompany Indebtedness to Capital Stock, (iii) transfer any intercompany
Indebtedness to the Borrower or any Restricted Subsidiary, (iv) settle,
discount, write off, forgive or cancel any intercompany Indebtedness or other
obligation owing by Holdings, the Borrower or any Restricted Subsidiary,
(v) settle, discount, write off, forgive or cancel any Indebtedness owing by any
present or former consultants, directors, officers or employees of any Parent
Entity, Holdings, the Borrower or any Subsidiary or any of their successors or
assigns, (vi) surrender or waive contractual rights and settle or waive
contractual or litigation claims or (vii) terminate any Swap Agreement.

(v) Dispositions for fair market value (including those of the type otherwise
described herein) made after the Closing Date in an aggregate amount not to
exceed the greater of (x) $25,000,000 and (y) 2.0% of Total Assets at any one
time outstanding;

(w) any swap of assets in exchange for services in the ordinary course of
business of comparable or greater fair market value of usefulness to the
business of the Borrower and its Restricted Subsidiaries as a whole, as
determined in good faith by the Borrower.

Notwithstanding the foregoing, the Disposition of any Capital Stock of a
Restricted Subsidiary (other than as permitted by clause (d) above) shall not be
permitted unless all the Capital Stock of such Restricted Subsidiary is Disposed
of pursuant to such Disposition (and any other Investments in such Restricted
Subsidiary, or any of its Restricted Subsidiaries, are also Disposed of or
otherwise repaid in connection with such Disposition, or are treated as
Investments under, and permitted by, clause (y) of Section 7.8).

To the extent the Required Lenders waive the provisions of this Section 7.5 with
respect to the sale or other disposition of any Collateral, or any Collateral is
sold or disposed of as permitted by this Section 7.5, such Collateral in each
case (unless sold or disposed of to a Loan Party) shall be sold or otherwise
disposed of free and clear of the Liens created by the Loan Documents and the
Administrative Agent shall take such actions in accordance with Section 10.14 as
are appropriate in connection therewith.

7.6 Restricted Payments. Declare or pay any dividend (other than dividends
payable solely in stock of the Person making such dividend) on, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, defeasance, retirement or other acquisition of,
any Capital Stock of any Group Member, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of any Group Member (collectively,
“Restricted Payments”), except that:

(a) any Restricted Subsidiary may make Restricted Payments to the Borrower or
its equity holders on a pro rata basis;

(b) (i) so long as no Default or Event of Default shall have occurred and be
continuing or would result therefrom, the Borrower may pay dividends to Holdings
to permit Holdings to purchase (and Holdings may purchase) or to pay dividends
to any of its direct or indirect parent companies to permit any of its direct or
indirect parent companies to purchase Capital Stock of Holdings or any of its
direct or indirect parent companies from present or former officers or employees
of any Group Member, their estates and their heirs upon the death, disability or
termination of employment of such officer or employee, provided, that the
aggregate amount of payments under this clause (i) after the Closing Date (net
of any proceeds received by Holdings and contributed to the Borrower after the
Closing Date in connection with resales of any such Capital Stock) shall not
exceed $12,500,000 in cash in the aggregate during any fiscal year plus (A) the
balance of any such $12,500,000 limit not used in any fiscal year (which may

 

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be used in any subsequent fiscal year), (B) the amount of any equity
contribution made to the Borrower (through Holdings) for the purpose of such
repurchase (and Not Otherwise Applied), and (C) the proceeds of any key-man life
insurance with respect to such employee paid to Holdings, the Borrower or any of
its Restricted Subsidiaries and (ii) the Borrower may pay dividends to Holdings
to permit Holdings to pay, or to pay dividends to or any of its direct or
indirect parent companies permit the or any of its direct or indirect parent
companies to pay, Management Fees;

(c) the Borrower may pay dividends to Holdings to provide for the payment by
Holdings of, or to permit Holdings to pay dividends to or any of its direct or
indirect parent companies to provide for the payment by or any of its direct or
indirect parent companies of, customary corporate indemnities owing to directors
of the Holdings, or any of its direct or indirect parent companies, the
Borrower, its Subsidiaries or any of their Affiliates in the ordinary course of
business;

(d) Holdings may make Restricted Payments in the form of repurchases of its
Capital Stock deemed to occur upon the non-cash exercise of stock options and
warrants;

(e) Restricted Payments made on the Closing Date to consummate the Transactions;

(f) Holdings and its Restricted Subsidiaries may pay dividends through issuance
of Permitted Capital Stock and may redeem any Capital Stock in exchange for
other Permitted Capital Stock;

(g) the Borrower may make Restricted Payments to Holdings to enable it to pay
Closing Costs and to make payments required to be made by it pursuant to any
acquisition agreement pertaining to acquisitions by the Borrower and its
Restricted Subsidiaries consummated prior to the Closing Date and Permitted
Acquisitions by the Borrower and its Restricted Subsidiaries thereafter;

(h) the Borrower may directly or indirectly make distributions to Holdings (and
Holdings may make distributions to or any of its direct or indirect parent
companies) or make payments on behalf of Holdings (or any of its direct or
indirect parent companies), to the extent necessary to pay the taxes and the
operating and administrative expenses of Holdings (or any of its direct or
indirect parent companies) incurred in the ordinary course of its business
including, without limitation, reasonable directors’ fees and expenses;

(i) so long as no Event of Default shall have occurred and be continuing or
result therefrom, the Borrower or any Restricted Subsidiary may make additional
Restricted Payments in an amount that shall not exceed the greater of
(A) $25,000,000 and (B) 2.0% of Total Assets as of the Applicable Date of
Determination;

(j) the Borrower or any Restricted Subsidiary may make additional Restricted
Payments to the extent that such Restricted Payments are made with net proceeds
received by Holdings or any Parent Entity after the Closing Date from the
issuance or sale of Permitted Capital Stock of Holdings or any Parent Entity
(or, if after an Initial Public Offering, Public Company) or proceeds of an
equity contribution initially made to Holdings (other than any Cure Amount), in
each case to the extent such proceeds have been contributed to the common equity
of the Borrower (which such equity proceeds so utilized shall not also increase
the Available Amount or be credited for any other purpose);

(k) the Borrower and the Restricted Subsidiaries may make Restricted Payments
(or may make Restricted Payments to Holdings (or, after an Initial Public
Offering, Public Company’s) or any Parent Entity for such purpose) the proceeds
of which shall be used to pay customary costs, fees and expenses related to any
unsuccessful equity or debt offering permitted by this Agreement, so long as the
proceeds of such offering were intended to be contributed to the Borrower or any
Restricted Subsidiary or such offering was otherwise related to the business of
the Borrower and the Restricted Subsidiaries;

 

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(l) the Borrower and the Restricted Subsidiaries may make Restricted Payments to
Holdings (or, after an Initial Public Offering, Public Company) or any Parent
Entity to pay cash in lieu of fractional Capital Stock in connection with any
dividend, split or combination thereof or any Acquisition, Investment or other
transaction otherwise permitted hereunder;

(m) after an Initial Public Offering, Public Company may (and the Borrower and
the Restricted Subsidiaries may make Restricted Payments so that Public Company
may) declare and pay regular quarterly dividends on its common stock (or similar
Capital Stock of Public Company) in an amount not to exceed 6% per year of the
aggregate net cash proceeds of such Initial Public Offering that were actually
received by or contributed to the Permitted Capital Stock of the Borrower in or
from all such public offerings;

(n) (i) so long as (A) no Event of Default shall have occurred and be continuing
or result therefrom and (B) on a on a Pro Forma Basis after giving effect
thereto as of the Applicable Date of Determination the Consolidated First Lien
Leverage Ratio is less than or equal to 4.50 to 1.00, Holdings, any Parent
Entity, the Borrower and the Restricted Subsidiaries may make Restricted
Payments in an aggregate amount equal to the sum of the amounts available under
clauses (b) and (f) of the definition of “Available Amount” and (ii) Holdings,
any Parent Entity, the Borrower and the Restricted Subsidiaries may make
Restricted Payments in an aggregate amount not to exceed the Available Amount
(excluding amounts available under clauses (b) and (f) of the definition
thereof;

(o) any Permitted SRS Distribution;

(p) with respect to any taxable period during which the Borrower or any of its
Subsidiaries is a member of a consolidated, unitary, combined or similar tax
group in which NMH Holdings, Inc. (or any direct or indirect parent of NMH
Holdings, Inc.) is the common parent, the Borrower (or another Restricted
Subsidiary of the Borrower) may directly (or indirectly through Holdings) make
payment to NMH Holdings, Inc. in order for NMH Holdings, Inc. (or any direct or
indirect parent of NMH Holdings, Inc.) to pay the portion of its consolidated,
unitary, combined or similar U.S. federal, state and local and non-U.S. income
taxes attributable to the income of the Borrower and any of its Subsidiaries in
an amount not to exceed the income tax liabilities that would have been payable
by the Borrower and its Subsidiaries on a stand-alone basis, reduced by any such
income taxes paid or to be paid directly by the Borrower or its Subsidiaries;
provided that the amount of any such payments, dividends or distributions
attributable to any income of an Unrestricted Subsidiary shall be limited to the
cash distributions made by such Unrestricted Subsidiary to the Borrower or its
Restricted Subsidiaries for such purpose; and

(q) the Borrower or any Restricted Subsidiary may make Restricted Payments with
the Capital Stock of, and/or the proceeds of the sale of Capital Stock of, an
Unrestricted Subsidiary or proceeds of a dividend or distribution from an
Unrestricted Subsidiary.

7.7 Swap Agreements. Enter into any Swap Agreement, except (a) Swap Agreements
entered into to hedge or mitigate risks to which the Borrower or any Restricted
Subsidiary has actual exposure (other than those in respect of Capital Stock or,
except as provided in clause (b) below, the Senior Notes) and (b) Swap
Agreements entered into in order to effectively cap, collar or exchange interest
rates (from fixed to floating rates, from one floating rate to another floating
rate or otherwise) with respect to any interest-bearing liability or investment
of the Borrower or any Restricted Subsidiary.

 

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7.8 Investments. Make any Investment, except in the case of Holdings and any of
its Restricted Subsidiaries (other than any Insurance Subsidiary unless
otherwise expressly included in this Section 7.8 or permitted by Section 7.16):

(a) accounts receivable and other extensions of trade credit by the Borrower and
its Subsidiaries in the ordinary course of business and advances made to
Alliance Human Services in the ordinary course of business;

(b) Investments in Cash Equivalents;

(c) Guarantee Obligations permitted by Section 7.2;

(d) intercompany Investments by (i) any Group Member (x) in the Borrower or any
Person that, prior to such investment, is a Subsidiary Guarantor or (y) in any
Excluded Subsidiary and (ii) by any Restricted Subsidiary that is not a
Guarantor in any other Restricted Subsidiary that is not a Guarantor; provided,
however, that any such Investments in any Insurance Subsidiary must be made in
compliance with clause (u) below and the aggregate amount of Investments made
pursuant to subclause (y) shall not exceed the greater of (a) $50,000,000 and
(b) 5% of Total Assets at any time outstanding;

(e) existing Investments as listed on Schedule 7.8(g);

(f) Capital Expenditures;

(g) Permitted Acquisitions;

(h) the formation of and Investments in new Restricted Subsidiaries of Holdings
or the Borrower that are Subsidiary Guarantors, provided that (i) such
Restricted Subsidiary is owned by the Borrower or a Subsidiary Guarantor and
(ii) after the date of the formation or acquisition of any such Restricted
Subsidiary and the Investment therein, and after giving effect thereto, such new
Restricted Subsidiary and its parent shall have entered into any and all
agreements (in form and substance reasonably satisfactory to the Administrative
Agent) necessary to comply with Section 6.9;

(i) the Borrower and its Restricted Subsidiaries may receive and own Capital
Stock or other investments acquired as non-cash consideration pursuant to
dispositions permitted under Section 7.5;

(j) the Borrower and its Restricted Subsidiaries may make pledges and deposits
permitted under Section 7.3;

(k) the Borrower and its Restricted Subsidiaries may make Investments and
guarantees expressly permitted under Sections 7.2, 7.4, 7.5 (other than 7.5(u))
and 7.6;

(l) the Borrower and its Restricted Subsidiaries may make an Investment that
could otherwise be made as a Restricted Payment to the extent the related
advance or investment would be permitted under Section 7.6(i) (it being
understood that any such Investment shall be deemed to be and shall count as a
Restricted Payment for purposes of Section 7.6(i));

(m) the Borrower and its Restricted Subsidiaries may hold Investments to the
extent such Investments reflect an increase in the value of Investments and
would otherwise exceed the limitations herein;

 

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(n) Investments consisting of endorsements for collection or deposit in the
ordinary course of business;

(o) Investments in deposit accounts opened and maintained in the ordinary course
of business;

(p) Holdings and the Borrower may acquire and hold promissory notes of employees
of Holdings or its Restricted Subsidiaries in connection with such Person’s
purchase of Permitted Capital Stock of Holdings;

(q) Investments received in connection with any bankruptcy or reorganization of,
or any good faith settlement of delinquent accounts and disputes with, any
customer or supplier arising in the ordinary course of business;

(r) the Borrower may enter into Swap Agreements that are not speculative in
nature to the extent permitted hereunder;

(s) any Investments consisting of deferred compensation owed to employees of
Holdings, the Borrower and their respective Restricted Subsidiaries;

