exv10w1



 





Exhibit 10.1

Execution Version



 




SECOND AMENDED AND RESTATED CREDIT AGREEMENT




Dated as of February 28, 2008




among




ODYSSEY HEALTHCARE OPERATING A, LP,

ODYSSEY HEALTHCARE OPERATING B, LP,

HOSPICE OF THE PALM COAST, INC., and

OHC INVESTMENT, INC. (to be merged with and into VISTACARE, INC.)

as Borrowers,




THE OTHER CREDIT PARTIES SIGNATORY HERETO,

as Credit Parties,




THE LENDERS SIGNATORY HERETO

FROM TIME TO TIME,

as Lenders,




GENERAL ELECTRIC CAPITAL CORPORATION,

as Agent and a Lender,




BANK OF AMERICA, N.A AND FIFTH THIRD BANK,

as Co-Syndication Agents,




and




SUNTRUST BANK. AND COMPASS BANK,

as Co-Documentation Agents




GE CAPITAL MARKETS, INC.,

as Sole Lead Arranger



 




 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	1. AMOUNT AND TERMS OF CREDIT
	 	 	2	 
	1.1. Credit Facilities
	 	 	2	 
	1.2. Letters of Credit
	 	 	5	 
	1.3. Prepayments
	 	 	5	 
	1.4. Use of Proceeds
	 	 	7	 
	1.5. Interest and Applicable Margins
	 	 	7	 
	1.6. [Intentionally Omitted]
	 	 	10	 
	1.7. [Intentionally Omitted]
	 	 	10	 
	1.8. Cash Management Systems
	 	 	10	 
	1.9. Fees
	 	 	10	 
	1.10. Receipt of Payments
	 	 	11	 
	1.11. Application and Allocation of Payments
	 	 	11	 
	1.12. Evidence of Debt
	 	 	12	 
	1.13. Indemnity
	 	 	13	 
	1.14. Access
	 	 	15	 
	1.15. Taxes
	 	 	15	 
	1.16. Capital Adequacy; Increased Costs; Illegality
	 	 	16	 
	1.17. Single Loan; Joint and Several Obligations
	 	 	17	 
	 
	 	 	 	 
	2. CONDITIONS PRECEDENT
	 	 	18	 
	2.1. Conditions to the Initial Loans
	 	 	18	 
	2.2. Further Conditions to Each Loan
	 	 	20	 
	 
	 	 	 	 
	3. REPRESENTATIONS AND WARRANTIES
	 	 	21	 
	3.1. Existence; Compliance with Law
	 	 	21	 
	3.2. Executive Offices, Collateral Locations, FEIN
	 	 	22	 
	3.3. Power, Authorization, Enforceable Obligations
	 	 	22	 
	3.4. Financial Statements and Projections
	 	 	23	 
	3.5. Material Adverse Effect
	 	 	23	 
	3.6. Ownership of Property; Liens
	 	 	24	 
	3.7. Labor Matters
	 	 	24	 
	3.8. Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness
	 	 	25	 
	3.9. Government Regulation
	 	 	25	 
	3.10. Margin Regulations
	 	 	25	 
	3.11. Taxes
	 	 	26	 
	3.12. ERISA
	 	 	26	 
	3.13. No Litigation
	 	 	27	 
	3.14. Brokers
	 	 	27	 
	3.15. Intellectual Property
	 	 	28	 
	3.16. Full Disclosure
	 	 	28	 
	3.17. Environmental Matters
	 	 	28	 
	3.18. Insurance
	 	 	29	 
	3.19. Deposit and Disbursement Accounts
	 	 	29	 






-i- 









 






	 	 	 	 	 
	3.20. [Intentionally Omitted]
	 	 	29	 
	3.21. [Intentionally Omitted]
	 	 	29	 
	3.22. Agreements and Other Documents
	 	 	29	 
	3.23. Solvency
	 	 	30	 
	3.24. Compliance With Health Care Laws
	 	 	30	 
	3.25. HIPAA Compliance
	 	 	31	 
	3.26. Non-Guarantor Subsidiaries
	 	 	32	 
	 
	 	 	 	 
	4. FINANCIAL STATEMENTS AND INFORMATION
	 	 	32	 
	4.1. Reports and Notices
	 	 	32	 
	4.2. Communication with Accountants
	 	 	32	 
	 
	 	 	 	 
	5. AFFIRMATIVE COVENANTS
	 	 	32	 
	5.1. Maintenance of Existence and Conduct of Business
	 	 	32	 
	5.2. Payment of Charges
	 	 	33	 
	5.3. Books and Records
	 	 	33	 
	5.4. Insurance; Damage to or Destruction of Collateral
	 	 	33	 
	5.5. Compliance with Laws and Corporate Integrity Agreement
	 	 	35	 
	5.6. Supplemental Disclosure
	 	 	35	 
	5.7. Intellectual Property
	 	 	35	 
	5.8. Environmental Matters
	 	 	35	 
	5.9. Landlords’ Agreements, Mortgagee Agreements, Bailee Letters, Lease
Performance and Real Estate Purchases
	 	 	36	 
	5.10. Further Assurances
	 	 	37	 
	5.11. Non-Guarantor Subsidiaries
	 	 	37	 
	5.12. Merger
	 	 	38	 
	5.13. Permitted L/Cs
	 	 	39	 
	5.14.
Post-Closing Matters
	 	 	39	 
	 
	 	 	 	 
	6. NEGATIVE COVENANTS
	 	 	40	 
	6.1. Mergers, Subsidiaries, Etc
	 	 	40	 
	6.2. Investments; Loans and Advances
	 	 	42	 
	6.3. Indebtedness
	 	 	43	 
	6.4. Employee Loans and Affiliate Transactions
	 	 	44	 
	6.5. Capital Structure and Business
	 	 	44	 
	6.6. Guaranteed Indebtedness
	 	 	45	 
	6.7. Liens
	 	 	45	 
	6.8. Sale of Stock and Assets
	 	 	46	 
	6.9. ERISA
	 	 	46	 
	6.10. Financial Covenants
	 	 	46	 
	6.11. Hazardous Materials
	 	 	46	 
	6.12. Sale-Leasebacks
	 	 	47	 
	6.13. Cancellation of Indebtedness
	 	 	47	 
	6.14. Restricted Payments
	 	 	47	 
	6.15. Change of Corporate Name or Location; Change of Fiscal Year
	 	 	47	 
	6.16. No Impairment of Intercompany Transfers
	 	 	48	 
	6.17. No Speculative Transactions
	 	 	48	 
	6.18. Leases; Real Estate Purchases
	 	 	48	 






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	6.19. Business Associate Agreement
	 	 	48	 
	 
	 	 	 	 
	7. TERM
	 	 	48	 
	7.1. Termination
	 	 	48	 
	7.2. Survival of Obligations Upon Termination of Financing Arrangements
	 	 	48	 
	 
	 	 	 	 
	8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
	 	 	49	 
	8.1. Events of Default
	 	 	49	 
	8.2. Remedies
	 	 	51	 
	8.3. Waivers by Credit Parties
	 	 	52	 
	 
	 	 	 	 
	9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
	 	 	52	 
	9.1. Assignment and Participations
	 	 	52	 
	9.2. Appointment of Agent
	 	 	54	 
	9.3. Agent’s Reliance, Etc
	 	 	55	 
	9.4. GE Capital and Affiliates
	 	 	56	 
	9.5. Lender Credit Decision
	 	 	56	 
	9.6. Indemnification
	 	 	56	 
	9.7. Successor Agent
	 	 	57	 
	9.8. Setoff and Sharing of Payments
	 	 	57	 
	9.9. Advances; Payments; Non-Funding Lenders; Information; Actions in Concert
	 	 	58	 
	9.10. Titles
	 	 	60	 
	 
	 	 	 	 
	10. SUCCESSORS AND ASSIGNS
	 	 	61	 
	10.1. Successors and Assigns
	 	 	61	 
	 
	 	 	 	 
	11. MISCELLANEOUS
	 	 	61	 
	11.1. Complete Agreement; Modification of Agreement
	 	 	61	 
	11.2. Amendments and Waivers
	 	 	62	 
	11.3. Fees and Expenses
	 	 	63	 
	11.4. No Waiver
	 	 	65	 
	11.5. Remedies
	 	 	65	 
	11.6. Severability
	 	 	65	 
	11.7. Conflict of Terms
	 	 	65	 
	11.8. Confidentiality
	 	 	65	 
	11.9. GOVERNING LAW
	 	 	66	 
	11.10. Notices
	 	 	67	 
	11.11. Section Titles
	 	 	68	 
	11.12. Counterparts
	 	 	68	 
	11.13. WAIVER OF JURY TRIAL
	 	 	68	 
	11.14. Press Releases and Related Matters
	 	 	68	 
	11.15. Reinstatement
	 	 	69	 
	11.16. Advice of Counsel
	 	 	69	 
	11.17. No Strict Construction
	 	 	69	 
	11.18. USA PATRIOT Act Notice
	 	 	69	 
	11.19. Effect of Amendment and Restatement on Existing Credit Agreement
	 	 	69	 






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	12. CROSS-GUARANTY
	 	 	70	 
	12.1. Cross-Guaranty
	 	 	70	 
	12.2. Waivers by Borrowers
	 	 	71	 
	12.3. Benefit of Guaranty
	 	 	71	 
	12.4. Subordination of Subrogation, Etc
	 	 	71	 
	12.5. Election of Remedies
	 	 	72	 
	12.6. Limitation
	 	 	72	 
	12.7. Contribution with Respect to Guaranty Obligations
	 	 	73	 
	12.8. Liability Cumulative
	 	 	74	 






-iv- 









 






INDEX OF APPENDICES




	 	 	 	 	 
	Annex A (Recitals)

	 	-
	 	Definitions
	Annex B (Section 1.2)

	 	-
	 	Letters of Credit
	Annex C (Section 1.8)

	 	-
	 	Cash Management System
	Annex D (Section 2.1(a))

	 	-
	 	Closing Checklist
	Annex E (Section 4.1(a))

	 	-
	 	Financial Statements and Projections -Reporting
	Annex F (Section 6.10)

	 	-
	 	Financial Covenants
	Annex G (Section 9.9(a))

	 	-
	 	Lenders’ Wire Transfer Information
	Annex H (Section 11.10)

	 	-
	 	Notice Addresses
	Annex I (from Annex A-

Commitments definition)

	 	-	 	Revolving Loan Commitments as of Closing Date
	Annex J (from Annex A 

Term Loan Commitment 
Definition)
	 	-	 	Term Loan Commitments as of Closing Date
	 
	 	 	 	 
	Exhibit 1.1(a)(i)

	 	-
	 	Form of Notice of Revolving Credit Advance
	Exhibit 1.1(b)(i)(A)

	 	-
	 	Form of Notice of Delayed Draw Term Loan
	Exhibit 1.3(b)(iv)

	 	-
	 	Form of Excess Cash Flow Certificate
	Exhibit 1.5(e)

	 	-
	 	Form of Notice of Conversion/Continuation
	Exhibit 1.12(e)-1

	 	-
	 	Form of Revolving Note
	Exhibit 1.12(e)-2

	 	-
	 	Form of Term Note
	Exhibit 9.1(a)

	 	-
	 	Form of Assignment Agreement
	 
	 	 	 	 
	Schedule 1.1

	 	-
	 	Agent’s Representatives
	Disclosure Schedule 2.1(h)

	 	-
	 	Payoff Debt
	Disclosure Schedule 3.1

	 	-
	 	Type of Entity; State of Organization
	Disclosure Schedule 3.2

	 	-
	 	Executive Offices; Collateral Locations; FEIN
	Disclosure Schedule 3.4(a)

	 	-
	 	Financial Statements
	Disclosure Schedule 3.4(b)

	 	-
	 	Projections
	Disclosure Schedule 3.6

	 	-
	 	Real Estate and Leases
	Disclosure Schedule 3.7

	 	-
	 	Labor Matters
	Disclosure Schedule 3.8

	 	-
	 	Ventures, Subsidiaries and Affiliates; Outstanding Stock
	Disclosure Schedule 3.11

	 	-
	 	Tax Matters
	Disclosure Schedule 3.12

	 	-
	 	ERISA Plans
	Disclosure Schedule 3.13

	 	-
	 	Litigation
	Disclosure Schedule 3.15

	 	-
	 	Intellectual Property
	Disclosure Schedule 3.17

	 	-
	 	Hazardous Materials
	Disclosure Schedule 3.18

	 	-
	 	Insurance
	Disclosure Schedule 3.19

	 	-
	 	Deposit and Disbursement Accounts
	Disclosure Schedule 3.22

	 	-
	 	Material Agreements
	Disclosure Schedule 3.24

	 	-
	 	Medicare/Medicaid
	Disclosure Schedule 3.26

	 	-
	 	Non-Guarantor Subsidiaries
	Disclosure Schedule 6.3

	 	-
	 	Indebtedness
	Disclosure Schedule 6.4(a)

	 	-
	 	Transactions with Affiliates
	Disclosure Schedule 6.5(c)

	 	-
	 	Real Property Owned by Non-Guarantor Subsidiaries
	Disclosure Schedule 6.7

	 	-
	 	Existing Liens






-v- 









 






SECOND AMENDED AND RESTATED CREDIT AGREEMENT




          This SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of February 28, 2008 among ODYSSEY
HEALTHCARE OPERATING A, LP, a Delaware limited partnership (“OpCoA”), ODYSSEY HEALTHCARE
OPERATING B, LP, a Delaware limited partnership (“OpCoB”), HOSPICE OF THE PALM COAST, INC.,
a Florida not for profit corporation (“Palm Coast”), OHC INVESTMENT, INC., a Delaware
corporation (“AcquisitionCo”), to be merged with and into VISTACARE, INC., a Delaware
corporation, (“Target”), the other Credit Parties signatory hereto; GENERAL ELECTRIC
CAPITAL CORPORATION, a Delaware corporation (in its individual capacity, “GE Capital”), for
itself, as a Lender, and as Agent for Lenders; BANK OF AMERICA, N.A. and FIFTH THIRD BANK and, as
Co-Syndication Agents; SUNTRUST BANK and COMPASS BANK, as Co-Documentation Agents; and the other
Lenders signatory hereto from time to time.




RECITALS




          WHEREAS, OpCoA, OpCoB and Palm Coast are each a party to that certain Amended and Restated
Credit Agreement dated as of May 24, 2007, by and among Agent, GE Capital as the sole lender party
thereto, OpCoA, OpCoB, Palm Coast and the other Credit Parties signatory from time to time thereto
(the “Existing Credit Agreement”);




          WHEREAS, Parent and AcquisitionCo have entered into an Agreement and Plan of Merger dated as
of January 15, 2008 with the Target pursuant to which AcquisitionCo has offered to purchase all of
the outstanding shares of class A common stock of the Target and effect a merger of AcquisitionCo
with and into the Target on the terms and subject to the conditions set forth therein;




          WHEREAS, the parties desire to amend and restate the Existing Credit Agreement to, among other
things, (a) add AcquisitionCo as an additional Borrower, (b) reduce the amount of the Revolving
Loan Commitment, (c) provide for additional financing to the Borrowers through a senior secured
term loan which will be used to fund a portion of the consideration for the Acquisition, and (d)
provide (i) working capital financing for Borrowers, (ii) funds for Permitted Acquisitions and
other general corporate purposes of Borrowers and (iii) funds for other purposes permitted
hereunder; and for these purposes, Lenders are willing to make or continue certain loans and other
extensions of credit to Borrowers upon the terms and conditions set forth herein;




          WHEREAS, OpCoA, OpCoB and Palm Coast have secured all of their obligations under the Loan
Documents by granting to Agent, for the benefit of Agent and Lenders, a security interest in and
lien upon substantially all of their existing personal property and after-acquired personal
property;




          WHEREAS, each Credit Party as of the date hereof (other than Borrowers, the Target, the Target
Subsidiary Guarantors and the Non-Guarantor Subsidiaries) has guaranteed all of the obligations of
Borrowers to Agent and Lenders under the Loan Documents, and each Credit Party as of the date
hereof (other than AcquisitionCo, the Target, the Target Subsidiary
Guarantors and the Non-Guarantor Subsidiaries) has granted to Agent, for the benefit of Agent



 









 






and Lenders, a security interest in and lien upon substantially all of its existing personal
property and after-acquired personal property, including, without limitation, the Stock of each
Subsidiary owned by such Credit Party (other than the Stock of AcquisitionCo, the Target and the
Target Subsidiary Guarantors) to secure such guaranty; and




          WHEREAS, capitalized terms used in this Agreement shall have the meanings ascribed to them in
Annex A and, for purposes of this Agreement and the other Loan Documents, the rules of
construction set forth in Annex A shall govern. All Annexes, Disclosure Schedules,
Exhibits and other attachments (collectively, “Appendices”) hereto, or expressly identified
to this Agreement, are incorporated herein by reference, and taken together with this Agreement,
shall constitute but a single agreement. These Recitals shall be construed as part of the
Agreement.




          NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter
contained, and for other good and valuable consideration, the parties hereto agree as follows:




1. AMOUNT AND TERMS OF CREDIT




     1.1. Credit Facilities.



          (a) Revolving Credit Facility.




               (i) Subject to the terms and conditions hereof, each Revolving Lender agrees to make available
to Borrowers from time to time until the Revolving Commitment Termination Date its Pro Rata Share
of advances (each, a “Revolving Credit Advance”). The Pro Rata Share of the Revolving Loan
of any Revolving Lender shall not at any time exceed its separate Revolving Loan Commitment and the
Revolving Loans of all Revolving Lenders shall not at any time exceed the Maximum Amount. The
obligations of each Revolving Lender hereunder shall be several and not joint. Until the Revolving
Commitment Termination Date, Borrowers may from time to time borrow, repay and reborrow under this
Section 1.1(a). Each Revolving Credit Advance shall be made on notice by Borrowers to one
of the representatives of Agent identified in Schedule 1.1 at the address specified
therein. Any such notice must be given no later than (1) noon (New York time) on the Business Day
of the proposed Revolving Credit Advance, in the case of an Index Rate Loan, or (2) noon (New York
time) on the date which is 3 Business Days prior to the proposed Revolving Credit Advance, in the
case of a LIBOR Loan. Each such notice (a “Notice of Revolving Credit Advance”) must be
given in writing (by telecopy or overnight courier) substantially in the form of Exhibit
1.1(a)(i), and shall include the information required in such Exhibit and such other
information as may be reasonably required by Agent. If Borrowers desire to have the Revolving
Credit Advances bear interest by reference to a LIBOR Rate, Borrowers must comply with Section
1.5(e).



               (ii) The obligation of each Borrower shall be joint and several to pay the full principal
amount of each Lender’s Revolving Loan Commitment or, if less, such Lender’s Pro Rata Share of the
aggregate unpaid principal amount of all Revolving Credit Advances together with interest thereon
as prescribed in Section 1.5. The entire unpaid balance of the



-2-









 







Revolving Loans shall be due and payable in full in immediately available funds on the
Revolving Commitment Termination Date.



          (b) Term Loan.




               (i) Subject to the terms and conditions hereof and in reliance upon the representations and
warranties set forth herein, each Term Lender agrees to make a term loan (collectively, the
“Initial Term Loan”) on the Closing Date to the Borrowers in the amount of the applicable
Term Lender’s Pro Rata Share of the Initial Term Loan, the aggregate principal amount of such
Initial Term Loan being $126,500,000. Subject to the terms and conditions hereof, including the
requirement that the Effective Time (as defined in the Acquisition Agreement) shall have occurred
as of, or shall occur simultaneously with, the Delayed Draw Funding Date, and in reliance upon the
representations and warranties set forth herein, each Term Lender agrees to make a term loan
(collectively, the “Delayed Draw Term Loan”) to the Borrowers in the amount of the
applicable Term Lender’s Pro Rata Share of the Delayed Draw Term Loan on the Delayed Draw Funding
Date, in accordance with clauses (A) through (C) below of this Section 1.1(b)(i).




          (A) Notice of Borrowing. The Borrowers may request during the term of this
Agreement prior to the Term Commitment Termination Date the Delayed Draw Term Loan by
delivering a notice to one of the representatives of Agent identified in Schedule
1.1 at the address specified therein. Any such notice must be given no later than (1)
noon (New York time) on the date which is 1 Business Day prior to the proposed Delayed Draw
Term Loan, in the case of an Index Rate Loan, or (2) noon (New York time) on the date which
is 3 Business Days prior to the proposed Delayed Draw Term Loan, in the case of a LIBOR
Loan. Such notice (a “Notice of Delayed Draw Term Loan”) must be given in writing
(by telecopy or overnight courier) substantially in the form of Exhibit
1.1(b)(i)(A), and shall include the information required in such Exhibit and such other
information as may be reasonably required by Agent. Agent shall notify the Term Lenders
promptly after receipt of the Notice of Delayed Draw Term Loan on the date such Notice of
Delayed Draw Term Loan is received by telecopy, telephone or other similar form of
transmission. If Borrowers desire to have the Delayed Draw Term Loan bear interest by
reference to a LIBOR Rate, Borrowers must comply with Section 1.5(e).




          (B) Amount. The Delayed Draw Term Loan shall be in an aggregate amount equal
to $3,500,000 and shall be made once, if at all, on the Delayed Draw Funding Date.
Notwithstanding anything to the contrary set forth in this Agreement, in the event that the
Initial Term Loan is made on the Merger Funding Date in the aggregate principal amount of
the Term Loan Commitment, the Term Lenders shall have no obligation to make the Delayed Draw
Term Loan.




          (C) Disbursement. Each Term Lender will make its Pro Rata Share of the Delayed
Draw Term Loan available to the Agent, for the account of the Borrowers, on the Delayed Draw
Funding Date at the office of the Agent designated in writing, upon reasonable advance
notice by 11:00 a.m. (New York time) on the date specified in the



-3-









 







Notice of Delayed Draw Term Loan in funds immediately available to the Agent. Such
borrowing will then be made available to the Borrowers by the Agent by depositing in
the account designated by the Borrowers the aggregate of the amounts made available to the
Agent by the Term Lenders and in like funds as received by the Agent. All such payments by
each Term Lender shall be made without setoff, counterclaim or deduction of any kind.



               (ii) The obligations of each Term Lender hereunder shall be several and not joint. The
obligations of each Borrower shall be joint and several to pay each Term Lender’s Pro Rata Share of
the Term Loan, together with interest thereon as prescribed in Section 1.5.



               (iii) Borrowers shall repay the Term Loan during the six consecutive one year periods
following the Merger Funding Date in the applicable aggregate amount set forth opposite such one
year period below in the chart below. Each such aggregate amount shall be paid in equal
consecutive quarterly installments on the first Business Day of April, July, October and January
during each such one year period, commencing on the first Business Day of the Fiscal Quarter
immediately following the Merger Funding Date. The amount of each quarterly installment shall
equal an amount which, when combined with all installments payable during such one year period,
shall equal the annual aggregate amount applicable to such one year period.



	 	 	 	 	 
	Year	 	Aggregate Annual Amount
	1
	 	$	6,500,000	 
	2
	 	$	6,500,000	 
	3
	 	$	13,000,000	 
	4
	 	$	13,000,000	 
	5
	 	$	16,250,000	 
	6
	 	$	19,500,000	 






          The final installment due on February 28, 2014 shall be in the amount of $55,250,000 or, if
different, the remaining principal balance of the Term Loan.




               (iv) Notwithstanding Section 1.1(b)(iii), the aggregate outstanding principal balance
of the Term Loan and all other non-contingent Obligations shall be due and payable in full in
immediately available funds on the Commitment Termination Date, if not sooner paid in full. No
payment with respect to the Term Loan may be reborrowed.



               (v) Each payment of principal with respect to the Term Loan shall be paid to Agent for the
ratable benefit of each Term Lender making a Term Loan, ratably in proportion to each such Term
Lender’s respective Term Loan Commitment.



               (c) [Intentionally Omitted]




-4-











 





          (d) Reliance on Notices. Agent shall be entitled to rely upon, and shall be fully
protected in relying upon, any Notice of Revolving Credit Advance, Notice of
Conversion/Continuation or similar notice believed by Agent in good faith to be genuine. Agent may
assume that each Person executing and delivering any notice in accordance herewith was duly
authorized, unless the responsible individual acting thereon for Agent has actual knowledge to the
contrary. Agent and each Lender may regard any notice or other communication pursuant to any Loan
Document from any Borrower as a notice or communication from all Borrowers, and may give any notice
or communication required or permitted to be given to any Borrower or Borrowers hereunder to
another Borrower or Borrowers.




     1.2. Letters of Credit.



          Subject to and in accordance with the terms and conditions contained herein and in
Annex B, Borrowers shall have the right to request, and Lenders agree to incur, or purchase
participations in, Letter of Credit Obligations in respect of each Borrower.




     1.3. Prepayments.



          (a) Voluntary Prepayments; Reductions in Revolving Loan Commitments. Borrowers may at
any time on at least 5 days’ prior written notice by Borrowers to Agent (i) voluntarily prepay all
or part of the Revolving Loan or the Term Loan and/or (ii) permanently reduce (but not terminate)
the Revolving Loan Commitment; provided, that (A) any such prepayments or reductions shall
be in a minimum amount of $500,000 and integral multiples of $100,000 in excess of such amount and
(B) after giving effect to such reductions, Borrowers shall comply with Section 1.3(b)(i).
In addition, Borrowers may at any time on at least 10 days’ prior written notice by Borrowers to
Agent terminate the Revolving Loan Commitment; provided, that upon such termination, all
Loans and other Obligations shall be immediately due and payable in full and all Letter of Credit
Obligations shall be cash collateralized or otherwise satisfied in accordance with Annex B
hereto. Any voluntary prepayment and any reduction or termination of the Revolving Loan Commitment
must be accompanied by payment of any LIBOR funding breakage costs in accordance with
Section 1.13(b). Upon any such reduction or termination of the Revolving Loan Commitment,
each Borrower’s right to request Revolving Credit Advances, or request that Letter of Credit
Obligations be incurred on its behalf, shall simultaneously be permanently reduced or terminated,
as the case may be; provided, that a permanent reduction of the Revolving Loan Commitment shall
require a corresponding pro rata reduction in the L/C Sublimit. Each notice of partial prepayment
shall designate the Loans or other Obligations to which such prepayment is to be applied;
provided that any partial prepayments of the Term Loan made by or on behalf of any Borrower
shall be applied pro rata to the remaining scheduled installments of principal of the Term Loan.




          (b) Mandatory Prepayments.




               (i) If at any time the aggregate outstanding balance of the Revolving Loan exceeds the Maximum
Amount (an “Overadvance”), Borrowers shall, within one Business Day of the earlier of
Borrower’s knowledge of the existence of such Overadvance or notice from Agent of the existence of
such Overadvance, repay the aggregate outstanding Revolving Credit Advances to the extent required
to eliminate such excess. If any such excess remains after



-5-









 




repayment in full of the aggregate
outstanding Revolving Credit Advances, Borrowers shall
provide cash collateral for the Letter of Credit Obligations in the manner set forth in
Annex B to the extent required to eliminate such excess.




               (ii) Within three Business Days of receipt by any Credit Party of proceeds of any asset
disposition, including the Sale of Stock of any of its Subsidiaries (excluding proceeds of asset
dispositions permitted by clauses (a) or (c) of Section 6.8) in an aggregate amount
exceeding $1,000,000 in any Fiscal Year, Borrowers shall prepay the Loans in an amount equal to all
such proceeds, net of (A) reasonable and customary commissions and other reasonable and customary
transaction costs, fees and expenses properly attributable to such transaction and payable by
Borrowers in connection therewith (in each case, paid to non-Affiliates), (B) transfer taxes,
(C) amounts payable to holders of senior Liens (to the extent such Liens constitute Permitted
Encumbrances hereunder), if any, and (D) an appropriate reserve for income taxes in accordance with
GAAP in connection therewith. Any such prepayment shall be applied in accordance with
Section 1.3(c). Each Credit Party shall distribute or contribute such proceeds of each
such asset disposition to one or more Borrowers, as applicable, in order for the Borrowers to make
such prepayment.



               (iii) If any Credit Party incurs Indebtedness (other than Indebtedness permitted by
Section 6.3), no later than three Business Days following the date of receipt of the
proceeds thereof, Borrowers shall prepay the Loans in an amount equal to all such proceeds, net of
underwriting discounts and commissions and other reasonable costs paid to non-Affiliates in
connection therewith. Any such prepayment shall be applied in accordance with
Section 1.3(c). Each Credit Party shall distribute or contribute such proceeds of such
Indebtedness to one or more Borrowers, as applicable, in order for the Borrowers to make such
prepayment.



               (iv) Until the Termination Date, Borrowers shall prepay the Term Loan on the date that is ten
(10) days after the earlier of (A) the date on which Holdings’ annual audited Financial Statements
for the immediately preceding Fiscal Year are delivered pursuant to Annex E or (B) the date
on which such annual audited Financial Statements were required to be delivered pursuant to
Annex E, in an amount equal to fifty percent (50%) of Excess Cash Flow for the immediately
preceding Fiscal Year. Any prepayments from Excess Cash Flow paid pursuant to this clause
(iv) shall be applied pro rata to the remaining installments of the Term Loan. Each such
prepayment shall be accompanied by a certificate substantially in the form of Exhibit
1.3(b)(iv) signed by Holdings’ chief financial officer certifying the manner in which Excess
Cash Flow and the resulting prepayment were calculated. Notwithstanding anything to the contrary
herein, after the occurrence and during the continuation of an Event of Default, Borrowers shall
prepay the Obligations in the amounts and at the times required under this Section
1.3(b)(iv) and each such prepayment shall be applied as set forth in Section 1.3(c).



               (v) Within five (5) Business Days of receipt by any Credit Party of the proceeds of any
auction rate securities owned by such Credit Party on the Closing Date, such Credit Party shall, in
an amount equal to such proceeds, prepay the principal balance of any Revolving Credit Advances
outstanding until the same has been paid in full.



-6-









 





               (vi) Within five (5) Business Days after the Merger Funding Date, Borrowers shall prepay the
principal balance of any Revolving Credit Advances outstanding at
such time in an amount equal to the amount of any Revolving Credit Advances made on the
Closing Date.



          (c) Application of Certain Mandatory Prepayments. Any prepayments made by any
Borrower pursuant to Sections 1.3(b)(ii) or (b)(iii) above or Section
5.4(c) shall be applied as follows: first, to Fees and reimbursable expenses of Agent
then due and payable pursuant to any of the Loan Documents; second, to interest then due
and payable on the Term Loan; third, to prepay the scheduled principal installments of the
Term Loan on a pro rata basis, until the Term Loan has been prepaid in full; fourth, to
interest then due and payable on Revolving Credit Advances; fifth, to the principal balance
of Revolving Credit Advances outstanding until the same has been paid in full; and last, to
any Letter of Credit Obligations to provide cash collateral therefor in the manner set forth in
Annex B, until all such Letter of Credit Obligations have been fully cash collateralized in
the manner set forth in Annex B. The Revolving Loan Commitments shall not be permanently
reduced by the amount of any such prepayments.




          (d) No Implied Consent. Nothing in this Section 1.3 shall be construed to
constitute Agent’s or any Lender’s consent to any transaction that is not permitted by other
provisions of this Agreement or the other Loan Documents.




     1.4. Use of Proceeds.



     Borrowers shall utilize the proceeds of the Loans solely to (i) pay a portion of the
consideration for the Acquisition, (ii) repay all amounts owing under all other Indebtedness
(except for Indebtedness permitted under Section 6.3), (iii) to pay fees and expenses
incurred in connection with the foregoing and this Agreement, and (iv) in addition, in the case of
proceeds of the Revolving Loan, for the financing of Borrowers’ ordinary working capital and
Capital Expenditures, to finance Permitted Acquisitions and for general corporate needs.



     1.5. Interest and Applicable Margins.



          (a) Borrowers shall pay interest to Agent, for the ratable benefit of Lenders in accordance
with the various Loans being made by each Lender, in arrears on each applicable Interest Payment
Date, at the following rates: (i) with respect to the Revolving Credit Advances, the Index Rate
plus the Applicable Revolver Index Margin per annum or, at the election of Borrowers, the
applicable LIBOR Rate plus the Applicable Revolver LIBOR Margin per annum, based on the aggregate
Revolving Credit Advances outstanding from time to time; and (ii) with respect to the Term Loan,
the Index Rate plus the Applicable Term Loan Index Margin per annum or, at the election of
Borrowers, the applicable LIBOR Rate plus the Applicable Term Loan LIBOR Margin per annum.




