Exhibit 10.1
REVOLVING CREDIT AND TERM LOAN AGREEMENT
dated as of July 15, 2011
among
THE ENSIGN GROUP, INC.
as Borrower
THE LENDERS FROM TIME TO TIME PARTY HERETO
WELLS FARGO BANK, NATIONAL ASSOCIATION
as Syndication Agent
BBVA COMPASS
as Documentation Agent
and
SUNTRUST BANK
as Administrative Agent
SUNTRUST ROBINSON HUMPHREY, INC.
as Joint Lead Arranger and Sole Book Manager
and
WELLS FARGO SECURITIES, LLC
as Joint Lead Arranger

 

 

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TABLE OF CONTENTS

              Page  
 
       
ARTICLE I
       
 
       
DEFINITIONS; CONSTRUCTION
    1  
Section 1.1. Definitions
    1  
Section 1.2. Classifications of Loans and Borrowings
    31  
Section 1.3. Accounting Terms and Determination
    31  
Section 1.4. Terms Generally
    31  
 
       
ARTICLE II
       
 
       
AMOUNT AND TERMS OF THE COMMITMENTS
    32  
Section 2.1. General Description of Facilities
    32  
Section 2.2. Revolving Loans
    32  
Section 2.3. Procedure for Revolving Borrowings
    32  
Section 2.4. Swingline Commitment
    32  
Section 2.5. Term Loan Commitments
    34  
Section 2.6. Funding of Borrowings
    34  
Section 2.7. Interest Elections
    34  
Section 2.8. Optional Reduction and Termination of Commitments
    35  
Section 2.9. Repayment of Loans
    36  
Section 2.10. Evidence of Indebtedness
    37  
Section 2.11. Optional Prepayments
    37  
Section 2.12. Mandatory Prepayments
    38  
Section 2.13. Interest on Loans
    38  
Section 2.14. Fees
    39  
Section 2.15. Computation of Interest and Fees
    40  
Section 2.16. Inability to Determine Interest Rates
    40  
Section 2.17. Illegality
    41  
Section 2.18. Increased Costs
    41  
Section 2.19. Funding Indemnity
    42  
Section 2.20. Taxes
    43  
Section 2.21. Payments Generally; Pro Rata Treatment; Sharing of Set-offs
    45  
Section 2.22. Letters of Credit
    46  
Section 2.23. Increase of Commitments; Additional Lenders
    50  
Section 2.24. Mitigation of Obligations
    53  
Section 2.25. Replacement of Lenders
    53  
Section 2.26. Defaulting Lenders and Potential Defaulting Lenders
    53  
 
       
ARTICLE III
       
 
       
CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT
    55  
Section 3.1. Conditions to Effectiveness
    55  
Section 3.2. Conditions to Each Credit Event
    58  
Section 3.3. Delivery of Documents
    59  

 

 

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              Page  
 
       
ARTICLE IV
       
 
       
REPRESENTATIONS AND WARRANTIES
    59  
Section 4.1. Existence; Power
    59  
Section 4.2. Organizational Power; Authorization
    59  
Section 4.3. Governmental Approvals; No Conflicts
    59  
Section 4.4. Financial Statements
    60  
Section 4.5. Litigation and Environmental Matters
    60  
Section 4.6. Compliance with Laws and Agreements
    60  
Section 4.7. Investment Company Act
    60  
Section 4.8. Taxes
    60  
Section 4.9. Margin Regulations
    61  
Section 4.10. ERISA
    61  
Section 4.11. Ownership of Property; Insurance
    61  
Section 4.12. Disclosure
    62  
Section 4.13. Labor Relations
    62  
Section 4.14. Subsidiaries
    62  
Section 4.15. Solvency
    62  
Section 4.16. Deposit and Disbursement Accounts
    62  
Section 4.17. Collateral Documents
    63  
Section 4.18. Material Agreements
    63  
Section 4.19. Healthcare Matters
    63  
Section 4.20. OFAC
    66  
Section 4.21. Patriot Act
    66  
Section 4.22. Excluded Subsidiaries
    66  
 
       
ARTICLE V
       
 
       
AFFIRMATIVE COVENANTS
    67  
Section 5.1. Financial Statements and Other Information
    67  
Section 5.2. Notices of Material Events
    68  
Section 5.3. Existence; Conduct of Business
    70  
Section 5.4. Compliance with Laws
    70  
Section 5.5. Payment of Obligations
    70  
Section 5.6. Books and Records
    70  
Section 5.7. Visitation and Inspection
    71  
Section 5.8. Maintenance of Properties; Insurance
    71  
Section 5.9. Use of Proceeds; Margin Regulations
    71  
Section 5.10. Casualty and Condemnation
    71  
Section 5.11. Cash Management
    72  
Section 5.12. Additional Subsidiaries and Collateral
    72  
Section 5.13. Additional Negative Pledges; Leased Locations
    73  
Section 5.14. Further Assurances
    75  
Section 5.15. Health Care Matters
    75  
Section 5.16. Post-Closing Matters
    76  
 
       
ARTICLE VI
       
 
       
FINANCIAL COVENANTS
    76  
Section 6.1. Leverage Ratio
    76  
Section 6.2. Interest/Rent Coverage Ratio
    76  
Section 6.3. Asset Coverage Ratio
    76  

 

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              Page  
 
       
ARTICLE VII
       
 
       
NEGATIVE COVENANTS
    76  
Section 7.1. Indebtedness and Preferred Equity
    76  
Section 7.2. Liens
    78  
Section 7.3. Fundamental Changes
    79  
Section 7.4. Investments, Loans
    79  
Section 7.5. Restricted Payments
    80  
Section 7.6. Sale of Assets
    80  
Section 7.7. Transactions with Affiliates
    81  
Section 7.8. Restrictive Agreements
    81  
Section 7.9. Sale and Leaseback Transactions
    81  
Section 7.10. Hedging Transactions
    82  
Section 7.11. Amendment to Material Documents
    82  
Section 7.12. Excluded Subsidiaries
    82  
Section 7.13. Accounting Changes
    82  
Section 7.14. Government Regulation
    82  
 
       
ARTICLE VIII
       
 
       
EVENTS OF DEFAULT
    83  
Section 8.1. Events of Default
    83  
Section 8.2. Application of Proceeds from Collateral
    85  
 
       
ARTICLE IX
       
 
       
THE ADMINISTRATIVE AGENT
    86  
Section 9.1. Appointment of the Administrative Agent
    86  
Section 9.2. Nature of Duties of the Administrative Agent
    87  
Section 9.3. Lack of Reliance on the Administrative Agent
    87  
Section 9.4. Certain Rights of the Administrative Agent
    87  
Section 9.5. Reliance by the Administrative Agent
    88  
Section 9.6. The Administrative Agent in its Individual Capacity
    88  
Section 9.7. Successor Administrative Agent
    88  
Section 9.8. Withholding Tax
    89  
Section 9.9. The Administrative Agent May File Proofs of Claim
    89  
Section 9.10. Authorization to Execute Other Loan Documents
    90  
Section 9.11. Collateral and Guaranty Matters
    90  
Section 9.12. Documentation Agent; Syndication Agent
    91  
Section 9.13. Right to Realize on Collateral and Enforce Guarantee
    91  
Section 9.14. Secured Bank Product Obligations and Hedging Obligations
    91  

 

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              Page  
 
       
ARTICLE X
       
 
       
MISCELLANEOUS
    92  
Section 10.1. Notices
    92  
Section 10.2. Waiver; Amendments
    94  
Section 10.3. Expenses; Indemnification
    96  
Section 10.4. Successors and Assigns
    98  
Section 10.5. Governing Law; Jurisdiction; Consent to Service of Process
    101  
Section 10.6. WAIVER OF JURY TRIAL
    102  
Section 10.7. Right of Set-off
    102  
Section 10.8. Counterparts; Integration
    102  
Section 10.9. Survival
    102  
Section 10.10. Severability
    103  
Section 10.11. Confidentiality
    103  
Section 10.12. Interest Rate Limitation
    103  
Section 10.13. Waiver of Effect of Corporate Seal
    103  
Section 10.14. Patriot Act
    104  
Section 10.15. No Advisory or Fiduciary Responsibility
    104  
Section 10.16. Location of Closing
    104  

 

iv

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Schedules
       
 
       
Schedule I
      Commitment Amounts
 
       
Schedule 4.11
  —   Real Property
Schedule 4.14
  —   Subsidiaries
Schedule 4.16
  —   Deposit and Disbursement Accounts
Schedule 4.18
  —   Material Agreements
Schedule 4.19
  —   Healthcare Matters
Schedule 5.16
  —   Post-Closing Matters
Schedule 5.16A
  —   Post-Closing Matters — Filings to be Terminated
Schedule 7.1
  —   Existing Indebtedness
Schedule 7.2
  —   Existing Liens
Schedule 7.4
  —   Existing Investments
Schedule 7.8
  —   Existing Leases with Restrictive Agreements
 
       
Exhibits
       
 
       
Exhibit A
  —   Form of Assignment and Acceptance
Exhibit B
  —   Form of Guaranty and Security Agreement
 
       
Exhibit 2.3
  —   Form of Notice of Revolving Borrowing
Exhibit 2.4
  —   Form of Notice of Swingline Borrowing
Exhibit 2.7
  —   Form of Notice of Continuation/Conversion
Exhibit 3.1(b)(ii)
  —   Form of Secretary’s Certificate
Exhibit 3.1(b)(v)
  —   Form of Officer’s Certificate
Exhibit 5.1(c)
  —   Form of Compliance Certificate

 

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REVOLVING CREDIT AND TERM LOAN AGREEMENT
THIS REVOLVING CREDIT AND TERM LOAN AGREEMENT (this “Agreement”) is made and
entered into as of July 15, 2011, by and among THE ENSIGN GROUP, INC. a Delaware
corporation (the “Borrower”), the several banks and other financial institutions
and lenders from time to time party hereto (the “Lenders”) and SUNTRUST BANK, in
its capacity as administrative agent for the Lenders (the “Administrative
Agent”), as issuing bank (the “Issuing Bank”) and as swingline lender (the
“Swingline Lender”).
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lenders (a) establish a $75,000,000
revolving credit facility in favor of, and (b) make term loans in an aggregate
principal amount equal to $75,000,000 to, the Borrower;
WHEREAS, subject to the terms and conditions of this Agreement, the Lenders, the
Issuing Bank and the Swingline Lender, to the extent of their respective
Commitments as defined herein, are willing severally to establish the requested
revolving credit facility, letter of credit subfacility and swingline
subfacility in favor of and severally to make the term loans to the Borrower;
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the Borrower, the Lenders, the Administrative Agent, the Issuing Bank
and the Swingline Lender agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
Section 1.1. Definitions. In addition to the other terms defined herein, the
following terms used herein shall have the meanings herein specified (to be
equally applicable to both the singular and plural forms of the terms defined):
“Acquisition” shall mean (a) any Investment by the Borrower or any of its
Subsidiaries in any other Person organized in the United States (with
substantially all of the assets of such Person and its Subsidiaries located in
the United States), pursuant to which such Person shall become a Subsidiary of
the Borrower or any of its Subsidiaries or shall be merged with the Borrower or
any of its Subsidiaries or (b) any acquisition by the Borrower or any of its
Subsidiaries of the assets of any Person (other than a Subsidiary of the
Borrower) that constitute all or substantially all of the assets of such Person
or a division or business unit of such Person, whether through purchase, capital
lease, exercise of an option to purchase, merger or other business combination
or transaction (and substantially all of such assets, division or business unit
are located in the United States). With respect to a determination of the amount
of an Acquisition, such amount shall include all consideration (including any
deferred payments) set forth in the applicable agreements governing such
Acquisition as well as the assumption of any Indebtedness in connection
therewith.
“Additional Lender” shall have the meaning set forth in Section 2.23.
“Adjusted LIBO Rate” shall mean, with respect to each Interest Period for a
Eurodollar Borrowing, the rate per annum obtained by dividing (i) LIBOR for such
Interest Period by (ii) a percentage equal to 1.00 minus the Eurodollar Reserve
Percentage.

 

 

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“Administrative Agent” shall have the meaning set forth in the introductory
paragraph hereof.
“Administrative Questionnaire” shall mean, with respect to each Lender, an
administrative questionnaire in the form provided by the Administrative Agent
and submitted to the Administrative Agent duly completed by such Lender.
“Affiliate” shall mean, as to any Person, any other Person that directly, or
indirectly through one or more intermediaries, Controls, is Controlled by, or is
under common Control with, such Person. For the purposes of this definition,
“Control” shall mean the power, directly or indirectly, either to (i) vote 5% or
more of the securities having ordinary voting power for the election of
directors (or persons performing similar functions) of a Person or (ii) direct
or cause the direction of the management and policies of a Person, whether
through the ability to exercise voting power, by control or otherwise. The terms
“Controlled by” and “under common Control with” have the meanings correlative
thereto.
“Aggregate Revolving Commitment Amount” shall mean the aggregate principal
amount of the Aggregate Revolving Commitments from time to time. On the Closing
Date, the Aggregate Revolving Commitment Amount is $75,000,000.
“Aggregate Revolving Commitments” shall mean, collectively, all Revolving
Commitments of all Lenders at any time outstanding.
“Anti-Terrorism Order” shall mean Executive Order 13224, signed by President
George W. Bush on September 23, 2001.
“Applicable Lending Office” shall mean, for each Lender and for each Type of
Loan, the “Lending Office” of such Lender (or an Affiliate of such Lender)
designated for such Type of Loan in the Administrative Questionnaire submitted
by such Lender or such other office of such Lender (or such Affiliate of such
Lender) as such Lender may from time to time specify to the Administrative Agent
and the Borrower as the office by which its Loans of such Type are to be made
and maintained.
“Applicable Margin” shall mean, as of any date, with respect to all Loans
outstanding on such date or the letter of credit fee, as the case may be, the
percentage per annum determined by reference to the applicable Leverage Ratio in
effect on such date as set forth in the pricing grid below (the “Pricing Grid”);
provided that a change in the Applicable Margin resulting from a change in the
Leverage Ratio shall be effective on the second Business Day after the Borrower
delivers each of the financial statements required by Section 5.1(a) and (b) and
the Compliance Certificate required by Section 5.1(c); provided, further, that
if at any time the Borrower shall have failed to deliver such financial
statements and such Compliance Certificate when so required, the Applicable
Margin shall be at Level I as set forth in the Pricing Grid until such time as
such financial statements and Compliance Certificate are delivered, at which
time the Applicable Margin shall be determined as provided above.
Notwithstanding the foregoing, the Applicable Margin from the Closing Date until
the date by which the financial statements and Compliance Certificate for the
Fiscal Quarter ending September 30, 2011 are required to be delivered shall be
at Level III as set forth in the Pricing Grid. In the event that any financial
statement or Compliance Certificate delivered hereunder is shown to be
inaccurate (regardless of whether this Agreement or the Commitments are in
effect when such inaccuracy is discovered), and such inaccuracy, if corrected,
would have led to the application of a higher Applicable Margin based upon the
Pricing Grid (the “Accurate Applicable Margin”) for any period that such
financial statement or Compliance Certificate covered, then (i) the Borrower
shall immediately deliver to the Administrative Agent a correct financial
statement or Compliance Certificate, as the case may be, for such period,
(ii) the Applicable Margin shall be adjusted such that after giving effect to
the corrected financial statement or Compliance Certificate, as the case may be,
the Applicable Margin shall be reset to the Accurate Applicable Margin based
upon the Pricing Grid for such period and (iii) the Borrower shall immediately
pay to the Administrative Agent, for the account of the Lenders, the accrued
additional interest owing as a result of such Accurate Applicable Margin for
such period. The provisions of this definition shall not limit the rights of the
Administrative Agent and the Lenders with respect to Section 2.13(c) or
Article VIII.

 

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Pricing Grid

                              Applicable   Applicable   Applicable   Applicable
        Margin for   Margin for   Margin for   Percentage for Pricing      
Eurodollar   Base Rate   Letter of   Commitment Level   Leverage Ratio   Loans  
Loans   Credit Fees   Fee
I
  Greater than or equal to 2.50:1.00   3.00% per annum   2.00% per annum   3.00%
per annum   0.50% per annum
II
  Less than 2.50:1.00 but greater than or equal to 2.00:1.00   2.75% per annum  
1.75% per annum   2.75% per annum   0.45% per annum
III
  Less than 2.00:1.00 but greater than or equal to 1.50:1.00   2.50% per annum  
1.50% per annum   2.50% per annum   0.40% per annum
IV
  Less than 1.50:1.00 but greater than or equal to 1.00:1.00   2.25% per annum  
1.25% per annum   2.25% per annum   0.35% per annum
V
  Less than 1.00:1:00   2.00% per annum   1.00% per annum   2.00% per annum  
0.30% per annum

“Applicable Percentage” shall mean, as of any date, with respect to the
commitment fee as of such date, the percentage per annum determined by reference
to the Leverage Ratio in effect on such date as set forth in the Pricing Grid;
provided that a change in the Applicable Percentage resulting from a change in
the Leverage Ratio shall be effective on the second Business Day after which the
Borrower delivers each of the financial statements required by Section 5.1(a)
and (b) and the Compliance Certificate required by Section 5.1(c); provided,
further, that if at any time the Borrower shall have failed to deliver such
financial statements and such Compliance Certificate when so required, the
Applicable Percentage shall be at Level I as set forth in the Pricing Grid until
such time as such financial statements and Compliance Certificate are delivered,
at which time the Applicable Percentage shall be determined as provided above.
Notwithstanding the foregoing, the Applicable Percentage for the commitment fee
from the Closing Date until the date by which the financial statements and
Compliance Certificate for the Fiscal Quarter ending September 30, 2011 are
required to be delivered shall be at Level III as set forth in the Pricing Grid.
In the event that any financial statement or Compliance Certificate delivered
hereunder is shown to be inaccurate (regardless of whether this Agreement or the
Commitments are in effect when such inaccuracy is discovered), and such
inaccuracy, if corrected, would have led to the application of a higher
Applicable Percentage based upon the Pricing Grid (the “Accurate Applicable
Percentage”) for any period that such financial statement or Compliance
Certificate covered, then (i) the Borrower shall immediately deliver to the
Administrative Agent a correct financial statement or Compliance Certificate, as
the case may be, for such period, (ii) the Applicable Percentage shall be
adjusted such that after giving effect to the corrected financial statement or
Compliance Certificate, as the case may be, the Applicable Percentage shall be
reset to the Accurate Applicable Percentage based upon the Pricing Grid for such
period and (iii) the Borrower shall immediately pay to the Administrative Agent,
for the account of the Lenders, the accrued additional commitment fee owing as a
result of such Accurate Applicable Percentage for such period. The provisions of
this definition shall not limit the rights of the Administrative Agent and the
Lenders with respect to Section 2.13(c) or Article VIII.

 

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“Appraisal” shall mean, for any Mortgaged Property, a FIRREA-compliant MAI
appraisal commissioned and reviewed by the Administrative Agent and prepared by
an appraiser selected by the Administrative Agent for which the Borrower has
provided all information reasonably requested by the applicable appraiser.
“Appraised Mortgaged Property” shall mean any Mortgaged Property in which the
Administrative Agent has a first priority Lien and for which the Real Estate
Documents referenced in Section 5.13(c) and an Appraisal have been delivered to
the Administrative Agent.
“Approved Fund” shall mean any Person (other than a natural Person) that is (or
will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business and that is administered or managed by (i) a Lender, (ii) an Affiliate
of a Lender or (iii) an entity or an Affiliate of an entity that administers or
manages a Lender.
“Asset Coverage Ratio” shall mean, as of any date, the ratio of (i) Consolidated
Unencumbered Enterprise Value for the four consecutive Fiscal Quarters ending on
or immediately prior to such date for which financial statements are required to
have been delivered under this Agreement to (ii) Consolidated Total Adjusted
Debt as of such date.
“Assignment and Acceptance” shall mean an assignment and acceptance entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.4(b)) and accepted by the Administrative Agent, in the
form of Exhibit A attached hereto or any other form approved by the
Administrative Agent.
“Availability Period” shall mean the period from the Closing Date to but
excluding the Revolving Commitment Termination Date.
“Bank Product Obligations” shall mean, collectively, all obligations and other
liabilities of any Loan Party to any Bank Product Provider arising with respect
to any Bank Products.
“Bank Product Provider” shall mean any Person that, at the time it provides any
Bank Product to any Loan Party, (i) is a Lender or an Affiliate of a Lender and
(ii) except when the Bank Product Provider is SunTrust Bank and its Affiliates,
has provided prior written notice to the Administrative Agent which has been
acknowledged by the Borrower of (x) the existence of such Bank Product, (y) the
maximum dollar amount of obligations arising thereunder (the “Bank Product
Amount”) and (z) the methodology to be used by such parties in determining the
obligations under such Bank Product from time to time. In no event shall any
Bank Product Provider acting in such capacity be deemed a Lender for purposes
hereof to the extent of and as to Bank Products except that each reference to
the term “Lender” in Article IX and Section 10.3(b) shall be deemed to include
such Bank Product Provider and in no event shall the approval of any such person
in its capacity as Bank Product Provider be required in connection with the
release or termination of any security interest or Lien of the Administrative
Agent. The Bank Product Amount may be changed from time to time upon written
notice to the Administrative Agent by the applicable Bank Product Provider. No
Bank Product Amount may be established at any time that a Default or Event of
Default exists.
“Bank Products” shall mean any of the following services provided to any Loan
Party by any Bank Product Provider: (a) any treasury or other cash management
services, including deposit accounts, automated clearing house (ACH) origination
and other funds transfer, depository (including cash vault and check deposit),
zero balance accounts and sweeps, return items processing, controlled
disbursement accounts, positive pay, lockboxes and lockbox accounts, account
reconciliation and information reporting, payables outsourcing, payroll
processing, trade finance services, investment accounts and securities accounts,
and (b) card services, including credit cards (including purchasing cards and
commercial cards), prepaid cards, including payroll, stored value and gift
cards, merchant services processing, and debit card services.

 

4

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“Base Rate” shall mean the highest of (i) the rate which the Wall Street Journal
reports from time to time as the prime lending rate, as in effect from time to
time, (ii) the Federal Funds Rate, as in effect from time to time, plus one-half
of one percent (0.50%) per annum and (iii) the Adjusted LIBO Rate determined on
a daily basis for an Interest Period of one (1) month, plus one percent (1.00%)
per annum (any changes in such rates to be effective as of the date of any
change in such rate).
“Borrower” shall have the meaning set forth in the introductory paragraph
hereof.
“Borrowing” shall mean a borrowing consisting of (i) Loans of the same Class and
Type, made, converted or continued on the same date and, in the case of
Eurodollar Loans, as to which a single Interest Period is in effect, or (ii) a
Swingline Loan.
“Business Day” shall mean any day other than (i) a Saturday, Sunday or other day
on which commercial banks in Atlanta, Georgia are authorized or required by law
to close and (ii) if such day relates to a Borrowing of, a payment or prepayment
of principal or interest on, a conversion of or into, or an Interest Period for,
a Eurodollar Loan or a notice with respect to any of the foregoing, any day on
which banks are not open for dealings in Dollar deposits in the London interbank
market.
“Capital Expenditures” shall mean, for any period, without duplication, (i) the
additions to property, plant and equipment and other capital expenditures of the
Borrower and its Subsidiaries that are (or would be) set forth on a consolidated
statement of cash flows of the Borrower for such period prepared in accordance
with GAAP and (ii) Capital Lease Obligations incurred by the Borrower and its
Subsidiaries during such period, excluding any expenditure to the extent such
expenditure is part of the aggregate amounts payable in connection with, or
other consideration for, any Permitted Acquisition consummated during or prior
to such period.
“Capital Lease Obligations” of any Person shall mean all obligations of such
Person to pay rent or other amounts under any lease (or other arrangement
conveying the right to use) of real or personal property, or a combination
thereof, which obligations are required to be classified and accounted for as
capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in
accordance with GAAP.
“Capital Stock” shall mean all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of
how designated) of or in a corporation, partnership, limited liability company
or equivalent entity whether voting or nonvoting, including common stock,
preferred stock or any other “equity security” (as such term is defined in
Rule 3a11-1 of the General Rules and Regulations promulgated by the Securities
and Exchange Commission under the Exchange Act).
“Cash Collateralize” shall mean, in respect of any obligations, to provide and
pledge (as a first priority perfected security interest) cash collateral for
such obligations in Dollars with the Administrative Agent pursuant to
documentation in form and substance reasonably satisfactory to the
Administrative Agent (and “Cash Collateralized” and “Cash Collateralization”
have the corresponding meanings).

 

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“CHAMPVA” shall mean, collectively, the Civilian Health and Medical Program of
the Department of Veterans Affairs, a program of medical benefits covering
retirees and dependents of former members of the armed services administered by
the United States Department of Veterans Affairs, and all laws, rules,
regulations, manuals, orders or requirements pertaining to such program.
“Change in Control” shall mean the occurrence of one or more of the following
events: (i) any sale, lease, exchange or other transfer (in a single transaction
or a series of related transactions) of all or substantially all of the assets
of the Borrower to any Person or “group” (within the meaning of the Exchange Act
and the rules of the Securities and Exchange Commission thereunder in effect on
the date hereof), (ii) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or “group” (within the meaning of the
Exchange Act and the rules of the Securities and Exchange Commission thereunder
as in effect on the date hereof) of 35% or more of the outstanding shares of the
voting equity interests of the Borrower, or (iii) during any period of 24
consecutive months, a majority of the members of the board of directors or other
equivalent governing body of the Borrower cease to be composed of individuals
who are Continuing Directors.
“Change in Law” shall mean (i) the adoption of any applicable law, rule or
regulation after the date of this Agreement, (ii) any change in any applicable
law, rule or regulation, or any change in the interpretation, implementation or
application thereof, by any Governmental Authority after the date of this
Agreement, or (iii) compliance by any Lender (or its Applicable Lending Office)
or the Issuing Bank (or, for purposes of Section 2.18(b), by the Parent Company
of such Lender or the Issuing Bank, if applicable) with any request, guideline
or directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement; provided that for
purposes of this Agreement, (x) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines or directives in connection
therewith and (y) all requests, rules, guidelines or directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case 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 each of the Loans comprising such Borrowing, is a Revolving Loan, a
Swingline Loan or a Term Loan and, when used in reference to any Commitment,
refers to whether such Commitment is a Revolving Commitment, a Swingline
Commitment or a Term Loan Commitment.
“Closing Date” shall mean the date on which the conditions precedent set forth
in Section 3.1 and Section 3.2 have been satisfied or waived in accordance with
Section 10.2.
“Code” shall mean the Internal Revenue Code of 1986, as amended and in effect
from time to time.
“Collateral” shall mean all tangible and intangible property, real and personal,
of any Loan Party that is or purports to be the subject of a Lien to the
Administrative Agent to secure the whole or any part of the Obligations or any
Guarantee thereof, and shall include, without limitation, all casualty insurance
proceeds and condemnation awards with respect to any of the foregoing.
“Collateral Access Agreement” shall mean each landlord waiver or bailee
agreement granted to, and in form and substance reasonably acceptable to, the
Administrative Agent.

 

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“Collateral Documents” shall mean, collectively, the Guaranty and Security
Agreement, the Control Account Agreements, the Sweep Agreements, the Perfection
Certificate, all Copyright Security Agreements, all Patent Security Agreements,
all Trademark Security Agreements, all Collateral Access Agreements, all
Negative Pledges, all Real Estate Documents (if any), all loss payee
endorsements required by Section 5.8, all assignments of key man life insurance
policies and all other instruments and agreements now or hereafter securing or
perfecting the Liens securing the whole or any part of the Obligations or any
Guarantee thereof, all UCC financing statements and stock powers, and all other
documents, instruments, agreements and certificates executed and delivered by
any Loan Party to the Administrative Agent and the Lenders in connection with
the foregoing.
“Commitment” shall mean a Revolving Commitment, a Swingline Commitment or a Term
Loan Commitment or any combination thereof (as the context shall permit or
require).
“Compliance Certificate” shall mean a certificate from the principal executive
officer or the principal financial officer of the Borrower in the form of, and
containing the certifications set forth in, the certificate attached hereto as
Exhibit 5.1(c).
“Consolidated EBITDA” shall mean, for the Borrower and its Subsidiaries for any
period, an amount equal to the sum of (i) Consolidated Net Income for such
period plus (ii) to the extent deducted in determining Consolidated Net Income
for such period, and without duplication, (A) Consolidated Interest Expense,
(B) income tax expense determined on a consolidated basis in accordance with
GAAP, (C) depreciation and amortization determined on a consolidated basis in
accordance with GAAP, (D) non-cash stock-based compensation expense determined
on a consolidated basis in accordance with GAAP, (E) non-cash
acquisition-related charges determined on a consolidated basis in accordance
with GAAP and (F) all other non-cash charges acceptable to the Administrative
Agent determined on a consolidated basis in accordance with GAAP, in each case
for such period; provided that (i) in no event may the Consolidated EBITDA
attributable to the Excluded Subsidiaries exceed the lesser of (x) $5,000,000
and (y) 5% of Consolidated EBITDA without giving effect to this proviso, and
(ii) for purposes of calculating compliance with the financial covenants set
forth in Article VI, to the extent that during such period any Loan Party shall
have consummated a Permitted Acquisition or other Acquisition approved in
writing by the Required Lenders, or any sale, transfer or other disposition of
any Person, business, property or assets, Consolidated EBITDA shall be
calculated on a Pro Forma Basis with respect to such Person, business, property
or assets so acquired or disposed of.
“Consolidated EBITDAR” shall mean, for the Borrower and its Subsidiaries for any
period, an amount equal to the sum of (i) Consolidated EBITDA for such period
and (ii) Consolidated Lease Expense for such period.
“Consolidated Interest Expense” shall mean, for the Borrower and its
Subsidiaries for any period, determined on a consolidated basis in accordance
with GAAP, the sum of (i) total interest expense, including, without limitation,
the interest component of any payments in respect of Capital Lease Obligations,
expensed during such period (whether or not actually paid during such period)
plus (ii) the net amount payable (or minus the net amount receivable) with
respect to Hedging Transactions during such period (whether or not actually paid
or received during such period).
“Consolidated Lease Expense” shall mean, for the Borrower and its Subsidiaries
for any period, the aggregate amount of fixed and contingent rentals expensed
with respect to leases of real and personal property (excluding Capital Lease
Obligations) for such period (whether or not actually paid during such period)
determined on a consolidated basis in accordance with GAAP.
“Consolidated Net Income” shall mean, for the Borrower and its Subsidiaries for
any period, the net income (or loss) of the Borrower and its Subsidiaries for
such period determined on a consolidated basis in accordance with GAAP; provided
that there shall be excluded from Consolidated Net Income (to the extent
otherwise included therein) (i) any extraordinary gains or losses, (ii) any
gains attributable to write-ups of assets or the sale of assets (other than the
sale of inventory in the ordinary course of business), (iii) any equity interest
of the Borrower or any Subsidiary of the Borrower in the unremitted earnings of
any Person that is not a Subsidiary, and (iv) any income (or loss) of any Person
accrued prior to the date it becomes a Subsidiary or is merged into or
consolidated with the Borrower or any Subsidiary or the date that such Person’s
assets are acquired by the Borrower or any Subsidiary.

 

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“Consolidated Total Adjusted Debt” shall mean, as of any date, (i) Consolidated
Total Debt minus (ii) all Indebtedness of the Borrower and its Subsidiaries
secured by Liens on Real Property owned by the Borrower and its Subsidiaries.
“Consolidated Total Debt” shall mean, as of any date, all Indebtedness of the
Borrower and its Subsidiaries measured on a consolidated basis as of such date,
but excluding Hedging Obligations.
“Consolidated Total Net Debt” shall mean, as of any date, (i) Consolidated Total
Debt minus (ii) all cash and Permitted Investments held on such date by the
Borrower and its Subsidiaries in Controlled Accounts in excess of $20,000,000;
provided that the aggregate amount of cash and Permitted Investments deducted
from Consolidated Total Debt at any time pursuant to this clause (ii) shall not
exceed $150,000,000.
“Consolidated Unencumbered Enterprise Value” shall mean, as of any date, (a) (i)
Consolidated EBITDA of the Borrower and its Subsidiaries for the four
consecutive Fiscal Quarters ending on or immediately prior to such date for
which financial statements are required to have been delivered under this
Agreement minus (ii) that portion of such Consolidated EBITDA attributable to
the Encumbered Facilities, multiplied by (b) five (5).
“Continuing Director” shall mean, with respect to any period, any individuals
(A) who were members of the board of directors or other equivalent governing
body of the Borrower on the first day of such period, (B) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (A) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body, or (C) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (A) and
(B) above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in the case of
both clauses (B) and (C), any individual whose initial nomination for, or
assumption of office as, a member of that board or equivalent governing body
occurs as a result of an actual or threatened (in writing) solicitation of
proxies or consents for the election or removal of one or more directors by any
person or group other than a solicitation for the election of one or more
directors by or on behalf of the board of directors).
“Contractual Obligation” of any Person shall mean any provision of any security
issued by such Person or of any agreement, instrument or undertaking under which
such Person is obligated or by which it or any of the property in which it has
an interest is bound.
“Control Account Agreement” shall mean any tri-party agreement by and among a
Loan Party, the Administrative Agent and a depositary bank or securities
intermediary at which such Loan Party maintains a Controlled Account, in each
case in form and substance satisfactory to the Administrative Agent.
“Controlled Account” shall have the meaning set forth in Section 5.11.
“Copyright” shall have the meaning assigned to such term in the Guaranty and
Security Agreement.

 

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“Copyright Security Agreement” shall mean any Copyright Security Agreement
executed by a Loan Party owning registered Copyrights or applications for
Copyrights in favor of the Administrative Agent for the benefit of the Secured
Parties, both on the Closing Date and thereafter.
“Default” shall mean any condition or event that, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
“Default Interest” shall have the meaning set forth in Section 2.13(c).
“Defaulting Lender” shall mean, at any time, subject to Section 2.26(b), (i) any
Lender that has failed for two (2) or more Business Days to comply with its
obligations under this Agreement to make a Loan, to make a payment to the
Issuing Bank in respect of a Letter of Credit or to the Swingline Lender in
respect of a Swingline Loan or to make any other payment due hereunder (each a
“funding obligation”), unless such Lender has notified the Administrative Agent
and the Borrower in writing that such failure is the result of such Lender’s
determination that one or more conditions precedent to funding has not been
satisfied (which conditions precedent, together with any applicable Default,
will be specifically identified in such writing), (ii) any Lender that has
notified the Administrative Agent in writing, or has stated publicly, that it
does not intend to comply with any such funding obligation hereunder, unless
such writing or public statement states that such position is based on such
Lender’s determination that one or more conditions precedent to funding cannot
be satisfied (which conditions precedent, together with any applicable Default,
will be specifically identified in such writing or public statement), (iii) any
Lender that has defaulted on its obligation to fund generally under any other
loan agreement, credit agreement or other financing agreement, (iv) any Lender
that has, for three (3) or more Business Days after written request of the
Administrative Agent or the Borrower, failed to confirm in writing to the
Administrative Agent and the Borrower that it will comply with its prospective
funding obligations hereunder (provided that such Lender will cease to be a
Defaulting Lender pursuant to this clause (iv) upon the Administrative Agent’s
and the Borrower’s receipt of such written confirmation), or (v) any Lender with
respect to which a Lender Insolvency Event has occurred and is continuing. Any
determination by the Administrative Agent that a Lender is a Defaulting Lender
will be conclusive and binding, absent manifest error, and such Lender shall be
deemed to be a Defaulting Lender (subject to Section 2.26(b)) upon notification
of such determination by the Administrative Agent to the Borrower, the Issuing
Bank, the Swingline Lender and the Lenders.
“DOJ Investigation” shall mean the investigation of the Borrower and its
Subsidiaries by the U.S. Department of Justice as disclosed in the Borrower’s
filings with the Securities and Exchange Commission in its Form 10-Q for the
quarterly period ended March 31, 2011.
“Dollar(s)” and the sign “$” shall mean lawful money of the United States.
“Domestic Subsidiary” shall mean each Subsidiary of the Borrower that is
organized under the laws of the United States or any state or district thereof.
“Encumbered Facility” shall mean (i) any facility that is not owned in fee
simple by a Loan Party, (ii) any facility owned or leased by a Excluded
Subsidiary, (iii) any HUD Facility (other than the Existing HUD Facility) or
(iv) any facility located on any Real Property subject to a Lien securing the
RBS Note, the Ten Project Note or any other Indebtedness of the Borrower or any
of its Subsidiaries (other than the Obligations). For the avoidance of doubt, no
Mortgaged Property shall be considered an Encumbered Facility.
“Environmental Laws” shall mean all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by or with any Governmental Authority relating in
any way to the environment, preservation or reclamation of natural resources,
the management, Release or threatened Release of any Hazardous Material or to
health and safety matters.

 

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“Environmental Liability” shall mean any liability, contingent or otherwise
(including any liability for damages, costs of environmental investigation and
remediation, costs of administrative oversight, fines, natural resource damages,
penalties or indemnities), of the Borrower or any of its Subsidiaries directly
or indirectly resulting from or based upon (i) any actual or alleged violation
of any Environmental Law, (ii) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (iii) any actual or
alleged exposure to any Hazardous Materials, (iv) the Release or threatened
Release of any Hazardous Materials or (v) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended and in effect from time to time, and any successor statute thereto and
the regulations promulgated and rulings issued thereunder.
“ERISA Affiliate” shall mean any person that for purposes of Title I or Title IV
of ERISA or Section 412 of the Code would be deemed at any relevant time to be a
“single employer” or otherwise aggregated with the Borrower or any of its
Subsidiaries under Section 414(b), (c), (m) or (o) of the Code or Section 4001
of ERISA.
“ERISA Event” shall mean (i) any “reportable event” as defined in Section 4043
of ERISA with respect to a Plan (other than an event as to which the PBGC has
waived under subsection .22, .23, .25, .27 or .28 of PBGC
Regulation Section 4043 the requirement of Section 4043(a) of ERISA that it be
notified of such event); (ii) any failure to make a required contribution to any
Plan that would result in the imposition of a lien or other encumbrance or the
provision of security under Section 430 of the Code or Section 303 or 4068 of
ERISA, or the arising of such a lien or encumbrance, there being or arising any
“unpaid minimum required contribution” or “accumulated funding deficiency” (as
defined or otherwise set forth in Section 4971 of the Code or Part 3 of Subtitle
B of Title 1 of ERISA), whether or not waived, or any filing of any request for
or receipt of a minimum funding waiver under Section 412 of the Code or
Section 303 of ERISA with respect to any Plan or Multiemployer Plan, or that
such filing may be made, or any determination that any Plan is, or is expected
to be, in at-risk status under Title IV of ERISA; (iii) any incurrence by the
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates of
any liability under Title IV of ERISA with respect to any Plan or Multiemployer
Plan (other than for premiums due and not delinquent under Section 4007 of
ERISA); (iv) any institution of proceedings, or the occurrence of an event or
condition which would reasonably be expected to constitute grounds for the
institution of proceedings by the PBGC, under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan; (v) any
incurrence by the Borrower, any of its Subsidiaries or any of their respective
ERISA Affiliates of any liability with respect to the withdrawal or partial
withdrawal from any Plan or Multiemployer Plan, or the receipt by the Borrower,
any of its Subsidiaries or any of their respective ERISA Affiliates of any
notice that a Multiemployer Plan is in endangered or critical status under
Section 305 of ERISA; (vi) any receipt by the Borrower, any of its Subsidiaries
or any of their respective ERISA Affiliates of any notice, or any receipt by any
Multiemployer Plan from the Borrower, any of its Subsidiaries or any of their
respective ERISA Affiliates of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA; (vii) engaging in a non-exempt prohibited transaction within the
meaning of Section 4975 of the Code or Section 406 of ERISA; or (viii) any
filing of a notice of intent to terminate any Plan if such termination would
require material additional contributions in order to be considered a standard
termination within the meaning of Section 4041(b) of ERISA, any filing under
Section 4041(c) of ERISA of a notice of intent to terminate any Plan, or the
termination of any Plan under Section 4041(c) of ERISA.