(t) Investments and formations by the Borrower and the Restricted Subsidiaries
in and of Restricted Subsidiaries (other than Insurance Subsidiaries) that are
not Guarantors, which does not exceed the greater of (x) $35,000,000 and
(y) 3.5% of Total Assets at any one time outstanding;

(u) Investments by the Borrower or any Wholly-Owned Subsidiary in any Insurance
Subsidiary (including in respect of the formation thereof) solely to the extent
permitted by Section 7.17(b);

(v) Investments consisting of loans and advances to directors and employees of
any Group Member (including for travel, entertainment and relocation expenses)
in the ordinary course of business;

(w) Investments in 50% or less of the equity interest of other Persons
(“Minority Investments”) held by a Restricted Subsidiary acquired pursuant to a
Permitted Acquisition, which Minority Investments existed at the time of such
Permitted Acquisition and were not made in contemplation of or in connection
with such Permitted Acquisition;

(x) Investments made in connection with the funding of contributions under any
non-qualified retirement plan or similar employee compensation plan in an amount
not to exceed the amount of compensation expense recognized by the Borrower and
its Restricted Subsidiaries in connection with such plans;

(y) Investments that do not exceed, in the aggregate, the greater of
(A) $50,000,000 and (B) 5.0% of Total Assets at any one time outstanding; plus
any amount that could otherwise be made as a Restricted Payment permitted at the
time under Section 7.6(i) (it being understood that any amounts so applied shall
be deemed to be and count as Restricted Payments for purposes of
Section 7.6(i));

(z) Investments in the form of or made out of the proceeds of an issuance of
Permitted Capital Stock;

 

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(aa) Investments in any Unrestricted Subsidiary in lieu of Restricted Payments
that could be made pursuant to Section 7.6(i) (it being understood that any
amounts so applied shall be deemed to be and count as Restricted Payments for
purposes of Section 7.6(i));

(bb) any retained equity interest in a Person (including an Unrestricted
Subsidiary) whose equity interests were the subject of a Permitted SRS
Distribution;

(cc) Investments in an amount not to exceed the Available Amount;

(dd) guarantees made by Holdings, the Borrower or any Restricted Subsidiary of
Holdings in respect of any obligation of the Borrower or any other Restricted
Subsidiary of Holdings to the extent the underlying obligation is permitted
hereunder;

(ee) Investments consisting of loans and advances to directors and employees of
any Group Member (including for travel, entertainment and relocation expenses)
not exceeding $2,000,000 in the aggregate at any time outstanding;

(ff) Investments held by a Restricted Subsidiary acquired pursuant to a
Permitted Acquisition, which Investments existed at the time of such Permitted
Acquisition and were not made in contemplation of or in connection with such
Permitted Acquisition;

(gg) Investments made in connection with the funding of contributions under any
non-qualified retirement plan or similar employee compensation plan in an amount
not to exceed the amount of compensation expense recognized by the Borrower and
its Restricted Subsidiaries in connection with such plans;

(hh) (i) deposits in the ordinary course of business consistent with past
practices to secure the performance of operating leases and payment of utility
contracts and (ii) good faith deposits required in connection with Permitted
Acquisitions and other Investments permitted under this Section 7.8;

(ii) Investments in Joint Ventures and Unrestricted Subsidiaries having an
aggregate fair market value (measured on the date each such Investment was made
and without giving effect to subsequent changes in value), when taken together
with all other Investments made pursuant to this clause (ii) since the Closing
Date, not to exceed the greater of (a) $30,000,000 and (b) 3.0% of Total Assets
(but, to the extent that any Investment made pursuant to this clause (ii) since
the Closing Date is sold or otherwise liquidated for cash or designated as a
Restricted Subsidiary, minus all Returns with respect to such Investment (less
the cost of disposition, if any) or the fair market value of such Unrestricted
Subsidiary at the time of redesignation (as applicable));

(jj) following the consummation of a Permitted Acquisition of Capital Stock of a
Person that, immediately thereafter, is not wholly-owned, Investments consisting
of the purchase of additional Capital Stock of such Persons; and

(kk) additional Investments made solely with the Net Cash Proceeds of any
capital contributions or other equity issuances of Permitted Capital Stock
(other than any Cure Amount or any other capital contribution or equity
issuances to the extent utilized in connection with other transactions permitted
hereunder on or prior to the date of such Investment) made or received by
Holdings.

The amount of any Investment shall be the initial amount of such Investment and
any addition thereto, as reduced by any repayment of principal (in the case of
an Investment constituting Indebtedness) or any distribution constituting a
return of capital (in the case of any other Investment).

 

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7.9 Optional Prepayments and Modifications of Certain Junior Debt Instruments.
(a) Make any optional or voluntary payment, prepayment, repurchase or redemption
of or otherwise optionally or voluntarily defease or segregate funds with
respect to the Senior Notes, any Additional Debt or Additional Term Notes, or
any Indebtedness in excess of $50,000,000 that is contractually subordinated in
right of payment to the Obligations (it being understood that Indebtedness shall
not be deemed to be subordinated in right of payment merely because such
Indebtedness is secured by a Lien that is senior to the Lien securing the
Obligations), or any Permitted Refinancing incurred in respect of any of the
foregoing; provided that (i) the Borrower may pay, prepay, repurchase or redeem
any of the foregoing Indebtedness, (A) pursuant to a refinancing thereof with
Permitted Refinancings (to the extent permitted by Section 7.2), (B) with the
Available Amount, (C) to the extent that the consideration therefor consists of
Permitted Capital Stock of Holdings or Capital Stock of any direct or indirect
parent of Holdings, (D) with up to $40,000,000 of proceeds of the Term Loans, or
(E) in whole or in part, in lieu of Restricted Payments permitted under
Section 7.6(i) or 7.6(q), and (ii) the foregoing shall not be construed to
prohibit the Refinancing or the conversion of any such Indebtedness into equity;
(b) amend, modify, waive or otherwise change, or consent or agree to any
material amendment, modification, waiver or other change to, any of the terms of
any Indebtedness described in clause (a) above that is materially adverse to the
interests of the Lenders (determined by comparison to such terms in effect on
the Closing Date or otherwise to such terms in effect on the date of creation
thereof and disregarding any default or potential default in respect thereof)
except (x) in accordance with the terms of the applicable intercreditor or
subordination terms or agreement or (y) as permitted pursuant to or reasonably
necessary to effect a Permitted Refinancing thereof; or (c) designate any
Indebtedness (other than obligations of the Loan Parties pursuant to the Loan
Documents) as “Designated Senior Indebtedness” (or any other defined term having
a similar purpose) for the purposes of any Indebtedness described in clause
(a) above that is subordinated to the Obligations.

7.10 Transactions with Affiliates. Enter into any transaction, including any
purchase, sale, lease or exchange of property, the rendering of any service or
the payment of any management, advisory or similar fees, with any Affiliate
(other than Holdings, the Borrower or any Subsidiary Guarantor) unless such
transaction is (a) otherwise permitted under this Agreement and (b) upon fair
and reasonable terms no less favorable to the relevant Group Member than it
would obtain in a comparable arm’s length transaction with a Person that is not
an Affiliate. Notwithstanding the foregoing, (i) Holdings and its Restricted
Subsidiaries may pay to the Sponsor fees pursuant to and in accordance with the
Management Agreement as in effect on the Closing Date (and not prior to the
times payable under the Management Agreement as in effect on the Closing Date)
(the “Management Fees”) and expenses and indemnities in connection therewith,
(ii) Holdings, the Borrower and its Restricted Subsidiaries may pay customary
fees to, and the out-of-pocket expenses of, its board of directors, employees
and officers and may provide customary corporate indemnities for the benefit of
members of its board of directors, employees and officers, (iii) the payment of
Closing Costs, (iv) Restricted Payments permitted under Section 7.6,
(v) transactions pursuant to permitted agreements in existence on the Closing
Date and set forth on Schedule 7.10 or any amendment thereto to the extent such
an amendment is not adverse to the Lenders in any material respect and
(vi) transactions necessary to insert parent companies above Holdings.

7.11 Sales and Leasebacks. Enter into any arrangement with any Person providing
for the leasing by any Group Member of any property or containing an obligation
of such Group Member to repurchase such property from such Person, which
property has been or is to be sold or transferred by such Group Member to such
Person (or any Affiliate thereof) or to any other Person (or any Affiliate
thereof) to whom funds have been or are to be advanced by such Person (or any
Affiliate thereof) on the security of such property or rental obligations of
such Group Member (any such transaction a “Sale Leaseback Transaction”) except
any Sale Leaseback Transaction (a) in respect of property consisting of capital
assets so sold pursuant to such Sale Leaseback Transaction solely for cash
consideration in an amount not less than the cost thereof within one hundred and
eighty (180) days after the date that such property was initially acquired by a
Group Member or (b) in respect of any other property consisting of capital
assets so sold pursuant to such Sale Leaseback Transaction for market value and
solely for cash consideration and in respect of which the Borrower shall comply
with Section 2.11(b).

 

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7.12 Changes in Fiscal Periods. Permit the fiscal year of the Borrower or
Holdings to end on a day other than September 30th or change the Borrower’s or
Holdings’ method of determining fiscal quarters; provided, however that the
Borrower may, upon written notice to the Administrative Agent, change its fiscal
year to any other fiscal year reasonably acceptable to the Administrative Agent,
provided that as a condition to any such change the Borrower and the
Administrative Agent shall, and are hereby authorized by the Lenders to, make
any adjustments to this Agreement that are necessary or appropriate to reflect
such change in fiscal year.

7.13 Negative Pledge Clauses. Enter into or suffer to exist or become effective
any agreement that prohibits or limits the ability of any Group Member to
create, incur, assume or suffer to exist any Lien upon any of its property or
revenues, whether now owned or hereafter acquired, to secure its obligations
under the Loan Documents to which it is a party other than (a) this Agreement
and the other Loan Documents, the Senior Note Indenture, the Mortgage Facility,
the Credit Agreement Refinancing Indebtedness, Additional Debt, Additional Term
Notes, the Incremental Equivalent Debt, Permitted Senior Unsecured Debt,
Unrestricted Additional Term Notes or documents evidencing Indebtedness incurred
under Sections 7.2(e), (f), (g), (h), (q), (r), (s), (t), (u), (w), (z), (cc),
(dd), (ii) or (jj) and any Permitted Refinancing in respect of any such
Indebtedness and (b) agreements which (i) are binding on a Restricted Subsidiary
at the time such Restricted Subsidiary first becomes a Restricted Subsidiary, so
long as such agreements were not entered into in contemplation of such Person
becoming a Restricted Subsidiary, (ii) are customary provisions in joint venture
agreements and other similar agreements applicable to joint ventures permitted
under Section 7.8 and applicable solely to such joint venture entered into in
the ordinary course of business, (iii) are customary restrictions on leases,
subleases, licenses or asset sale agreements otherwise permitted hereby so long
as such restrictions relate to the assets subject thereto, (iv) are customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of the Borrower or any Restricted Subsidiary, (v) are
customary provisions restricting assignment of any agreement entered into in the
ordinary course of business, and (vi) are restrictions on cash or other deposits
imposed by customers under contracts entered into in the ordinary course of
business.

7.14 Clauses Restricting Subsidiary Distributions. Enter into or suffer to exist
or become effective any consensual encumbrance or restriction on the ability of
any Restricted Subsidiary of the Borrower to make Restricted Payments in respect
of any Capital Stock of such Restricted Subsidiary held by, or pay any
Indebtedness owed to, the Borrower or any other Restricted Subsidiary of the
Borrower, except for (x) agreements which (i) are binding on a Restricted
Subsidiary at the time such Restricted Subsidiary first becomes a Restricted
Subsidiary, so long as such agreements were not entered into in contemplation of
such Person becoming a Restricted Subsidiary, (ii) are customary provisions in
joint venture agreements and other similar agreements applicable to joint
ventures permitted under Section 7.8 and applicable solely to such joint venture
entered into in the ordinary course of business, (iii) are customary
restrictions on leases, subleases, licenses or asset sale agreements otherwise
permitted hereby so long as such restrictions relate to the assets subject
thereto, (iv) are customary provisions restricting subletting or assignment of
any lease governing a leasehold interest of the Borrower or any Restricted
Subsidiary, (v) are customary provisions restricting assignment of any agreement
entered into in the ordinary course of business, and (vi) are restrictions on
cash or other deposits imposed by customers under contracts entered into in the
ordinary course of business), (y) such encumbrances or restrictions existing
under or by reason of (i) any restrictions existing under the Loan Documents, or
the Senior Notes Indenture, the Mortgage Facility, the Credit Agreement
Refinancing Indebtedness, Additional Debt, Additional Term Note, the Incremental
Equivalent Debt, Permitted Senior Unsecured Debt, Unrestricted Additional Term
Notes or documents evidencing Indebtedness incurred under Sections 7.2(e), (f),
(g), (h), (q), (r), (s), (t), (u), (w), (z), (cc), (dd), (ii) or (jj) and any
Permitted Refinancing in respect of any such Indebtedness

 

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or (ii) any restrictions with respect to a Subsidiary imposed pursuant to an
agreement that has been entered into in connection with the Disposition of all
or substantially all of the Capital Stock or assets of such Subsidiary and
(z) restrictions applicable only to Foreign Subsidiaries.