          As of the Closing Date, the Applicable Margins are as follows:





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	Applicable Revolver Index Margin
	 	 	2.00	%
	Applicable Revolver LIBOR Margin
	 	 	3.00	%
	Applicable Term Loan Index Margin
	 	 	2.00	%
	Applicable Term Loan LIBOR Margin
	 	 	3.00	%






     The Applicable Margins shall be adjusted by reference to the following grids:



	 	 	 	 	 	 	 	 	 
	 	 	Applicable	 	Applicable
	If Leverage Ratio is:	 	Index Margin:	 	LIBOR Margin:
	Equal to or greater than 2.50:1.00
	 	 	2.25	%	 	 	3.25	%
	Equal to or greater than 1.75:1.00 but
less than 2.50:1.00
	 	 	2.00	%	 	 	3.00	%
	Equal to or greater than 1.25:1.00 but
less than 1.75:1.00
	 	 	1.75	%	 	 	2.75	%
	Less than 1.25:1.00
	 	 	1.50	%	 	 	2.50	%





Adjustments in the Applicable Margins commencing with the Fiscal Quarter ending September 30, 2008
shall be implemented quarterly on a prospective basis, for each calendar month commencing at least
five (5) days after the date of delivery to Lenders of the quarterly unaudited or annual audited
(as applicable) Financial Statements evidencing the need for an adjustment. Concurrently with the
delivery of those Financial Statements, Borrowers shall deliver to Agent and Lenders a certificate,
signed by its chief financial officer, setting forth in reasonable detail the basis for the
continuance of, or any change in, the Applicable Margins. Failure to timely deliver such Financial
Statements shall, in addition to any other remedy provided for in this Agreement, result in an
increase in the Applicable Margins to the highest level set forth in the foregoing grid, until the
first day of the first calendar month following the delivery of those Financial Statements
demonstrating that such an increase is not required. If an Event of Default has occurred and is
continuing at the time any reduction in the Applicable Margins is to be implemented, that reduction
shall be deferred until the first day of the first calendar month following the date on which such
Event of Default is waived or cured. If, as a result of any restatement of or other adjustment to
the Financial Statements or for any other reason, Agent or Requisite Lenders determine that (a) the
Leverage Ratio as calculated by Borrowers as of any applicable date was inaccurate and (b) a proper
calculation of the Leverage Ratio would have resulted in a higher level of pricing for any period,
then Borrowers shall automatically and retroactively be obligated to pay to Lenders, and shall pay
to Lenders promptly on demand by Agent, an amount equal to the excess of the amount of interest and
fees that should have been paid for such period over the amount of interest and fees actually paid
for such period.




          (b) If any payment on any Loan becomes due and payable on a day other than a Business Day, the
maturity thereof will be extended to the next succeeding Business Day (except as set forth in the
definition of LIBOR Period) and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension.




          (c) All computations of Fees calculated on a per annum basis and interest shall be made by
Agent on the basis of a 360-day year (or, in the case of Index Rate Loans,




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calculated on the basis
of a 365/366-day year), in each case for the actual number of days occurring in the period for
which such interest and Fees are payable. The Index Rate is a floating
rate determined for each day. Each determination by Agent of an interest rate and Fees
hereunder shall be final, binding and conclusive on Borrowers, absent manifest error.




          (d) So long as an Event of Default has occurred and is continuing under
Section 8.1(a), (h) or (i), or so long as any other Event of Default has
occurred and is continuing and at the election of Agent (or upon the written request of Requisite
Lenders) confirmed by written notice from Agent to Borrowers, the interest rates applicable to the
Loans and the Letter of Credit Fees shall be increased by two percentage points (2%) per annum
above the rates of interest or the rate of such Fees otherwise applicable hereunder (“Default
Rate”), and all outstanding Obligations shall bear interest at the Default Rate applicable to
such Obligations. Interest and Letter of Credit Fees at the Default Rate shall (x) with respect to
any Event of Default under Section 8.1(a), (h) or (i), accrue from the
initial date of such Event of Default or (y) with respect to any other Event of Default, accrue
from the date of receipt of written notice from Agent of such Event of Default and shall continue
until that Event of Default is cured or waived and shall be payable upon demand.




          (e) Subject to the terms of Section 1.1(a)(i), Section 1.1(b)(i), this
Section 1.5(e) and the conditions precedent set forth in Section 2.2, Borrowers
shall have the option to (i) request that any Revolving Credit Advance or Delayed Draw Term Loan be
made as a LIBOR Loan, (ii) convert at any time all or any part of outstanding Loans from Index Rate
Loans to LIBOR Loans, (iii) convert any LIBOR Loan to an Index Rate Loan, subject to payment of
LIBOR breakage costs in accordance with Section 1.13(b) if such conversion is made prior to
the expiration of the LIBOR Period applicable thereto, or (iv) continue all or any portion of any
Loan as a LIBOR Loan upon the expiration of the applicable LIBOR Period and the succeeding LIBOR
Period of that continued Loan shall commence on the first day after the last day of the LIBOR
Period of the Loan to be continued. Any Loan or group of Loans having the same proposed LIBOR
Period to be made or continued as, or converted into, a LIBOR Loan must be in a minimum amount of
$500,000 and integral multiples of $100,000 in excess of such amount. Any such election must be
made by noon (New York time) on the 3rd Business Day prior to (1) the date of any proposed Advance
or Delayed Draw Term Loan which is to bear interest at the LIBOR Rate, (2) the end of each LIBOR
Period with respect to any LIBOR Loans to be continued as such, or (3) the date on which Borrowers
wish to convert any Index Rate Loan to a LIBOR Loan for a LIBOR Period designated by Borrowers in
such election. If no election is received with respect to a LIBOR Loan by noon (New York time) on
the 3rd Business Day prior to the end of the LIBOR Period with respect thereto (or if an Event of
Default has occurred and is continuing or if the additional conditions precedent set forth in
Section 2.2 shall not have been satisfied), that LIBOR Loan shall be converted to an Index
Rate Loan at the end of its LIBOR Period. Borrowers must make such election by notice to Agent in
writing, by telecopy or overnight courier. In the case of any conversion or continuation, such
election must be made pursuant to a written notice (a “Notice of Conversion/Continuation”)
in the form of Exhibit 1.5(e).




          (f) Notwithstanding anything to the contrary set forth in this Section 1.5, if a court
of competent jurisdiction determines in a final order that the rate of interest payable




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hereunder
exceeds the highest rate of interest permissible under law (the “Maximum Lawful Rate”),
then so long as the Maximum Lawful Rate would be so exceeded, the rate of interest
payable hereunder shall be equal to the Maximum Lawful Rate; provided,
however, that if at any time thereafter the rate of interest payable hereunder is less than
the Maximum Lawful Rate, Borrowers shall continue to pay interest hereunder at the Maximum Lawful
Rate until such time as the total interest received by Agent, on behalf of Lenders, is equal to the
total interest that would have been received had the interest rate payable hereunder been (but for
the operation of this paragraph) the interest rate payable since the Closing Date as otherwise
provided in this Agreement. Thereafter, interest hereunder shall be paid at the rate(s) of
interest and in the manner provided in Sections 1.5(a) through (e), unless and
until the rate of interest again exceeds the Maximum Lawful Rate, and at that time this paragraph
shall again apply. In no event shall the total interest received by any Lender pursuant to the
terms hereof exceed the amount that such Lender could lawfully have received had the interest due
hereunder been calculated for the full term hereof at the Maximum Lawful Rate. If the Maximum
Lawful Rate is calculated pursuant to this paragraph, such interest shall be calculated at a daily
rate equal to the Maximum Lawful Rate divided by the number of days in the year in which such
calculation is made. If, notwithstanding the provisions of this Section 1.5(f), a court of
competent jurisdiction shall finally determine that a Lender has received interest hereunder in
excess of the Maximum Lawful Rate, Agent shall, to the extent permitted by applicable law, promptly
apply such excess in the order specified in Section 1.11 and thereafter shall refund any
excess to Borrowers or as a court of competent jurisdiction may otherwise order.




     1.6. [Intentionally Omitted].



     1.7. [Intentionally Omitted].



     1.8. Cash Management Systems.



          On or prior to the Closing Date, Borrowers will establish and will maintain until the
Termination Date, the cash management systems described in Annex C (the “Cash
Management Systems”).




     1.9. Fees.



          (a) Borrowers shall pay to GE Capital, individually, the Fees specified in that certain fee
letter dated January 15, 2008 between Holdings and GE Capital (the “GE Capital Fee
Letter”), at the times specified for payment therein. It being agreed and acknowledged by each
of the parties hereto that, notwithstanding anything to the contrary set forth therein, such GE
Capital Fee Letter shall survive, and shall not be superseded by, the execution and delivery of
this Agreement and the other Loan Documents and any reference to the “Facilities” therein shall
mean the Commitments herein in an aggregate amount of $160,000,000.




          (b) As additional compensation for the Revolving Lenders, Borrowers shall pay to Agent, for
the ratable benefit of the Revolving Lenders, in arrears, on or before the fifth Business Day of
each month prior to the Revolving Commitment Termination Date and on the Revolving Commitment
Termination Date, a Fee for Borrowers’ non-use of the Revolving Loan Commitments in an amount equal
to one quarter of one percent (0.25%) per annum (calculated




-10-









 







on the basis of a 360 day year for
actual days elapsed) multiplied by the difference between
(x) the Maximum Amount (as it may be adjusted from time to time) and (y) the average for the
period of the daily closing balances of the aggregate Revolving Loan outstanding during the period
for which such Fee is due.




          (c) Borrowers shall pay to Agent, for the ratable benefit of Revolving Lenders, the Letter of
Credit Fee as provided in Annex B.




          (d) As additional compensation for the Term Lenders, Borrowers shall pay to the Agent, for the
ratable benefit of the Term Lenders, in arrears, on or before the fifth Business Day of each month
prior to the Term Commitment Termination Date and on the Term Commitment Termination Date, a Fee
for Borrowers’ non-use of the Term Loan Commitment in an amount equal to one quarter of one percent
(0.25%) per annum (calculated on the basis of a 360 day year for actual days elapsed) multiplied by
the unused portion of the Term Loan Commitment.




     1.10. Receipt of Payments.



          Borrowers shall make each payment under this Agreement not later than 2:00 p.m. (New York
time) on the day when due in immediately available funds in Dollars to the Collection Account. For
purposes of computing interest and Fees as of any date, all payments shall be deemed received on
the Business Day on which immediately available funds therefor are received in the Collection
Account prior to 2:00 p.m. New York time. Payments received after 2:00 p.m. New York time on any
Business Day or on a day that is not a Business Day shall be deemed to have been received on the
following Business Day.




     1.11. Application and Allocation of Payments.



          (a) So long as no Event of Default has occurred and is continuing, (i) voluntary prepayments
shall be applied as determined by Borrowers, subject to the provisions of Section 1.3(a);
and (ii) mandatory prepayments shall be applied as set forth in Section 1.3(c) or
Section 1.3(b)(iv) as applicable. All payments and prepayments applied to a particular
Loan shall be applied ratably to the portion thereof held by each Lender as determined by its
Pro Rata Share. As to any other payment, and as to all payments made when an Event of Default has
occurred and is continuing or following the Commitment Termination Date, each Borrower hereby
irrevocably waives the right to direct the application of any and all payments received from or on
behalf of such Borrower, and each Borrower hereby irrevocably agrees that Agent shall apply any and
all such payments to amounts then due and payable in the following order: (1) to Fees and Agent’s
expenses reimbursable hereunder; (2) to interest on the Loans, ratably in proportion to the
interest accrued as to each Loan; (3) to principal payments on the Loans and any Obligations under
any Secured Rate Contract and to provide cash collateral for Letter of Credit Obligations in the
manner described in Annex B, ratably to the aggregate, combined principal balance of the
Loans, Obligations under any Secured Rate Contract and outstanding Letter of Credit Obligations;
and (4) to all other Obligations, including expenses of Lenders to the extent reimbursable under
Section 11.3.




-11-









 








          (b) At any time an Event of Default under Section 8.1(a) has occurred and is
continuing for at least ten (10) Business Days, Agent is authorized to, and at its sole election
may, charge to the Revolving Loan balance on behalf of each Borrower and cause to be paid all Fees,
expenses, Charges, costs (including insurance premiums in accordance with Section 5.4(a))
and interest and principal, other than principal of the Revolving Loan, owing by Borrowers under
this Agreement or any of the other Loan Documents if and to the extent Borrowers fail to pay
promptly any such amounts as and when due, it being understood that in the event Agent charges the
Revolving Loan balance for any unpaid amount, the Event of Default then in existence under
Section 8.1(a) solely as a result of Borrowers’ failure to pay such amount shall be cured
by such charge to Borrowers’ Revolving Loan balance. At Agent’s option and to the extent permitted
by law, any charges so made shall constitute part of the Revolving Loan hereunder.




     1.12. Evidence of Debt.



          (a) Records of Lenders. Each Lender shall maintain in accordance with its usual
practice accounts evidencing Indebtedness of Borrowers to such Lender resulting from each Loan of
such Lender from time to time, including the amounts of principal and interest payable and paid to
such Lender from time to time under this Agreement. In addition, each Lender having sold a
participation in any of its Obligations or having identified an SPV as such to the Agent, acting as
agent for the Borrowers solely for this purpose and solely for tax purposes, shall establish and
maintain at its address referred to in Section 11.10 (or at such other address as such Lender shall
notify the Borrowers) a record of ownership, in which such Lender shall register by book entry (A)
the name and address of each such participant and SPV (and each change thereto, whether by
assignment or otherwise) and (B) the rights, interest or obligation of each such participant and
SPV in any Obligation, in any Commitment and in any right to receive any payment hereunder.




          (b) Records of Agent. Agent, acting as agent for the Borrowers solely for tax
purposes and solely with respect to the actions described in this Section 1.12, shall
establish and maintain at its address referred to in Section 11.10 (or at such other
address as the Agent may notify the Borrowers) (A) a record of ownership (the “Register”)
in which Agent agrees to register by book entry the interests (including any rights to receive
payment hereunder) of Agent, each Lender and each L/C Issuer in the Revolving Loans and Term Loans,
each of their obligations under this Agreement to participate in each Loan and Letter of Credit,
and any assignment of any such interest, obligation or right and (B) accounts in the Register in
accordance with its usual practice in which it shall record (1) the names and addresses of the
Lenders and the L/C Issuers (and each change thereto pursuant to Section 9.1
(Assignments and Participations)), (2) the Commitments of each Lender, (3) the amount of
each Loan and each funding of any participation described in clause (A) above, for LIBOR
Loans, the Interest Period applicable thereto, (4) the amount of any principal or interest due and
payable or paid and (5) any other payment received by Agent from the Borrowers and its application
to the Obligations.




          (c) Registered Obligations. Notwithstanding anything to the contrary contained in
this Agreement, the Loans (including any Notes evidencing such Loans and, in the case of Revolving
Loans, the corresponding obligations to participate in Letter of Credit




-12-









 







Obligations) are registered
obligations, the right, title and interest of the Lenders and the L/C
Issuers and their assignees in and to such Loans shall be transferable only upon notation of
such transfer in the Register and no assignment thereof shall be effective until recorded therein.
This Section 1.12 and Section 9.1 shall be construed so that the Loans are at all
times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and
881(c)(2) of the Code and any related regulations (and any successor provisions).




          (d) Prima Facie Evidence. The entries made in the Register and in the accounts
maintained pursuant to clauses (a) and (b) above shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the obligations recorded
therein; provided, however, that no error in such account and no failure of any
Lender or Agent to maintain any such account shall affect the obligations of any Credit Party to
repay the Loans in accordance with their terms. In addition, the Credit Parties, Agent, the
Lenders and the L/C Issuers shall treat each Person whose name is recorded in the Register as a
Lender or L/C Issuer, as applicable, for all purposes of this Agreement. Information contained in
the Register with respect to any Lender or any L/C Issuer shall be available for access by the
Borrowers, Agent, such Lender or such L/C Issuer at any reasonable time and from time to time upon
reasonable prior notice. No Lender or L/C Issuer shall, in such capacity, have access to or be
otherwise permitted to review any information in the Register other than information with respect
to such Lender or L/C Issuer unless otherwise agreed by Agent.




          (e) Notes. Upon any Lender’s request, each Borrower shall promptly execute and
deliver Notes to such Lender evidencing the Loans of such Lender in a Facility and, with respect to
Revolving Loans, substantially in the form of Exhibit 1.12(e)-1 (each a “Revolving
Note” and, collectively, the “Revolving Notes”), and, with respect to Term Loans,
substantially in the form of Exhibit 1.12(e)-2 (each a “Term Note” and,
collectively, the “Term Notes”); provided, however, that only one Revolving
Note and one Term Note, as applicable, shall be issued to each Lender, except (i) to an existing
Lender exchanging existing Notes to reflect changes in the Register relating to such Lender, in
which case the new Notes delivered to such Lender shall be dated the date of the original Notes and
(ii) in the case of loss, destruction or mutilation of existing Notes and similar circumstances.
Each Note, if issued, shall only be issued as means to evidence the right, title or interest of a
Lender or a registered assignee in and to the related Loan, as set forth in the Register, and in no
event shall any Note be considered a bearer instrument or obligation.




     1.13. Indemnity.



          (a) Each Credit Party that is a signatory hereto shall jointly and severally indemnify and
hold harmless each of Agent, Lenders and their respective Affiliates, and each such Person’s
respective officers, directors, employees, attorneys, agents and representatives (each, an
“Indemnified Person”), from and against any and all suits, actions, proceedings, claims,
damages, losses, liabilities and expenses (including reasonable attorneys’ fees and disbursements
and other costs of investigation or defense, including those incurred upon any appeal) that may be
instituted or asserted against or incurred by any such Indemnified Person as the result of credit
having been extended, suspended or terminated under this Agreement and the other Loan Documents and
the administration of such credit, and in connection with or arising out of the




-13-









 







transactions
contemplated hereunder and thereunder and any actions or failures to act in
connection therewith, including any and all Environmental Liabilities and legal costs and
expenses arising out of or incurred in connection with disputes between or among any parties to any
of the Loan Documents (collectively, “Indemnified Liabilities”); provided, that no
such Credit Party shall be liable for any indemnification to an Indemnified Person to the extent
that any such suit, action, proceeding, claim, damage, loss, liability or expense results from that
Indemnified Person’s bad faith, gross negligence or willful misconduct. NO INDEMNIFIED PERSON
SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR
THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH
SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A
RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A
RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.




          (b) To induce Lenders to provide the LIBOR Rate option on the terms provided herein, if
(i) any LIBOR Loans are repaid in whole or in part prior to the last day of any applicable LIBOR
Period (whether that repayment is made pursuant to any provision of this Agreement or any other
Loan Document or occurs as a result of acceleration, by operation of law or otherwise); (ii) any
Borrower shall default in payment when due of the principal amount of or interest on any LIBOR
Loan; (iii) any Borrower shall refuse to accept any borrowing of, or shall request a termination
of, any borrowing of, conversion into or continuation of, LIBOR Loans after Borrowers have given
notice requesting the same in accordance herewith; or (iv) any Borrower shall fail to make any
prepayment of a LIBOR Loan after Borrowers have given a notice thereof in accordance herewith, then
Borrowers shall jointly and severally indemnify and hold harmless each Lender from and against all
losses, costs and expenses resulting from or arising from any of the foregoing. Such
indemnification shall include any loss (including loss of margin) or expense arising from the
reemployment of funds obtained by it or from fees payable to terminate deposits from which such
funds were obtained. For the purpose of calculating amounts payable to a Lender under this
subsection, each Lender shall be deemed to have actually funded its relevant LIBOR Loan through the
purchase of a deposit bearing interest at the LIBOR Rate in an amount equal to the amount of that
LIBOR Loan and having a maturity comparable to the relevant LIBOR Period; provided, that
each Lender may fund each of its LIBOR Loans in any manner it sees fit, and the foregoing
assumption shall be utilized only for the calculation of amounts payable under this subsection.
This covenant shall survive the termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder. As promptly as practicable under the circumstances, each Lender
shall provide Borrowers with its written calculation of all amounts payable pursuant to this
Section 1.13(b), and such calculation shall be binding (absent manifest error) on the
parties hereto unless Borrowers shall object in writing within 10 Business Days of receipt thereof,
specifying the basis for such objection in reasonable detail.





-14-









 








     1.14. Access.



          Except to the extent prohibited by applicable law and by confidentiality agreements, each
Credit Party that is a party hereto shall, during normal business hours, from
time to time upon 3 Business Days’ prior notice as frequently as Agent reasonably determines
to be appropriate, but, unless an Event of Default has occurred and is continuing, no more than
twice in any Fiscal Year: (a) provide Agent and any of its officers, employees and agents access
to its properties, facilities, advisors and employees (including officers) of each Credit Party and
to the Collateral, (b) permit Agent, and any of its officers, employees and agents, to inspect,
audit and make extracts from any Credit Party’s books and records, and (c) permit Agent, and its
officers, employees and agents, to inspect, review, evaluate and make test verifications and counts
of the Accounts, Inventory and other Collateral of any Credit Party; provided, that if no Event of
Default has occurred and is continuing, Borrowers shall not be responsible for the costs of any
such visits, inspections or verifications in any Fiscal Year. If a Default or Event of Default has
occurred and is continuing or if access is necessary to preserve or protect the Collateral as
determined by Agent, each such Credit Party shall provide such access to Agent and to each Lender
at all times and without advance notice. Each Credit Party shall, so long as any Event of Default
has occurred and is continuing, make available to Agent and its counsel, as quickly as is possible
under the circumstances, originals or copies of all books and records that Agent may reasonably
request. Each Credit Party shall deliver any document or instrument necessary for Agent, as it may
from time to time reasonably request, to obtain records from any service bureau or other Person
that maintains records for such Credit Party, and shall maintain duplicate records or supporting
documentation on media, including computer tapes and discs owned by such Credit Party.
Representatives of other Lenders may accompany Agent’s representatives on regularly scheduled
audits at no charge to Borrowers.




     1.15. Taxes.



          (a) Any and all payments by each Borrower hereunder (including any payments made pursuant to
Section 12) or under the Notes shall be made, in accordance with this Section 1.15,
free and clear of and without deduction for any and all present or future Taxes. If any Borrower
shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder
(including any sum payable pursuant to Section 12) or under the Notes, (i) the sum payable
shall be increased as much as shall be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section 1.15) Agent
or Lenders, as applicable, receive an amount equal to the sum they would have received had no such
deductions been made, (ii) such Borrower shall make such deductions, and (iii) such Borrower shall
pay the full amount deducted to the relevant taxing or other authority in accordance with
applicable law. Within 45 days after the date of any payment of Taxes, Borrowers shall furnish to
Agent the original or a certified copy of a receipt evidencing payment thereof, or other evidence
of such payment reasonably satisfactory to Agent. Agent and Lenders shall not be obligated to
return or refund any amounts received pursuant to this Section.




          (b) Each Credit Party that is a signatory hereto shall jointly and severally indemnify and,
within 10 days of written demand therefor, pay Agent and each Lender for the full amount of Taxes
(including any Taxes imposed by any jurisdiction on amounts payable




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under this
Section 1.15) paid by Agent or such Lender, as appropriate, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such
Taxes were correctly or legally asserted.




          (c) Each Lender organized under the laws of a jurisdiction outside the United States (a
“Foreign Lender”) as to which payments to be made under this Agreement or under the Notes
are exempt from United States withholding tax under an applicable statute or tax treaty shall
provide to Borrowers and Agent a properly completed and executed IRS Form W-8ECI or Form W-8BEN or
other applicable form, certificate or document prescribed by the IRS or the United States
certifying as to such Foreign Lender’s entitlement to such exemption (a “Certificate of
Exemption”). Any foreign Person that seeks to become a Lender under this Agreement shall
provide a Certificate of Exemption to Borrowers and Agent prior to becoming a Lender hereunder. No
foreign Person may become a Lender hereunder if such Person fails to deliver a Certificate of
Exemption in advance of becoming a Lender.




     1.16. Capital Adequacy; Increased Costs; Illegality.



          (a) If any Lender shall have determined that any law, treaty, governmental (or
quasi-governmental) rule, regulation, guideline or order regarding capital adequacy, reserve
requirements or similar requirements or compliance by any Lender with any request or directive
regarding capital adequacy, reserve requirements or similar requirements (whether or not having the
force of law), in each case, adopted after the Closing Date, from any central bank or other
Governmental Authority increases or would have the effect of increasing the amount of capital,
reserves or other funds required to be maintained by such Lender and thereby reducing the rate of
return on such Lender’s capital as a consequence of its obligations hereunder, then Borrowers shall
from time to time within 5 Business Days of written demand by such Lender (with a copy of such
demand to Agent) pay to Agent, for the account of such Lender, additional amounts sufficient to
compensate such Lender for such reduction. A certificate as to the amount of that reduction and
showing the basis of the computation thereof in reasonable detail submitted by such Lender to
Borrowers and to Agent shall, absent manifest error, be final, conclusive and binding for all
purposes.




          (b) If, due to either (i) the introduction of or any change in any law or regulation (or any
change in the interpretation thereof) or (ii) the compliance with any guideline or request from any
central bank or other Governmental Authority (whether or not having the force of law), in each case
adopted after the Closing Date, there shall be any increase in the cost to any Lender of agreeing
to make or making, funding or maintaining any Loan, then Borrowers shall from time to time, within
5 Business Days of written demand by such Lender (with a copy of such demand to Agent), pay to
Agent for the account of such Lender additional amounts sufficient to compensate such Lender for
such increased cost. A certificate as to the amount of such increased cost in reasonable detail,
submitted to Borrowers and to Agent by such Lender, shall be conclusive and binding on Borrowers
for all purposes, absent manifest error. Each Lender agrees that, as promptly as practicable after
it becomes aware of any circumstances referred to above which would result in any such increased
cost, the affected Lender shall, to the extent not inconsistent with such Lender’s internal
policies of general application, use reasonable




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commercial efforts to minimize costs and expenses
incurred by it and payable to it by Borrowers pursuant to this Section 1.16(b).




          (c) Notwithstanding anything to the contrary contained herein, if, after the Closing Date, the
introduction of or any change in any law or regulation (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other Governmental
Authority shall assert that it is unlawful, for any Lender to agree to make or to make or to
continue to fund or maintain any LIBOR Loan, then, unless that Lender is able to make or to
continue to fund or to maintain such LIBOR Loan at another branch or office of that Lender without,
in that Lender’s opinion, adversely affecting it or its Loans or the income obtained therefrom, on
written notice thereof and demand therefor by such Lender to Borrowers through Agent, (i) the
obligation of such Lender to agree to make or to make or to continue to fund or maintain LIBOR
Loans shall terminate and (ii) Borrowers shall forthwith prepay in full all outstanding LIBOR
Loans owing by Borrowers to such Lender, together with interest accrued thereon, unless Borrowers,
within 5 Business Days after the delivery of such notice and demand, convert all LIBOR Loans into
Index Rate Loans.




          (d) Within 15 days after receipt by Borrowers of written notice and demand from any Lender (an
“Affected Lender”) for payment of additional amounts or increased costs as provided in
Sections 1.15(a), 1.16(a) or 1.16(b), Borrowers may, at their option,
notify Agent and such Affected Lender of its intention to replace the Affected Lender. So long as
no Default or Event of Default has occurred and is continuing, Borrowers, with the consent of
Agent, may obtain, at Borrowers’ expense, a replacement Lender (“Replacement Lender”) for
the Affected Lender, which Replacement Lender must be reasonably satisfactory to Agent. If
Borrowers obtain a Replacement Lender within 90 days following notice of their intention to do so,
the Affected Lender must sell and assign its Loans and Commitments to such Replacement Lender for
an amount equal to the principal balance of all Loans held by the Affected Lender and all accrued
interest and Fees with respect thereto through the date of such sale; provided, that
Borrowers shall have reimbursed such Affected Lender for the additional amounts or increased costs
that it is entitled to receive under this Agreement through the date of such sale and assignment.
Notwithstanding the foregoing, Borrowers shall not have the right to obtain a Replacement Lender if
the Affected Lender rescinds its demand for increased costs or additional amounts within 15 days
following its receipt of Borrowers’ notice of intention to replace such Affected Lender.
Furthermore, if Borrowers give a notice of intention to replace and do not so replace such Affected
Lender within 90 days thereafter, Borrowers’ rights under this Section 1.16(d) shall
terminate with respect to such replacement attempt and Borrowers shall promptly pay all increased
costs or additional amounts demanded by such Affected Lender pursuant to Sections 1.15(a),
1.16(a) and 1.16(b).




     1.17. Single Loan; Joint and Several Obligations.



          All Loans to each Borrower and all of the other Obligations of each Borrower arising under
this Agreement and the other Loan Documents shall constitute one general joint and several
obligation of Borrowers secured, until the Termination Date, by all of the Collateral.




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2. CONDITIONS PRECEDENT




     2.1. Conditions to the Initial Loans.



          No Lender shall be obligated to make any Loan or incur any Letter of Credit Obligations on the
Closing Date or on the Delayed Draw Funding Date, as applicable, or to take,
fulfill, or perform any other action hereunder, until the following conditions have been
satisfied or provided for in a manner reasonably satisfactory to Agent, or waived in writing by
Agent and Lenders; provided, that only the conditions set forth in clauses (b), (f) and (g)
of this Section 2.1 shall be applicable for the Delayed Draw Funding Date to the extent the
Delayed Draw Funding Date is not the Closing Date:




          (a) Credit Agreement; Loan Documents. This Agreement or counterparts hereof shall
have been duly executed by, and delivered to, Borrowers, each other Credit Party that is a party
hereto, Agent and Lenders; and Agent shall have received such documents, instruments, agreements
and legal opinions as Agent shall reasonably request in connection with the transactions
contemplated by this Agreement and the other Loan Documents, including all those listed in the
Closing Checklist attached hereto as Annex D, each in form and substance reasonably
satisfactory to Agent.




          (b) Approvals; Absence of Litigation. Agent shall have received (i) reasonably
satisfactory evidence that the Credit Parties have obtained all required consents and approvals of
all Persons including all requisite Governmental Authorities, to the execution, delivery and
performance of this Agreement and the other Loan Documents and the consummation of the Related
Transactions (other than the Merger in case the Closing Date occurs on a date that is prior to the
Merger Funding Date) or (ii) an officer’s certificate in form and substance reasonably satisfactory
to Agent affirming that no such consents or approvals are required. There shall not exist any
action, suit, investigation, litigation or proceeding pending or threatened in any court or before
any arbitrator or Governmental Authority that has or would reasonably be expected to have a
Material Adverse Effect or a material adverse effect on any of the Related Transactions.




          (c) Payment of Fees. Borrowers shall have paid the Fees required to be paid on the
Closing Date in the respective amounts specified in Section 1.9 (including the Fees
specified in the GE Capital Fee Letter), and shall have reimbursed Agent for all fees, costs and
expenses of closing incurred (to the extent Borrowers have been notified of such costs and
expenses) as of or prior to the Closing Date.




          (d) Capital Structure; Other Indebtedness. The capital structure of each Credit Party
and the terms and conditions of all Indebtedness of each Credit Party shall be acceptable to Agent
in its reasonable discretion.




          (e) Searches. Agent shall have completed its legal due diligence review of UCC, tax
lien, judgment, litigation, Intellectual Property and other appropriate searches, with results
reasonably satisfactory to Agent.





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          (f) Related Transaction Documents. Agent shall have received fully executed copies of
the Acquisition Agreement and final and complete copies of each of the other Related Transaction
Documents, each of which shall be in full force and effect in form and substance reasonably
satisfactory to Agent.




          (g) Acquisition. The Acquisition Agreement (including all schedules and annexes
thereto) shall not have been altered, amended or otherwise changed or supplemented since its date
of execution and delivery by the parties thereto unless in form and substance reasonably
satisfactory to the Agent and the Requisite Lenders. No condition in the Acquisition Agreement
shall have been waived without the prior written consent of the Agent and the Requisite Lenders.
The Acceptance Date (as defined in the Acquisition Agreement) shall have occurred (or shall occur
substantially concurrently with the initial Loans made on the Closing Date) in accordance with the
Acquisition Agreement. If the Closing Date is also the Merger Funding Date, or in case of the
Delayed Draw Funding Date, the Effective Time (as defined in the Acquisition Agreement) shall have
occurred (or shall occur substantially concurrently with the Loans made on such date) pursuant to
the Acquisition Agreement and in compliance in all material respects with the applicable provisions
of Delaware law.




          (h) Indebtedness, Payoff Debt. After giving effect to the Related Transactions
occurring on the Closing Date, Holdings and its Subsidiaries shall have no outstanding Indebtedness
or preferred stock other than Indebtedness permitted under Section 6.3. All Payoff Debt
will have been repaid, redeemed or otherwise satisfied in full and all Liens securing the Payoff
Debt shall be terminated and released as evidenced by a payoff letter or other documentation
reasonably satisfactory to the Agent duly executed and delivered by the holders of the applicable
Payoff Debt or an agent or trustee thereof or otherwise reasonably satisfactory to the Agent.
Agent and the Lenders shall be satisfied in their reasonable judgment that (i) Holdings’ and its
Subsidiaries’ Indebtedness and Liens do not exceed $2,500,000 (exclusive of Permitted L/Cs) and
(ii) there shall not exist as a result of, and after giving effect to, the consummation of the
Related Transactions that occur on the Closing Date, a default (or any event which with the giving
of notice or lapse of time or both will be a default) under any of Holdings’ or any of its
Subsidiaries’ debt instruments or other material agreements.