 

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“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, bears interest at a rate
determined by reference to the Adjusted LIBO Rate.
“Eurodollar Reserve Percentage” shall mean the aggregate of the maximum reserve
percentages (including, without limitation, any emergency, supplemental, special
or other marginal reserves) expressed as a decimal (rounded upwards, if
necessary, to the next 1/100 of 1%) in effect on any day to which the
Administrative Agent is subject with respect to the Adjusted LIBO Rate pursuant
to regulations issued by the Board of Governors of the Federal Reserve System
(or any Governmental Authority succeeding to any of its principal functions)
with respect to eurocurrency funding (currently referred to as “eurocurrency
liabilities” under Regulation D). Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without the
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under Regulation D. The Eurodollar Reserve
Percentage shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage.
“Event of Default” shall have the meaning set forth in Section 8.1.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended and in
effect from time to time.
“Excluded Subsidiary” shall mean each of the following Subsidiaries:
(i) for so long as such Subsidiary remains bound by the RBS Note, CM Health
Holdings LLC, Lufkin Health Holdings LLC, Moenium Holdings LLC and Polk Health
Holdings LLC;
(ii) for so long as such Subsidiary remains bound by the Ten Project Note, Sky
Holdings AZ LLC, Terrace Holdings AZ LLC, Ensign Highland LLC, Valley Health
Holdings LLC, Plaza Health Holdings LLC, Rillito Holdings LLC, Mountainview
Communitycare LLC, Meadowbrook Health Associates LLC, Cedar Avenue Holdings LLC
and Granada Investments LLC;
(iii) City Heights Health Associates LLC, Claremont Foothills Health Associates
LLC, Permunitum, LLC and Vista Woods Health Associates, LLC, unless and until
the facility leases for the Arroyo Vista, Claremont and Vista Knoll skilled
nursing facilities are amended or waived in writing (or the landlord for such
facilities otherwise consents in writing) to permit unlimited guarantees by such
Subsidiaries of all Obligations and to permit Liens to be granted by such
Subsidiaries to the Administrative Agent to secure the Obligations in accounts
receivable of such Subsidiaries (with subordination of all Liens with respect to
such accounts receivable in favor of the landlord on terms reasonably acceptable
to the Administrative Agent), or such Subsidiaries cease to be bound by such
Leases;
(iv) from and after September 30, 2011, (x) Ensign Pleasanton LLC, unless Ensign
Pleasanton LLC shall (1) have purchased in fee simple the Ukiah skilled nursing
facility subject to that certain Lease, dated as of August 1, 2006, between
Ukiah SNF, LLC, as the landlord, and Ensign Pleasanton LLC, and such Real Estate
shall cease to be subject to such Lease, (2) have obtained the consent of such
landlord and any other Person required under such Lease to the grant of
first-priority Liens on all personal property and Capital Stock of Ensign
Pleasanton LLC securing the Obligations pursuant to the Guaranty and Security
Agreement and the subordination of any Liens in favor of such landlord to the
Liens in favor of the Administrative Agent or (3) cease to be bound by such
Lease, and (y) Ensign Whittier East LLC, unless Ensign Whittier East LLC shall
(1) have purchased in fee simple the Whittier Hills skilled nursing facility
subject to that certain Lease, dated as of January 1, 2006, between Whittier
East, LLC, as the landlord, and Ensign Whittier East LLC and such Real Estate
shall cease to be subject to such Lease, (2) have obtained the consent of such
landlord to the grant of first-priority Liens on all personal property and
Capital Stock of Ensign Whittier East LLC securing the Obligations pursuant to
the Guaranty and Security Agreement and the subordination of any Liens in favor
of such landlord to the Liens in favor of the Administrative Agent or (3) cease
to be bound by such Lease; and

 

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(v) to the extent elected by the Borrower by written notice to the
Administrative Agent, any other Subsidiary of the Borrower (other than a HUD
Subsidiary) that incurs Indebtedness pursuant to Section 7.1(h) secured by Liens
on Real Property pursuant to Section 7.2(f).
“Excluded Taxes” shall mean, with respect to any Recipient of any payment to be
made by or on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) the Recipient’s net income by the
United States, or by the jurisdiction under the laws of which such Recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its Applicable Lending Office is located, (b) any branch
profits taxes imposed by the United States or any similar tax imposed by any
other jurisdiction in which such Recipient is located, and (c) any withholding
taxes that (i) are imposed on amounts payable to such Recipient at the time such
Recipient becomes a Recipient under this Agreement or designates a new lending
office, except in each case to the extent that amounts with respect to such
taxes were payable either (A) to such Recipient’s assignor immediately before
such Recipient became a Recipient under this Agreement, or (B) to such Recipient
immediately before it designated a new lending office, (ii) are attributable to
such Recipient’s failure to comply with Section 2.20(e), or (iii) are imposed as
a result of a failure by such Recipient to satisfy the conditions for avoiding
withholding under FATCA.
“Existing HUD Facility” shall mean the facility subject to a Lien securing the
Existing HUD Note.
“Existing HUD Note” shall mean that certain Deed of Trust Note, dated as of
January 30, 2001, executed by Ensign Southland LLC, a Subsidiary of the
Borrower, for the benefit of Continental Wingate Associates, Inc.
“Existing Lenders” shall mean (i) all lenders party to the GE Revolving Credit
Agreement and (ii) all lenders who are the beneficiaries of the Six Project
Note.
“FATCA” shall mean Sections 1471 through 1474 of the Code as of the date of this
Agreement and any current or future regulations or official interpretations
thereof.
“Federal Funds Rate” shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the next 1/100 of 1%) equal to the weighted average of
the rates on overnight Federal funds transactions with member banks of the
Federal Reserve System arranged by Federal funds brokers, as published by the
Federal Reserve Bank of New York on the next succeeding Business Day or, if such
rate is not so published for any Business Day, the Federal Funds Rate for such
day shall be the average (rounded upwards, if necessary, to the next 1/100 of
1%) of the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by the Administrative Agent.

 

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“Fee Letter” shall mean that certain fee letter, dated as of June 15, 2011,
executed by SunTrust Robinson Humphrey, Inc. and SunTrust Bank and accepted by
the Borrower.
“Fiscal Quarter” shall mean any fiscal quarter of the Borrower.
“Fiscal Year” shall mean any fiscal year of the Borrower.
“Foreign Person” shall mean any Person that is not a U.S. Person.
“Foreign Subsidiary” shall mean each Subsidiary of the Borrower that is
organized under the laws of a jurisdiction other than one of the fifty states of
the United States or the District of Columbia.
“GAAP” shall mean generally accepted accounting principles in the United States
applied on a consistent basis and subject to the terms of Section 1.3.
“GE Revolving Credit Agreement” shall mean that certain Second Amended and
Restated Loan and Security Agreement, dated as of February 21, 2008, by and
among the Borrower, certain of its Subsidiaries party thereto and General
Electric Capital Corporation, as lender, as amended or modified from time to
time.
“GE Term Loan Agreement” shall mean that certain Fourth Amended and Restated
Loan Agreement, dated as of November 10, 2009, by and among certain Subsidiaries
of the Borrower party thereto, the lenders party thereto and General Electric
Capital Corporation, as agent, as amended or modified from time to time.
“Governmental Authority” shall mean the government of the United States, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government. “Governmental
Authority” shall include any agency, branch or other governmental body charged
with the responsibility, or vested with the authority to administer or enforce,
any Health Care Laws, including any Medicare or Medicaid contractors,
intermediaries or carriers.
“Governmental Deposit Account” shall mean a deposit account of a Loan Party
maintained in accordance with the requirements of Section 5.11, into direct
proceeds of Medicare and Medicaid payments made by Governmental Payors are
deposited.
“Governmental Payor” shall mean Medicare, Medicaid, TRICARE, CHAMPVA, any state
health plan adopted pursuant to Title XIX of the Social Security Act, any other
state or federal health care program and any other Governmental Authority which
presently or in the future maintains a Third Party Payor Program.
“Guarantee” of or by any Person (the “guarantor”) shall mean any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly and
including any obligation, direct or indirect, of the guarantor (i) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (ii) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (iii) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (iv) as an account party in respect of any
letter of credit or letter of guaranty issued in support of such Indebtedness or
obligation; provided that the term “Guarantee” shall not include endorsements
for collection or deposit in the ordinary course of business. The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Guarantee is made or,
if not so stated or determinable, the maximum reasonably anticipated liability
in respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith. The term “Guarantee” used as a verb has
a corresponding meaning.

 

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“Guarantor” shall mean each of the Subsidiary Loan Parties.
“Guaranty and Security Agreement” shall mean the Guaranty and Security
Agreement, dated as of the date hereof and substantially in the form of
Exhibit B, made by the Loan Parties in favor of the Administrative Agent for the
benefit of the Secured Parties.
“Hazardous Materials” shall mean all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
“Health Care Law” shall mean any Requirement of Law relating to (a) fraud and
abuse (including, without limitation, the following statutes, as amended and in
effect from time to time, and any successor statutes thereto and the regulations
promulgated thereunder: the federal Anti-Kickback Statute (42 U.S.C. §
1320a-7b(b)); the Stark Law (42 U.S.C. § 1395nn and §1395(q)); the civil False
Claims Act (31 U.S.C. § 3729 et seq.); Sections 1320a-7 and 1320a-7a and
1320a-7b of Title 42 of the United States Code; and the Medicare Prescription
Drug, Improvement, and Modernization Act of 2003 (Pub. L. No. 108-173));
(b) Medicare, Medicaid, CHAMPVA, TRICARE or other Third Party Payor Programs;
(c) the licensure or regulation of healthcare providers, suppliers,
professionals, facilities or payors; (d) the provision of, or payment for,
health care services, items or supplies; (e) patient health care; (f) quality,
safety certification and accreditation standards and requirements; (g) the
billing, coding or submission of claims or collection of accounts receivable or
refund of overpayments; (h) HIPAA; (i) fee-splitting prohibitions; (j) health
planning or rate-setting laws, including laws regarding certificates of need and
certificates of exemption; (k) certificates of operations and authority;
(l) laws regulating the provision of free or discounted care or services; and
(m) any and all other applicable federal, state or local health care laws,
rules, codes, statutes, regulations, manuals, orders, ordinances, statutes,
policies, professional or ethical rules, administrative guidance and
requirements, in each case as amended from time to time.
“Health Care Permits” shall mean, with respect to any Person, any permit,
approval, consent, authorization, license, provisional license, registration,
accreditation, certificate, certification, certificate of need, qualification,
operating authority, concession, grant, franchise, variance or permission from
any Governmental Authority issued or required under applicable Health Care Laws.
“Hedging Obligations” of any Person shall mean any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired under (i) any and all Hedging Transactions,
(ii) any and all cancellations, buy backs, reversals, terminations or
assignments of any Hedging Transactions and (iii) any and all renewals,
extensions and modifications of any Hedging Transactions and any and all
substitutions for any Hedging Transactions.

 

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“Hedging Transaction” of any Person shall mean (a) any transaction (including an
agreement with respect to any such transaction) now existing or hereafter
entered into by such Person that is a rate swap transaction, swap option, basis
swap, forward rate transaction, commodity swap, commodity option, equity or
equity index swap or option, bond option, interest rate option, foreign exchange
transaction, cap transaction, floor transaction, collar transaction, currency
swap transaction, cross-currency rate swap transaction, currency option, spot
transaction, credit protection transaction, credit swap, credit default swap,
credit default option, total return swap, credit spread transaction, repurchase
transaction, reverse repurchase transaction, buy/sell-back transaction,
securities lending transaction, or any other similar transaction (including any
option with respect to any of these transactions) or any combination thereof,
whether or not any such transaction is governed by or subject to any master
agreement, and (b) any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed by,
any form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement (any such master agreement, together
with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.
“HIPAA” shall mean the (a) Health Insurance Portability and Accountability Act
of 1996; (b) the Health Information Technology for Economic and Clinical Health
Act (Title XIII of the American Recovery and Reinvestment Act of 2009); and
(c) any state and local laws regulating the privacy and/or security of
individually identifiable information, including state laws providing for
notification of breach of privacy or security of individually identifiable
information, in each case, with respect to the laws described in clauses (a),
(b) and (c) of this definition, as amended and in effect from time to time, and
any successor statutes thereto and the regulations promulgated thereunder.
“HUD Facility” shall mean a skilled nursing facility or similar facility and the
tangible personal property related thereto, including the fixtures, furnishings
and equipment therein, Health Care Permits related thereto and accounts
receivable arising from the operations thereof, to the extent the foregoing
secures any HUD Financing.
“HUD Financing” shall mean Indebtedness incurred by a HUD Subsidiary or group of
HUD Subsidiaries that is guaranteed by the United States Department of Housing
and Urban Development but is not guaranteed by (other than customary
non-recourse guarantees), or otherwise recourse to, the Borrower or any other
Subsidiary (or any of their respective assets).
“HUD Subsidiary” shall mean any wholly-owned Subsidiary Loan Party,
substantially all the assets of which consist of a HUD Facility.
“Increasing Lender” shall have the meaning set forth in Section 2.23.
“Incremental Commitment” shall have the meaning set forth in Section 2.23.
“Incremental Revolving Commitment” shall have the meaning set forth in Section
2.23.
“Incremental Term Loan” shall have the meaning set forth in Section 2.23.
“Indebtedness” of any Person shall mean, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person in respect of the deferred purchase price
of property or services (other than trade payables incurred in the ordinary
course of business; provided that, for purposes of Section 8.1(g), trade
payables overdue by more than 120 days shall be included in this definition
except to the extent that any of such trade payables are being disputed in good
faith and by appropriate measures), (iv) all obligations of such Person under
any conditional sale or other title retention agreement(s) relating to property
acquired by such Person, (v) all Capital Lease Obligations of such Person,
(vi) all obligations, contingent or otherwise, of such Person in respect of
letters of credit, acceptances or similar extensions of credit, (vii) all
Guarantees of such Person of the type of Indebtedness described in clauses
(i) through (vi) above, (viii) all Indebtedness of a third party secured by any
Lien on property owned by such Person, whether or not such Indebtedness has been
assumed by such Person, (ix) all obligations of such Person, contingent or
otherwise, to purchase, redeem, retire or otherwise acquire for value any
Capital Stock of such Person, (x) all Off-Balance Sheet Liabilities and (xi) all
Hedging Obligations. The Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer, except to the extent that the terms of such
Indebtedness or the terms of the partnership agreement or operating agreement of
such partnership or joint venture, as applicable, provide that such Person is
not liable therefor.

 

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“Indemnified Taxes” shall mean Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of any Loan
Party under any Loan Document.
“Information Memorandum” shall mean the Confidential Information Memorandum
dated June 2011 relating to the Borrower and the transactions contemplated by
this Agreement and the other Loan Documents.
“Insurance Subsidiary” shall mean Standardbearer Insurance Company, Ltd., a
Cayman Islands exempted company and a wholly-owned Foreign Subsidiary of the
Borrower.
“Interest/Rent Coverage Ratio” shall mean, as of any date, the ratio of (i)
Consolidated EBITDAR for the four consecutive Fiscal Quarters ending on or
immediately prior to such date for which financial statements are required to
have been delivered under this Agreement to (ii) the sum of Consolidated
Interest Expense and Consolidated Lease Expense for the four consecutive Fiscal
Quarters ending on or immediately prior to such date for which financial
statements are required to have been delivered under this Agreement.
“Interest Period” shall mean with respect to any Eurodollar Borrowing, a period
of one, two, three or six months; provided that:
(i) the initial Interest Period for such Borrowing shall commence on the date of
such Borrowing (including the date of any conversion from a Borrowing of another
Type), and each Interest Period occurring thereafter in respect of such
Borrowing shall commence on the day on which the next preceding Interest Period
expires;
(ii) if any Interest Period would otherwise end on a day other than a Business
Day, such Interest Period shall be extended to the next succeeding Business Day,
unless such Business Day falls in another calendar month, in which case such
Interest Period would end on the next preceding Business Day;
(iii) any Interest Period which begins on the last Business Day of a calendar
month or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period shall end on the last Business
Day of such calendar month;
(iv) each principal installment of the Term Loans shall have an Interest Period
ending on each installment payment date and the remaining principal balance (if
any) of the Term Loans shall have an Interest Period determined as set forth
above; and

 

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(v) no Interest Period may extend beyond the Revolving Commitment Termination
Date, unless on the Revolving Commitment Termination Date the aggregate
outstanding principal amount of Term Loans is equal to or greater than the
aggregate principal amount of Eurodollar Loans with Interest Periods expiring
after such date, and no Interest Period may extend beyond the Maturity Date.
“Investments” shall have the meaning set forth in Section 7.4.
“Issuing Bank” shall mean SunTrust Bank in its capacity as the issuer of Letters
of Credit pursuant to Section 2.22.
“Johnson Notes” shall mean, collectively, those certain Promissory Notes, each
dated as of October 1, 2009, executed by certain Subsidiaries of the Borrower
for the benefit of Johnson Land Enterprises, L.L.C.
“LC Commitment” shall mean that portion of the Aggregate Revolving Commitments
that may be used by the Borrower for the issuance of Letters of Credit in an
aggregate face amount not to exceed $15,000,000.
“LC Disbursement” shall mean a payment made by the Issuing Bank pursuant to a
Letter of Credit.
“LC Documents” shall mean all applications, agreements and instruments relating
to the Letters of Credit but excluding the Letters of Credit.
“LC Exposure” shall mean, at any time, the sum of (i) the aggregate undrawn
amount of all outstanding Letters of Credit at such time, plus (ii) the
aggregate amount of all LC Disbursements that have not been reimbursed by or on
behalf of the Borrower at such time. The LC Exposure of any Lender shall be its
Pro Rata Share of the total LC Exposure at such time.
“Lead Arranger” shall mean SunTrust Robinson Humphrey, Inc., in its capacity as
joint lead arranger in connection with this Agreement.
“Lender Insolvency Event” shall mean that (i) a Lender or its Parent Company is
insolvent, or is generally unable to pay its debts as they become due, or admits
in writing its inability to pay its debts as they become due, or makes a general
assignment for the benefit of its creditors, (ii) a Lender or its Parent Company
is the subject of a bankruptcy, insolvency, reorganization, liquidation or
similar proceeding, or a receiver, trustee, conservator, custodian or similar
Person charged with reorganization or liquidation of its business or assets,
including the Federal Deposit Insurance Corporation or any other state or
federal regulatory authority acting in such capacity, has been appointed for
such Lender or its Parent Company, or such Lender or its Parent Company has
taken any action in furtherance of or indicating its consent to or acquiescence
in any such proceeding or appointment, or (iii) a Lender or its Parent Company
has been adjudicated as, or determined by any Governmental Authority having
regulatory authority over such Person or its assets to be, insolvent; provided
that, for the avoidance of doubt, a Lender Insolvency Event shall not be deemed
to have occurred solely by virtue of the ownership or acquisition of any equity
interest in or control of a Lender or a Parent Company thereof by a Governmental
Authority or an instrumentality thereof so long as such ownership or acquisition
does not result in or provide such Lender with immunity from the jurisdiction of
courts within the United States or from the enforcement of judgments or writs of
attachment on its assets or permit such Lender (or such Governmental Authority)
to reject, repudiate, disavow or disaffirm any contracts or agreements made with
such Lender.

 

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“Lender-Related Hedge Provider” shall mean any Person that, at the time it
enters into a Hedging Transaction with any Loan Party, (i) is a Lender or an
Affiliate of a Lender and (ii) except when the Lender-Related Hedge Provider is
SunTrust Bank or any of its Affiliates, has provided prior written notice to the
Administrative Agent which has been acknowledged by the Borrower of (x) the
existence of such Hedging Transaction and (y) the methodology to be used by such
parties in determining the obligations under such Hedging Transaction from time
to time. In no event shall any Lender-Related Hedge Provider acting in such
capacity be deemed a Lender for purposes hereof to the extent of and as to
Hedging Obligations except that each reference to the term “Lender” in
Article IX and Section 10.3(b) shall be deemed to include such Lender-Related
Hedge Provider. In no event shall the approval of any such Person in its
capacity as Lender-Related Hedge Provider be required in connection with the
release or termination of any security interest or Lien of the Administrative
Agent.
“Lenders” shall have the meaning set forth in the introductory paragraph hereof
and shall include, where appropriate, the Swingline Lender, each Increasing
Lender and each Additional Lender that joins this Agreement pursuant to
Section 2.23.
“Letter of Credit” shall mean any stand-by letter of credit issued pursuant to
Section 2.22 by the Issuing Bank for the account of the Borrower pursuant to the
LC Commitment.
“Leverage Ratio” shall mean, as of any date, the ratio of (i) Consolidated Total
Net Debt as of such date to (ii) Consolidated EBITDA for the four consecutive
Fiscal Quarters ending on or immediately prior to such date for which financial
statements are required to have been delivered under this Agreement.
“LIBOR” shall mean, for any Interest Period with respect to a Eurodollar
Borrowing, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Reuters Screen LIBOR01 Page (or any successor page) as
the London interbank offered rate for Dollar deposits at approximately
11:00 a.m. (London, England time) two (2) Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period. If for
any reason such rate is not available, LIBOR for such Interest Period shall be
the rate per annum reasonably determined by the Administrative Agent as the rate
of interest at which Dollar deposits in the approximate amount of the Eurodollar
Loans comprising part of such Borrowing would be offered by the Administrative
Agent to major banks in the London interbank Eurodollar market at their request
at or about 10:00 a.m. two (2) Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period.
“Licensed Personnel” shall mean any Person (including any physician) involved in
the delivery of health care or medical items, services or supplies, employed or
retained by the Borrower or any of its Subsidiaries.
“Lien” shall mean any mortgage, pledge, security interest, lien (statutory or
otherwise), charge, encumbrance, hypothecation, assignment, deposit arrangement,
or other arrangement having the practical effect of any of the foregoing or any
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement and any capital lease having the same economic effect as any
of the foregoing).
“Loan Documents” shall mean, collectively, this Agreement, the Collateral
Documents, the LC Documents, the Fee Letter, all Notices of Borrowing, all
Notices of Conversion/Continuation, all Compliance Certificates, any promissory
notes issued hereunder and any and all other instruments, agreements, documents
and writings executed in connection with any of the foregoing.
“Loan Parties” shall mean the Borrower and the Subsidiary Loan Parties.

 

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“Loans” shall mean all Revolving Loans, Swingline Loans and Term Loans in the
aggregate or any of them, as the context shall require, and shall include, where
appropriate, any loan made pursuant to Section 2.23.
“Loan to Value Ratio” shall mean the ratio of (i) the aggregate principal amount
of all Loans and Letters of Credit outstanding hereunder to (ii) the Appraised
Value of all Appraised Mortgaged Properties. For purposes of this definition,
the term “Appraised Value” shall mean, with respect to any Real Estate, an
amount equal to the appraised fair market value of such Real Estate (on an
individual, as opposed to portfolio values, basis), as determined by the most
recent Appraisal prepared pursuant to Section 5.13(d).
“Material Adverse Effect” shall mean, with respect to any event, act, condition
or occurrence of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), whether
singularly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences whether or not related,
resulting in a material adverse change in, or a material adverse effect on,
(i) the business, results of operations, financial condition, assets,
liabilities or properties of the Borrower and its Subsidiaries taken as a whole
(provided that the parties hereto acknowledge that a settlement of the DOJ
Investigation involving a payment of less than $40,000,000 shall not be deemed a
material adverse effect hereunder), (ii) the ability of the Loan Parties to
perform any of their respective obligations under the Loan Documents, (iii) the
rights and remedies of the Administrative Agent, the Issuing Bank, the Swingline
Lender or the Lenders under any of the Loan Documents or (iv) the legality,
validity or enforceability of any of the Loan Documents.
“Material Agreements” shall mean (i) all agreements, indentures or notes
governing the terms of any Material Indebtedness, (ii) all employment and
non-compete agreements with senior management, (iii) all leases of Real Estate,
(iv) the GE Term Loan Agreement and all related documents, (v) the RBS Note and
all related documents, and (vi) all other agreements, documents, contracts,
indentures and instruments pursuant to which a default, breach or termination
thereof could reasonably be expected to result in a Material Adverse Effect.
“Material Indebtedness” shall mean any Indebtedness (other than the Loans and
the Letters of Credit) of the Borrower or any of its Subsidiaries individually
or in an aggregate committed or outstanding principal amount exceeding
$5,000,000. For purposes of determining the amount of attributed Indebtedness
from Hedging Obligations, the “principal amount” of any Hedging Obligations at
any time shall be the Net Mark-to-Market Exposure of such Hedging Obligations.
“Maturity Date” shall mean, with respect to the Term Loans, the earlier of
(i) July 15, 2016 and (ii) the date on which the principal amount of all
outstanding Term Loans have been declared or automatically have become due and
payable (whether by acceleration or otherwise).
“Medicaid” shall mean, collectively, the health care assistance program
established by Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) and
any statutes succeeding thereto, and all laws, rules, regulations, manuals,
orders or requirements pertaining to such program, including (a) all federal
statutes affecting such program; (b) all state statutes and plans for medical
assistance enacted in connection with such program and federal rules and
regulations promulgated in connection with such program; and (c) all applicable
provisions of all rules, regulations, manuals, orders and administrative,
reimbursement, and requirements of all Government Authorities promulgated in
connection with such program (whether or not having the force of law), in each
case as the same may be amended and in effect from time to time.

 

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“Medicare” shall mean, collectively, the health insurance program for the aged
and disabled established by Title XVIII of the Social Security Act (42 U.S.C.
1395 et seq.) and any statutes succeeding thereto, and all laws, rules,
regulations, manuals, orders or requirements pertaining to such program
including (a) all federal statutes (whether set forth in Title XVIII of the
Social Security Act (42 U.S.C. 1395 et seq.) or elsewhere) affecting such
program; and (b) all applicable provisions of all rules, regulations, manuals,
orders and administrative and reimbursement requirements of all Governmental
Authorities promulgated in connection with such program (whether or not having
the force of law), in each case as the same may be amended and in effect from
time to time.
“Moody’s” shall mean Moody’s Investors Service, Inc.
“Mortgage Release Event” shall mean that (x) the action giving rise to the
Mortgage Trigger Event has been dismissed with prejudice, has been litigated to
a final judgment which has been paid in full or has been settled for a
settlement amount that has been paid in full, and (y) no Default or Event of
Default shall exist or shall result therefrom or from any payment made in
connection therewith.
“Mortgage Trigger Event” shall mean that (i) the Borrower or any of its
Subsidiaries shall be named in any action, fully or partially unsealed, in which
the United States has affirmatively intervened, or any criminal indictment
alleging violation of the federal False Claims Act or any other applicable law
with damages, fines, penalties or overpayment in excess of $40,000,000 or
alleging criminal liability for actions within the statute of limitation, or
(ii) the Borrower or any of its Subsidiaries otherwise receives a written demand
from any Governmental Authority for payment of damages, fines, penalties or
overpayments in excess of $40,000,000.
“Mortgaged Property” shall mean, collectively, the Real Estate in which the
Administrative Agent has been granted Liens pursuant to Mortgages.
“Mortgages” shall mean each mortgage, deed of trust, deed to secure debt or
other real estate security documents delivered by any Loan Party to the
Administrative Agent from time to time, all in form and substance reasonably
satisfactory to the Administrative Agent.
“Multiemployer Plan” shall mean any “multiemployer plan” as defined in Section
4001(a)(3) of ERISA, which is contributed to by (or to which there is or may be
an obligation to contribute of) the Borrower, any of its Subsidiaries or an
ERISA Affiliate, and each such plan for the five-year period immediately
following the latest date on which the Borrower, any of its Subsidiaries or an
ERISA Affiliate contributed to or had an obligation to contribute to such plan.
“Negative Pledge” shall mean each negative pledge granted for the benefit of,
and in form and substance reasonably acceptable to, the Administrative Agent by
the Borrower or any of its Subsidiaries with respect to any Real Estate.
“Net Mark-to-Market Exposure” of any Person shall mean, as of any date of
determination with respect to any Hedging Obligation, the excess (if any) of all
unrealized losses over all unrealized profits of such Person arising from such
Hedging Obligation. “Unrealized losses” shall mean the fair market value of the
cost to such Person of replacing the Hedging Transaction giving rise to such
Hedging Obligation as of the date of determination (assuming such Hedging
Transaction were to be terminated as of that date), and “unrealized profits”
shall mean the fair market value of the gain to such Person of replacing such
Hedging Transaction as of the date of determination (assuming such Hedging
Transaction were to be terminated as of that date).
“Non-Defaulting Lender” shall mean, at any time, a Lender that is not a
Defaulting Lender or a Potential Defaulting Lender.

 

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“Non-Public Information” shall mean any material non-public information (within
the meaning of United States federal and state securities laws) with respect to
the Borrower, its Affiliates or any of their securities or loans.
“Non-U.S. Plan” shall mean any plan, fund (including, without limitation, any
superannuation fund) or other similar program established, contributed to
(regardless of whether through direct contributions or through employee
withholding) or maintained outside the United States by the Borrower or one or
more of its Subsidiaries primarily for the benefit of employees of the Borrower
or such Subsidiaries residing outside the United States, which plan, fund or
other similar program provides, or results in, retirement income, a deferral of
income in contemplation of retirement, or payments to be made upon termination
of employment, and which plan is not subject to ERISA or the Code.
“Notices of Borrowing” shall mean, collectively, the Notices of Revolving
Borrowing and the Notices of Swingline Borrowing.
“Notice of Conversion/Continuation” shall have the meaning set forth in Section
2.7(b).
“Notice of Revolving Borrowing” shall have the meaning set forth in Section 2.3.
“Notice of Swingline Borrowing” shall have the meaning set forth in Section 2.4.
“Obligations” shall mean (a) all amounts owing by the Loan Parties to the
Administrative Agent, the Issuing Bank, any Lender (including the Swingline
Lender) or the Lead Arranger pursuant to or in connection with this Agreement or
any other Loan Document or otherwise with respect to any Loan or Letter of
Credit, including, without limitation, all principal, interest (including any
interest accruing after the filing of any petition in bankruptcy or the
commencement of any insolvency, reorganization or like proceeding relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding), reimbursement obligations, fees, expenses,
indemnification and reimbursement payments, costs and expenses (including all
fees and expenses of counsel to the Administrative Agent, the Issuing Bank and
any Lender (including the Swingline Lender) incurred pursuant to this Agreement
or any other Loan Document), whether direct or indirect, absolute or contingent,
liquidated or unliquidated, now existing or hereafter arising hereunder or
thereunder, (b) all Hedging Obligations owed by any Loan Party to any
Lender-Related Hedge Provider, and (c) all Bank Product Obligations, together
with all renewals, extensions, modifications or refinancings of any of the
foregoing.
“OFAC” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets
Control.
“Off-Balance Sheet Liabilities” of any Person shall mean (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability of such Person under any sale
and leaseback transactions that do not create a liability on the balance sheet
of such Person, (iii) any Synthetic Lease Obligation or (iv) any obligation
arising with respect to any other transaction which is the functional equivalent
of or takes the place of borrowing but which does not constitute a liability on
the balance sheet of such Person.
“OSHA” shall mean the Occupational Safety and Health Act of 1970, as amended and
in effect from time to time, and any successor statute thereto.
“Other Taxes” shall mean any and all present or future stamp, court or
documentary, intangible, recording, filing or similar Taxes that arise from any
payment made hereunder or under any other Loan Document or from the execution,
delivery, performance or enforcement or registration of, from the receipt or
perfection of a security interest under, or otherwise with respect to, this
Agreement or any other Loan Document.

 

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“Parent Company” shall mean, with respect to a Lender, the “bank holding
company” as defined in Regulation Y, if any, of such Lender, and/or any Person
owning, beneficially or of record, directly or indirectly, a majority of the
shares of such Lender.
“Participant” shall have the meaning set forth in Section 10.4(d).
“Patent” shall have the meaning assigned to such term in the Guaranty and
Security Agreement.
“Patent Security Agreement” shall mean any Patent Security Agreement executed by
a Loan Party owning Patents or licenses of Patents in favor of the
Administrative Agent for the benefit of the Secured Parties, both on the Closing
Date and thereafter.
“Patriot Act” shall mean the USA PATRIOT Improvement and Reauthorization Act of
2005 (Pub. L. 109-177 (signed into law March 9, 2006)), as amended and in effect
from time to time.
“Payment Office” shall mean the office of the Administrative Agent located at
303 Peachtree Street, N.E., Atlanta, Georgia 30308, or such other location as to
which the Administrative Agent shall have given written notice to the Borrower
and the other Lenders.
“PBGC” shall mean the U.S. Pension Benefit Guaranty Corporation referred to and
defined in ERISA, and any successor entity performing similar functions.
“Perfection Certificate” shall have the meaning assigned to such term in the
Guaranty and Security Agreement.
“Permitted Acquisition” shall mean any Acquisition by a Loan Party that occurs
when the following conditions have been satisfied:
(i) before and after giving effect to such Acquisition, no Default or Event of
Default has occurred and is continuing or would result therefrom, and all
representations and warranties of each Loan Party set forth in the Loan
Documents shall be and remain true and correct in all material respects;
(ii) before and after giving effect to such Acquisition, on a Pro Forma Basis,
the Borrower is in compliance with each of the covenants set forth in
Article VI, measuring Consolidated Total Debt for purposes of Sections 6.1 and
6.3 as of the date of such Acquisition and otherwise recomputing the covenants
set forth in Article VI as of the last day of the most recently ended Fiscal
Quarter for which financial statements are required to have been delivered
pursuant to Section 5.1(a) or (b) as if such Acquisition had occurred, and any
Indebtedness incurred in connection therewith was incurred, on the first day of
the relevant period for testing compliance;
(iii) at least five (5) days prior to the date of the consummation of any such
Acquisition for which the aggregate consideration to be paid is at least
$10,000,000, the Borrower shall have delivered to the Administrative Agent
notice of such Acquisition, together with, to the extent available and received
by the Borrower in connection with such Acquisition (including after request by
the Borrower to the applicable seller), historical financial information with
respect to the Person whose stock or assets are being acquired, the acquisition
agreement and such other information in the possession of the Borrower that is
reasonably requested by the Administrative Agent;

 

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(iv) such Acquisition is approved by the board of directors (or the equivalent
thereof) of the Person whose stock or assets are being acquired;
(v) the Person or assets being acquired is in the same type of business
conducted by the Borrower and its Subsidiaries on the date hereof or any
business reasonably related thereto;
(vi) such Acquisition is consummated in compliance with all Requirements of Law,
and all consents and approvals from any Governmental Authority and all material
consents and approvals from any other Person in each case required in connection
with such Acquisition have been obtained; and
(vii) at least five (5) days prior to the date of the consummation of any such
Acquisition for which the aggregate consideration to be paid is at least
$10,000,000, the Borrower shall have delivered to the Administrative Agent a
certificate executed by a Responsible Officer certifying that each of the
conditions set forth above has been satisfied (or, with respect to the condition
set forth in clause (iv), that such condition will be satisfied by the date of
the consummation of such Acquisition).
“Permitted Alternative Investments” shall mean any of the following, but
excluding any Permitted Investment:
(i) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States (or by any agency thereof
to the extent such obligations are backed by the full faith and credit of the
United States);
(ii) commercial paper having the highest rating, at the time of acquisition
thereof, of S&P or Moody’s and in either case maturing within one year from the
date of acquisition thereof;
(iii) certificates of deposit, bankers’ acceptances and time deposits maturing
within one year from the date of acquisition thereof issued or guaranteed by or
placed with, and money market deposit accounts issued or offered by, any
domestic office of any commercial bank organized under the laws of the United
States or any state thereof which has a combined capital and surplus and
undivided profits of not less than $500,000,000;
(iv) other securities, including, without limitation, corporate debt, having the
highest rating, at the time of acquisition thereof, of S&P or Moody’s and in
either case maturing within one year from the date of acquisition thereof; and
(v) mutual funds investing solely in any one or more of the Permitted
Alternative Investments described in clauses (i) through (iv) above.
“Permitted Encumbrances” shall mean:
(i) Liens imposed by law for taxes not yet due or which are being contested in
good faith by appropriate proceedings diligently conducted and with respect to
which adequate reserves are being maintained in accordance with GAAP;

 

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(ii) statutory Liens of landlords, carriers, warehousemen, mechanics,
materialmen and other Liens imposed by law in the ordinary course of business
for amounts not yet due or which are being contested in good faith by
appropriate proceedings diligently conducted and with respect to which adequate
reserves are being maintained in accordance with GAAP;
(iii) pledges and deposits made in the ordinary course of business in compliance
with workers’ compensation, unemployment insurance and other social security
laws or regulations;
(iv) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;
(v) judgment and attachment liens not giving rise to an Event of Default or
Liens created by or existing from any litigation or legal proceeding that are
currently being contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves are being maintained in
accordance with GAAP;
(vi) customary rights of set-off, revocation, refund or chargeback under deposit
agreements or under the Uniform Commercial Code or common law of banks or other
financial institutions where the Borrower or any of its Subsidiaries maintains
deposits (other than deposits intended as cash collateral) in the ordinary
course of business; and
(vii) easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligations and do not materially detract from the
value of the affected property or materially interfere with the ordinary conduct
of business of the Borrower and its Subsidiaries taken as a whole;
provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.
“Permitted Investments” shall mean:
(i) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States (or by any agency thereof
to the extent such obligations are backed by the full faith and credit of the
United States), in each case maturing within one year from the date of
acquisition thereof;
(ii) commercial paper having the highest rating, at the time of acquisition
thereof, of S&P or Moody’s and in either case maturing within six months from
the date of acquisition thereof;
(iii) certificates of deposit, bankers’ acceptances and time deposits maturing
within 180 days of the date of acquisition thereof issued or guaranteed by or
placed with, and money market deposit accounts issued or offered by, any
domestic office of any commercial bank organized under the laws of the United
States or any state thereof which has a combined capital and surplus and
undivided profits of not less than $500,000,000;
(iv) fully collateralized repurchase agreements with a term of not more than
30 days for securities described in clause (i) above and entered into with a
financial institution satisfying the criteria described in clause (iii) above;
and

 

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(v) mutual funds investing solely in any one or more of the Permitted
Investments described in clauses (i) through (iv) above.
“Person” shall mean any individual, partnership, firm, corporation, association,
joint venture, limited liability company, trust or other entity, or any
Governmental Authority.
“Plan” shall mean any “employee benefit plan” as defined in Section 3 of ERISA
(other than a Multiemployer Plan) maintained or contributed to by the Borrower
or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate has or
may have an obligation to contribute, and each such plan that is subject to
Title IV of ERISA for the five-year period immediately following the latest date
on which the Borrower or any ERISA Affiliate maintained, contributed to or had
an obligation to contribute to (or is deemed under Section 4069 of ERISA to have
maintained or contributed to or to have had an obligation to contribute to, or
otherwise to have liability with respect to) such plan.
“Potential Defaulting Lender” shall mean, at any time, subject to Section
2.26(b), any Lender as to which the Administrative Agent has notified the
Borrower that (i) an event of the kind referred to in the definition of “Lender
Insolvency Event” has occurred and is continuing in respect of any financial
institution affiliate of such Lender, (ii) such Lender has (or its Parent
Company or a financial institution affiliate thereof has) notified the
Administrative Agent in writing, or has stated publicly, that it does not intend
to comply with its funding obligations under any other loan agreement, credit
agreement or other financing agreement, unless such writing or public statement
states that such position is based on such Lender’s determination that one or
more conditions precedent to funding cannot be satisfied (which conditions
precedent, together with any applicable default, will be specifically identified
in such writing or public statement), or (iii) such Lender has, or whose Parent
Company has, a non-investment grade rating from Moody’s or S&P or another
nationally recognized rating agency. Any determination by the Administrative
Agent that a Lender is a Potential Defaulting Lender will be conclusive and
binding, absent manifest error, and such Lender shall be deemed to be a
Potential Defaulting Lender (subject to Section 2.26(b)) upon notification of
such determination by the Administrative Agent to the Borrower, the Issuing
Bank, the Swingline Lender and the Lenders.
“Proceeding” shall mean any investigation, inquiry, litigation, review, hearing,
suit, claim, audit, arbitration, proceeding or action (in each case, whether
civil, criminal, administrative, investigative or informal) commenced, brought,
conducted or heard by or before, or otherwise involving, any Governmental
Authority or arbitrator.
“Pro Forma Basis” shall mean, (i) with respect to any Person, business, property
or asset acquired in a Permitted Acquisition or other Acquisition approved in
writing by the Required Lenders, the inclusion as “Consolidated EBITDA” of the
EBITDA (i.e. net income before interest, taxes, depreciation and amortization)
for such Person, business, property or asset as if such Acquisition had been
consummated on the first day of the applicable period, based on historical
results accounted for in accordance with GAAP, adjusted by (A) any credit
received for acquisition-related costs and savings to the extent expressly
permitted pursuant to Article 11 of Securities and Exchange Commission
Regulation S-X and (B) other reasonable adjustments consistent with the
operation by the Borrower or any of its Subsidiaries of comparable businesses,
properties or assets that are in the same or reasonably related line of business
in the same or similar geographies for (1) insurance expense savings, (2) bad
debt expense savings and (3) any other non-recurring or non-cash charges that
have been deducted from the EBITDA of or attributable to such Person, business,
property or asset prior to such Acquisition; provided that in each case (x) the
cost savings associated with such adjustments are reasonably expected by the
Borrower in good faith to be realized within six (6) months of the consummation
of such Acquisition and (y) for any such adjustments included six months after
the consummation of such Acquisition, the Borrower and its Subsidiaries have
achieved annualized run-rate savings consistent with such adjustments; and
(ii) with respect to any Person, business, property or asset sold, transferred
or otherwise disposed of, the exclusion from “Consolidated EBITDA” of the EBITDA
(i.e. net income before interest, taxes, depreciation and amortization) for such
Person, business, property or asset so disposed of during such period as if such
disposition had been consummated on the first day of the applicable period, in
accordance with GAAP.