7.15 Lines of Business. Enter into any business, either directly or through any
Restricted Subsidiary, except for those businesses in which the Borrower and its
Restricted Subsidiaries are engaged on the date of this Agreement or that are
reasonably related, supportive, synergetic, complementary or ancillary thereto,
including relating to social services or any other healthcare services, it being
understood and acknowledged that any Insurance Subsidiary shall be the only
entity conducting insurance business (and business reasonably related thereto)
and that any Insurance Subsidiary shall be engaged for the underwriting of
insurance policies for Holdings, the Borrower and its Restricted Subsidiaries
and each of such Person’s respective employees, officers or directors.

7.16 Insurance Subsidiary Investments. Permit any Insurance Subsidiary to make
any Investment in any Person except:

(a) Investments in Cash Equivalents;

(b) Investments in deposit accounts opened and maintained in the ordinary course
of business;

(c) Investments in accounts receivable in the ordinary course of business; and

(d) Investments in notes or bonds (including interest only notes or bonds) in an
aggregate amount (for all Insurance Subsidiaries combined) up to the greater of
(x) $10,000,000 and (y) 1.0% of Total Assets that are rated at least BBB- by S&P
or Baa3 by Moody’s at the time of purchase; provided that an aggregate amount up
to $6,000,000 of such Investments shall have a rating of at least A by S&P or A2
by Moody’s at the time of purchase.

7.17 Insurance Subsidiary. Permit any Insurance Subsidiary to enter into any (or
renew, extend or materially modify any existing) reinsurance or stop-loss
insurance arrangements except in the ordinary course of business with reinsurers
rated as least “A-” by A.M. Best & Co. or reinsurers whose obligations to the
Insurance Subsidiary are secured by letters of credit or other collateral
reasonably acceptable to the board of directors of such Insurance Subsidiary or
(b) permit any Investment in any Insurance Subsidiary, except for Investments in
an aggregate amount (for all Insurance Subsidiaries combined) not in excess of
the greater of (x) $25,000,000 and (y) 2.0% of Total Assets; provided that such
amount may be increased by non-material amounts in the discretion and with the
approval of the Administrative Agent (for the avoidance of doubt, such
investments shall exclude any expenses and premiums paid to any Insurance
Subsidiary by any Group Member in the ordinary course of such Group Member’s
business).

7.18 Limitations on Institutional L/C Collateral Account. Permit Holdings or any
of its Subsidiaries to withdraw or apply the funds deposited in the
Institutional L/C Collateral Account for any purpose other than to (i) prepay
the Loans; (ii) cash collateralize any Institutional L/C Exposure; or
(iii) secure any Obligations hereunder in a manner reasonably satisfactory to
the Administrative Agent.

 

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SECTION 8

EVENTS OF DEFAULT

If any of the following events shall occur and be continuing:

(a) the Borrower shall fail to pay any principal of any Loan or Reimbursement
Obligation when due in accordance with the terms hereof; or the Borrower shall
fail to pay any interest on any Loan or Reimbursement Obligation within five
(5) Business Days, or any other amount payable hereunder or under any other Loan
Document, within ten (10) Business Days after such amount becomes due in
accordance with the terms hereof; or

(b) any representation or warranty made or deemed made by any Loan Party herein
or in any other Loan Document or that is contained in any certificate, document
or financial statement furnished by it at any time under or in connection with
this Agreement or any such other Loan Document shall prove to have been
inaccurate in any materially adverse respect on or as of the date made or deemed
made; or

(c) any Loan Party shall default in the observance or performance of any
agreement contained in clause (i) of Section 6.4(a) (with respect to the
Borrower only in its jurisdiction of incorporation), Section 6.7(a) (provided
that the delivery of a notice of Default or Event of Default at any time will
cure an Event of Default under Section 6.7(a) arising from the failure of the
Borrower to timely deliver such notice of Default or Event of Default)or
Section 7 of this Agreement; provided that an Event of Default under Section 7.1
is subject to the Cure Right set forth in Section 8; provided further that an
Event of Default under Section 7.1 shall not constitute an Event of Default for
purposes of any Term Loan unless and until the Administrative Agent (with the
consent, or at the request, of the Majority Facility Lenders of the Revolving
Facility) has actually terminated the Revolving Commitments and declared all
outstanding Revolving Loans to be immediately due and payable in accordance with
this Agreement and such declaration has not been rescinded on or before such
date; or

(d) any Loan Party shall default in the observance or performance of any other
agreement contained in this Agreement or any other Loan Document (other than as
provided in paragraphs (a) through (c) of this Section 8), and such default
shall continue unremedied for a period of thirty (30) days after notice to the
Borrower from the Administrative Agent or the Required Lenders; or

(e) any Group Member shall (i) default in making any payment of any principal of
any Indebtedness (including any Guarantee Obligation, but excluding the
Obligations) on the scheduled or original due date with respect thereto, or
(ii) default in making any payment of any interest on any such Indebtedness
(excluding the Obligations), in each case of clauses (i) and (ii), beyond the
period of grace and giving of notice, if any, provided in the instrument or
agreement under which such Indebtedness was created and such default has not
been waived or (iii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to
cause, beyond all applicable grace periods and with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity or (in
the case of any such Indebtedness constituting a Guarantee Obligation) to become
payable and such default has not been waived; provided, that a default, event or
condition described in clause (i), (ii) or (iii) of this paragraph (e) shall not
at any time constitute an Event of Default unless, at such time, one or more
defaults, events or conditions of the type described in clauses (i), (ii) and
(iii) of this paragraph (e) shall have occurred and be continuing with respect
to Indebtedness the outstanding principal amount of which exceeds in the
aggregate the greater of (x) $50,000,000 and (y) 5% of Total Assets; provided
further that this paragraph (e) shall not apply to any breach or default of
Indebtedness (x) that is remedied by the Borrower or the applicable Restricted
Subsidiary or (y) that is waived (including in the form of amendment) by the
requisite holders of the applicable item of Indebtedness, in either case, prior
to the acceleration of all the Loans pursuant to this Section 8, and such remedy
shall cause any default arising hereunder to cease to exists; provided that this
clause (e) shall not apply to intercompany Indebtedness or Indebtedness that is
incurred on a non-recourse basis; or

 

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(f) (i) any Group Member shall commence any case, proceeding or other action
(A) under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or any Group Member shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced
against any Group Member any case, proceeding or other action of a nature
referred to in clause (i) above that (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed or
undischarged for a period of sixty (60) days; or (iii) there shall be commenced
against any Group Member any case, proceeding or other action seeking issuance
of a warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets that results in the entry of an order for
any such relief that shall not have been vacated, discharged, or stayed or
bonded pending appeal within sixty (60) days from the entry thereof; or (iv) any
Group Member shall take any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or

(g) (i) any Person shall engage in any non-exempt “prohibited transaction” (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) a failure to satisfy the minimum funding standard (within the meaning of
Section 302 of ERISA or Section 412 of the Code), whether or not waived, or any
Lien in favor of the PBGC or a Plan shall arise on the assets of the Borrower or
any Commonly Controlled Entity, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Lenders, likely to result
in the termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other similar event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such events or
conditions, if any, would, reasonably be expected to have a Material Adverse
Effect; or

(h) one or more judgments or decrees shall be entered against any Group Member
involving in the aggregate a liability (not paid or covered by insurance as to
which the relevant insurance company has not denied coverage) of the greater of
(x) $50,000,000 and (y) 5% of Total Assets or more, and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending appeal
within forty-five (45) days from the entry thereof; or

(i) any of the Security Documents shall cease, for any reason, to be in full
force and effect (except in accordance with its terms), or any Loan Party or any
Affiliate of any Loan Party shall so assert, or any Lien created by any of the
Security Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby (except in accordance with its terms);
or

(j) the guarantee contained in Section 2 of the Guarantee and Security Agreement
shall cease, for any reason, to be in full force and effect or any Loan Party or
any Affiliate of any Loan Party shall so assert (except in accordance with its
terms); or

(k) a Change of Control shall occur; or

 

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(l) any Insurance Subsidiary shall become subject to any conservation,
rehabilitation, liquidation order, directive or mandate issued by any
Governmental Authority which could reasonably be expected to have a Material
Adverse Effect;

then, and in any such event, (I) other than (x) an event described in paragraph
(c) of this Section 8 in respect of a default of performance or compliance with
the covenant under Section 7.1 or (y) an event with respect to the Borrower
described in clause (i) or (ii) of paragraph (f) of this Section 8; provided
that in the case of clause (x), the actions hereinafter described will be
permitted to occur only (A) following the expiration of the ability to
effectuate the Cure Right if such Cure Right has not been so exercised and
(B) if the express conditions of the last proviso contained in Section 8(c) have
been satisfied, and at any time thereafter during the continuance of such event,
(A) if such event is an Event of Default specified in clause (y) above with
respect to the Borrower, automatically the Commitments shall immediately
terminate and the Loans (with accrued interest thereon) and all other amounts
owing under this Agreement and the other Loan Documents (including all amounts
of Reimbursement Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default (other than as described in clause (x) above), either
or both of the following actions may be taken: (i) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Loans (with
accrued interest thereon) and all other amounts owing under this Agreement and
the other Loan Documents (including all amounts of Reimbursement Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) to be due and payable
forthwith, whereupon the same shall immediately become due and payable and (II)
in the case of an event under paragraph (c) of this Section 8 in respect of a
failure to observe or perform the covenant under Section 7.1 (provided that the
actions hereinafter described will be permitted to occur only following the
expiration of the ability to effectuate the Cure Right if such Cure Right has
not been so exercised), and at any time thereafter during the continuance of
such event, the Administrative Agent with the consent of the Majority Facility
Lenders with respect to the Revolving Facility may, and at the request of the
Majority Facility Lenders with respect to the Revolving Facility shall, by
notice to the Borrower, take either or both of the following actions, at the
same or different times (except the following actions may not be taken until the
ability to exercise the Cure Right under Section 8 has expired): (i) terminate
the Revolving Commitments, and thereupon the Revolving Commitments shall
terminate immediately, and (ii) declare the Revolving Loans then outstanding to
be due and payable in whole (or in part, in which case any principal not so
declared to be due and payable may thereafter, during the continuance of such
event, be declared to be due and payable), and thereupon the principal of the
Revolving Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued
hereunder, 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 (to the extent permitted by applicable law). With respect to all
Letters of Credit with respect to which presentment for honor shall not have
occurred at the time of an acceleration pursuant to this paragraph, the Borrower
shall at such time deposit in a cash collateral account opened by the
Administrative Agent an amount equal to the aggregate then undrawn and unexpired
amount of such Letters of Credit. Amounts held in such cash collateral account
shall be applied by the Administrative Agent to the payment of Reimbursement
Obligations in respect of drafts drawn under such Letters of Credit, and the
unused portion thereof after all such Letters of Credit shall have expired or
been fully drawn upon, if any, shall be applied to repay other Obligations.
After all such Letters of Credit shall have expired or been fully drawn upon,
all Reimbursement Obligations shall have been satisfied and all other
Obligations shall have been paid in full, the balance, if any, in such cash
collateral account shall be returned to the Borrower (or such other Person as
may be lawfully entitled thereto). Except as expressly provided above in this
Section, presentment, demand, protest and all other notices of any kind are
hereby expressly waived by the Borrower.

 

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Solely for the purposes of determining whether a Default or an Event of Default
has occurred under paragraphs (e), (f) or (h) of this Section 8, any reference
in any such paragraph to any Restricted Subsidiary shall be deemed not to
include any such Restricted Subsidiaries affected by any event or circumstance
referred to in such paragraph that did not, in the aggregate when taken together
with any other similarly situated Restricted Subsidiaries, as of the last day of
the fiscal quarter of the Borrower most recently ended, have aggregate assets
with a value equal to or greater than 7.5% of Total Assets of the Borrower and
its Restricted Subsidiaries as of such date, based on the consolidated balance
sheet of the Borrower and its Restricted Subsidiaries as of such date.

Notwithstanding anything to the contrary contained in Section 8, in the event
that the Borrower fails to comply with the requirements of the covenant under
Section 7.1 at the end of any fiscal quarter, until the expiration of the
twentieth (20th) day subsequent to the date that the Compliance Certificate is
required to be delivered pursuant to Section 6.2(b), in respect of the period
ending on the last day of such quarter, any net cash proceeds of any common
equity contribution made, directly or indirectly to the Borrower, or any net
cash proceeds of any issuance of Permitted Capital Stock of the Borrower, in
each case following the Closing Date and/or following the end of such fiscal
quarter and on or prior to such twentieth (20th) day, in each case in an
aggregate amount equal to the amount necessary to cure the relevant failure to
comply with such covenant may, at the election of the Borrower be included in
the calculation of Consolidated EBITDA for purposes of determining compliance
with such covenant (the “Cure Right”), and upon the earlier of (x) the delivery
by the Borrower of written notice to the Administrative Agent that it intends to
exercise the Cure Right hereunder (it being understood that to the extent such
notice is provided in advance of delivery of a Compliance Certificate for the
applicable period, the amount of such net cash proceeds that are received as the
Cure Amount may be lower than specified in such notice to the extent that the
amount necessary to cure any Event of Default under Section 7.1 is less than the
full amount of any originally designated amount) and (y) receipt by the Borrower
of such cash proceeds (the “Cure Amount”), such covenant shall be recalculated
giving effect to the following pro forma statements:

(i) solely for purpose of determining the existence of an Event of Default under
Section 7.1, Consolidated EBITDA for the fiscal quarter of the Borrower for
which such certificate is required to be delivered shall be increased by an
amount equal to the Cure Amount, and such increase shall be effective for all
periods that include the fiscal quarter of the Borrower for which such Cure
Right was exercised and not for any other purpose under this Agreement; and

(ii) if, after giving effect to the foregoing recalculations (but not giving
effect to any payment of Indebtedness made with such Cure Amount (when
calculating compliance with Section 7.1 at the end of such (but no other) fiscal
quarter), the Borrower shall then be in compliance with the requirements of the
covenant under Section 7.1 at the end of such fiscal quarter, the Borrower shall
be deemed to have satisfied the requirements of the covenant under Section 7.1
as of the last day of such fiscal quarter with the same effect as though there
had been no failure to comply therewith at such date, and the applicable breach
or Default or Event of Default of the covenant under Section 7.1 that had
occurred shall be deemed cured for this purpose under this Agreement and the
other Loan Documents) if the Borrower has delivered written notice pursuant to
clause (x) above; provided that if the Cure Amount is not received by the
Borrower prior to such twentieth (20th) day, such Default or Event of Default
shall be deemed reinstated.