          (i) EBITDA. (1) EBITDA of Holdings and its Subsidiaries, including the Target and its
Subsidiaries, for the four Fiscal Quarter period most recently ended prior to the Closing Date
shall be no less than $44,900,000; provided that with respect to the Target and its
Subsidiaries, (a) for the twelve-month period ended September 30, 2007, EBITDA shall be the total
adjusted reported EBITDA per the KPMG Report plus the total potential synergy capture per the KPMG
Report in an amount not to exceed $20,000,000 for such period, and (b) for the twelve-month period
ended December 31, 2007, EBITDA shall include adjustments identified in the KPMG Report plus the
total potential synergy capture per the KPMG Report in an amount not to exceed $20,000,000 for such
period; and (2) EBITDA of Holdings and its Subsidiaries, excluding the Target and its Subsidiaries,
for the four Fiscal Quarter period most recently ended prior to the Closing Date shall be no less
than $32,000,000 including the add back of one-time severance expenses to the extent included in
the calculation of consolidated net income of Holdings and its Subsidiaries for such period in
accordance with GAAP.




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          (j) Leverage Ratio. Holdings and its Subsidiaries on a consolidated basis shall have
on the Closing Date after giving effect to the Term Loan made on the Closing Date and the other
transactions described herein a Leverage Ratio for the four Fiscal Quarters most recently ended of
not more than 2.90 to 1.00 (for purposes of this clause (j), the Leverage Ratio shall not take into
account accrued Medicare Cap Liabilities or cash or Cash Equivalents on hand).




          (k) Pro Forma Financial Statements; Minimum Cash. Agent and the Lenders shall have
received and be reasonably satisfied with a pro forma estimated balance sheet of Holdings and its
Subsidiaries at the Closing Date after giving effect to the Related Transactions to occur on the
Closing Date, and such balance sheet shall demonstrate that Holdings and its Subsidiaries,
including the Target, have a minimum of $5,000,000 of unencumbered (other than the Liens in favor
of Agent for the benefit of the Lenders) cash and Cash Equivalents on hand (net of accrued Medicare
Cap Liabilities) on and as of the Closing Date.




          (l) Revolving Credit Advances. On the Closing Date, there will be no Revolving Credit
Advance in excess of $15,000,000 and no request for any Letter of Credit under the terms hereof.




          (m) Solvency. Agent and Lenders shall be satisfied, based on financial statements
(actual and pro forma), projections and other evidence provided by Borrowers, or reasonably
requested by Agent, including, without limitation, a certificate of the chief financial officer of
Holdings, in form and substance reasonably satisfactory to Agent, that each of the Borrowers and
each of the Guarantors, after incurring the Indebtedness contemplated by this Agreement, will be
solvent, able to satisfy its obligations as they mature and adequately capitalized.




          (n) Representations and Warranties; Default. Both before and after giving effect to
the Loans made on the Closing Date, (i) the representations and warranties set forth in any Loan
Document shall be true and correct on and as of the Closing Date or, to the extent such
representations and warranties expressly relate to an earlier date, on and as of such earlier date,
and (ii) no Default or Event of Default shall be continuing.




     2.2. Further Conditions to Each Loan.



          Except as otherwise expressly provided herein, no Lender shall be obligated to fund any
Advance, make the Delayed Draw Term Loan after the Closing Date, convert or continue any Loan as a
LIBOR Loan or incur any Letter of Credit Obligation, if, as of the date thereof:




          (a) any representation or warranty by any Credit Party contained herein or in any other Loan
Document is untrue or incorrect in any material respect as of such date, except to the extent that
such representation or warranty expressly relates to an earlier date and except for changes therein
expressly permitted or expressly contemplated by this Agreement and Agent or, as applicable,
Requisite Revolving Lenders or Requisite Term Lenders have determined not to make such Advance or
the Delayed Draw Term Loan, convert or continue any Loan as a LIBOR





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Loan or incur such Letter of
Credit Obligation as a result of the fact that such warranty or representation is untrue or
incorrect in any material respect;




          (b) any event or circumstance having a Material Adverse Effect has occurred since the date
hereof as reasonably determined by the Requisite Revolving Lenders or Requisite Term Lenders, as
applicable, and Agent or Requisite Revolving Lenders or Requisite Term Lenders, as applicable, have
determined not to make such Advance or the Delayed Draw Term Loan, convert or continue any Loan as
a LIBOR Loan or incur such Letter of Credit Obligation as a result of the fact that such event or
circumstance has occurred;




          (c) any Default or Event of Default has occurred and is continuing or would result after
giving effect to any Advance (or the incurrence of any Letter of Credit Obligation) or the making
of the Delayed Draw Term Loan, and Agent or, as applicable, Requisite Revolving Lenders or
Requisite Term Lenders shall have determined not to make any Advance or the Delayed Draw Term Loan,
convert or continue any Loan as a LIBOR Loan or incur any Letter of Credit Obligation as a result
of that Default or Event of Default; or




          (d) after giving effect to any Advance (or the incurrence of any Letter of Credit
Obligations), the outstanding principal amount of the aggregate Revolving Loans would exceed the
Maximum Amount.



The request and acceptance by any Borrower of the proceeds of any Advance, the making of the
Delayed Draw Term Loan after the Closing Date or the incurrence of any Letter of Credit Obligations
shall be deemed to constitute, as of the date thereof, (i) a representation and warranty by
Borrowers that the conditions in this Section 2.2 have been satisfied and (ii) a
reaffirmation by Borrowers of the cross-guaranty provisions set forth in Section 12 and of
the granting and continuance of Agent’s Liens, on behalf of itself and Lenders, pursuant to the
Collateral Documents.




3. REPRESENTATIONS AND WARRANTIES




          To induce Lenders to make the Loans and to incur Letter of Credit Obligations, the Credit
Parties executing this Agreement, jointly and severally, make the following representations and
warranties to Agent and each Lender with respect to all Credit Parties, each and all of which shall
survive the execution and delivery of this Agreement.




     3.1. Existence; Compliance with Law.



          Each Credit Party (a) is a corporation, limited liability company or limited partnership duly
organized, validly existing and in good standing under the laws of its respective jurisdiction of
incorporation or organization set forth in Disclosure Schedule 3.1; (b) is duly qualified
to conduct business and is in good standing in each other jurisdiction where its ownership or lease
of property or the conduct of its business requires such qualification, except where the failure to
be so qualified would not result in exposure to losses, damages or liabilities in excess of
$2,000,000; (c) has the requisite power and authority and the legal right to own, pledge, mortgage
or otherwise encumber and operate its properties, to lease the property it operates under lease and
to conduct its business as now, heretofore and proposed to be





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conducted; (d) subject to specific
representations regarding Environmental Laws, has all material licenses, permits, consents or
approvals from or by, and has made all material filings with, and has given all material notices
to, all Governmental Authorities having jurisdiction, to the extent required for such ownership,
operation and conduct; (e) is in compliance with its charter and bylaws or partnership or operating
agreement, as applicable; and (f) subject to specific representations set forth herein regarding
ERISA, Environmental Laws, tax and other laws, is in compliance with all applicable provisions of
law, except where the failure to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.




     3.2. Executive Offices, Collateral Locations, FEIN.



          As of the Closing Date, each Credit Party’s name as it appears in official filings in its
state of incorporation or organization, state of incorporation or organization, organization type,
organization number, if any, issued by its state of incorporation or organization, and the current
location of each Credit Party’s chief executive office and business premises are set forth in
Disclosure Schedule 3.2, and, except as set forth on Disclosure Schedule 3.2 none
of such locations has changed to another state within twelve months preceding the Closing Date and
each Credit Party has only one state of incorporation or organization. In addition, Disclosure
Schedule 3.2 lists the federal employer identification number of each Credit Party as of the
Closing Date.




     3.3. Power, Authorization, Enforceable Obligations.



          The execution, delivery and performance by each Credit Party of the Loan Documents to which it
is a party and the creation of all Liens provided for therein: (a) are within such Credit Party’s
power; (b) have been duly authorized by all necessary corporate, limited liability company or
limited partnership action; (c) do not contravene any provision of such Credit Party’s charter,
bylaws or partnership or operating agreement as applicable; (d) do not violate any law or
regulation, or any order or decree of any court or Governmental Authority; (e) do not conflict with
or result in the breach or termination of, constitute a default under or accelerate or permit the
acceleration of any performance required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which such Person is a party or by which such Person or any of its
property is bound; (f) do not result in the creation or imposition of any Lien upon any of the
property of such Person other than those in favor of Agent, on behalf of itself and Lenders,
pursuant to the Loan Documents; and (g) do not require the consent or approval of any Governmental
Authority or any other Person, except those that have been obtained or are otherwise referred to in
Section 2.1(b), all of which will have been duly obtained, made or complied with prior to
the Closing Date. Each of the Loan Documents shall be duly executed and delivered by each Credit
Party that is a party thereto and each such Loan Document shall constitute a legal, valid and
binding obligation of such Credit Party enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity regardless of whether
considered in a proceeding in law or equity.





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     3.4. Financial Statements and Projections.



          Except for the Projections, all Financial Statements concerning Holdings and its Subsidiaries
that are referred to below have been prepared in accordance with GAAP consistently applied
throughout the periods covered (except as disclosed therein and except, with respect to unaudited
Financial Statements, for the absence of footnotes and normal year-end audit adjustments) and
present fairly in all material respects the financial position of the Persons covered thereby as at
the dates thereof and the results of their operations and cash flows for the periods then ended.




          (a) Financial Statements. The following Financial Statements attached hereto as
Disclosure Schedule 3.4(a) have been delivered on or prior to the date hereof:




               (i) The audited consolidated balance sheet at December 31, 2006 and the related consolidated
statements of income and cash flows of Holdings and its Subsidiaries for the Fiscal Year then
ended, certified by Ernst & Young LLP.



               (ii) The unaudited consolidated balance sheet at December 31, 2007 and the related
consolidated statements of income and cash flows of Holdings and its Subsidiaries for the Fiscal
Quarter then ended.



          (b) Projections. The Projections delivered on the date hereof and attached hereto as
Disclosure Schedule 3.4(b) have been prepared by Borrowers in light of the past operations
of their businesses and based on the assumed consummation of the Acquisition, and reflect
projections for the five year period beginning on January 1, 2008 on an annual basis. The
Projections are based upon the same accounting principles as those used in the preparation of the
financial statements described above and the estimates and assumptions stated therein, all of which
Borrowers believe to be reasonable and fair in light of current conditions and current facts known
to Borrowers and, as of the Closing Date, reflect Borrowers’ good faith and reasonable estimates of
the future financial performance of Borrowers and of the other information projected therein for
the period set forth therein (it being understood that all such Projections will be subject to
uncertainties and contingencies and that no representation is given that any particular projection
will be realized).




     3.5. Material Adverse Effect.



          Between December 31, 2006 and the Closing Date: (a) no Credit Party has incurred any
obligations, contingent or noncontingent liabilities, liabilities for Charges, long-term leases or
unusual forward or long-term commitments that, alone or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, (b) no contract, lease or other agreement or instrument
has been entered into by any Credit Party or has become binding upon any Credit Party’s assets and
no law or regulation applicable to any Credit Party has been adopted that has had or could
reasonably be expected to have a Material Adverse Effect, and (c) no Credit Party is in default and
to the best of Borrowers’ knowledge no third party is in default under any material contract, lease
or other agreement or instrument, that alone or in the aggregate could reasonably be expected to
have a Material Adverse Effect. Between December






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31, 2006 and the Closing Date, no event has
occurred, that alone or together with other events, could reasonably be expected to have a Material
Adverse Effect.




     3.6. Ownership of Property; Liens.



          As of the Closing Date, the real estate (“Real Estate”) listed in Disclosure
Schedule 3.6 constitutes all of the real property owned, leased, or subleased by any Credit
Party. Each Credit Party owns good and indefeasible fee simple title to all of its owned Real
Estate, and valid and marketable leasehold interests in all of its leased Real Estate, all as
described on Disclosure Schedule 3.6, and a summary of terms of all such leases reasonably
satisfactory to Agent has been delivered to Agent. Disclosure Schedule 3.6 further
describes any Real Estate with respect to which any Credit Party is a lessor, sublessor or assignor
as of the Closing Date. Each Credit Party also has good and marketable title to, or valid
leasehold interests in, all of its personal property and assets material to its business, except
for minor defects in title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties or assets for their intended purposes. As of the
Closing Date, none of the properties and assets of any Credit Party are subject to any Liens other
than Permitted Encumbrances, and there are no facts, circumstances or conditions known to any
Borrower or Guarantor that could reasonably be expected to result in any Liens (including Liens
arising under Environmental Laws) other than Permitted Encumbrances. Disclosure
Schedule 3.6 also describes, as of the Closing Date, any purchase options, rights of first
refusal or other similar contractual rights pertaining to any Real Estate owned by a Credit Party
or granted by, or in favor of, any Credit Party pertaining to any other Real Estate. As of the
Closing Date, no portion of any Credit Party’s Real Estate has suffered any material damage by fire
or other casualty loss that has not heretofore been repaired and restored in all material respects
to its original condition (normal wear and tear excepted) or otherwise remedied. As of the Closing
Date, all material permits required to have been issued or appropriate to enable the Real Estate to
be lawfully occupied and used for all of the purposes for which it is currently occupied and used
have been lawfully issued and are in full force and effect.




     3.7. Labor Matters.



          As of the Closing Date (a) no strikes or other material labor disputes against any Credit
Party are pending or, to any Borrower’s or Guarantor’s knowledge, threatened; (b) hours worked by
and payment made to employees of each Credit Party comply in all material respects with the Fair
Labor Standards Act and each other federal, state, local or foreign law applicable to such matters;
(c) all payments due from any Credit Party for employee health and welfare insurance have been paid
or accrued as a liability on the books of such Credit Party; (d) except as set forth in
Disclosure Schedule 3.7, no Credit Party is a party to or bound by any collective
bargaining agreement, management agreement, employment agreement, bonus, restricted stock, stock
option, or stock appreciation plan or agreement or any similar plan, agreement or arrangement (and
true and complete copies of any collective bargaining agreements, management agreements and
employment agreements described on Disclosure Schedule 3.7 have been delivered to Agent);
(e) there is no organizing activity involving any Credit Party pending or, to any Borrower’s or
Guarantor’s knowledge, threatened by any labor union or group of employees; (f) there are no
representation proceedings pending or, to any Borrower’s or




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Guarantor’s knowledge, threatened with
the National Labor Relations Board, and no labor organization or group of employees of any Credit
Party has made a pending demand for recognition; and (g) except as set forth in Disclosure
Schedule 3.7, there are no material complaints or charges against any Credit Party pending or,
to the knowledge of any Borrower or Guarantor, threatened to be filed with any Governmental
Authority or arbitrator based on, arising out of, in connection with, or otherwise relating to the
employment or termination of employment by any Credit Party of any individual.




     3.8. Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness.



          Except as set forth in Disclosure Schedule 3.8, as of the Closing Date, no Credit
Party has any Subsidiaries, is engaged in any joint venture or partnership with any other Person,
or is an Affiliate of any other Person. All of the issued and outstanding Stock of each Credit
Party (excluding Holdings and Target) is owned by each of the Stockholders and in the amounts set
forth in Disclosure Schedule 3.8. Except as set forth in Disclosure Schedule 3.8
or the Acquisition Agreement, there are no outstanding rights to purchase, options, warrants or
similar rights or agreements pursuant to which any Credit Party may be required to issue, sell,
repurchase or redeem any of its Stock or other equity securities or any Stock or other equity
securities of its Subsidiaries. All outstanding Indebtedness and Guaranteed Indebtedness of each
Credit Party as of the Closing Date (except for the Obligations) is described in
Section 6.3 (including Disclosure Schedule 6.3).




     3.9. Government Regulation.



          No Credit Party is an “investment company” or an “affiliated person” of, or “promoter” or
“principal underwriter” for, an “investment company,” as such terms are defined in the Investment
Company Act of 1940. No Credit Party is subject to regulation under the Federal Power Act, or any
other federal or state statute that restricts or limits its ability to incur Indebtedness or to
perform its obligations hereunder. The making of the Loans by Lenders to Borrowers, the incurrence
of the Letter of Credit Obligations on behalf of Borrowers, the application of the proceeds thereof
and repayment thereof will not violate any provision of any such statute or any rule, regulation or
order issued by the Securities and Exchange Commission.




     3.10. Margin Regulations.



          No Credit Party is engaged, nor will it engage, principally or as one of its important
activities, in the business of extending credit for the purpose of “purchasing” or “carrying” any
“margin stock” as such terms are defined in Regulation U of the Federal Reserve Board as now and
from time to time hereafter in effect (such securities being referred to herein as “Margin
Stock”). No Credit Party owns any Margin Stock (other than Target Margin Stock which will no
longer be Margin Stock as of the Merger Funding Date), and none of the proceeds of the Loans or
other extensions of credit under this Agreement will be used, directly or indirectly, for the
purpose of purchasing or carrying any Margin Stock (other than Target Margin Stock which will no
longer be Margin Stock as of the Merger Funding Date), for the purpose of reducing or retiring any
Indebtedness that was originally incurred to purchase or carry any Margin Stock or for any other
purpose that might cause any of the Loans or other extensions of credit under this Agreement to be
considered a “purpose credit” within the meaning of





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Regulations T, U or X of the Federal Reserve
Board. None of the transactions contemplated by this Agreement will violate Regulations T, U or X
of the Federal Reserve Board. No Credit Party will take or permit to be taken any action that
might cause any Loan Document to violate any regulation of the Federal Reserve Board.




     3.11. Taxes.



          All Federal and other material tax returns, reports and statements, including information
returns, required by any Governmental Authority to be filed by any Credit Party have been filed
with the appropriate Governmental Authority and all Charges have been paid prior to the date on
which any fine, penalty, interest or late charge may be added thereto for nonpayment thereof (or
any such fine, penalty, interest, late charge or loss has been paid), excluding Charges or other
amounts less than $1,000,000 in aggregate or being contested in accordance with
Section 5.2(b). Proper and accurate amounts have been withheld by each Credit Party from
its respective employees for all periods in compliance in all material respects with all applicable
federal, state, local and foreign laws and such withholdings have been timely paid to the
respective Governmental Authorities. Disclosure Schedule 3.11 sets forth as of the Closing
Date those taxable years for which any Credit Party’s tax returns are currently being audited by
the IRS or any other applicable Governmental Authority, and any assessments or threatened
assessments in connection with such audit, or otherwise currently outstanding. Except as described
in Disclosure Schedule 3.11, as of the Closing Date, no Credit Party has executed or filed
with the IRS or any other Governmental Authority any agreement or other document extending, or
having the effect of extending, the period for assessment or collection of any Charges. None of
the Credit Parties and their respective predecessors are liable for any Charges in an aggregate
amount greater than $1,000,000: (a) under any agreement (including any tax sharing agreements) or
(b) to each Borrower’s and Guarantor’s knowledge, as a transferee. As of the Closing Date, no
Credit Party has agreed or been requested to make any adjustment under IRC Section 481(a), by
reason of a change in accounting method or otherwise, which could reasonably be expected to have a
Material Adverse Effect.




     3.12. ERISA.



          (a) Disclosure Schedule 3.12 lists as of the Closing Date (i) all ERISA Affiliates and
(ii) all Plans and separately identifies all Pension Plans, including Title IV Plans, Multiemployer
Plans, ESOPs and Welfare Plans, including all Retiree Welfare Plans. Copies of all such listed
Plans, together with a copy of the latest IRS/DOL 5500-series form for each such Plan as of the
Closing Date, have been delivered to Agent. Except with respect to Multiemployer Plans, each
Qualified Plan has been determined by the IRS to qualify under Section 401 of the IRC, the trusts
created thereunder have been determined to be exempt from tax under the provisions of Section 501
of the IRC, and, to the knowledge of any Borrower or Guarantor, nothing has occurred that could
reasonably be expected to result in the loss of such qualification or tax-exempt status. Each Plan
is in compliance in all material respects with the applicable provisions of ERISA and the IRC,
including the timely filing of all reports required under the IRC or ERISA. Neither any Credit
Party nor ERISA Affiliate has failed to make any material contribution or pay any amount due as
required by either Section 412 of the IRC or Section 302 of ERISA or the terms of any such Plan.
Neither any Credit Party nor ERISA





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Affiliate has engaged in a “prohibited transaction,” as defined
in Section 406 of ERISA and Section 4975 of the IRC, in connection with any Plan, that could
reasonably be expected to subject any Credit Party to a material tax on prohibited transactions
imposed by Section 502(i) of ERISA or Section 4975 of the IRC.




          (b) Except as set forth in Disclosure Schedule 3.12: (i) no Title IV Plan has any
Unfunded Pension Liability; (ii) no ERISA Event or event described in Section 4062(e) of ERISA with
respect to any Title IV Plan has occurred or is reasonably expected to occur; (iii) there are no
pending, or to the knowledge of any Borrower or Guarantor, threatened claims (other than claims for
benefits in the normal course), sanctions, actions or lawsuits, asserted or instituted against any
Plan or any Person as fiduciary or sponsor of any Plan; (iv) no Credit Party or ERISA Affiliate has
incurred or reasonably expects to incur any material liability as a result of a complete or partial
withdrawal from a Multiemployer Plan; (v) within the last five years no Title IV Plan of any Credit
Party or ERISA Affiliate has been terminated, whether or not in a “standard termination” as that
term is used in Section 4041(b)(1) of ERISA, nor has any Title IV Plan of any Credit Party or any
ERISA Affiliate (determined at any time within the last five years) with Unfunded Pension
Liabilities been transferred outside of the “controlled group” (within the meaning of
Section 4001(a)(14) of ERISA) of any Credit Party or ERISA Affiliate (determined at such time);
(vi) except in the case of any ESOP, Stock of all Credit Parties and their ERISA Affiliates makes
up, in the aggregate, no more than ten percent (10%) of fair market value of the assets of any Plan
measured on the basis of fair market value as of the latest valuation date of any Plan; and
(vii) no liability under any Title IV Plan has been satisfied with the purchase of a contract from
an insurance company that is not rated AAA by the Standard & Poor’s Corporation or an equivalent
rating by another nationally recognized rating agency.




     3.13. No Litigation.



          No action, claim, lawsuit, demand, investigation or proceeding is now pending or, to the
knowledge of any Borrower or Guarantor, threatened against any Credit Party, before any
Governmental Authority or before any arbitrator or panel of arbitrators (collectively,
“Litigation”), (a) that challenges any Credit Party’s right or power to enter into or
perform any of its obligations under the Loan Documents to which it is a party, or the validity or
enforceability of any Loan Document or any action taken thereunder, or (b) that has a reasonable
risk of being determined adversely to any Credit Party and that, if so determined, could reasonably
be expected to have a Material Adverse Effect. Except as set forth on Disclosure
Schedule 3.13, as of the Closing Date there is no Litigation pending or, to any Borrower’s or
Guarantor’s knowledge, threatened, that seeks damages in excess of $1,000,000 not otherwise covered
by or in excess of any applicable insurance policy of a Credit Party, or injunctive relief against,
or alleges criminal misconduct of, any Credit Party.




     3.14. Brokers.



          No broker or finder brought about the obtaining, making or closing of the Loans, and no Credit
Party or Affiliate thereof has any obligation to any Person in respect of any finder’s or brokerage
fees in connection therewith.





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     3.15. Intellectual Property.



          As of the Closing Date, each Credit Party owns or has rights to use all Intellectual Property
necessary to continue to conduct its business as now conducted by it, and each Patent, Trademark,
Copyright and License is listed, together with application or registration numbers, as applicable,
in Disclosure Schedule 3.15. Each Credit Party conducts its business and affairs without
infringement of or interference with any Intellectual Property of any other Person in any material
respect. Except as set forth in Disclosure Schedule 3.15, none of the Borrowers or
Guarantors is aware of any infringement claim by any other Person with respect to any Intellectual
Property.




     3.16. Full Disclosure.



          No information contained in this Agreement, any of the other Loan Documents, any Projections
or Financial Statements or other written reports from time to time delivered hereunder or any
written statement furnished by or on behalf of any Credit Party to Agent or any Lender pursuant to
the terms of this Agreement contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to make the statements contained herein or
therein not misleading in light of the circumstances under which they were made (it being
understood that all Projections will be subject to uncertainties and contingencies and that no
representation is given that any particular projection will be realized). Borrowers will take no
action, or omit to take any action, that would cause the Liens granted to Agent, on behalf of
itself and Lenders, pursuant to the Collateral Documents to not be at any time fully perfected
first priority Liens in and to the Collateral described therein (to the extent the Collateral
Documents and applicable law allow for such perfection), subject, as to priority, only to Permitted
Encumbrances.




     3.17. Environmental Matters.



          (a) Except as set forth in Disclosure Schedule 3.17, as of the Closing Date: (i) the
Real Estate is free of contamination from any Hazardous Material except for such contamination that
would not adversely impact the value or marketability of such Real Estate and that would not result
in Environmental Liabilities that could reasonably be expected to exceed $1,000,000; (ii) no Credit
Party has caused or suffered to occur any Release of Hazardous Materials on, at, in, under, above,
to, from or about any of its Real Estate; (iii) the Credit Parties are and have been in compliance
with all Environmental Laws, except for such noncompliance that would not result in Environmental
Liabilities which could reasonably be expected to exceed $1,000,000; (iv) the Credit Parties have
obtained, and are in compliance with, all Environmental Permits required by Environmental Laws for
the operations of their respective businesses as presently conducted, except where the failure to
so obtain or comply with such Environmental Permits would not result in Environmental Liabilities
that could reasonably be expected to exceed $1,000,000, and all such Environmental Permits are
valid, uncontested and in good standing; (v) no Credit Party is involved in operations or knows of
any facts, circumstances or conditions, including any Releases of Hazardous Materials, that are
likely to result in any Environmental Liabilities of such Credit Party which could reasonably be
expected to exceed $1,000,000, and no Credit Party has permitted any current or former tenant or
occupant of the






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Real Estate to engage in any such operations; (vi) there is no Litigation arising
under or related to any Environmental Laws, Environmental Permits or Hazardous Material that seeks
damages, penalties, fines, costs or expenses in excess of $1,000,000 or injunctive relief against,
or that alleges criminal misconduct by, any Credit Party; (vii) no written notice has been received
by any Credit Party identifying it as a “potentially responsible party” or requesting information
under CERCLA or analogous state statutes, and to the knowledge of the Borrowers and the Guarantors,
there are no facts, circumstances or conditions that may result in any Credit Party being
identified as a “potentially responsible party” under CERCLA or analogous state statutes; and
(viii) the Credit Parties have provided to Agent copies of all existing environmental reports,
reviews and audits and all written information pertaining to actual or potential Environmental
Liabilities, in each case relating to any Credit Party.




          (b) Each Credit Party hereby acknowledges and agrees that Agent (i) is not now, and has not
ever been, in control of any of the Real Estate or any Credit Party’s affairs, and (ii) does not
have the capacity through the provisions of the Loan Documents or otherwise to influence any Credit
Party’s conduct with respect to the ownership, operation or management of any of its Real Estate or
compliance with Environmental Laws or Environmental Permits.




     3.18. Insurance.



          Disclosure Schedule 3.18 lists all insurance policies of any nature maintained, as of
the Closing Date, for current occurrences by each Credit Party, as well as a summary of the terms
of each such policy.




     3.19. Deposit and Disbursement Accounts.



          Disclosure Schedule 3.19 lists all banks and other financial institutions at which any
Credit Party maintains deposit or other accounts as of the Closing Date, and such Schedule
correctly identifies the name, address and telephone number of each depository, the name in which
the account is held, a description of the purpose of the account, and the complete account number
therefor.




     3.20. [Intentionally Omitted]



     3.21. [Intentionally Omitted]



     3.22. Agreements and Other Documents.



          As of the Closing Date, Borrowers have provided or made available to Agent or its counsel, on
behalf of Lenders, accurate and complete copies (or summaries) of all of the following agreements
or documents to which any Credit Party is subject and each of which is listed in Disclosure
Schedule 3.22: supply agreements and purchase agreements not terminable by such Credit Party
within 90 days following written notice issued by such Credit Party and involving transactions in
excess of $1,000,000 per annum; leases of Equipment having a remaining term of one year or longer
and requiring aggregate rental and other payments in excess of $1,000,000 per annum; licenses and
permits held by the Credit Parties, the absence of which could be reasonably likely to have a
Material Adverse Effect; and instruments and





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documents evidencing any Indebtedness or Guaranteed
Indebtedness of such Credit Party in an amount in excess of $1,000,000 and any Lien granted by such
Credit Party with respect thereto.




     3.23. Solvency.



          Both before and after giving effect to (a) the Loans and Letter of Credit Obligations to be
made or incurred on the Closing Date or such other date as Loans and Letter of Credit Obligations
requested hereunder are made or incurred, (b) the disbursement of the proceeds of such Loans
pursuant to the instructions of Borrowers; and (c) the payment and accrual of all transaction costs
in connection with the foregoing, each Credit Party is and will be Solvent.




     3.24. Compliance With Health Care Laws. 



          Without limiting the generality of Sections 3.1 or 5.5 or any other representation or warranty
made herein, Credit Parties and each of the facilities operated by Credit Parties and, to
Borrowers’ and Guarantors’ knowledge, each of Credit Parties’ licensed employees and contractors
(other than contracted agencies) in the exercise of their respective duties on behalf of any Credit
Party or any such facilities, are in compliance with all applicable statutes, laws, ordinances,
rules and regulations of any federal, state or local governmental authority with respect to
regulatory matters primarily relating to patient healthcare (including without limitation Title
XVIII of the Social Security Act, as amended, governing Medicare and regulations pertaining
thereto; all federal laws and regulations affecting the medical assistance program established by
Titles V, XIX, XX, and XXI of the Social Security Act, and all state laws, regulations and plans
for medical assistance enacted in connection with the federal laws and regulations; Section
1128B(b) of the Social Security Act, as amended, 42 U.S.C. Section 1320a-7(b) (Criminal Penalties
Involving Medicare or State Health Care Programs) and regulations pertaining thereto, commonly
referred to as the “Federal Anti-Kickback Statute;” Section 1877 of the Social Security Act, as
amended, 42 U.S.C Section 1395nn (Ethics in Patient Referrals Act) and regulations pertaining
thereto, commonly referred to as the “Stark Statute;” 31 U.S.C. §3729 et seq. commonly known as the
“False Claims Act” and regulations pertaining thereto; federal laws and regulations regarding the
submission of false claims, false billing, false coding, and similar state laws and regulations;
federal and state laws and regulations applicable to reimbursement and reassignment; federal and
state licensing laws and regulations; laws and regulations administered by the federal Food and
Drug Administration; laws and regulations administered by the federal Drug Enforcement
Administration and analogous state agencies; and state certificate of need laws (collectively,
“Healthcare Laws”)), except where the failure to so comply could not reasonably be expected
to have a Material Adverse Effect. Each Credit Party has maintained in all material respects all
records required to be maintained by the Food and Drug Administration, Drug Enforcement Agency and
State Boards of Pharmacy and the federal and state Medicare and Medicaid programs as required by
the Healthcare Laws and, to the knowledge of Borrowers and Guarantors, there are no presently
existing circumstances which could reasonably be expected to result in violations of the Healthcare
Laws that could reasonably be expected to have a Material Adverse Effect. Each Credit Party and
each of its Affiliates is acting in compliance with the Corporate Integrity Agreement and its
corporate compliance plan in all material respects. Each Credit Party and its Affiliates have such
permits, licenses,




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franchises, certificates and other approvals or authorizations of governmental
or regulatory authorities as are necessary under applicable law to own their respective properties
and to conduct their respective business (including without limitation such permits as are required
under such federal, state and other health care laws, and under such HMO or similar licensure laws
and such insurance laws and regulations, as are applicable thereto), and with respect to those
facilities and other businesses that participate in Medicare and/or Medicaid, to receive
reimbursement under Medicare and Medicaid, except where the failure to have such licenses, permits,
franchises, certificates or other government approvals or authorizations could not reasonably be
expected to have a Material Adverse Effect. Except as listed in Disclosure Schedule 3.24, to
Borrowers’ and Guarantors’ knowledge, no restrictions, deficiencies, required plans of correction
actions or other such remedial measures exist with respect to federal and state Medicare and
Medicaid certifications or licensure that individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect.