 

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“Pro Rata Share” shall mean (i) with respect to any Class of Commitment or Loan
of any Lender at any time, a percentage, the numerator of which shall be such
Lender’s Commitment of such Class (or, if such Commitment has been terminated or
expired or the Loans have been declared to be due and payable, such Lender’s
Revolving Credit Exposure or Term Loan, as applicable), and the denominator of
which shall be the sum of all Commitments of such Class of all Lenders (or, if
such Commitments have been terminated or expired or the Loans have been declared
to be due and payable, all Revolving Credit Exposure or Term Loans, as
applicable, of all Lenders) and (ii) with respect to all Classes of Commitments
and Loans of any Lender at any time, the numerator of which shall be the sum of
such Lender’s Revolving Commitment (or, if such Revolving Commitment has been
terminated or expired or the Loans have been declared to be due and payable,
such Lender’s Revolving Credit Exposure) and Term Loan and the denominator of
which shall be the sum of all Lenders’ Revolving Commitments (or, if such
Revolving Commitments have been terminated or expired or the Loans have been
declared to be due and payable, all Revolving Credit Exposure of all Lenders
funded under such Commitments) and Term Loans.
“Public Lender” shall mean any Lender who does not wish to receive Non-Public
Information and who may be engaged in investment and other market related
activities with respect to the Borrower, its Affiliates or any of their
securities or loans.
“RBS Note” shall mean that certain Note, dated as of December 31, 2010, executed
by certain Subsidiaries of the Borrower for the benefit of RBS Asset Finance,
Inc.
“Real Estate” shall mean all real property owned or leased by the Borrower and
its Subsidiaries.
“Real Estate Documents” shall mean, collectively, all Mortgages, all
environmental indemnity agreements, and all other documents, instruments,
agreements and certificates executed and delivered by any Loan Party to the
Administrative Agent and the Lenders in connection with the foregoing.
“Recipient” shall mean, as applicable, (a) the Administrative Agent, (b) any
Lender and (c) the Issuing Bank.
“Regulation D” shall mean Regulation D of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time, and any
successor regulations.
“Regulation T” shall mean Regulation T of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time, and any
successor regulations.
“Regulation U” shall mean Regulation U of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time, and any
successor regulations.
“Regulation X” shall mean Regulation X of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time, and any
successor regulations.
“Regulation Y” shall mean Regulation Y of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time, and any
successor regulations.

 

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“Related Parties” shall mean, with respect to any specified Person, such
Person’s Affiliates and the respective managers, administrators, trustees,
partners, directors, officers, employees, agents, advisors or other
representatives of such Person and such Person’s Affiliates.
“Release” shall mean any release, spill, emission, leaking, dumping, injection,
pouring, deposit, disposal, discharge, dispersal, leaching or migration into the
environment (including ambient air, surface water, groundwater, land surface or
subsurface strata) or within any building, structure, facility or fixture.
“Required Lenders” shall mean, at any time, Lenders holding more than 50% of the
aggregate outstanding Revolving Commitments and Term Loans at such time or, if
the Lenders have no Commitments outstanding, then Lenders holding more than 50%
of the aggregate outstanding Revolving Credit Exposure and Term Loans of the
Lenders at such time; provided that to the extent that any Lender is a
Defaulting Lender, such Defaulting Lender and all of its Revolving Commitments,
Revolving Credit Exposure and Term Loans shall be excluded for purposes of
determining Required Lenders.
“Required Revolving Lenders” shall mean, at any time, Lenders holding more than
50% of the aggregate outstanding Revolving Commitments at such time or, if the
Lenders have no Revolving Commitments outstanding, then Lenders holding more
than 50% of the aggregate outstanding Revolving Credit Exposure at such time;
provided that to the extent that any Lender is a Defaulting Lender, such
Defaulting Lender and all of its Revolving Commitments and Revolving Credit
Exposure shall be excluded for purposes of determining Required Revolving
Lenders.
“Requirement of Law” for any Person shall mean the articles or certificate of
incorporation, bylaws, partnership certificate and agreement, or limited
liability company certificate of organization and agreement, as the case may be,
and other organizational and governing documents of such Person, and any law,
treaty, rule or regulation, or determination of a 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, including, without
limitation, all Health Care Laws.
“Responsible Officer” shall mean (x) with respect to certifying compliance with
the financial covenants set forth in Article VI, the chief financial officer or
the treasurer of the Borrower and (y) with respect to all other provisions, any
of the president, the chief executive officer, the chief operating officer, the
chief financial officer, the treasurer or a vice president of the Borrower or
such other representative of the Borrower as may be designated in writing by any
one of the foregoing with the consent of the Administrative Agent.
“Restricted Payment” shall mean, for any Person, any dividend or distribution on
any class of its Capital Stock, or any payment on account of, or set apart
assets for a sinking or other analogous fund for, the purchase, redemption,
retirement, defeasance or other acquisition of any shares of its Capital Stock,
any Indebtedness subordinated to the Obligations or any Guarantee thereof or any
options, warrants or other rights to purchase such Capital Stock or such
Indebtedness, whether now or hereafter outstanding, or any management or similar
fees.
“Revolving Commitment” shall mean, with respect to each Lender, the commitment
of such Lender to make Revolving Loans to the Borrower and to acquire
participations in Letters of Credit and Swingline Loans in an aggregate
principal amount not exceeding the amount set forth with respect to such Lender
on Schedule I, as such schedule may be amended pursuant to Section 2.23, or, in
the case of a Person becoming a Lender after the Closing Date, the amount of the
assigned “Revolving Commitment” as provided in the Assignment and Acceptance
executed by such Person as an assignee, or the joinder executed by such Person,
in each case as such commitment may subsequently be increased or decreased
pursuant to the terms hereof.

 

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“Revolving Commitment Termination Date” shall mean the earliest of (i) July 15,
2016, (ii) the date on which the Revolving Commitments are terminated pursuant
to Section 2.8 and (iii) the date on which all amounts outstanding under this
Agreement have been declared or have automatically become due and payable
(whether by acceleration or otherwise).
“Revolving Credit Exposure” shall mean, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender’s Revolving Loans, LC
Exposure and Swingline Exposure.
“Revolving Loan” shall mean a loan made by a Lender (other than the Swingline
Lender) to the Borrower under its Revolving Commitment, which may either be a
Base Rate Loan or a Eurodollar Loan.
“S&P” shall mean Standard & Poor’s, a division of The McGraw-Hill Companies,
Inc.
“Sanctioned Country” shall mean a country subject to a sanctions program
identified on the list maintained by OFAC and available at
http://www.treasury.gov/resource-center/sanctions/Pages/default.aspx, or as
otherwise published from time to time.
“Sanctioned Person” shall mean (i) a Person named on the list of “Specially
Designated Nationals and Blocked Persons” maintained by OFAC available at
http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx,
or as otherwise published from time to time, or (ii) (A) an agency of the
government of a Sanctioned Country, (B) an organization controlled by a
Sanctioned Country, or (C) a person resident in a Sanctioned Country, to the
extent subject to a sanctions program administered by OFAC.
“Secured Parties” shall mean the Administrative Agent, the Lenders, the Issuing
Bank, the Lender-Related Hedge Providers and the Bank Product Providers.
“Six Project Note” shall mean that certain Six Project Promissory Note, dated as
of November 10, 2009, executed by certain Subsidiaries of the Borrower in order
to evidence the Six Project Loan under as and as defined in the GE Term Loan
Agreement.
“Solvent” shall mean, with respect to any Person on a particular date, that on
such date (a) the fair value of the property of such Person is greater than the
total amount of liabilities, including subordinated and contingent liabilities,
of such Person; (b) the present fair saleable value of the assets of such Person
is not less than the amount that will be required to pay the probable liability
of such Person on its debts and liabilities, including subordinated and
contingent liabilities as they become absolute and matured; (c) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person’s ability to pay as such debts and liabilities mature; and
(d) such Person is not engaged in a business or transaction, and is not about to
engage in a business or transaction, for which such Person’s property would
constitute an unreasonably small capital. The amount of contingent liabilities
(such as litigation, guaranties and pension plan liabilities) at any time shall
be computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that would reasonably be expected to
become an actual or matured liability.
“Subsidiary” shall mean, with respect to any Person (the “parent”) at any date,
any corporation, partnership, joint venture, limited liability company,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent’s consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, partnership, joint venture, limited liability
company, association or other entity (i) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held,
or (ii) that is, as of such date, otherwise controlled, by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent. Unless otherwise indicated, all references to “Subsidiary” hereunder
shall mean a Subsidiary of the Borrower.

 

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“Subsidiary Loan Party” shall mean any Subsidiary that executes or becomes a
party to the Guaranty and Security Agreement, unless and until any such
Subsidiary is released pursuant to Section 9.11(c).
“Sweep Agreement” shall have the meaning set forth in Section 5.11.
“Swingline Commitment” shall mean the commitment of the Swingline Lender to make
Swingline Loans in an aggregate principal amount at any time outstanding not to
exceed $10,000,000.
“Swingline Exposure” shall mean, with respect to each Lender, the principal
amount of the Swingline Loans in which such Lender is legally obligated either
to make a Base Rate Loan or to purchase a participation in accordance with
Section 2.4, which shall equal such Lender’s Pro Rata Share of all outstanding
Swingline Loans.
“Swingline Lender” shall mean SunTrust Bank.
“Swingline Loan” shall mean a loan made to the Borrower by the Swingline Lender
under the Swingline Commitment.
“Synthetic Lease” shall mean a lease transaction under which the parties intend
that (i) the lease will be treated as an “operating lease” by the lessee
pursuant to Accounting Standards Codification Sections 840-10 and 840-20, as
amended, and (ii) the lessee will be entitled to various tax and other benefits
ordinarily available to owners (as opposed to lessees) of like property.
“Synthetic Lease Obligations” shall mean, with respect to any Person, the sum of
(i) all remaining rental obligations of such Person as lessee under Synthetic
Leases which are attributable to principal and, without duplication, (ii) all
rental and purchase price payment obligations of such Person under such
Synthetic Leases assuming such Person exercises the option to purchase the lease
property at the end of the lease term.
“Taxes” shall mean any and all present or future taxes, levies, imposts, duties,
deductions, assessments, fees, charges or withholdings imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.
“Ten Project Note” shall mean that certain Consolidated Amended and Restated
Promissory Note, dated as of December 29, 2006, executed by certain Subsidiaries
of the Borrower in order to evidence the Ten Project Loan under as and as
defined in the GE Term Loan Agreement.
“Term Loan” shall mean a term loan made by a Lender to the Borrower pursuant to
Section 2.5 or Section 2.23.
“Term Loan Commitment” shall mean, with respect to each Lender, the obligation
of such Lender to make a Term Loan hereunder on the Closing Date, in a principal
amount not exceeding the amount set forth with respect to such Lender on
Schedule I. The aggregate principal amount of all Lenders’ Term Loan Commitments
as of the Closing Date is $75,000,000.

 

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“Third Party Payor” shall mean any Governmental Payor, private insurers, managed
care plans, and any other person or entity which presently or in the future
maintains Third Party Payor Programs.
“Third Party Payor Authorizations” shall mean all participation agreements,
provider or supplier agreements, enrollments, accreditations and billing numbers
necessary to participate in and receive reimbursement from a Third Party Payor
Program, including all Medicare and Medicaid participation agreements.
“Third Party Payor Programs” shall mean all payment or reimbursement programs,
sponsored or maintained by any Third Party Payor, in which the Borrower or any
of its Subsidiaries participates.
“Trademark” shall have the meaning assigned to such term in the Guaranty and
Security Agreement.
“Trademark Security Agreement” shall mean any Trademark Security Agreement
executed by a Loan Party owning registered Trademarks or applications for
Trademarks in favor of the Administrative Agent for the benefit of the Secured
Parties, both on the Closing Date and thereafter.
“Trading with the Enemy Act” shall mean the Trading with the Enemy Act of the
United States of America (50 U.S.C. App. §§ 1 et seq.), as amended and in effect
from time to time.
“TRICARE” shall mean, collectively, a program of medical benefits covering
former and active members of the uniformed services and certain of their
dependents, financed and administered by the United States Departments of
Defense, Health and Human Services and Transportation, and all laws applicable
to such programs.
“Type”, when used in reference to a Loan or a Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Base Rate.
“Unfunded Pension Liability” of any Plan shall mean the amount, if any, by which
the value of the accumulated plan benefits under the Plan, determined on a plan
termination basis in accordance with actuarial assumptions at such time
consistent with those prescribed by the PBGC for purposes of Section 4044 of
ERISA, exceeds the fair market value of all Plan assets allocable to such
liabilities under Title IV of ERISA (excluding any accrued but unpaid
contributions).
“Uniform Commercial Code” or “UCC” shall mean the Uniform Commercial Code as
amended and in effect from time to time in the State of New York.
“United States” or “U.S.” shall mean the United States of America.
“U.S. Person” shall mean any Person that is a “United States person” as defined
in Section 7701(a)(30) of the Code.
“U.S. Tax Compliance Certificate” shall have the meaning set forth in Section
2.20(e)(ii).
“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.

 

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“Withholding Agent” shall mean the Borrower, any other Loan Party or the
Administrative Agent, as applicable.
Section 1.2. Classifications of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g. “Revolving
Loan” or “Term Loan”) or by Type (e.g. “Eurodollar Loan” or “Base Rate Loan”) or
by Class and Type (e.g. “Revolving Eurodollar Loan”). Borrowings also may be
classified and referred to by Class (e.g. “Revolving Borrowing”) or by Type
(e.g. “Eurodollar Borrowing”) or by Class and Type (e.g. “Revolving Eurodollar
Borrowing”).
Section 1.3. Accounting Terms and Determination. Unless otherwise defined or
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared, in accordance with GAAP as
in effect from time to time, applied on a basis consistent with the most recent
audited consolidated financial statement of the Borrower delivered pursuant to
Section 5.1(a); provided that if the Borrower notifies the Administrative Agent
that the Borrower wishes to amend any covenant in Article VI to eliminate the
effect of any change in GAAP on the operation of such covenant (or if the
Administrative Agent notifies the Borrower that the Required Lenders wish to
amend Article VI for such purpose), then the Borrower’s compliance with such
covenant shall be determined on the basis of GAAP in effect immediately before
the relevant change in GAAP became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrower
and the Required Lenders (and each party hereto agrees to negotiate in good
faith with respect to such amendment). Notwithstanding any other provision
contained herein, (i) all terms of an accounting or financial nature used herein
shall be construed, and all computations of amounts and ratios referred to
herein shall be made, without giving effect to any election under Accounting
Standards Codification Section 825-10 (or any other Financial Accounting
Standard having a similar result or effect) to value any Indebtedness or other
liabilities of any Loan Party or any Subsidiary of any Loan Party at “fair
value”, as defined therein; and (ii) for purposes of this Agreement, any change
in GAAP requiring leases which were previously classified as operating leases to
be treated as capitalized leases shall be disregarded and such leases shall
continue to be treated as operating leases consistent with GAAP as in effect
immediately before such change in GAAP became effective.
Section 1.4. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”. In
the computation of periods of time from a specified date to a later specified
date, the word “from” means “from and including” and the word “to” means “to but
excluding”. Unless the context requires otherwise (i) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as it was
originally executed or as it may from time to time be amended, restated,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (ii) any reference
herein to any Person shall be construed to include such Person’s successors and
permitted assigns, (iii) the words “hereof”, “herein” and “hereunder” and words
of similar import shall be construed to refer to this Agreement as a whole and
not to any particular provision hereof, (iv) all references to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles,
Sections, Exhibits and Schedules to this Agreement and (v) all references to a
specific time shall be construed to refer to the time in the city and state of
the Administrative Agent’s principal office, unless otherwise indicated.

 

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ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENTS
Section 2.1. General Description of Facilities. Subject to and upon the terms
and conditions herein set forth, (i) the Lenders hereby establish in favor of
the Borrower a revolving credit facility pursuant to which each Lender severally
agrees (to the extent of such Lender’s Revolving Commitment) to make Revolving
Loans to the Borrower in accordance with Section 2.2; (ii) the Issuing Bank may
issue Letters of Credit in accordance with Section 2.22; (iii) the Swingline
Lender may make Swingline Loans in accordance with Section 2.4; (iv) each Lender
agrees to purchase a participation interest in the Letters of Credit and the
Swingline Loans pursuant to the terms and conditions hereof; provided that in no
event shall the aggregate principal amount of all outstanding Revolving Loans,
Swingline Loans and outstanding LC Exposure exceed the Aggregate Revolving
Commitment Amount in effect from time to time; and (v) each Lender severally
agrees to make a Term Loan to the Borrower in a principal amount not exceeding
such Lender’s Term Loan Commitment on the Closing Date.
Section 2.2. Revolving Loans. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make Revolving Loans, ratably in
proportion to its Pro Rata Share of the Aggregate Revolving Commitments, to the
Borrower, from time to time during the Availability Period, in an aggregate
principal amount outstanding at any time that will not result in (a) such
Lender’s Revolving Credit Exposure exceeding such Lender’s Revolving Commitment
or (b) the aggregate Revolving Credit Exposures of all Lenders exceeding the
Aggregate Revolving Commitment Amount. During the Availability Period, the
Borrower shall be entitled to borrow, prepay and reborrow Revolving Loans in
accordance with the terms and conditions of this Agreement; provided that the
Borrower may not borrow or reborrow should there exist a Default or Event of
Default.
Section 2.3. Procedure for Revolving Borrowings. The Borrower shall give the
Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) of each Revolving Borrowing, substantially in the form of Exhibit 2.3
attached hereto (a “Notice of Revolving Borrowing”), (x) prior to 1:00 p.m. one
(1) Business Day prior to the requested date of each Base Rate Borrowing and
(y) prior to 1:00 p.m. three (3) Business Days prior to the requested date of
each Eurodollar Borrowing. Each Notice of Revolving Borrowing shall be
irrevocable and shall specify (i) the aggregate principal amount of such
Borrowing, (ii) the date of such Borrowing (which shall be a Business Day),
(iii) the Type of such Revolving Loan comprising such Borrowing and (iv) in the
case of a Eurodollar Borrowing, the duration of the initial Interest Period
applicable thereto (subject to the provisions of the definition of Interest
Period). Each Revolving Borrowing shall consist entirely of Base Rate Loans or
Eurodollar Loans, as the Borrower may request. The aggregate principal amount of
each Eurodollar Borrowing shall not be less than $5,000,000 or a larger multiple
of $250,000, and the aggregate principal amount of each Base Rate Borrowing
shall not be less than $1,000,000 or a larger multiple of $100,000; provided
that Base Rate Loans made pursuant to Section 2.4 or Section 2.22(d) may be made
in lesser amounts as provided therein. At no time shall the total number of
Eurodollar Borrowings outstanding at any time exceed four (4). Promptly
following the receipt of a Notice of Revolving Borrowing in accordance herewith,
the Administrative Agent shall advise each Lender of the details thereof and the
amount of such Lender’s Revolving Loan to be made as part of the requested
Revolving Borrowing.
Section 2.4. Swingline Commitment.
(a) Subject to the terms and conditions set forth herein, the Swingline Lender
may, in its sole discretion, make Swingline Loans to the Borrower, from time to
time during the Availability Period, in an aggregate principal amount
outstanding at any time not to exceed the lesser of (i) the Swingline Commitment
then in effect and (ii) the difference between the Aggregate Revolving
Commitment Amount and the aggregate Revolving Credit Exposures of all Lenders;
provided that the Swingline Lender shall not be required to make a Swingline
Loan to refinance an outstanding Swingline Loan. The Borrower shall be entitled
to borrow, repay and reborrow Swingline Loans in accordance with the terms and
conditions of this Agreement.

 

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(b) The Borrower shall give the Administrative Agent written notice (or
telephonic notice promptly confirmed in writing) of each Swingline Borrowing,
substantially in the form of Exhibit 2.4 attached hereto (a “Notice of Swingline
Borrowing”), prior to 1:00 p.m. on the requested date of each Swingline
Borrowing. Each Notice of Swingline Borrowing shall be irrevocable and shall
specify (i) the principal amount of such Swingline Borrowing, (ii) the date of
such Swingline Borrowing (which shall be a Business Day) and (iii) the account
of the Borrower to which the proceeds of such Swingline Borrowing should be
credited. The Administrative Agent will promptly advise the Swingline Lender of
each Notice of Swingline Borrowing. The aggregate principal amount of each
Swingline Loan shall not be less than $100,000 or a larger multiple of $50,000,
or such other minimum amounts agreed to by the Swingline Lender and the
Borrower. The Swingline Lender will make the proceeds of each Swingline Loan
available to the Borrower in Dollars in immediately available funds at the
account specified by the Borrower in the applicable Notice of Swingline
Borrowing not later than 3:00 p.m. on the requested date of such Swingline
Borrowing.
(c) The Swingline Lender, at any time and from time to time in its sole
discretion, may, but in no event no less frequently than once each calendar week
shall, on behalf of the Borrower (which hereby irrevocably authorizes and
directs the Swingline Lender to act on its behalf), give a Notice of Revolving
Borrowing to the Administrative Agent requesting the Lenders (including the
Swingline Lender) to make Base Rate Loans in an amount equal to the unpaid
principal amount of any Swingline Loan. Each Lender will make the proceeds of
its Base Rate Loan included in such Borrowing available to the Administrative
Agent for the account of the Swingline Lender in accordance with Section 2.6,
which will be used solely for the repayment of such Swingline Loan.
(d) If for any reason a Base Rate Borrowing may not be (as determined in the
sole discretion of the Administrative Agent), or is not, made in accordance with
the foregoing provisions, then each Lender (other than the Swingline Lender)
shall purchase an undivided participating interest in such Swingline Loan in an
amount equal to its Pro Rata Share thereof on the date that such Base Rate
Borrowing should have occurred. On the date of such required purchase, each
Lender shall promptly transfer, in immediately available funds, the amount of
its participating interest to the Administrative Agent for the account of the
Swingline Lender.
(e) Each Lender’s obligation to make a Base Rate Loan pursuant to subsection
(c) of this Section or to purchase participating interests pursuant to
subsection (d) of this Section shall be absolute and unconditional and shall not
be affected by any circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right that such Lender or any other
Person may have or claim against the Swingline Lender, the Borrower or any other
Person for any reason whatsoever, (ii) the existence of a Default or an Event of
Default or the termination of any Lender’s Revolving Commitment, (iii) the
existence (or alleged existence) of any event or condition which has had or
could reasonably be expected to have a Material Adverse Effect, (iv) any breach
of this Agreement or any other Loan Document by any Loan Party, the
Administrative Agent or any Lender or (v) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing. If such amount
is not in fact made available to the Swingline Lender by any Lender, the
Swingline Lender shall be entitled to recover such amount on demand from such
Lender, together with accrued interest thereon for each day from the date of
demand thereof (x) at the Federal Funds Rate until the second Business Day after
such demand and (y) at the Base Rate at all times thereafter. Until such time as
such Lender makes its required payment, the Swingline Lender shall be deemed to
continue to have outstanding Swingline Loans in the amount of the unpaid
participation for all purposes of the Loan Documents. In addition, such Lender
shall be deemed to have assigned any and all payments made of principal and
interest on its Loans and any other amounts due to it hereunder to the Swingline
Lender to fund the amount of such Lender’s participation interest in such
Swingline Loans that such Lender failed to fund pursuant to this Section, until
such amount has been purchased in full.

 

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Section 2.5. Term Loan Commitments. Subject to the terms and conditions set
forth herein, each Lender severally agrees to make a single term loan to the
Borrower on the Closing Date in a principal amount equal to the Term Loan
Commitment of such Lender. The Term Loans may be, from time to time, Base Rate
Loans or Eurodollar Loans or a combination thereof; provided that on the Closing
Date all Term Loans shall be Base Rate Loans. The execution and delivery of this
Agreement by the Borrower and the satisfaction of all conditions precedent
pursuant to Section 3.1 shall be deemed to constitute the Borrower’s request to
borrow the Term Loans on the Closing Date.
Section 2.6. Funding of Borrowings.
(a) Each Lender will make available each Loan to be made by it hereunder on the
proposed date thereof by wire transfer in immediately available funds by
11:00 a.m. to the Administrative Agent at the Payment Office; provided that the
Swingline Loans will be made as set forth in Section 2.4. The Administrative
Agent will make such Loans available to the Borrower by promptly crediting the
amounts that it receives, in like funds by the close of business on such
proposed date, to an account maintained by the Borrower with the Administrative
Agent or, at the Borrower’s option, by effecting a wire transfer of such amounts
to an account designated by the Borrower to the Administrative Agent.
(b) Unless the Administrative Agent shall have been notified by any Lender prior
to 5:00 p.m. one (1) Business Day prior to the date of a Borrowing in which such
Lender is to participate that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative
Agent may assume that such Lender has made such amount available to the
Administrative Agent on such date, and the Administrative Agent, in reliance on
such assumption, may make available to the Borrower on such date a corresponding
amount. If such corresponding amount is not in fact made available to the
Administrative Agent by such Lender on the date of such Borrowing, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest (x) at the Federal Funds Rate
until the second Business Day after such demand and (y) at the Base Rate at all
times thereafter. If such Lender does not pay such corresponding amount
forthwith upon the Administrative Agent’s demand therefor, the Administrative
Agent shall promptly notify the Borrower, and the Borrower shall immediately pay
such corresponding amount to the Administrative Agent together with interest at
the rate specified for such Borrowing. Nothing in this subsection shall be
deemed to relieve any Lender from its obligation to fund its Pro Rata Share of
any Borrowing hereunder or to prejudice any rights which the Borrower may have
against any Lender as a result of any default by such Lender hereunder.
(c) All Revolving Borrowings shall be made by the Lenders on the basis of their
respective Pro Rata Shares. No Lender shall be responsible for any default by
any other Lender in its obligations hereunder, and each Lender shall be
obligated to make its Loans provided to be made by it hereunder, regardless of
the failure of any other Lender to make its Loans hereunder.
Section 2.7. Interest Elections.
(a) Each Borrowing initially shall be of the Type specified in the applicable
Notice of Borrowing. Thereafter, the Borrower may elect to convert such
Borrowing into a different Type or to continue such Borrowing, all as provided
in this Section. The Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.

 

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(b) To make an election pursuant to this Section, the Borrower shall give the
Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) of each Borrowing that is to be converted or continued, as the case may
be, substantially in the form of Exhibit 2.7 attached hereto (a “Notice of
Conversion/Continuation”) (x) prior to 1:00 p.m. one (1) Business Day prior to
the requested date of a conversion into a Base Rate Borrowing and (y) prior to
1:00 p.m. three (3) Business Days prior to a continuation of or conversion into
a Eurodollar Borrowing. Each such Notice of Conversion/Continuation shall be
irrevocable and shall specify (i) the Borrowing to which such Notice of
Conversion/Continuation applies and, if different options are being elected with
respect to different portions thereof, the portions thereof that are to be
allocated to each resulting Borrowing (in which case the information to be
specified pursuant to clauses (iii) and (iv) shall be specified for each
resulting Borrowing), (ii) the effective date of the election made pursuant to
such Notice of Conversion/Continuation, which shall be a Business Day,
(iii) whether the resulting Borrowing is to be a Base Rate Borrowing or a
Eurodollar Borrowing, and (iv) if the resulting Borrowing is to be a Eurodollar
Borrowing, the Interest Period applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of “Interest
Period”. If any such Notice of Conversion/Continuation requests a Eurodollar
Borrowing but does not specify an Interest Period, the Borrower shall be deemed
to have selected an Interest Period of one month. The principal amount of any
resulting Borrowing shall satisfy the minimum borrowing amount for Eurodollar
Borrowings and Base Rate Borrowings set forth in Section 2.3.
(c) If, on the expiration of any Interest Period in respect of any Eurodollar
Borrowing, the Borrower shall have failed to deliver a Notice of
Conversion/Continuation, then, unless such Borrowing is repaid as provided
herein, the Borrower shall be deemed to have elected to convert such Borrowing
to a Base Rate Borrowing. No Borrowing may be converted into, or continued as, a
Eurodollar Borrowing if a Default or an Event of Default exists, unless the
Administrative Agent and each of the Lenders shall have otherwise consented in
writing. No conversion of any Eurodollar Loan shall be permitted except on the
last day of the Interest Period in respect thereof.
(d) Upon receipt of any Notice of Conversion/Continuation, the Administrative
Agent shall promptly notify each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.
Section 2.8. Optional Reduction and Termination of Commitments.
(a) Unless previously terminated, all Revolving Commitments, Swingline
Commitments and LC Commitments shall terminate on the Revolving Commitment
Termination Date. The Term Loan Commitments shall terminate on the Closing Date
upon the making of the Term Loans pursuant to Section 2.5.
(b) Upon at least three (3) Business Days’ prior written notice (or telephonic
notice promptly confirmed in writing) to the Administrative Agent (which notice
shall be irrevocable), the Borrower may reduce the Aggregate Revolving
Commitments in part or terminate the Aggregate Revolving Commitments in whole;
provided that (i) any partial reduction shall apply to reduce proportionately
and permanently the Revolving Commitment of each Lender, (ii) any partial
reduction pursuant to this Section shall be in an amount of at least $5,000,000
and any larger multiple of $1,000,000, and (iii) no such reduction shall be
permitted which would reduce the Aggregate Revolving Commitment Amount to an
amount less than the aggregate outstanding Revolving Credit Exposure of all
Lenders. Any such reduction in the Aggregate Revolving Commitment Amount below
the principal amount of the Swingline Commitment and the LC Commitment shall
result in a dollar-for-dollar reduction in the Swingline Commitment and the LC
Commitment.

 

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(c) With the written approval of the Administrative Agent, the Borrower may
terminate (on a non-ratable basis) the unused amount of the Revolving Commitment
of a Defaulting Lender, and in such event the provisions of Section 2.26 will
apply to all amounts thereafter paid by the Borrower for the account of any such
Defaulting Lender under this Agreement (whether on account of principal,
interest, fees, indemnity or other amounts); provided that such termination will
not be deemed to be a waiver or release of any claim that the Borrower, the
Administrative Agent, the Issuing Bank, the Swingline Lender or any other Lender
may have against such Defaulting Lender.
Section 2.9. Repayment of Loans.
(a) The outstanding principal amount of all Revolving Loans and Swingline Loans
shall be due and payable (together with accrued and unpaid interest thereon) on
the Revolving Commitment Termination Date.
(b) The Borrower unconditionally promises to pay to the Administrative Agent for
the account of each Lender the then unpaid principal amount of the Term Loan of
such Lender in installments payable on the dates set forth below, with each such
installment being in the aggregate principal amount for all Lenders set forth
opposite such date below (and on such other date(s) and in such other amounts as
may be required from time to time pursuant to this Agreement):

          Installment Date   Aggregate Principal Amount  
 
       
September 30, 2011
  $ 937,500  
December 31, 2011
  $ 937,500  
March 31, 2012
  $ 937,500  
June 30, 2012
  $ 937,500  
September 30, 2012
  $ 937,500  
December 31, 2012
  $ 937,500  
March 31, 2013
  $ 937,500  
June 30, 2013
  $ 937,500  
September 30, 2013
  $ 937,500  
December 31, 2013
  $ 937,500  
March 31, 2014
  $ 937,500  
June 30, 2014
  $ 937,500  
September 30, 2014
  $ 937,500  
December 31, 2014
  $ 937,500  
March 31, 2015
  $ 937,500  
June 30, 2015
  $ 937,500  
September 30, 2015
  $ 937,500  
December 31, 2015
  $ 937,500  
March 31, 2016
  $ 937,500  
June 30, 2016
  $ 937,500  

provided that, to the extent not previously paid, the aggregate unpaid principal
balance of the Term Loans shall be due and payable on the Maturity Date.

 

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Section 2.10. Evidence of Indebtedness.
(a) Each Lender shall maintain in accordance with its usual practice appropriate
records evidencing the Indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender from time to time, including the amounts of
principal and interest payable thereon and paid to such Lender from time to time
under this Agreement. The Administrative Agent shall maintain appropriate
records in which shall be recorded (i) the Revolving Commitment and the Term
Loan Commitment of each Lender, (ii) the amount of each Loan made hereunder by
each Lender, the Class and Type thereof and, in the case of each Eurodollar
Loan, the Interest Period applicable thereto, (iii) the date of any continuation
of any Loan pursuant to Section 2.7, (iv) the date of any conversion of all or a
portion of any Loan to another Type pursuant to Section 2.7, (v) the date and
amount of any principal or interest due and payable or to become due and payable
from the Borrower to each Lender hereunder in respect of the Loans and (vi) both
the date and amount of any sum received by the Administrative Agent hereunder
from the Borrower in respect of the Loans and each Lender’s Pro Rata Share
thereof. The entries made in such records shall be prima facie evidence of the
existence and amounts of the obligations of the Borrower therein recorded;
provided that the failure or delay of any Lender or the Administrative Agent in
maintaining or making entries into any such record or any error therein shall
not in any manner affect the obligation of the Borrower to repay the Loans (both
principal and unpaid accrued interest) of such Lender in accordance with the
terms of this Agreement.
(b) This Agreement evidences the obligation of the Borrower to repay the Loans
and is being executed as a “noteless” credit agreement. However, at the request
of any Lender (including the Swingline Lender) at any time, the Borrower agrees
that it will prepare, execute and deliver to such Lender a promissory note
payable to the order of such Lender (or, if requested by such Lender, to such
Lender and its registered assigns) and in a form approved by the Administrative
Agent. Thereafter, the Loans evidenced by such promissory note and interest
thereon shall at all times (including after assignment permitted hereunder) be
represented by one or more promissory notes in such form payable to the order of
the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).
Section 2.11. Optional Prepayments. The Borrower shall have the right at any
time and from time to time to prepay any Borrowing, in whole or in part, without
premium or penalty, by giving written notice (or telephonic notice promptly
confirmed in writing) to the Administrative Agent no later than (i) in the case
of any prepayment of any Eurodollar Borrowing, 1:00 p.m. not less than three
(3) Business Days prior to the date of such prepayment, (ii) in the case of any
prepayment of any Base Rate Borrowing, 1:00 p.m. not less than one (1) Business
Day prior to the date of such prepayment, and (iii) in the case of any
prepayment of any Swingline Borrowing, prior to 1:00 p.m. on the date of such
prepayment. Each such notice shall be irrevocable and shall specify the proposed
date of such prepayment and the principal amount of each Borrowing or portion
thereof to be prepaid. Upon receipt of any such notice, the Administrative Agent
shall promptly notify each affected Lender of the contents thereof and of such
Lender’s Pro Rata Share of any such prepayment. If such notice is given, the
aggregate amount specified in such notice shall be due and payable on the date
designated in such notice, together with accrued interest to such date on the
amount so prepaid in accordance with Section 2.13(d); provided that if a
Eurodollar Borrowing is prepaid on a date other than the last day of an Interest
Period applicable thereto, the Borrower shall also pay all amounts required
pursuant to Section 2.19. Each partial prepayment of any Loan shall be in an
amount that would be permitted in the case of an advance of a Revolving
Borrowing of the same Type pursuant to Section 2.2 or, in the case of a
Swingline Loan, pursuant to Section 2.4. Each prepayment of a Borrowing shall be
applied ratably to the Loans comprising such Borrowing and, in the case of a
prepayment of a Term Loan Borrowing, to principal installments in the manner
directed by the Borrower.