Notwithstanding anything herein to the contrary, (i) in each four-fiscal-quarter
period of the Borrower there shall be at least two (2) fiscal quarters in which
the Cure Right is not exercised, (ii) the Cure Right shall not be exercised more
than five (5) times during the term of this Agreement, (iii) the Cure

 

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Amount shall not exceed the amount required to cause the Borrower to be in
compliance with the covenant under Section 7.1, and (iv) neither the
Administrative Agent nor any Lender or Secured Party shall exercise any remedy
under the Loan Documents or applicable law on the basis of an Event of Default
caused by the failure to comply with Section 7.1 until after the Borrower’s
ability to cure has lapsed and Borrower has not exercised the Cure Right.
Notwithstanding any other provision in this Agreement to the contrary, the Cure
Amount received pursuant to any exercise of the Cure Right shall be disregarded
for all other purposes.

SECTION 9

THE AGENTS

9.1 Appointment and Authority. Each of the Lenders and the Issuing Lender hereby
irrevocably appoints Barclays, to act on its behalf as the Administrative Agent
hereunder and under the other Loan Documents and authorizes such Agent to take
such actions on its behalf and to exercise such powers as are delegated to such
Agent by the terms hereof or thereof, together with such actions and powers as
are reasonably incidental thereto. The provisions of this Section 9.1 are solely
for the benefit of the Administrative Agent, the Lenders and the Issuing Lender,
and neither Borrower nor any other Loan Party shall have rights as a third party
beneficiary of any of such provisions.

9.2 Rights as a Lender. Each person serving as an Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not an Agent and the term “Lender” or
“Lenders” shall, unless otherwise expressly indicated or unless the context
otherwise requires, include each person serving as an Agent hereunder in its
individual capacity. Such person and its Affiliates may accept deposits from,
lend money to, act as the financial advisor or in any other advisory capacity
for and generally engage in any kind of business with Borrower or any Subsidiary
or other Affiliate thereof as if such person were not an Agent hereunder and
without any duty to account therefor to the Lenders.

9.3 Exculpatory Provisions. No Agent shall have any duties or obligations except
those expressly set forth herein and in the other Loan Documents. Without
limiting the generality of the foregoing, no Agent:

(a) shall be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;

(b) shall have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that such Agent is required
to exercise as directed in writing by the Required Lenders (or such other number
or percentage of the Lenders as shall be expressly provided for herein or in the
other Loan Documents); provided that such Agent shall not be required to take
any action that, in its judgment or the judgment of its counsel, may expose such
Agent to liability or that is contrary to any Loan Document or applicable
Requirements of Law; and

(c) shall, except as expressly set forth herein and in the other Loan Documents,
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to Borrower or any of its Affiliates that is
communicated to or obtained by the person serving as such Agent or any of its
Affiliates in any capacity.

No Agent shall be liable for any action taken or not taken by it (x) with the
consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary,

 

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or as such Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Section 10.2) or (y) in the absence of its own
gross negligence or willful misconduct. No Agent shall be deemed to have
knowledge of any Default unless and until notice describing such Default is
given to such Agent by Borrower, a Lender or the Issuing Lender.

No Agent shall be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this
Agreement or any other 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 or conditions set forth herein or therein
or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Loan Document or any
other agreement, instrument or document or (v) the satisfaction of any condition
set forth in Section 5 or elsewhere herein, other than to confirm receipt of
items expressly required to be delivered to such Agent. Without limiting the
generality of the foregoing, the use of the term “agent” in this Agreement with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a matter of market custom
and is intended to create or reflect only an administrative relationship between
independent contracting parties.

Each party to this Agreement acknowledges and agrees that the Administrative
Agent may use an outside service provider for the tracking of all UCC financing
statements required to be filed pursuant to the Loan Documents and notification
to the Administrative Agent of, among other things, the upcoming lapse or
expiration thereof, and that any such service provider will be deemed to be
acting at the request and on behalf of Borrower and the other Loan Parties. No
Agent shall be liable for any action taken or not taken by any such service
provider.

9.4 Reliance by Agent. Each 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, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper person. Each Agent also may rely upon any statement made to it orally or
by telephone and believed by it to have been made by the proper person, and
shall not incur any liability for relying thereon. In determining compliance
with any condition hereunder to the making of a Loan, or the issuance of a
Letter of Credit, that by its terms must be fulfilled to the satisfaction of a
Lender or the Issuing Lender, the Administrative Agent may presume that such
condition is satisfactory to such Lender or the Issuing Lender unless the
Administrative Agent shall have received notice to the contrary from such Lender
or the Issuing Lender prior to the making of such Loan or the issuance of such
Letter of Credit. Each Agent may consult with legal counsel (who may be counsel
for Borrower), independent accountants and other experts selected by it, and
shall be entitled to rely upon the advice of any such counsel, accountants or
experts and shall not be liable for any action taken or not taken by it in
accordance with such advice.

9.5 Delegation of Duties. Each Agent may perform any and all of its duties and
exercise its rights and powers hereunder or under any other Loan Document by or
through, or delegate any and all such rights and powers to, any one or more
sub-agents appointed by such Agent. Each Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such subagent and to the Related Parties of each
Agent and any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as
well as activities as Agent.

 

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9.6 Resignation of Agent.

(a) Each Agent may at any time give notice of its resignation to the Lenders,
the Is-suing Lender and Borrower. Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, with the Borrower’s
consent, to appoint a successor, which shall be a bank with an office in the
United States, or an Affiliate of any such bank with an office in the United
States. If no such successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within thirty (30) days after
the retiring Agent gives notice of its resignation, then the retiring Agent may,
on behalf of the Lenders and the Issuing Lender, appoint a successor Agent
meeting the qualifications set forth above provided that if the Agent shall
notify Borrower and the Lenders that no qualifying person has accepted such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (1) the retiring Agent shall be discharged from
its duties and obligations hereunder and under the other Loan Documents (except
that in the case of any collateral security held by the Administrative Agent on
behalf of the Lenders or the Issuing Lender under any of the Loan Documents, the
retiring Administrative Agent shall continue to hold such collateral security as
nominee until such time as a successor Administrative Agent is appointed) and
(2) all payments, communications and determinations provided to be made by, to
or through an Agent shall instead be made by or to each Lender and the Issuing
Lender directly, until such time as the Required Lenders appoint a successor
Agent as provided for above in this paragraph. Upon the acceptance of a
successor’s appointment as Agent hereunder, such successor shall succeed to and
become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Agent, and the retiring Agent shall be discharged from all
of its duties and obligations hereunder or under the other Loan Documents (if
not already discharged therefrom as provided above in this paragraph). The fees
payable by Borrower to a successor Agent shall be the same as those payable to
its predecessor unless otherwise agreed between Borrower and such successor.
After the retiring Agent’s resignation hereunder and under the other Loan
Documents, the provisions of this Section 9 shall continue in effect for the
benefit of such retiring Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while the retiring Agent was acting as Agent.

(b) The Issuing Lender or the Swingline Lender may at any time give notice of
its resignation to the Lenders, the Administrative Agent and Borrower. Upon
receipt of any such notice of resignation, the Required Lenders shall have the
right with the Borrower’s consent to appoint a successor, which shall be a bank
with an office in the United States, or an Affiliate of any such bank with an
office in the United States. If no such successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within thirty
(30) days after the retiring Issuing Lender and/or the Swingline Lender gives
notice of its resignation, then the Borrower may, on behalf of the Lenders and
the Administrative Agent, appoint a successor Issuing Lender and/or the
Swingline Lender meeting the qualifications set forth above; provided that if
the Issuing Lender and/or the Swingline Lender shall notify Borrower and the
Lenders that no qualifying person has accepted such appointment, then such
resignation shall nonetheless become effective in accordance with such notice
and (1) the retiring Issuing Lender and/or the Swingline Lender shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents and (2) all payments, communications and determinations provided to be
made by, to or through an Issuing Lender and/or the Swingline Lender shall
instead be made by or to each Lender and the Administrative Agent directly,
until such time as the Required Lenders appoint a successor Issuing Lender
and/or the Swingline Lender as provided for above in this paragraph (except as
to already outstanding Letters of Credit and Swingline Loans, as to which the
Issuing Lender and the Swingline Lender shall continue in such capacities until
the Revolving L/C Exposure relating thereto shall be reduced to zero and such
Swingline Loans shall have been repaid, as applicable, or until the successor
Administrative Agent shall succeed to the roles of Issuing Lender and Swingline
Lender in accordance with the next sentence and perform the actions required by
the next sentence). Upon the acceptance of a successor’s appointment as Issuing
Lender and/or Swingline Lender hereunder, unless the Administrative Agent and/or
such successor gives notice to Borrower otherwise, (i) such successor shall
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become vested with all of the rights, powers, privileges and duties of the
retiring Issuing Lender and Swingline Lender and (ii) the successor Issuing
Lender shall issue letters of credit in substitution for the Letters of Credit,
if any, outstanding at the time of such succession or make other arrangements
satisfactory to the retiring Issuing Lender to effectively assume the
obligations of the retiring Issuing Lender with respect to such Letters of
Credit. At the time any such resignation of the Issuing Lender shall become
effective, Borrower shall pay all unpaid fees accrued for the account of the
retiring Issuing Lender.

9.7 Non-Reliance on Agent and Other Lenders. Each Lender and the Issuing Lender
acknowledges that it has, independently and without reliance upon any Agent 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 Lender further represents and warrants that it has had the
opportunity to review each document made available to it in connection with this
Agreement and has acknowledged and accepted the terms and conditions applicable
to the recipients thereof. Each Lender and the Issuing Lender also acknowledges
that it will, independently and without reliance upon any Agent or any other
Lender and based on such documents and information as it shall from time to time
deem appropriate, continue to make its own decisions in taking or not taking
action under or based upon this Agreement, any other Loan Document or any
related agreement or any document furnished hereunder or thereunder.

9.8 Withholding Tax. To the extent required by any applicable law, the
Administrative Agent may withhold from any payment to any Lender an amount
equivalent to any applicable withholding tax. Without limiting or expanding the
provisions of Section 2.18, 2.19 or 2.20, each Lender shall, and does hereby,
indemnify the Administrative Agent against, and shall make payable in respect
thereof within thirty (30) days after demand therefor, any and all taxes,
interest, additions to tax and penalties and any and all related losses, claims,
liabilities and expenses (including fees, charges and disbursements of any
counsel for the Administrative Agent) incurred by or asserted against the
Administrative Agent by the Internal Revenue Service or any other Governmental
Authority as a result of the failure of the Administrative Agent to properly
withhold tax from amounts paid to or for the account of any Lender for any
reason (including, without limitation, because the appropriate form was not
delivered or not property executed, or because such Lender failed to notify the
Administrative Agent of a change in circumstance that rendered the exemption
from, or reduction of, withholding tax ineffective). 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 this Agreement or any other Loan
Document against any amount due the Administrative Agent under this Section 9.8.
The agreements in this Section 9.8 shall survive the resignation and/or
replacement of the Administrative Agent, any assignment of rights by, or the
replacement of, a Lender, the termination of the Commitments and the repayment,
satisfaction or discharge of all other Obligations. For the avoidance of doubt,
the term “Lender” shall, for purposes of this Section 9.8, include any Swingline
Lender, any Conduit Lender and any Issuing Lender.

9.9 No Fiduciary Duties, Etc.

(a) 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), each Loan Party acknowledges and agrees that
(i) (A) the arranging and other services regarding this Agreement provided by
the Agents, the Co-Documentation Agents, the Syndication Agents, the Lenders and
the Joint Lead Arrangers and Joint Bookrunners are arm’s-length commercial
transactions between the Loan Parties and their respective Affiliates, on the
one hand, and the Agents, the Co-Documentation Agents, the Syndication Agents,
the Lenders and the Joint Lead Arrangers and Joint Bookrunners, on the other
hand, (B) each Loan Party has consulted its own legal, accounting, regulatory
and tax advisors to the extent it has deemed appropriate, and (C) each Loan
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and accepts, the terms, risks and conditions of the transactions contemplated
hereby and by the other Loan Documents; (ii) (A) each of the Agents, the
Co-Documentation Agents, the Syndication Agent, the Lenders and the Joint Lead
Arrangers and Joint Bookrunners 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 the
Borrower, Holdings, any of their respective Affiliates or any other Person and
(B) none of the Agents, the Co-Documentation Agents, the Syndication Agents, the
Lenders and the Joint Lead Arrangers and Joint Bookrunners has any obligation to
the Loan Parties or any of their respective Affiliates with respect to the
transactions contemplated hereby except those obligations expressly set forth
herein and in the other Loan Documents; and (iii) the Agents, the
Co-Documentation Agents, the Lenders and the Joint Lead Arrangers and their
respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Borrower, Holdings and their
respective Affiliates, and none of the Agents, the Co-Documentation Agents, the
Syndication Agents, the Lenders and the Joint Lead Arrangers and Joint
Bookrunners has any obligation to disclose any of such interests to the
Borrower, Holdings or any of their respective Affiliates.