     3.25. HIPAA Compliance.



          (a) To the extent that and for so long as (i) any Credit Party is a “covered entity” as
defined in 45 C.F.R. § 160.103, (ii) any Credit Party and/or its business and operations are
subject to or covered by the HIPAA administrative requirements codified at 45 C.F.R. Parts 160 and
162 (the “Transactions Rule”) and/or the HIPAA security and privacy requirements codified
at 45 C.F.R. Parts 160 and 164 (the “Privacy and Security Rules”), and/or (iii) any Credit
Party sponsors any “group health plans” as defined in 45 C.F.R. § 160.103, such Credit Party has,
except to the extent that the failure to do any of the following could not reasonably be expected
to have a Material Adverse Effect: (x) completed surveys, audits, inventories, reviews, analyses
and/or assessments, including risk assessments, (collectively “Assessments”) of all areas
of its business and operations subject to HIPAA and/or that could be adversely affected by the
failure of such Credit Party to be HIPAA Compliant (as defined below) to the extent these
Assessments are appropriate or required for such Credit Party to be HIPAA Compliant;
(y) established a plan for each Credit Party to be and remain HIPAA Compliant (a “HIPAA
Compliance Plan”); and (z) implemented its HIPAA Compliance Plan to ensure that such Credit
Party is HIPAA Compliant. For purposes of this Agreement, “HIPAA Compliant” shall mean
that a Credit Party (1) is in compliance in all material respects with the applicable requirements
of HIPAA, including all requirements of the Transactions Rule and the Privacy and Security Rules
and (2) is not subject to, and could not reasonably be expected to become subject to, any civil or
criminal penalty or any investigation, claim or process that could reasonably be expected to have a
Material Adverse Effect.




          (b) Each Credit Party and/or certain other affiliates of such Credit Party have elected to be
treated as a single covered entity in accordance with the Privacy and Security Rules (45 C.F.R.
§ 164.105(b)) (the “Affiliated Covered Entities”), have documented such affiliation in
accordance with 45 C.F.R. §164.105(b), and are in compliance with the requirements of 45 C.F.R.
§164.105(b). As such, each Credit Party has the legal right, power and authority to execute the
Business Associate Agreement on behalf of the Affiliated Covered Entity, in accordance with the
Privacy and Security Rules, and that the provisions of the Business Associate Agreement shall be
binding upon such Credit Party and all of such Credit Party’s affiliates that are participating as
Affiliated Covered Entities, in accordance with the Privacy and




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Security Rules, as if each and
every such affiliate were a party to such Business Associate Agreement directly. For purposes of
this Section 3.25(b), prior to the consummation of the Merger, the term “Credit Party”
shall not include the Target and its Subsidiaries.




     3.26. Non-Guarantor Subsidiaries.



          Except as set forth on Disclosure Schedule 3.26, none of the Non-Guarantor
Subsidiaries (other than the JV Subsidiaries) has any assets, conducts any business activities or
has any liabilities.




4. FINANCIAL STATEMENTS AND INFORMATION




     4.1. Reports and Notices.



          Each Credit Party executing this Agreement hereby agrees that from and after the Closing Date
and until the Termination Date, it shall deliver to Agent or to Agent and Lenders, as required, the
Financial Statements, notices, Projections and other information at the times, to the Persons and
in the manner set forth in Annex E.




     4.2. Communication with Accountants.



          Each Credit Party executing this Agreement authorizes (a) Agent and (b) so long as an Event of
Default has occurred and is continuing, each Lender, to communicate directly with its independent
certified public accountants, including Ernst & Young LLP, and authorizes and, at Agent’s request,
shall instruct those accountants and advisors to disclose and make available to Agent and each
Lender any and all Financial Statements and other supporting financial documents, schedules and
information relating to any Credit Party (including copies of any issued management letters) with
respect to the business, financial condition and other affairs of any Credit Party; provided,
however, that such accountants’ failure to disclose or make materials available to Agent and
Lenders as a result of such accountants’ confidentiality policies shall not constitute a breach of
this Section 4.2.




5. AFFIRMATIVE COVENANTS




          Each Credit Party executing this Agreement jointly and severally agrees as to all Credit
Parties that, and agrees to cause its Subsidiaries to comply with the following, from and after the
date hereof and until the Termination Date:




     5.1. Maintenance of Existence and Conduct of Business.



          Except as otherwise expressly permitted in this Agreement, each Credit Party shall: (a) do or
cause to be done all things necessary to preserve and keep in full force and effect its corporate
existence and its rights and franchises; (b) continue to conduct its business substantially as now
conducted or as otherwise permitted hereunder; and (c) at all times maintain, preserve and protect
all of its material assets and properties used or useful in the conduct of its business, and keep
the same in good repair, working order and condition in all material respects (taking into
consideration ordinary wear and tear) and from time to time make,





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or cause to be made, all
necessary or appropriate repairs, replacements and improvements thereto consistent with industry
practices.




     5.2. Payment of Charges.



          (a) Subject to Section 5.2(b), each Credit Party shall pay and discharge or cause to
be paid and discharged promptly all Charges due and payable by it, including (i) Charges imposed
upon it, its income and profits, or any of its property (real, personal or mixed) and all Charges
with respect to tax, social security and unemployment withholding with respect to its employees,
(ii) lawful claims for labor, materials, supplies and services or otherwise, and (iii) all storage
or rental charges payable to warehousemen or bailees, in each case, before any thereof shall become
past due.




          (b) Each Credit Party may in good faith contest, by appropriate proceedings, the validity or
amount of any Charges, Taxes or claims; provided, that (i) adequate reserves with respect
to such contest are maintained on the books of such Credit Party, in accordance with GAAP; (ii) no
Lien shall be imposed to secure payment of such Charges, Taxes or claims (other than payments to
warehousemen and/or bailees) that is superior to any of the Liens securing the Obligations and such
contest is maintained and prosecuted continuously and with diligence and operates to suspend
collection or enforcement of such Charges, Taxes or claims; (iii) none of the Collateral becomes
subject to forfeiture or loss as a result of such contest; (iv) such Credit Party shall promptly
pay or discharge such contested Charges, Taxes or claims and all additional charges, interest,
penalties and expenses, if any, and shall deliver to Agent evidence reasonably acceptable to Agent
of such compliance, payment or discharge, if such contest is terminated or discontinued adversely
to such Credit Party or the conditions set forth in this Section 5.2(b) are no longer met;
and (v) Agent has not advised Borrowers in writing that Agent reasonably believes that nonpayment
or nondischarge thereof could have or result in a Material Adverse Effect.




     5.3. Books and Records.



          Each Credit Party shall keep adequate books and records with respect to its business
activities in which proper entries, reflecting all financial transactions, are made in accordance
with GAAP and on a basis consistent with the Financial Statements attached as Disclosure
Schedule 3.4(a).




     5.4. Insurance; Damage to or Destruction of Collateral.



          (a) The Credit Parties shall, at their sole cost and expense, maintain the policies of
insurance described on Disclosure Schedule 3.18 as in effect on the date hereof or
otherwise in form and amounts and with insurers reasonably acceptable to Agent; provided that the
Credit Parties shall have at least thirty (30) days to effect any changes in their policies of
insurance described on Disclosure Schedule 3.18 reasonably requested by Agent. Such
policies of insurance (or the loss payable and additional insured endorsements delivered to Agent)
shall contain provisions pursuant to which the insurer agrees to provide 30 days’ prior written
notice to Agent in the event of any non-renewal, cancellation or amendment of any such insurance
policy. If any Credit Party at any time or times hereafter shall fail to obtain or maintain any of
the





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policies of insurance required above, or to pay all premiums relating thereto, Agent may at any
time or times thereafter obtain and maintain such policies of insurance and pay such premiums and
take any other action with respect thereto that Agent deems advisable. Agent shall have no
obligation to obtain insurance for any Credit Party or pay any premiums therefor. By doing so,
Agent shall not be deemed to have waived any Default or Event of Default arising from any Credit
Party’s failure to maintain such insurance or pay any premiums therefor. All sums so disbursed,
including reasonable attorneys’ fees, court costs and other charges related thereto, shall be
payable on demand by Borrowers to Agent and shall be additional Obligations hereunder secured by
the Collateral.




          (b) Agent reserves the right at any time upon any change in any Credit Party’s risk profile
(including any change in the product mix maintained by any Credit Party or any laws affecting the
potential liability of such Credit Party) to, after prior written notice to Borrowers, require
additional forms and limits of insurance to, in Agent’s reasonable opinion, adequately protect both
Agent’s and Lenders’ interests in all or any portion of the Collateral and to ensure that each
Credit Party is protected by insurance in amounts and with coverage customary for its industry. If
reasonably requested by Agent in writing, each Credit Party shall deliver to Agent from time to
time a report of a reputable insurance broker, reasonably satisfactory to Agent, with respect to
its insurance policies.




          (c) Each Credit Party shall deliver to Agent, in form and substance reasonably satisfactory to
Agent, endorsements to (i) all “All Risk” insurance naming Agent, on behalf of itself and Lenders,
as loss payee, and (ii) all general liability and other liability policies naming Agent, on behalf
of itself and Lenders, as additional insured. Each Credit Party irrevocably makes, constitutes and
appoints Agent (and all officers, employees or agents designated by Agent), so long as any Event of
Default has occurred and is continuing or the anticipated insurance proceeds exceed $1,000,000, as
such Credit Party’s true and lawful agent and attorney-in-fact for the purpose of making, settling
and adjusting claims under such “All Risk” policies of insurance, endorsing the name of such Credit
Party on any check or other item of payment for the proceeds of such “All Risk” policies of
insurance and for making all determinations and decisions with respect to such “All Risk” policies
of insurance. Agent shall have no duty to exercise any rights or powers granted to it pursuant to
the foregoing power-of-attorney, but, while exercising any rights and powers hereunder, agrees to
act in good faith. Borrowers shall promptly notify Agent of any loss, damage, or destruction to
the Collateral in the amount of $1,000,000 or more, whether or not covered by insurance. After
deducting from such proceeds the expenses, if any, incurred by Agent in the collection or handling
thereof, Agent may, at its option, apply such proceeds to the reduction of the Obligations in
accordance with Section 1.3(c), or permit or require the applicable Credit Party to use
such money, or any part thereof, to replace, repair, restore or rebuild the Collateral in a
diligent and expeditious manner with materials and workmanship of substantially the same quality as
existed before the loss, damage or destruction. Notwithstanding the foregoing, if the casualty
giving rise to such insurance proceeds could not reasonably be expected to have a Material Adverse
Effect, such insurance proceeds do not exceed $3,000,000 in the aggregate for such casualty and no
Event of Default has occurred and is continuing, Agent shall make available to the applicable
Credit Party such proceeds and permit such Credit Party to replace, restore, repair or rebuild the
property; provided, that if such Credit Party shall not have completed or entered into
binding agreements





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to complete such replacement, restoration, repair or rebuilding within 180 days
of such casualty, such Credit Party shall pay such proceeds to Agent and Agent may apply such
insurance proceeds to the Obligations in accordance with Section 1.3(c). To the extent not
used to replace, repair, restore or rebuild the Collateral, such insurance proceeds shall be
applied in accordance with Section 1.3(c).




     5.5. Compliance with Laws and Corporate Integrity Agreement.



          Each Credit Party shall comply with all federal, state, local and foreign laws and regulations
applicable to it, including all Healthcare Laws and those laws and regulations relating to ERISA
and labor matters and Environmental Laws and Environmental Permits, except, in each case, to the
extent that the failure to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. Each Credit Party shall, and shall cause each of its
Subsidiaries to, comply with the terms and conditions of the Corporate Integrity Agreement in all
material respects, subject to any transition period agreed to in writing by the Office of the
United States Inspector General of the Department of Health and Human Services with respect to the
Target and the Target’s Subsidiaries.




     5.6. Supplemental Disclosure.



          From time to time as may be reasonably requested by Agent (which request will not be made more
frequently than once each year absent the occurrence and continuance of an Event of Default), the
Credit Parties shall supplement each Disclosure Schedule hereto, or any representation herein or in
any other Loan Document, with respect to any matter hereafter arising that, if existing or
occurring at the date of this Agreement, would have been required to be set forth or described in
such Disclosure Schedule or as an exception to such representation or that is necessary to correct
any information in such Disclosure Schedule or representation which has been rendered inaccurate
thereby (and, in the case of any supplements to any Disclosure Schedule, such Disclosure Schedule
shall be appropriately marked to show the changes made therein); provided, that (a) no such
supplement to any such Disclosure Schedule or representation shall amend, supplement or otherwise
modify any Disclosure Schedule or representation, or be or be deemed a waiver of any Default or
Event of Default resulting from the matters disclosed therein, except as consented to by Agent and
Requisite Lenders in writing, and (b) no supplement shall be required or permitted as to
representations and warranties that relate solely to any preceding specific date.




     5.7. Intellectual Property.



          Each Credit Party will (i) conduct its business and affairs without infringement of or
interference with any Intellectual Property of any other Person in any material respect and (ii)
within ten (10) Business Days of the filing thereof, provide Agent with written notice of the
registration of any Intellectual Property with any Governmental Authority.




     5.8. Environmental Matters.



          Each Credit Party shall and shall cause each Person within its control to: (a) conduct its
operations and keep and maintain its Real Estate in compliance with all




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Environmental Laws and Environmental Permits other than noncompliance that could not reasonably be expected to have a
Material Adverse Effect; (b) implement any and all investigation, remediation, removal and response
actions that are appropriate or necessary to comply with Environmental Laws and Environmental
Permits pertaining to the presence, generation, treatment, storage, use, disposal, transportation
or Release of any Hazardous Material on, at, in, under, above, to, from or about any of its Real
Estate except where noncompliance could be reasonably likely to result in Environmental Liabilities
in excess of $1,000,000; (c) notify Agent promptly after such Credit Party becomes aware of any
violation of Environmental Laws or Environmental Permits or any Release on, at, in, under, above,
to, from or about any Real Estate that is reasonably likely to result in Environmental Liabilities
in excess of $1,000,000; and (d) promptly forward to Agent a copy of any order, notice, request for
information or any communication or report received by such Credit Party in connection with any
such violation or Release or any other matter relating to any Environmental Laws or Environmental
Permits that could reasonably be expected to result in Environmental Liabilities in excess of
$1,000,000, in each case whether or not the Environmental Protection Agency or any Governmental
Authority has taken or threatened any action in connection with any such violation, Release or
other matter. If Agent at any time has a reasonable basis to believe that there may be a violation
of any Environmental Laws or Environmental Permits by any Credit Party or any Environmental
Liability arising thereunder, or a Release of Hazardous Materials on, at, in, under, above, to,
from or about any of its Real Estate, that, in each case, could reasonably be expected to have a
Material Adverse Effect, then each Credit Party shall, upon Agent’s written request (i) cause the
performance of such environmental audits including subsurface sampling of soil and groundwater, and
preparation of such environmental reports, at Borrowers’ expense, as Agent may from time to time
reasonably request, which shall be conducted by reputable environmental consulting firms reasonably
acceptable to Agent and shall be in form and substance reasonably acceptable to Agent, and
(ii) permit Agent or its representatives to have access to all Real Estate for the purpose of
conducting such environmental audits and testing as Agent deems appropriate, including subsurface
sampling of soil and groundwater. Borrowers shall reimburse Agent for the reasonable costs of such
audits and tests and the same will constitute a part of the Obligations secured hereunder.




     5.9. Landlords’ Agreements, Mortgagee Agreements, Bailee Letters, Lease
Performance and Real Estate Purchases.



          (a) Each Credit Party shall use commercially reasonable efforts to obtain a landlord’s
agreement, mortgagee agreement or bailee letter, as applicable, from the lessor of each leased
property, mortgagee of owned property or bailee with respect to any location where data, systems or
information critical to the business of any Credit Party are located (excluding the current
corporate headquarters of Target so long as the material data, systems and information located at
the corporate headquarters of Target are transferred to the Dallas, Texas corporate headquarters of
the Credit Parties within nine (9) months following the Closing Date), which agreement or letter
shall contain a waiver or subordination of all Liens or claims that the landlord, mortgagee or
bailee may assert against the Collateral at that location, and shall otherwise be reasonably
satisfactory in form and substance to Agent. Each Credit Party shall timely and fully pay and
perform its obligations under all leases and other agreements with respect to each leased location
or public warehouse where any Collateral is or may be located.





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          (b) In the event that the aggregate value of the real property owned by the Credit Parties is
greater than $10,000,000, to the extent not previously delivered to the Agent, each Credit Party
shall promptly deliver to Agent a Mortgage on any real property owned or thereafter acquired by
such Credit Party, together with all Mortgage Supporting Documents relating thereto (or, if such
real property is located in a jurisdiction outside the United States, similar documents deemed
appropriate by Agent to obtain the equivalent in such jurisdiction of a first-priority mortgage on
such real property) and all legal opinions relating to the matters described in this
Section 5.9(b), which opinions shall be as reasonably required by, and in form and
substance and from counsel reasonably satisfactory to, Agent. For the avoidance of doubt, the
Credit Parties shall continue to be obligated to deliver such Mortgages, Mortgage Supporting
Documents and legal opinions described in the preceding sentence notwithstanding the fact that the
aggregate value of such owned real property declines below $10,000,000. Notwithstanding the
foregoing, unless Borrowers and the Agent otherwise agree, prior to the Merger Funding Date, in no
event shall AcquisitionCo, the Target or any of the Target’s Subsidiaries be required to grant a
security interest in any of their respective real property or personal property as security for any
Obligation.




     5.10. Further Assurances.



          Each Credit Party executing this Agreement agrees that it shall and shall cause each other
Credit Party to, at such Credit Party’s expense and upon request of Agent or the Requisite Lenders,
duly execute and deliver, or cause to be duly executed and delivered, to Agent such further
instruments and do and cause to be done such further acts as may be necessary or proper in the
reasonable opinion of Agent to carry out more effectively the provisions and purposes of this
Agreement or any other Loan Document. Except with respect to the Non-Guarantor Subsidiaries and,
prior to the Merger Funding Date, the Target and the Target’s Subsidiaries, each Credit Party shall
(i) cause each Person, upon it becoming a Subsidiary of such Credit Party (provided that this shall
not be construed to constitute consent by any of the Lenders to any transaction not expressly
permitted by the terms of this Agreement), promptly to guaranty the Obligations and to grant to
Agent, for the benefit of Agent and Lenders, a first priority perfected security interest in and
Lien (subject to Permitted Encumbrances) on the personal property and fee-owned real property of
such Subsidiary to secure the Obligations, (ii) pledge and deliver, or cause to be pledged and
delivered, to Agent, for the benefit of Agent and Lenders, all of the Stock (and all documents
representing all certificated Stock) of such Subsidiary to secure the Obligations together with
undated powers or endorsements duly executed in blank and (iii) execute such documents and take
such actions (including the delivery of legal opinions, organizational documents, good standing
certificates, resolutions and incumbency certificates) as may be reasonably required by Agent in
connection therewith. The documentation for such guaranty, security and pledge shall be
substantially similar to the Loan Documents executed concurrently herewith with such modifications
as are reasonably requested by Agent.




     5.11. Non-Guarantor Subsidiaries. 



          With respect to any Non-Guarantor Subsidiary, promptly following the date the Agent requires a
Mortgage pursuant to Section 5.9(b) upon any real property owned by such


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Non-Guarantor Subsidiary or promptly (but in no event more than five (5) Business Days) following the date such
Non-Guarantor Subsidiary (other than any JV Subsidiary) engages in any business, operations or
activities, or holds any property not permitted under Section 6.5(c)
hereof, or upon Agent’s or the Requisite Lenders’ request at any time after the occurrence and
during the continuance of an Event of Default, such Non-Guarantor Subsidiary (other than any JV
Subsidiary) shall cease to be a Non-Guarantor Subsidiary for all purposes under this Agreement and
any other Loan Document and shall execute a Guaranty, in form and substance reasonably satisfactory
to Agent and, subject to Section 5.9(b), shall cause a first priority perfected Lien
(subject to Permitted Encumbrances) to be granted in favor of Agent in all personal property and
fee-owned real property and Stock of such Non-Guarantor Subsidiary, and Credit Parties and such
Non-Guarantor Subsidiary shall execute such documents and take such actions (including the delivery
of legal opinions, organizational documents, good standing certificates, resolutions and incumbency
certificates) as may be reasonably required by Agent in connection therewith.




     5.12. Merger.



          Each Credit Party shall use its reasonable best efforts to consummate the Merger in accordance
with the terms of the Acquisition Agreement as soon as reasonably practicable on or after the
Closing Date in compliance with all applicable laws and legal requirements and in any event no
later than 180 days after the Closing Date. If, at any time on or after the Closing Date, the
Target Shares beneficially owned by AcquisitionCo, together with any Target Shares beneficially
owned by Holdings and its other Affiliates, shall collectively represent at least 90% of the
outstanding Target Shares, then the Credit Parties shall take all actions necessary and appropriate
to cause the Merger to become effective as soon as reasonably practicable without a meeting of the
Target’s stockholders in accordance with Section 253 of the Delaware General Corporation Law. On
the Merger Funding Date (or thereafter as agreed by the Agent) the Borrowers shall deliver or cause
to be delivered to the Agent, unless otherwise agreed by the Agent, in form and substance
reasonably satisfactory to the Agent:




          (a) (i) originals of a joinder to the Guaranty and a joinder to the Business Associate
Agreement, in each case, duly executed by each Target Subsidiary Guarantor, (ii) originals of a
joinder to the Security Agreement duly executed by Target and each Target Subsidiary Guarantor, and
(iii) originals of Trademark Security Agreements, Copyright Security Agreements and Patent Security
Agreements and signed by each of the Target and each Target Subsidiary Guarantor which owns
Trademarks, Copyrights and/or Patents, as applicable, together with (A) copies of UCC, Intellectual
Property and other appropriate search reports and of all effective prior filings listed therein,
together with evidence of the termination of such prior filings and other documents with respect to
the priority of the security interest of the Agent in the Collateral, in each case as may be
reasonably requested by the Agent, (B) all documents representing all securities, chattel paper and
instruments being pledged pursuant to such agreements and related undated powers or endorsements
duly executed in blank and other instruments, documents and agreements executed pursuant thereto,
and (C) all Control Letters that, in the reasonable judgment of the Agent, are required for the
Target and each Target Subsidiary Guarantor to comply with the Loan Documents as of the Merger
Funding Date, each duly executed by the parties thereto;




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          (b) duly executed favorable opinions of counsel to the Credit Parties in Delaware and, to the
extent requested by Agent, in each other jurisdiction in which the Target or
any Target Subsidiary Guarantor is organized, reasonably satisfactory to the Agent, each
addressed to the Agent and the Lenders and addressing such matters with respect to the Loan
Documents executed by the Target and the Target Subsidiary Guarantors as the Agent may reasonably
request;




          (c) a copy of the charter and bylaws (or analogous governing agreement) and amendments thereto
(the “Constituent Documents”) of Target and each Target Subsidiary Guarantor, such charter
to be certified as of a recent date by the Governmental Authority in its jurisdiction of formation,
together with, if applicable, certificates attesting to the good standing of such Credit Party in
such jurisdiction;




          (d) a certificate of the secretary, assistant secretary or other officer of Target and each
such Target Subsidiary Guarantor in charge of maintaining books and records of Target and or each
such Target Subsidiary Guarantor certifying as to (i) the names and signatures of each officer of
Target and or each such Target Subsidiary Guarantor authorized to execute and deliver any Loan
Document and who will execute any such Loan Document, (ii) the Constituent Documents of Target and
or each such Target Subsidiary Guarantor attached to such certificate are complete and correct
copies of such Constituent Documents as in effect on the date of such certification (or, for any
such Constituent Document delivered pursuant to clause (c) above, that there have been no changes
from such Constituent Document so delivered) and (iii) the resolutions of Target and or each such
Target Subsidiary Guarantor’s board of directors or other appropriate governing body approving and
authorizing the execution, delivery and performance of each Loan Document to which Target and each
such Target Subsidiary Guarantor is a party; and




          (e) a certificate of a Senior Officer of Holdings to the effect that the Merger has been
consummated together with a copy of the filed certificate of merger.




     5.13. Permitted L/Cs.



          Each Credit Party shall cause each Permitted L/C to be terminated (and not automatically
extended) on or prior to its next expiry date following the Closing Date and, to the extent
required by the beneficiary thereof, replaced with a Letter of Credit issued hereunder.




     5.14. Post-Closing Matters.



          Each Credit Party hereby agrees to deliver, or cause to be delivered, to Agent as soon as
practicable but in any event no later than 30 days after the Closing Date, duly executed Control
Letters covering the securities account identified on Disclosure Schedule 3.19 as number
279587 at Bank of America, N.A. and number 249-00401-1-6 EMT at Banc of America Securities LLC,
which Control Letters shall be in form and substance reasonably satisfactory to Agent.




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6. NEGATIVE COVENANTS




          Each Credit Party executing this Agreement jointly and severally agrees as to all Credit
Parties that, and agrees to cause its Subsidiaries to comply with the following, from and after the
date hereof until the Termination Date:




     6.1. Mergers, Subsidiaries, Etc.



          No Credit Party shall directly or indirectly, by operation of law or otherwise, (a) form any
Subsidiary other than any of the Non-Guarantor Subsidiaries or acquire any Subsidiary, or (b) merge
with, consolidate with, acquire all or substantially all of the assets or Stock of, or otherwise
combine with or acquire, any Person (or business unit thereof). Notwithstanding the foregoing, (i)
any Credit Party may merge into any other Credit Party that is not a Non-Guarantor Subsidiary;
provided, that a Borrower shall be the survivor of any such merger to which a Borrower is a
party, (ii) any Credit Party that is not a Non-Guarantor Subsidiary may acquire all or
substantially all of the Stock of any other Credit Party, (iii) any Credit Party that is not a
Borrower or a Non-Guarantor Subsidiary may acquire all or substantially all of the assets of any
other Credit Party that is also not a Borrower or a Non-Guarantor Subsidiary, (iv) any Borrower may
acquire all or substantially all of the assets or Stock of any other Credit Party, (v) any Credit
Party that is not a Non-Guarantor Subsidiary may acquire all or substantially all of the assets or
Stock of any Person (the “Target Company”) and, (vi) any Credit Party that is not a
Non-Guarantor Subsidiary may form a Subsidiary in order to acquire all or substantially all of the
stock or assets of a Target Company (in each case of (i) through (vi), herein referred to as, a
“Permitted Acquisition”) subject to the satisfaction of each of the following conditions,
each to the reasonable satisfaction of Agent:





          (A) (1) Agent shall receive prompt written notice after the completion of any Permitted
Acquisition with total consideration and other amounts payable of less than $5,000,000 (a
“Threshold Acquisition”), and (2) with respect to any proposed Permitted Acquisition
with total consideration and other amounts payable of $5,000,000 or more, Agent shall
receive at least fifteen (15) Business Days’ prior written notice of such proposed Permitted
Acquisition, which notice shall, in each case, include a reasonably detailed description of
such proposed Permitted Acquisition;




          (B) At the time of such Permitted Acquisition and after giving effect thereto, (1) no
Default or Event of Default has occurred and is continuing; (2) the sum of all consideration
and other amounts payable (including all transaction costs, non-competition payments or
similar payments and all Indebtedness and Guaranteed Indebtedness incurred or assumed in
connection therewith or Indebtedness, liabilities and contingent obligations otherwise
reflected in a consolidated balance sheet of the Credit Parties after giving effect to such
Permitted Acquisition) in connection with all Permitted Acquisitions completed subsequent to
the Closing Date shall not exceed $50,000,000 in the aggregate or $15,000,000 for the period
commencing on the Closing Date and ending on August 28, 2009 and (3) such Permitted
Acquisition shall only involve assets located in the United States and comprising a
business, or those assets of a business, that primarily involve the provision of hospice or
home health services such that the



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consummation of such Permitted Acquisition would not subject Agent or any Lender to
regulatory or third party approvals in connection with the exercise of its rights and
remedies under this Agreement or any other Loan Documents other than the approvals
applicable to a hospice or home health service provider;




          (C) the consideration and other amounts payable in connection with such Permitted
Acquisition shall be payable in cash on the date of consummation of such Permitted
Acquisition, other than (1) unsecured Indebtedness in an amount not to exceed 20% of the
aggregate consideration and other amounts payable in connection with such Permitted
Acquisition and (2) amounts due and payable after the date of the consummation of such
Permitted Acquisition under customary non-competition agreements in an amount not to exceed
$1,000,000 per agreement;




          (D) such Permitted Acquisition shall be consensual and shall have been approved by the
Target Company’s board of directors or other governing body and, if applicable, the Target
Company’s Stockholders;




          (E) no Indebtedness or Guaranteed Indebtedness shall be incurred, assumed or otherwise
be reflected on a consolidated balance sheet of Borrowers and Target Company after giving
effect to such Permitted Acquisition, except (1) Loans made hereunder and (2) Indebtedness
and/or Guaranteed Indebtedness permitted under Section 6.3 or Section 6.6,
as applicable;




          (F) the Target Company shall have Pro Forma Acquisition EBITDA of not less than $0 for
the trailing twelve month period preceding the date of the consummation of the Permitted
Acquisition, as determined based upon the Target Company’s financial statements for its most
recently completed fiscal year and its most recent interim financial period completed within
60 days prior to the date of consummation of such Permitted Acquisition;




          (G) the business and assets acquired in such Permitted Acquisition shall be free and
clear of all Liens (other than Permitted Encumbrances);




          (H) at or prior to the closing of any Permitted Acquisition, subject to Section
5.9(b), Agent will be granted a first priority perfected Lien (subject to Permitted
Encumbrances) in all assets acquired pursuant thereto or, as applicable, in the assets and
Stock of the Target Company, and the applicable Credit Party and the Target Company shall
have executed such documents and taken such actions as may be reasonably required by Agent
in connection therewith;




          (I) concurrently with delivery of the notice referred to in clause (A) above,
Borrowers shall have delivered to Agent, in form and substance satisfactory to Agent in its
reasonable credit judgment:




	 	(1)	 	a pro forma consolidated balance sheet, income
statement and cash flow statement of Holdings and its Subsidiaries (the
“Acquisition 
Pro Forma”), based on recent financial statements, which
shall 




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	 	 	 	fairly present in all material respects the assets,
liabilities, financial condition and results of operations of
Holdings and its Subsidiaries in accordance with GAAP consistently
applied, but taking into account such Permitted Acquisition and the
funding of all Loans in connection therewith, and such Acquisition
Pro Forma shall (x) reflect that, on a pro forma basis, Holdings and
its Subsidiaries would have had a Leverage Ratio not in excess of the
ratio permitted by Annex F hereto for the four quarter period
reflected in the Compliance Certificate most recently delivered to
Agent pursuant to Section 4.1 prior to the consummation of
such Permitted Acquisition (after giving effect to such Permitted
Acquisition and all Loans funded in connection therewith as if made
on the first day of such period), and (y) reflect that, on a pro
forma basis, no Event of Default has occurred and is continuing or
would result after giving effect to such Permitted Acquisition; and






	 	(2)	 	a certificate of the chief financial officer of
Holdings to the effect that: (x) the Credit Parties will be Solvent
upon the consummation of the Permitted Acquisition; (y) the Acquisition
Pro Forma fairly presents the financial condition of Holdings and its
Subsidiaries (on a consolidated basis) as of the date thereof after
giving effect to the Permitted Acquisition; and (z) Holdings and its
Subsidiaries have completed their due diligence investigation with
respect to the Target Company and such Permitted Acquisition, which
investigation was conducted in a commercially reasonable manner,
consistent with past practices;






          (J) on or prior to the date of such Permitted Acquisition (or promptly thereafter for
any Threshold Acquisition), Agent shall have received (1) a copy of the acquisition
agreement and (2) copies of all other related agreements, instruments, opinions,
certificates, lien search results and other documents reasonably requested by Agent.


Notwithstanding anything to the contrary in this Section 6.1, Borrowers shall not be
required to satisfy the conditions set forth in subsections (C), (F) and
(I) above for any Threshold Acquisition.