 

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Section 2.12. Mandatory Prepayments.
(a) Immediately upon receipt by the Borrower or any of its Subsidiaries of any
proceeds of any sale or disposition by the Borrower or any of its Subsidiaries
of any of its assets, or any proceeds from any casualty insurance policies or
eminent domain, condemnation or similar proceedings, the Borrower shall prepay
the Obligations in an amount equal to all such proceeds, net of commissions and
other reasonable and customary transaction costs, fees and expenses properly
attributable to such transaction and payable by the Borrower in connection
therewith (in each case, paid to non-Affiliates); provided that the Borrower
shall not be required to prepay the Obligations with respect to (i) proceeds
from the sales of inventory in the ordinary course of business, (ii) proceeds
from the sales of assets securing Indebtedness permitted under Section 7.1(c) to
the extent such proceeds are used to repay such Indebtedness, (iii) proceeds
from other asset sales permitted under Section 7.6 in an aggregate amount less
than (x) $25,000,000 in any twelve month period and (y) $125,000,000 during the
term of this Agreement and (iv) proceeds that are reinvested in assets then used
or usable in the business of the Borrower and its Subsidiaries within 180 days
following receipt thereof, so long as such proceeds are held in Controlled
Accounts until reinvested. Any such prepayment shall be applied in accordance
with subsection (c) of this Section.
(b) Any prepayments made by the Borrower pursuant to subsection (a) of this
Section shall be applied as follows: first, to the Administrative Agent’s fees
and reimbursable expenses then due and payable pursuant to any of the Loan
Documents; second, to all reimbursable expenses of the Lenders and all fees and
reimbursable expenses of the Issuing Bank then due and payable pursuant to any
of the Loan Documents, pro rata to the Lenders and the Issuing Bank based on
their respective pro rata shares of such fees and expenses; third, to interest
and fees then due and payable hereunder, pro rata to the Lenders based on their
respective pro rata shares of such interest and fees; fourth, to the principal
balance of the Term Loans, until the same shall have been paid in full, pro rata
to the Lenders based on their Pro Rata Shares of the Term Loans, and applied to
installments of the Term Loans on a pro rata basis (including, without
limitation, the final payment due on the Maturity Date); fifth, to the principal
balance of the Swingline Loans, until the same shall have been paid in full, to
the Swingline Lender; sixth, to the principal balance of the Revolving Loans,
until the same shall have been paid in full, pro rata to the Lenders based on
their respective Revolving Commitments; and seventh, to Cash Collateralize the
Letters of Credit in an amount in cash equal to the LC Exposure as of such date
plus any accrued and unpaid fees thereon. The Revolving Commitments of the
Lenders shall be permanently reduced by the amount of any prepayments made
pursuant to clauses fifth through seventh above.
(c) If at any time the aggregate Revolving Credit Exposure of all Lenders
exceeds the Aggregate Revolving Commitment Amount, as reduced pursuant to
Section 2.8 or otherwise, the Borrower shall immediately repay the Swingline
Loans and the Revolving Loans in an amount equal to such excess, together with
all accrued and unpaid interest on such excess amount and any amounts due under
Section 2.19. Each prepayment shall be applied as follows: first, to the
Swingline Loans to the full extent thereof; second, to the Base Rate Loans to
the full extent thereof; and third, to the Eurodollar Loans to the full extent
thereof. If, after giving effect to prepayment of all Swingline Loans and
Revolving Loans, the aggregate Revolving Credit Exposure of all Lenders exceeds
the Aggregate Revolving Commitment Amount, the Borrower shall Cash Collateralize
its reimbursement obligations with respect to all Letters of Credit in an amount
equal to such excess plus any accrued and unpaid fees thereon.
Section 2.13. Interest on Loans.
(a) The Borrower shall pay interest on (i) each Base Rate Loan at the Base Rate
plus the Applicable Margin in effect from time to time and (ii) each Eurodollar
Loan at the Adjusted LIBO Rate for the applicable Interest Period in effect for
such Loan plus the Applicable Margin in effect from time to time.

 

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(b) The Borrower shall pay interest on each Swingline Loan at the Base Rate plus
the Applicable Margin in effect from time to time.
(c) Notwithstanding subsections (a) and (b) of this Section, at the option of
the Required Lenders if an Event of Default has occurred and is continuing, and
automatically after acceleration or with respect to any past due amount
hereunder, the Borrower shall pay interest (“Default Interest”) with respect to
all Eurodollar Loans at the rate per annum equal to 200 basis points above the
otherwise applicable interest rate for such Eurodollar Loans for the
then-current Interest Period until the last day of such Interest Period, and
thereafter, and with respect to all Base Rate Loans and all other Obligations
hereunder (other than Loans), at the rate per annum equal to 200 basis points
above the otherwise applicable interest rate for Base Rate Loans.
(d) Interest on the principal amount of all Loans shall accrue from and
including the date such Loans are made to but excluding the date of any
repayment thereof. Interest on all outstanding Base Rate Loans and Swingline
Loans shall be payable quarterly in arrears on the last day of each March, June,
September and December and on the Revolving Commitment Termination Date or the
Maturity Date, as the case may be. Interest on all outstanding Eurodollar Loans
shall be payable on the last day of each Interest Period applicable thereto,
and, in the case of any Eurodollar Loans having an Interest Period in excess of
three months, on each day which occurs every three months after the initial date
of such Interest Period, and on the Revolving Commitment Termination Date or the
Maturity Date, as the case may be. Interest on any Loan which is converted into
a Loan of another Type or which is repaid or prepaid shall be payable on the
date of such conversion or on the date of any such repayment or prepayment (on
the amount repaid or prepaid) thereof. All Default Interest shall be payable on
demand.
(e) The Administrative Agent shall determine each interest rate applicable to
the Loans hereunder and shall promptly notify the Borrower and the Lenders of
such rate in writing (or by telephone, promptly confirmed in writing). Any such
determination shall be conclusive and binding for all purposes, absent manifest
error.
Section 2.14. Fees.
(a) The Borrower shall pay to the Administrative Agent for its own account fees
in the amounts and at the times previously agreed upon in writing by the
Borrower and the Administrative Agent.
(b) The Borrower agrees to pay to the Administrative Agent for the account of
each Lender a commitment fee, which shall accrue at the Applicable Percentage
per annum (determined daily in accordance with the Pricing Grid) on the daily
amount of the unused Revolving Commitment of such Lender during the Availability
Period. For purposes of computing the commitment fee, the Revolving Commitment
of each Lender shall be deemed used to the extent of the outstanding Revolving
Loans and LC Exposure, but not Swingline Exposure, of such Lender.
(c) The Borrower agrees to pay (i) to the Administrative Agent, for the account
of each Lender, a letter of credit fee with respect to its participation in each
Letter of Credit, which shall accrue at a rate per annum equal to the Applicable
Margin for Eurodollar Loans then in effect on the average daily amount of such
Lender’s LC Exposure attributable to such Letter of Credit during the period
from and including the date of issuance of such Letter of Credit to but
excluding the date on which such Letter of Credit expires or is drawn in full
(including, without limitation, any LC Exposure that remains outstanding after
the Revolving Commitment Termination Date) and (ii) to the Issuing Bank for its
own account a facing fee, which shall accrue at the rate set forth in the Fee
Letter on the average daily amount of the LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the Availability
Period (or until the date that such Letter of Credit is irrevocably cancelled,
whichever is later), as well as the Issuing Bank’s standard fees with respect to
issuance, amendment, renewal or extension of any Letter of Credit or processing
of drawings thereunder. Notwithstanding the foregoing, if the Required Lenders
elect to increase the interest rate on the Loans to the rate for Default
Interest pursuant to Section 2.13(c), the rate per annum used to calculate the
letter of credit fee pursuant to clause (i) above shall automatically be
increased by 200 basis points.

 

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(d) The Borrower shall pay on the Closing Date to the Administrative Agent and
its affiliates all fees in the Fee Letter that are due and payable on the
Closing Date. The Borrower shall pay on the Closing Date to the Lenders all
upfront fees previously agreed in writing.
(e) Accrued fees under subsections (b) and (c) of this Section shall be payable
quarterly in arrears on the last day of each March, June, September and
December, commencing on September 30, 2011, and on the Revolving Commitment
Termination Date (and, if later, the date the Loans and LC Exposure shall be
repaid in their entirety); provided that any such fees accruing after the
Revolving Commitment Termination Date shall be payable on demand.
(f) Anything herein to the contrary notwithstanding, during such period as a
Lender is a Defaulting Lender, such Defaulting Lender will not be entitled to
commitment fees accruing with respect to its Revolving Commitment during such
period pursuant to subsection (b) of this Section or letter of credit fees
accruing during such period pursuant to subsection (c) of this Section (without
prejudice to the rights of the Lenders other than Defaulting Lenders in respect
of such fees), provided that (x) to the extent that a portion of the LC Exposure
of such Defaulting Lender is reallocated to the Non-Defaulting Lenders pursuant
to Section 2.26, such fees that would have accrued for the benefit of such
Defaulting Lender will instead accrue for the benefit of and be payable to such
Non-Defaulting Lenders, pro rata in accordance with their respective Revolving
Commitments, and (y) to the extent any portion of such LC Exposure cannot be so
reallocated, such fees will instead accrue for the benefit of and be payable to
the Issuing Bank. The pro rata payment provisions of Section 2.21 shall
automatically be deemed adjusted to reflect the provisions of this subsection.
Section 2.15. Computation of Interest and Fees.
Interest hereunder based on the prime lending rate shall be computed on the
basis of a year of 365 days (or 366 days in a leap year) and paid for the actual
number of days elapsed (including the first day but excluding the last day). All
other interest and all fees hereunder shall be computed on the basis of a year
of 360 days and paid for the actual number of days elapsed (including the first
day but excluding the last day). Each determination by the Administrative Agent
of an interest rate or fee hereunder shall be made in good faith and, except for
manifest error, shall be final, conclusive and binding for all purposes.
Section 2.16. Inability to Determine Interest Rates. If, prior to the
commencement of any Interest Period for any Eurodollar Borrowing:
(i) the Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower) that, by reason of circumstances
affecting the relevant interbank market, adequate means do not exist for
ascertaining LIBOR for such Interest Period, or

 

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(ii) the Administrative Agent shall have received notice from the Required
Lenders that the Adjusted LIBO Rate does not adequately and fairly reflect the
cost to such Lenders of making, funding or maintaining their Eurodollar Loans
for such Interest Period, the Administrative Agent shall give written notice (or
telephonic notice, promptly confirmed in writing) to the Borrower and to the
Lenders as soon as practicable thereafter. Until the Administrative Agent shall
notify the Borrower and the Lenders that the circumstances giving rise to such
notice no longer exist, (i) the obligations of the Lenders to make Eurodollar
Revolving Loans or to continue or convert outstanding Loans as or into
Eurodollar Loans shall be suspended and (ii) all such affected Loans shall be
converted into Base Rate Loans on the last day of the then current Interest
Period applicable thereto unless the Borrower prepays such Loans in accordance
with this Agreement. Unless the Borrower notifies the Administrative Agent at
least one (1) Business Day before the date of any Eurodollar Borrowing for which
a Notice of Revolving Borrowing or a Notice of Conversion/ Continuation has
previously been given that it elects not to borrow, continue or convert to a
Eurodollar Borrowing on such date, then such Revolving Borrowing shall be made
as, continued as or converted into a Base Rate Borrowing.
Section 2.17. Illegality. If any Change in Law shall make it unlawful or
impossible for any Lender to make, maintain or fund any Eurodollar Loan and such
Lender shall so notify the Administrative Agent, the Administrative Agent shall
promptly give notice thereof to the Borrower and the other Lenders, whereupon
until such Lender notifies the Administrative Agent and the Borrower that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Lender to make Eurodollar Revolving Loans, or to continue or convert
outstanding Loans as or into Eurodollar Loans, shall be suspended. In the case
of the making of a Eurodollar Borrowing, such Lender’s Revolving Loan shall be
made as a Base Rate Loan as part of the same Revolving Borrowing for the same
Interest Period and, if the affected Eurodollar Loan is then outstanding, such
Loan shall be converted to a Base Rate Loan either (i) on the last day of the
then current Interest Period applicable to such Eurodollar Loan if such Lender
may lawfully continue to maintain such Loan to such date or (ii) immediately if
such Lender shall determine that it may not lawfully continue to maintain such
Eurodollar Loan to such date. Notwithstanding the foregoing, the affected Lender
shall, prior to giving such notice to the Administrative Agent, designate a
different Applicable Lending Office if such designation would avoid the need for
giving such notice and if such designation would not otherwise be
disadvantageous to such Lender in the good faith exercise of its discretion.
Section 2.18. Increased Costs.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or similar
requirement that is not otherwise included in the determination of the Adjusted
LIBO Rate hereunder against assets of, deposits with or for the account of, or
credit extended by, any Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate) or the Issuing Bank;
(ii) impose on any Lender, the Issuing Bank or the eurodollar interbank market
any other condition affecting this Agreement or any Eurodollar Loans made by
such Lender or any Letter of Credit or any participation therein; or
(iii) subject any Recipient to any Taxes (other than Indemnified Taxes and
Excluded Taxes) on its loans, loan principal, letters of credit, commitments or
other obligations, or its deposits, reserves, other liabilities or capital
attributable thereto;
and the result of any of the foregoing is to increase the cost to such Lender of
making, converting into, continuing or maintaining a Eurodollar Loan or to
increase the cost to such Lender or the Issuing Bank of participating in or
issuing any Letter of Credit or to reduce the amount received or receivable by
such Lender or the Issuing Bank hereunder (whether of principal, interest or any
other amount), then, from time to time, such Lender or the Issuing Bank may
provide the Borrower (with a copy thereof to the Administrative Agent) with
written notice and demand with respect to such increased costs or reduced
amounts and within five (5) Business Days after receipt of the certificate
required under subsection (c) below, the Borrower shall pay to such Lender or
the Issuing Bank, as the case may be, such additional amounts as will compensate
such Lender or the Issuing Bank for any such increased costs incurred or
reduction suffered.

 

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(b) If any Lender or the Issuing Bank shall have determined that on or after the
date of this Agreement any Change in Law regarding capital requirements has or
would have the effect of reducing the rate of return on such Lender’s or the
Issuing Bank’s capital (or on the capital of the Parent Company of such Lender
or the Issuing Bank) as a consequence of its obligations hereunder or under or
in respect of any Letter of Credit to a level below that which such Lender, the
Issuing Bank or such Parent Company could have achieved but for such Change in
Law (taking into consideration such Lender’s or the Issuing Bank’s policies or
the policies of such Parent Company with respect to capital adequacy), then,
from time to time, such Lender or the Issuing Bank may provide the Borrower
(with a copy thereof to the Administrative Agent) with written notice and demand
with respect to such reduced amounts, and within five (5) Business Days after
receipt of the certificate required under subsection (c) below, the Borrower
shall pay to such Lender or the Issuing Bank, as the case may be, such
additional amounts as will compensate such Lender, the Issuing Bank or such
Parent Company for any such reduction suffered.
(c) A certificate of such Lender or the Issuing Bank setting forth (x) the
amount or amounts necessary to compensate such Lender, the Issuing Bank or the
Parent Company of such Lender or the Issuing Bank, as the case may be, specified
in subsection (a) or (b) of this Section and (y) a reasonably detailed
explanation of the applicable Change in Law, shall be delivered to the Borrower
(with a copy to the Administrative Agent) and shall be conclusive, absent
manifest error.
(d) Failure or delay on the part of any Lender or the Issuing Bank to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender’s or the Issuing Bank’s right to demand such compensation.
Section 2.19. Funding Indemnity. In the event of (a) the payment of any
principal of a Eurodollar Loan other than on the last day of the Interest Period
applicable thereto (including as a result of an Event of Default), (b) the
conversion or continuation of a Eurodollar Loan other than on the last day of
the Interest Period applicable thereto, or (c) the failure by the Borrower to
borrow, prepay, convert or continue any Eurodollar Loan on the date specified in
any applicable notice (regardless of whether such notice is withdrawn or
revoked), then, in any such event, the Borrower shall compensate each Lender,
within five (5) Business Days after written demand from such Lender, for any
loss, cost or expense attributable to such event. In the case of a Eurodollar
Loan, such loss, cost or expense shall be deemed to include an amount determined
by such Lender to be the excess, if any, of (A) the amount of interest that
would have accrued on the principal amount of such Eurodollar Loan if such event
had not occurred at the Adjusted LIBO Rate applicable to such Eurodollar Loan
for the period from the date of such event to the last day of the then current
Interest Period therefor (or, in the case of a failure to borrow, convert or
continue, for the period that would have been the Interest Period for such
Eurodollar Loan) over (B) the amount of interest that would accrue on the
principal amount of such Eurodollar Loan for the same period if the Adjusted
LIBO Rate were set on the date such Eurodollar Loan was prepaid or converted or
the date on which the Borrower failed to borrow, convert or continue such
Eurodollar Loan. A certificate as to any additional amount payable under this
Section submitted to the Borrower by any Lender (with a copy to the
Administrative Agent) shall be conclusive, absent manifest error.

 

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Section 2.20. Taxes.
(a) Any and all payments by or on account of any obligation of the Borrower or
any other Loan Party hereunder or under any other Loan Document shall be made
free and clear of and without deduction or withholding for any Indemnified Taxes
or Other Taxes; provided that if any applicable law requires the deduction or
withholding of any Tax from any such payment, then the applicable Withholding
Agent shall make such deduction and timely pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law and, if such
Tax is an Indemnified Tax or Other Tax, then the sum payable by the Borrower or
other Loan Party, as applicable, shall be increased as necessary so that after
making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section) the
applicable Recipient shall receive an amount equal to the sum it would have
received had no such deductions or withholdings been made.
(b) In addition, without limiting the provisions of subsection (a) of this
Section, the Borrower shall timely pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify each Recipient, within five (5) Business Days
after written demand therefor, for the full amount of any Indemnified Taxes or
Other Taxes paid or payable by such Recipient (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the Borrower by the applicable Recipient shall be conclusive, absent manifest
error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes
by the Borrower or any other Loan Party to a Governmental Authority, the
Borrower or other Loan Party, as applicable, shall deliver to the Administrative
Agent an original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to the Administrative
Agent.
(e) Tax Forms.
(i) Any Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent, on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), duly executed
originals of IRS Form W-9 certifying, to the extent such Lender is legally
entitled to do so, that such Lender is exempt from U.S. federal backup
withholding tax.
(ii) Any Lender that is a Foreign Person and that is entitled to an exemption
from or reduction of withholding tax under the Code or any treaty to which the
United States is a party with respect to payments under this Agreement shall
deliver to the Borrower and the Administrative Agent, at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law or reasonably requested by the Borrower or the
Administrative Agent as will permit such payments to be made without withholding
or at a reduced rate of withholding. Without limiting the generality of the
foregoing, each Lender that is a Foreign Person shall, to the extent it is
legally entitled to do so, (w) on or prior to the date such Lender becomes a
Lender under this Agreement, (x) on or prior to the date on which any such form
or certification expires or becomes obsolete, (y) after the occurrence of any
event requiring a change in the most recent form or certification previously
delivered by it pursuant to this subsection, and (z) from time to time upon the
reasonable request by the Borrower or the Administrative Agent, deliver to the
Borrower and the Administrative Agent (in such number of copies as shall be
requested by the Borrower or the Administrative Agent), whichever of the
following is applicable:
(A) if such Lender is claiming eligibility for benefits of an income tax treaty
to which the United States is a party (x) with respect to payments of interest
under any Loan Document, duly executed originals of IRS Form W-8BEN, or any
successor form thereto, establishing an exemption from, or reduction of, U.S.
federal withholding tax pursuant to the “interest” article of such tax treaty,
and (y) with respect to any other applicable payments under any Loan Document,
duly executed originals of IRS Form W-8BEN, or any successor form thereto,
establishing an exemption from, or reduction of, U.S. federal withholding tax
pursuant to the “business profits” or “other income” article of such tax treaty;

 

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(B) duly executed originals of IRS Form W-8ECI, or any successor form thereto,
certifying that the payments received by such Lender are effectively connected
with such Lender’s conduct of a trade or business in the United States;
(C) if such Lender is claiming the benefits of the exemption for portfolio
interest under Section 871(h) or Section 881(c) of the Code, duly executed
originals of IRS Form W-8BEN, or any successor form thereto, together with a
certificate (a “U.S. Tax Compliance Certificate”) upon which such Lender
certifies that (1) such Lender is not a bank for purposes of
Section 881(c)(3)(A) of the Code, or the obligation of the Borrower hereunder is
not, with respect to such Lender, a loan agreement entered into in the ordinary
course of its trade or business, within the meaning of that Section, (2) such
Lender is not a 10% shareholder of the Borrower within the meaning of
Section 871(h)(3) or Section 881(c)(3)(B) of the Code, (3) such Lender is not a
controlled foreign corporation that is related to the Borrower within the
meaning of Section 881(c)(3)(C) of the Code, and (4) the interest payments in
question are not effectively connected with a U.S. trade or business conducted
by such Lender; or
(D) if such Lender is not the beneficial owner (for example, a partnership or a
participating Lender granting a typical participation), duly executed originals
of IRS Form W-8IMY, or any successor form thereto, accompanied by IRS Form W-9,
IRS Form W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate, and/or
other certification documents from each beneficial owner, as applicable.
(iii) Each Lender agrees that if any form or certification it previously
delivered under this Section expires or becomes obsolete or inaccurate in any
respect and such Lender is not legally entitled to provide an updated form or
certification, it shall promptly notify the Borrower and the Administrative
Agent of its inability to update such form or certification.
(f) If a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the Administrative Agent such documentation prescribed by applicable law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Lender has complied with such Lender’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment.

 

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Section 2.21. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) The Borrower shall make each payment required to be made by it hereunder
(whether of principal, interest, fees or reimbursement of LC Disbursements, or
of amounts payable under Section 2.18, 2.19 or 2.20, or otherwise) prior to
12:00 noon on the date when due, in immediately available funds, free and clear
of any defenses, rights of set-off, counterclaim, or withholding or deduction of
taxes. Any amounts received after such time on any date may, in the discretion
of the Administrative Agent, be deemed to have been received on the next
succeeding Business Day for purposes of calculating interest thereon. All such
payments shall be made to the Administrative Agent at the Payment Office, except
payments to be made directly to the Issuing Bank or the Swingline Lender as
expressly provided herein and except that payments pursuant to Sections 2.18,
2.19, 2.20 and 10.3 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be made payable for the period of such extension. All payments
hereunder shall be made in Dollars.
(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
as follows: first, to all fees and reimbursable expenses of the Administrative
Agent then due and payable pursuant to any of the Loan Documents; second, to all
reimbursable expenses of the Lenders and all fees and reimbursable expenses of
the Issuing Bank then due and payable pursuant to any of the Loan Documents, pro
rata to the Lenders and the Issuing Bank based on their respective pro rata
shares of such fees and expenses; third, to all interest and fees then due and
payable hereunder, pro rata to the Lenders based on their respective pro rata
shares of such interest and fees; and fourth, to all principal of the Loans and
unreimbursed LC Disbursements then due and payable hereunder, pro rata to the
parties entitled thereto based on their respective pro rata shares of such
principal and unreimbursed LC Disbursements.
(c) If any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or participations in LC Disbursements or Swingline Loans that would
result in such Lender receiving payment of a greater proportion of the aggregate
amount of its Revolving Credit Exposure, Term Loans and accrued interest and
fees thereon than the proportion received by any other Lender with respect to
its Revolving Credit Exposure or Term Loans, then the Lender receiving such
greater proportion shall purchase (for cash at face value) participations in the
Revolving Credit Exposure and Term Loans of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving Credit Exposure and Term Loans;
provided that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this subsection shall not
be construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Revolving Credit Exposure or Term Loans to any assignee or participant,
other than to the Borrower or any Subsidiary or Affiliate thereof (as to which
the provisions of this subsection shall apply). The Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.

 

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(d) Unless the Administrative Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Administrative Agent for
the account of the Lenders or the Issuing Bank hereunder that the Borrower will
not make such payment, the Administrative Agent may assume that the Borrower has
made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders or the Issuing Bank, as the case may
be, the amount or amounts due. In such event, if the Borrower has not in fact
made such payment, then each of the Lenders or the Issuing Bank, as the case may
be, severally agrees to repay to the Administrative Agent forthwith on demand
the amount so distributed to such Lender or Issuing Bank with interest thereon,
for each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation.
(e) Notwithstanding anything herein to the contrary, any amount paid by the
Borrower for the account of a Defaulting Lender under this Agreement (whether on
account of principal, interest, fees, reimbursement of LC Disbursements,
indemnity payments or other amounts) will be retained by the Administrative
Agent in a segregated interest bearing deposit account (or otherwise invested in
investments agreed to by the Borrower and the Administrative Agent at such time)
until the Revolving Commitment Termination Date, at which time the funds in such
account will be applied by the Administrative Agent, to the fullest extent
permitted by law, in the following order of priority: first, to the payment of
any amounts owing by such Defaulting Lender to the Administrative Agent under
this Agreement; second, to the payment of any amounts owing by such Defaulting
Lender to the Issuing Bank and the Swingline Lender under this Agreement; third,
to the payment of interest due and payable to the Lenders hereunder that are not
Defaulting Lenders, ratably among them in accordance with the amounts of such
interest then due and payable to them; fourth, to the payment of fees then due
and payable to the Lenders hereunder that are not Defaulting Lenders, ratably
among them in accordance with the amounts of such fees then due and payable to
them; fifth, to the payment of principal and unreimbursed LC Disbursements then
due and payable to the Lenders hereunder that are not Defaulting Lenders,
ratably in accordance with the amounts thereof then due and payable to them;
sixth, to the ratable payment of other amounts then due and payable to the
Lenders hereunder that are not Defaulting Lenders; and seventh, to pay amounts
owing under this Agreement to such Defaulting Lender or as a court of competent
jurisdiction may otherwise direct; provided that the Administrative Agent shall
not be responsible or liable for any loss in value of any funds maintained in
such interest bearing account.
Section 2.22. Letters of Credit.
(a) During the Availability Period, the Issuing Bank, in reliance upon the
agreements of the other Lenders pursuant to subsections (d) and (e) of this
Section, may, in its sole discretion, issue, at the request of the Borrower,
Letters of Credit for the account of the Borrower on the terms and conditions
hereinafter set forth; provided that (i) each Letter of Credit shall expire on
the earlier of (A) the date one year after the date of issuance of such Letter
of Credit (or, in the case of any renewal or extension thereof, one year after
such renewal or extension) and (B) the date that is five (5) Business Days prior
to the Revolving Commitment Termination Date; (ii) each Letter of Credit shall
be in a stated amount of at least $50,000; and (iii) the Borrower may not
request any Letter of Credit if, after giving effect to such issuance, (A) the
aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate
Revolving Credit Exposure of all Lenders would exceed the Aggregate Revolving
Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Issuing Bank without recourse a
participation in each Letter of Credit equal to such Lender’s Pro Rata Share of
the aggregate amount available to be drawn under such Letter of Credit on the
date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize
the Revolving Commitment of each Lender by an amount equal to the amount of such
participation.

 

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(b) To request the issuance of a Letter of Credit (or any amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall give the
Issuing Bank and the Administrative Agent irrevocable written notice at least
three (3) Business Days prior to the requested date of such issuance specifying
the date (which shall be a Business Day) such Letter of Credit is to be issued
(or amended, renewed or extended, as the case may be), the expiration date of
such Letter of Credit, the amount of such Letter of Credit, the name and address
of the beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit. In addition to the
satisfaction of the conditions in Article III, the issuance of such Letter of
Credit (or any amendment which increases the amount of such Letter of Credit)
will be subject to the further conditions that such Letter of Credit shall be in
such form and contain such terms as the Issuing Bank shall approve and that the
Borrower shall have executed and delivered any additional applications,
agreements and instruments relating to such Letter of Credit as the Issuing Bank
shall reasonably require; provided that in the event of any conflict between
such applications, agreements or instruments and this Agreement, the terms of
this Agreement shall control.
(c) At least two (2) Business Days prior to the issuance of any Letter of
Credit, the Issuing Bank will confirm with the Administrative Agent (by
telephone or in writing) that the Administrative Agent has received such notice,
and, if not, the Issuing Bank will provide the Administrative Agent with a copy
thereof. Unless the Issuing Bank has received notice from the Administrative
Agent, on or before the Business Day immediately preceding the date the Issuing
Bank is to issue the requested Letter of Credit, directing the Issuing Bank not
to issue the Letter of Credit because such issuance is not then permitted
hereunder because of the limitations set forth in subsection (a) of this Section
or that one or more conditions specified in Article III are not then satisfied,
then, subject to the terms and conditions hereof, the Issuing Bank shall, on the
requested date, issue such Letter of Credit in accordance with the Issuing
Bank’s usual and customary business practices.
(d) The Issuing Bank shall examine all documents purporting to represent a
demand for payment under a Letter of Credit promptly following its receipt
thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent
of such demand for payment and whether the Issuing Bank has made or will make a
LC Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve the Borrower of its obligation to reimburse the
Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower
shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank
for any LC Disbursements paid by the Issuing Bank in respect of such drawing,
without presentment, demand or other formalities of any kind. Unless the
Borrower shall have notified the Issuing Bank and the Administrative Agent prior
to 11:00 a.m. on the Business Day immediately prior to the date on which such
drawing is honored that the Borrower intends to reimburse the Issuing Bank for
the amount of such drawing in funds other than from the proceeds of Revolving
Loans, the Borrower shall be deemed to have timely given a Notice of Revolving
Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate
Borrowing on the date on which such drawing is honored in an exact amount due to
the Issuing Bank; provided that for purposes solely of such Borrowing, the
conditions precedent set forth in Section 3.2 hereof shall not be applicable.
The Administrative Agent shall notify the Lenders of such Borrowing in
accordance with Section 2.3, and each Lender shall make the proceeds of its Base
Rate Loan included in such Borrowing available to the Administrative Agent for
the account of the Issuing Bank in accordance with Section 2.6. The proceeds of
such Borrowing shall be applied directly by the Administrative Agent to
reimburse the Issuing Bank for such LC Disbursement.

 

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(e) If for any reason a Base Rate Borrowing may not be (as determined in the
sole discretion of the Administrative Agent), or is not, made in accordance with
the foregoing provisions, then each Lender (other than the Issuing Bank) shall
be obligated to fund the participation that such Lender purchased pursuant to
subsection (a) of this Section in an amount equal to its Pro Rata Share of such
LC Disbursement on and as of the date which such Base Rate Borrowing should have
occurred. Each Lender’s obligation to fund its participation shall be absolute
and unconditional and shall not be affected by any circumstance, including,
without limitation, (i) any set-off, counterclaim, recoupment, defense or other
right that such Lender or any other Person may have against the Issuing Bank or
any other Person for any reason whatsoever, (ii) the existence of a Default or
an Event of Default or the termination of the Aggregate Revolving Commitments,
(iii) any adverse change in the condition (financial or otherwise) of the
Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the
Borrower or any other Lender, (v) any amendment, renewal or extension of any
Letter of Credit or (vi) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing. On the date that such
participation is required to be funded, each Lender shall promptly transfer, in
immediately available funds, the amount of its participation to the
Administrative Agent for the account of the Issuing Bank. Whenever, at any time
after the Issuing Bank has received from any such Lender the funds for its
participation in a LC Disbursement, the Issuing Bank (or the Administrative
Agent on its behalf) receives any payment on account thereof, the Administrative
Agent or the Issuing Bank, as the case may be, will distribute to such Lender
its Pro Rata Share of such payment; provided that if such payment is required to
be returned for any reason to the Borrower or to a trustee, receiver,
liquidator, custodian or similar official in any bankruptcy proceeding, such
Lender will return to the Administrative Agent or the Issuing Bank any portion
thereof previously distributed by the Administrative Agent or the Issuing Bank
to it.
(f) To the extent that any Lender shall fail to pay any amount required to be
paid pursuant to subsection (d) or (e) of this Section on the due date therefor,
such Lender shall pay interest to the Issuing Bank (through the Administrative
Agent) on such amount from such due date to the date such payment is made at a
rate per annum equal to the Federal Funds Rate; provided that if such Lender
shall fail to make such payment to the Issuing Bank within three (3) Business
Days of such due date, then, retroactively to the due date, such Lender shall be
obligated to pay interest on such amount at the rate set forth in
Section 2.13(c).
(g) If any Event of Default shall occur and be continuing, on the Business Day
that the Borrower receives notice from the Administrative Agent or the Required
Lenders demanding that its reimbursement obligations with respect to the Letters
of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall
deposit in an account with the Administrative Agent, in the name of the
Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an
amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of
such date plus any accrued and unpaid fees thereon; provided that such
obligation to Cash Collateralize the reimbursement obligations of the Borrower
with respect to the Letters of Credit shall become effective immediately, and
such deposit shall become immediately due and payable, without demand or notice
of any kind, upon the occurrence of any Event of Default with respect to the
Borrower described in Section 8.1(h) or (i). Such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the
obligations of the Borrower under this Agreement. The Administrative Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. The Borrower agrees to execute any documents
and/or certificates to effectuate the intent of this subsection. Other than any
interest earned on the investment of such deposits, which investments shall be
made at the option and sole discretion of the Administrative Agent and at the
Borrower’s risk and expense, such deposits shall not bear interest. Interest and
profits, if any, on such investments shall accumulate in such account. Moneys in
such account shall be applied by the Administrative Agent to reimburse the
Issuing Bank for LC Disbursements for which it had not been reimbursed and, to
the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrower for the LC Exposure at such time or,
if the maturity of the Loans has been accelerated, with the consent of the
Required Lenders, be applied to satisfy other obligations of the Borrower under
this Agreement and the other Loan Documents. If the Borrower is required to Cash
Collateralize its reimbursement obligations with respect to the Letters of
Credit as a result of the occurrence of an Event of Default, such cash
collateral so posted (to the extent not so applied as aforesaid) shall be
returned to the Borrower within three (3) Business Days after all Events of
Default have been cured or waived.

 

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(h) Upon the request of any Lender, but no more frequently than quarterly, the
Issuing Bank shall deliver (through the Administrative Agent) to each Lender and
the Borrower a report describing the aggregate Letters of Credit then
outstanding. Upon the request of any Lender from time to time, the Issuing Bank
shall deliver to such Lender any other information reasonably requested by such
Lender with respect to each Letter of Credit then outstanding.
(i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be
absolute, unconditional and irrevocable and shall be performed strictly in
accordance with the terms of this Agreement under all circumstances whatsoever
and irrespective of any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit or this
Agreement;
(ii) the existence of any claim, set-off, defense or other right which the
Borrower or any Subsidiary or Affiliate of the Borrower may have at any time
against a beneficiary or any transferee of any Letter of Credit (or any Persons
or entities for whom any such beneficiary or transferee may be acting), any
Lender (including the Issuing Bank) or any other Person, whether in connection
with this Agreement or the Letter of Credit or any document related hereto or
thereto or any unrelated transaction;
(iii) any draft or other document presented under a Letter of Credit proving to
be forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect;
(iv) payment by the Issuing Bank under a Letter of Credit against presentation
of a draft or other document to the Issuing Bank that does not comply with the
terms of such Letter of Credit;
(v) any other event or circumstance whatsoever, whether or not similar to any of
the foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of, or provide a right of set-off against, the
Borrower’s obligations hereunder; or
(vi) the existence of a Default or an Event of Default.
Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related
Party of any of the foregoing shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to above), or any error, omission, interruption, loss
or delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to
make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the Issuing Bank;
provided that the foregoing shall not be construed to excuse the Issuing Bank
from liability to the Borrower to the extent of any actual direct damages (as
opposed to special, indirect (including claims for lost profits or other
consequential damages), or punitive damages, claims in respect of which are
hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by the Issuing Bank’s failure to
exercise due care when determining whether drafts or other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or willful misconduct
on the part of the Issuing Bank (as finally determined by a court of competent
jurisdiction), the Issuing Bank shall be deemed to have exercised due care in
each such determination. In furtherance of the foregoing and without limiting
the generality thereof, the parties agree that, with respect to documents
presented that appear on their face to be in substantial compliance with the
terms of a Letter of Credit, the Issuing Bank may, in its sole discretion,
either accept and make payment upon such documents without responsibility for
further investigation, regardless of any notice or information to the contrary,
or refuse to accept and make payment upon such documents if such documents are
not in strict compliance with the terms of such Letter of Credit.