(b) Anything herein to the contrary notwithstanding, none of the Joint
Bookrunners, Joint Lead Arrangers, Syndication Agent or Co-Documentation Agents
listed on the cover page hereof shall have any powers, duties or
responsibilities under this Agreement or any of the other Loan Documents, except
in its capacity, as applicable, as the Administrative Agent, a Lender or the
Issuing Lender hereunder.

9.10 Enforcement. Notwithstanding anything to the contrary contained herein or
in any other Loan Document, the authority to enforce rights and remedies
hereunder and under the other Loan Documents against the Loan Parties or any of
them shall be vested exclusively in, and all actions and proceedings at law in
connection with such enforcement shall be instituted and maintained exclusively
by, the Administrative Agent, or as the Required Lenders may require or
otherwise direct, for the benefit of all the Lenders and the Issuing Lender;
provided, however, that the foregoing shall not prohibit (a) the Administrative
Agent from exercising on its own behalf the rights and remedies that inure to
its benefit (solely in its capacity as Administrative Agent) hereunder and under
the other Loan Documents, (b) the Issuing Lender or the Swingline Lender from
exercising the rights and remedies that inure to its benefit (solely in its
capacity as Issuing Lender or Swingline Lender, as the case may be) hereunder
and under the other Loan Documents, (c) any Lender from exercising setoff rights
in accordance with, and subject to, the terms of this Agreement, or (d) any
Lender from filing proofs of claim or appearing and filing pleadings on its own
behalf during the pendency of a proceeding relative to any Loan Party under any
bankruptcy or insolvency law.

9.11 Collateral and Guaranty Matters. Each of the Lenders (on behalf of itself,
its Affiliates and Related Parties (and in its capacity as a Lender under any
Specified Swap Agreement) and the Issuing Lender irrevocably authorize the
Administrative Agent, at its option and in its discretion,

(a) to release any Lien on any property granted to or held by the Administrative
Agent under any Loan Document (i) upon the payment in full of all Obligations
(other than contingent obligations), termination or expiration of the
Commitments of the Lenders to make any Loan or to issue any Letter of Credit and
termination or cash collateralization, in accordance with the provisions of this
Agreement, of all Letters of Credit, (ii) that is sold or transferred or to be
sold or transferred as part of or in connection with any sale permitted
hereunder or under any other Loan Document to a Person that is not a Loan Party,
(iii) that constitutes “excluded collateral” (as described in Section 3 of the
Guarantee and Security Agreement), (iv) if the property subject to such a Lien
is owned by a Guarantor upon release of such Guarantor from its Guarantee
Obligation, (v) upon the designation of a Subsidiary as an Unrestricted
Subsidiary, (vi) if the property subject to such Lien is located in an area that
has been identified by the Secretary of Housing and Urban Development as a
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special flood hazards (whether as a result of a change in the mapping of Special
Flood Hazard Areas or otherwise) and in which flood insurance has been made
available under the National Flood Insurance Act of 1968 or (vii) if approved,
authorized or ratified in writing in accordance with Section 10.2;

(b) to release any Guarantor from its obligations under this Agreement and other
Loan Documents if such Person ceases to be a Restricted Subsidiary (including
upon the designation of a Subsidiary as an Unrestricted Subsidiary) or a Person
required to be a Subsidiary Guarantor pursuant to the terms of the Loan
Documents as a result of a transaction permitted hereunder; and

(c) to (x) subordinate any Lien on any property granted to or held by the
Administrative Agent under any Loan Document to the holder of any Lien on such
property that is permitted hereunder or (y) to enter into intercreditor
agreements.

Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under this Agreement and other Loan Documents
pursuant to this Section 9.11. In each case as specified in this Section 9.11,
the Administrative Agent will, at the Borrower’s expense, execute and deliver to
the applicable Loan Party such documents as such Loan Party may reasonably
request to evidence the release of such item of Collateral from the assignment
and security interest granted under the Security Documents or to subordinate its
interest in such item, or to release such Guarantor from its obligations under
the Loan Documents, in each case in accordance with the terms of the Loan
Documents and this Section 9.11.

9.12 Indemnity; Damage Waiver.

(a) Reserved.

(b) Reimbursement by Lenders. To the extent that Borrower for any reason fails
to indefeasibly pay any amount required under Section 10.5 to be paid by it to
the Administrative Agent (or any sub-agent thereof), the Issuing Lender, the
Swingline Lender or any Related Party of any of the foregoing, each Lender
severally agrees to pay to the Administrative Agent (or any such sub-agent), the
Issuing Lender, the Swingline Lender or such Related Party, as the case may be,
such Lender’s pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount (such
indemnity shall be effective whether or not the related losses, claims, damages,
liabilities and related expenses are incurred or asserted by any party hereto or
any third party); provided that (i) the unreimbursed expense or indemnified
loss, claim, damage, liability or related expense, as the case may be, was
incurred by or asserted against the Administrative Agent (or any such
sub-agent), the Swingline Lender or the Issuing Lender in its capacity as such,
or against any Related Party of any of the foregoing acting for the
Administrative Agent (or any such sub-agent), the Swingline Lender or Issuing
Lender in connection with such capacity and (ii) such indemnity for the
Swingline Lender or the Issuing Lender shall not include losses incurred by the
Swingline Lender or the Issuing Lender due to one or more Lenders defaulting in
their obligations to purchase participations of Swingline Exposure under
Section 2.7 or Revolving L/C Exposure under Section 3.4 or to make Revolving
Loans under Section 3.4 (it being understood that this proviso shall not affect
the Swingline Lender’s or the Issuing Lender’s rights against any Defaulting
Lender). The obligations of the Lenders under this paragraph (c) are subject to
the provisions of Section 2.17. For purposes hereof, a Lender’s “pro rata share”
shall be determined based upon its share of the sum of the Total Revolving
Extensions of Credit, outstanding Tranche B Term Loans and unused Total
Revolving Commitments and the Institutional L/C Exposure at the time.

 

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(c) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable Requirements of Law, no party hereto shall assert, and each party
hereto hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby, the transactions contemplated hereby or thereby, any Loan
or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred
to in paragraph (b) above shall be liable for any damages arising from the use
by unintended recipients of any information or other materials distributed by it
through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby.

(d) Payments. All amounts due under this Section 9.12 shall be payable not later
than three (3) Business Days after demand therefor.

(e) Specified Swap Agreements. No Lender under any Specified Swap Agreement that
obtains the benefits of the Security Agreement or any Collateral by virtue of
the provisions hereof or of the Security Agreement or any Security 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 or otherwise in respect
of the Collateral (including the release or impairment of any Collateral) other
than in its capacity as a Lender and, in such case, only to the extent expressly
provided in the Loan Documents. Notwithstanding any other provision of this
Section 9 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, Secured Obligations arising under Specified Swap Agreements
with Lenders unless the Administrative Agent has received written notice of such
Secured Obligations, together with such supporting documentation as the
Administrative Agent may request from the applicable Lender.

SECTION 10

MISCELLANEOUS

10.1 Amendments and Waivers. Except as provided in Section 2.24 with respect to
an Extension Offer, in Section 2.25 with respect to any Incremental Facility
Amendment, in Section 2.28 with respect to any Refinancing Amendments, in
Section 10.20 or as otherwise specifically provided herein, neither this
Agreement, any other Loan Document, nor any terms hereof or thereof may be
amended, supplemented or modified except in accordance with the provisions of
this Section 10.1. The Required Lenders and each Loan Party party to the
relevant Loan Document may, or, with the written consent of the Required
Lenders, the Administrative Agent and each Loan Party party to the relevant Loan
Document may, from time to time, (a) enter into written amendments, supplements
or modifications hereto and to the other Loan Documents for the purpose of
adding any provisions to this Agreement or the other Loan Documents or changing
in any manner the rights of the Lenders or of the Loan Parties hereunder or
thereunder or (b) waive, on such terms and conditions as the Required Lenders or
the Administrative Agent, as the case may be, may specify in such instrument,
any of the requirements of this Agreement or the other Loan Documents or any
Default or Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement or modification shall (i) except
as provided for hereunder with respect to Refinancing Amendments or
Section 2.24, forgive the principal amount or extend the final scheduled date of
maturity of any Loan, extend the scheduled date of any amortization payment (but
not prepayment) in respect of any Tranche B Term Loan, reduce the stated rate of
any interest or fee payable hereunder (except (x) in connection with the waiver
of applicability of any post-default increase in interest rates (which waiver
shall be effective with the consent of the Required Lenders) and (y) that any
amendment or modification of defined terms used in the financial covenants in
this Agreement shall not constitute a reduction in the rate of interest or fees
for purposes of this clause (i)) or extend

 

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the scheduled date of any payment thereof, or increase the amount or extend the
expiration date of any Lender’s Revolving Commitment, in each case without the
written consent of each Lender (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default
or of any mandatory reductions of Commitments shall not constitute an increase
of Commitment of any Lender and that an increase in the available portion of any
Commitment of any Lender shall not constitute an increase in the Commitment of
any Lender) directly and adversely affected thereby; (ii) eliminate or reduce
the voting rights of any Lender under this Section 10.1 without the written
consent of such Lender; (iii) reduce any percentage specified in the definition
of Required Lenders without the written consent of all Lenders (it being
understood that, other than as specifically provided in this Agreement,
including pursuant to (w) this Section 10.1 with respect to Replacement Tranche
B Term Loans, (x) any Incremental Facility Amendment (the consent requirements
for which are set forth in Section 2.25), (y) a Refinancing Amendment (the
consent requirements for which are set forth in Section 2.28) and (z) an
Extension Offer pursuant to Section 2.24, with the consent of the Required
Lenders, additional extensions of credit pursuant to this Agreement may be
included in the determination of the Required Lenders or a particular Class of
Lenders on substantially the same basis as the Term Loans and Revolving
Commitments on the Closing Date), (iv) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Agreement and the
other Loan Documents, release all or substantially all of the Collateral or
release all or substantially all of the Loan Parties (or Loan Parties owning all
or substantially all of the Collateral) from their obligations under the
Guarantee and Security Agreement (except in accordance with its terms), in each
case without the written consent of all Lenders (it being understood that any
subordination of a lien permitted hereunder shall not constitute a release of a
lien under this section and the granting of any pari passu liens in connection
with the incurrence of debt or the granting of liens otherwise permitted
hereunder from time to time (including pursuant to amendments) shall not
constitute a release of liens); (v) amend, waive or otherwise modify any term or
provision of 7.1, Section 8 (solely as relates to Section 7.1) or the definition
of “Consolidated First Lien Leverage Ratio” (or any of its component definitions
(as such in such Section but not as used in other Sections of this Agreement))
without the consent of the Majority Facility Lenders with respect to the
Revolving Commitments, (vi) reduce the percentage specified in the definition of
Majority Facility Lenders with respect to any Facility without the written
consent of all Lenders under such Facility; (vii) amend, modify or waive any
provision of Section 9 without the written consent of the Administrative Agent;
(viii) amend, modify or waive any provision of Section 2.6 or 2.7 without the
written consent of the Swingline Lender; (ix) amend, modify or waive any
provision of Section 3 or the Institutional L/C Collateral Account Agreement or
the Institutional Letter of Credit Fee Letter without the written consent of
each Issuing Lender affected thereby; or (x) in connection with an amendment
that addresses solely a repricing transaction in which any Class of Term Loans
is refinanced with a Class of term loans bearing (or is modified in such a
manner such that the resulting term loans bear) a lower Yield (a “Permitted
Repricing Amendment”), only the consent of the Lenders holding Term Loans
subject to such permitted repricing transaction that will continue as a Lender
in respect of the repriced tranche of Term Loans or modified Term Loans (it
being agreed that if the opportunity of consent is made available to all Lenders
on the same terms, only the consent of the Borrower and any of the parties
identified in clauses (i) through (x) shall be required for an amendment,
modification, supplement or waiver referred to therein). Any such waiver and any
such amendment, supplement or modification shall apply equally to each of the
Lenders and shall be binding upon the Loan Parties, the Lenders, the
Administrative Agent and all future holders of the Loans. In the case of any
waiver, the Loan Parties, the Lenders and the Administrative Agent shall be
restored to their former position and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.
Notwithstanding the foregoing, no Lender consent is required to effect any
amendment, modification or supplement to any intercreditor agreement or
arrangement permitted under this Agreement or in any document pertaining to any
Indebtedness permitted hereby that is permitted to be secured by the Collateral,
including any Incremental Term Loan, Incremental Revolving Loan, Refinancing
Term Loan, Refinancing Revolving Loan, Refinancing Revolving Commitment,

 

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Extended Term Loans, Extended Revolving Loans, Refinancing Notes, Additional
Term Notes, Unrestricted Additional Term Notes and Permitted First Priority
Refinancing Debt, Permitted Second Priority Refinancing Debt, or Permitted
Unsecured Refinancing Debt for the purpose of adding the holders of such
Indebtedness (or their Senior Representative) as a party thereto and otherwise
causing such Indebtedness to be subject thereto, in each case as contemplated by
the terms of any First Lien Intercreditor Agreement or any Junior Lien
Intercreditor Agreement.