     6.2. Investments; Loans and Advances.



          Except as otherwise expressly permitted by this Section 6, no Credit Party shall make
or permit to exist any investment in, or make, accrue or permit to exist loans or advances of money
to, any Person, through the direct or indirect lending of money, holding of securities or
otherwise, except that: (a) Borrowers may hold investments comprised of notes payable, or stock or
other securities issued by Account Debtors to any Borrower pursuant to negotiated agreements with
respect to settlement of such Account Debtor’s Accounts in the ordinary course of business,
so long as the aggregate amount of such Accounts so settled by Borrowers does not



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exceed
$1,000,000; (b) each Credit Party may make and maintain investments in any other Credit Party;
provided, that, (i) the aggregate amount of investments made by Credit Parties (other than
any Non-Guarantor Subsidiary) in Odyssey Fort Worth and Odyssey Detroit shall not exceed
$8,000,000, (ii) the aggregate amount of investments made by Credit Parties (other than any
Non-Guarantor Subsidiary) in all Non-Guarantor Subsidiaries listed on Disclosure Schedule
3.8 as of the Closing Date (excluding Odyssey Fort Worth and Odyssey Detroit) shall not exceed
$20,000,000, and (iii) the aggregate amount of investments made by Credit Parties (other than any
Non-Guarantor Subsidiary) in all Non-Guarantor Subsidiaries formed in accordance with the terms of
this Agreement after the Closing Date shall not exceed $6,000,000; (c) Credit Parties may make
investments, subject, in the case of Borrowers and Guarantors and excluding investments that secure
Permitted L/Cs, to Control Letters in favor of Agent for the benefit of the Lenders or otherwise
subject to a perfected security interest in favor of Agent for the benefit of the Lenders, in (the
investments described in clauses (i) – (v) below and the investments permitted in
clause (d) below are collectively referred to as “Cash Equivalents”):
(i) marketable direct obligations issued or unconditionally guaranteed by the United States of
America or any agency thereof maturing within one year from the date of acquisition thereof,
(ii) commercial paper maturing no more than one year from the date of creation thereof and
currently having the highest rating obtainable from either Standard & Poor’s Ratings Group or
Moody’s Investors Service, Inc., (iii) certificates of deposit maturing no more than one year from
the date of creation thereof issued by commercial banks incorporated under the laws of the United
States of America, each having combined capital, surplus and undivided profits of not less than
$300,000,000 and having a senior unsecured rating of “A” or better by a nationally recognized
rating agency (an “A Rated Bank”), (iv) time deposits maturing no more than 30 days from
the date of creation thereof with A Rated Banks and (v) mutual funds that invest solely in one or
more of the investments described in clauses (i) through (iv) above;
provided that investments of Borrower and Guarantors permitted by this clause (c)
in an aggregate amount of less than $2,500,000 outstanding at any time (excluding investments that
secure Permitted L/Cs) shall not be required to be subject to such Control Letters, (d) at any time
during the period ending 270 days following the Closing Date, the Credit Parties may hold
investments comprised of auction rate securities disclosed to Agent in writing to the extent such
investments were made prior to, and exist as of, the Closing Date, and (e) other investments not
exceeding $5,000,000 in the aggregate at any time outstanding. Notwithstanding the foregoing, no
Credit Party shall make or permit to exist any investment in, or make, accrue or permit to exist
loans or advances of money to, AcquisitionCo prior to the Merger Funding Date, through the direct
or indirect lending of money, holding of securities or otherwise, except to the extent necessary to
allow AcquisitionCo to satisfy its obligations under the Acquisition Agreement.




     6.3. Indebtedness.



          No Credit Party shall create, incur, assume or permit to exist any Indebtedness, except
(without duplication) (i) Indebtedness secured by purchase money security interests and Capital
Leases permitted in Section 6.7(c), (ii) the Loans and the other Obligations,
(iii) unfunded pension fund and other employee benefit plan obligations and liabilities to the
extent they are permitted to remain unfunded under applicable law, (iv) existing Indebtedness
described in Disclosure Schedule 6.3 and refinancings thereof or amendments or
modifications thereto that do not have the effect of increasing the principal amount thereof or
changing the



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amortization thereof (other than to extend the same) and that are otherwise on terms
and conditions no less favorable to any Credit Party than the terms of the Indebtedness being
refinanced, amended or modified, (v) (i) unsecured Indebtedness consisting of intercompany loans
and advances made by any Credit Party (other than the Non-Guarantor Subsidiaries) to any other
Credit Party so long as the obligations under such intercompany loans and advances shall be
subordinated to the Obligations in a manner reasonably satisfactory to the Agent; provided,
that, Credit Parties shall not make intercompany loans or advances to the Non-Guarantor
Subsidiaries in excess of the respective amounts permitted under Section 6.2(b) less the amount of
any other investments made under Section 6.2(b) and (ii) Subordinated Debt consisting of
intercompany loans and advances made by any Non-Guarantor Subsidiary to any other Credit Party,
(vi) Indebtedness arising upon the draw of one or more Permitted L/Cs, and (vii) unsecured
Indebtedness incurred (x) in connection with Permitted Acquisitions not exceeding $20,000,000 in
the aggregate at any time outstanding and (y) in connection with any single Permitted Acquisition
not exceeding $5,000,000 in the aggregate.




     6.4. Employee Loans and Affiliate Transactions.



          (a) No Credit Party shall enter into or be a party to any transaction with any Affiliate
(other than another Credit Party that is not a Non-Guarantor Subsidiary) thereof except in the
ordinary course of and pursuant to the reasonable requirements of such Credit Party’s business and
upon fair and reasonable terms that are no less favorable to such Credit Party than would be
obtained in a comparable arm’s length transaction with a Person not an Affiliate of such Credit
Party. In addition, if any such transaction or series of related transactions involves payments in
excess of $1,000,000 in the aggregate, the terms of these transactions must be disclosed in
advance, in writing, to Agent and Lenders. All such transactions existing as of the date hereof
are described in Disclosure Schedule 6.4(a).




          (b) No Credit Party shall enter into any lending or borrowing transaction with any employees
of any Credit Party, except loans to its respective employees in the ordinary course of business
consistent with past practices for travel and entertainment expenses, relocation costs and similar
purposes and stock option financing up to a maximum of $100,000 to any employee and up to a maximum
of $500,000 in the aggregate at any one time outstanding.




     6.5. Capital Structure and Business.



          (a) No Credit Party shall (i) issue or sell any shares of preferred Stock to the extent the
terms of such preferred Stock provide for, or permit the holders of such preferred Stock to
require, a mandatory redemption or any other cash payment prior to February 28, 2014 unless such
redemption or other cash payment is subject to the terms of this Agreement and the other Loan
Documents, (ii) make any change in its capital structure as described in Disclosure
Schedule 3.8, including the issuance or sale of any shares of Stock, warrants or other
securities convertible into Stock or any revision of the terms of its outstanding Stock;
provided, that Holdings may issue or sell shares of its Stock for cash so long as no Change
of Control occurs after giving effect thereto, or (iii) amend its charter or bylaws in a manner
that would adversely
affect Agent or Lenders or such Credit Party’s duty or ability to repay the Obligations. No
Credit



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Party shall engage in any business other than the businesses currently engaged in by it or
businesses reasonably related thereto (including home health).




          (b) Prior to the Merger Funding Date, AcquisitionCo shall not engage in any business,
operations or activity, or hold any property, other than the following, in each case to the extent
permitted by AcquisitionCo’s Constituent Documents, (i) holding Stock of the Target, (ii) issuing,
selling and redeeming its own Stock, (iii) paying taxes and dividends permitted hereunder, (iv)
holding directors’ and shareholders’ meetings, preparing corporate and similar records and other
activities required to maintain its separate corporate or other legal structure, (v) preparing
reports to, and preparing and making notices to and filings with, Governmental Authorities and to
its holders of Stock, (vi) as necessary to consummate the transactions contemplated by the Loan
Documents or any Related Transaction and (vii) such other business, operations and activities
consented to by the Agent.




          (c) Unless such Non-Guarantor Subsidiary has complied with Section 5.11 to the reasonable
satisfaction of Agent, no Non-Guarantor Subsidiary (other than the JV Subsidiaries) shall engage in
any business, operations or activities, or hold any property in an aggregate value of greater than
$10,000 with respect to such Non-Guarantor Subsidiary at any time (excluding intangible assets
relating to certificates of need), other than (i) in the case of Odyssey Fort Worth and Odyssey
Detroit, ownership in fee of such parcels of real property on the Closing Date as described on
Disclosure Schedule 6.5(c) and (ii) taking such actions necessary to maintain its existence
and good standing or to comply with the terms of the Loan Documents.




     6.6. Guaranteed Indebtedness.



          No Credit Party shall create, incur, assume or permit to exist any Guaranteed Indebtedness in
an aggregate amount greater than $1,000,000 except (a) by endorsement of instruments or items of
payment for deposit to the general account of any Credit Party (other than a Non-Guarantor
Subsidiary), (b) for Guaranteed Indebtedness incurred for the benefit of any other Credit Party
(other than a Non-Guarantor Subsidiary) if the primary obligation is expressly permitted by this
Agreement and (c) reimbursement obligations in respect of Permitted L/Cs.




     6.7. Liens.



          No Credit Party shall create, incur, assume or permit to exist any Lien on or with respect to
its Accounts or any of its other properties or assets (other than Target Margin Stock), whether now
owned or hereafter acquired (including any fee ownership interests in Real Estate which have not
been required to be encumbered as Collateral pursuant to Section 5.9(b) hereof), except for
(a) Permitted Encumbrances; (b) Liens in existence on the date hereof and summarized on
Disclosure Schedule 6.7 securing the Indebtedness described on Disclosure
Schedule 6.3 and permitted refinancings, extensions and renewals thereof, including extensions
or renewals of any such Liens; provided, that the principal amount of the Indebtedness so
secured is not increased and the Lien does not attach to any other property; and (c) Liens created
after the date hereof by conditional sale or other title retention agreements (including Capital
Leases) or in
connection with purchase money Indebtedness with respect to assets acquired by



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any Credit
Party in the ordinary course of business, involving the incurrence of an aggregate amount of
purchase money Indebtedness and Capital Lease Obligations of not more than $10,000,000 outstanding
at any one time for all such Liens (provided that such Liens attach only to the assets
subject to such purchase money debt and such Indebtedness is or was incurred within 20 days
following such purchase and does not exceed one hundred percent (100%) of the purchase price of the
subject assets). In addition, no Credit Party shall become a party to any agreement, note,
indenture or instrument, or take any other action, that would prohibit the creation of a Lien on
any of its properties or other assets in favor of Agent, on behalf of itself and Lenders, as
additional collateral for the Obligations, except operating leases, Capital Leases or Licenses
which prohibit Liens upon the assets that are subject thereto.




     6.8. Sale of Stock and Assets.



          Except as otherwise expressly permitted by Section 6.1 or Section 6.2 of this Agreement, no
Credit Party shall sell, transfer, convey, assign or otherwise dispose of any of its properties or
other assets, including the Stock of any of its Subsidiaries (whether in a public or a private
offering or otherwise) or any of its Accounts, other than (a) the sale of Inventory in the ordinary
course of business, (b) the sale, transfer, conveyance or other disposition by a Credit Party of
assets (other than the sale of Inventory in the ordinary course of business) having a net book
value not exceeding $1,000,000 in any single transaction or $5,000,000 in the aggregate in any
Fiscal Year, and (c) the sale of Target Margin Stock for fair market value. With respect to any
disposition of assets or other properties permitted pursuant to clause (b) above, subject
to Section 1.3(b), Agent agrees on reasonable prior written notice to release its Lien on
such assets or other properties in order to permit the applicable Credit Party to effect such
disposition and shall execute and deliver to Borrowers, at Borrowers’ expense, appropriate UCC-3
termination statements and other releases as reasonably requested by Borrowers.




     6.9. ERISA.



          No Credit Party shall, or shall cause or permit any ERISA Affiliate to, cause or permit to
occur an event that could result in the imposition of a Lien under Section 412 of the IRC or
Section 302 or 4068 of ERISA or cause or permit to occur an ERISA Event to the extent such ERISA
Event could reasonably be expected to have a Material Adverse Effect.




     6.10. Financial Covenants.



          Borrowers shall not breach or fail to comply with any of the Financial Covenants.




     6.11. Hazardous Materials.



          No Credit Party shall cause or permit a Release of any Hazardous Material on, at, in, under,
above, to, from or about any of the Real Estate where such Release would (a) violate in any
respect, or form the basis for any Environmental Liabilities under, any Environmental Laws or
Environmental Permits or (b) otherwise adversely impact the value of any of the Real Estate or
any of the Collateral, other than such violations or Environmental Liabilities that could not
reasonably be expected to have a Material Adverse Effect.




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     6.12. Sale-Leasebacks.



          No Credit Party shall engage in any sale-leaseback, synthetic lease or similar transaction
involving any of its assets.




     6.13. Cancellation of Indebtedness.



          No Credit Party shall cancel any claim or debt owing to it in excess of $500,000, except for
reasonable consideration negotiated on an arm’s length basis and in the ordinary course of its
business consistent with past practices.




     6.14. Restricted Payments.



          No Credit Party shall make any Restricted Payment, except (a) payments with respect to
intercompany loans and advances between Credit Parties to the extent permitted by
Section 6.3, (b) dividends and distributions by Subsidiaries of any Credit Party paid to
such Credit Party (other than Non-Guarantor Subsidiaries), (c) employee loans permitted under
Section 6.4(b), (d) management fees paid by any Credit Party to any other Credit Party
(other than Non-Guarantor Subsidiaries), (e) payments to Target or stockholders or optionholders of
Target required by the Acquisition Agreement, including payments arising from AcquisitionCo’s
exercise of its rights under Section 1.3 of the Acquisition Agreement, and (f) payments by Holdings
to purchase or redeem its Stock (or warrants, options or other rights to acquire such Stock) (i) in
an aggregate amount not to exceed $1,000,000 in any Fiscal Year, to the extent such Stock is
purchased or redeemed from officers, directors and employees, or (ii) in an aggregate amount not to
exceed $30,000,000 in any Fiscal Year so long as with respect to clause (f)(ii) only, as of the
date of such purchase or redemption (A) Holdings shall have a Leverage Ratio of not greater than
1.00:1.00, (B) Holdings, the Borrowers and the Guarantors shall have available unencumbered (other
than the Liens in favor of Agent for the benefit of the Lenders) cash and Cash Equivalents on hand
(less accrued Medicare Cap Liabilities) of not less than $5,000,000, (C) there shall be no
outstanding principal balance on any Revolving Loan, in each case before and after giving effect to
such Restricted Payment, and (D) such purchase or redemption is not made prior to the first
anniversary of the Closing Date. Notwithstanding the foregoing, prior to the Merger Funding Date
none of Target, Target’s Subsidiaries and AcquisitionCo shall be permitted to make any Restricted
Payments, other than to officers, directors and employees thereof not to exceed $250,000 in the
aggregate for all such Restricted Payments.




     6.15. Change of Corporate Name or Location; Change of Fiscal Year.



          No Borrower or Guarantor shall (a) change its name as it appears in official filings in the
state of its incorporation or other organization, (b) change its chief executive office, principal
place of business, or the location of its records concerning the Collateral, in each case other
than to the location of another Borrower or Guarantor, or (c) change its organization
identification number, if any, issued by its state of incorporation or other organization, in each
case without at least 30 days prior written notice to Agent and, in the case of a change in
any Borrower’s or Guarantor’s chief executive office (other than the closing of the current
corporate headquarters of the Target), a landlord agreement that is reasonably satisfactory to
Agent shall have been obtained with respect to such location, and provided that any such
new location shall



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be in the continental United States. No Credit Party shall change its Fiscal
Year other than Target and the Target’s Subsidiaries to conform with Holdings’ Fiscal Year. No
Borrower or Guarantor shall (a) change the type of entity that it is, or (b) change its state of
incorporation or organization, in each case without at least 30 days prior written notice to Agent
and after Agent’s written acknowledgment that any reasonable action requested by Agent in
connection therewith, including to continue the perfection of any Liens in favor of Agent, on
behalf of Lenders, in any Collateral, has been completed or taken.




     6.16. No Impairment of Intercompany Transfers.



          No Credit Party shall directly or indirectly enter into or become bound by any agreement,
instrument, indenture or other obligation (other than this Agreement and the other Loan Documents)
that could directly or indirectly restrict, prohibit or require the consent of any Person with
respect to the payment of dividends or distributions or the making or repayment of intercompany
loans by a Subsidiary of any Borrower to any Borrower or between Borrowers.




     6.17. No Speculative Transactions.



          No Credit Party shall engage in any transaction involving commodity options, futures contracts
or similar transactions, except solely to hedge against fluctuations in the prices of commodities
owned or purchased by it and the values of foreign currencies receivable or payable by it and
interest swaps, caps or collars.




     6.18. Leases; Real Estate Purchases.



          Except as permitted under Section 6.1 in connection with a Permitted Acquisition, no
Credit Party shall purchase a fee simple ownership interest in any single parcel of Real Estate
with a purchase price in excess of $5,000,000.




     6.19. Business Associate Agreement.



          No Credit Party shall terminate the Business Associate Agreement.




7. TERM




     7.1. Termination.



          The financing arrangements contemplated hereby shall be in effect until the Commitment
Termination Date, and the Loans and all other Obligations shall be automatically due and payable in
full on such date.




     7.2. Survival of Obligations Upon Termination of Financing Arrangements.



          Except as otherwise expressly provided for in the Loan Documents, no termination or
cancellation (regardless of cause or procedure) of any financing arrangement under this Agreement
shall in any way affect or impair the obligations, duties and liabilities of the Credit Parties or
the rights of Agent and Lenders relating to any unpaid portion of the Loans



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or any other
Obligations, due or not due, liquidated, contingent or unliquidated, or any transaction or event
occurring prior to such termination, or any transaction or event, the performance of which is
required after the Commitment Termination Date. Except as otherwise expressly provided herein or
in any other Loan Document, all undertakings, agreements, covenants, warranties and representations
of or binding upon the Credit Parties, and all rights of Agent and each Lender, all as contained in
the Loan Documents, shall not terminate or expire, but rather shall survive any such termination or
cancellation and shall continue in full force and effect until the Termination Date;
provided, that the provisions of Section 11, the payment obligations under
Sections 1.15 and 1.16, and the indemnities contained in the Loan Documents shall
survive the Termination Date.




8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES




     8.1. Events of Default.



          The occurrence of any one or more of the following events (regardless of the reason therefor)
shall constitute an “Event of Default” hereunder:




          (a) Any Borrower (i) fails to make any payment of principal of the Loans when due and payable,
(ii) fails to make any payment of interest on, or Fees owing in respect of, the Loans or any of the
other Obligations within 3 Business Days following the date such interest, Fees or other
Obligations are due and payable, or (iii) fails to pay or reimburse Agent or Lenders for any
expense reimbursable hereunder or under any other Loan Document within 10 days following Agent’s
demand for such reimbursement or payment of expenses.




          (b) Any Credit Party fails or neglects to perform, keep or observe any of the provisions of
Sections 1.4, 5.4(a) or 6, or any of the provisions set forth in Annex
F, respectively.




          (c) Any Borrower fails or neglects to perform, keep or observe any of the provisions of
Section 1.8, 4, 5.12 or 5.14 or any provisions set forth in
Annexes C or E, respectively, and the same shall remain unremedied for the earlier of 3
Business Days after (i) any Senior Officer’s knowledge of such breach or (ii) receipt by Borrowers
of written notice from Agent of such breach.




          (d) Any Credit Party fails or neglects to perform, keep or observe any other provision of this
Agreement or of any of the other Loan Documents (other than any provision embodied in or covered by
any other clause of this Section 8.1) and the same shall remain unremedied for the earlier
of 15 days after (i) any Senior Officer’s knowledge of such breach or (ii) receipt by Borrowers of
written notice from Agent of such breach; provided, however, that if such breach is not susceptible
to cure within such 15-day period and Borrowers are diligently
pursuing such cure at the expiration of such 15-day period, such 15-day period shall be
extended an additional 15 days.




     (e) A default or breach occurs under any other agreement, document or instrument to which any
Credit Party is a party that is not cured within any applicable grace period therefor, and such
default or breach (i) involves the failure to make any payment when



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due in respect of any
Indebtedness or Guaranteed Indebtedness (other than the Obligations) of any Credit Party in excess
of $1,000,000 in the aggregate (including (x) undrawn committed or available amounts and
(y) amounts owing to all creditors under any combined or syndicated credit arrangements), or
(ii) causes, or permits any holder of such Indebtedness or Guaranteed Indebtedness or a trustee to
cause, Indebtedness or Guaranteed Indebtedness or a portion thereof in excess of $1,000,000 in the
aggregate to become due prior to its stated maturity or prior to its regularly scheduled dates of
payment, or cash collateral in respect thereof to be demanded, in each case, regardless of whether
such default is waived, or such right is exercised, by such holder or trustee.




          (f) Any representation or warranty herein or in any Loan Document or in any written statement,
report, financial statement or certificate made or delivered to Agent or any Lender by any Credit
Party is untrue or incorrect in any material respect as of the date when made or deemed made.




          (g) Assets of any Credit Party with a fair market value of $500,000 or more are attached,
seized, levied upon or subjected to a writ or distress warrant, or come within the possession of
any receiver, trustee, custodian or assignee for the benefit of creditors of any Credit Party and
such condition continues for 30 days or more.




          (h) A case or proceeding is commenced against any Credit Party seeking a decree or order in
respect of such Credit Party (i) under the Bankruptcy Code, or any other applicable federal, state
or foreign bankruptcy or other similar law, (ii) appointing a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) for such Credit Party or for any
substantial part of any such Credit Party’s assets, or (iii) ordering the winding-up or liquidation
of the affairs of such Credit Party, and such case or proceeding shall remain undismissed or
unstayed for 60 days or more or a decree or order granting the relief sought in such case or
proceeding shall be entered by a court of competent jurisdiction.




          (i) Any Credit Party (i) files a petition seeking relief under the Bankruptcy Code, or any
other applicable federal, state or foreign bankruptcy or other similar law, (ii) consents to or
fails to contest in a timely and appropriate manner the institution of proceedings thereunder or
the filing of any such petition or the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official) for such Credit Party
or for any substantial part of any such Credit Party’s assets, (iii) makes an assignment for the
benefit of creditors, (iv) takes any action in furtherance of any of the foregoing, or (v) admits
in writing its inability to, or is generally unable to, pay its debts as such debts become due.




          (j) A final judgment or judgments for the payment of money in excess of $1,000,000 in the
aggregate at any time are outstanding against one or more of the Credit Parties and the same are
not, within 30 days after the entry thereof, discharged or execution thereof stayed or bonded
pending appeal, or such judgments are not discharged prior to the expiration of any such stay.




          (k) Any material provision of any Loan Document for any reason ceases to be valid, binding and
enforceable in accordance with its terms (or any Credit Party shall challenge



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the enforceability of
any Loan Document or shall assert in writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms), or any Lien created under any Loan
Document ceases to be a valid and perfected first priority Lien (except as otherwise permitted
herein or therein) in any of the Collateral purported to be covered thereby due to any action or
omission by any Credit Party.




          (l) Any Change of Control occurs.




          (m) the Merger Funding Date and the Effective Time (as defined in the Acquisition Agreement in
effect on the Closing Date) shall not have occurred on or before August 28, 2008.




     8.2. Remedies.



          (a) If any Default or Event of Default has occurred and is continuing, Agent may (and at the
written request of the Requisite Revolving Lenders with respect to additional Advances and/or the
incurrence of additional Letter of Credit Obligations, and at the written request of the Requisite
Term Lenders with respect to the Delayed Draw Term Loan facility, shall), without notice, suspend
the Revolving Loan facility with respect to additional Advances and/or the incurrence of additional
Letter of Credit Obligations or suspend the Delayed Draw Term Loan facility with respect to the
making of the Delayed Draw Term Loan, whereupon any additional Advances and additional Letter of
Credit Obligations or the Delayed Draw Term Loan, as applicable, shall be made or incurred in
Agent’s sole discretion (or in the sole discretion of the Requisite Revolving Lenders or Requisite
Term Lenders, as applicable, if such suspension occurred at their direction) so long as such
Default or Event of Default is continuing. If any Event of Default has occurred and is continuing,
Agent may (and at the written request of Requisite Lenders shall), without notice except as
otherwise expressly provided herein, increase the rate of interest applicable to the outstanding
principal balance of the Loans and the Letter of Credit Fees to the Default Rate.




          (b) If any Event of Default has occurred and is continuing, Agent may (and at the written
request of the Requisite Lenders shall), without notice: (i) terminate the Revolving Loan facility
with respect to further Advances or the incurrence of further Letter of Credit Obligations; (ii)
terminate the Delayed Draw Term Loan facility with respect to the making of the Delayed Draw Term
Loan (iii) declare all or any portion of the Obligations, including all or any portion of any Loan
to be forthwith due and payable, and require that the Letter of Credit Obligations be cash
collateralized as provided in Annex B, all without presentment, demand,
protest or further notice of any kind, all of which are expressly waived by Borrowers and each
other Credit Party; (iv) conduct, at Borrowers’ expense, such appraisals of Borrowers’ assets as
may be desired by Agent or Lenders or (v) exercise any rights and remedies provided to Agent under
the Loan Documents or at law or equity, including all remedies provided under the Code;
provided, that upon the occurrence of an Event of Default specified in
Sections 8.1(h) or (i), each of the Revolving Loan facility and the Delayed Draw
Term Loan facility shall be immediately terminated and all of the Obligations, including the
aggregate Revolving Loan, shall become immediately due and payable without declaration, notice or
demand by any Person.




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     8.3. Waivers by Credit Parties.



          Except as otherwise provided for in this Agreement or by applicable law, each Credit Party
waives (including for purposes of Section 12): (a) presentment, demand and protest and
notice of presentment, dishonor, notice of intent to accelerate, notice of acceleration, protest,
default, nonpayment, maturity, release, compromise, settlement, extension or renewal of any or all
commercial paper, accounts, contract rights, documents, instruments, chattel paper and guaranties
at any time held by Agent on which any Credit Party may in any way be liable, and hereby ratifies
and confirms whatever Agent may do in this regard, (b) all rights to notice and a hearing prior to
Agent’s taking possession or control of, or to Agent’s replevy, attachment or levy upon, the
Collateral or any bond or security that might be required by any court prior to allowing Agent to
exercise any of its remedies, and (c) the benefit of all valuation, appraisal, marshaling and
exemption laws.




9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT




     9.1. Assignment and Participations.



          (a) Right to Assign. Each Lender may sell, transfer, negotiate or assign all or a
portion of its rights and obligations hereunder (including all or a portion of its Commitments and
its rights and obligations with respect to Loans and Letter of Credit Obligations) to (i) any
existing Lender, (ii) any Affiliate or Approved Fund of any existing Lender or (iii) any Eligible
Assignee acceptable (which acceptance shall not be unreasonably withheld or delayed) to Agent and,
as long as no Event of Default is continuing, the Borrowers; provided, however,
that (x) such sales, transfers or assignments do not have to be ratable between the Facilities but
must be ratable among the obligations owing to and owed by such Lender with respect to a Facility
and (y) for each Facility, the aggregate outstanding principal amount (determined as of the
effective date of the applicable Assignment Agreement) of the Loans, Commitments and Letter of
Credit Obligations subject to any such sale, transfer or assignment shall be in a minimum amount of
$1,000,000, unless such sale, transfer or assignment is made to an existing Lender or an Affiliate
or Approved Fund of any existing Lender, is of the assignor’s (together with its Affiliates and
Approved Funds) entire interest in such Facility or is made with the prior consent of the Borrowers
and Agent.




          (b) Procedure. The parties to each sale, transfer or assignment made in reliance on
clause (a) above (other than those described in clause (d) or (e) below)
shall execute and deliver to Agent an Assignment Agreement via an electronic settlement system
designated by
Agent (or if previously agreed with Agent, via a manual execution and delivery of the
assignment) evidencing such sale, transfer or assignment together with any existing Note subject to
such sale, transfer or assignment (or any affidavit of loss therefor acceptable to Agent), any tax
forms required to be delivered pursuant to Section 2.15(c) and payment of an assignment fee
in the amount of $3,500, provided that (1) if a sale, transfer or assignment by a Lender is made to
an Affiliate or an Approved Fund of such assigning Lender, then no assignment fee shall be due in
connection with such sale, transfer or assignment, and (2) if a sale, transfer or assignment by a
Lender is made to an assignee that is not an Affiliate or Approved Fund of such assignor Lender,
and concurrently to one or more Affiliates or Approved Funds of such assignee, then only one



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assignment fee of $3,500 shall be due in connection with such sale, transfer or assignment. Upon
receipt of all the foregoing, and conditioned upon such receipt and, if such assignment is made in
accordance with Section 9.1(a)(iii), upon Agent (and the Borrowers, if applicable)
consenting to such assignment, from and after the effective date specified in such Assignment
Agreement, Agent shall record or cause to be recorded in the Register the information contained in
such Assignment Agreement.




          (c) Effectiveness. Subject to the recording of an Assignment Agreement by Agent in
the Register pursuant to Section 1.12(b), (i) the assignee thereunder shall become a party
hereto and, to the extent that rights and obligations under the Loan Documents have been assigned
to such assignee pursuant to such Assignment Agreement, shall have the rights and obligations of a
Lender, (ii) any applicable Note, if any, shall be transferred to such assignee through such entry
and (iii) the assignor thereunder shall, to the extent that rights and obligations under this
Agreement have been assigned by it pursuant to such Assignment Agreement, relinquish its rights
(except for those surviving the termination of the Commitments and the payment in full of the
Obligations) and be released from its obligations under the Loan Documents, other than those
relating to events or circumstances occurring prior to such assignment (and, in the case of an
assignment covering all or the remaining portion of an assigning Lender’s rights and obligations
under the Loan Documents, such Lender shall cease to be a party hereto except that each Lender
agrees to remain bound by Sections 9.2 through 9.9).




          (d) Grant of Security Interests. In addition to the other rights provided in this
Section 9.1, each Lender may grant a security interest in, or otherwise assign as
collateral, any of its rights under this Agreement, whether now owned or hereafter acquired
(including rights to payments of principal or interest on the Loans), to (A) any federal reserve
bank (pursuant to Regulation A of the Federal Reserve Board), without notice to Agent or (B) any
holder of, or trustee for the benefit of the holders of, such Lender’s securities by notice to
Agent; provided, however, that no such holder or trustee, whether because of such
grant or assignment or any foreclosure thereon (unless such foreclosure is made through an
assignment in accordance with clause (a) above), shall be entitled to any rights of such
Lender hereunder and no such Lender shall be relieved of any of its obligations hereunder.




          (e) Participants and SPVs. In addition to the other rights provided in this
Section 9.1, each Lender may, (x) with notice to Agent, grant to an SPV the option to make
all or any part of any Loan that such Lender would otherwise be required to make hereunder (and the
exercise of such option by such SPV and the making of Loans pursuant thereto shall satisfy the
obligation of such Lender to make such Loans hereunder) and such SPV may assign to such
Lender the right to receive payment with respect to any Obligation and (y) without notice to
or consent from Agent or the Borrowers, sell participations to one or more Persons in or to all or
a portion of its rights and obligations under the Loan Documents (including all its rights and
obligations with respect to the Term Loans, Revolving Loans and Letter of Credit Obligations);
provided, however, that, whether as a result of any term of any Loan Document or of
such grant or participation, (i) no such SPV or participant shall have a commitment, or be deemed
to have made an offer to commit, to make Loans hereunder, and, except as provided in the applicable
option agreement, none shall be liable for any obligation of such Lender hereunder, (ii) such
Lender’s rights and obligations, and the rights and obligations of the Credit Parties towards such



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Lender, under any Loan Document shall remain unchanged and each other party hereto shall continue
to deal solely with such Lender, which shall remain the holder of the Obligations in the Register,
except that (A) each such participant and SPV shall be entitled to the benefit of
Sections 1.13, 1.15 and 1.16, but only to the extent such participant or
SPV delivers the tax forms such Lender is required to collect pursuant to Section 1.15(c)
and then only to the extent of any amount to which such Lender would be entitled in the absence of
any such grant or participation and (B) each such SPV may receive other payments that would
otherwise be made to such Lender with respect to Loans funded by such SPV to the extent provided in
the applicable option agreement and set forth in a notice provided to Agent by such SPV and such
Lender, provided, however, that in no case (including pursuant to clause
(A) or (B) above) shall an SPV or participant have the right to enforce any of the
terms of any Loan Document, and (iii) the consent of such SPV or participant shall not be required
(either directly, as a restraint on such Lender’s ability to consent hereunder or otherwise) for
any amendments, waivers or consents with respect to any Loan Document or to exercise or refrain
from exercising any powers or rights such Lender may have under or in respect of the Loan Documents
(including the right to enforce or direct enforcement of the Obligations), except for those
described in clauses (ii) and (iii) of Section 11.2(c) with respect to
amounts, or dates fixed for payment of amounts, to which such participant or SPV would otherwise be
entitled and, in the case of participants, except for those described in
Section 11.2(c)(v). No party hereto shall institute (and each of the Borrowers and each
Credit Party signatory hereto shall cause each other Credit Party not to institute) against any SPV
grantee of an option pursuant to this clause (e) any bankruptcy, reorganization,
insolvency, liquidation or similar proceeding, prior to the date that is one year and one day after
the payment in full of all outstanding commercial paper of such SPV; provided, however, that each
Lender having designated an SPV as such agrees to indemnify each Indemnified Person against any
Indemnified Liability that may be incurred by, or asserted against, such Indemnified Person as a
result of failing to institute such proceeding (including a failure to get reimbursed by such SPV
for any such Indemnified Liability). The agreement in the preceding sentence shall survive the
termination of the Commitments and the payment in full of the Obligations.