 

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(j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when
a Letter of Credit is issued and subject to applicable laws, (i) each standby
Letter of Credit shall be governed by the “International Standby Practices 1998”
(ISP98) (or such later revision as may be published by the Institute of
International Banking Law & Practice on any date any Letter of Credit may be
issued), (ii) each documentary Letter of Credit shall be governed by the Uniform
Customs and Practices for Documentary Credits (2007 Revision), International
Chamber of Commerce Publication No. 600 (or such later revision as may be
published by the International Chamber of Commerce on any date any Letter of
Credit may be issued) and (iii) the Borrower shall specify the foregoing in each
letter of credit application submitted for the issuance of a Letter of Credit.
Section 2.23. Increase of Commitments; Additional Lenders.
(a) From time to time after the Closing Date and in accordance with this
Section, the Borrower and one or more Increasing Lenders or Additional Lenders
(each as defined below) may enter into an agreement to increase the aggregate
Revolving Commitments and/or the aggregate Term Loan Commitments hereunder (each
such increase, an “Incremental Commitment”) so long as the following conditions
are satisfied:
(i) the aggregate principal amount of all such Incremental Commitments made
pursuant to this Section shall not exceed $100,000,000 (the principal amount of
each such Incremental Commitment, the “Incremental Commitment Amount”);
(ii) the Borrower shall execute and deliver such documents and instruments and
take such other actions as may be reasonably required by the Administrative
Agent in connection with and at the time of any such proposed increase;
(iii) at the time of and immediately after giving effect to any such proposed
increase, no Default or Event of Default shall exist, all representations and
warranties of each Loan Party set forth in the Loan Documents shall be true and
correct in all material respects (other than those representations and
warranties that are expressly qualified by a Material Adverse Effect or other
materiality, in which case such representations and warranties shall be true and
correct in all respects), and, since December 31, 2010, there shall have been no
change which has had or could reasonably be expected to have a Material Adverse
Effect;
(iv) (x) any incremental Term Loans made pursuant to this Section (the
“Incremental Term Loans”) shall have a maturity date no earlier than the
Maturity Date and shall have a Weighted Average Life to Maturity no shorter than
that of the Term Loans made pursuant to Section 2.5, and (y) any incremental
Revolving Commitments provided pursuant to this Section (the “Incremental
Revolving Commitments”) shall have a termination date no earlier than the
Revolving Commitment Termination Date;

 

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(v) the Borrower and its Subsidiaries shall be in pro forma compliance with each
of the financial covenants set forth in Article VI as of the most recently ended
Fiscal Quarter for which financial statements are required to have been
delivered, calculated as if all such Incremental Term Loans had been made and
all such Incremental Revolving Commitments had been established (and fully
funded) as of the first day of the relevant period for testing compliance; and
(vi) any collateral securing any such Incremental Commitments shall also secure
all other Obligations on a pari passu basis.
(b) The Borrower shall provide at least 30 days’ written notice to the
Administrative Agent (who shall promptly provide a copy of such notice to each
Lender) of any proposal to establish an Incremental Commitment. The Borrower may
also, but is not required to, specify any fees offered to those Lenders (the
“Increasing Lenders”) that agree to increase the principal amount of their
Revolving Commitments and/or their Term Loan Commitments, which fees may be
variable based upon the amount by which any such Lender is willing to increase
the principal amount of its Revolving Commitment and/or its Term Loan
Commitment, as applicable. Each Increasing Lender shall as soon as practicable,
and in any case within 15 days following receipt of such notice, specify in a
written notice to the Borrower and the Administrative Agent the amount of such
proposed Incremental Commitment that it is willing to provide. No Lender (or any
successor thereto) shall have any obligation, express or implied, to offer to
increase the aggregate principal amount of its Revolving Commitment and/or its
Term Loan Commitment, and any decision by a Lender to increase its Revolving
Commitment and/or its Term Loan Commitment shall be made in its sole discretion
independently from any other Lender. Only the consent of each Increasing Lender
shall be required for an increase in the aggregate principal amount of the
Revolving Commitments and/or the Term Loan Commitments, as applicable, pursuant
to this Section. No Lender which declines to increase the principal amount of
its Revolving Commitment and/or its Term Loan Commitment may be replaced with
respect to its existing Revolving Commitment and/or its Term Loans, as
applicable, as a result thereof without such Lender’s consent. If any Lender
shall fail to notify the Borrower and the Administrative Agent in writing about
whether it will increase its Revolving Commitment and/or its Term Loan
Commitment within 15 days after receipt of such notice, such Lender shall be
deemed to have declined to increase its Revolving Commitment and/or its Term
Loan Commitment, as applicable. The Borrower may accept some or all of the
offered amounts or designate new lenders that are acceptable to the
Administrative Agent and the Borrower (such approvals of the Administrative
Agent and the Borrower not to be unreasonably withheld) as additional Lenders
hereunder in accordance with this Section (the “Additional Lenders”), which
Additional Lenders may assume all or a portion of such Incremental Commitment.
The Borrower and the Administrative Agent shall have discretion jointly to
adjust the allocation of such Incremental Revolving Commitments and/or such
Incremental Term Loans among the Increasing Lenders and the Additional Lenders.
The sum of the increase in the Revolving Commitments and the Term Loan
Commitments of the Increasing Lenders plus the Revolving Commitments and the
Term Loan Commitments of the Additional Lenders shall not in the aggregate
exceed the unsubscribed amount of the Incremental Commitment Amount.
(c) Subject to subsections (a) and (b) of this Section, any increase requested
by the Borrower shall be effective upon delivery to the Administrative Agent of
each of the following documents:
(i) an originally executed copy of an instrument of joinder, in form and
substance reasonably acceptable to the Administrative Agent, executed by the
Borrower, by each Additional Lender and by each Increasing Lender, setting forth
the new Revolving Commitments and/or new Term Loan Commitments, as applicable,
of such Lenders and setting forth the agreement of each Additional Lender to
become a party to this Agreement and to be bound by all of the terms and
provisions hereof;

 

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(ii) such evidence of appropriate corporate authorization on the part of the
Borrower with respect to such Incremental Commitment and such opinions of
counsel for the Borrower with respect to such Incremental Commitment as the
Administrative Agent may reasonably request;
(iii) a certificate of the Borrower signed by a Responsible Officer, in form and
substance reasonably acceptable to the Administrative Agent, certifying that
each of the conditions in subsection (a) of this Section has been satisfied;
(iv) to the extent requested by any Additional Lender or any Increasing Lender,
executed promissory notes evidencing such Incremental Revolving Commitments
and/or such Incremental Term Loans, issued by the Borrower in accordance with
Section 2.10; and
(v) any other certificates or documents that the Administrative Agent shall
reasonably request, in form and substance reasonably satisfactory to the
Administrative Agent.
Upon the effectiveness of any such Incremental Commitment, the Commitments and
Pro Rata Share of each Lender will be adjusted to give effect to the Incremental
Revolving Commitments and/or the Incremental Term Loans, as applicable, and
Schedule I shall automatically be deemed amended accordingly.
(d) If any Incremental Term Loans or any Incremental Revolving Commitments are
to have terms that are different from the Term Loans or the Revolving
Commitments, as applicable, outstanding immediately prior to such incurrence
(any such Incremental Term Loans or Incremental Revolving Commitments, the
“Non-Conforming Credit Extensions”), all such terms shall be as set forth in a
separate assumption agreement among the Borrower, the Lenders providing such
Incremental Term Loans and/or Incremental Revolving Commitments and the
Administrative Agent, the execution and delivery of which agreement shall be a
condition to the effectiveness of the Non-Conforming Credit Extensions. The
scheduled principal payments on the Term Loans to be made pursuant to Section
2.9 shall be ratably increased after the making of any Incremental Term Loans
(other than Term Loans that are Non-Conforming Credit Extensions) under this
Section by the aggregate principal amount of such Incremental Term Loans. After
the incurrence of any Non-Conforming Credit Extensions that are Term Loans, all
optional prepayments of Term Loans shall be allocated ratably between the
then-outstanding Term Loans and such Non-Conforming Credit Extensions. If the
Borrower incurs Incremental Revolving Commitments under this Section, regardless
of whether such Incremental Revolving Commitments are Non-Conforming Credit
Extensions, the Borrower shall, after such time, repay and incur Revolving Loans
ratably as between the Incremental Revolving Commitments and the Revolving
Commitments outstanding immediately prior to such incurrence. Notwithstanding
anything to the contrary in Section 10.2, the Administrative Agent is expressly
permitted to amend the Loan Documents to the extent necessary to give effect to
any increase pursuant to this Section and mechanical changes necessary or
advisable in connection therewith (including amendments to implement the
requirements in the preceding two sentences, amendments to ensure pro rata
allocations of Eurodollar Loans and Base Rate Loans between Loans incurred
pursuant to this Section and Loans outstanding immediately prior to any such
incurrence and amendments to implement ratable participation in Letters of
Credit between the Non-Conforming Credit Extensions consisting of Incremental
Revolving Commitments and the Revolving Commitments outstanding immediately
prior to any such incurrence).

 

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(e) For purposes of this Section, “Weighted Average Life to Maturity” shall
mean, when applied to any Indebtedness at any date, the number of years obtained
by dividing (i) the sum of the products obtained by multiplying (x) 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 (y) the number of years (calculated to the nearest one-twelfth) that
will elapse between such date and the making of such payment by (ii) the then
outstanding principal amount of such Indebtedness.
Section 2.24. Mitigation of Obligations. If any Lender requests compensation
under Section 2.18, or if the Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.20, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the sole judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable under
Section 2.18 or Section 2.20, as the case may be, in the future and (ii) would
not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay
all costs and expenses incurred by any Lender in connection with such
designation or assignment.
Section 2.25. Replacement of Lenders. If (a) any Lender requests compensation
under Section 2.18, or if the Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.20, or (b) any Lender is a Defaulting Lender, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions set forth in
Section 10.4(b)), all of its interests, rights (other than its existing rights
to payments pursuant to Section 2.18 or 2.20, as applicable) and obligations
under this Agreement to an assignee that shall assume such obligations (which
assignee may be another Lender) (a “Replacement Lender”); provided that (i) the
Borrower shall have received the prior written consent of the Administrative
Agent, which consent shall not be unreasonably withheld, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal amount of
all Loans owed to it, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder from the assignee (in the case of such
outstanding principal and accrued interest) and from the Borrower (in the case
of all other amounts), and (iii) in the case of a claim for compensation under
Section 2.18 or payments required to be made pursuant to Section 2.20, such
assignment will result in a reduction in such compensation or payments. A Lender
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to apply.
Section 2.26. Defaulting Lenders and Potential Defaulting Lenders.
(a) If a Revolving Lender becomes, and during the period it remains, a
Defaulting Lender or a Potential Defaulting Lender, the following provisions
shall apply, notwithstanding anything to the contrary in this Agreement:
(i) the LC Exposure and the Swingline Exposure of such Defaulting Lender will,
subject to the limitation in the proviso below, automatically be reallocated
(effective no later than one (1) Business Day after the Administrative Agent has
actual knowledge that such Revolving Lender has become a Defaulting Lender)
among the Non-Defaulting Lenders pro rata in accordance with their respective
Revolving Commitments (calculated as if the Defaulting Lender’s Revolving
Commitment was reduced to zero and each Non-Defaulting Lender’s Revolving
Commitment had been increased proportionately); provided that the sum of each
Non-Defaulting Lender’s total Revolving Credit Exposure may not in any event
exceed the Revolving Commitment of such Non-Defaulting Lender as in effect at
the time of such reallocation; and

 

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(ii) to the extent that any portion (the “unreallocated portion”) of the LC
Exposure and the Swingline Exposure of any Defaulting Lender cannot be
reallocated pursuant to clause (i) above for any reason, or with respect to the
LC Exposure and the Swingline Exposure of any Potential Defaulting Lender, the
Borrower will, not later than two (2) Business Days after demand by the
Administrative Agent (at the direction of the Issuing Bank and/or the Swingline
Lender), (x) Cash Collateralize the obligations of the Borrower to the Issuing
Bank or the Swingline Lender in respect of such LC Exposure or such Swingline
Exposure, as the case may be, in an amount at least equal to the aggregate
amount of the unreallocated portion of the LC Exposure and the Swingline
Exposure of such Defaulting Lender or the LC Exposure and the Swingline Exposure
of such Potential Defaulting Lender, (y) in the case of such Swingline Exposure,
prepay and/or Cash Collateralize in full the unreallocated portion thereof, or
(z) make other arrangements satisfactory to the Administrative Agent, the
Issuing Bank and the Swingline Lender in their sole discretion to protect them
against the risk of non-payment by such Defaulting Lender or Potential
Defaulting Lender;
provided that neither any such reallocation nor any payment by a Non-Defaulting
Lender pursuant thereto nor any such Cash Collateralization or reduction will
constitute a waiver or release of any claim the Borrower, the Administrative
Agent, the Issuing Bank, the Swingline Lender or any other Lender may have
against such Defaulting Lender or cause such Defaulting Lender to be a
Non-Defaulting Lender.
(b) If the Borrower, the Administrative Agent, the Issuing Bank and the
Swingline Lender agree in writing in their discretion that any Defaulting Lender
has ceased to be a Defaulting Lender or any Potential Defaulting Lender has
ceased to be a Potential Defaulting Lender, the Administrative Agent will so
notify the parties hereto, whereupon as of the effective date specified in such
notice, and subject to any conditions set forth therein, the LC Exposure and the
Swingline Exposure of the other Lenders shall be readjusted to reflect the
inclusion of such Lender’s Commitment, and such Lender will purchase at par such
portion of outstanding Revolving Loans of the other Lenders and/or make such
other adjustments as the Administrative Agent may determine to be necessary to
cause the Revolving Credit Exposure of the Lenders to be on a pro rata basis in
accordance with their respective Revolving Commitments, whereupon such Lender
will cease to be a Defaulting Lender or Potential Defaulting Lender, as the case
may be, and will be a Non-Defaulting Lender (and such Revolving Credit Exposure
of each Lender will automatically be adjusted on a prospective basis to reflect
the foregoing). If any cash collateral has been posted with respect to the LC
Exposure or the Swingline Exposure of such Defaulting Lender or Potential
Defaulting Lender, the Administrative Agent will promptly return such cash
collateral to the Borrower; provided that no adjustments will be made
retroactively with respect to fees accrued or payments made by or on behalf of
the Borrower while such Lender was a Defaulting Lender; provided, further, that
except to the extent otherwise expressly agreed by the affected parties, no
change hereunder from Defaulting Lender to Non-Defaulting Lender will constitute
a waiver or release of any claim of any party hereunder arising from such
Lender’s having been a Defaulting Lender.
(c) So long as any Lender is a Defaulting Lender or a Potential Defaulting
Lender, the Issuing Bank will not be required to issue, amend, extend, renew or
increase any Letter of Credit, and the Swingline Lender will not be required to
fund any Swingline Loans, as applicable, unless it is satisfied that 100% of the
related LC Exposure and Swingline Exposure after giving effect thereto is fully
covered or eliminated by any combination satisfactory to the Issuing Bank or the
Swingline Lender, as the case may be, of the following:
(i) in the case of a Defaulting Lender, the Swingline Exposure and the LC
Exposure of such Defaulting Lender is reallocated to the Non-Defaulting Lenders
as provided in subsection (a)(i) of this Section;

 

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(ii) in the case of a Defaulting Lender or a Potential Defaulting Lender,
without limiting the provisions of subsection (a)(ii) of this Section, the
Borrower Cash Collateralizes its reimbursement obligations in respect of such
Letter of Credit or such Swingline Loan in an amount at least equal to the
aggregate amount of the unreallocated obligations (contingent or otherwise) of
such Defaulting Lender or Potential Defaulting Lender in respect of such Letter
of Credit or such Swingline Loan, or the Borrower makes other arrangements
satisfactory to the Administrative Agent, the Issuing Bank and the Swingline
Lender, as the case may be, in their sole discretion to protect them against the
risk of non-payment by such Defaulting Lender or Potential Defaulting Lender;
and
(iii) in the case of a Defaulting Lender or a Potential Defaulting Lender, the
Borrower agrees that the face amount of such requested Letter of Credit or the
principal amount of such requested Swingline Loan will be reduced by an amount
equal to the unreallocated, non-Cash Collateralized portion thereof as to which
such Defaulting Lender or such Potential Defaulting Lender would otherwise be
liable, in which case the obligations of the Non-Defaulting Lenders in respect
of such Letter of Credit or such Swingline Loan will, subject to the limitation
in the proviso below, be on a pro rata basis in accordance with the Commitments
of the Non-Defaulting Lenders, and the pro rata payment provisions of
Section 2.21 will be deemed adjusted to reflect this provision; provided that
the sum of each Non-Defaulting Lender’s total Revolving Credit Exposure may not
in any event exceed the Revolving Commitment of such Non-Defaulting Lender as in
effect at the time of such reduction.
ARTICLE III
CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT
Section 3.1. Conditions to Effectiveness. The obligations of the Lenders
(including the Swingline Lender) to make Loans and the obligation of the Issuing
Bank to issue any Letters of Credit hereunder shall not become effective until
the date on which each of the following conditions is satisfied (or waived in
accordance with Section 10.2 or otherwise permitted to be satisfied after the
Closing Date pursuant to Section 5.16):
(a) The Administrative Agent shall have received payment of all fees, expenses
and other amounts due and payable on or prior to the Closing Date, including,
without limitation, reimbursement or payment of all out-of-pocket expenses of
the Administrative Agent, the Lead Arranger and their Affiliates (including
reasonable fees, charges and disbursements of one outside counsel to the
Administrative Agent) required to be reimbursed or paid by the Borrower
hereunder, under any other Loan Document and under any agreement with the
Administrative Agent or the Lead Arranger.
(b) The Administrative Agent (or its counsel) shall have received the following,
each to be in form and substance satisfactory to the Administrative Agent:
(i) a counterpart of this Agreement signed by or on behalf of each party hereto
or written evidence satisfactory to the Administrative Agent (which may include
telecopy transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement;

 

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(ii) a certificate of the Secretary or Assistant Secretary of each Loan Party in
the form of Exhibit 3.1(b)(ii), attaching and certifying copies of its bylaws,
or partnership agreement or limited liability company agreement, and of the
resolutions of its board of directors or other equivalent governing body, or
comparable organizational documents and authorizations, authorizing the
execution, delivery and performance of the Loan Documents to which it is a party
and certifying the name, title and true signature of each officer of such Loan
Party executing the Loan Documents to which it is a party;
(iii) certified copies of the articles or certificate of incorporation,
certificate of organization or limited partnership, or other registered
organizational documents of each Loan Party, together with certificates of good
standing or existence, as may be available from the Secretary of State of the
jurisdiction of organization of such Loan Party and each other jurisdiction
where such Loan Party is required to be qualified to do business as a foreign
corporation;
(iv) favorable written opinions of Dorsey & Whitney LLP, counsel to the Loan
Parties, and Albright, Stoddard, Warnick & Albright, Nevada counsel to the Loan
Parties, addressed to the Administrative Agent, the Issuing Bank and each of the
Lenders, and covering such matters relating to the Loan Parties, the Loan
Documents and the transactions contemplated therein as the Administrative Agent
or the Required Lenders shall reasonably request;
(v) a certificate in the form of Exhibit 3.1(b)(v), dated the Closing Date and
signed by a Responsible Officer, certifying that after giving effect to the
funding of the Term Loans and any initial Revolving Borrowing, (A) no Default or
Event of Default exists, (B) all representations and warranties of each Loan
Party set forth in the Loan Documents are true and correct, (C) since the date
of the financial statements of the Borrower described in Section 4.4, there
shall have been no change which has had or could reasonably be expected to have
a Material Adverse Effect and (D) the conditions set forth in clauses (c) and
(d) below have been satisfied;
(vi) a duly executed Notice of Borrowing for any initial Revolving Borrowing;
(vii) a duly executed funds disbursement agreement, together with a report
setting forth the sources and uses of the proceeds hereof;
(viii) certified copies of all consents, approvals, authorizations,
registrations and filings and orders required or advisable to be made or
obtained under any Requirement of Law, or by any Contractual Obligation of any
Loan Party, in connection with the execution, delivery, performance, validity
and enforceability of the Loan Documents or any of the transactions contemplated
thereby, and such consents, approvals, authorizations, registrations, filings
and orders shall be in full force and effect and all applicable waiting periods
shall have expired, and no investigation or inquiry by any governmental
authority regarding the Commitments or any transaction being financed with the
proceeds thereof shall be ongoing;
(ix) copies of (A) the internally prepared quarterly financial statements of the
Borrower and its Subsidiaries on a consolidated and consolidating basis for the
Fiscal Quarter ended March 31, 2011, including the related statements of income
and cash flows, (B) the audited consolidated and unaudited consolidating
financial statements for the Borrower and its Subsidiaries for the Fiscal Years
ended December 31, 2008, December 31, 2009 and December 31, 2010, including in
each case the related statements of income, shareholders’ equity and cash flows,
and (C) financial projections on a quarterly basis for the Fiscal Year ending
December 31, 2011 and annually thereafter through December 31, 2016;

 

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(x) a duly completed and executed Compliance Certificate, including calculations
of the financial covenants set forth in Article VI hereof as of March 31, 2011,
calculated on a pro forma basis as if the Term Loans and any initial Revolving
Borrowing had been funded as of the first day of the relevant period for testing
compliance (and setting forth in reasonable detail such calculations);
(xi) a certificate, dated the Closing Date and signed by the chief financial
officer of the Borrower and by the treasurer of each other Loan Party,
confirming that each Loan Party is Solvent before and after giving effect to the
funding of the Term Loans and any initial Revolving Borrowing and the
consummation of the transactions contemplated to occur on the Closing Date;
(xii) the Guaranty and Security Agreement, duly executed by the Borrower and
each of its Domestic Subsidiaries (other than the Excluded Subsidiaries),
together with (A) UCC financing statements and other applicable documents under
the laws of all necessary or appropriate jurisdictions with respect to the
perfection of the Liens granted under the Guaranty and Security Agreement, as
requested by the Administrative Agent in order to perfect such Liens, duly
authorized by the Loan Parties, (B) copies of favorable UCC, tax and judgment
lien search reports in all necessary or appropriate jurisdictions and under all
legal and trade names of the Loan Parties, as requested by the Administrative
Agent, indicating that there are no prior Liens on any of the Collateral other
than Permitted Encumbrances and Liens to be released on the Closing Date, (C) a
Perfection Certificate, duly completed and executed by the Borrower, (D) duly
executed Patent Security Agreements, Trademark Security Agreements and Copyright
Security Agreements, (E) original certificates evidencing all issued and
outstanding shares of Capital Stock of all Subsidiaries (other than the Excluded
Subsidiaries) owned directly by any Loan Party (or, if the pledge of all of the
voting Capital Stock of any Foreign Subsidiary would result in materially
adverse tax consequences, limited to 66% of the issued and outstanding voting
Capital Stock of such Foreign Subsidiary and 100% of the issued and outstanding
non-voting Capital Stock of such Foreign Subsidiary, as applicable); (F) stock
or membership interest powers or other appropriate instruments of transfer
executed in blank; and (G) a master intercompany promissory note duly executed
by the Loan Parties;
(xiii) Reserved;
(xiv) Negative Pledges covering all Real Estate owned or leased by the Loan
Parties (other than any Real Estate pledged by any Subsidiary to secure the
Existing HUD Note or the Johnson Notes), duly executed by the applicable Loan
Party, together with evidence that such Negative Pledges have been, or will
promptly after the Closing Date be, recorded in all places to the extent
necessary or desirable, in the sole judgment of the Administrative Agent, to
enforce a negative pledge against such Real Estate in favor of the
Administrative Agent for the benefit of the Secured Parties (or in favor of such
other trustee as may be required or desired under local law);
(xv) with respect to any Real Estate that is leased by the Loan Parties, a copy
of the underlying lease, as applicable, and a Collateral Access Agreement from
the landlord of such leased property, which Collateral Access Agreement shall be
reasonably satisfactory in form and substance to the Administrative Agent;
provided that, with respect to any location other than the headquarters location
or a location leased from the Borrower or any of its Subsidiaries, this
condition shall be deemed to be satisfied if such Loan Party uses its
commercially reasonable efforts to deliver such Collateral Access Agreement
(whether or not any such Collateral Access Agreement is delivered);

 

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(xvi) copies of duly executed payoff letters, in form and substance satisfactory
to the Administrative Agent, executed by each of the Existing Lenders or the
administrative agent thereof, together with (a) UCC-3 or other appropriate
termination statements, in form and substance satisfactory to the Administrative
Agent, releasing all liens of the Existing Lenders upon any of the personal
property of the Borrower and its Subsidiaries, (b) cancellations and releases,
in form and substance satisfactory to the Administrative Agent, releasing all
liens of the Existing Lenders upon any of the Real Property of the Borrower and
its Subsidiaries, and (c) any other releases, terminations or other documents
reasonably required by the Administrative Agent to evidence the payoff of
Indebtedness owed to the Existing Lenders;
(xvii) certified copies of all Material Agreements; and
(xviii) certificates of insurance, in form and detail acceptable to the
Administrative Agent, describing the types and amounts of insurance (property
and liability) maintained by any of the Loan Parties, in each case naming the
Administrative Agent as loss payee or additional insured, as the case may be,
together with a lender’s loss payable endorsement in form and substance
satisfactory to the Administrative Agent.
(c) The Leverage Ratio as of the Closing Date is not greater than 2.50:1.00
(calculating Consolidated Total Net Debt on a pro forma basis giving effect to
the Term Loans and any initial Revolving Borrowing and Consolidated EBITDA with
respect to the four consecutive Fiscal Quarters ending on March 31, 2011).
(d) The Revolving Credit Exposure will not exceed $35,000,000 after giving
effect to any initial Revolving Borrowing.
Without limiting the generality of the provisions of this Section, for purposes
of determining compliance with the conditions specified in this Section, each
Lender that has signed this Credit Agreement shall be deemed to have consented
to, approved of, accepted or been satisfied with each document or other matter
required thereunder to be consented to, approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.
Section 3.2. Conditions to Each Credit Event. The obligation of each Lender to
make a Loan on the occasion of any Borrowing and of the Issuing Bank to issue,
amend, renew or extend any Letter of Credit is subject to Section 2.26(c) and
the satisfaction of the following conditions:
(a) at the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default or Event of Default shall exist (including without
limitation under Section 5.13(d), if applicable);
(b) at the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, all representations and warranties of each Loan Party set forth in
the Loan Documents shall be true and correct in all material respects (other
than those representations and warranties that are expressly qualified by a
Material Adverse Effect or other materiality, in which case such representations
and warranties shall be true and correct in all respects);

 

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(c) since December 31, 2010, there shall have been no change which has had or
could reasonably be expected to have a Material Adverse Effect; and
(d) the Borrower shall have delivered the required Notice of Borrowing.
Each Borrowing and each issuance, amendment, renewal or extension of any Letter
of Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in subsections (a),
(b) and (c) of this Section.
Section 3.3. Delivery of Documents. All of the Loan Documents, certificates,
legal opinions and other documents and papers referred to in this Article,
unless otherwise specified, shall be delivered to the Administrative Agent for
the account of each of the Lenders and in sufficient counterparts or copies for
each of the Lenders and shall be in form and substance satisfactory in all
respects to the Administrative Agent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent, each Lender
and the Issuing Bank as follows:
Section 4.1. Existence; Power. The Borrower and each of its Subsidiaries (i) is
duly organized, validly existing and in good standing as a corporation,
partnership or limited liability company under the laws of the jurisdiction of
its organization, (ii) has all requisite power and authority to carry on its
business as now conducted, and (iii) is duly qualified to do business, and is in
good standing, in each jurisdiction where such qualification is required, except
where a failure to be so qualified could not reasonably be expected to result in
a Material Adverse Effect.
Section 4.2. Organizational Power; Authorization. The execution, delivery and
performance by each Loan Party of the Loan Documents to which it is a party are
within such Loan Party’s organizational powers and have been duly authorized by
all necessary organizational and, if required, shareholder, partner or member
action. This Agreement has been duly executed and delivered by the Borrower and
constitutes, and each other Loan Document to which any Loan Party is a party,
when executed and delivered by such Loan Party, will constitute, valid and
binding obligations of the Borrower or such Loan Party (as the case may be),
enforceable against it in accordance with their respective terms, except as may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors’ rights generally and by
general principles of equity.
Section 4.3. Governmental Approvals; No Conflicts. The execution, delivery and
performance by each Loan Party of the Loan Documents to which it is a party
(a) do not require any consent or approval of, registration or filing with, or
any action by, any Governmental Authority, except those as have been obtained or
made and are in full force and effect and except for filings necessary to
perfect or maintain perfection of the Liens created under the Loan Documents,
(b) will not violate any Requirement of Law applicable to the Borrower or any of
its Subsidiaries or any judgment, order or ruling of any Governmental Authority,
(c) will not violate or result in a default under any Contractual Obligation of
the Borrower or any of its Subsidiaries or any of its assets or give rise to a
right thereunder to require any payment to be made by the Borrower or any of its
Subsidiaries, (d) will not result in the creation or imposition of any Lien on
any asset of the Borrower or any of its Subsidiaries, except Liens (if any)
created under the Loan Documents, and (e) do not affect the Borrower’s or any
Subsidiary’s right to receive, or reduce the amount of, payments and
reimbursements from Third Party Payors, or materially adversely affect any
Health Care Permit.

 

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Section 4.4. Financial Statements. The Borrower has furnished to each Lender
(i) the audited consolidated balance sheet of the Borrower and its Subsidiaries
as of December 31, 2010, and the related audited consolidated statements of
income, shareholders’ equity and cash flows for the Fiscal Year then ended,
audited by Deloitte & Touche, LLP and (ii) the unaudited consolidated balance
sheet of the Borrower and its Subsidiaries as of March 31, 2011, and the related
unaudited consolidated statements of income and cash flows for the Fiscal
Quarter and year-to-date period then ended, certified by a Responsible Officer.
Such financial statements fairly present the consolidated financial condition of
the Borrower and its Subsidiaries as of such dates and the consolidated results
of operations for such periods in conformity with GAAP consistently applied,
subject to year-end audit adjustments and the absence of footnotes in the case
of the statements referred to in clause (ii). Since December 31, 2010, there
have been no changes with respect to the Borrower and its Subsidiaries which
have had or could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
Section 4.5. Litigation and Environmental Matters.
(a) No litigation, investigation or proceeding of or before any arbitrators or
Governmental Authorities, including the DOJ Investigation, is pending against
or, to the knowledge of the Borrower, threatened in writing against or affecting
the Borrower or any of its Subsidiaries (i) as to which there is a reasonable
possibility of an adverse determination that could reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect or
(ii) which in any manner draws into question the validity or enforceability of
this Agreement or any other Loan Document.
(b) Neither the Borrower nor any of its Subsidiaries (i) has failed to comply
with any Environmental Law or to obtain, maintain or comply with any permit,
license or other approval required under any Environmental Law, (ii) has become
subject to any Environmental Liability, (iii) has received notice of any claim
with respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability, in the case of each of clauses (i), (ii), (iii) and
(iv) which have had or could reasonably be expected to have, either individually
or in the aggregate, a Material Adverse Effect.
Section 4.6. Compliance with Laws and Agreements. The Borrower and each of its
Subsidiaries is in compliance with (a) all Requirements of Law and all
judgments, decrees and orders of any Governmental Authority and (b) all
indentures, agreements or other instruments binding upon it or its properties,
except where non-compliance, either individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
Section 4.7. Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is (a) an “investment company” or is “controlled” by an “investment
company”, as such terms are defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended and in effect from time to time, or
(b) otherwise subject to any other regulatory scheme limiting its ability to
incur debt or requiring any approval or consent from, or registration or filing
with, any Governmental Authority in connection therewith.
Section 4.8. Taxes. The Borrower and its Subsidiaries and each other Person for
whose taxes the Borrower or any of its Subsidiaries could become liable have
timely filed or caused to be filed all Federal income tax returns and all other
material tax returns that are required to be filed by them, and have paid all
taxes shown to be due and payable on such returns or on any assessments made
against it or its property and all other taxes, fees or other charges imposed on
it or any of its property by any Governmental Authority, except where the same
are currently being contested in good faith by appropriate proceedings and for
which the Borrower or such Subsidiary, as the case may be, has set aside on its
books adequate reserves in accordance with GAAP. The charges, accruals and
reserves on the books of the Borrower and its Subsidiaries in respect of such
taxes are adequate, and no tax liabilities that could be materially in excess of
the amount so provided are anticipated.

 

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Section 4.9. Margin Regulations. None of the proceeds of any of the Loans or
Letters of Credit will be used, directly or indirectly, for “purchasing” or
“carrying” any “margin stock” within the respective meanings of each of such
terms under Regulation U or for any purpose that violates the provisions of
Regulation T, Regulation U or Regulation X. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
“margin stock”.
Section 4.10. ERISA. Each Plan is in substantial compliance in form and
operation with its terms and with ERISA and the Code (including, without
limitation, the Code provisions compliance with which is necessary for any
intended favorable tax treatment) and all other applicable laws and regulations.
Each Plan (and each related trust, if any) which is intended to be qualified
under Section 401(a) of the Code has received a favorable determination letter
from the Internal Revenue Service to the effect that it meets the requirements
of Sections 401(a) and 501(a) of the Code covering all applicable tax law
changes, or is comprised of a master or prototype plan that has received a
favorable opinion letter from the Internal Revenue Service, and nothing has
occurred since the date of such determination that would adversely affect such
determination (or, in the case of a Plan with no determination, nothing has
occurred that would adversely affect the issuance of a favorable determination
letter or otherwise adversely affect such qualification). No ERISA Event has
occurred or is reasonably expected to occur. There exists no Unfunded Pension
Liability with respect to any Plan. None of the Borrower, any of its
Subsidiaries or any ERISA Affiliate is making or accruing an obligation to make
contributions, or has, within any of the five calendar years immediately
preceding the date this assurance is given or deemed given, made, or accrued an
obligation to make, contributions to any Multiemployer Plan. There are no
actions, suits or claims pending against or involving a Plan (other than routine
claims for benefits) or, to the knowledge of the Borrower, any of its
Subsidiaries or any ERISA Affiliate, threatened in writing, which would
reasonably be expected to be asserted successfully against any Plan and, if so
asserted successfully, would reasonably be expected either singly or in the
aggregate to result in liability to the Borrower or any of its Subsidiaries. The
Borrower, each of its Subsidiaries and each ERISA Affiliate have made all
contributions to or under each Plan and Multiemployer Plan required by law
within the applicable time limits prescribed thereby, by the terms of such Plan
or Multiemployer Plan, respectively, or by any contract or agreement requiring
contributions to a Plan or Multiemployer Plan. No Plan which is subject to
Section 412 of the Code or Section 302 of ERISA has applied for or received an
extension of any amortization period within the meaning of Section 412 of the
Code or Section 303 or 304 of ERISA. None of the Borrower, any of its
Subsidiaries or any ERISA Affiliate have ceased operations at a facility so as
to become subject to the provisions of Section 4068(a) of ERISA, withdrawn as a
substantial employer so as to become subject to the provisions of Section 4063
of ERISA or ceased making contributions to any Plan subject to Section 4064(a)
of ERISA to which it made contributions. None of the Borrower or any of its
Subsidiaries has established, contributes to or maintains any Non-U.S. Plan.
Section 4.11. Ownership of Property; Insurance.
(a) Each of the Borrower and its Subsidiaries has good title to, or valid
leasehold interests in, all of its real and personal property material to the
operation of its business, including all such properties reflected in the most
recent audited consolidated balance sheet of the Borrower referred to in
Section 4.4 or purported to have been acquired by the Borrower or any of its
Subsidiaries after said date (except as sold or otherwise disposed of in the
ordinary course of business), in each case free and clear of Liens prohibited by
this Agreement. All leases that individually or in the aggregate are material to
the business or operations of the Borrower and its Subsidiaries are valid and
subsisting and are in full force. No Indebtedness of the Borrower and its
Subsidiaries is owed to any of the “Secured Parties” listed on Schedule 5.16A,
and no Liens on assets or property of the Borrower and its Subsidiaries are
secured by Liens perfected by the UCC financing statements listed on
Schedule 5.16A.

 

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(b) Each of the Borrower and its Subsidiaries owns, or is licensed or otherwise
has the right to use, all patents, trademarks, service marks, trade names,
copyrights and other intellectual property material to its business, and the use
thereof by the Borrower and its Subsidiaries does not infringe in any material
respect on the rights of any other Person.
(c) The properties of the Borrower and its Subsidiaries are insured (i) with
financially sound and reputable insurance companies which are not Affiliates of
the Borrower, in such amounts with such deductibles and covering such risks as
are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower or any applicable Subsidiary
operates or (ii) as determined in the Borrower’s reasonable business judgment,
through the Borrower’s self-insured retention program maintained through the
Insurance Subsidiary.
(d) As of the Closing Date, all Real Property owned or leased by the Borrower
and its Subsidiaries is set forth on Schedule 4.11.
Section 4.12. Disclosure. The Borrower has disclosed to the Lenders all
agreements, instruments, and corporate or other restrictions to which the
Borrower or any of its Subsidiaries is subject, and all other matters known to
any of them, that, either individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. Neither the Information
Memorandum nor any of the reports (including, without limitation, all reports
that the Borrower is required to file with the Securities and Exchange
Commission), financial statements, certificates or other information furnished
by or on behalf of the Borrower to the Administrative Agent or any Lender in
connection with the negotiation or syndication of this Agreement or any other
Loan Document or delivered hereunder or thereunder (as modified or supplemented
by any other information so furnished) contains any material misstatement of
fact or omits to state any material fact necessary to make the statements
therein, taken as a whole in light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
Section 4.13. Labor Relations. There are no material strikes, lockouts or other
labor disputes or grievances against the Borrower or any of its Subsidiaries,
or, to the Borrower’s knowledge, threatened in writing against or affecting the
Borrower or any of its Subsidiaries, and no material unfair labor practice
charges or grievances are pending against the Borrower or any of its
Subsidiaries, or, to the Borrower’s knowledge, threatened in writing against any
of them before any Governmental Authority. All payments due from the Borrower or
any of its Subsidiaries pursuant to the provisions of any collective bargaining
agreement have been paid or accrued as a liability on the books of the Borrower
or any such Subsidiary, except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect.
Section 4.14. Subsidiaries. Schedule 4.14 sets forth the name of, the ownership
interest of the applicable Loan Party in, the jurisdiction of incorporation or
organization of, and the type of each Subsidiary of the Borrower and the other
Loan Parties and identifies each Subsidiary that is a Subsidiary Loan Party, in
each case as of the Closing Date.
Section 4.15. Solvency. After giving effect to the execution and delivery of the
Loan Documents and the making of the Loans under this Agreement, each Loan Party
is Solvent.
Section 4.16. Deposit and Disbursement Accounts. Schedule 4.16 lists all banks
and other financial institutions at which any Loan Party maintains deposit
accounts, lockbox accounts, disbursement accounts, investment accounts or other
similar accounts as of the Closing Date, and such Schedule correctly identifies
the name, address and telephone number of each financial institution, the name
in which the account is held, the type of the account, and the complete account
number therefor.

 

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Section 4.17. Collateral Documents.
(a) The Guaranty and Security Agreement is effective to create in favor of the
Administrative Agent for the ratable benefit of the Secured Parties a legal,
valid and enforceable security interest in the Collateral (as defined therein),
and when UCC financing statements in appropriate form are filed in the offices
specified on Schedule 3 to the Guaranty and Security Agreement, the Guaranty and
Security Agreement shall constitute a fully perfected Lien (to the extent that
such Lien may be perfected by the filing of a UCC financing statement) on, and
security interest in, all right, title and interest of the grantors thereunder
in such Collateral, in each case prior and superior in right to any other
Person, other than with respect to Liens expressly permitted by Section 7.2.
When the certificates evidencing all Capital Stock pledged pursuant to the
Guaranty and Security Agreement are delivered to the Administrative Agent,
together with appropriate stock powers or other similar instruments of transfer
duly executed in blank, the Liens in such Capital Stock shall be fully perfected
first priority security interests, perfected by “control” as defined in the UCC.
(b) When the filings in subsection (a) of this Section are made and when, if
applicable, the Patent Security Agreements and the Trademark Security Agreements
are filed in the United States Patent and Trademark Office and the Copyright
Security Agreements are filed in the United States Copyright Office, the
Guaranty and Security Agreement shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in the
Patents, Trademarks and Copyrights, if any, in which a security interest may be
perfected by filing, recording or registering a security agreement, financing
statement or analogous document in the United States Patent and Trademark Office
or the United States Copyright Office, as applicable, in each case prior and
superior in right to any other Person.
Section 4.18. Material Agreements. As of the Closing Date, all Material
Agreements of the Borrower and its Subsidiaries are described on Schedule 4.18,
and each such Material Agreement is in full force and effect. The Borrower does
not have any knowledge of any pending amendments or threatened termination of
any of the Material Agreements. As of the Closing Date, the Borrower has
delivered to the Administrative Agent a true, complete and correct copy of each
Material Agreement (including all schedules, exhibits, amendments, supplements,
modifications, assignments and all other documents delivered pursuant thereto or
in connection therewith).
Section 4.19. Healthcare Matters.
(a) Compliance with Health Care Laws. The Borrower and each of its Subsidiaries
is, and at all times during the four calendar years immediately preceding the
Closing Date has been, in compliance with all Health Care Laws and requirements
of Third Party Payor Programs applicable to it, its assets, business or
operations, except where the failure to do so has not had or could not
reasonably be expected to have, in the aggregate, a Material Adverse Effect. No
circumstance exists or event has occurred which could result in a violation of
any Health Care Law or any requirement of any Third Party Payor Program that
could reasonably be expected to result in a Material Adverse Effect.
(b) Health Care Permits. The Borrower and each of its Subsidiaries holds, and at
all times during the four calendar years immediately preceding the Closing Date
has held, all Health Care Permits necessary for it to own, lease, sublease or
operate its assets or to conduct its business or operations for the period
covered by such Health Care Permit. All such Health Care Permits are, and at all
times during the four calendar years immediately preceding the Closing Date have
been, in full force and effect and there is and has been no material default
under, violation of, or other noncompliance with the terms and conditions of any
such Health Care Permit. No condition exists or event has occurred which, in
itself or with the giving of notice or lapse of time or both, has resulted or
would result in the suspension, revocation, termination, restriction,
limitation, modification or non-renewal of any Health Care Permit that could
reasonably be expected to have, in the aggregate, a Material Adverse Effect.
Other than in connection with the DOJ Investigation, no Governmental Authority
has taken, or to the knowledge of the Borrower or any of its Subsidiaries
intends to take, action to suspend, revoke, terminate, place on probation,
restrict, limit, modify or not renew any Health Care Permit of the Borrower or
any of its Subsidiaries. As of the Closing Date, Schedule 4.19 sets forth an
accurate, complete and current list of all material Health Care Permits, and all
Third Party Payor Authorizations for Third Party Payor Programs in which the
Borrower or any of its Subsidiaries participates.