Notwithstanding the foregoing, this Agreement may be amended (or amended and
restated) with the written consent of the then Required Lenders, the
Administrative Agent and the Borrower (a) to add one or more additional credit
facilities to this Agreement and to permit the extensions of credit from time to
time outstanding thereunder and the accrued interest and fees in respect thereof
to share ratably in the benefits of this Agreement and the other Loan Documents
with the extensions of credit under the Facilities and the accrued interest and
fees in respect thereof and (b) to include appropriately the Lenders holding
such credit facilities in any determination of the Required Lenders and Majority
Facility Lenders.

In addition, notwithstanding the foregoing, this Agreement may be amended with
the written consent of the Administrative Agent, the Borrower and the Lenders
providing the relevant Replacement Tranche B Term Loans (as defined below) to
permit the refinancing, replacement or modification of all outstanding Tranche B
Term Loans (“Refinanced Tranche B Term Loans”) with a replacement “B” term loan
tranche hereunder (“Replacement Tranche B Term Loans”), provided that (a) the
aggregate principal amount of such Replacement Tranche B Term Loans (with
appropriate adjustments to take into account any upfront fees or original issue
discount) shall not exceed the aggregate principal amount of such Refinanced
Tranche B Term Loans, (b) the Applicable Margin for such Replacement Tranche B
Term Loans shall not be higher than the Applicable Margin for such Refinanced
Tranche B Term Loans, (c) the weighted average life to maturity of such
Replacement Tranche B Term Loans shall not be shorter than the weighted average
life to maturity of such Refinanced Tranche B Term Loans at the time of such
refinancing, and (d) the Lenders providing the relevant Replacement Tranche B
Term Loans shall have the same relative rights and priorities under the Loan
Documents as the Lenders of the Refinanced Tranche B Term Loans at the time of
such refinancing.

If the Borrower wishes to replace the Commitments, Loans and other extensions of
credit, as applicable, under any Facility (the “Facility Interests”) with ones
having different terms, it shall have the option, with the consent of the
Administrative Agent and subject to at least three (3) Business Days’ advance
notice to the Lenders under such Facility, instead of reducing, terminating and
repaying such Facility Interests to be replaced, to (i) require the Lenders
under such Facility to assign such Facility Interests to the Administrative
Agent or its designees and (ii) amend the terms thereof in accordance with this
Section 10.1 (with such replacement, if applicable, being deemed to have been
made pursuant to this Section 10.1). Pursuant to any such assignment, all
Facility Interests to be replaced shall be purchased at par (allocated among the
Lenders under such Facility in the same manner as would be required if all Loans
included therein were being optionally prepaid and all Commitments included
therein were being optionally reduced or terminated by the Borrower),
accompanied by payment of any accrued interest and fees thereon and any amounts
owing pursuant to Sections 2.20 or 3. By receiving such purchase price, the
Lenders under such Facility shall automatically be deemed to have assigned the
Facility Interests under such Facility pursuant to the terms of the form of
Assignment and Assumption attached hereto as Exhibit A, and accordingly no other
action by such Lenders shall be required in connection therewith. The provisions
of this paragraph are intended to facilitate the maintenance of the perfection
and priority of existing security interests in the Collateral during any such
replacement.

The Borrower may, by written notice to the Administrative Agent from time to
time, make one or more offers (each, a “Loan Modification Offer”) to all the
Lenders of one or more classes of Loans and/or Commitments (each class subject
to such a Loan Modification Offer, an “Affected Class”) to make one or

 

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more Permitted Amendments (as defined below) pursuant to procedures reasonably
specified by the Administrative Agent and reasonably acceptable to the Borrower.
Such notice shall set forth (i) the terms and conditions of the requested
Permitted Amendment and (ii) the date on which such Permitted Amendment is
requested to become effective (which shall not be less than five (5) Business
Days nor more than thirty (30) Business Days after the date of such notice,
unless otherwise agreed to by the Administrative Agent). Permitted Amendments
shall become effective only with respect to the Loans and Commitments of the
Lenders of the Affected Class that accept the applicable Loan Modification Offer
(such Lenders, the “Accepting Lenders”) and, in the case of any Accepting
Lender, only with respect to such Lender’s Loan and Commitments of such Affected
Class as to which such Lender’s acceptance has been made.

The Borrower and each Accepting Lender shall execute and deliver to the
Administrative Agent such documentation as the Administrative Agent shall
reasonably specify to evidence the acceptance of the Permitted Amendments and
the terms and conditions thereof. The Administrative Agent shall promptly notify
each Lender as to the effectiveness of each Permitted Amendment. Each of the
parties hereto hereby agrees that, upon the effectiveness of any Permitted
Amendment, this Agreement shall be deemed amended to the extent (but only to the
extent) necessary to reflect the existence and terms of such Permitted Amendment
and only with respect to the Loans and Commitments of the Accepting Lenders of
the Affected Class. Notwithstanding the foregoing, no Permitted Amendment shall
become effective unless the Administrative Agent, to the extent so reasonably
requested by the Administrative Agent, shall have received legal opinions, board
resolutions and/or an officer’s certificate consistent with those delivered on
the Closing Date under Sections 5.1 and 5.2.

“Permitted Amendments” shall be (i) an extension of the final maturity date of
the applicable Loans and/or Commitments of the Accepting Lenders (provided that
such extensions may not result in having more than one additional final maturity
date under this Agreement in any year without the consent of the Administrative
Agent), (ii) a reduction or elimination of the scheduled amortization of the
applicable Loans of the Accepting Lenders, (iii) change in the required
percentage with respect to the applicable Loans and/or Commitments of the
Accepting Lenders (including by implementation of a “LIBOR floor”) and the
payment of additional fees to the Accepting Lenders (any such increase and/or
payments to be in the form of cash, Capital Stock or other property to the
extent not prohibited by this Agreement) and (iv) if the right to participate in
such amendment is provided to all Lenders on the same terms, a reduction of the
principal amount of the applicable Loans and/or Commitments or a conversion of
the principal amount of the applicable Loans to equity.

10.2 Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy), and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered, or three (3) Business Days after being deposited
in the mail, postage prepaid, or, in the case of telecopy notice, when received,
addressed as follows in the case of Holdings, the Borrower and the
Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:

 

Holdings and Borrower:      National Mentor Holdings, Inc.      313 Congress
Street      Boston, MA 02210      Attention: CEO (with a copy to General
Counsel)      Telecopy: (617) 790-4271      Telephone: (617) 790-4800

 

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with a copy to:      Kirkland & Ellis LLP      300 North LaSalle Street     
Chicago, IL 60654      Attn: Christopher Butler, P.C.      Telecopy: (312)
862-2200      Telephone: (312) 862-2000 Administrative Agent:      Barclays Bank
PLC      745 7th Avenue      New York, NY 10019      Attention: Vanessa
Kurbatskiy      Telecopy: (212) 526-5115      Telephone: (212) 526- 2799     
e-mail: vanessa.kurbatskiy@barclays.com / ltmny@barclays.com with a copy to:
     Weil Gotshal & Manges LLP      767 Fifth Avenue      New York, NY 10153
     Attn: John Cobb, Esq.      Telecopy: (212) 310-8007      Telephone: (212)
310-8959      e-mail: john.cobb@weil.com

provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.

Notices and other communications to the Lenders hereunder may be delivered or
furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Section 2 or 3 unless otherwise agreed by the Administrative Agent
and the applicable Lender. The Administrative Agent or the 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.

10.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.

10.4 Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.

10.5 Payment of Expenses. The Borrower agrees (a) to pay or reimburse each of
the Administrative Agent and the Joint Bookrunners for all its reasonable and
documented out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents

 

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prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including
the reasonable and documented fees and disbursements of one counsel to the
Administrative Agent and Joint Bookrunners (and, to the extent necessary, one
local counsel to the Administrative Agent and Joint Bookrunners in any material
jurisdiction as to which the Administrative Agent reasonably determines local
counsel is necessary) and such other counsel to the Administrative Agent and
Joint Bookrunners as is retained with the Borrower’s consent, and filing and
recording fees and expenses, with statements with respect to the foregoing to be
submitted to the Borrower prior to the Closing Date (in the case of amounts to
be paid on the Closing Date) and from time to time thereafter on a quarterly
basis or such other periodic basis as the Administrative Agent and Borrower
shall deem appropriate, (b) to pay or reimburse each Lender and Agent for all
its reasonable and documented out-of-pocket costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including the
reasonable and documented fees and disbursements of one counsel to all Lenders
and the Agents in the aggregate, (c) to pay, indemnify, and hold each Lender and
Agent harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, that may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and
(d) to pay, indemnify, and hold (i) each Lender and each Agent and (ii) each of
the foregoing’s respective partners, trustees, shareholders, officers,
directors, employees, advisors, representatives, agents, attorneys and
controlling persons (each, an “Indemnitee”) harmless from and against any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents and any such other
documents, including any of the foregoing relating to the use of proceeds of the
Loans or the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of any Group Member or any of the
Properties and the reasonable fees and expenses of one legal counsel for the
Agents and all Lenders (and one local counsel to such Lenders in any material
jurisdiction as to which the Lenders reasonably determine is necessary) in
connection with claims, actions or proceedings by any Indemnitee against any
Loan Party under any Loan Document (all the foregoing in this clause (d),
collectively, the “Indemnified Liabilities”), provided, that the Borrower shall
have no obligation hereunder to any Indemnitee with respect to Indemnified
Liabilities to the extent such Indemnified Liabilities are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence, bad faith or willful misconduct of or material breach
of any Loan Document by such Indemnitee (or any of such Indemnitee’s affiliates
or their respective officers, directors, employees or agents), to the extent
such Indemnitee has settled any claim without the consent of the Borrower (which
is not to be unreasonably withheld or delayed) or disputes between Lenders
(other than with respect to a dispute with a Lender in its capacity as
Administrative Agent, Issuing Lender or Swingline Lender). Without limiting the
foregoing, and to the extent permitted by applicable law, each of Holdings and
the Borrower agrees not to assert and to cause its Subsidiaries not to assert,
and hereby waives and agrees to cause its Subsidiaries to waive, all rights for
contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses
of whatever kind or nature, under or related to Environmental Laws, that any of
them might have by statute or otherwise against any Indemnitee, except to the
extent such claims, demands, penalties, fines, liabilities, settlements,
damages, costs, and expenses of whatever kind or nature, under or related to
Environmental Laws, are found by a final and nonappealable decision of a court
of competent jurisdiction to have resulted from the gross negligence, bad faith
or willful misconduct, of or material breach of any Loan Document by, such
Indemnitee (or any of such Indemnitee’s affiliates or their respective officers,
directors, employees or agents), to the extent such Indemnitee has settled any
claim without the consent of the Borrower (which is not to be unreasonably
withheld or delayed) or disputes between Lenders (other than with respect to
disputes not involving acts or omissions by the Borrower).

 

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In the case of any investigation, litigation or other proceeding to which the
indemnity in clause (d) of this Section applies, such indemnity shall be
effective whether or not such investigation, litigation or other proceeding is
brought by a third party or any Group Member or an Indemnified Party, and
whether or not an Indemnified Party is otherwise a party thereto. All amounts
due under this Section 10.5 shall be payable not later than thirty (30) days
after written demand therefor. Statements payable by the Borrower pursuant to
this Section 10.5 shall be submitted to the address of the Borrower set forth in
Section 10.2, or to such other Person or address as may be hereafter designated
by the Borrower in a written notice to the Administrative Agent. The agreements
in this Section 10.5 shall survive termination of the Commitments and repayment
of the Loans and all other amounts payable hereunder. This Section 10.5 shall
not apply with respect to Taxes other than Taxes that represent losses, claims,
damages, etc. arising from any non-Tax claim.

10.6 Successors and Assigns; Participations and Assignments.

(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 (including any affiliate of an Issuing Lender that issues any
Letter of Credit), except that (i) the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance with
this Section.

(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more assignees (each, an “Assignee”) all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans at the time owing to it) with the prior
written consent of:

(A) the Borrower (such consent not to be unreasonably withheld or delayed),
provided that no consent of the Borrower shall be required for an assignment to
a Lender, an Affiliate of a Lender, an Approved Fund (as defined below) or, if
an Event of Default under Section 8(a) or 8(f) has occurred and is continuing,
any other Person; and

(B) in the case of an assignment of a Revolving Commitment or any participation
in a Revolving Letter of Credit, each Issuing Lender and the Administrative
Agent (such consent not to be unreasonably withheld or delayed), provided that
no such consent shall be required for assignments to a Lender, an Affiliate of a
Lender or an Approved Fund.