     9.2. Appointment of Agent.



          GE Capital is hereby appointed to act on behalf of all Lenders as Agent under this Agreement
and the other Loan Documents. The provisions of this Section 9.2 are solely for the
benefit of Agent and Lenders and no Credit Party nor any other Person shall have any rights as a
third party beneficiary of any of the provisions hereof. In performing its functions and duties
under this Agreement and the other Loan Documents, Agent shall act solely as an agent of
Lenders and does not assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for any Credit Party or any other Person. Agent shall have
no duties or responsibilities except for those expressly set forth in this Agreement and the other
Loan Documents. The duties of Agent shall be mechanical and administrative in nature and Agent
shall not have, or be deemed to have, by reason of this Agreement, any other Loan Document or
otherwise a fiduciary relationship in respect of any Lender. Except as expressly set forth in this
Agreement and the other Loan Documents, Agent shall not have any duty to disclose, and shall not be
liable for failure to disclose, any information relating to any Credit Party or any of their
respective Subsidiaries or any Account Debtor that is communicated to or obtained by GE Capital or
any of its Affiliates in any capacity. Neither Agent nor any of its



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Affiliates nor any of their
respective officers, directors, employees, agents or representatives shall be liable to any Lender
for any action taken or omitted to be taken by it hereunder or under any other Loan Document, or in
connection herewith or therewith, except for damages caused by its or their own bad faith, gross
negligence or willful misconduct, as determined by a final court of competent jurisdiction.




          If Agent shall request instructions from Requisite Lenders, Requisite Term Lenders, Requisite
Revolving Lenders or all affected Lenders with respect to any act or action (including failure to
act) in connection with this Agreement or any other Loan Document, then Agent shall be entitled to
refrain from such act or taking such action unless and until Agent shall have received instructions
from Requisite Lenders, Requisite Term Lenders, Requisite Revolving Lenders or all affected
Lenders, as the case may be, and Agent shall not incur liability to any Person by reason of so
refraining. Agent shall be fully justified in failing or refusing to take any action hereunder or
under any other Loan Document (a) if such action would, in the opinion of Agent, be contrary to law
or the terms of this Agreement or any other Loan Document, (b) if such action would, in the opinion
of Agent, expose Agent to Environmental Liabilities or (c) if Agent shall not first be indemnified
to its satisfaction against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. Without limiting the foregoing, no Lender shall
have any right of action whatsoever against Agent as a result of Agent acting or refraining from
acting hereunder or under any other Loan Document in accordance with the instructions of Requisite
Lenders, Requisite Term Lenders, Requisite Revolving Lenders or all affected Lenders, as
applicable.




     9.3. Agent’s Reliance, Etc.



          Neither Agent nor any of its Affiliates nor any of their respective directors, officers,
agents or employees shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Agreement or the other Loan Documents, except for damages caused by its
or their own bad faith, gross negligence or willful misconduct, as determined by a final court of
competent jurisdiction. Without limiting the generality of the foregoing, Agent: (a) may treat
the payee of any Note as the holder thereof until Agent receives written notice of the assignment
or transfer thereof signed by such payee and in form reasonably satisfactory to Agent; (b) may
consult with legal counsel, independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it in good faith in accordance
with the advice of such counsel, accountants or experts; (c) makes no warranty or representation to
any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with this Agreement or the
other Loan Documents; (d) shall not have any duty to ascertain or to inquire as to the performance
or observance of any of the terms, covenants or conditions of this Agreement or the other Loan
Documents on the part of any Credit Party or to inspect the Collateral (including the books and
records) of any Credit Party; (e) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or the
other Loan Documents or any other instrument or document furnished pursuant hereto or thereto; and
(f) shall incur no liability under or in respect of this Agreement or the other Loan Documents by
acting upon any notice, consent, certificate or other instrument or writing (which



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may be by
telecopy, telegram, cable or telex) believed by it to be genuine and signed or sent by the proper
party or parties.




     9.4. GE Capital and Affiliates.



          With respect to its Commitments hereunder, GE Capital shall have the same rights and powers
under this Agreement and the other Loan Documents as any other Lender and may exercise the same as
though it were not Agent; and the term “Lender” or “Lenders” shall, unless otherwise expressly
indicated, include GE Capital in its individual capacity. GE Capital and its Affiliates may lend
money to, invest in, and generally engage in any kind of business with, any Credit Party, any of
their Affiliates and any Person who may do business with or own securities of any Credit Party or
any such Affiliate, all as if GE Capital were not Agent and without any duty to account therefor to
Lenders. GE Capital and its Affiliates may accept fees and other consideration from any Credit
Party for services in connection with this Agreement or otherwise without having to account for the
same to Lenders.




     9.5. Lender Credit Decision.



          Each Lender acknowledges that it has, independently and without reliance upon Agent or any
other Lender and based on the Financial Statements referred to in Section 3.4(a) and such
other documents and information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under this Agreement. Each Lender
acknowledges the potential conflict of interest of each other Lender as a result of Lenders holding
disproportionate interests in the Loans, and expressly consents to, and waives any claim based
upon, such conflict of interest.




     9.6. Indemnification.



          Lenders agree to indemnify Agent (to the extent not reimbursed by Credit Parties and without
limiting the obligations of Borrowers hereunder), ratably according to their respective Pro Rata
Shares, from and against any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against Agent in any way relating to or arising out of this
Agreement or any other Loan Document or any action taken or omitted to be
taken by Agent in connection therewith; provided, that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from Agent’s gross negligence or willful
misconduct. Without limiting the foregoing, each Lender agrees to reimburse Agent promptly upon
demand for its ratable share of any out-of-pocket expenses (including reasonable counsel fees)
incurred by Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement and
each other Loan Document, to the extent that Agent is not reimbursed for such expenses by Credit
Parties.





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     9.7. Successor Agent.



          Agent may resign at any time by giving not less than 30 days’ prior written notice thereof to
Lenders and Borrowers. Upon any such resignation, the Requisite Lenders shall have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed by the Requisite
Lenders and shall have accepted such appointment within 30 days after the resigning Agent’s giving
notice of resignation, then the resigning Agent may, on behalf of Lenders, appoint a successor
Agent, which shall be a Lender, if a Lender is willing to accept such appointment, or otherwise
shall be a commercial bank or financial institution or a subsidiary of a commercial bank or
financial institution if such commercial bank or financial institution is organized under the laws
of the United States of America or of any State thereof and has a combined capital and surplus of
at least $300,000,000. If no successor Agent has been appointed pursuant to the foregoing, within
30 days after the date such notice of resignation was given by the resigning Agent, such
resignation shall become effective and the Requisite Lenders shall thereafter perform all the
duties of Agent hereunder until such time, if any, as the Requisite Lenders appoint a successor
Agent as provided above. Any successor Agent appointed by Agent or Requisite Lenders hereunder
shall be subject to the prior approval of Borrowers, such approval not to be unreasonably withheld
or delayed; provided, that such approval shall not be required if an Event of Default has
occurred and is continuing. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall succeed to and become vested with all the rights,
powers, privileges and duties of the resigning Agent. Upon the earlier of the acceptance of any
appointment as Agent hereunder by a successor Agent or the effective date of the resigning Agent’s
resignation, the resigning Agent shall be discharged from its duties and obligations under this
Agreement and the other Loan Documents, except that any indemnity rights or other rights in favor
of such resigning Agent shall continue. After any resigning Agent’s resignation hereunder, the
provisions of this Section 9 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was acting as Agent under this Agreement and the other Loan Documents.




     9.8. Setoff and Sharing of Payments.



          In addition to any rights now or hereafter granted under applicable law and not by way of
limitation of any such rights, upon the occurrence and during the continuance of any Event of
Default and subject to Section 9.9(f), each Lender is hereby authorized at any time or from
time to time, without notice to any Credit Party or to any other Person, any such notice being
hereby expressly waived, to offset and to appropriate and to apply any and all balances held by it
at any of its offices for the account of any Borrower or Guarantor (regardless of whether
such balances are then due to such Borrower or Guarantor) and any other properties or assets
at any time held or owing by that Lender or that holder to or for the credit or for the account of
any Borrower or Guarantor against and on account of any of the Obligations that are not paid when
due. Any Lender exercising a right of setoff or otherwise receiving any payment on account of the
Obligations in excess of its Pro Rata Share thereof shall purchase for cash (and the other Lenders
or holders shall sell) such participations in each such other Lender’s or holder’s Pro Rata Share
of the Obligations as would be necessary to cause such Lender to share the amount so offset or
otherwise received with each other Lender or holder in accordance with their respective Pro Rata
Shares (other than offset rights exercised by any Lender with respect to




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Sections 1.13,
1.15 or 1.16). Each Credit Party that, during the existence and continuance of an
Event of Default, is a Borrower or Guarantor agrees, to the fullest extent permitted by law, that
(a) any Lender may exercise its right to offset with respect to amounts in excess of its Pro Rata
Share of the Obligations and may sell participations in such amounts so offset to other Lenders and
holders and (b) any Lender so purchasing a participation in the Loans made or other Obligations
held by other Lenders or holders may exercise all rights of offset, bankers’ lien, counterclaim or
similar rights with respect to such participation as fully as if such Lender or holder were a
direct holder of the Loans and the other Obligations in the amount of such participation.
Notwithstanding the foregoing, if all or any portion of the offset amount or payment otherwise
received is thereafter recovered from the Lender that has exercised the right of offset, the
purchase of participations by that Lender shall be rescinded and the purchase price restored
without interest.




     9.9. Advances; Payments; Non-Funding Lenders; Information; Actions in
Concert.



          (a) Advances; Payments.




               (i) Agent shall notify Lenders, promptly after receipt of a Notice of Revolving Credit Advance
and in any event prior to 1:00 p.m. (New York time) on the date such Notice of Revolving Advance is
received, by telecopy, telephone or other similar form of transmission. Each Revolving Lender
shall make the amount of such Lender’s Pro Rata Share of such Revolving Credit Advance available to
Agent in same day funds by wire transfer to Agent’s account as set forth in Annex G not
later than 3:00 p.m. (New York time) on the requested funding date, in the case of an Index Rate
Loan, and not later than 11:00 a.m. (New York time) on the requested funding date, in the case of a
LIBOR Loan. After receipt of such wire transfers (or, in the Agent’s sole discretion, before
receipt of such wire transfers), subject to the terms hereof, Agent shall make the requested
Revolving Credit Advance to Borrowers. All payments by each Revolving Lender shall be made without
setoff, counterclaim or deduction of any kind.



               (ii) Once each calendar week or more frequently at Agent’s election (each, a “Settlement
Date”), Agent shall advise each Lender by telephone, or telecopy of the amount of such Lender’s
Pro Rata Share of principal, interest and Fees paid for the benefit of Lenders with respect to each
applicable Loan. Provided that each Lender has funded all payments or Advances required to be made
by it and has purchased all participations required to be purchased by it under this Agreement and
the other Loan Documents as of such Settlement Date, Agent shall pay to each Lender such Lender’s
Pro Rata Share of principal, interest and Fees paid by Borrowers since the previous Settlement Date
for the benefit of such Lender on the
Loans held by it. To the extent that any Lender (a “Non-Funding Lender”) has failed
to fund all such payments and Advances, failed to fund the purchase of all such participations or
failed to fund all or any portion of its Pro Rata Share of the Delayed Draw Term Loan in accordance
with Section 1.1(b)(i), Agent shall be entitled to set off the funding short-fall against
that Non-Funding Lender’s Pro Rata Share of all payments received from Borrowers. Such payments
shall be made by wire transfer to such Lender’s account (as specified by such Lender in
Annex G or the applicable Assignment Agreement) not later than 2:00 p.m. (New York time) on
the next Business Day following each Settlement Date.



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          (b) Availability of Lender’s Pro Rata Share. Agent may assume that each Revolving
Lender and Term Lender will make its Pro Rata Share of each Revolving Credit Advance and the
Delayed Draw Term Loan, as applicable, available to Agent on each funding date. If such Pro Rata
Share is not, in fact, paid to Agent by such Revolving Lender or Term Lender, as applicable, when
due, Agent will be entitled to recover such amount on demand from such Revolving Lender or Term
Lender, as applicable, without setoff, counterclaim or deduction of any kind. If any Revolving
Lender or Term Lender, as applicable, fails to pay the amount of its Pro Rata Share forthwith upon
Agent’s demand, Agent shall promptly notify Borrowers and Borrowers shall immediately repay such
amount to Agent. Nothing in this Section 9.9(b) or elsewhere in this Agreement or the
other Loan Documents shall be deemed to require Agent to advance funds on behalf of any Revolving
Lender or Term Lender or to relieve any Revolving Lender or Term Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Borrowers may have against any
Revolving Lender or Term Lender as a result of any default by such Revolving Lender or Term Lender
hereunder. To the extent that Agent advances funds to any Borrower on behalf of any Revolving
Lender or Term Lender and is not reimbursed therefor on the same Business Day as such Advance or
Delayed Draw Term Loan is made, Agent shall be entitled to retain for its account all interest
accrued on such Advance or Delayed Draw Term Loan until reimbursed by the applicable Revolving
Lender or Term Lender.




          (c) Return of Payments.




               (i) If Agent pays an amount to a Lender under this Agreement in the belief or expectation that
a related payment has been or will be received by Agent from Borrowers and such related payment is
not received by Agent, then Agent will be entitled to recover such amount from such Lender on
demand without setoff, counterclaim or deduction of any kind.



               (ii) If Agent determines at any time that any amount received by Agent under this Agreement
must be returned to any Borrower or paid to any other Person pursuant to any insolvency law or
otherwise, then, notwithstanding any other term or condition of this Agreement or any other Loan
Document, Agent will not be required to distribute any portion thereof to any Lender. In addition,
each Lender will repay to Agent on demand any portion of such amount that Agent has distributed to
such Lender, together with interest at such rate, if any, as Agent is required to pay to any
Borrower or such other Person, without setoff, counterclaim or deduction of any kind.



          (d) Non-Funding Lenders. The failure of any Non-Funding Lender to make any Revolving
Credit Advance or Pro Rata Share of the Delayed Draw Term Loan or any payment required by it
hereunder on the date specified therefor shall not relieve any other Revolving Lender or Term
Lender (each such other Revolving Lender or Term Lender, an “Other Lender”) of its
obligations to make such Advance or purchase such participation on such date, but neither any Other
Lender nor Agent shall be responsible for the failure of any Non-Funding Lender to make an Advance
or fund the Delayed Draw Term Loan, purchase a participation or make any other payment required
hereunder. Notwithstanding anything set forth herein to the contrary, a Non-Funding Lender shall
not have any voting or consent rights under or with respect to any Loan Document or constitute a
“Lender,” a “Requisite Revolving Lender”




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or a “Requisite Term Lender” (or be included in the
calculation of “Requisite Lenders,” “Requisite Revolving Lenders”
or “Requisite Term Lenders”
hereunder) for any voting or consent rights under or with respect to any Loan Document. At
Borrowers’ request, Agent or a Person reasonably acceptable to Agent shall have the right with
Agent’s consent and in Agent’s sole discretion (but shall have no obligation) to purchase from any
Non-Funding Lender, and each Non-Funding Lender agrees that it shall, at Agent’s request, sell and
assign to Agent or such Person, all of the Commitments of that Non-Funding Lender for an amount
equal to the principal balance of all Loans held by such Non-Funding Lender and all accrued
interest and fees with respect thereto through the date of sale, such purchase and sale to be
consummated pursuant to an executed Assignment Agreement.




          (e) Dissemination of Information. Agent shall use reasonable efforts to provide
Lenders with any notice of Default or Event of Default received by Agent from, or delivered by
Agent to, any Credit Party, with notice of any Event of Default of which Agent has actually become
aware and with notice of any action taken by Agent following any Event of Default;
provided, that Agent shall not be liable to any Lender for any failure to do so, except to
the extent that such failure is attributable to Agent’s gross negligence or willful misconduct, as
determined by a final court of competent jurisdiction. Lenders acknowledge that Borrowers are
required to provide Financial Statements to Lenders in accordance with Annex E hereto and
agree that Agent shall have no duty to provide the same to Lenders.




          (f) Actions in Concert. Anything in this Agreement to the contrary notwithstanding,
each Lender hereby agrees with each other Lender that no Lender shall take any action to protect or
enforce its rights against any Credit Party arising out of this Agreement or the Notes (including
exercising any rights of setoff) without first obtaining the prior written consent of Agent and
Requisite Lenders, it being the intent of Lenders that any such action to protect or enforce rights
under this Agreement and the Notes shall be taken in concert and at the direction or with the
consent of Agent or Requisite Lenders; provided, that nothing in this Section 9.9(f) shall
prohibit any Lender from (i) defending any action, suit or proceeding brought against such Lender
by a Credit Party, (ii) filing suit regarding the collection of Obligations owed to it to the
limited extent necessary to avoid the running of the applicable statute of limitations period, and
(iii) filing a proof of claim in any bankruptcy or similar proceeding.




     9.10. Titles.



          Notwithstanding anything else to the contrary in this Agreement or any other Loan Document, no
party hereto designated as a documentation agent, a syndication agent, an arranger or a bookrunner
shall have any duties or responsibilities under this Agreement or any other Loan Document nor any
fiduciary duty to any Lender or L/C Issuer, and no implied covenants, functions, responsibilities,
duties obligations or liabilities shall be read into this Agreement or otherwise exist against any
such documentation agent, syndication agent, arranger or bookrunner, in such capacity.




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10. SUCCESSORS AND ASSIGNS




     10.1. Successors and Assigns.



          This Agreement and the other Loan Documents shall be binding on and shall inure to the benefit
of each Credit Party, Agent, Lenders and their respective successors and assigns (including, in the
case of any Credit Party, a debtor-in-possession on behalf of such Credit Party), except as
otherwise provided herein or therein. No Credit Party may assign, transfer, hypothecate or
otherwise convey its rights, benefits, obligations or duties hereunder or under any of the other
Loan Documents without the prior express written consent of Agent and Lenders. Any such purported
assignment, transfer, hypothecation or other conveyance by any Credit Party without the prior
express written consent of Agent and Lenders shall be void. The terms and provisions of this
Agreement are for the purpose of defining the relative rights and obligations of each Credit Party,
Agent and Lenders with respect to the transactions contemplated hereby and no Person shall be a
third party beneficiary of any of the terms and provisions of this Agreement or any of the other
Loan Documents.




11. MISCELLANEOUS




     11.1. Complete Agreement; Modification of Agreement.



          The Loan Documents constitute the complete agreement between the parties with respect to the
subject matter thereof and may not be modified, altered or amended except as set forth in
Section 11.2. Any letter of interest, commitment letter or fee letter between any Credit
Party and Agent or any Lender or any of their respective Affiliates, predating this Agreement and
relating to a financing of substantially similar form, purpose or effect shall be superseded by
this Agreement. Notwithstanding the foregoing, it is agreed and acknowledged by each of the
parties hereto that the GE Capital Fee Letter shall survive the execution and delivery of this
Agreement.




     11.2. Amendments and Waivers.



          (a) Except for actions expressly permitted to be taken by Agent, no amendment, modification,
termination or waiver of any provision of this Agreement or any other Loan Document, or any consent
to any departure by any Credit Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by Agent, Borrowers, and by Requisite Lenders, Requisite Revolving
Lenders, Requisite Term Lenders or all affected Lenders,
as applicable. Except as set forth in clause (c) below, all such amendments,
modifications, terminations or waivers requiring the consent of any Lenders shall require the
written consent of Requisite Lenders.




          (b) No amendment, modification, termination or waiver of or consent with respect to any
provision of this Agreement that waives compliance with the conditions precedent set forth in
Section 2.1 and Section 2.2 to the making of the Delayed Draw Term Loan or set
forth in Section 2.2 to the making of any Loan or the incurrence of any Letter of Credit
Obligation shall be effective unless the same shall be in writing and signed by Agent, Borrowers
and, as applicable, Requisite Term Loan Lenders or Requisite Revolving Lenders.




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Notwithstanding
anything contained in this Agreement to the contrary, no waiver or consent with respect to any
Default or any Event of Default shall be effective for purposes of the conditions precedent to the
making of the Delayed Draw Term Loan set forth in Section 2.1 or Section 2.2 or to
the making of Loans or the incurrence of Letter of Credit Obligations set forth in Section
2.2 unless the same shall be in writing and signed by Agent, Borrowers, and, as applicable,
Requisite Term Lenders or Requisite Revolving Lenders.




          (c) No amendment, modification, termination or waiver shall, unless in writing and signed by
Agent and each Lender directly affected thereby: (i) increase the principal amount of any Lender’s
Commitment (which action shall be deemed to directly affect all Lenders; (ii) reduce the principal
of, rate of interest on (other than a reduction from the Default Rate to the interest rate that
would have been applicable to such Obligations in the event the Agent or Requisite Lenders had not
elected to impose the Default Rate) or Fees payable with respect to any Loan or Letter of Credit
Obligations of any affected Lender; (iii) extend any scheduled payment date (other than payment
dates of mandatory prepayments under Section 1.3(b)(ii)-(iii)) or final maturity date of
the principal amount of any Loan of any affected Lender; (iv) waive, forgive, defer, extend or
postpone any payment of interest or Fees as to any affected Lender; (v) except as otherwise
permitted herein or in the other Loan Documents, release any Guaranty or release all or
substantially all of the Collateral or consent to the assignment or transfer by any Credit Party of
its rights, benefits, obligations or other duties hereunder or under any of the other Loan
Documents (which action shall be deemed to directly affect all Lenders); (vi) change the percentage
of the Commitments or of the aggregate unpaid principal amount of the Loans that shall be required
for Lenders or any of them to take any action hereunder; and (vii) amend or waive this
Section 11.2 or the definition of the terms “Pro Rata Share”, “Requisite Lenders”,
“Requisite Revolving Lenders” or “Requisite Term Lenders”, insofar as such definitions affect the
substance of this Section 11.2. Furthermore, no amendment, modification, termination or
waiver affecting the rights or duties of Agent or L/C Issuer under this Agreement or any other Loan
Document shall be effective unless in writing and signed by Agent or L/C Issuer, as the case may
be, in addition to Lenders required hereinabove to take such action. No amendment, modification or
waiver of this Agreement or any Loan Document altering the ratable treatment of Obligations arising
under Secured Rate Contracts resulting in such Obligations being junior in right of payment to
principal on the Loans or resulting in Obligations owing to any Secured Swap Provider becoming
unsecured (other than release of Liens in accordance with the terms hereof), in each case in a
manner adverse to any Secured Swap Provider, shall be effective without the written consent of such
Secured Swap Provider, or,
in the case of any Secured Rate Contract arranged by Agent or any Affiliate of Agent, the
written consent of Agent. Each amendment, modification, termination or waiver shall be effective
only in the specific instance and for the specific purpose for which it was given. No amendment,
modification, termination or waiver shall be required for Agent to take additional Collateral
pursuant to any Loan Document. No amendment, modification, termination or waiver of any provision
of any Note shall be effective without the written concurrence of the holder of that Note. No
notice to or demand on any Credit Party in any case shall entitle such Credit Party or any other
Credit Party to any other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance with this
Section 11.2 shall be binding upon each holder of the Notes at the time outstanding and
each future holder of the Notes.




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          (d) If, in connection with any proposed amendment, modification, waiver or termination (a
“Proposed Change”):




               (i) requiring the consent of all affected Lenders, the consent of Requisite Lenders is
obtained, but the consent of other Lenders whose consent is required is not obtained (any such
Lender whose consent is not obtained as described in this clause (i) and in
clauses (ii), (iii) and (iv) below being referred to as a
“Non-Consenting Lender”);



               (ii) requiring the consent of Requisite Term Lenders, the consent of Term Lenders holding
fifty-one percent (51%) or more of the aggregate Term Loan Commitments and Term Loan is obtained,
but the consent of Requisite Term Lenders is not obtained;



               (iii) requiring the consent of Requisite Revolving Lenders, the consent of Revolving Lenders
holding fifty-one percent (51%) or more of the aggregate Revolving Loan Commitments is obtained,
but the consent of Requisite Revolving Lenders is not obtained; or



               (iv) requiring the consent of Requisite Lenders, the consent of Lenders holding fifty-one
percent (51%) or more of the aggregate Commitments and Loans is obtained, but the consent of
Requisite Lenders is not obtained,


then, so long as Agent is not a Non-Consenting Lender, at Borrowers’ request, Agent or a Person
reasonably acceptable to Agent shall have the right with Agent’s consent and in Agent’s sole
discretion (but shall have no obligation) to purchase from such Non-Consenting Lenders, and such
Non-Consenting Lenders agree that they shall, upon Agent’s request, sell and assign to Agent or
such Person, all of the Commitments of such Non-Consenting Lenders for an amount equal to the
principal balance of all Loans held by the Non-Consenting Lenders and all accrued but unpaid
interest and Fees with respect thereto through the date of sale, such purchase and sale to be
consummated pursuant to an executed Assignment Agreement.




          (e) Upon payment in full in cash and performance of all of the Obligations (other than
unasserted indemnification Obligations), termination of the Commitments and a release of all claims
against Agent and Lenders, and so long as no suits, actions, proceedings or claims are pending or
threatened against any Indemnified Person asserting any damages, losses or
liabilities that are Indemnified Liabilities, Agent shall promptly deliver to Borrowers
termination statements, mortgage releases and other documents necessary or appropriate to evidence
the termination of the Liens securing payment of the Obligations.




     11.3. Fees and Expenses.



          Borrowers shall reimburse Agent (and, with respect to clauses (c), (d) and (e)
below, all Lenders) for all fees, costs and expenses, including the reasonable fees, costs and
expenses of counsel, consultants, auditors or other advisors (including environmental and
management consultants and appraisers), incurred in connection with the negotiation and preparation
of the Loan Documents, closing of the transactions contemplated hereunder and those the perfection
of Liens on Collateral and incurred in connection with:




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          (a) the forwarding to Borrowers or any other Person on behalf of Borrowers by Agent of the
proceeds of any Loan (including a wire transfer fee of $25 per wire transfer);




          (b) any amendment, modification or waiver of, consent with respect to, or termination of, any
of the Loan Documents or Related Transaction Documents or advice in connection with the syndication
and administration of the Loans made pursuant hereto or its rights hereunder or thereunder;




          (c) any litigation, contest, dispute, suit, proceeding or action (whether instituted by Agent,
any Lender, any Borrower or any other Person and whether as a party, witness or otherwise), other
than any such litigation, contest, dispute, suit, proceeding or action instituted by Agent or any
Lender against one or more other Lenders or the Agent only, in any way relating to the Collateral,
any of the Loan Documents or any other agreement to be executed or delivered in connection herewith
or therewith, including any litigation, contest, dispute, suit, case, proceeding or action, and any
appeal or review thereof, in connection with a case commenced by or against any or all of the
Borrowers or any other Person that may be obligated to Agent by virtue of the Loan Documents;
including any such litigation, contest, dispute, suit, proceeding or action arising in connection
with any work-out or restructuring of the Loans during the pendency of one or more Events of
Default; provided, that in the case of reimbursement of counsel for Lenders other than
Agent, such reimbursement shall be limited to one counsel for all such Lenders; provided,
further, that no Person shall be entitled to reimbursement under this clause (c) in
respect of any litigation, contest, dispute, suit, proceeding or action to the extent any of the
foregoing results from such Person’s bad faith, gross negligence or willful misconduct, as
determined by a final court of competent jurisdiction;




          (d) any attempt to enforce any remedies of Agent against any or all of the Credit Parties or
any other Person that may be obligated to Agent or any Lender by virtue of any of the Loan
Documents, including any such attempt to enforce any such remedies in the course of any work-out or
restructuring of the Loans during the pendency of one or more Events of Default; provided,
that in the case of reimbursement of counsel for Lenders other than Agent, such reimbursement shall
be limited to one counsel for all such Lenders;




          (e) any workout or restructuring of the Loans during the pendency of one or more Events of
Default; and




          (f) efforts to verify, protect, evaluate, assess, appraise, collect, sell, liquidate or
otherwise dispose of any of the Collateral;



including, as to each of clauses (a) through (f) above, all reasonable attorneys’
and other professional and service providers’ fees arising from such services and other advice,
assistance or other representation, including those in connection with any appellate proceedings,
and all expenses, costs, charges and other fees incurred by such counsel and others in connection
with or relating to any of the events or actions described in this Section 11.3, all of
which shall be payable, on demand, by Borrowers to Agent. Without limiting the generality of the
foregoing, such expenses, costs, charges and fees may include: reasonable fees, costs and expenses
of accountants, environmental advisors, appraisers, investment bankers, management and other
consultants and paralegals; court costs and expenses; photocopying and duplication expenses;




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court
reporter fees, costs and expenses; long distance telephone charges; air express charges; telegram
or telecopy charges; secretarial overtime charges; and reasonable expenses for travel, lodging and
food paid or incurred in connection with the performance of such legal or other advisory services.




     11.4. No Waiver.



          Agent’s or any Lender’s failure, at any time or times, to require strict performance by the
Credit Parties of any provision of this Agreement or any other Loan Document shall not waive,
affect or diminish any right of Agent or such Lender thereafter to demand strict compliance and
performance herewith or therewith. Any suspension or waiver of an Event of Default shall not
suspend, waive or affect any other Event of Default whether the same is prior or subsequent thereto
and whether the same or of a different type. Subject to the provisions of Section 11.2,
none of the undertakings, agreements, warranties, covenants and representations of any Credit Party
contained in this Agreement or any of the other Loan Documents and no Default or Event of Default
by any Credit Party shall be deemed to have been suspended or waived by Agent or any Lender, unless
such waiver or suspension is by an instrument in writing signed by an officer of or other
authorized employee of Agent and the applicable required Lenders, and directed to Borrowers
specifying such suspension or waiver.




     11.5. Remedies.



          Agent’s and Lenders’ rights and remedies under this Agreement shall be cumulative and
nonexclusive of any other rights and remedies that Agent or any Lender may have under any other
agreement, including the other Loan Documents, by operation of law or otherwise. Recourse to the
Collateral shall not be required.




     11.6. Severability.



          Wherever possible, each provision of this Agreement and the other Loan Documents shall be
interpreted in such a manner as to be effective and valid under applicable
law, but if any provision of this Agreement or any other Loan Document shall be prohibited by
or invalid under applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such provision or the remaining
provisions of this Agreement or such other Loan Document.




     11.7. Conflict of Terms.



          Except as otherwise provided in this Agreement or any of the other Loan Documents by specific
reference to the applicable provisions of this Agreement, if any provision contained in this
Agreement conflicts with any provision in any of the other Loan Documents, the provision contained
in this Agreement shall govern and control.




     11.8. Confidentiality.



          Agent and each Lender agree to use commercially reasonable efforts (equivalent to the efforts
Agent or such Lender applies to maintaining the confidentiality of its own




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confidential
information) to maintain as confidential all confidential information provided to them by the
Credit Parties and designated as confidential for a period of two years following receipt thereof,
except that Agent and any Lender may disclose such information (a) to Persons employed or engaged
by Agent or such Lender; (b) to any bona fide assignee or participant or potential assignee or
participant that has agreed to comply with the covenants contained in this Section 9.1(d)
and Section 11.8 (and any such bona fide assignee or participant or potential assignee or
participant may disclose such information to Persons employed or engaged by them as described in
clause (a) above); (c) as required or requested by any Governmental Authority or reasonably
believed by Agent or such Lender to be compelled by any court decree, subpoena or legal or
administrative order or process; (d) as, on the advice of Agent’s or such Lender’s counsel, is
required by law; (e) in connection with the exercise of any right or remedy under the Loan
Documents or in connection with any Litigation to which Agent or such Lender is a party; or
(f) that ceases to be confidential through no fault of Agent or any Lender.




     11.9. GOVERNING LAW.



          EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE
OBLIGATIONS SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY HEREBY CONSENTS AND AGREES THAT
THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY, CITY OF NEW YORK, NEW YORK SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES,
AGENT AND LENDERS PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS;
PROVIDED, THAT AGENT, LENDERS AND THE CREDIT PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM
THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK COUNTY; PROVIDED
FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM
BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL
OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR
OF AGENT. EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY WAIVES ANY OBJECTION THAT
SUCH CREDIT PARTY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR
FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH CREDIT PARTY HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER




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PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES
THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH IN ANNEX H OF THIS AGREEMENT
AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH CREDIT PARTY’S ACTUAL
RECEIPT THEREOF OR 3 DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.