 

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(c) Third Party Payor Authorizations. The Borrower and each of its Subsidiaries
holds, and at all times during the four calendar years immediately preceding the
Closing Date has held, in full force and effect, all Third Party Payor
Authorizations necessary to participate in and be reimbursed by all Third Party
Payor Programs in which the Borrower or any of its Subsidiaries participates,
except where the failure to do so has not had or could not reasonably be
expected to have, in the aggregate, a Material Adverse Effect. Other than the
DOJ Investigation, there is no investigation, audit, claim review, or other
action pending or, to the knowledge of the Borrower or any of its Subsidiaries,
threatened in writing, which could result in a suspension, revocation,
termination, restriction, limitation, modification or non-renewal of any Third
Party Payor Authorization or result in the exclusion of the Borrower or any of
its Subsidiaries from any Third Party Payor Program that could reasonably be
expected to have, in the aggregate, a Material Adverse Effect.
(d) Licensed Personnel. The Licensed Personnel have complied and currently are
in compliance with all applicable Health Care Laws and hold, and, at all times
that such Persons have been Licensed Personnel of the Borrower or any of its
Subsidiaries, have held, all professional licenses and other Health Care Permits
and all Third Party Payor Authorizations required in the performance of such
Licensed Personnel’s duties for the Borrower or any of its Subsidiaries, and
each such Health Care Permit and Third Party Payor Authorization is in full
force and effect and, to the knowledge of the Borrower and its Subsidiaries,
other than in connection with the DOJ Investigation, no suspension, revocation,
termination, impairment, modification or non-renewal of any such Health Care
Permit or Third Party Payor Authorization is pending or threatened in writing,
except where the failure to do so has not had or could not reasonably be
expected to have, in the aggregate, a Material Adverse Effect.
(e) Accreditation. The Borrower and each of its Subsidiaries has obtained and
maintains accreditation in good standing and without limitation or impairment by
all applicable accrediting organizations, to the extent prudent and customary in
the industry in which it is engaged or required by law (including any foreign
law or equivalent regulation), except where the failure to have or maintain such
accreditation in good standing or imposition of limitation or impairment would
not have, in the aggregate, a Material Adverse Effect.
(f) Proceedings; Audits. Other than in connection with the DOJ Investigation,
there are no pending (or, to the knowledge of the Borrower or any of its
Subsidiaries, threatened) Proceedings against or affecting the Borrower or any
of its Subsidiaries or, to the knowledge of the Borrower or any of its
Subsidiaries, any Licensed Personnel, relating to any actual or alleged
non-compliance with any Health Care Law or requirement of any Third Party Payor
Program that could reasonably be expected to have, in the aggregate, a Material
Adverse Effect. There are no facts, circumstances or conditions that would
reasonably be expected to form the basis for any such Proceeding against or
affecting any Group Member or, to the knowledge of the Borrower or any of its
Subsidiaries, any Licensed Personnel that could reasonably be expected to have,
in the aggregate, a Material Adverse Effect. There currently exist no
restrictions, deficiencies, required plans of correction or other such remedial
measures with respect to any Health Care Permit of the Borrower or any of its
Subsidiaries, or the participation by the Borrower or any of its Subsidiaries in
any Third Party Payor Program that could reasonably be expected to have, in the
aggregate, a Material Adverse Effect. Without limiting the foregoing, other than
in connection with the DOJ Investigation, no validation review, program
integrity review, audit or other investigation related to the Borrower or any of
its Subsidiaries or its operations, or the consummation of the transactions
contemplated in the Loan Documents or related to the Collateral, (i) has been
conducted by or on behalf of any Governmental Authority, or (ii) is scheduled,
pending or, to the knowledge of the Borrower or any of its Subsidiaries,
threatened in writing, in each case that could reasonably be expected to have,
in the aggregate, a Material Adverse Effect.

 

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(g) Overpayments. Neither the Borrower nor any of its Subsidiaries (i) has
knowingly retained an overpayment received from, or failed to refund any amount
due to, any Third Party Payor in material violation of any Health Care Law or
contract; or (ii) except as set forth on Schedule 4.19, has received written
notice of, or has knowledge of, any material overpayment or refunds due to any
Third Party Payor.
(h) Material Statements. Neither the Borrower nor any of its Subsidiaries, nor
any officer, affiliate, employee or agent of the Borrower or any of its
Subsidiaries, has made an untrue statement of a material fact or fraudulent
statement to any Governmental Authority, failed to disclose a material fact that
must be disclosed to any Governmental Authority, or committed an act, made a
statement or failed to make a statement that, at the time such statement,
disclosure or failure to disclose occurred, that could reasonably be expected to
have, in the aggregate, a Material Adverse Effect.
(i) Prohibited Transactions. Except as where any of the following could not be
reasonably expected to result in a Material Adverse Effect, neither the Borrower
nor any of its Subsidiaries, nor any officer, affiliate or managing employee of
the Borrower or any of its Subsidiaries, directly or indirectly, has (i) offered
or paid or solicited or received any remuneration, in cash or in kind, or made
any financial arrangements, in violation of any Health Care Law; (ii) given or
agreed to give, or is aware that there has been made or that there is any
agreement to make, any gift or gratuitous payment of any kind, nature or
description (whether in money, property or services) in violation of any Health
Care Law; (iii) made or agreed to make, or is aware that there has been made or
that there is any agreement to make, any contribution, payment or gift of funds
or property to, or for the private use of, any governmental official, employee
or agent where either the contribution, payment or gift or the purpose of such
contribution, payment or gift is or was illegal under the laws of any
Governmental Authority having jurisdiction over such payment, contribution or
gift; (iv) established or maintained any unrecorded fund or asset for any
purpose or made any misleading, false or artificial entries on any of its books
or records for any reason; or (v) made, or agreed to make, or is aware that
there has been made or that there is any agreement to make, any payment to any
person with the intention or understanding that any part of such payment would
be in violation of any Health Care Law or used or was given for any purpose
other than that described in the documents supporting such payment. To the
knowledge of the Borrower and its Subsidiaries, no Person has filed or has
threatened in writing to file against the Borrower, any of its Subsidiaries or
any of their Affiliates an action under any federal or state whistleblower
statute, including, without limitation, under the False Claims Act of 1863 (31
U.S.C. § 3729 et seq.).
(j) Exclusion. Except as where any of the following could not be reasonably
expected to result in a Material Adverse Effect, neither the Borrower nor any of
its Subsidiaries, nor any owner, officer, director, partner, agent, managing
employee or Person with a “direct or indirect ownership interest” (as that
phrase is defined in 42 C.F.R. § 420.201) in the Borrower or any of its
Subsidiaries, nor any Licensed Personnel of the Borrower or any of its
Subsidiaries, has been (or has been threatened to be) (i) excluded from any
Third Party Payor Program pursuant to 42 U.S.C. § 1320a-7 and related
regulations, (ii) “suspended” or “debarred” from selling products to the U.S.
government or its agencies pursuant to the Federal Acquisition Regulation,
relating to debarment and suspension applicable to federal government agencies
generally (42 C.F.R. Subpart 9.4), or other applicable laws or regulations,
(iii) debarred, disqualified, suspended or excluded from participation in any
Third Party Payor Program or is listed on the General Services Administration
list of excluded parties, nor is any such debarment, disqualification,
suspension or exclusion threatened or pending, or (iv) made a party to any other
action by any Governmental Authority that may prohibit it from selling products
or providing services to any governmental or other purchaser pursuant to any
federal, state or local laws or regulations.

 

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(k) Corporate Integrity Agreement. Neither the Borrower nor any of its
Subsidiaries, nor any owner, officer, director, partner, agent, managing
employee or Person with a “direct or indirect ownership interest” (as that
phrase is defined in 42 C.F.R. §1001.1001) in the Borrower or any of its
Subsidiaries is a party to, or bound by, any material order, individual
integrity agreement, corporate integrity agreement, corporate compliance
agreement, deferred prosecution agreement.
Section 4.20. OFAC. Neither any Loan Party nor any of its Subsidiaries or
Affiliates (i) is a Sanctioned Person, (ii) has more than 10% of its assets in
Sanctioned Countries, or (iii) derives more than 10% of its operating income
from investments in, or transactions with, Sanctioned Persons or Sanctioned
Countries. No part of the proceeds of any Loans hereunder will be used directly
or indirectly to fund any operations in, finance any investments or activities
in or make any payments to a Sanctioned Person or a Sanctioned Country or 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 United States Foreign Corrupt
Practices Act of 1977, as amended and in effect from time to time.
Section 4.21. Patriot Act. Neither any Loan Party nor any of its Subsidiaries is
an “enemy” or an “ally of the enemy” within the meaning of Section 2 of the
Trading with the Enemy Act or any enabling legislation or executive order
relating thereto. Neither any Loan Party nor any or its Subsidiaries is in
violation of (a) the Trading with the Enemy Act, (b) any of the foreign assets
control regulations of the United States Treasury Department (31 C.F.R.,
Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto or (c) the Patriot Act. None of the Loan Parties (i) is a
blocked person described in Section 1 of the Anti-Terrorism Order or (ii) to the
best of its knowledge, engages in any dealings or transactions, or is otherwise
associated, with any such blocked person.
Section 4.22. Excluded Subsidiaries. None of the Excluded Subsidiaries engage in
any business, operations or activities, or hold any property, other than
(i) owning in fee simple the Real Property securing the Ten Project Note, the
RBS Note or Indebtedness permitted under Section 7.1(h), as applicable,
(ii) leasing such Real Property to a Loan Party that operates the skilled
nursing facility located thereon, (iii) paying and performing its obligations in
connection with the Ten Project Note, the RBS Note or Indebtedness permitted
under Section 7.1(h), as applicable, (iv) issuing, selling and redeeming its own
Capital Stock, (v) holding directors’ and shareholders’ meetings, preparing
corporate and similar records and other activities required to maintain its
separate corporate or other legal structure, and (vi) preparing reports to, and
preparing and making notices to and filings with, Governmental Authorities.

 

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ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that so long as any Lender has a Commitment
hereunder or any Obligation remains unpaid or outstanding:
Section 5.1. Financial Statements and Other Information. The Borrower will
deliver to the Administrative Agent and each Lender:
(a) as soon as available and in any event within 90 days after the end of each
Fiscal Year of the Borrower (or if the Borrower is no longer required to file
periodic reports under Section 13(a) or Section 15(d) of the Exchange Act, then
120 days after the end of each Fiscal Year), a copy of the annual audited report
for such Fiscal Year for the Borrower and its Subsidiaries, containing a
consolidated balance sheet of the Borrower and its Subsidiaries as of the end of
such Fiscal Year and the related consolidated statements of income,
stockholders’ equity and cash flows (together with all footnotes thereto) of the
Borrower and its Subsidiaries for such Fiscal Year, setting forth in each case
in comparative form the figures for the previous Fiscal Year, all in reasonable
detail and reported on by Deloitte & Touche, LLP or other independent public
accountants of nationally recognized standing (without a “going concern” or like
qualification, exception or explanation and without any qualification or
exception as to the scope of such audit) to the effect that such financial
statements present fairly in all material respects the financial condition and
the results of operations of the Borrower and its Subsidiaries for such Fiscal
Year on a consolidated basis in accordance with GAAP and that the examination by
such accountants in connection with such consolidated financial statements has
been made in accordance with generally accepted auditing standards;
(b) as soon as available and in any event within 45 days after the end of each
of the first three Fiscal Quarters of the Borrower (or if the Borrower is no
longer required to file periodic reports under Section 13(a) or Section 15(d) of
the Exchange Act, then 60 days after the end of each Fiscal Quarter), an
unaudited consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as of the end of such Fiscal Quarter and the related unaudited
consolidated and consolidating statements of income and cash flows of the
Borrower and its Subsidiaries for such Fiscal Quarter and the then elapsed
portion of such Fiscal Year, setting forth in each case in comparative form the
figures for the corresponding Fiscal Quarter and the corresponding portion of
the Borrower’s previous Fiscal Year;
(c) concurrently with the delivery of the financial statements referred to in
subsections (a) and (b) of this Section (other than the financial statements for
the fourth Fiscal Quarter of each Fiscal Year delivered pursuant to subsection
(b) of this Section), a Compliance Certificate signed by the principal executive
officer or the principal financial officer of the Borrower (i) certifying as to
whether there exists a Default or Event of Default on the date of such
certificate and, if a Default or an Event of Default then exists, specifying the
details thereof and the action which the Borrower has taken or proposes to take
with respect thereto, (ii) setting forth in reasonable detail calculations
demonstrating compliance with the financial covenants set forth in Article VI,
(iii) specifying any change in the identity of the Subsidiaries as of the end of
such Fiscal Year or Fiscal Quarter from the Subsidiaries identified to the
Lenders on the Closing Date or as of the most recent Fiscal Year or Fiscal
Quarter, as the case may be, and (iv) stating whether any change in GAAP or the
application thereof has occurred since the date of the mostly recently delivered
audited financial statements of the Borrower and its Subsidiaries, and, if any
change has occurred, specifying the effect of such change on the financial
statements accompanying such Compliance Certificate;
(d) as soon as available and in any event within 60 days after the end of the
calendar year, a budget for the succeeding Fiscal Year, containing an income
statement, balance sheet and statement of cash flow;
(e) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed with the
Securities and Exchange Commission, or any Governmental Authority succeeding to
any or all functions of said Commission, or with any national securities
exchange, or distributed by the Borrower to its shareholders generally, as the
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(f) promptly following any request therefor, such other information regarding
the results of operations, business affairs and financial condition of the
Borrower or any of its Subsidiaries as the Administrative Agent or any Lender
may reasonably request.
So long as the Borrower is required to file periodic reports under Section 13(a)
or Section 15(d) of the Exchange Act, the Borrower shall be deemed to have
satisfied its obligation to deliver the financial statements referred to in
clauses (a), (b) and (e) upon the filing of such reports with the Securities and
Exchange Commission.
Section 5.2. Notices of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default or Event of Default;
(b) the filing or commencement of, or any material development in, any action,
suit, proceeding, audit, claim, demand, order or dispute with, by or before any
arbitrator or Governmental Authority against or, to the knowledge of the
Borrower, affecting the Borrower or any of its Subsidiaries that (i) seeks
injunctive or similar relief, (ii) alleges potential or actual violations of any
Health Care Law by the Borrower or any of its Subsidiaries or any of its
Licensed Personnel and (iii) if adversely determined, could, either individually
or in the aggregate, reasonably be expected to result in a Material Adverse
Effect;
(c) the occurrence of any event or any other development by which the Borrower
or any of its Subsidiaries (i) fails to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) becomes subject to any Environmental
Liability, (iii) receives notice of any claim with respect to any Environmental
Liability, or (iv) becomes aware of any basis for any Environmental Liability,
in each case which, either individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect;
(d) promptly and in any event within 15 days after (i) the Borrower, any of its
Subsidiaries or any ERISA Affiliate knows or has reason to know that any ERISA
Event has occurred, a certificate of the chief financial officer of the Borrower
describing such ERISA Event and the action, if any, proposed to be taken with
respect to such ERISA Event and a copy of any notice filed with the PBGC or the
IRS pertaining to such ERISA Event and any notices received by the Borrower,
such Subsidiary or such ERISA Affiliate from the PBGC or any other governmental
agency with respect thereto, and (ii) becoming aware (1) that there has been an
increase in Unfunded Pension Liabilities (not taking into account Plans with
negative Unfunded Pension Liabilities) since the date the representations
hereunder are given or deemed given, or from any prior notice, as applicable,
(2) of the existence of any Withdrawal Liability, (3) of the adoption of, or the
commencement of contributions to, any Plan subject to Section 412 of the Code by
the Borrower, any of its Subsidiaries or any ERISA Affiliate, or (4) of the
adoption of any amendment to a Plan subject to Section 412 of the Code which
results in a material increase in contribution obligations of the Borrower, any
of its Subsidiaries or any ERISA Affiliate, a detailed written description
thereof from the chief financial officer of the Borrower;
(e) the occurrence of any event of default, or the receipt by the Borrower or
any of its Subsidiaries of any written notice of an alleged default or event of
default, with respect to any Material Indebtedness of the Borrower or any of its
Subsidiaries;
(f) any material amendment or modification to any Material Agreement (together
with a copy thereof), and prompt notice of any termination, expiration or loss
of any Material Agreement that, individually or in the aggregate, could
reasonably be expected to result in a reduction in Consolidated EBITDA of 10% or
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(g) any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.
The Borrower will furnish to the Administrative Agent and each Lender the
following:
(x) promptly and in any event at least 15 days prior thereto, notice of any
change (i) in any Loan Party’s legal name (but, for the avoidance of doubt,
excluding any trade names), (ii) in any Loan Party’s chief executive office, its
principal place of business, any office in which it maintains books or records
or any office or facility at which Collateral owned by it is located (including
the establishment of any such new office or facility), (iii) in any Loan Party’s
identity or legal structure or (iv) in any Loan Party’s federal taxpayer
identification number or organizational number, and promptly and in any event at
least 30 days prior thereto, notice of any change in any Loan Party’s
jurisdiction of organization; and
(y) promptly and in any event no later than three (3) Business Days after any
Responsible Officer of the Borrower or any of its Subsidiaries has actual
knowledge of:
(i) the voluntary disclosure by the Borrower or any of its Subsidiaries to the
Office of the Inspector General of the United States Department of Health and
Human Services, or any Third Party Payor Program (including to any intermediary,
carrier or contractor of such Program), of an actual overpayment matter
involving the submission of claims to a Third Party Payor in an amount greater
than $500,000;
(ii) that the Borrower or any of its Subsidiaries, or an owner, officer,
manager, employee or Person with a “direct or indirect ownership interest” (as
that phrase is defined in 42 C.F.R. §420.201) in the Borrower or any of its
Subsidiaries, (i) has had a civil monetary penalty assessed against him or her
pursuant to 42 U.S.C. §1320a-7a or is the subject of a proceeding seeking to
assess such penalty; (ii) has been excluded from participation in a Federal
Health Care Program (as that term is defined in 42 U.S.C. §1320a-7b) or is the
subject of a proceeding seeking to assess such penalty; (iii) has been convicted
(as that term is defined in 42 C.F.R. §1001.2) of any of those offenses
described in 42 U.S.C. §1320a-7b or 18 U.S.C. §§669, 1035, 1347, 1518 or is the
subject of a proceeding seeking to assess such penalty; or (iv) has been
involved or named in a U.S. Attorney complaint made or any other action taken
pursuant to the False Claims Act under 31 U.S.C. §§3729-3731 or in any qui tam
action brought pursuant to 31 U.S.C. §3729 et seq.;
(iii) any claim to recover any alleged overpayments (other than any such claim
made against the Borrower or any of its Subsidiaries that relates to a period
during which the Borrower or such Subsidiary did not operate the respective
facility) with respect to any receivables in excess of $500,000;
(iv) notice of any final and documented material reduction in the level of
reimbursement expected to be received with respect to receivables;
(v) any allegations of licensure violations or fraudulent acts or omissions
involving the Borrower or any of its Subsidiaries, or, to the knowledge of the
Borrower or any of its Subsidiaries, any Licensed Personnel that would, in the
aggregate, have a Material Adverse Effect;
(vi) the pending or threatened imposition of any material fine or penalty by any
Governmental Authority under any Health Care Law against the Borrower or any of
its Subsidiaries, or, to the knowledge of the Borrower or any of its
Subsidiaries, any Licensed Personnel;

 

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(vii) any changes in any Health Care Law (including the adoption of a new Health
Care Law) known to the Borrower or any of its Subsidiaries that would, in the
aggregate, have a Material Adverse Effect;
(viii) any pending or threatened (in writing) revocation, suspension,
termination, probation, restriction, limitation, denial, or non-renewal with
respect to any Health Care Permit or Third Party Payor Authorization;
(ix) any non-routine and material inspection of any facility of the Borrower or
any of its Subsidiaries by any Governmental Authority;
(x) notice of the occurrence of any material reportable event as defined in any
corporate integrity agreement, corporate compliance agreement or deferred
prosecution agreement pursuant to which the Borrower or any of its Subsidiaries
has to make a submission to any Governmental Authority or other Person under the
terms of such agreement, if any; and
(xi) without duplication, any failure of the Borrower or any of its Subsidiaries
to comply with the covenants and conditions of Section 5.15.
Each notice or other document delivered under this Section shall be accompanied
by a written statement of a Responsible Officer setting forth the details of the
event or development requiring such notice or other document and any action
taken or proposed to be taken with respect thereto.
Section 5.3. Existence; Conduct of Business. The Borrower will, and will cause
each of its Subsidiaries to, do or cause to be done all things necessary to
preserve, renew and maintain in full force and effect its legal existence and
its respective rights, licenses, permits, privileges, franchises, patents,
copyrights, trademarks and trade names material to the conduct of its business;
provided that nothing in this Section shall prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 7.3.
Section 5.4. Compliance with Laws. The Borrower will, and will cause each of its
Subsidiaries to, comply with all laws, rules, regulations and requirements of
any Governmental Authority applicable to its business and properties, including,
without limitation, all Environmental Laws, ERISA and OSHA, except where the
failure to do so, either individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect.
Section 5.5. Payment of Obligations. The Borrower will, and will cause each of
its Subsidiaries to, pay and discharge at or before maturity all of its
obligations and liabilities (including, without limitation, all taxes,
assessments and other governmental charges, levies and all other claims that
could result in a statutory Lien) before the same shall become delinquent or in
default, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has
set aside on its books adequate reserves with respect thereto in accordance with
GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect.
Section 5.6. Books and Records. The Borrower will, and will cause each of its
Subsidiaries to, keep proper books of record and account in which full, true and
correct entries shall be made of all dealings and transactions in relation to
its business and activities to the extent necessary to prepare the consolidated
financial statements of the Borrower in conformity with GAAP.

 

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Section 5.7. Visitation and Inspection. The Borrower will, and will cause each
of its Subsidiaries to, permit any representative of the Administrative Agent or
any Lender to visit and inspect its properties, to examine its books and records
and to make copies and take extracts therefrom, and to discuss its affairs,
finances and accounts with any of its officers and with its independent
certified public accountants, all at such reasonable times as the Administrative
Agent or any Lender may reasonably request after reasonable prior notice to the
Borrower; provided that, so long as no Event of Default shall have occurred and
be continuing, the Administrative Agent and the Lenders shall not make more than
two such visits and inspections in any Fiscal Year; provided, further, that if
an Event of Default has occurred and is continuing, no prior notice shall be
required and the limitation on the number of visits and inspections shall no
longer apply.
Section 5.8. Maintenance of Properties; Insurance. The Borrower will, and will
cause each of its Subsidiaries to, (a) keep and maintain all property material
to the conduct of its business in good working order and condition, ordinary
wear and tear excepted, (b) maintain with financially sound and reputable
insurance companies which are not Affiliates of the Borrower (i) insurance with
respect to its properties and business, and the properties and business of its
Subsidiaries, against loss or damage of the kinds customarily insured against by
companies in the same or similar businesses operating in the same or similar
locations and (ii) all insurance required to be maintained pursuant to the
Collateral Documents, and will, upon request of the Administrative Agent,
furnish to each Lender a certificate of a Responsible Officer setting forth the
nature and extent of all insurance maintained by the Borrower and its
Subsidiaries in accordance with this Section, and (c) at all times shall name
the Administrative Agent as additional insured on all liability policies of the
Borrower and its Subsidiaries and as loss payee (pursuant to a loss payee
endorsement approved by the Administrative Agent) on all casualty and property
insurance policies of the Borrower and its Subsidiaries; provided that, so long
as no Event of Default shall have occurred and be continuing, the Administrative
Agent shall not make more than two requests for a certificate pursuant to clause
(b)(ii) of this Section in any Fiscal Year; provided, further, that if an Event
of Default has occurred and is continuing, the limitation on the number of
requests for such a certificate shall no longer apply.
Section 5.9. Use of Proceeds; Margin Regulations. The Borrower will use the
proceeds of the Term Loans and any initial Revolving Borrowing to refinance the
Six Project Note and Indebtedness outstanding under the GE Revolving Credit
Agreement and to pay transaction costs and expenses arising in connection
herewith, and, after the Closing Date, will use the proceeds of the Revolving
Loans to finance working capital needs, Permitted Acquisitions and capital
expenditures and for other general corporate purposes of the Borrower and its
Subsidiaries. No part of the proceeds of any Loan will be used, whether directly
or indirectly, for any purpose that would violate any rule or regulation of the
Board of Governors of the Federal Reserve System, including Regulation T,
Regulation U or Regulation X. All Letters of Credit will be used for general
corporate purposes.
Section 5.10. Casualty and Condemnation. The Borrower (a) will furnish to the
Administrative Agent and the Lenders prompt written notice of any casualty or
other insured damage to any material portion of any Collateral or the
commencement of any action or preceding for the taking of any material portion
of any Collateral or any part thereof or interest therein under power of eminent
domain or by condemnation or similar proceeding and (b) will ensure that the net
cash proceeds of any such event (whether in the form of insurance proceeds,
condemnation awards or otherwise) are collected and applied in accordance with
the applicable provisions of this Agreement and the Collateral Documents.

 

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Section 5.11. Cash Management. The Borrower shall, and shall cause its Domestic
Subsidiaries to, no later than 30 days after the Closing Date:
(i) execute and deliver to the Administrative Agent, and thereafter maintain in
effect, Control Account Agreements with respect to all deposit accounts and
securities accounts (other than zero-balance accounts for the purpose of
managing local disbursements, payroll, withholding and other fiduciary accounts
and Government Deposit Accounts) (each, a “Controlled Account”); each Controlled
Account shall be a cash collateral account, with all cash, checks and other
similar items of payment in such account securing payment of the Obligations,
and in which the Borrower and each of its Subsidiaries shall have granted a
first priority Lien to the Administrative Agent, on behalf of the Secured
Parties, pursuant to such Control Account Agreements;
(ii) execute and deliver to the Administrative Agent, and thereafter maintain in
effect, “sweep” agreement (each, a “Sweep Agreement”) with respect to each
Governmental Deposit Account pursuant to which the applicable depository bank
will agree to sweep amounts deposited therein on a daily basis to a Controlled
Account as and when funds clear and become available in accordance with such
depository bank’s customary procedures, each with such financial institution and
each in form and substance reasonably acceptable to the Administrative Agent; no
Loan Party will change any sweep instruction set forth in such Sweep Agreement
without the prior written consent of the Administrative Agent. The
Administrative Agent agrees and confirms that the Loan Parties will have sole
dominion and “control” (within the meaning of Section 9-104 of the UCC and the
common law) over each Governmental Deposit Account and all funds therein and the
Administrative Agent disclaims any right of any nature whatsoever to control or
otherwise direct or make any claim against the funds held in any Governmental
Deposit Account from time to time;
(iii) deposit promptly, and in any event no later than 10 Business Days after
the date of receipt thereof, all cash, checks, drafts or other similar items of
payment relating to or constituting payments made in respect of any and all
accounts and other Collateral into Controlled Accounts or Government Deposit
Accounts, in each case except for cash and Permitted Investments the aggregate
value of which does not exceed $250,000 at any time; and
(iv) at any time after the occurrence and during the continuance of an Event of
Default, at the request of the Required Lenders, the Borrower will, and will
cause each other Loan Party to, cause all payments constituting proceeds of
accounts or other Collateral to be directed into lockbox accounts under
agreements in form and substance satisfactory to the Administrative Agent.
Section 5.12. Additional Subsidiaries and Collateral.
(a) In the event that, subsequent to the Closing Date, any Person becomes a
Domestic Subsidiary, whether pursuant to formation, acquisition or otherwise, or
ceases to be an Excluded Subsidiary, (x) the Borrower shall promptly notify the
Administrative Agent and the Lenders thereof and (y) within 90 days after the
date such Person becomes a Domestic Subsidiary (or, in the case of any Domestic
Subsidiary with no assets, within 180 days after such date) or ceases to be an
Excluded Subsidiary, the Borrower shall cause such Subsidiary (i) to become a
new Guarantor and to grant Liens in favor of the Administrative Agent in all of
its personal property by executing and delivering to the Administrative Agent a
supplement to the Guaranty and Security Agreement in form and substance
reasonably satisfactory to the Administrative Agent, executing and delivering a
Copyright Security Agreement, Patent Security Agreement and Trademark Security
Agreement, as applicable, and authorizing and delivering, at the request of the
Administrative Agent, such UCC financing statements or similar instruments
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Administrative Agent and granted under any of the Loan Documents and (ii) to
deliver all such other documentation (including, without limitation, certified
organizational documents, resolutions, lien searches, negative pledges and legal
opinions) and to take all such other actions as such Subsidiary would have been
required to deliver and take pursuant to Section 3.1 if such Subsidiary had been
a Loan Party on the Closing Date or that such Subsidiary would be required to
deliver pursuant to Section 5.13 with respect to any Real Estate. In addition,
within 90 days after the date any Person becomes a Domestic Subsidiary (or, in
the case of any Domestic Subsidiary with no assets, within 180 days after such
date) or ceases to be an Excluded Subsidiary, the Borrower shall, or shall cause
the applicable Loan Party to (i) pledge all of the Capital Stock of such
Subsidiary to the Administrative Agent as security for the Obligations by
executing and delivering a supplement to the Guaranty and Security Agreement in
form and substance satisfactory to the Administrative Agent, and (ii) deliver
the original certificates evidencing such pledged Capital Stock to the
Administrative Agent, together with appropriate powers executed in blank.
(b) In the event that, subsequent to the Closing Date, any Person becomes a
Foreign Subsidiary, whether pursuant to formation, acquisition or otherwise,
(x) the Borrower shall promptly notify the Administrative Agent and the Lenders
thereof and (y) to the extent such Foreign Subsidiary is owned directly by any
Loan Party, within 60 days after such Person becomes a Foreign Subsidiary or, if
the Administrative Agent determines in its sole discretion that the Borrower is
working in good faith, such longer period as the Administrative Agent shall
permit not to exceed 60 additional days, the Borrower shall, or shall cause the
applicable Loan Party to (i) pledge all of the Capital Stock of such Foreign
Subsidiary (or, if the pledge of all of the voting Capital Stock of such Foreign
Subsidiary would result in materially adverse tax consequences, then such pledge
shall be limited to 66% of the issued and outstanding voting Capital Stock and
100% of the issued and outstanding non-voting Capital Stock of such Foreign
Subsidiary, as applicable) to the Administrative Agent as security for the
Obligations pursuant to a pledge agreement in form and substance satisfactory to
the Administrative Agent, (ii) deliver the original certificates evidencing such
pledged Capital Stock to the Administrative Agent, together with appropriate
powers executed in blank and (iii) deliver all such other documentation
(including, without limitation, certified organizational documents, resolutions,
lien searches and legal opinions) and to take all such other actions as the
Administrative Agent may reasonably request.
(c) The Borrower agrees that, following the delivery of any Collateral Documents
required to be executed and delivered by this Section, the Administrative Agent
shall have a valid and enforceable, first priority perfected Lien on the
property required to be pledged pursuant to subsections (a) and (b) of this
Section (to the extent that such Lien can be perfected by execution, delivery
and/or recording of the Collateral Documents or UCC financing statements, or
possession of such Collateral), free and clear of all Liens other than Liens
expressly permitted by Section 7.2. All actions to be taken pursuant to this
Section shall be at the expense of the Borrower or the applicable Loan Party,
and shall be taken to the reasonable satisfaction of the Administrative Agent.
Section 5.13. Additional Negative Pledges; Leased Locations; Mortgages.
(a) If any Loan Party proposes to acquire a fee ownership interest in any Real
Estate after the Closing Date, then, unless such Real Property is being
encumbered with a Lien permitted under Section 7.2(f) or (g) on a
contemporaneous basis, such Loan Party shall at the time of such acquisition
provide to the Administrative Agent a Negative Pledge in recordable form and
otherwise in form and substance reasonably satisfactory to the Administrative
Agent.
(b) To the extent otherwise permitted hereunder, if any Loan Party proposes to
lease any Real Estate, it shall first provide to the Administrative Agent a copy
of such lease and a Collateral Access Agreement from the landlord of such leased
property or the bailee with respect to any warehouse or other location where
such books, records or Collateral will be stored or located, which agreement or
letter shall be reasonably satisfactory in form and substance to the
Administrative Agent; provided that if such Loan Party is unable to deliver any
such Collateral Access Agreement after using its commercially reasonable efforts
to do so, the Administrative Agent may waive the foregoing requirement in its
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(c) If the Mortgage Trigger Event occurs, the Borrower shall deliver or cause to
be delivered to the Administrative Agent (i) within 30 days after the Mortgage
Trigger Event occurring (or such later date to which the Administrative Agent
may agree in its sole discretion), Mortgages on all Real Estate owned in fee
simple by the Loan Parties, other than Encumbered Facilities, duly executed by
the applicable Loan Parties, together with such evidence of corporate authority,
legal opinions, fixture filings and environmental indemnity agreements as the
Administrative Agent may reasonably request in connection therewith, and
(ii) within 90 days after the Mortgage Trigger Event occurring (or such later
date to which the Administrative Agent may agree in its sole discretion),
(A) title insurance policies, surveys, flood zone certification, zoning letters,
building permits and certificates of occupancy, in each case relating to such
Real Estate and in form and substance reasonably satisfactory to the
Administrative Agent, and (B) if requested by the Administrative Agent, (x) a
policy of flood insurance that (1) covers any Mortgaged Property, (2) is written
in an amount not less than the outstanding principal amount of the Indebtedness
secured by such Mortgage reasonably allocable to such real property or the
maximum limit of coverage made available with respect to the particular type of
property under the National Flood Insurance Act of 1968, whichever is less, and
(3) has a term ending not later than the maturity of the Indebtedness secured by
such Mortgage, (y) confirmation that the Loan Parties have received the notice
required pursuant to Section 208(e)(3) of Regulation H of the Board of Governors
of the Federal Reserve, and (z) such other Real Estate Documents reasonably
requested by the Administrative Agent, in each case in form and substance
reasonably satisfactory to the Administrative Agent.
(d) To the extent that the Borrower demonstrates to the Administrative Agent, by
delivery of a certificate of a Responsible Officer of the Borrower and
Appraisals of Mortgaged Properties selected by the Borrower, that the Loan to
Value Ratio is less than 0.80:1.00, then (x) the Administrative Agent shall
promptly release any Mortgages (at the expense of Borrower and without recourse
or warranty to the Secured Parties) on Mortgaged Properties other than Appraised
Mortgaged Properties and (y) the Borrower shall maintain a Loan to Value Ratio
not greater than 0.80:1.00 at all times thereafter through and including the
Mortgage Release Event (if any), including after giving effect to any additional
Revolving Credit Exposure extended thereafter. The Administrative Agent shall
have the right to obtain additional Appraisals of Appraised Mortgaged Properties
from time to time, but no more frequently than once in any 12-month period
unless an Event of Default has occurred and is continuing. The Borrower shall
have the right from time to time (x) to include additional Real Estate of the
Loan Parties as Appraised Mortgaged Properties for purposes of the Loan to Value
Ratio by delivering to the Administrative Agent the Real Estate Documents
referenced in subsection (c) above and Appraisals for such Real Estate and
(y) to have any Mortgaged Property released from any Mortgage so long as the
Loan to Value Ratio after giving effect to such release is not greater than
0.80:1.0, as certified by a Responsible Officer of the Borrower and demonstrated
by the Appraisals of the remaining Appraised Mortgaged Properties.
Notwithstanding the foregoing or Section 8.1(e), no Event of Default shall arise
as a result of the Borrower’s failure to maintain a Loan to Value Ratio not
greater than 0.80:1.00 pursuant to clause (y) above unless such failure shall
remain unremedied for 120 days (rather than 30 days) after the earlier of
(x) any Responsible Officer of the Borrower becomes aware of such failure, or
(y) notice thereof shall have been given to the Borrower by the Administrative
Agent or any Lender.

 

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Section 5.14. Further Assurances. The Borrower will, and will cause each other
Loan Party to, execute any and all further documents, financing statements,
agreements and instruments, and take all such further actions (including the
filing and recording of financing statements and other documents), which may be
required under any applicable law, or which the Administrative Agent or the
Required Lenders may reasonably request, to effectuate the transactions
contemplated by the Loan Documents or to grant, preserve, protect or perfect the
Liens created by the Collateral Documents or the validity or priority of any
such Lien, all at the expense of the Loan Parties. The Borrower also agrees to
provide to the Administrative Agent, from time to time upon request, evidence
reasonably satisfactory to the Administrative Agent as to the perfection and
priority of the Liens created or intended to be created by the Collateral
Documents.
Section 5.15. Health Care Matters.
(a) Without limiting or qualifying Section 5.4, or any other provision of this
Agreement, the Borrower and each of its Subsidiaries will be in material
compliance with all applicable Health Care Laws relating to the operation of
such Person’s business.
(b) Each of the Borrower and its Subsidiaries shall:
(i) obtain, maintain and preserve, and cause each of its Subsidiaries to obtain,
maintain and preserve, and take all necessary action to timely renew, all
material Health Care Permits (including, as applicable, Health Care Permits
necessary for it to be eligible to receive payment and compensation from and to
participate in Medicare, Medicaid or any other Third Party Payor programs) which
are necessary or useful in the proper conduct of its business;
(ii) be and remain in material compliance with all requirements for
participation in, and for licensure required to provide the goods or services
that are reimbursable under, Medicare, Medicaid and other Third Party Payor
Programs;
(iii) cause all Licensed Personnel to be in material compliance with all
applicable Health Care Laws in the performance of their duties to or for the
Borrower and its Subsidiaries, and to maintain in full force and effect all
professional licenses and other Health Care Permits required to perform such
duties; and
(iv) keep and maintain all records required to be maintained by any Governmental
Authority or otherwise under any Health Care Law.
(c) The Borrower and each of its Subsidiaries shall maintain a corporate and
health care regulatory compliance program (“CCP”) which addresses the
requirements of Health Care Laws, including, without limitation, HIPAA and
includes at least the following components and allows the Administrative Agent
(and/or its consultants) from time to time to review such CCP: (i) standards of
conduct and procedures that describe compliance policies regarding laws with an
emphasis on prevention of fraud and abuse; (ii) a specific officer within
high-level personnel identified as having overall responsibility for compliance
with such standards and procedures; (iii) training and education programs which
effectively communicate the compliance standards and procedures to employees and
agents, including, without limitation, fraud and abuse laws and illegal billing
practices; (iv) auditing and monitoring systems and reasonable steps for
achieving compliance with such standards and procedures, including, without
limitation, publicizing a report system to allow employees and other agents to
anonymously report criminal or suspect conduct and potential compliance
problems; (v) disciplinary guidelines and consistent enforcement of compliance
policies, including, without limitation, discipline of individuals responsible
for the failure to detect violations of the CCP; and (vi) mechanisms to
immediately respond to detected violations of the CCP. The Borrower and its
Subsidiaries shall modify such CCPs from time to time, as may be necessary to
ensure continuing compliance with all applicable Health Care Laws. Upon request,
the Administrative Agent (and/or its consultants) shall be permitted to review
such CCPs.