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender, an Affiliate of a Lender or
an Approved Fund or an assignment of the entire remaining amount of the
assigning Lender’s interests under any Facility, the amount of the Commitments
or Tranche B Term Loans, as applicable, of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than $1,000,000 (or, in the case of the Revolving Facility, $5,000,000)
unless each of the Borrower and the Administrative Agent otherwise consent,
provided that no such consent of the Borrower shall be required if an Event of
Default under Section 8(a) or 8(f) has occurred and is continuing;

 

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(B) 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,
provided that this clause shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender’s rights and obligations in
respect of each Facility. Section 10.6(b)(ii)(B) shall not be construed to
prohibit assignment of a proportionate part of all the assigning Lender’s rights
and obligations in respect of a single Facility;

(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500;

(D) the Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire in which the Assignee
designates one or more credit contacts to whom all syndicate-level information
(which may contain material non-public information about the Borrower, the Loan
Parties and their Related Parties or their respective securities) will be made
available and who may receive such information in accordance with the Assignee’s
compliance procedures and applicable laws, including Federal and state
securities laws; and

(E) No assignment shall be made to (i) a competitor (or any Affiliate thereof)
of the Borrower and (ii) any other Person identified by the Borrower to the
Administrative Agent in writing as of the Closing Date and (iii) (x) any
Affiliate or (y) any fund that is administered or managed by an entity or an
Affiliate, in each case, of the Persons described in the preceding clause
(ii) (each, a “Disqualified Lender”); it being understood and agreed that list
referenced in clause (ii) above shall be available to the Lenders upon request.

For the purposes of this Section 10.6, “Approved Fund” means any Person (other
than a natural person) that is engaged in making, purchasing, holding or
investing in bank loans and similar extensions of credit in the ordinary course
of its business and that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv)
below, from and after the effective date specified in each Assignment and
Assumption the Assignee thereunder shall be a party hereto and, to the extent of
the interest assigned by such Assignment and Assumption, 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
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption 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 10.5). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 10.6
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 paragraph (c) of
this Section.

(iv) The Administrative Agent, acting for this purpose as a non-fiduciary agent
of the Borrower, shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Commitments, Revolving Extensions of
Credit and Institutional L/C Exposure of, and principal amount of the Loans
owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive, and the Borrower,
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Agent, the Issuing Lender and the Lenders shall treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.

(v) Upon its receipt of a duly completed Assignment and Assumption executed by
an assigning Lender and an Assignee, the Assignee’s completed administrative
questionnaire (unless the Assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph. Notwithstanding anything to the
contrary contained in this Agreement, the Loans and the Letter of Credit are
registered obligations and the right, title and interest of the Lenders in and
to such Loans and Letters of Credit, as the case may be, shall be transferable
only in accordance with the terms hereof. This Section 10.6(b)(v) shall be
construed so that the Loans and the Letters of Credit are at all times
maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2)
and 881(c)(2) of the Code.

(c) (i) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
that are not a Disqualified Lender (a “Participant”) in all or a portion of such
Lender’s rights and obligations under this Agreement (including all or a portion
of its Commitments and the Loans owing to it); provided that (A) such Lender’s
obligations under this Agreement shall remain unchanged, (B) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (C) the Borrower, the Administrative Agent, the Issuing
Lenders and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this
Agreement. Any agreement 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 the Loan Documents; provided that such agreement may provide that such Lender
will not, without the consent of the Participant, agree to any amendment,
modification or waiver that (1) requires the consent of each Lender directly
affected thereby pursuant to the proviso to the second sentence of Section 10.1
and (2) directly affects such Participant. Subject to paragraph (c)(ii) of this
Section, 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 of such Sections (including Sections 2.19(d) and (e) and Sections
2.21 and 2.22 as if the Participant were a 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. To the extent permitted by law, each Participant also shall
be entitled to the benefits of Section 10.7(b) as though it were a Lender,
provided such Participant shall be subject to Section 10.7(a) 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 of its
Participants in compliance with Section 5f.103-1(c) of the United States
Treasury Regulations. The entries in a Participant register shall be conclusive
absent manifest error, and the parties shall treat each Person whose mane is
recorded in the Participant register as the Participant for all purposes of this
Agreement, notwithstanding a notice to the contrary.

(ii) A Participant shall not be entitled to receive any greater payment under
Section 2.18 or 2.19 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant except to the
extent such entitlement to a greater payment results from a change in any
Requirement of Law after the Participant became a Participant.

 

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(d) 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 (and any initial or subsequent pledgee or grantee, as the case may be,
may in turn at any time and from time to time pledge or grant a security
interest in all or any portion of such rights as collateral security to secure
obligations of such Person), including any pledge or assignment to secure
obligations to a Federal Reserve Bank or other central bank, and this Section
shall not apply to any such pledge or assignment of a security interest;
provided that no such pledge or assignment of a security interest shall release
a Lender from any of its obligations hereunder or substitute any such pledgee or
Assignee for such Lender as a party hereto.

(e) The Borrower, upon receipt of written notice from the relevant Lender,
agrees to issue Notes to any Lender requiring Notes to facilitate transactions
of the type described in paragraph (d) above.

(f) Notwithstanding the foregoing, any Conduit Lender may assign any or all of
the Loans it may have funded hereunder to its designating Lender without the
consent of the Borrower or the Administrative Agent and without regard to the
limitations set forth in Section 10.6(b). Each of Holdings, the Borrower, each
Lender and the Administrative Agent hereby confirms that it will not institute
against a Conduit Lender or join any other Person in instituting against a
Conduit Lender any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding under any state bankruptcy or similar law, for one year
and one (1) day after the payment in full of the latest maturing commercial
paper note issued by such Conduit Lender; provided, however, that each Lender
designating any Conduit Lender hereby agrees to indemnify, save and hold
harmless each other party hereto for any loss, cost, damage or expense arising
out of its inability to institute such a proceeding against such Conduit Lender
during such period of forbearance.

(g) (i) Notwithstanding anything else to the contrary contained in this
Agreement, any Lender may assign all or a portion of its Term Loans to any Debt
Fund Affiliate, Non-Debt Fund Affiliate or Purchasing Borrower Party; provided
that:

(A) if a Purchasing Borrower Party is an assignee, no Default or Event of
Default has occurred or is continuing or would result therefrom;

(B) the assigning Lender and Non-Debt Fund Affiliate or Purchasing Borrower
Party purchasing such Lender’s Term Loans shall execute and deliver to the
Administrative Agent an assignment agreement substantially in the form of
Exhibit G (an “Affiliated Lender Assignment and Assumption”) in lieu of an
Assignment and Assumption (which shall include a customary “big boy” disclaimer
by all parties thereto);

(C) for the avoidance of doubt, Lenders shall not be permitted to assign
Revolving Commitments or Revolving Loans to any Purchasing Borrower Party or
Non-Debt Fund Affiliate;

(D) any Term Loans assigned to any Purchasing Borrower Party shall be
automatically and permanently cancelled upon the effectiveness of such
assignment and will thereafter no longer be outstanding for any purpose
hereunder;

(E) no Purchasing Borrower Party may use the proceeds from Revolving Loans or
Swing Line Loans to purchase any Term Loans; and

(F) no Term Loan may be assigned to a Non-Debt Fund Affiliate pursuant to this
Section 10.6(g) if after giving effect to such assignment, Non-Debt Fund
Affiliate in the aggregate would own in excess of 20% of all Term Loans then
outstanding.

 

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(ii) Notwithstanding anything to the contrary in this Agreement, no Non-Debt
Fund Affiliate shall have any right to (i) attend (including by telephone) any
meeting or discussions (or portion thereof) among the Administrative Agent or
any Lender to which representatives of the Loan Parties are not invited, and
(ii) receive any information or material prepared by the Administrative Agent or
any Lender or any communication by or among the Administrative Agent and/or one
or more Lenders, except to the extent such information or materials have been
made available to any Loan Party or its representatives (and in any case, other
than the right to receive notices of prepayments and other administrative
notices in respect of its Loans required to be delivered to Lenders), or
(iii) make or bring (or participate in, other than as a passive participant in
or recipient of its pro rata benefits of) any claim, in its capacity as a
Lender, against the Administrative Agent or any other Lender with respect to any
duties or obligations or alleged duties or obligations of such Agent or any
other such Lender under the Loan Documents (other than for payments due).

(iii) Each Lender participating in any assignment to any Non-Debt Fund Affiliate
or Purchasing Borrower Party acknowledges and agrees that in connection with
such assignment, (1) any Non-Debt Fund Affiliate or Purchasing Borrower Party
then may have, and later may come into possession of information regarding the
Borrower, the Sponsor, their respective affiliates not known to such Lender and
that may be material to a decision by such Lender to participate in such
prepayment (including material non-public information), (2) such Lender has
independently and, without reliance on any Non-Debt Fund Affiliate or Purchasing
Borrower Party or any of their Subsidiaries, Holdings, the Borrower or any of
their Subsidiaries, or the Administrative Agent, has made its own analysis and
determination to participate in such assignment notwithstanding such Lender’s
lack of knowledge of the Excluded Information, (3) none of any Non-Debt Fund
Affiliate or Purchasing Borrower Party or any of their Subsidiaries, Holdings,
the Borrower or their respective Subsidiaries, or the Administrative Agent shall
have any liability to such Lender, and such Lender hereby waives and releases,
to the extent permitted by law, any claims such Lender may have against any
Non-Debt Fund Affiliate or Purchasing Borrower Party and any of their
Subsidiaries, Holdings, the Borrower and their respective Subsidiaries, and the
Administrative Agent, under applicable laws or otherwise, with respect to the
nondisclosure of the Excluded Information and (4) that the Excluded Information
may not be available to the Administrative Agent or the other Lenders.

(iv) any Non-Debt Fund Affiliate may, with the consent of the Borrower and with
written notice to the Administrative Agent, contribute any of its Term Loans to
the Borrower (whether through any of its direct or indirect parent entities or
otherwise) and, to the extent agreed with the Borrower, may in return receive
(1) loans or Permitted Capital Stock of Holdings or any parent entity of
Holdings (to the extent not constituting a Change in Control) or (2) an
unsecured loan from the Borrower that (v) does not have a cash interest rate in
excess of the interest rate applicable to the Loans so contributed by such Non
Debt Fund Affiliate plus 3.0%, (w) is subordinated in right of payment to the
Obligations of the Borrower, (x) is not subject to any scheduled amortization,
redemption, sinking fund or similar payment and does not have a final maturity,
in each case, on or before the date that is 91 days after the Term Loan Maturity
Date, (y) does not include any financial covenants and (z) does not include any
covenant, default or other agreement that is more restrictive (taken as a whole)
on the Loan Parties in any material respect than any comparable covenant in this
Agreement. Any Term Loans so contributed pursuant to this subsection shall,
without further action by any Person, be deemed cancelled for all purposes

 

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and no longer outstanding (and may not be resold by the Borrower), for all
purposes of this Agreement and all other Loan Documents, including, but not
limited to (A) the making of, or the application of, any payments to the Lenders
under this Agreement or any other Loan Document, (B) the making of any request,
demand, authorization, direction, notice, consent or waiver under this Agreement
or any other Loan Document or (C) the determination of Required Lenders, or for
any similar or related purpose, under this Agreement or any other Loan Document.
In connection with any Term Loans so cancelled pursuant to this subsection,
Administrative Agent is authorized to make appropriate entries in the Register
to reflect any such cancellation. Any non-cash gains from the cancellation of
such Term Loans shall not increase Consolidated EBITDA or Excess Cash Flow for
any purpose hereunder. The cancellations contemplated by this subsection shall
be deemed to be optional prepayments by the Borrower pursuant to Section 2.10,
and the principal amount of any such Term Loans so cancelled shall be applied on
a pro rata basis to reduce the scheduled remaining installments of principal on
such Term Loans (including the installment due on the Term Loan Maturity Date).

(h) Notwithstanding anything in Section 10.1 or the definition of “Required
Lenders” to the contrary, for purposes of determining whether the “Required
Lenders” have (i) consented (or not consented) to any amendment, modification,
waiver, consent or other action with respect to any of the terms of any Loan
Document or any departure by any Loan Party therefrom, (ii) otherwise acted on
any matter related to any Loan Document, or (iii) directed or required the
Administrative Agent or any Lender to undertake any action (or refrain from
taking any action) with respect to or under any Loan Document:

(i) all Tranche B Term Loans held by any Non-Debt Fund Affiliate shall be deemed
to be not outstanding for all purposes of calculating whether the Required
Lenders have taken any actions; and

(ii) all Tranche B Term Loans, Revolving Commitments and Revolving L/C Exposure
held by Debt Fund Affiliates may not account for more than 50% of the Tranche B
Term Loans, Revolving Commitments and Revolving L/C Exposure of consenting
Lenders included in determining whether the “Required Lenders” have consented to
any action pursuant to Section 10.1.

Additionally, the Loan Parties and each Non-Debt Fund Affiliate hereby agree
that if a case under Title 11 of the United States Code is commenced against any
Loan Party, such Loan Party shall seek (and each Non-Debt Fund Affiliate shall
consent) to provide that the vote of any Non-Debt Fund Affiliate (in its
capacity as a Lender) with respect to any plan of reorganization of such Loan
Party shall not be counted except that such Non-Debt Fund Affiliates’ vote (in
its capacity as a Lender) may be counted to the extent any such plan of
reorganization proposed to treat the Obligations held by such Non-Debt Fund
Affiliate in a manner that is less favorable in any material respect to such
Non-Debt Fund Affiliate than the proposed treatment of similar Obligations held
by Lenders that are not Affiliates of the Borrower. Each Non-Debt Fund Affiliate
hereby irrevocably appoints the Administrative Agent (such appointment being
coupled with an interest) as such Non-Debt Fund Affiliate’s attorney-in-fact,
with full authority in the place and stead of such Non-Debt Fund Affiliate and
in the name of such Non-Debt Fund Affiliate, from time to time in the
Administrative Agent’s discretion to take any action and to execute any
instrument that the Administrative Agent may deem reasonably necessary to carry
out the provisions of this paragraph.