     11.10. Notices.



          (a) Addresses. All notices, demands, requests, directions and other communications
required or expressly authorized to be made by this Agreement shall, whether or not specified to be
in writing but unless otherwise expressly specified to be given by any other means, be given in
writing and (i) addressed to (A) the party to be notified and sent to the address or facsimile
number indicated in Annex H, or (B) otherwise to the party to be notified at its address specified
on the signature page of any applicable Assignment Agreement, (ii) posted to Intralinks®
(to the extent such system is available and set up by or at the direction of the Agent prior
to posting) in an appropriate location by uploading such notice, demand, request, direction or
other communication to www.intralinks.com, faxing it to 866-545-6600 with an appropriate bar-coded
fax coversheet or using such other means of posting to Intralinks® as may be available
and reasonably acceptable to the Agent prior to such posting, (iii) posted to any other E-System
set up by or at the direction of Agent in an appropriate location or (iv) addressed to such other
address as shall be notified in writing (A) in the case of Borrowers and Agent, to the other
parties hereto and (B) in the case of all other parties, to Borrowers and Agent. Transmission by
electronic mail (including E-Fax, even if transmitted to the fax numbers set forth in clause
(i) above) shall not be sufficient or effective to transmit any such notice under this
clause (a) unless such transmission is an available means to post to any E-System.




          (b) Effectiveness. All communications described in clause (a) above and all other
notices, demands, requests and other communications made in connection with this
Agreement shall be effective and be deemed to have been received (i) if delivered by hand,
upon personal delivery, (ii) if delivered by overnight courier service, one Business Day after
delivery to such courier service, (iii) if delivered by mail, when deposited in the mails, (iv) if
delivered by facsimile (other than to post to an E-System pursuant to clause (a)(ii) or (a)(iii)
above), upon sender’s receipt of confirmation of proper transmission, and (v) if delivered by
posting to any E-System, on the later of the date of such posting in an appropriate location and
the date access to such posting is given to the recipient thereof in accordance with the standard
procedures applicable to such E-System. Failure or delay in delivering copies of any notice,
demand, request, consent, approval, declaration or other communication to any Person (other than
Borrowers or Agent) designated in Annex H to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration or other
communication. The giving of any notice required hereunder may be waived in writing by the party
entitled to receive such notice.




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     11.11. Section Titles.



          The Section titles and Table of Contents contained in this Agreement are and shall be without
substantive meaning or content of any kind whatsoever and are not a part of the agreement between
the parties hereto.




     11.12. Counterparts.



          This Agreement may be executed in any number of separate counterparts, each of which shall
collectively and separately constitute one agreement.




     11.13. WAIVER OF JURY TRIAL.



          BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY
AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE
AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES
BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION
OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND ANY CREDIT PARTY ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.




     11.14. Press Releases and Related Matters.



          Each Credit Party executing this Agreement agrees that neither it nor its Affiliates will in
the future issue any press releases or other public disclosure using the name of GE Capital or its
affiliates or referring to this Agreement or the other Loan Documents without at least 2 Business
Days’ prior notice to GE Capital and without the prior written consent of GE Capital unless (and
only to the extent that) such Credit Party or Affiliate is required to do so under law and then, in
any event, such Credit Party or Affiliate will consult with GE Capital before issuing such press
release or other public disclosure. Each Credit Party consents to the publication by Agent or any
Lender of a tombstone or similar advertising material relating to the financing transactions
contemplated by this Agreement using the Credit Parties’ name, product photographs, logo or
trademark. Agent or such Lender shall provide a draft of any such tombstone or similar advertising
material to Borrowers for review and comment prior to the publication thereof. Agent reserves the
right to provide to industry trade organizations information necessary and customary for inclusion
in league table measurements.




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     11.15. Reinstatement.



          This Agreement shall remain in full force and effect and continue to be effective should any
petition be filed by or against any Borrower for liquidation or reorganization, should any Borrower
become insolvent or make an assignment for the benefit of any creditor or creditors or should a
receiver or trustee be appointed for all or any significant part of any Borrower’s assets, and
shall continue to be effective or to be reinstated, as the case may be, if at any time payment and
performance of the Obligations, or any part thereof, is, pursuant to applicable law, rescinded or
reduced in amount, or must otherwise be restored or returned by any obligee of the Obligations,
whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though such
payment or performance had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reduced
only by such amount paid and not so rescinded, reduced, restored or returned.




     11.16. Advice of Counsel.



          Each of the parties represents to each other party hereto that it has discussed this Agreement
and, specifically, the provisions of Sections 11.9 and 11.13, with its counsel.




     11.17. No Strict Construction.



          The parties hereto have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this Agreement.




     11.18. USA PATRIOT Act Notice. 



          Each Lender that is subject to the Patriot Act (as hereinafter defined) and Agent (for itself
and not on behalf of any Lender) hereby notifies each Borrower that pursuant to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
“Patriot Act”), it is required to obtain, verify and record information that identifies
each Borrower, which information includes the name and address of each Borrower and other
information that will allow such Lender or Agent, as applicable, to identify such Borrower in
accordance with the Patriot Act.




     11.19. Effect of Amendment and Restatement on Existing Credit Agreement. 



          (a) On the Closing Date, the Existing Credit Agreement is amended and restated in its entirety
by this Agreement. The parties hereto acknowledge and agree that (i) this Agreement, the Notes and
the other Loan Documents executed and delivered in connection herewith do not constitute a
novation, payment and reborrowing, or termination of the “Obligations” (as defined in the
Existing Credit Agreement) under the Existing Credit Agreement as in effect prior to the Closing
Date; (ii) such “Obligations” are in all respects continuing (as amended and restated hereby) with
only the terms thereof being modified as




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provided in this Agreement; (iii) the Liens and security
interests as granted under the Loan Documents (whether delivered hereunder or in connection with
the Existing Credit Agreement) securing payment of such “Obligations” are in all respects
continuing and in full force and effect and secure the payment of the Obligations (as defined in
this Agreement); and (iv) upon the effectiveness of this Agreement all loans outstanding under the
Existing Credit Agreement immediately before the effectiveness of this Agreement will be Loans
hereunder and all outstanding letters of credit under the Existing Credit Agreement will be Letters
of Credit hereunder, in each case on the terms and conditions set forth in this Agreement.




          (b) Notwithstanding the modification effected by this Agreement of the representations,
warranties and covenants of the Borrowers contained in the Existing Credit Agreement, the Borrowers
acknowledge and agree that any choses in action or other rights created in favor of the Agent, the
“Agent” under the Existing Credit Agreement, any lender under the Existing Credit Agreement, any
Lender and each of their respective successors and assigns arising out of the representations,
warranties and covenants of the Borrowers contained in or delivered (including representations,
warranties and covenants delivered in connection with the making of Loans or other extensions of
credit thereunder) in connection with the Existing Credit Agreement, shall survive the execution
and delivery of this Agreement; provided that it is understood and agreed that the
Borrowers’ monetary obligations under the Existing Credit Agreement in respect of the loans
thereunder are evidenced by this Agreement.




          (c) All indemnification obligations of the Borrowers pursuant to the Existing Credit Agreement
shall survive the amendment and restatement of the Existing Credit Agreement pursuant to this
Agreement.




          (d) Except as expressly amended and restated hereby and by the Notes, the Existing Credit
Agreement and the other Loan Documents are and shall continue in full force and
effect. On and after the Closing Date, (a) each reference in the Loan Documents to the
“Credit Agreement,” “thereunder,” “thereof” or similar words referring to the Credit Agreement
shall mean and be a reference to this Agreement (as further amended, restated, modified or
otherwise supplemented from time to time) and (b) each reference in the Loan Documents to a “Note”
or amendment or restatement thereof shall be a reference to a Note hereunder, and (c) each
reference to “Agent”, “L/C Issuer” or “Lender” in a Loan Document shall be a reference to the
Agent, L/C Issuer or Lender hereunder as the case may be.




12. CROSS-GUARANTY




     12.1. Cross-Guaranty.



          Each Borrower hereby agrees that such Borrower is jointly and severally liable for, and hereby
absolutely and unconditionally guarantees to Agent, Lenders and each Secured Swap Provider and
their respective successors and assigns, the full and prompt payment (whether at stated maturity,
by acceleration or otherwise) and performance of, all Obligations owed or hereafter owing to Agent
and Lenders by each other Borrower. Each Borrower agrees that its guaranty obligation hereunder is
a continuing guaranty of payment and performance and not of collection, that its obligations under
this Section 12 shall not be discharged until payment




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and performance, in full, of the
Obligations has occurred, and that its obligations under this Section 12 shall be absolute
and unconditional, irrespective of, and unaffected by,




          (a) the genuineness, validity, regularity, enforceability or any future amendment of, or
change in, this Agreement, any other Loan Document or any other agreement, document or instrument
to which any Borrower is or may become a party;




          (b) the absence of any action to enforce this Agreement (including this Section 12) or
any other Loan Document or the waiver or consent by Agent and Lenders with respect to any of the
provisions thereof;




          (c) the existence, value or condition of, or failure to perfect its Lien against, any security
for the Obligations or any action, or the absence of any action, by Agent and Lenders in respect
thereof (including the release of any such security);




          (d) the insolvency of any Credit Party; or




          (e) any other action or circumstances that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor.



Each Borrower shall be regarded, and shall be in the same position, as principal debtor with
respect to the Obligations guaranteed hereunder.




     12.2. Waivers by Borrowers.



          Each Borrower expressly waives all rights it may have now or in the future under any statute,
or at common law, or at law or in equity, or otherwise, to compel Agent or Lenders to marshall
assets or to proceed in respect of the Obligations guaranteed hereunder against any other
Credit Party, any other party or against any security for the payment and performance of the
Obligations before proceeding against, or as a condition to proceeding against, such Borrower. It
is agreed among each Borrower, Agent and Lenders that the foregoing waivers are of the essence of
the transaction contemplated by this Agreement and the other Loan Documents and that, but for the
provisions of this Section 12 and such waivers, Agent and Lenders would decline to enter
into this Agreement.




     12.3. Benefit of Guaranty.



          Each Borrower agrees that the provisions of this Section 12 are for the benefit of
Agent and Lenders and their respective successors, transferees, endorsees and assigns, and nothing
herein contained shall impair, as between any other Borrower and Agent or Lenders, the obligations
of such other Borrower under the Loan Documents.




     12.4. Subordination of Subrogation, Etc.



          Notwithstanding anything to the contrary in this Agreement or in any other Loan Document, and
except as set forth in Section 12.7, each Borrower hereby expressly and irrevocably
subordinates to payment of the Obligations any and all rights at law or in equity to




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subrogation,
reimbursement, exoneration, contribution, indemnification or set off and any and all defenses
available to a surety, guarantor or accommodation co-obligor until the Obligations are indefeasibly
paid in full in cash. Each Borrower acknowledges and agrees that this subordination is intended to
benefit Agent and Lenders and shall not limit or otherwise affect such Borrower’s liability
hereunder or the enforceability of this Section 12, and that Agent, Lenders and their
respective successors and assigns are intended third party beneficiaries of the waivers and
agreements set forth in this Section 12.4.




     12.5. Election of Remedies.



          If Agent or any Lender may, under applicable law, proceed to realize its benefits under any of
the Loan Documents giving Agent or such Lender a Lien upon any Collateral, whether owned by any
Borrower or by any other Person, either by judicial foreclosure or by non-judicial sale or
enforcement, Agent or any Lender may, at its sole option, determine which of its remedies or rights
it may pursue without affecting any of its rights and remedies under this Section 12. If,
in the exercise of any of its rights and remedies, Agent or any Lender shall forfeit any of its
rights or remedies, including its right to enter a deficiency judgment against any Borrower or any
other Person, whether because of any applicable laws pertaining to “election of remedies” or the
like, each Borrower hereby consents to such action by Agent or such Lender and waives any claim
based upon such action, even if such action by Agent or such Lender shall result in a full or
partial loss of any rights of subrogation that each Borrower might otherwise have had but for such
action by Agent or such Lender. Any election of remedies that results in the denial or impairment
of the right of Agent or any Lender to seek a deficiency judgment against any Borrower shall not
impair any other Borrower’s obligation to pay the full amount of the Obligations. In the event
Agent or any Lender shall bid at any foreclosure or trustee’s sale or at any private sale permitted
by law or the Loan Documents, Agent or such Lender may bid all or less than the amount of the
Obligations and the amount of such bid need not be paid by Agent or
such Lender but shall be credited against the Obligations. The amount of the successful bid
at any such sale, whether Agent, Lender or any other party is the successful bidder, shall be
conclusively deemed to be the fair market value of the Collateral and the difference between such
bid amount and the remaining balance of the Obligations shall be conclusively deemed to be the
amount of the Obligations guaranteed under this Section 12, notwithstanding that any
present or future law or court decision or ruling may have the effect of reducing the amount of any
deficiency claim to which Agent or any Lender might otherwise be entitled but for such bidding at
any such sale.




     12.6. Limitation.



          Notwithstanding any provision herein contained to the contrary, each Borrower’s liability
under this Section 12 (which liability is in any event in addition to amounts for which
such Borrower is primarily liable under Section 1) shall be limited to an amount not to
exceed as of any date of determination the greater of:




          (a) the net amount of all Loans advanced to Borrowers under this Agreement and then re-loaned
or otherwise transferred to, or for the benefit of, Borrowers; and





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          (b) the amount that could be claimed by Agent and Lenders from such Borrower under this
Section 12 without rendering such claim voidable or avoidable under Section 548 of Chapter
11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law after taking into account, among other
things, such Borrower’s right of contribution and indemnification from each other Borrower under
Section 12.7.




     12.7. Contribution with Respect to Guaranty Obligations.



          (a) To the extent that any Borrower shall make a payment under this Section 12 of all
or any of the Obligations (other than Loans made to that Borrower for which it is primarily liable)
(a “Guarantor Payment”) that, taking into account all other Guarantor Payments then
previously or concurrently made by any other Borrower, exceeds the amount that such Borrower would
otherwise have paid if each Borrower had paid the aggregate Obligations satisfied by such Guarantor
Payment in the same proportion that such Borrower’s “Allocable Amount” (as defined below) (as
determined immediately prior to such Guarantor Payment) bore to the aggregate Allocable Amounts of
each of the Borrowers as determined immediately prior to the making of such Guarantor Payment,
then, following indefeasible payment in full in cash of the Obligations and termination of the
Commitments, such Borrower shall be entitled to receive contribution and indemnification payments
from, and be reimbursed by, each other Borrower for the amount of such excess, pro rata based upon
their respective Allocable Amounts in effect immediately prior to such Guarantor Payment.




          (b) As of any date of determination, the “Allocable Amount” of any Borrower shall be equal to
the maximum amount of the claim that could then be recovered from such Borrower under this
Section 12 without rendering such claim voidable or avoidable under Section 548 of Chapter
11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law.




          (c) This Section 12.7 is intended only to define the relative rights of Borrowers and
nothing set forth in this Section 12.7 is intended to or shall impair the obligations of
Borrowers, jointly and severally, to pay any amounts as and when the same shall become due and
payable in accordance with the terms of this Agreement, including Section 12.1. Nothing
contained in this Section 12.7 shall limit the liability of any Borrower to pay the Loans
made directly or indirectly to that Borrower and accrued interest, Fees and expenses with respect
thereto for which such Borrower shall be primarily liable.




          (d) The parties hereto acknowledge that the rights of contribution and indemnification
hereunder shall constitute assets of Borrower to which such contribution and indemnification is
owing.




          (e) The rights of the indemnifying Borrowers against other Credit Parties under this
Section 12.7 shall be exercisable upon the full and indefeasible payment of the Obligations
and the termination of the Commitments.





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     12.8. Liability Cumulative.



          The liability of Borrowers under this Section 12 is in addition to and shall be
cumulative with all liabilities of each Borrower to Agent and Lenders under this Agreement and the
other Loan Documents to which such Borrower is a party or in respect of any Obligations or
obligation of the other Borrower, without any limitation as to amount, unless the instrument or
agreement evidencing or creating such other liability specifically provides to the contrary.




[Remainder of page intentionally left blank.]




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          IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written above.




	 	 	 	 	 	 	 	 	 
	 	 	BORROWERS:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	ODYSSEY HEALTHCARE OPERATING A, LP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Odyssey HealthCare GP, LLC	 	 
	 	 	Its:	 	General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/
R. Dirk Allison	 	 
	 

	 	 	 	Name:
	 	 

R. Dirk Allison
	 	 
	 

	 	 	 	Title:
	 	Senior Vice President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	ODYSSEY HEALTHCARE OPERATING B, LP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Odyssey HealthCare GP, LLC	 	 
	 	 	Its:	 	General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ R. Dirk Allison	 	 
	 

	 	 	 	Name:
	 	 

R. Dirk Allison
	 	 
	 

	 	 	 	Title:
	 	Senior Vice President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	HOSPICE OF THE PALM COAST, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ R. Dirk Allison	 	 
	 

	 	 	 	Name:
	 	 

R. Dirk Allison
	 	 
	 

	 	 	 	Title:
	 	Senior Vice President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	OHC INVESTMENT, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ R. Dirk Allison	 	 
	 

	 	 	 	Name:
	 	 

R. Dirk Allison
	 	 
	 

	 	 	 	Title:
	 	Senior Vice President and Chief Financial Officer	 	 






Odyssey Credit Agreement — Signature Page




 









 








	 	 	 	 	 	 	 
	 	 	AGENT AND LENDERS:	 	 
	 
	 	 	 	 	 	 
	 	 	GENERAL ELECTRIC CAPITAL	 	 
	 	 	CORPORATION, as Agent and a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ John Dale	 	 
	 

	 	 	 	 

     Duly Authorized Signatory
	 	 
	 
	 	 	 	 	 	 
	 	 	BANK OF TEXAS, NA, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Bianca A. Gulberti	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Bianca A. Gulberti
	 	 
	 

	 	Title:	 	Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Daniel H. Penkar	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	Daniel H. Penkar	 	 
	 

	 	Title:	 	Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	COMPASS BANK, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Key Coker	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	Key Coker	 	 
	 

	 	Title:	 	Executive Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	FIFTH THIRD BANK, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/  Jeffrey A. Thieman	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	Jeffrey A. Thieman	 	 
	 

	 	Title:	 	Vice President	 	 





Odyssey Credit
Agreement — Signature Page


 









 








	 	 	 	 	 	 	 
	 	 	SUNTRUST BANK, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Helen C. Hartz	 	 
	 

	 	Name:
	 	Helen C. Hartz

	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	Vice
President	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	UNION BANK OF CALIFORNIA, N.A., as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Michael Tschida	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	Michael Tschida	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	Vice President	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	WELLS FARGO FOOTHILL, LLC, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Elizabeth Downey	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	Elizabeth Downey	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	Vice President	 	 
	 

	 	 	 	 	 	 





Odyssey Credit Agreement
— Signature Page


 









 








          The following Persons are signatories to this Agreement in their capacity as Credit Parties
and not as Borrowers.




	 	 	 	 	 	 	 
	 	 	ODYSSEY HEALTHCARE, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	/s/ R. Dirk Allison	 	 
	 

	 	Its:
	 	 

Senior Vice President and Chief Financial Officer
	 	 
	 
	 	 	 	 	 	 
	 	 	ODYSSEY HEALTHCARE HOLDING COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	/s/ R. Dirk Allison	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:
	 	Senior Vice President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	ODYSSEY HEALTHCARE GP, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	/s/ R. Dirk Allison	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:
	 	Senior Vice President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	ODYSSEY HEALTHCARE LP, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	/s/ Jean M. Hunn	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:
	 	Manager	 	 






	 	 	 	 	 	 	 	 	 
	 	 	ODYSSEY HEALTHCARE MANAGEMENT, LP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Odyssey HealthCare GP, LLC	 	 
	 	 	Its:	 	General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By	 	/s/ R. Dirk Allison	 	 
	 

	 	 	 	Its:
	 	 

Senior Vice President and Chief
Financial Officer
	 	 






Odyssey Credit
Agreement — Signature Page


 









 








ANNEX A (Recitals)

to

SECOND AMENDED AND RESTATED CREDIT AGREEMENT




DEFINITIONS




          Capitalized terms used in the Loan Documents shall have (unless otherwise provided elsewhere
in the Loan Documents) the following respective meanings, and all references to Sections, Exhibits,
Schedules or Annexes in the following definitions shall refer to Sections, Exhibits, Schedules or
Annexes of or to the Agreement:




          “Account Debtor” means any Person who may become obligated to any Credit Party under,
with respect to, or on account of, an Account, Chattel Paper or General Intangibles (including a
payment intangible).




          “Accounting Changes” has the meaning ascribed thereto in Annex F.




          “Accounts” means all “accounts,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, including (a) all accounts receivable, other receivables,
book debts and other forms of obligations (other than forms of obligations evidenced by Chattel
Paper or Instruments), (including any such obligations that may be characterized as an account or
contract right under the Code), (b) all of each Credit Party’s rights in, to and under all purchase
orders or receipts for goods or services, (c) all of each Credit Party’s rights to any goods
represented by any of the foregoing (including unpaid sellers’ rights of rescission, replevin,
reclamation and stoppage in transit and rights to returned, reclaimed or repossessed goods), (d)
all rights to payment due to any Credit Party for property sold, leased, licensed, assigned or
otherwise disposed of, for a policy of insurance issued or to be issued, for a secondary obligation
incurred or to be incurred, for energy provided or to be provided, for the use or hire of a vessel
under a charter or other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by such Credit Party or in connection with any other
transaction (whether or not yet earned by performance on the part of such Credit Party), (e) all
health care insurance receivables and (f) all collateral security and guaranties of any kind, given
by any Account Debtor or any other Person with respect to any of the foregoing.




          “Acquisition” means the purchase by AcquisitionCo of Target Shares pursuant to the
Tender Offer and the consummation of the Merger, in each case, in accordance with the terms of the
Acquisition Agreement.




          “Acquisition Agreement” means the Agreement and Plan of Merger dated as of January 15,
2008 by and among Parent, AcquisitionCo and Target.




          “AcquisitionCo” has the meaning ascribed thereto in the preamble to the Agreement.




Annex A — Page 1




 









 








          “Advance” means any Revolving Credit Advance.




          “Affected Lender” has the meaning ascribed to it in Section 1.16(d).




          “Affiliate” means, with respect to any Person, (a) each Person that, directly or
indirectly, owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary,
ten percent (10%) or more of the Stock having ordinary voting power in the election of directors of
such Person, (b) each Person that controls, is controlled by or is under common control with such
Person, (c) each of such Person’s officers, directors, joint venturers and partners and (d) in the
case of Borrowers, the immediate family members, spouses and lineal descendants of individuals who
are Affiliates of any Borrower. For the purposes of this definition, “control” of a Person
shall mean the possession, directly or indirectly, of the power to direct or cause the direction of
its management or policies, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that the term “Affiliate” shall specifically
exclude Agent and each Lender.




          “Agent” means GE Capital in its capacity as Administrative Agent for Lenders or its
successor appointed pursuant to Section 9.7.




          “Agreement” means the Second Amended and Restated Credit Agreement dated as of the
date hereof by and among Borrowers, the other Credit Parties party thereto, GE Capital, as Agent
and Lender and the other Lenders from time to time party thereto, as the same may be amended,
supplemented, restated or otherwise modified from time to time.




          “Appendices” has the meaning ascribed to it in the recitals to the Agreement.




          “Applicable Margins” means collectively the Applicable Revolver Index Margin, the
Applicable Term Loan Index Margin, the Applicable Revolver LIBOR Margin and the Applicable Term
Loan LIBOR Margin.




          “Applicable Revolver Index Margin” means the per annum interest rate margin from time
to time in effect and payable in addition to the Index Rate applicable to the Revolving Loan, as
determined by reference to Section 1.5(a).




          “Applicable Revolver LIBOR Margin” means the per annum interest rate from time to time
in effect and payable in addition to the LIBOR Rate applicable to the Revolving Loan, as determined
by reference to Section 1.5(a).




          “Applicable Term Loan Index Margin” means the per annum interest rate from time to
time in effect and payable in addition to the Index Rate applicable to the Term Loan, as determined
by reference to Section 1.5(a).




          “Applicable Term Loan LIBOR Margin” means the per annum interest rate from time to
time in effect and payable in addition to the LIBOR Rate applicable to the Term Loan, as determined
by reference to Section 1.5(a).




Annex A — Page 2




 









 








          “Approved Fund” means, with respect to any Lender, any Person (other than a natural
Person) that (a) 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 (b) is
advised or managed by (i) such Lender, (ii) any Affiliate of such Lender or (iii) any Person (other
than an individual) or any Affiliate of any Person (other than an individual) that administers or
manages such Lender.




          “Assignment Agreement” means an assignment agreement substantially in the form
attached hereto as Exhibit 9.1(a).




          “Bankruptcy Code” means the provisions of Title 11 of the United States Code, 11
U.S.C. §§101 et seq.




          “Blocked Accounts” has the meaning ascribed to it in Annex C.




          “Borrowers” means (i) prior to the consummation of the Merger, OpCoA, OpCoB, Palm
Coast and AcquisitionCo, and (ii) upon and after consummation of the Merger, OpCoA, OpCoB, Palm
Coast and Target, and in each case each individually as a “Borrower”.




          “Business Associate Agreement” means that certain Business Associate Agreement
effective May 14, 2004 duly executed by and among Holdings, each Borrower (other than
AcquisitionCo), each Guarantor and Agent, together with all exhibits and schedules thereto, as the
same may be amended, modified, restated or supplemented from time to time in accordance with the
terms thereof.




          “Business Day” means any day that is not a Saturday, a Sunday or a day on which banks
are required or permitted to be closed in the States of Illinois and/or New York and in reference
to LIBOR Loans shall mean any such day that is also a LIBOR Business Day.




          “Capital Expenditures” means, with respect to any Person, all expenditures (by the
expenditure of cash or the incurrence of Indebtedness) by such Person during any measuring period
for any fixed assets or improvements or for replacements, substitutions or additions thereto that
have a useful life of more than one year and that are required to be capitalized under GAAP,
excluding in each instance, any such expenditures made pursuant to a Permitted Acquisition.




          “Capital Lease” means, with respect to any Person, any lease of any property (whether
real, personal or mixed) by such Person as lessee that, in accordance with GAAP, would be required
to be classified and accounted for as a capital lease on a balance sheet of such Person.




          “Capital Lease Obligation” means, with respect to any Capital Lease of any Person, the
amount of the obligation of the lessee thereunder that, in accordance with GAAP, would appear on a
balance sheet of such lessee in respect of such Capital Lease.




          “Cash Collateral Account” has the meaning ascribed to it Annex B.




Annex A — Page 3






 









 








          “Cash Equivalents” has the meaning ascribed to it in Section 6.2(c).




          “Cash Management Systems” has the meaning ascribed to it in Section 1.8.




          “Certificate of Exemption” has the meaning ascribed to it in Section 1.15(c).




          “Change of Control” means any of the following: (a) any person or group of persons
(within the meaning of the Securities Exchange Act of 1934) shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934) of thirty-five percent (35%) or more of the issued and
outstanding shares of capital Stock of Holdings having the right to vote for the election of
directors of Holdings under ordinary circumstances; (b) during any period of twelve consecutive
calendar months, individuals who at the beginning of such period constituted the board of directors
of Holdings (together with any new directors whose election by the board of directors of Holdings
or whose nomination for election by the Stockholders of Holdings was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at the beginning of such
period or whose election or nomination for election was previously so approved) cease for any
reason other than death or disability to constitute a majority of the directors then in office; (c)
Holdings ceases to own and control all of the economic and voting rights associated with all of the
outstanding capital Stock of any of its direct Subsidiaries; (d) Parent ceases to own and control
all of the economic and voting rights associated with all of the outstanding capital Stock of any
of its direct Subsidiaries; (e) Odyssey GP ceases to own and control all of the economic and voting
rights associated with all of the outstanding capital Stock of any of its direct Subsidiaries; or
(f) Odyssey LP ceases to own and control all of the economic and voting rights associated with all
of the outstanding capital Stock of any of its direct Subsidiaries.




          “Charges” means all federal, state, county, city, municipal, local, foreign or other
governmental taxes (including taxes owed to the PBGC at the time due and payable), levies,
assessments, charges, liens, claims or encumbrances upon or relating to (a) the Collateral, (b) the
Obligations, (c) the employees, payroll, income or gross receipts of any Credit Party, (d) any
Credit Party’s ownership or use of any properties or other assets, or (e) any other aspect of any
Credit Party’s business.




          “Chattel Paper” means any “chattel paper,” as such term is defined in the Code,
including electronic chattel paper, now owned or hereafter acquired by any Credit Party.




          “Closing Checklist” means the schedule, including all appendices, exhibits or
schedules thereto, listing certain documents and information to be delivered in connection with the
Agreement, the other Loan Documents and the transactions contemplated thereunder, substantially in
the form attached hereto as Annex D.




          “Closing Date” means the date on which the Initial Term Loan is made, which shall be
the same date as AcquisitionCo acquires any Target Shares pursuant to the Tender Offer.




Annex A — Page 4





 











 





          “Code” means the Uniform Commercial Code as the same may, from time to time, be
enacted and in effect in the State of New York; provided, that to the extent that the Code
is used to define any term herein or in any Loan Document and such term is defined differently in
different Articles or Divisions of the Code, the definition of such term contained in Article or
Division 9 shall govern; provided, further, that in the event that, by reason of
mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies
with respect to, Agent’s or any Lender’s Lien on any Collateral is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction other than the State of New York, the
term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other
jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection,
priority or remedies and for purposes of definitions related to such provisions.




          “Collateral” means the property covered by the Security Agreement and the other
Collateral Documents and any other property, real or personal, tangible or intangible, now existing
or hereafter acquired, that may at any time be or become subject to a security interest or Lien in
favor of Agent, on behalf of itself and Lenders, to secure the Obligations.




          “Collateral Documents” means the Security Agreement, the Master Pledge Agreement, the
Guaranties, the Trademark Security Agreements, and all similar agreements entered into guaranteeing
payment of, or granting a Lien upon property as security for payment of, the Obligations.




          “Collection Account” means that certain account of Agent, account number 502-710-79 in
the name of Agent at Deutsche Bank Trust Company Americas in New York, New York ABA No. 021 001
033, or such other account as may be specified in writing by Agent as the “Collection Account.”




          “Commitment Termination Date” means the earliest of (a) the Term Loan Maturity Date,
(b) the date of termination of Lenders’ obligations to make Advances and to incur Letter of Credit
Obligations or permit existing Loans to remain outstanding pursuant to Section 8.2(b), and
(c) the date of prepayment in full by Borrowers of the Loans and the cancellation and return (or
stand-by guarantee) of all Letters of Credit or the cash collateralization of all Letter of Credit
Obligations pursuant to Annex B, and the permanent reduction of all Commitments to zero
dollars ($0).




          “Commitments” means (a) as to any Lender, such Lender’s Revolving Loan Commitment and
Term Loan Commitment as set forth on Annex I to the Agreement or in the most recent
Assignment Agreement executed by such Lender and (b) as to all Lenders, the aggregate of all
Lenders’ Revolving Loan Commitments and Term Loan Commitments, which aggregate commitment shall be
$160,000,000 on the Closing Date, and as to each of clauses (a) and (b), as such
Commitments may be increased, reduced, amortized or adjusted from time to time in accordance with
the Agreement.




          “Compliance Certificate” has the meaning ascribed to it in Annex E.




          “Constituent Documents” has the meaning ascribed to it in Section 5.12(c).




Annex A — Page 5









 








          “Contracts” means all “contracts,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, in any event, including all contracts, undertakings, or
agreements (other than rights evidenced by Chattel Paper, Documents or Instruments) in or under
which any Credit Party may now or hereafter have any right, title or interest, including any
agreement relating to the terms of payment or the terms of performance of any Account.




          “Control Letter” means a letter agreement, in form and substance reasonably
satisfactory to Agent, between Agent and (i) the issuer of uncertificated securities with respect
to uncertificated securities in the name of any Credit Party, (ii) a securities intermediary with
respect to securities, whether certificated or uncertificated, securities entitlements and other
financial assets held in a securities account in the name of any Credit Party, (iii) a futures
commission merchant or clearing house, as applicable, with respect to commodity accounts and
commodity contracts held by any Credit Party, whereby, among other things, the issuer, securities
intermediary or futures commission merchant disclaims any security interest in the applicable
financial assets, acknowledges the Lien of Agent, on behalf of itself and Lenders, on such
financial assets, and agrees to follow the instructions or entitlement orders of Agent without
further consent by the affected Credit Party.




          “Copyright License” means any and all rights now owned or hereafter acquired by any
Credit Party under any written agreement granting any right to use any Copyright or Copyright
registration.




          “Copyrights” means all of the following now owned or hereafter adopted or acquired by
any Credit Party: (a) all copyrights and General Intangibles of like nature (whether registered or
unregistered), all registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the United States Copyright
Office or in any similar office or agency of the United States, any state or territory thereof, or
any other country or any political subdivision thereof, and (b) all reissues, extensions or
renewals thereof.