 

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Section 5.16. Post-Closing Matters. The Borrower will, and will cause each other
Loan Party to, satisfy the requirements set forth on Schedule 5.16 on or before
the date specified for such requirement or such later date as agreed to by the
Administrative Agent in its sole discretion.
ARTICLE VI
FINANCIAL COVENANTS
The Borrower covenants and agrees that so long as any Lender has a Commitment
hereunder or any Obligation remains unpaid or outstanding:
Section 6.1. Leverage Ratio. The Borrower will maintain at all times a Leverage
Ratio of not greater than 3.25:1.00 (the “Maximum Leverage Threshold”); provided
that if the aggregate consideration paid in connection with all Permitted
Acquisitions consummated during any six consecutive month period exceeds
$50,000,000, then, at the election of the Borrower by written notice to the
Administrative Agent (with a description in reasonable detail of the Permitted
Acquisitions consummated during such period and the consideration paid), the
Maximum Leverage Threshold shall be increased to 3.50:1.00 for the current
Fiscal Quarter and the immediately following two Fiscal Quarters; provided,
further, that the Maximum Leverage Threshold shall not be increased pursuant to
the preceding proviso (i) more than four times (or with respect to more than
twelve Fiscal Quarters) during the term of this Agreement and (ii) unless in the
most recently ended four consecutive Fiscal Quarter period there shall be at
least one Fiscal Quarter in respect of which the Maximum Leverage Threshold has
not been increased.
Section 6.2. Interest/Rent Coverage Ratio. The Borrower will maintain, as of the
end of each Fiscal Quarter, commencing with the Fiscal Quarter ending on
September 30, 2011, an Interest/Rent Coverage Ratio of not less than 2.50:1.00.
Section 6.3. Asset Coverage Ratio. The Borrower will maintain at all times an
Asset Coverage Ratio of not less than 1.25:1.00.
ARTICLE VII
NEGATIVE COVENANTS
The Borrower covenants and agrees that so long as any Lender has a Commitment
hereunder or any Obligation remains outstanding:
Section 7.1. Indebtedness and Preferred Equity. The Borrower will not, and will
not permit any of its Subsidiaries to, create, incur, assume or suffer to exist
any Indebtedness, except:
(a) Indebtedness created pursuant to the Loan Documents;
(b) Indebtedness of the Borrower and its Subsidiaries existing on the date
hereof and set forth on Schedule 7.1 and extensions, renewals and replacements
of any such Indebtedness that do not increase the outstanding principal amount
thereof (immediately prior to giving effect to such extension, renewal or
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(c) Indebtedness of the Borrower or any of its Subsidiaries incurred to finance
the acquisition, construction or improvement of any fixed or capital assets,
including Capital Lease Obligations (it being understood that the completion of
the construction or development of additional beds at existing facilities or new
facilities shall constitute the acquisition of property), and any Indebtedness
assumed in connection with the acquisition of any such assets or secured by a
Lien on any such assets (provided that such Indebtedness is incurred prior to or
within 90 days after such acquisition or the completion of such construction or
improvements), and extensions, renewals or replacements of any such Indebtedness
that do not increase the outstanding principal amount thereof (immediately prior
to giving effect to such extension, renewal or replacement) or shorten the
maturity or the weighted average life thereof; provided that the aggregate
principal amount of such Indebtedness does not exceed $25,000,000 at any time
outstanding; provided, further, that the aggregate principal amount of Capital
Lease Obligations that are permitted under subsection (j) of this Section shall
not be included in calculating the aggregate principal amount of Indebtedness
for purposes of the limitation set forth in this subsection;
(d) Indebtedness of the Borrower owing to any Subsidiary and of any Subsidiary
owing to the Borrower or any other Subsidiary; provided that any such
Indebtedness that is owed by a Subsidiary that is not a Subsidiary Loan Party
shall be subject to Section 7.4;
(e) Guarantees by the Borrower of Indebtedness of any Subsidiary and by any
Subsidiary of Indebtedness of the Borrower or any other Subsidiary; provided
that Guarantees by any Loan Party of Indebtedness of any Subsidiary that is not
a Subsidiary Loan Party shall be subject to Section 7.4; provided, further, that
the Borrower may Guarantee on an unsecured basis all Indebtedness permitted
under Section 7.1(h);
(f) Indebtedness of any Person which becomes a Subsidiary after the date of this
Agreement and Indebtedness secured by assets acquired by the Borrower or any of
its Subsidiaries after the date of this Agreement; provided that in each case
(i) such Indebtedness exists at the time that such Person becomes a Subsidiary
or such asset is acquired and is not created in contemplation of or in
connection with such Person becoming a Subsidiary or such asset being acquired,
and (ii) the aggregate principal amount of all such Indebtedness permitted
hereunder shall not exceed $5,000,000 at any time outstanding;
(g) Hedging Obligations permitted by Section 7.10;
(h) Indebtedness secured by Liens permitted by Section 7.2(f) or (g) in an
aggregate principal amount not to exceed at any time outstanding the greater of
(x) $100,000,000 and (y) Consolidated EBITDA for the most recently ended four
consecutive Fiscal Quarters for which financial statements have been delivered;
provided that, at the time of and immediately after giving effect to any such
Indebtedness, (A) no Default or Event of Default shall exist, (B) the Borrower
and its Subsidiaries shall be in pro forma compliance with Sections 6.1 and 6.3
as of the most recently ended Fiscal Quarter for which financial statements are
required to have been delivered, calculated as if all such Indebtedness had been
incurred as of the first day of the relevant period for testing compliance and
(C) the aggregate principal amount of all HUD Financings shall not exceed
$15,000,000 at any time outstanding;
(i) other unsecured Indebtedness of the Borrower or its Subsidiaries; provided
that, at the time of and immediately after giving effect to any such
Indebtedness, (A) no Default or Event of Default shall exist and (B) the
Borrower and its Subsidiaries shall be in pro forma compliance with Sections 6.1
and 6.3 as of the most recently ended Fiscal Quarter for which financial
statements are required to have been delivered, calculated as if all such
Indebtedness had been incurred as of the first day of the relevant period for
testing compliance; and
(j) Capital Lease Obligations incurred in connection with any Permitted
Acquisition structured as a capital lease.

 

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The Borrower will not, and will not permit any Subsidiary to, issue any
preferred stock or other preferred equity interest that (i) matures or is
mandatorily redeemable pursuant to a sinking fund obligation or otherwise,
(ii) is or may become redeemable or repurchaseable by the Borrower or such
Subsidiary at the option of the holder thereof, in whole or in part, or (iii) is
convertible or exchangeable at the option of the holder thereof for Indebtedness
or preferred stock or any other preferred equity interest described in this
paragraph, on or prior to, in the case of clause (i), (ii) or (iii), the date
that is 180 days after the later of the Revolving Commitment Termination Date
and the Maturity Date.
Section 7.2. Liens. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien on any of its
assets or property now owned or hereafter acquired, except:
(a) Liens securing the Obligations; provided that no Liens may secure Hedging
Obligations or Bank Product Obligations without securing all other Obligations
on a basis at least pari passu with such Hedging Obligations or Bank Product
Obligations and subject to the priority of payments set forth in Section 2.21
and Section 8.2;
(b) Permitted Encumbrances;
(c) Liens on any property or asset of the Borrower or any of its Subsidiaries
existing on the date hereof and set forth on Schedule 7.2; provided that such
Liens shall not apply to any other property or asset of the Borrower or any
Subsidiary;
(d) purchase money Liens upon or in any fixed or capital assets to secure the
purchase price or the cost of construction or improvement of such fixed or
capital assets or to secure Indebtedness incurred solely for the purpose of
financing the acquisition, construction or improvement of such fixed or capital
assets (including Liens securing any Capital Lease Obligations); provided that
(i) any such Lien secures Indebtedness permitted by Section 7.1(c), (ii) any
such Lien attaches to such asset concurrently or within 90 days after the
acquisition or the completion of the construction or improvements thereof,
(iii) any such Lien does not extend to any other asset, and (iv) the
Indebtedness secured thereby does not exceed the cost of acquiring, constructing
or improving such fixed or capital assets;
(e) any Lien (x) existing on any asset of any Person at the time such Person
becomes a Subsidiary of the Borrower, (y) existing on any asset of any Person at
the time such Person is merged with or into the Borrower or any of its
Subsidiaries, or (z) existing on any asset prior to the acquisition thereof by
the Borrower or any of its Subsidiaries; provided that (i) any such Lien was not
created in the contemplation of any of the foregoing and (ii) any such Lien
secures only those obligations which it secures on the date that such Person
becomes a Subsidiary or the date of such merger or the date of such acquisition;
(f) Liens on Real Estate (other than HUD Facilities) owned or acquired by the
Borrower or any of its Subsidiaries after the date of this Agreement; provided
that (i) any such Lien secures only Indebtedness permitted by Section 7.1(h) and
(ii) no such Lien is prohibited by any other Contractual Obligation of the
Borrower or any of its Subsidiaries;
(g) to the extent required in connection with any HUD Financing, Liens on the
HUD Facility securing such HUD Financing (but not on the Capital Stock of any
HUD Subsidiary); provided that (i) any such Lien secures only Indebtedness
permitted by Section 7.1(h) and (ii) no such Lien is prohibited by any other
Contractual Obligation of the Borrower or any of its Subsidiaries; and
(h) extensions, renewals, or replacements of any Lien referred to in subsections
(b) through (g) of this Section; provided that the principal amount of the
Indebtedness secured thereby is not increased and that any such extension,
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Section 7.3. Fundamental Changes.
(a) The Borrower will not, and will not permit any of its Subsidiaries to, merge
into or consolidate into any other Person, or permit any other Person to merge
into or consolidate with it, or sell, lease, transfer or otherwise dispose of
(in a single transaction or a series of transactions) all or substantially all
of its assets (in each case, whether now owned or hereafter acquired) or all or
substantially all of the stock of any of its Subsidiaries (in each case, whether
now owned or hereafter acquired) or liquidate or dissolve; provided that if, at
the time thereof and immediately after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing, (i) the Borrower or any
Subsidiary may merge with a Person if the Borrower (or such Subsidiary if the
Borrower is not a party to such merger) is the surviving Person, (ii) any
Subsidiary may merge into another Subsidiary, provided that if any party to such
merger is a Subsidiary Loan Party, the Subsidiary Loan Party shall be the
surviving Person, (iii) any Subsidiary may sell, transfer, lease or otherwise
dispose of all or substantially all of its assets to the Borrower or to a
Subsidiary Loan Party, and (iv) any Subsidiary (other than a Subsidiary Loan
Party) may liquidate or dissolve if the Borrower determines in good faith that
such liquidation or dissolution is in the best interests of the Borrower and is
not materially disadvantageous to the Lenders; provided, further, that any such
merger involving a Person that is not a wholly owned Subsidiary immediately
prior to such merger shall not be permitted unless also permitted by
Section 7.4.
(b) The Borrower will not, and will not permit any of its Subsidiaries to,
engage in any business other than businesses of the type conducted by the
Borrower and its Subsidiaries on the date hereof and businesses reasonably
related thereto.
Section 7.4. Investments, Loans. The Borrower will not, and will not permit any
of its Subsidiaries to, purchase, hold or acquire (including pursuant to any
merger with any Person that was not a wholly owned Subsidiary prior to such
merger) any Capital Stock, evidence of Indebtedness or other securities
(including any option, warrant, or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, Guarantee any obligations
of, or make or permit to exist any investment or any other interest in, any
other Person (all of the foregoing being collectively called “Investments”), or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person that constitute a business unit, or create or
form any Subsidiary, except:
(a) Investments (other than Permitted Investments) existing on the date hereof
and set forth on Schedule 7.4 (including Investments in Subsidiaries);
(b) Permitted Investments;
(c) Permitted Alternative Investments; provided that the aggregate amount of all
such Permitted Alternative Investments held by the Borrower and its Subsidiaries
(other than the Insurance Subsidiary) does not exceed $20,000,000 at any time;
(d) Guarantees by the Borrower and its Subsidiaries constituting Indebtedness
permitted by Section 7.1; provided that the aggregate principal amount of
Indebtedness of Subsidiaries that are not Subsidiary Loan Parties that is
Guaranteed by any Loan Party shall be subject to the limitation set forth in
subsection (e) of this Section; provided, further, that the Borrower may
Guarantee on an unsecured basis all Indebtedness permitted under Section 7.1(h);

 

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(e) Investments made by the Borrower in or to any Subsidiary and by any
Subsidiary to the Borrower or in or to another Subsidiary; provided that the
aggregate amount of Investments by the Loan Parties in or to, and Guarantees by
the Loan Parties of Indebtedness of, any Subsidiary that is not a Subsidiary
Loan Party (including all such Investments and Guarantees existing on the
Closing Date) shall not exceed $25,000,000 at any time outstanding; provided,
further, that the Borrower may Guarantee on an unsecured basis all Indebtedness
permitted under Section 7.1(h) and such Guarantee shall not be subject to the
limitation set forth in this subsection;
(f) loans or advances to employees, officers or directors of the Borrower or any
of its Subsidiaries in the ordinary course of business for travel, relocation
and related expenses; provided that the aggregate amount of all such loans and
advances does not exceed $3,000,000 at any time outstanding;
(g) Hedging Transactions permitted by Section 7.10;
(h) Permitted Acquisitions; and
(i) other Investments which in the aggregate do not exceed $5,000,000 in any
Fiscal Year.
Section 7.5. Restricted Payments. The Borrower will not, and will not permit any
of its Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except:
(i) dividends payable by the Borrower solely in interests of any class of its
common equity;
(ii) Restricted Payments made by any Subsidiary to the Borrower or to another
Subsidiary, on at least a pro rata basis with any other shareholders if such
Subsidiary is not wholly owned by the Borrower and other wholly owned
Subsidiaries of the Borrower; and
(iii) cash dividends and distributions paid on the common equity of the
Borrower; provided that (x) no Default or Event of Default shall have occurred
and be continuing at the time such dividend or distribution is paid, and (y) the
aggregate amount of all such Restricted Payments made by the Borrower in any
Fiscal Year does not exceed 20% of Consolidated Net Income (if greater than $0)
earned during the immediately preceding Fiscal Year.
Section 7.6. Sale of Assets. The Borrower will not, and will not permit any of
its Subsidiaries to, convey, sell, lease, assign, transfer or otherwise dispose
of any of its assets, business or property or, in the case of any Subsidiary,
any shares of such Subsidiary’s Capital Stock, in each case whether now owned or
hereafter acquired, to any Person other than the Borrower or any wholly owned
Subsidiary of the Borrower (or to qualify directors if required by applicable
law), except:
(a) the sale or other disposition for fair market value of obsolete or worn out
property or other property not necessary for operations disposed of in the
ordinary course of business;
(b) the sale of inventory and Permitted Investments in the ordinary course of
business; and

 

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(c) if no Event of Default has occurred and is continuing, the sale or other
disposition of such assets in an aggregate amount not to exceed the lesser of
(i) in any Fiscal Year, 10% of the aggregate book value of all assets of the
Borrower and its Subsidiaries set forth in the financial statements most
recently delivered pursuant to Section 5.1(a) or 5.1(b) (and until delivery of
the financial statements for the Fiscal Quarter ending June 30, 2011, as set
forth in the financial statements for the Fiscal Quarter ending March 31, 2011)
and (ii) $100,000,000 in the aggregate during the term of this Agreement.
Section 7.7. Transactions with Affiliates. The Borrower will not, and will not
permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except:
(a) in the ordinary course of business at prices and on terms and conditions not
less favorable to the Borrower or such Subsidiary than could be obtained on an
arm’s-length basis from unrelated third parties;
(b) transactions between or among Loan Parties not involving any other
Affiliates; and
(c) any Restricted Payment permitted by Section 7.5.
Section 7.8. Restrictive Agreements. The Borrower will not, and will not permit
any of its Subsidiaries to, directly or indirectly, enter into, incur or permit
to exist any agreement (including any lease of Real Estate) that prohibits,
restricts or imposes any condition upon (a) the ability of the Borrower or any
of its Subsidiaries to create, incur or permit any Lien upon any of its assets
or properties, whether now owned or hereafter acquired, or (b) the ability of
any of its Subsidiaries to pay dividends or other distributions with respect to
its Capital Stock, to make or repay loans or advances to the Borrower or any
other Subsidiary thereof, to Guarantee Indebtedness of the Borrower or any other
Subsidiary thereof or to transfer any of its property or assets to the Borrower
or any other Subsidiary thereof; provided that (i) the foregoing shall not apply
to restrictions or conditions imposed by law or by this Agreement or any other
Loan Document, (ii) the foregoing shall not apply to customary restrictions and
conditions contained in agreements relating to the sale of a Subsidiary pending
such sale, provided such restrictions and conditions apply only to the
Subsidiary that is sold and such sale is permitted hereunder, (iii) the
foregoing shall not apply to restrictions contained in the leases of Real Estate
listed on Schedule 7.8 as in effect as of the Closing Date, (iv) clause
(a) shall not apply to restrictions or conditions imposed by any agreement
relating to secured Indebtedness permitted by this Agreement if such
restrictions and conditions apply only to the property or assets securing such
Indebtedness, (v) clause (a) shall not apply to customary provisions in leases
restricting the assignment thereof and (vi) the foregoing shall not apply to
Excluded Subsidiaries.
Section 7.9. Sale and Leaseback Transactions. The Borrower will not, and will
not permit any of its Subsidiaries to, enter into any arrangement, directly or
indirectly, whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereinafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property sold or
transferred (each, a “Sale/Leaseback Transaction”), unless at the time such
Sale/Leaseback Transaction is entered into (a) no Default or Event of Default
has occurred and is continuing, (b) after giving pro forma effect to such
Sale/Leaseback Transaction, the Borrower and its Subsidiaries are in compliance
with the financial covenants set forth in Article VI and (c) the Borrower has
delivered a certificate to the Lenders certifying the conditions set forth in
clauses (a) and (b) and setting forth in reasonable detail calculations
demonstrating pro forma compliance with the financial covenants set forth in
Article VI.

 

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Section 7.10. Hedging Transactions. The Borrower will not, and will not permit
any of its Subsidiaries to, enter into any Hedging Transaction, other than
Hedging Transactions entered into in the ordinary course of business to hedge or
mitigate risks to which the Borrower or any of its Subsidiaries is exposed in
the conduct of its business or the management of its liabilities, including,
without limitation, any Hedging Transaction entered into in order to hedge
against fluctuations in interest rates or currency values that arise in
connection with any Borrowing. Solely for the avoidance of doubt, the Borrower
acknowledges that a Hedging Transaction entered into for speculative purposes or
of a speculative nature (which shall be deemed to include any Hedging
Transaction under which the Borrower or any of its Subsidiaries is or may become
obliged to make any payment (i) in connection with the purchase by any third
party of any Capital Stock or any Indebtedness or (ii) as a result of changes in
the market value of any Capital Stock or any Indebtedness) is not a Hedging
Transaction entered into in the ordinary course of business to hedge or mitigate
risks.
Section 7.11. Amendment to Material Documents. The Borrower will not, and will
not permit any of its Subsidiaries to, amend, modify or waive any of its rights
under (a) its certificate of incorporation, bylaws or other organizational
documents or (b) any Material Agreements or in any manner that would not have an
adverse effect on the Lenders, the Administrative Agent, the Borrower or any of
its Subsidiaries.
Section 7.12. Excluded Subsidiaries. The Borrower will not permit any of the
Excluded Subsidiaries to engage in any business, operations or activities, or
hold any property, other than (i) owning the Real Property securing the Ten
Project Note, the RBS Note or Indebtedness permitted under Section 7.1(h), as
applicable, (ii) leasing such Real Property to a Loan Party that operates the
facility located thereon, (iii) paying and performing its obligations in
connection with the Ten Project Note, the RBS Note or Indebtedness permitted
under Section 7.1(h), as applicable, (iv) issuing, selling and redeeming its own
Capital Stock, (v) holding directors’ and shareholders’ meetings, preparing
corporate and similar records and other activities required to maintain its
separate corporate or other legal structure, and (vi) preparing reports to, and
preparing and making notices to and filings with, Governmental Authorities.
Section 7.13. Accounting Changes. The Borrower will not, and will not permit any
of its Subsidiaries to, make any significant change in accounting treatment or
reporting practices, except as required by GAAP, or change the fiscal year of
the Borrower or of any of its Subsidiaries, except to change the fiscal year of
a Subsidiary to conform its fiscal year to that of the Borrower.
Section 7.14. Government Regulation. The Borrower will not, and will not permit
any of its Subsidiaries to, (a) be or become subject at any time to any law,
regulation or list of any Governmental Authority of the United States
(including, without limitation, the OFAC list) that prohibits or limits the
Lenders or the Administrative Agent from making any advance or extension of
credit to the Borrower or from otherwise conducting business with the Loan
Parties, or (b) fail to provide documentary and other evidence of the identity
of the Loan Parties as may be requested by the Lenders or the Administrative
Agent at any time to enable the Lenders or the Administrative Agent to verify
the identity of the Loan Parties or to comply with any applicable law or
regulation, including, without limitation, Section 326 of the Patriot Act at 31
U.S.C. Section 5318.

 

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ARTICLE VIII
EVENTS OF DEFAULT
Section 8.1. Events of Default. If any of the following events (each, an “Event
of Default”) shall occur:
(a) the Borrower shall fail to pay any principal of any Loan or of any
reimbursement obligation in respect of any LC Disbursement, when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment or otherwise; or
(b) the Borrower shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount payable under subsection (a) of this Section
or an amount related to a Bank Product Obligation) payable under this Agreement
or any other Loan Document, when and as the same shall become due and payable,
and such failure shall continue unremedied for a period of five (5) days; or
(c) any representation or warranty made or deemed made by or on behalf of the
Borrower or any of its Subsidiaries in or in connection with this Agreement or
any other Loan Document (including the Schedules attached hereto and thereto),
or in any amendments or modifications hereof or waivers hereunder, or in any
certificate, report, financial statement or other document submitted to the
Administrative Agent or the Lenders by any Loan Party or any representative of
any Loan Party pursuant to or in connection with this Agreement or any other
Loan Document shall prove to be incorrect in any material respect (other than
any representation or warranty that is expressly qualified by a Material Adverse
Effect or other materiality, in which case such representation or warranty shall
prove to be incorrect in any respect) when made or deemed made or submitted; or
(d) the Borrower shall fail to observe or perform any covenant or agreement
contained in Section 5.3 (with respect to the Borrower’s legal existence) or
Article VI or VII; or
(e) (i) any Loan Party shall fail to observe or perform any covenant or
agreement contained in Section 5.1 or 5.2, and such failure shall remain
unremedied for five (5) days after the earlier of (x) any Responsible Officer of
the Borrower becomes aware of such failure, or (y) notice thereof shall have
been given to the Borrower by the Administrative Agent or any Lender, or
(ii) any Loan Party shall fail to observe or perform any covenant or agreement
contained in this Agreement (other than those referred to in subsections (a),
(b), (d) and (e)(i) of this Section) or any other Loan Document or related to
any Bank Product Obligation, and such failure shall remain unremedied for
30 days after the earlier of (x) any Responsible Officer of the Borrower becomes
aware of such failure, or (y) notice thereof shall have been given to the
Borrower by the Administrative Agent or any Lender; or
(f) the Borrower or any of its Subsidiaries (whether as primary obligor or as
guarantor or other surety) shall fail to pay any principal of, or premium or
interest on, any Material Indebtedness that is outstanding, when and as the same
shall become due and payable (whether at scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument evidencing or governing such Indebtedness; or any other event shall
occur or condition shall exist under any agreement or instrument relating to any
Material Indebtedness and shall continue after the applicable grace period, if
any, specified in such agreement or instrument, if the effect of such event or
condition is to accelerate, or permit the acceleration of, the maturity of such
Indebtedness; or any Material Indebtedness shall be declared to be due and
payable, or required to be prepaid or redeemed (other than by a regularly
scheduled required prepayment or redemption), purchased or defeased, or any
offer to prepay, redeem, purchase or defease such Indebtedness shall be required
to be made, in each case prior to the stated maturity thereof; or
(g) the Borrower or any of its Subsidiaries shall (i) commence a voluntary case
or other proceeding or file any petition seeking liquidation, reorganization or
other relief under any federal, state or foreign bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
custodian, trustee, receiver, liquidator or other similar official of it or any
substantial part of its property, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in clause (i) of this subsection, (iii) apply for or consent to the appointment
of a custodian, trustee, receiver, liquidator or other similar official for the
Borrower or any such Subsidiary or for a substantial part of its assets,
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit
of creditors, or (vi) take any action for the purpose of effecting any of the
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(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Borrower or any of its Subsidiaries or its debts, or any
substantial part of its assets, under any federal, state or foreign bankruptcy,
insolvency or other similar law now or hereafter in effect or (ii) the
appointment of a custodian, trustee, receiver, liquidator or other similar
official for the Borrower or any of its Subsidiaries or for a substantial part
of its assets, and in any such case, such proceeding or petition shall remain
undismissed for a period of 60 days or an order or decree approving or ordering
any of the foregoing shall be entered; or
(i) the Borrower or any of its Subsidiaries shall become unable to pay, shall
admit in writing its inability to pay, or shall fail to pay, its debts as they
become due; or
(j) (i) an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with other ERISA Events that have occurred, could
reasonably be expected to result in liability to the Borrower and its
Subsidiaries in an aggregate amount exceeding $10,000,000, (ii) there is or
arises an Unfunded Pension Liability (not taking into account Plans with
negative Unfunded Pension Liability) in an aggregate amount exceeding
$10,000,000, or (iii) there is or arises any potential Withdrawal Liability in
an aggregate amount exceeding $10,000,000; or
(k) any judgment or order for the payment of money in excess of $15,000,000 in
the aggregate, to the extent not adequately covered by insurance as to which a
solvent and unaffiliated insurance company has acknowledged coverage, shall be
rendered against the Borrower or any of its Subsidiaries, and there shall be a
period of 60 consecutive days during which (i) a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect or (ii) such judgment or order shall remain undischarged, unvacated or
unbonded; or
(l) any non-monetary judgment or order shall be rendered against the Borrower or
any of its Subsidiaries that could reasonably be expected, either individually
or in the aggregate for all such events, to have a Material Adverse Effect, and
there shall be a period of 60 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(m) a Change in Control shall occur or exist; or
(n) (i) there shall occur any revocation, suspension, termination, recession,
non-renewal or forfeiture or any similar final administrative action with
respect to one or more Health Care Permits, Third Party Payor Programs or Third
Party Payor Authorizations that could reasonably be expected, either
individually or in the aggregate, to have a Material Adverse Effect, (ii) the
Borrower or any of its Subsidiaries shall (x) be named in any action, fully or
partially unsealed, in which the United States has affirmatively intervened,
alleging violation of the federal False Claims Act or any other applicable law
and (y) the Borrower shall have offered, agreed or paid to, or received a final
judgment requiring payment to, any Governmental Authority for payment of any
fine, penalty or overpayment in excess of $40,000,000 or (iii) any Third Party
Payor Authorization with respect to Medicare or Medicaid (including provider
number) of five or more Subsidiaries are terminated in connection with or as a
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(o) any provision of the Guaranty and Security Agreement or any other Collateral
Document shall for any reason cease to be valid and binding on, or enforceable
against, any Loan Party, or any Loan Party shall so state in writing, or any
Loan Party shall seek to terminate its obligation under the Guaranty and
Security Agreement or any other Collateral Document (other than the release of
any guaranty or collateral to the extent permitted pursuant to Section 9.11); or
(p) any Lien purported to be created under any Collateral Document shall fail or
cease to be, or shall be asserted by any Loan Party not to be, a valid and
perfected Lien on any Collateral, with the priority required by the applicable
Collateral Documents (other than as a result of the failure by the
Administrative Agent to take any action within its control);
then, and in every such event (other than an event with respect to the Borrower
described in subsection (h) or (i) of this Section) and at any time thereafter
during the continuance of such event, the Administrative Agent may, and upon the
written request of the Required Lenders shall, by notice to the Borrower, take
any or all of the following actions, at the same or different times:
(i) terminate the Commitments, whereupon the Commitment of each Lender shall
terminate immediately, (ii) declare the principal of and any accrued interest on
the Loans, and all other Obligations owing hereunder, to be, whereupon the same
shall become, due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower,
(iii) exercise all remedies contained in any other Loan Document and
(iv) exercise any other remedies available at law or in equity; provided that,
if an Event of Default specified in either subsection (h) or (i) shall occur,
the Commitments shall automatically terminate and the principal of the Loans
then outstanding, together with accrued interest thereon, and all fees and all
other Obligations shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
Section 8.2. Application of Proceeds from Collateral. All proceeds from each
sale of, or other realization upon, all or any part of the Collateral by any
Secured Party after an Event of Default arises shall be applied as follows:
(a) first, to the reimbursable expenses of the Administrative Agent incurred in
connection with such sale or other realization upon the Collateral, until the
same shall have been paid in full;
(b) second, to the fees and other reimbursable expenses of the Administrative
Agent, the Swingline Lender and the Issuing Bank then due and payable pursuant
to any of the Loan Documents, until the same shall have been paid in full;
(c) third, to all reimbursable expenses, if any, of the Lenders then due and
payable pursuant to any of the Loan Documents, until the same shall have been
paid in full;
(d) fourth, to the fees and interest then due and payable under the terms of
this Agreement, until the same shall have been paid in full;
(e) fifth, to the aggregate outstanding principal amount of the Loans, the LC
Exposure, the Bank Product Obligations and the Net Mark-to-Market Exposure of
the Hedging Obligations that constitute Obligations, until the same shall have
been paid in full, allocated pro rata among the Secured Parties based on their
respective pro rata shares of the aggregate amount of such Loans, LC Exposure,
Bank Product Obligations and Net Mark-to-Market Exposure of such Hedging
Obligations;

 

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(f) sixth, to additional cash collateral for the aggregate amount of all
outstanding Letters of Credit until the aggregate amount of all cash collateral
held by the Administrative Agent pursuant to this Agreement is at least 105% of
the LC Exposure after giving effect to the foregoing clause fifth; and
(g) seventh, to the extent any proceeds remain, to the Borrower or as otherwise
provided by a court of competent jurisdiction.
All amounts allocated pursuant to the foregoing clauses third through fifth to
the Lenders as a result of amounts owed to the Lenders under the Loan Documents
shall be allocated among, and distributed to, the Lenders pro rata based on
their respective Pro Rata Shares; provided that all amounts allocated to that
portion of the LC Exposure comprised of the aggregate undrawn amount of all
outstanding Letters of Credit pursuant to clauses fifth and sixth shall be
distributed to the Administrative Agent, rather than to the Lenders, and held by
the Administrative Agent in an account in the name of the Administrative Agent
for the benefit of the Issuing Bank and the Lenders as cash collateral for the
LC Exposure, such account to be administered in accordance with Section 2.22(g).
All cash collateral for LC Exposure shall be applied to satisfy drawings under
the Letters of Credit as they occur; if any amount remains on deposit on cash
collateral after all letters of credit have either been fully drawn or expired,
such remaining amount shall be applied to other Obligations, if any, in the
order set forth above.
Notwithstanding the foregoing, Bank Product Obligations and Hedging Obligations
shall be excluded from the application described above if the Administrative
Agent has not received written notice thereof, together with such supporting
documentation as the Administrative Agent may request, from the Bank Product
Provider or the Lender-Related Hedge Provider, as the case may be. Each Bank
Product Provider or Lender-Related Hedge Provider that has given the notice
contemplated by the preceding sentence shall, by such notice, be deemed to have
acknowledged and accepted the appointment of the Administrative Agent pursuant
to the terms of Article IX hereof for itself and its Affiliates as if a “Lender”
party hereto.
ARTICLE IX
THE ADMINISTRATIVE AGENT
Section 9.1. Appointment of the Administrative Agent.
(a) Each Lender irrevocably appoints SunTrust Bank as the Administrative Agent
and authorizes it to take such actions on its behalf and to exercise such powers
as are delegated to the Administrative Agent under this Agreement and the other
Loan Documents, together with all such actions and powers that are reasonably
incidental thereto. The Administrative Agent may perform any of its duties
hereunder or under the other Loan Documents by or through any one or more
sub-agents or attorneys-in-fact appointed by the Administrative Agent. The
Administrative Agent and any such sub-agent or attorney-in-fact may perform any
and all of its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions set forth in this Article
shall apply to any such sub-agent, attorney-in-fact or Related Party and shall
apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as the
Administrative Agent.
(b) The Issuing Bank shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith until such
time and except for so long as the Administrative Agent may agree at the request
of the Required Lenders to act for the Issuing Bank with respect thereto;
provided that the Issuing Bank shall have all the benefits and immunities
(i) provided to the Administrative Agent in this Article with respect to any
acts taken or omissions suffered by the Issuing Bank in connection with Letters
of Credit issued by it or proposed to be issued by it and the application and
agreements for letters of credit pertaining to the Letters of Credit as fully as
if the term “Administrative Agent” as used in this Article included the Issuing
Bank with respect to such acts or omissions and (ii) as additionally provided in
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Section 9.2. Nature of Duties of the Administrative Agent. The Administrative
Agent shall not have any duties or obligations except those expressly set forth
in this Agreement and the other Loan Documents. Without limiting the generality
of the foregoing, (a) the Administrative Agent shall not be subject to any
fiduciary or other implied duties, regardless of whether a Default or an Event
of Default has occurred and is continuing, (b) the Administrative Agent shall
not have any duty to take any discretionary action or exercise any discretionary
powers, except those discretionary rights and powers expressly contemplated by
the Loan Documents that the Administrative Agent is required to exercise in
writing by the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in
Section 10.2), and (c) except as expressly set forth in the Loan Documents, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrower or
any of its Subsidiaries that is communicated to or obtained by the
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by
it, its sub-agents or its attorneys-in-fact with the consent or at the request
of the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in Section 10.2) or in
the absence of its own gross negligence or willful misconduct. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any sub-agents or attorneys-in-fact selected by it with reasonable care. The
Administrative Agent shall not be deemed to have knowledge of any Default or
Event of Default unless and until written notice thereof (which notice shall
include an express reference to such event being a “Default” or “Event of
Default” hereunder) is given to the Administrative Agent by the Borrower or any
Lender, and the Administrative Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered hereunder or thereunder or in
connection herewith or therewith, (iii) the performance or observance of any of
the covenants, agreements, or other terms and conditions set forth in any Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article III or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent. The Administrative Agent may consult with
legal counsel (including counsel for the Borrower) concerning all matters
pertaining to such duties.
Section 9.3. Lack of Reliance on the Administrative Agent. Each of the Lenders,
the Swingline Lender and the Issuing Bank acknowledges that it has,
independently and without reliance upon the Administrative Agent, the Issuing
Bank or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each of the Lenders, the Swingline Lender and the Issuing Bank also
acknowledges that it will, independently and without reliance upon the
Administrative Agent, the Issuing Bank or any other Lender and based on such
documents and information as it has deemed appropriate, continue to make its own
decisions in taking or not taking any action under or based on this Agreement,
any related agreement or any document furnished hereunder or thereunder.
Section 9.4. Certain Rights of the Administrative Agent. If the Administrative
Agent shall request instructions from the Required Lenders with respect to any
action or actions (including the failure to act) in connection with this
Agreement, the Administrative Agent shall be entitled to refrain from such act
or taking such act unless and until it shall have received instructions from
such Lenders, and the Administrative Agent shall not incur liability to any
Person by reason of so refraining. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent acting or refraining from acting hereunder in
accordance with the instructions of the Required Lenders where required by the
terms of this Agreement.

 

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Section 9.5. Reliance by the Administrative Agent. The Administrative Agent
shall be entitled to rely upon, and shall not incur any liability for relying
upon, any notice, request, certificate, consent, statement, instrument, document
or other writing (including any electronic message, posting or other
distribution) believed by it to be genuine and to have been signed, sent or made
by the proper Person. The Administrative Agent may also rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person and shall not incur any liability for relying thereon. The Administrative
Agent may consult with legal counsel (including counsel for the Borrower),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or not taken by it in accordance with the advice of
such counsel, accountants or experts.
Section 9.6. The Administrative Agent in its Individual Capacity. The bank
serving as the Administrative Agent shall have the same rights and powers under
this Agreement and any other Loan Document in its capacity as a Lender as any
other Lender and may exercise or refrain from exercising the same as though it
were not the Administrative Agent; and the terms “Lenders”, “Required Lenders”,
“Required Revolving Lenders”, or any similar terms shall, unless the context
clearly otherwise indicates, include the Administrative Agent in its individual
capacity. The bank acting as the Administrative Agent and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Subsidiary or Affiliate of the Borrower as if
it were not the Administrative Agent hereunder.
Section 9.7. Successor Administrative Agent.
(a) The Administrative Agent may resign at any time by giving notice thereof to
the Lenders and the Borrower. Upon any such resignation, the Required Lenders
shall have the right to appoint a successor Administrative Agent, subject to
approval by the Borrower provided that no Default or Event of Default shall
exist at such time. If no successor Administrative Agent shall have been so
appointed, and shall have accepted such appointment within 30 days after the
retiring Administrative Agent gives notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a commercial bank organized under the laws
of the United States or any state thereof or a bank which maintains an office in
the United States, having a combined capital and surplus of at least
$500,000,000.
(b) Upon the acceptance of its appointment as the Administrative Agent hereunder
by a successor, such successor Administrative Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations under this Agreement and the other
Loan Documents. If, within 45 days after written notice is given of the retiring
Administrative Agent’s resignation under this Section, no successor
Administrative Agent shall have been appointed and shall have accepted such
appointment, then on such 45th day (i) the retiring Administrative Agent’s
resignation shall become effective, (ii) the retiring Administrative Agent shall
thereupon be discharged from its duties and obligations under the Loan Documents
and (iii) the Required Lenders shall thereafter perform all duties of the
retiring Administrative Agent under the Loan Documents until such time as the
Required Lenders appoint a successor Administrative Agent as provided above.
After any retiring Administrative Agent’s resignation hereunder, the provisions
of this Article shall continue in effect for the benefit of such retiring
Administrative Agent and its representatives and agents in respect of any
actions taken or not taken by any of them while it was serving as the
Administrative Agent.