10.7 Adjustments; Set-off.

(a) Except to the extent that this Agreement expressly provides for payments to
be allocated to a particular Lender or to the Lenders under a particular
Facility, if any Lender (a “Benefitted

 

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Lender”) shall receive any payment of all or part of the Obligations owing to
it, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 8(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of the Obligations owing to such other Lender, such Benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of the Obligations owing to each such other Lender, or shall provide
such other Lenders with the benefits of any such collateral, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral ratably with each of the Lenders; provided, however,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such Benefitted Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such recovery, but
without interest; provided further that no amount received from any Loan Party
shall be applied to any Excluded Swap Obligation of such Loan Party; provided
further that the provisions of this paragraph shall not be construed to apply to
(v) any payment or prepayment made by or on behalf of the Borrower or any other
Loan Party pursuant to and in accordance with the express terms of this
Agreement (including the application of funds arising from the existence of a
Defaulting Lender), (w) the application of cash collateral supporting Letters of
Credit and Institutional Letters of Credit from time to time (including the
application of funds arising from the existence of a Defaulting Lender), (x) any
payment obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in Letters of Credit to any
assignee or participant or the termination of any Lender’s commitment and
non-pro rata repayment of Loans pursuant to Section 2.22, (y) transactions in
connection with an open market purchase or a Dutch Auction, or (z) in connection
with a transaction pursuant to an Extension Offer, Refinancing Amendment or
Incremental Facility Amendment or amendment in connection with a Permitted
Refinancing, or Indebtedness incurred pursuant to Section 10.6. For the
avoidance of doubt, this Section shall not limit the ability of Holdings, the
Borrower or any Restricted Subsidiary to (i) purchase and retire Term Loans
pursuant to an open market purchase or a Dutch Auction or (ii) pay principal,
fees, premiums and interest with respect to Refinancing Revolving Loans,
Refinancing Term Loans, Refinanced Tranche B Term Loans, Incremental Revolving
Loans or Incremental Term Loans following the effectiveness of any Refinancing
Amendment, any Extension Offer or Incremental Facility Amendment or exchange, as
applicable, on a basis different from the Loans of such Class that will continue
to be held by Lenders that were not Extending Lenders or Lenders pursuant to
such Incremental Facility Amendment, as applicable.

(b) In addition to any rights and remedies of the Lenders provided by law, each
Lender shall have the right after the occurrence and during the continuance of
an Event of Default, subject to the prior written consent of the Administrative
Agent, without prior notice to Holdings or the Borrower, any such notice being
expressly waived by Holdings and the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by Holdings or the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise), to set off and appropriate and apply against such amount then due
and payable any and all deposits (general or special, time or demand,
provisional or final other than payroll or trust accounts), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of Holdings or the Borrower, as the case may be; provided
that if any Defaulting Lender shall exercise any such right of setoff, (i) all
amounts so set off shall be paid over immediately to the Administrative Agent
for further application in accordance with the provisions of this Agreement and,
pending such payment, shall be segregated by such Defaulting Lender from its
other funds and deemed held in trust for the benefit of the Administrative
Agent, the Issuing Lender, the Swingline Lender and the Lenders and (ii) the
Defaulting Lender shall provide promptly to the Administrative Agent a statement
describing in reasonable detail the obligations owing to such Defaulting Lender
as to which it exercised such right of set-off. Each Lender agrees promptly to
notify the Borrower and the Administrative Agent after any such setoff and
application made by such Lender, provided that the failure to give such notice
shall not affect the validity of such setoff and application.

 

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10.8 Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.

10.9 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

10.10 Integration. This Agreement and the other Loan Documents represent the
entire agreement of Holdings, the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to the subject matter hereof not expressly set
forth or referred to herein or in the other Loan Documents.

10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

10.12 Submission to Jurisdiction; Waivers. Each of the parties hereto hereby
irrevocably and unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States for the Southern District of New York, and appellate
courts from any thereof, in each case, located in the Borough of Manhattan;

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to Holdings or the
Borrower, as the case may be at its address set forth in Section 10.2 or at such
other address of which the Administrative Agent shall have been notified
pursuant thereto;

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and

(e) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages; provided that
nothing contained in this Section 10.12(e) shall limit the Borrower’s indemnity
and reimbursement obligations to the extent set forth in Section 10.5.

 

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10.13 Acknowledgements. Each of Holdings and the Borrower hereby acknowledges
that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents;

(b) neither any Agent nor any Lender has any fiduciary relationship with or duty
to Holdings or the Borrower arising out of or in connection with this Agreement
or any of the other Loan Documents, and the relationship between any Agent and
Lenders, on one hand, and Holdings and the Borrower, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and

(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among Holdings, the Borrower and the Lenders.

10.14 Releases of Guarantees and Liens. Notwithstanding anything to the contrary
contained herein or in any other Loan Document, the Administrative Agent is
hereby irrevocably authorized by each Lender (without requirement of notice to
or consent of any Lender except as expressly required by Section 10.1) to take
any action requested by the Borrower having the effect of releasing any
Collateral or guarantee obligations (i) to the extent necessary to permit
consummation of any transaction not prohibited by any Loan Document or that has
been consented to in accordance with Section 10.1 or (ii) under the
circumstances described in Section 9.11.

10.15 Confidentiality. Each of the Administrative Agent, the Issuing Lenders and
the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority (including any self-regulatory
authority), (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the enforcement of rights
hereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Borrower and its
obligations, (g) with the consent of the Borrower or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent, the Issuing
Lender or any Lender on a non-confidential basis from a source other than the
Borrower; provided, however, that with respect to disclosures pursuant to
clauses (b) and (c) of this Section (other than disclosures pursuant to routine
regulatory examinations) and clause (e) of this Section (as such clause relates
to suits, actions or proceedings in which disclosure is being sought by a third
party), unless prohibited by applicable Requirements of Law or court order, each
Lender, each Issuing Lender and the Administrative Agent shall (x) notify the
Borrower of any request by any Governmental Authority or representative thereof
or other Person for disclosure of confidential and non-public information after
receipt of such request and (y) if such disclosure of such confidential or
non-public information is legally required, furnish only such portion of such
information as it is legally compelled to disclose and exercise commercially
reasonable efforts to obtain an order or other reliable assurance that
confidential treatment will be accorded to the disclosed information.

 

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For the purposes of this Section, “Information” means all information received
from the Borrower relating to the Borrower or its business, other than any such
information that is available to the Administrative Agent, the Issuing Lender or
any Lender on a non-confidential basis prior to disclosure by the Borrower;
provided that, in the case of information received from the Borrower after the
Closing Date, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section 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 to
its own confidential information.

EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 10.15 FURNISHED
TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION
CONCERNING THE BORROWER AND ITS RELATED PARTIES OR THEIR RESPECTIVE SECURITIES,
AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF
MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC
INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING
FEDERAL AND STATE SECURITIES LAWS.

10.16 WAIVERS OF JURY TRIAL. HOLDINGS, THE BORROWER, THE ADMINISTRATIVE AGENT
AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

10.17 USA PATRIOT ACT. Each Lender that is subject to the requirements of the
Patriot Act hereby notifies the Borrower and each Guarantor that pursuant to the
requirements of the Act, it is required to obtain, verify and record information
that identifies the Borrower or such Guarantor, which information includes the
name and address of the Borrower and other information that will allow such
Lender to identify the Borrower and each Guarantor in accordance with the
Patriot.

10.18 Replacement of Holdings. Notwithstanding any contrary provisions of this
Agreement, Holdings may, in order to achieve the effect of substituting a
corporation as the immediate parent company of the Borrower, form a corporation
that is a wholly owned subsidiary of Holdings (such corporation being referred
to herein as “New Holdings”), and transfer (subject to the Lien of the Guarantee
and Security Agreement) all its assets (including all outstanding Capital Stock
of the Borrower) to New Holdings; provided that (a) the arrangements for the
formation of New Holdings and the transfer of assets from Holdings to New
Holdings are reasonably satisfactory to the Administrative Agent, (b) New
Holdings shall become a party to this Agreement and each other Loan Document to
which Holdings is a party and shall assume all obligations of Holdings
thereunder pursuant to documentation reasonably satisfactory to the
Administrative Agent and (c) the Administrative Agent shall receive such
documents, certificates and legal opinions as the Administrative Agent or its
counsel may reasonably request with respect to the foregoing, all in form and
substance reasonably satisfactory to the Administrative Agent. If all of the
requirements of the preceding sentence are satisfied, then Holdings shall cease
to be a party to the Loan Documents and shall be released from its obligations
thereunder and thereupon the term “Holdings” shall be deemed to refer to New
Holdings. The Administrative Agent shall notify the Lenders of any replacement
of Holdings effected pursuant to this Section.

10.19 Mortgaged Property Acknowledgment. Each Lender by making or acquiring a
Loan or interest therein or issuing a Letter of Credit acknowledges that (x) any
Mortgage encumbering any Mortgaged Property hereunder was or will be entered
into without consultation with local counsel in the

 

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jurisdiction where such Mortgaged Property is located and (y) no title insurance
policies were or will be obtained with respect to any Mortgages encumbering any
Mortgaged Property. Consequently, there is a substantial risk that the Mortgages
encumbering any such Mortgaged Property may be invalid or ineffective under
applicable law and, in such event, the Lenders would not have any recovery as a
secured creditor or under any title insurance policy with respect thereto. Each
Lender agrees that neither the Administrative Agent, the Joint Lead Arrangers,
the Joint Bookrunners, the Documentations Agents, the Syndication Agent, the
Borrower (and its Subsidiaries) nor any of their officers, directors, agents,
attorneys, affiliates or other representatives shall have any liability to any
Lender as a result of the foregoing.

10.20 Intercreditor Agreement Governs. Each Lender and Agent (a) hereby agrees
that it will be bound by and will take no actions contrary to the provisions of
any intercreditor agreement entered into pursuant to the terms hereof,
(b) hereby authorizes and instructs the Administrative Agent to enter into each
intercreditor agreement and any other intercreditor agreement entered into
pursuant to the terms hereof and to subject the Liens securing the Secured
Obligations to the provisions thereof and (c) hereby authorizes and instructs
the Administrative Agent to enter into any intercreditor agreement that
includes, or to amend any then existing intercreditor agreement to provide for,
the terms described in the definition of the terms “Permitted First Priority
Refinancing Debt” or “Permitted Second Priority Refinancing Debt” or other
“First Lien Senior Secured Note” or the Administrative Agent, as applicable or
as otherwise provided for by the terms of this Agreement; provided that in each
case, such intercreditor agreement is substantially consistent with the terms
set forth on Exhibit I-1 or I-2 annexed hereto together with (A) any immaterial
changes and (B) material changes thereto in light of prevailing market
conditions, which material changes shall be posted to the Lenders not less than
five (5) Business Days before execution thereof and, if the Required Lenders
shall not have objected to such changes within five (5) Business Days after
posting, then the Required Lenders shall be deemed to have agreed that the
Administrative Agent’s entry into such intercreditor agreement (with such
changes) is reasonable and to have consented to such intercreditor agreement
(with such changes) and to the Administrative Agent’s execution thereof (it
being understood that junior Liens are not required to be pari passu with other
junior Liens, and that Indebtedness secured by junior Liens may secured by Liens
that are pari passu with, or junior in priority to, other Liens that are junior
to the Liens securing the Secured Obligations).

 

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

 

NMH HOLDINGS, LLC By:   NMH Holdings, Inc., its sole member By:  

/s/ Denis M. Holler

  Name: Denis M. Holler   Title: Chief Financial Officer and Treasurer NATIONAL
MENTOR HOLDINGS, INC. By:  

/s/ Denis M. Holler

  Name: Denis M. Holler   Title: Chief Financial Officer and Treasurer

 

[Signature Page to Credit Agreement]

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BARCLAYS BANK PLC, as Administrative Agent, Revolving Lender, Tranche B Term
Lender, Issuing Lender and Swingline Lender By:  

/s/ Vanessa A. Kurbatskiy

  Name: Vanessa A. Kurbatskiy   Title: Vice President

 

[Signature Page to Credit Agreement]

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GOLDMAN SACHS BANK USA, as Lender By:  

/s/ Robert Ehudin

  Name: Robert Ehudin   Title: Authorized Signatory

 

[Signature Page to Credit Agreement]

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JEFFERIES FINANCE LLC, as Lender By:  

/s/ Brian Buoye

  Name: Brian Buoye   Title: Managing Director

 

[Signature Page to Credit Agreement]

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UBS AG STAMFORD BRANCH, as Lender By:  

/s/ Lana Gifas

  Name: Lana Gifas  

Title: Director

          Banking Products Services, US

By:  

/s/ Jennifer Anderson

  Name: Jennifer Anderson  

Title: Associate Director

          Banking Products Services, US

 

[Signature Page to Credit Agreement]