Exhibit 10.1





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



 


 









 







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	 





 


 









 





	 	 	 	 	 
	 	 	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	 





 


ii









 





	 	 	 	 	 
	 	 	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	 





 


iii









 





	 	 	 	 	 
	 	 	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









 





	 	 	 	 	 
	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






 


v









 







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.


 


 









 





“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.


 


2









 





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.


 


3









 





“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









 





“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).


 


5









 





“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.


 


7









 





“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.


 


8









 





“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.


 


9









 





“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.


 


10









 





“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


 


11









 






(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.


 


12









 





“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.


 


13









 





“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.


 


15









 





“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


 


16









 






(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.


 


18









 





“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.


 


19









 





“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.


 


20









 





“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.


 


21









 





“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;


 


22









 






(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;


 


23









 






(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.


 


26









 





“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.


 


28









 





“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.


 


29









 





“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.


 


31









 





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.


 


34









 





(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.


 


35









 





(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.


 


36









 






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.


 


37









 






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.


 


38









 





(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.


 


39









 





(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
case may be; and


 


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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 more on a consolidated basis from the prior Fiscal Year; and


 


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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 required by the Administrative Agent to perfect the
Liens in favor of the


 


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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 reasonable discretion.


 


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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 replacement) or shorten the maturity or the weighted average life
thereof;


 


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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, renewal or replacement is limited to the assets
originally encumbered thereby.


 


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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
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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 result of the DOJ Investigation; or


 


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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 this Agreement with respect
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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.



(remainder of page left intentionally blank)



 


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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 	 



 


 









 





	 	 	 	 	 
	 	CALIFORNIA BANK & TRUST

as a Lender

 	 
	 	By:  	/s/ Richard
A. Sutton	 
	 	 	Name:  	Richard
A. Sutton 	 
	 	 	Title:  	Vice President 	 



 


 









 





	 	 	 	 	 
	 	COMPASS BANK

as a Lender

 	 
	 	By:  	/s/ James
T. Shua	 
	 	 	Name:  	James T. Shua 	 
	 	 	Title:  	An authorized signatory 	 


 


 









 






	 	 	 	 	 
	 	FIFTH THIRD BANK OF OHIO BANKING CORPORATION

as a Lender

 	 
	 	By:  	/s/ David
Gorelick	 
	 	 	Name:  	David
Gorelick 	 
	 	 	Title:  	Vice President 	 


 


 









 







	 	 	 	 	 
	 	WELLS FARGO BANK, N.A.

as a Lender

 	 
	 	By:  	/s/ Christopher
M. Gerardi	 
	 	 	Name:  	Christopher
M. Gerardi 	 
	 	 	Title:  	Vice President