 

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(c) In addition to the foregoing, if a Lender becomes, and during the period it
remains, a Defaulting Lender, and if any Default has arisen from a failure of
the Borrower to comply with Section 2.26(a), then the Issuing Bank and the
Swingline Lender may, upon prior written notice to the Borrower and the
Administrative Agent, resign as Issuing Bank or as Swingline Lender, as the case
may be, effective at the close of business Atlanta, Georgia time on a date
specified in such notice (which date may not be less than five (5) Business Days
after the date of such notice).
Section 9.8. Withholding Tax.
(a) To the extent required by any applicable law, the Administrative Agent may
withhold from any interest payment to any Lender an amount equivalent to any
applicable withholding tax. If the Internal Revenue Service or any authority of
the United States or any other jurisdiction asserts a claim that the
Administrative Agent did not properly withhold tax from amounts paid to or for
the account of any Lender (because the appropriate form was not delivered or was
not properly executed, or because such Lender failed to notify the
Administrative Agent of a change in circumstances that rendered the exemption
from, or reduction of, withholding tax ineffective, or for any other reason),
such Lender shall indemnify the Administrative Agent (to the extent that the
Administrative Agent has not already been reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so) fully for all amounts paid,
directly or indirectly, by the Administrative Agent as tax or otherwise,
including penalties and interest, together with all expenses incurred, including
legal expenses, allocated staff costs and any out of pocket expenses.
(b) Without duplication of any indemnity provided under subsection (a) of this
Section, each Lender shall also indemnify the Administrative Agent, within
10 days after demand therefor, for (i) any Indemnified Taxes attributable to
such Lender (to the extent that the Administrative Agent has not already been
reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so), (ii) any Taxes attributable to such Lender’s failure to comply with
the provisions of Section 10.4(d) relating to the maintenance of a Participant
Register and (iii) any Excluded Taxes attributable to such Lender, in each case,
that are payable or paid by the Administrative Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this subsection.
Section 9.9. The Administrative Agent May File Proofs of Claim.
(a) In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to any Loan Party, the Administrative Agent
(irrespective of whether the principal of any Loan or any Revolving Credit
Exposure shall then be due and payable as herein expressed or by declaration or
otherwise and irrespective of whether the Administrative Agent shall have made
any demand on the Borrower) shall be entitled and empowered, by intervention in
such proceeding or otherwise:
(i) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans or Revolving Credit Exposure and all
other Obligations that are owing and unpaid and to file such other documents as
may be necessary or advisable in order to have the claims of the Lenders, the
Issuing Bank and the Administrative Agent (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Lenders,
the Issuing Bank and the Administrative Agent and its agents and counsel and all
other amounts due the Lenders, the Issuing Bank and the Administrative Agent
under Section 10.3) allowed in such judicial proceeding; and

 

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(ii) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same.
(b) Any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the Issuing Bank to make such payments to the Administrative
Agent and, if the Administrative Agent shall consent to the making of such
payments directly to the Lenders and the Issuing Bank, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under Section 10.3.
Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender or the
Issuing Bank any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.
Section 9.10. Authorization to Execute Other Loan Documents. Each Lender hereby
authorizes the Administrative Agent to execute on behalf of all Lenders all Loan
Documents (including, without limitation, the Collateral Documents and any
subordination agreements) other than this Agreement.
Section 9.11. Collateral and Guaranty Matters. The Lenders 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 termination of all Revolving
Commitments, the Cash Collateralization of all reimbursement obligations with
respect to Letters of Credit in an amount equal to 105% of the aggregate LC
Exposure of all Lenders, and the payment in full of all Obligations (other than
contingent indemnification obligations and such Cash Collateralized
reimbursement obligations), (ii) that is sold or to be sold as part of or in
connection with any sale permitted hereunder or under any other Loan Document,
or (iii) if approved, authorized or ratified in writing in accordance with
Section 10.2;
(b) to release any Negative Pledge on any Real Property granted to or held by
the Administrative Agent (i) upon the termination of all Revolving Commitments,
the Cash Collateralization of all reimbursement obligations with respect to
Letters of Credit in an amount equal to 105% of the aggregate LC Exposure of all
Lenders, and the payment in full of all Obligations (other than contingent
indemnification obligations and such Cash Collateralized reimbursement
obligations), (ii) that is sold or to be sold as part of or in connection with
any sale permitted hereunder or under any other Loan Document, (iii) that is to
be encumbered in connection with any Lien permitted under Section 7.2(f) or (g)
or (iv) if approved, authorized or ratified in writing in accordance with
Section 10.2;
(c) to release any Loan Party from its obligations under the applicable
Collateral Documents (i) if such Person ceases to be a Subsidiary as a result of
a transaction permitted hereunder or (ii) if such Subsidiary is to become an
Excluded Subsidiary in connection with incurring Indebtedness permitted under
Section 7.1(h);

 

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(d) to release any Lien on any HUD Facility securing the Obligations in
connection with a HUD Financing permitted under Section 7.1(h) (it being
understood that the Administrative Agent shall not be required to release any
Lien on the Capital Stock of any HUD Subsidiary or any Guarantee of the
Obligations by any HUD Subsidiary); and
(e) to release any Lien on any Mortgaged Properties upon the occurrence of the
Mortgage Release Event, and to release any Lien on any Mortgaged Properties
pursuant to Section 5.13(d).
Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release its interest
in particular types or items of property, to release any Negative Pledge or to
release any Loan Party from its obligations under the applicable Collateral
Documents pursuant to this Section. In each case as specified in this Section,
the Administrative Agent is authorized, at the Borrower’s expense, to execute
and deliver to the applicable Loan Party such documents as such Loan Party may
reasonably request to evidence the release of such item of Collateral from the
Liens granted under the applicable Collateral Documents or such Negative Pledge,
or to release such Loan Party from its obligations under the applicable
Collateral Documents or such Negative Pledge, in each case in accordance with
the terms of the Loan Documents and this Section.
Section 9.12. Documentation Agent; Syndication Agent. Each Lender hereby
designates BBVA Compass as Documentation Agent and agrees that the Documentation
Agent shall have no duties or obligations under any Loan Documents to any Lender
or any Loan Party. Each Lender hereby designates Wells Fargo Bank, National
Association as Syndication Agent and agrees that the Syndication Agent shall
have no duties or obligations under any Loan Documents to any Lender or any Loan
Party.
Section 9.13. Right to Realize on Collateral and Enforce Guarantee. Anything
contained in any of the Loan Documents to the contrary notwithstanding, the
Borrower, the Administrative Agent and each Lender hereby agree that (i) no
Lender shall have any right individually to realize upon any of the Collateral
or to enforce the Collateral Documents, it being understood and agreed that all
powers, rights and remedies hereunder and under the Collateral Documents may be
exercised solely by the Administrative Agent, and (ii) in the event of a
foreclosure by the Administrative Agent on any of the Collateral pursuant to a
public or private sale or other disposition, the Administrative Agent or any
Lender may be the purchaser or licensor of any or all of such Collateral at any
such sale or other disposition and the Administrative Agent, as agent for and
representative of the Lenders (but not any Lender or Lenders in its or their
respective individual capacities unless the Required Lenders shall otherwise
agree in writing), shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Obligations
as a credit on account of the purchase price for any collateral payable by the
Administrative Agent at such sale or other disposition.
Section 9.14. Secured Bank Product Obligations and Hedging Obligations. No Bank
Product Provider or Lender-Related Hedge Provider that obtains the benefits of
Section 8.2, the Collateral Documents or any Collateral by virtue of the
provisions hereof or of any other Loan Document shall have any right to notice
of any action or to consent to, direct or object to any action hereunder or
under any other Loan Document 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 Article to the
contrary, the Administrative Agent shall not be required to verify the payment
of, or that other satisfactory arrangements have been made with respect to, Bank
Product Obligations and Hedging Obligations unless the Administrative Agent has
received written notice of such Obligations, together with such supporting
documentation as the Administrative Agent may request, from the applicable Bank
Product Provider or Lender-Related Hedge Provider, as the case may be.

 

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ARTICLE X
MISCELLANEOUS
Section 10.1. Notices.
(a) Written Notices.
(i) Except in the case of notices and other communications expressly permitted
to be given by telephone, all notices and other communications to any party
herein to be effective shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:

  To the Borrower:  
The Ensign Group, Inc.
27101 Puerta Real, Suite 450
Mission Viejo, CA 92691
Attention: Suzanne D. Snapper, Chief Financial Officer
Telecopy Number: (949) 540-3003
    With a copy to:  
Ensign Facility Services, Inc.
27101 Puerta Real, Suite 450
Mission Viejo, CA 92691
Attention: General Counsel
Telecopy Number: (949) 540-3007
    To the Administrative Agent:  
SunTrust Bank
303 Peachtree Street, N.E. / 23rd Floor
Atlanta, Georgia 30308
Attention: Ensign Group Account Manager
Telecopy Number: (404) 588-7497
    With a copy to:  
SunTrust Bank
Agency Services
303 Peachtree Street, N.E. / 25th Floor
Atlanta, Georgia 30308
Attention: Doug Weltz
Telecopy Number: (404) 221-2001

and

King & Spalding LLP
1180 Peachtree Street, N.W.
Atlanta, Georgia 30309
Attention: Carolyn Z. Alford
Telecopy Number: (404) 572-5100
    To the Issuing Bank:  
SunTrust Bank
25 Park Place, N.E. / Mail Code 3706 / 16th Floor
Atlanta, Georgia 30303
Attention: Standby Letter of Credit Dept.
Telecopy Number: (404) 588-8129

 

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  To the Swingline Lender:  
SunTrust Bank
Agency Services
303 Peachtree Street, N.E. / 25th Floor
Atlanta, Georgia 30308
Attention: Doug Weltz
Telecopy Number: (404) 221-2001
    To any other Lender:  
the address set forth in the Administrative Questionnaire or the Assignment and
Acceptance executed by such Lender

Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All such notices
and other communications shall be effective upon actual receipt by the relevant
Person or, if delivered by overnight courier service, upon the first Business
Day after the date deposited with such courier service for overnight (next-day)
delivery or, if sent by telecopy, upon transmittal in legible form by facsimile
machine or, if mailed, upon the third Business Day after the date deposited into
the mail or, if delivered by hand, upon delivery; provided that notices
delivered to the Administrative Agent, the Issuing Bank or the Swingline Lender
shall not be effective until actually received by such Person at its address
specified in this Section.
(ii) Any agreement of the Administrative Agent, the Issuing Bank or any Lender
herein to receive certain notices by telephone or facsimile is solely for the
convenience and at the request of the Borrower. The Administrative Agent, the
Issuing Bank and each Lender shall be entitled to rely on the authority of any
Person purporting to be a Person authorized by the Borrower to give such notice
and the Administrative Agent, the Issuing Bank and the Lenders shall not have
any liability to the Borrower or other Person on account of any action taken or
not taken by the Administrative Agent, the Issuing Bank or any Lender in
reliance upon such telephonic or facsimile notice. The obligation of the
Borrower to repay the Loans and all other Obligations hereunder shall not be
affected in any way or to any extent by any failure of the Administrative Agent,
the Issuing Bank or any Lender to receive written confirmation of any telephonic
or facsimile notice or the receipt by the Administrative Agent, the Issuing Bank
or any Lender of a confirmation which is at variance with the terms understood
by the Administrative Agent, the Issuing Bank and such Lender to be contained in
any such telephonic or facsimile notice.
(b) Electronic Communications.
(i) Notices and other communications to the Lenders and the Issuing Bank
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent, provided that the foregoing shall not apply to notices to
any Lender or the Issuing Bank pursuant to Article II unless such Lender, the
Issuing Bank, as applicable, and the Administrative Agent have agreed to receive
notices under any Section thereof by electronic communication and have agreed to
the procedures governing such communications. 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.

 

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(ii) Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement); provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
(c) Certification of Public Information. The Borrower and each Lender
acknowledge that certain of the Lenders may be Public Lenders and, if documents
or notices required to be delivered pursuant to Section 5.1 or Section 5.2
otherwise are being distributed through Syndtrak, Intralinks or any other
Internet or intranet website or other information platform (the “Platform”), any
document or notice that the Borrower has indicated contains Non-Public
Information shall not be posted on that portion of the Platform designated for
such Public Lenders. The Borrower agrees to clearly designate all information
provided to the Administrative Agent by or on behalf of the Borrower which is
suitable to make available to Public Lenders. If the Borrower has not indicated
whether a document or notice delivered pursuant to Section 5.1 or Section 5.2
contains Non-Public Information, the Administrative Agent reserves the right to
post such document or notice solely on that portion of the Platform designated
for Lenders who wish to receive Non-Public Information.
(d) Private Side Information Contacts. Each Public Lender agrees to cause at
least one individual at or on behalf of such Public Lender to at all times have
selected the “Private Side Information” or similar designation on the content
declaration screen of the Platform in order to enable such Public Lender or its
delegate, in accordance with such Public Lender’s compliance procedures and
applicable law, including Unites States federal and state securities laws, to
make reference to information that is not made available through the “Public
Side Information” portion of the Platform and that may contain Non-Public
Information with respect to the Borrower, its Affiliates or any of their
securities or loans for purposes of United States federal or state securities
laws. In the event that any Public Lender has determined for itself not to
access any information disclosed through the Platform or otherwise, such Public
Lender acknowledges that (i) other Lenders may have availed themselves of such
information and (ii) neither the Borrower nor the Administrative Agent has any
responsibility for such Public Lender’s decision to limit the scope of the
information it has obtained in connection with this Agreement and the other Loan
Documents.
Section 10.2. Waiver; Amendments.
(a) No failure or delay by the Administrative Agent, the Issuing Bank or any
Lender in exercising any right or power hereunder or under any other Loan
Document, and no course of dealing between the Borrower and the Administrative
Agent or any Lender, shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other or
further exercise thereof or the exercise of any other right or power hereunder
or thereunder. The rights and remedies of the Administrative Agent, the Issuing
Bank and the Lenders hereunder and under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies provided by law. No waiver of
any provision of this Agreement or of any other Loan Document or consent to any
departure by the Borrower therefrom shall in any event be effective unless the
same shall be permitted by subsection (b) of this Section, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. Without limiting the generality of the foregoing, the making of
a Loan or the issuance of a Letter of Credit shall not be construed as a waiver
of any Default or Event of Default, regardless of whether the Administrative
Agent, any Lender or the Issuing Bank may have had notice or knowledge of such
Default or Event of Default at the time.

 

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(b) No amendment or waiver of any provision of this Agreement or of the other
Loan Documents (other than the Fee Letter), nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Borrower and the Required Lenders, or the Borrower and
the Administrative Agent with the consent of the Required Lenders, and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided that, in addition to the
consent of the Required Lenders, no amendment, waiver or consent shall:
(i) increase the Commitment of any Lender without the written consent of such
Lender;
(ii) reduce the principal amount of any Loan or LC Disbursement or reduce the
rate of interest thereon, or reduce any fees payable hereunder, without the
written consent of each Lender directly affected thereby;
(iii) postpone the date fixed for any payment (other than any mandatory
prepayment) of any principal of, or interest on, any Loan or LC Disbursement or
any fees hereunder or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date for the termination or reduction of any Commitment,
without the written consent of each Lender directly affected thereby;
(iv) change Section 2.21(b) or (c) in a manner that would alter the pro rata
sharing of payments required thereby, without the written consent of each
Lender;
(v) change any of the provisions of this subsection (b) or the definition of
“Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders which are required to waive, amend or modify any rights
hereunder or make any determination or grant any consent hereunder, without the
consent of each Lender;
(vi) release all or substantially all of the guarantors, or limit the liability
of such guarantors, under any guaranty agreement guaranteeing any of the
Obligations, without the written consent of each Lender; or
(vii) release all or substantially all collateral (if any) securing any of the
Obligations, without the written consent of each Lender;
provided, further, that (x) no such amendment, waiver or consent shall amend,
modify or otherwise affect the rights, duties or obligations of the
Administrative Agent, the Swingline Lender or the Issuing Bank without the prior
written consent of such Person, and (y) no amendment, waiver or consent shall,
unless signed by the Borrower and the Required Revolving Lenders, or the
Borrower and the Administrative Agent with the consent of the Required Revolving
Lenders:
(1) amend or waive compliance with the conditions precedent to the obligations
of the Revolving Lenders to make any Revolving Loan or LC Disbursement;
(2) amend or waive non-compliance with any provision of Section 2.12(c);

 

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(3) waive any Default or Event of Default for the purpose of satisfying the
conditions precedent to the obligations of the Revolving Lenders to make any
Revolving Loan or LC Disbursement; or
(4) change any of the provisions of this clause (y);
provided, further, that no such amendment, waiver or consent shall change the
definition of “Required Revolving Lenders” or any other provision hereof
specifying the number or percentage of Revolving Lenders which are required to
waive, amend or modify any rights hereunder or make any determination or grant
any consent hereunder, without the consent of each Revolving Lender.
(c) Notwithstanding anything to the contrary herein, no Defaulting Lender shall
have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Commitment of such Lender may not be increased or
extended, and amounts payable to such Lender hereunder may not be permanently
reduced, without the consent of such Lender (other than reductions in fees and
interest in which such reduction does not disproportionately affect such
Lender). Notwithstanding anything contained herein to the contrary, this
Agreement may be amended and restated without the consent of any Lender (but
with the consent of the Borrower and the Administrative Agent) if, upon giving
effect to such amendment and restatement, such Lender shall no longer be a party
to this Agreement (as so amended and restated), the Commitments of such Lender
shall have terminated (but such Lender shall continue to be entitled to the
benefits of Sections 2.18, 2.19, 2.20 and 10.3), such Lender shall have no other
commitment or other obligation hereunder and such Lender shall have been paid in
full all principal, interest and other amounts owing to it or accrued for its
account under this Agreement.
Section 10.3. Expenses; Indemnification.
(a) The Borrower shall pay (i) all reasonable, documented out-of-pocket costs
and expenses of the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of one outside counsel for the
Administrative Agent and its Affiliates, in connection with the syndication of
the credit facilities provided for herein, the preparation and administration of
the Loan Documents and any amendments, modifications or waivers thereof (whether
or not the transactions contemplated in this Agreement or any other Loan
Document shall be consummated), including the reasonable fees, charges and
disbursements of one outside counsel for the Administrative Agent and its
Affiliates, (ii) all reasonable, documented out-of-pocket expenses incurred by
the Issuing Bank in connection with the issuance, amendment, renewal or
extension of any Letter of Credit or any demand for payment thereunder and
(iii) all documented out-of-pocket costs and expenses (including, without
limitation, the reasonable fees, charges and disbursements of outside counsel)
incurred by the Administrative Agent, the Issuing Bank or any Lender in
connection with the enforcement or protection of its rights in connection with
this Agreement, including its rights under this Section, or in connection with
the Loans made or any Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.

 

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(b) The Borrower shall indemnify the Administrative Agent (and any sub-agent
thereof), each Lender and the Issuing Bank, and each Related Party of any of the
foregoing Persons (each such Person being called an “Indemnitee”) against, and
hold each Indemnitee harmless from, any and all losses, claims, penalties,
damages, liabilities and related expenses (including the fees, charges and
disbursements of any counsel for any Indemnitee), and shall indemnify and hold
harmless each Indemnitee from all fees and time charges and disbursements for
attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or
asserted against any Indemnitee by any third party or by the Borrower or any
other Loan Party arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby, (ii) any Loan
or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the Issuing Bank to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or Release of Hazardous Materials on or from any property
owned or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory, whether brought by a third party or by the Borrower or any
other Loan Party, and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, penalties, damages, liabilities or related
expenses are determined by a court of competent jurisdiction by final and
non-appealable judgment to have resulted from (x) the gross negligence or
willful misconduct of such Indemnitee or (y) a claim brought by the Borrower or
any other Loan Party against an Indemnitee for breach in bad faith of such
Indemnitee’s obligations hereunder or under any other Loan Document. No
Indemnitee shall be liable for any damages arising from the use by others of any
information or other materials obtained through Syndtrak, Intralinks or any
other Internet or intranet website, except as a result of such Indemnitee’s
gross negligence or willful misconduct as determined by a court of competent
jurisdiction in a final and non-appealable judgment.
(c) The Borrower shall pay, and hold the Administrative Agent, the Issuing Bank
and each of the Lenders harmless from and against, any and all present and
future stamp, documentary, and other similar taxes with respect to this
Agreement and any other Loan Documents, any collateral described therein or any
payments due thereunder, and save the Administrative Agent, the Issuing Bank and
each Lender harmless from and against any and all liabilities with respect to or
resulting from any delay or omission to pay such taxes.
(d) To the extent that the Borrower fails to pay any amount required to be paid
to the Administrative Agent, the Issuing Bank or the Swingline Lender under
subsection (a), (b) or (c) hereof, each Lender severally agrees to pay to the
Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may
be, such Lender’s pro rata share (in accordance with its respective Revolving
Commitment (or Revolving Credit Exposure, as applicable) and Term Loan
determined as of the time that the unreimbursed expense or indemnity payment is
sought) of such unpaid amount; provided that the unreimbursed expense or
indemnified payment, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent, the
Issuing Bank or the Swingline Lender in its capacity as such.
(e) To the extent permitted by applicable law, the Borrower shall not assert,
and hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to actual
or direct damages) arising out of, in connection with or as a result of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby, the transactions contemplated therein, any Loan or any Letter of Credit
or the use of proceeds thereof.
(f) All amounts due under this Section shall be payable promptly after written
demand therefor.

 

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Section 10.4. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
the Administrative Agent and each Lender, and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an assignee in
accordance with the provisions of subsection (b) of this Section, (ii) by way of
participation in accordance with the provisions of subsection (d) of this
Section or (iii) by way of pledge or assignment of a security interest subject
to the restrictions of subsection (f) of this Section (and any other attempted
assignment or transfer by any party hereto shall be null and void). Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d) of this
Section and, to the extent expressly contemplated hereby, the Related Parties of
each of the Administrative Agent and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.
(b) Any Lender may at any time assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitments, Loans and other Revolving Credit Exposure at the time owing
to it); provided that any such assignment shall be subject to the following
conditions:
(i) Minimum Amounts.
(A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitments, Loans and other Revolving Credit Exposure at the time
owing to it or in the case of an assignment to a Lender, an Affiliate of a
Lender or an Approved Fund, no minimum amount need be assigned; and
(B) in any case not described in subsection (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Loans and
Revolving Credit Exposure outstanding thereunder) or, if the applicable
Commitment is not then in effect, the principal outstanding balance of the Loans
and Revolving Credit Exposure of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Administrative Agent or, if “Trade Date”
is specified in the Assignment and Acceptance, as of the Trade Date) shall not
be less than $1,000,000 with respect to Term Loans and $5,000,000 with respect
to Revolving Loans and in minimum increments of $1,000,000, unless each of the
Administrative Agent and, so long as no Event of Default has occurred and is
continuing, the Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed).
(ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans, other Revolving
Credit Exposure or the Commitments assigned, except that this subsection (b)(ii)
shall not prohibit any Lender from assigning all or a portion of its rights and
obligations among separate Commitments on a non-pro rata basis.
(iii) Required Consents. No consent shall be required for any assignment except
to the extent required by subsection (b)(i)(B) of this Section and, in addition:
(A) the consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (x) an Event of Default has occurred and is
continuing at the time of such assignment or (y) such assignment is of a Term
Loan to a Lender, an Affiliate of such Lender or an Approved Fund of such
Lender;

 

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(B) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required unless such assignment is of a Term Loan
to a Lender, an Affiliate of such Lender or an Approved Fund of such Lender; and
(C) the consent of the Issuing Bank (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment that increases the
obligation of the assignee to participate in exposure under one or more Letters
of Credit (whether or not then outstanding), and the consent of the Swingline
Lender (such consent not to be unreasonably withheld or delayed) shall be
required for any assignment in respect of the Revolving Commitments.
(iv) Assignment and Acceptance. The parties to each assignment shall deliver to
the Administrative Agent (A) a duly executed Assignment and Acceptance, (B) a
processing and recordation fee of $3,500 (except with respect to any assignment
by a Lender to one of its Affiliates), (C) an Administrative Questionnaire
unless the assignee is already a Lender and (D) the documents required under
Section 2.20(e).
(v) No Assignment to the Borrower. No such assignment shall be made to the
Borrower or any of the Borrower’s Affiliates or Subsidiaries.
(vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Acceptance, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Acceptance, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 2.18, 2.19, 2.20 and 10.3 with
respect to facts and circumstances occurring prior to the effective date of such
assignment; provided that, except to the extent otherwise expressly agreed by
the affected parties, no assignment by a Defaulting Lender will constitute a
waiver or release of any claim of any party hereunder arising from such Lender’s
having been a Defaulting Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection 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
subsection (d) of this Section. If the consent of the Borrower to an assignment
is required hereunder (including a consent to an assignment which does not meet
the minimum assignment thresholds specified above), the Borrower shall be deemed
to have given its consent unless it shall object thereto by written notice to
the Administrative Agent within five (5) Business Days after notice thereof has
actually been delivered by the assigning Lender (through the Administrative
Agent) to the Borrower.
(c) The Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at one of its offices in Atlanta, Georgia a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amount of the Loans and Revolving Credit Exposure owing to, each
Lender pursuant to the terms hereof from time to time (the “Register”).
Information contained in the Register with respect to any Lender shall be
available for inspection by such Lender at any reasonable time and from time to
time upon reasonable prior notice; information contained in the Register shall
also be available for inspection by the Borrower at any reasonable time and from
time to time upon reasonable prior notice. In establishing and maintaining the
Register, the Administrative Agent shall serve as the Borrower’s agent solely
for tax purposes and solely with respect to the actions described in this
Section, and the Borrower hereby agrees that, to the extent SunTrust Bank serves
in such capacity, SunTrust Bank and its officers, directors, employees, agents,
sub-agents and affiliates shall constitute “Indemnitees”.

 

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(d) Any Lender may at any time, without the consent of, or notice to, the
Borrower, the Administrative Agent, the Swingline Lender or the Issuing Bank,
sell participations to any Person (other than a natural person, the Borrower or
any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all
or a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans owing to it);
provided that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower, the
Administrative Agent, the Issuing Bank, the Swingline Lender 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 or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver with respect to the following to the
extent affecting such Participant: (i) increase the Commitment of such Lender;
(ii) reduce the principal amount of any Loan or LC Disbursement or reduce the
rate of interest thereon, or reduce any fees payable hereunder; (iii) postpone
the date fixed for any payment of any principal of, or interest on, any Loan or
LC Disbursement or any fees hereunder or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date for the termination or
reduction of any Commitment; (iv) change Section 2.21(b) or (c) in a manner that
would alter the pro rata sharing of payments required thereby; (v) change any of
the provisions of Section 10.2(b) or the definition of “Required Lenders” or
“Required Revolving Lenders” or any other provision hereof specifying the number
or percentage of Lenders which are required to waive, amend or modify any rights
hereunder or make any determination or grant any consent hereunder; (vi) release
all or substantially all of the guarantors, or limit the liability of such
guarantors, under any guaranty agreement guaranteeing any of the Obligations; or
(vii) release all or substantially all collateral (if any) securing any of the
Obligations. Subject to subsection (e) of this Section, the Borrower agrees that
each Participant shall be entitled to the benefits of Sections 2.18, 2.19, and
2.20 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection (b) of this Section; provided that such
Participant agrees to be subject to Section 2.24 as though it were a Lender. To
the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 10.7 as though it were a Lender; provided that such
Participant agrees to be subject to Section 2.21 as though it were a Lender.
Each Lender that sells a participation shall, acting solely for this purpose as
an agent of the Borrower, maintain a register in the United States on which it
enters the name and address of each Participant and the principal amounts (and
stated interest) of each Participant’s interest in the Loans or other
obligations under the Loan Documents (the “Participant Register”); provided that
no Lender shall have any obligation to disclose all or any portion of the
Participant Register to any Person (including the identity of any Participant or
any information relating to a Participant’s interest in any commitments, loans,
letters of credit or other obligations under any Loan Document) except to the
extent that such disclosure is necessary to establish that such commitment,
loan, letter of credit or other obligation is in registered form under Section
5f.103-1(c) of the United States Treasury Regulations. The entries in the
Participant Register shall be conclusive, absent manifest error, and such Lender
shall treat each person whose name is recorded in the Participant Register as
the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary.

 

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(e) A Participant shall not be entitled to receive any greater payment under
Sections 2.18 and 2.20 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent. A Participant shall not be entitled to the benefits of
Section 2.20 unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to
comply with Section 2.20(e) and (f) as though it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including, without limitation, any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
Section 10.5. Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement and the other Loan Documents and any claim, controversy,
dispute or cause of action (whether in contract or tort or otherwise) based
upon, arising out of or relating to this Agreement or any other Loan Document
(except, as to any other Loan Document, as expressly set forth therein) and the
transactions contemplated hereby and thereby shall be construed in accordance
with and be governed by the law of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally submits, for itself and
its property, to the exclusive jurisdiction of the United States District Court
for the Southern District of New York, and of the Supreme Court of the State of
New York sitting in New York county, and of any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document or the transactions contemplated hereby or
thereby, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
District Court or New York state court or, to the extent permitted by applicable
law, such appellate court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that the Administrative Agent, the Issuing Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
or any other Loan Document against the Borrower or its properties in the courts
of any jurisdiction.
(c) The Borrower irrevocably and unconditionally waives any objection which it
may now or hereafter have to the laying of venue of any such suit, action or
proceeding described in subsection (b) of this Section and brought in any court
referred to in subsection (b) of this Section. Each of the parties hereto
irrevocably waives, to the fullest extent permitted by applicable law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(d) Each party to this Agreement irrevocably consents to the service of process
in the manner provided for notices in Section 10.1. Nothing in this Agreement or
in any other Loan Document will affect the right of any party hereto to serve
process in any other manner permitted by law.

 

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Section 10.6. WAIVER OF JURY TRIAL. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 10.7. Right of Set-off. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
each Lender and the Issuing Bank shall have the right, at any time or from time
to time upon the occurrence and during the continuance of an Event of Default,
without prior notice to the Borrower, any such notice being expressly waived by
the Borrower to the extent permitted by applicable law, to set off and apply
against all deposits (general or special, time or demand, provisional or final)
of the Borrower at any time held or other obligations at any time owing by such
Lender and the Issuing Bank to or for the credit or the account of the Borrower
against any and all Obligations held by such Lender or the Issuing Bank, as the
case may be, irrespective of whether such Lender or the Issuing Bank shall have
made demand hereunder and although such Obligations may be unmatured. Each
Lender and the Issuing Bank agrees promptly to notify the Administrative Agent
and the Borrower after any such set-off and any application made by such Lender
or the Issuing Bank, as the case may be; provided that the failure to give such
notice shall not affect the validity of such set-off and application. Each
Lender and the Issuing Bank agrees to apply all amounts collected from any such
set-off to the Obligations before applying such amounts to any other
Indebtedness or other obligations owed by the Borrower and any of its
Subsidiaries to such Lender or the Issuing Bank.
Section 10.8. Counterparts; Integration. 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. This Agreement, the Fee Letter, the other Loan
Documents, and any separate letter agreements relating to any fees payable to
the Administrative Agent and its Affiliates constitute the entire agreement
among the parties hereto and thereto and their affiliates regarding the subject
matters hereof and thereof and supersede all prior agreements and
understandings, oral or written, regarding such subject matters. Delivery of an
executed counterpart to this Agreement or any other Loan Document by facsimile
transmission or by electronic mail in pdf format shall be as effective as
delivery of a manually executed counterpart hereof.
Section 10.9. Survival. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates, reports, notices
or other instruments delivered in connection with or pursuant to this Agreement
shall be considered to have been relied upon by the other parties hereto and
shall survive the execution and delivery of this Agreement and the other Loan
Documents and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent, the Issuing Bank or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.18, 2.19, 2.20, and 10.3 and Article IX shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.

 

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Section 10.10. Severability. Any provision of this Agreement or any other Loan
Document held to be illegal, invalid or unenforceable in any jurisdiction,
shall, as to such jurisdiction, be ineffective to the extent of such illegality,
invalidity or unenforceability without affecting the legality, validity or
enforceability of the remaining provisions hereof or thereof; and the
illegality, invalidity or unenforceability of a particular provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
Section 10.11. Confidentiality. Each of the Administrative Agent, the Issuing
Bank and the Lenders agrees to take normal and reasonable precautions to
maintain the confidentiality of any information relating to the Borrower or any
of its Subsidiaries or any of their respective businesses, to the extent
designated in writing as confidential and provided to it by the Borrower or any
of its Subsidiaries, other than any such information that is available to the
Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis
prior to disclosure by the Borrower or any of its Subsidiaries, except that such
information may be disclosed (i) to any Related Party of the Administrative
Agent, the Issuing Bank or any such Lender including, without limitation,
accountants, legal counsel and other advisors, (ii) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process,
(iii) to the extent requested by any regulatory agency or authority purporting
to have jurisdiction over it (including any self-regulatory authority such as
the National Association of Insurance Commissioners), (iv) to the extent that
such information becomes publicly available other than as a result of a breach
of this Section, or which becomes available to the Administrative Agent, the
Issuing Bank, any Lender or any Related Party of any of the foregoing on a
non-confidential basis from a source other than the Borrower or any of its
Subsidiaries, (v) in connection with the exercise of any remedy hereunder or
under any other Loan Documents or any suit, action or proceeding relating to
this Agreement or any other Loan Documents or the enforcement of rights
hereunder or thereunder, (vi) subject to execution by such Person of an
agreement containing provisions substantially the same as those of this Section,
to (A) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, or
(B) any actual or prospective party (or its Related Parties) to any swap or
derivative or other transaction under which payments are to be made by reference
to the Borrower and its obligations, this Agreement or payments hereunder,
(vii) to any rating agency, (viii) to the CUSIP Service Bureau or any similar
organization, or (ix) with the consent of the Borrower. Any Person required to
maintain the confidentiality of any information as provided for 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 its own confidential information. In the
event of any conflict between the terms of this Section and those of any other
Contractual Obligation entered into with any Credit Party (whether or not a Loan
Document), the terms of this Section shall govern.
Section 10.12. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which may be treated as interest on such
Loan under applicable law (collectively, the “Charges”), shall exceed the
maximum lawful rate of interest (the “Maximum Rate”) which may be contracted
for, charged, taken, received or reserved by a Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Rate to the date of
repayment (to the extent permitted by applicable law), shall have been received
by such Lender.
Section 10.13. Waiver of Effect of Corporate Seal. The Borrower represents and
warrants that neither it nor any other Loan Party is required to affix its
corporate seal to this Agreement or any other Loan Document pursuant to any
Requirement of Law, agrees that this Agreement is delivered by the Borrower
under seal and waives any shortening of the statute of limitations that may
result from not affixing the corporate seal to this Agreement or such other Loan
Documents.

 

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Section 10.14. Patriot Act. The Administrative Agent and each Lender hereby
notifies the Loan Parties that, pursuant to the requirements of the Patriot Act,
it is required to obtain, verify and record information that identifies each
Loan Party, which information includes the name and address of such Loan Party
and other information that will allow such Lender or the Administrative Agent,
as applicable, to identify such Loan Party in accordance with the Patriot Act.
Section 10.15. No Advisory or Fiduciary Responsibility. In connection with all
aspects of each transaction contemplated hereby (including in connection with
any amendment, waiver or other modification hereof or of any other Loan
Document), the Borrower and each other Loan Party acknowledges and agrees and
acknowledges its Affiliates’ understanding that (i) (A) the services regarding
this Agreement provided by the Administrative Agent and/or the Lenders are
arm’s-length commercial transactions between the Borrower, each other Loan Party
and their respective Affiliates, on the one hand, and the Administrative Agent
and the Lenders, on the other hand, (B) each of the Borrower and the other Loan
Parties have consulted their own legal, accounting, regulatory and tax advisors
to the extent they have deemed appropriate, and (C) the Borrower and each other
Loan Party is capable of evaluating and understanding, and understands and
accepts, the terms, risks and conditions of the transactions contemplated hereby
and by the other Loan Documents; (ii) (A) each of the Administrative Agent and
the Lenders is and has been acting solely as a principal and, except as
expressly agreed in writing by the relevant parties, has not been, is not, and
will not be acting as an advisor, agent or fiduciary for the Borrower, any other
Loan Party or any of their respective Affiliates, or any other Person, and
(B) neither the Administrative Agent nor any Lender has any obligation to the
Borrower, any other Loan Party or any of their Affiliates with respect to the
transaction contemplated hereby except those obligations expressly set forth
herein and in the other Loan Documents; and (iii) the Administrative Agent, the
Lenders and their respective Affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Borrower, the
other Loan Parties and their respective Affiliates, and each of the
Administrative Agent and the Lenders has no obligation to disclose any of such
interests to the Borrower, any other Loan Party or any of their respective
Affiliates. To the fullest extent permitted by law, each of the Borrower and the
other Loan Parties hereby waives and releases any claims that it may have
against the Administrative Agent or any Lender with respect to any breach or
alleged breach of agency or fiduciary duty in connection with any aspect of any
transaction contemplated hereby.
Section 10.16. Location of Closing. Each Lender and the Issuing Bank
acknowledges and agrees that it has delivered, with the intent to be bound, its
executed counterparts of this Agreement to the Administrative Agent, c/o King &
Spalding LLP, 1185 Avenue of the Americas, New York, New York 10036. The
Borrower acknowledges and agrees that it has delivered, with the intent to be
bound, its executed counterparts of this Agreement and each other Loan Document,
together with all other documents, instruments, opinions, certificates and other
items required under Section 3.1, to the Administrative Agent, c/o King &
Spalding LLP, 1185 Avenue of the Americas, New York, New York 10036. All parties
agree that the closing of the transactions contemplated by this Agreement has
occurred in New York.
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104

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

            THE ENSIGN GROUP, INC.
      By:   /s/ Gregory K. Stapley       Name:   Gregory K. Stapley       
Title:   Executive Vice President        SUNTRUST BANK
as the Administrative Agent, as the Issuing Bank, as
the Swingline Lender and as a Lender
      By:   /s/ David M. Felty       Name:   David M. Felty        Title:  
Director   

 

 

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            CALIFORNIA BANK & TRUST
as a Lender
      By:   /s/ Richard A. Sutton       Name:   Richard A. Sutton       
Title:   Vice President   

 

 

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            COMPASS BANK
as a Lender
      By:   /s/ James T. Shua       Name:   James T. Shua        Title:   An
authorized signatory   

 

 

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            FIFTH THIRD BANK OF OHIO BANKING CORPORATION
as a Lender
      By:   /s/ David Gorelick       Name:   David Gorelick        Title:   Vice
President   

 

 

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            WELLS FARGO BANK, N.A.
as a Lender
      By:   /s/ Christopher M. Gerardi       Name:   Christopher M. Gerardi     
  Title:   Vice President