          “Corporate Integrity Agreement” means the corporate integrity agreement, dated July 6,
2006, by and between The Office of Inspector General of the Department of Health and Human Services
and Holdings, as it may be amended.




          “Credit Parties” means Odyssey Healthcare Management LP, a Delaware limited
partnership, Holdings, Parent, Odyssey GP, Odyssey LP, each Non-Guarantor Subsidiary, each
Borrower, Target, each Target Subsidiary Guarantor and each of their respective Subsidiaries.




          “Current Assets” means, with respect to any Person, all current assets of such Person
as of any date of determination calculated in accordance with GAAP, but excluding cash, Cash
Equivalents and debts due from Affiliates.




          “Current Liabilities” means, with respect to any Person, all liabilities that should,
in accordance with GAAP, be classified as current liabilities, and in any event shall include all
Indebtedness payable on demand or within one year from any date of determination without any




Annex A — Page 6









 







option
on the part of the obligor to extend or renew beyond such year, all accruals for federal or other
taxes based on or measured by income and payable within such year, but excluding the current
portion of long-term debt required to be paid within one year and the aggregate outstanding
principal balances of the Revolving Loan.




          “Default” means any event that, with the passage of time or notice or both, would,
unless cured or waived, become an Event of Default.




          “Default Rate” has the meaning ascribed to it in Section 1.5(d).




          “Delayed Draw Funding Date” means the date on which the Delayed Draw Term Loan is
made, which shall be the same date as the Merger Funding Date.




          “Delayed Draw Term Loan” has the meaning ascribed to it in Section 1.1(b)(i).




          “Disbursement Accounts” has the meaning ascribed to it in Annex C.




          “Disclosure Schedules” means the Schedules prepared by Borrowers and denominated as
Disclosure Schedules 1.4 through 6.7 in the Index to the Agreement.




          “Documents” means all “documents,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located.




          “Dollars” or “$” means lawful currency of the United States of America.




          “EBITDA” means, with respect to any Person for any fiscal period, without duplication,
an amount equal to (a) consolidated net income of such Person for such period determined in
accordance with GAAP, minus (b) the sum of (i) income tax credits, (ii) interest income,
(iii) gain from extraordinary items for such period, (iv) any aggregate net gain (but not any
aggregate net loss) during such period arising from the sale, exchange or other disposition of
capital assets by such Person (including any fixed assets, whether tangible or intangible, all
inventory sold in conjunction with the disposition of fixed assets and all securities), (v) any
other non-cash gains that have been added in determining consolidated net income, and (vi) positive
net income from discontinued operations, in each case to the extent included in the calculation of
consolidated net income of such Person for such period in accordance with GAAP, but without
duplication, plus (c) the sum of (i) any provision for income taxes, (ii) Interest Expense,
(iii) loss from extraordinary items for such period, (iv) the amount of non-cash charges (including
depreciation and amortization) for such period, (v) amortized debt discount for such period,
(vi) the amount of any deduction to consolidated net income as the result of any grant to any
directors, officers or employees of such Person of any Stock, (vii) to the extent incurred prior to
the Closing Date, costs related to write-down of Houston in-patient unit building not to exceed
$225,000, a one-time charge related to costs of CON denial in Broward County, Florida not to exceed
$850,000 and other one-time charges related to costs of CON denial in jurisdictions other
than Broward County in an aggregate amount not to exceed




Annex A — Page 7









 







$3,000,000, (viii) fees and expenses
incurred in connection with the Related Transactions including any termination fees payable to
Target’s lenders, to the extent such fees are not capitalized, in an aggregate amount not to exceed
$3,000,000, (ix) severance expenses identified in the KPMG Report, (x) other unusual and
non-recurring expenses (or less unusual and non-recurring gains) which do not represent a cash
item, and (xi) losses from discontinued operations, in each case to the extent included in the
calculation of consolidated net income of such Person for such period in accordance with GAAP, but
without duplication, plus (d) Pro Forma Acquisition EBITDA (assuming that the Merger
qualifies as a Permitted Acquisition). For purposes of this definition, the following items shall
be excluded in determining consolidated net income of a Person: (1) except as otherwise included
in the calculation of Pro Forma Acquisition EBITDA, the income (or deficit) of any other Person
accrued prior to the date it became a Subsidiary of, or was merged or consolidated into, such
Person or any of such Person’s Subsidiaries; (2) the income (or deficit) of any other Person (other
than a wholly-owned Subsidiary) in which such Person has an ownership interest, except to the
extent any such income has actually been received by such Person in the form of cash dividends or
distributions; (3) the undistributed earnings of any Subsidiary of such Person to the extent that
the declaration or payment of dividends or similar distributions by such Subsidiary is not at the
time permitted by the terms of any contractual obligation or requirement of law applicable to such
Subsidiary; (4) any restoration to income of any contingency reserve or any increase in any
contingency reserve in each case to the extent such restoration or increase relates to a period
prior to the period in which such restoration or increase was made; (5) any write-up of any asset;
(6) any net gain from the collection of the proceeds of life insurance policies; (7) any net gain
arising from the acquisition of any securities, or the extinguishment, under GAAP, of any
Indebtedness, of such Person; (8) in the case of a successor to such Person by consolidation or
merger or as a transferee of its assets, any earnings of such successor prior to such
consolidation, merger or transfer of assets; and (9) any deferred credit representing the excess of
equity in any Subsidiary of such Person at the date of acquisition of such Subsidiary over the cost
to such Person of the investment in such Subsidiary. With respect to the Target, EBITDA shall be
adjusted to include any actual cost savings achieved as a result of the Acquisition as demonstrated
to Agent’s reasonable satisfaction and as annualized during the first three Fiscal Quarters after
the Closing Date and, for the avoidance of doubt, shall not be adjusted to include any potential
synergy capture under the KPMG Report unless such cost savings have been actually achieved.




          “Eligible Assignee” means any commercial bank, savings and loan association or savings
bank, or any other entity that is either (i) a fund, including a collateralized loan obligation
fund, or (ii) an “accredited investor” (as defined in Regulation D under the Securities Act),
including insurance companies, mutual funds, lease financing companies and commercial finance
companies, that in either case 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; provided, that no Credit Party shall be an Eligible Assignee.




          “Environmental Laws” means all applicable federal, state, local and foreign laws,
statutes, ordinances, codes, rules, standards and regulations, now or hereafter in effect, and any
applicable judicial or administrative interpretation thereof, including any applicable
judicial or administrative order, consent decree, order or judgment, imposing liability or
standards of conduct for or relating to the regulation and protection of human health, safety, the
environment and natural resources (including ambient air, surface water, groundwater, wetlands,
land surface




Annex A — Page 8









 







or subsurface strata, wildlife, aquatic species and vegetation). Environmental Laws
include the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42
U.S.C. §§ 9601 et seq.) (“CERCLA”); the Hazardous Materials Transportation
Authorization Act of 1994 (49 U.S.C. §§ 5101 et seq.); the Federal Insecticide, Fungicide,
and Rodenticide Act (7 U.S.C. §§ 136 et seq.); the Solid Waste Disposal Act (42 U.S.C.
§§ 6901 et seq.); the Toxic Substance Control Act (15 U.S.C. §§ 2601 et seq.); the
Clean Air Act (42 U.S.C. §§ 7401 et seq.); the Federal Water Pollution Control Act (33
U.S.C. §§ 1251 et seq.); the Occupational Safety and Health Act (29 U.S.C. §§ 651 et
seq.); and the Safe Drinking Water Act (42 U.S.C. §§ 300(f) et seq.), and any and all
regulations promulgated thereunder, and all analogous state, local and foreign counterparts or
equivalents and any transfer of ownership notification or approval statutes.




          “Environmental Liabilities” means, with respect to any Person, all liabilities,
obligations, responsibilities, response, remedial and removal costs, investigation and feasibility
study costs, capital costs, operation and maintenance costs, losses, damages, punitive damages,
property damages, natural resource damages, consequential damages, treble damages, costs and
expenses (including all reasonable fees, disbursements and expenses of counsel, experts and
consultants), fines, penalties, sanctions and interest incurred as a result of or related to any
claim, suit, action, investigation, proceeding or demand by any Person, whether based in contract,
tort, implied or express warranty, strict liability, criminal or civil statute or common law,
including any arising under or related to any Environmental Laws, Environmental Permits, or in
connection with any Release or threatened Release or presence of a Hazardous Material whether on,
at, in, under, from or about or in the vicinity of any real or personal property.




          “Environmental Permits” means all permits, licenses, authorizations, certificates,
approvals or registrations required by any Governmental Authority under any Environmental Laws.




          “Equipment” means all “equipment,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located and, in any event, including all such
Credit Party’s machinery and equipment, including processing equipment, conveyors, machine tools,
data processing and computer equipment, including embedded software and peripheral equipment and
all engineering, processing and manufacturing equipment, office machinery, furniture, materials
handling equipment, tools, attachments, accessories, automotive equipment, trailers, trucks,
forklifts, molds, dies, stamps, motor vehicles, rolling stock and other equipment of every kind and
nature, trade fixtures and fixtures not forming a part of real property, together with all
additions and accessions thereto, replacements therefor, all parts therefor, all substitutes for
any of the foregoing, fuel therefor, and all manuals, drawings, instructions, warranties and rights
with respect thereto, and all products and proceeds thereof and condemnation awards and insurance
proceeds with respect thereto.




          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time, and any regulations promulgated thereunder.




Annex A — Page 9









 








          “ERISA Affiliate” means, with respect to any Credit Party, any trade or business
(whether or not incorporated) that, together with such Credit Party, are treated as a single
employer within the meaning of Sections 414(b), (c), (m) or (o) of the IRC.




          “ERISA Event” means, with respect to any Credit Party or any ERISA Affiliate, (a) with
respect to a Title IV Plan, any event described in Section 4043(c) of ERISA for which notice to the
PBGC has not been waived; (b) the withdrawal of any Credit Party or ERISA Affiliate from a Title IV
Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer, as
defined in Section 4001(a)(2) of ERISA; (c) the complete or partial withdrawal of any Credit Party
or any ERISA Affiliate from any Multiemployer Plan; (d) the filing of a notice of intent to
terminate a Title IV Plan in a distress termination described in Section 4041(c) of ERISA or the
treatment of a plan amendment as a termination under Section 4041 of ERISA; (e) the institution of
proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC; (f) with respect to a
Title IV Plan, the existence of an “accumulated funding deficiency” (as defined in Section 412 of
the IRC or Section 302 of ERISA) whether or not waived, or the failure to make by its due date a
required installment under Section 412(m) of the Code or the failure to make any required
contribution to a Multiemployer Plan; (g) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect
to a Title IV Plan; (h) the making of any amendment to any Title IV Plan which could result in the
imposition of a lien or the posting of a bond or other security; (i) with respect to a Title IV
Plan an event described in Section 4062(e) of ERISA; (j) any other event or condition that would
reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the
imposition of liability under Section 4069 or 4212(c) of ERISA; (k) the termination of a
Multiemployer Plan under Section 4041A of ERISA or the reorganization or insolvency of a
Multiemployer Plan under Section 4241 or 4245 of ERISA; (l) the loss of a Qualified Plan’s
qualification or tax exempt status; or (m) the termination of a Plan described in Section 4064 of
ERISA.




          “ESOP” means a Plan that is intended to satisfy the requirements of Section 4975(e)(7)
of the IRC.




          “E-System” means any electronic system, including Intralinks® and any other
Internet or extranet-based site, whether such electronic system is owned, operated or hosted by
Agent, any of its Affiliates, or any of such Person’s respective officers, directors, employees,
attorneys, agents and representatives or any other Person, providing for access to data protected
by passcodes or other security system.




          “Event of Default” has the meaning ascribed to it in Section 8.1.




          “Excess Cash Flow” means, without duplication, with respect to any Fiscal Year of
Holdings and its Subsidiaries, consolidated net income plus (a) depreciation, amortization
and
Interest Expense to the extent deducted in determining consolidated net income, plus
(b) decreases in Working Capital during such Fiscal
Year (measured as the excess of such Working
Capital at the beginning of such Fiscal Year over such Working Capital at the end of such Fiscal



Annex A — Page 10









 






Year), minus (c) increases in Working Capital during such Fiscal Year (measured as the
excess of such Working Capital at the end of such Fiscal Year over such Working Capital at the
beginning of such Fiscal Year), minus (d) Capital Expenditures during such Fiscal Year
(excluding the financed portion thereof), minus (e) Interest Expense paid or accrued
(excluding any original issue discount, interest paid in kind or amortized debt discount, to the
extent included in determining Interest Expense) and scheduled principal payments paid or payable
in respect of Funded Debt, plus or minus (as the case may be) (f) extraordinary
gains or losses which are cash items not included in the calculation of net income, plus
(g) taxes deducted in determining consolidated net income to the extent not paid for in cash,
minus (h) an amount equal to the aggregate amount of all voluntary prepayments of the
principal amount of the Term Loan made during such Fiscal Year.




          “Existing Credit Agreement” has the meaning ascribed to it in the recitals to the
Agreement.




          “Facilities” means (a) the Term Loan Facility and (b) the Revolving Loan Facility.




          “Fair Labor Standards Act” means the Fair Labor Standards Act, 29 U.S.C. §201
et seq.




          “Federal Funds Rate” means, for any day, a floating rate equal to the weighted average
of the rates on overnight Federal funds transactions among members of the Federal Reserve System,
as determined by Agent in its sole discretion, which determination shall be final, binding and
conclusive (absent manifest error).




          “Federal Reserve Board” means the Board of Governors of the United States Federal
Reserve System and any successor thereto.




          “Fees” means any and all fees payable to Agent or any Lender pursuant to the Agreement
or any of the other Loan Documents.




          “Financial Covenants” means the financial covenants set forth in Annex F.




          “Financial Statements” means the consolidated income statements, statements of cash
flows and balance sheets of Holdings and its Subsidiaries delivered in accordance with
Sections 3.4 and 4.1 and Annex E.




          “Fiscal Quarter” means any of the quarterly accounting periods of Borrowers, ending on
March 31, June 30, September 30 and December 31 of each year.




          “Fiscal Year” means any of the annual accounting periods of Borrowers ending on
December 31 of each year.




          “Fixed Charge Coverage Ratio” means, with respect to any Person for any fiscal period,
the ratio of (1) EBITDA of such Person for such fiscal period, minus unfinanced Capital



Annex A — Page 11









 






Expenditures made by such Person during such period, minus cash taxes paid by such Person during
such period and minus Pro Forma Acquisition EBITDA for such period, to (2) Fixed Charges incurred
or accrued by such Person for such period.




          “Fixed Charges” means, with respect to any Person for any fiscal period, (a) the
aggregate of all Interest Expense paid or accrued during such period, plus (b) scheduled payments
of principal with respect to Indebtedness during such period.




          “Fixtures” means all “fixtures” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party.




          “Foreign Lender” has the meaning ascribed to it in Section 1.15(c).




          “Funded Debt” means, with respect to any Person, without duplication, all Indebtedness
for borrowed money evidenced by notes, bonds, debentures, or similar evidences of Indebtedness that
by its terms matures more than one year from, or is directly or indirectly renewable or extendible
at such Person’s option under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year from the date of creation thereof, and
specifically including Capital Lease Obligations, current maturities of long-term debt, revolving
credit and short-term debt extendible beyond one year at the option of the debtor, and also
including, in the case of Borrowers, the Obligations and, without duplication, Guaranteed
Indebtedness consisting of guaranties of Funded Debt of other Persons.




          “GAAP” means generally accepted accounting principles in the United States of America
consistently applied, as such term is further defined in Annex F to the Agreement.




          “GE Capital” means General Electric Capital Corporation, a Delaware corporation.




          “GE Capital Fee Letter” has the meaning ascribed to it in Section 1.9.




          “General Intangibles” means all “general intangibles,” as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, including all right, title and interest
that such Credit Party may now or hereafter have in or under any Contract, all payment intangibles,
customer lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefor and
reissues, extensions or renewals thereof, rights in Intellectual Property, interests in
partnerships, joint ventures and other business associations, licenses, permits, copyrights, trade
secrets, proprietary or confidential information, inventions (whether or not patented or
patentable), technical information, procedures, designs, knowledge, know-how, Software, data bases,
data, skill, expertise, experience, processes, models, drawings, materials and records, goodwill
(including the goodwill associated with any Trademark or Trademark License), all rights and claims
in or under insurance policies (including insurance for fire, damage, loss and casualty, whether
covering personal property, real property, tangible rights or intangible rights,
all liability, life, key man and business interruption insurance, and all unearned premiums),
uncertificated securities, choses in action, deposit, checking and other bank accounts, rights to
receive tax refunds and other payments, rights to receive dividends, distributions, cash,



Annex A — Page 12









 






Instruments and other property in respect of or in exchange for pledged Stock and Investment
Property, rights of indemnification, all books and records, correspondence, credit files, invoices
and other papers, including without limitation all tapes, cards, computer runs and other papers and
documents in the possession or under the control of such Credit Party or any computer bureau or
service company from time to time acting for such Credit Party.




          “Goods” means all “goods” as defined in the Code, now owned or hereafter acquired by
any Credit Party, wherever located, including embedded software to the extent included in “goods”
as defined in the Code, manufactured homes, standing timber that is cut and removed for sale and
unborn young of animals.




          “Governmental Authority” means any nation or government, any state or other political
subdivision thereof, and any agency, department or other entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.




          “Guaranteed Indebtedness” means as to any Person, any obligation of such Person
guaranteeing, providing comfort or otherwise supporting any Indebtedness, lease, dividend, or other
obligation (“primary obligation”) of any other Person (the “primary obligor”) in
any manner, including any obligation or arrangement of such Person to (a) purchase or repurchase
any such primary obligation, (b) advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency or any balance sheet condition of the
primary obligor, (c) purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation, (d) protect the beneficiary of such arrangement from loss
(other than product warranties given in the ordinary course of business) or (e) indemnify the owner
of such primary obligation against loss in respect thereof. The amount of any Guaranteed
Indebtedness at any time shall be deemed to be an amount equal to the lesser at such time of
(x) the stated or determinable amount of the primary obligation in respect of which such Guaranteed
Indebtedness is incurred and (y) the maximum amount for which such Person may be liable pursuant to
the terms of the instrument embodying such Guaranteed Indebtedness, or, if not stated or
determinable, the maximum reasonably anticipated liability (assuming full performance) in respect
thereof.




          “Guaranties” means, collectively, each guaranty executed by any Guarantor in favor of
Agent and Lenders in respect of the Obligations.




          “Guarantors” means each Credit Party, other than the Borrowers and, until they shall
have executed and delivered a Guaranty in compliance with Section 5.11, the Non-Guarantor
Subsidiaries, and each other Person, if any, that executes a guaranty or other similar agreement in
favor of Agent, for itself and the ratable benefit of Lenders, in connection with the transactions
contemplated by the Agreement and the other Loan Documents.




          “Hazardous Material” means any substance, material or waste that is regulated by, or
forms the basis of liability now or hereafter under, any Environmental Laws, including any material
or substance that is (a) defined as a “solid waste,” “hazardous waste,” “hazardous



Annex A — Page 13









 






material,”
“hazardous substance,” “extremely hazardous waste,” “restricted hazardous waste,” “pollutant,”
“contaminant,” “hazardous constituent,” “special waste,” “toxic substance” or other similar term or
phrase under any Environmental Laws, or (b) petroleum or any fraction or by-product thereof,
asbestos, polychlorinated biphenyls (PCB’s), or any radioactive substance.




          “Healthcare Laws” has the meaning ascribed to it in Section 3.24.




          “HIPAA” means the Health Insurance Portability and Accountability Act of 1996, as the
same may be amended, modified or supplemented from time to time, and any successor statute thereto,
and any and all rules or regulations promulgated from time to time thereunder.




          “Holdings” means Odyssey HealthCare, Inc., a Delaware corporation.




          “Indebtedness” means, with respect to any Person, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase price of property
payment for which is deferred six months or more, but excluding obligations to trade creditors
incurred in the ordinary course of business that are unsecured and not overdue by more than six
months unless being contested in good faith, (b) all reimbursement and other obligations with
respect to letters of credit, bankers’ acceptances and surety bonds, whether or not matured, (c)
all obligations evidenced by notes, bonds, debentures or similar instruments, (d) all indebtedness
created or arising under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the seller or lender under
such agreement in the event of default are limited to repossession or sale of such property), (e)
all Capital Lease Obligations and the present value (discounted at the Index Rate as in effect on
the Closing Date) of future rental payments under all synthetic leases, (f) all obligations of such
Person under commodity purchase or option agreements or other commodity price hedging arrangements,
in each case whether contingent or matured, (g) all obligations of such Person under any foreign
exchange contract, currency swap agreement, interest rate swap, cap or collar agreement or other
similar agreement or arrangement designed to alter the risks of that Person arising from
fluctuations in currency values or interest rates, in each case whether contingent or matured, (h)
all Indebtedness referred to above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon or in property or other
assets (including accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Indebtedness and (i) the Obligations.




          “Indemnified Liabilities” has the meaning ascribed to it in Section 1.13.




          “Indemnified Person” has the meaning ascribed to in Section 1.13.




          “Index Rate” means, for any day, a floating rate equal to the higher of (i) the rate
publicly quoted from time to time by The Wall Street Journal as the “prime rate” (or, if
The Wall Street Journal ceases quoting a prime rate the highest per annum rate of
interest published by the Federal Reserve Board in Federal Reserve statistical release H.15 (519)
entitled “Selected Interest Rates” as the Bank prime loan rate or its equivalent), and (ii) the
Federal Funds Rate plus 50 basis points per annum. Each change in any interest rate provided for
in the




Annex A — Page 14









 







Agreement based upon the Index Rate shall take effect at the time of such change in the
Index Rate.




          “Index Rate Loan” means a Loan or portion thereof bearing interest by reference to the
Index Rate.




          “Initial Term Loan” has the meaning ascribed to it in Section 1.1(b)(i).




          “Instruments” means all “instruments,” as such term is defined in the Code, now owned
or hereafter acquired by any Credit Party, wherever located, and, in any event, including all
certificated securities, all certificates of deposit, and all promissory notes and other evidences
of Indebtedness, other than instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.




          “Intellectual Property” means any and all Licenses, Patents, Copyrights, Trademarks,
and the goodwill associated with such Trademarks.




          “Interest Expense” means, with respect to any Person for any fiscal period, interest
expense (whether cash or non-cash) of such Person determined in accordance with GAAP for the
relevant period ended on such date, including, interest expense with respect to any Funded Debt of
such Person and interest expense for the relevant period that has been capitalized on the balance
sheet of such Person.




          “Interest Payment Date” means (a) as to any Index Rate Loan, the first Business Day of
each month to occur while such Loan is outstanding, and (b) as to any LIBOR Loan, the last day of
the applicable LIBOR Period; provided, that, in the case of any LIBOR Period greater than
three months in duration, interest shall be payable at three month intervals and on the last day of
such LIBOR Period; and provided further, that in addition to the foregoing, each of
(x) the date upon which all of the Commitments have been terminated and the Loans have been paid in
full and (y) the Commitment Termination Date shall be deemed to be an “Interest Payment Date” with
respect to any interest that has then accrued under the Agreement.




          “Inventory” means all “inventory,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located, and in any event including inventory,
merchandise, goods and other personal property that are held by or on behalf of any Credit Party
for sale or lease or are furnished or are to be furnished under a contract of service, or that
constitute raw materials, work in process, finished goods, returned goods, or materials or supplies
of any kind, nature or description used or consumed or to be used or consumed in such Credit
Party’s business or in the processing, production, packaging, promotion, delivery or shipping of
the same, including all supplies and embedded Software.




          “Investment Property” means all “investment property” as such term is defined in the
Code now owned or hereafter acquired by any Credit Party, wherever located, including (i) all
securities, whether certificated or uncertificated, including stocks, bonds, interests in limited
liability companies, partnership interests, treasuries, certificates of deposit, and mutual fund
shares; (ii) all securities entitlements of any Credit Party, including the rights of any Credit



Annex A — Page 15









 






Party to any securities account and the financial assets held by a securities intermediary in such
securities account and any free credit balance or other money owing by any securities intermediary
with respect to that account; (iii) all securities accounts of any Credit Party; (iv) all commodity
contracts of any Credit Party; and (v) all commodity accounts held by any Credit Party.




          “IRC” means the Internal Revenue Code of 1986, as amended from time to time, and all
regulations promulgated thereunder.




          “IRS” means the Internal Revenue Service.




          “JV Subsidiary” means Odyssey Augusta, Odyssey Savannah, Odyssey Kansas City, Odyssey
Boston, Odyssey St. Louis or any other Subsidiary of a Credit Party which is created after the
Closing Date in accordance with the terms of this Agreement in which Stock is owned by a health
care provider, or an Affiliate thereof, that is not an Affiliate of Holdings.




          “KMPG Report” means the KPMG Project Vista Report, dated December 18, 2007 provided to
the Agent.




          “L/C Issuer” has the meaning ascribed to it in Annex B.




          “L/C Sublimit” has the meaning ascribed to it in Annex B.




          “Lenders” means (a) GE Capital, the other Lenders named on the signature pages of the
Agreement, and, if any such Lender shall decide to assign all or any portion of the Obligations
pursuant to the terms of this Agreement, such term shall include any assignee of such Lender, and
(b) solely for the purpose of obtaining the benefit of the Liens granted to the Agent for the
benefit of the Lenders under the Collateral Documents, a Person to whom any Obligations in respect
of a Secured Rate Contract are owed. For the avoidance of doubt, any Person to whom any
Obligations in respect of a Secured Rate Contract are owed and which does not hold any Loans or
Commitments shall not be entitled to any other rights as a “Lender” under this Agreement or any
other Loan Document.




          “Letter of Credit Fee” has the meaning ascribed to it in Annex B.




          “Letter of Credit Obligations” means all outstanding obligations incurred by Agent and
Lenders at the request of Borrowers, whether direct or indirect, contingent or otherwise, due or
not due, in connection with the issuance of Letters of Credit by Agent or another L/C Issuer or the
purchase of a participation as set forth in Annex B with respect to any Letter of Credit.
The amount of such Letter of Credit Obligations shall equal the maximum
amount that may be payable at such time or at any time thereafter by Agent or Lenders
thereupon or pursuant thereto.




          “Letters of Credit” means documentary or standby letters of credit issued for the
account of any Borrower by any L/C Issuer, and bankers’ acceptances issued by any Borrower, for
which Agent and Lenders have incurred Letter of Credit Obligations.




Annex A — Page 16









 








          “Leverage Ratio” means, with respect to Holdings and its Subsidiaries, on a
consolidated basis, the ratio of (a) Funded Debt of Holdings and its Subsidiaries plus
accrued Medicare Cap Liabilities minus available unencumbered (other than the Liens in
favor of Agent for the benefit of the Lenders) cash and Cash Equivalents, in each case as of any
date of determination, to (b) EBITDA for the twelve months ending on that date of determination.




          “LIBOR Business Day” means a Business Day on which banks in the City of London are
generally open for interbank or foreign exchange transactions.




          “LIBOR Loan” means a Loan or any portion thereof bearing interest by reference to the
LIBOR Rate.




          “LIBOR Period” means, with respect to any LIBOR Loan, each period commencing on a
LIBOR Business Day selected by Borrowers pursuant to the Agreement and ending one, two, three or
six months (or to the extent available to all applicable Lenders, nine or twelve months)
thereafter, as selected by Borrowers’ irrevocable notice to Agent as set forth in
Section 1.5(e); provided, that the foregoing provision relating to LIBOR Periods is
subject to the following:





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




     (b) any LIBOR Period that would otherwise extend beyond the Revolving
Commitment Termination Date, with respect to Revolving Loans, or the Commitment
Termination Date, with respect to all Loans, shall end 2 LIBOR Business Days prior
to such date;




     (c) any LIBOR Period that begins on the last LIBOR 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 LIBOR Period) shall end on the last LIBOR Business
Day of a calendar month;




     (d) Borrowers shall select LIBOR Periods so as not to require a payment or
prepayment of any LIBOR Loan during a LIBOR Period for such Loan; and




     (e) Borrowers shall select LIBOR Periods so that there shall be no more than 5
separate LIBOR Loans in existence at any one time.



Annex A — Page 17









 





          “LIBOR Rate” means for each LIBOR Period, a rate of interest determined by Agent equal
to:





     (a) the offered rate for deposits in United States Dollars for the applicable
LIBOR Period that appears on the Reuters Screen LIBOR01 page as of 11:00 a.m.
(London time), on the second full LIBOR Business Day next preceding the first day of
such LIBOR Period (unless such date is not a Business Day, in which event the next
succeeding Business Day will be used); divided by




     (b) a number equal to 1.0 minus the aggregate (but without duplication)
of the rates (expressed as a decimal fraction) of reserve requirements in effect on
the day that is 2 LIBOR Business Days prior to the beginning of such LIBOR Period
(including basic, supplemental, marginal and emergency reserves under any
regulations of the Federal Reserve Board or other Governmental Authority having
jurisdiction with respect thereto, as now and from time to time in effect) for
Eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Federal Reserve Board that are required to be maintained by a
member bank of the Federal Reserve System.


If such interest rates shall cease to be available from Reuters, the LIBOR Rate shall be determined
from such financial reporting service or other information as shall be mutually acceptable to Agent
and Borrowers.




          “License” means any Copyright License, Patent License, Trademark License or other
license of rights or interests now held or hereafter acquired by any Credit Party.




          “Lien” means any mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, lien, charge, claim, security interest, easement or encumbrance, or preference,
priority or other security agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing, and the filing of, or agreement to give, any
financing statement perfecting a security interest under the Code or comparable law of any
jurisdiction).




          “Litigation” has the meaning ascribed to it in Section 3.13.




          “Loan Documents” means the Agreement, the Notes, the Collateral Documents, and all
other agreements, instruments, documents and certificates identified in the Closing Checklist
executed and delivered to, or in favor of, Agent or any Lenders and including all other pledges,
powers of attorney, consents, assignments, contracts, notices, and all other written matter whether
heretofore, now or hereafter executed by or on behalf of any Credit Party, or any employee of any
Credit Party, and delivered to Agent or any Lender in connection with the
Agreement or the transactions contemplated thereby. Any reference in the Agreement or any
other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto,
and all amendments, restatements, supplements or other modifications thereto, and shall



Annex A — Page 18









 






refer to
the Agreement or such Loan Document as the same may be in effect at any and all times such
reference becomes operative.




          “Loans” means, collectively, the Revolving Loan and the Term Loan.




          “Lock Boxes” has the meaning ascribed to it in Annex C.




          “Margin Stock” has the meaning ascribed to in Section 3.10.




          “Master Pledge Agreement” means the Amended and Restated Pledge Agreement dated as of
the date hereof executed by Holdings, Parent, Odyssey GP and Odyssey LP in favor of Agent, on
behalf of itself and Lenders, pledging all Stock of Subsidiaries (other than, prior to the Merger
Funding Date, AcquisitionCo, Target and Target’s Subsidiaries) and all intercompany notes owing to
or held by any of them.




          “Material Adverse Effect” means a material adverse effect on (a) the business,
industry, assets, operations or financial or other condition of the Credit Parties considered as a
whole, (b) any Credit Party’s ability to pay any of the Loans or any of the other Obligations in
accordance with the terms of the Agreement, (c) the Collateral or Agent’s Liens, on behalf of
itself and Lenders, on the Collateral or the priority of such Liens, or (d) Agent’s or any Lender’s
rights and remedies under the Agreement and the other Loan Documents. Without limiting the
generality of the foregoing, any event or occurrence adverse to one or more Credit Parties which
results or could reasonably be expected to result in costs and/or liabilities or loss of revenues,
individually or in the aggregate, in any 30-day period in excess of fifteen percent (15%) of the
EBITDA of Holdings and its Subsidiaries for the twelve-month period ending as of the last day of
the most recently ended Fiscal Quarter (based on the Compliance Certificate most recently delivered
pursuant to Section 4.1) shall constitute a Material Adverse Effect.




          “Maximum Amount” means, as of any date of determination, an amount equal to the
Revolving Loan Commitment of all Revolving Lenders as of that date.




          “Maximum Lawful Rate” has the meaning ascribed to it in Section 1.5(f).




          “Medicare Cap Liabilities” means, as of any date of determination, the amount that
would be identified as “Medicare Cap Liabilities” in the most recent Financial Statements of
Holdings delivered to Agent in accordance with Section 4.1 and Annex E.




          “Merger” means, following consummation of the Tender Offer, the merger of
AcquisitionCo with and into Target on the terms and subject to the conditions set forth in the
Acquisition Agreement.




          “Merger Funding Date” means the date upon which Borrowers draw on the Term Loan in
order to fund the Merger Consideration and the Option Consideration as defined in and in accordance
with the terms of the Acquisition Agreement.





Annex A — Page 19












 





          “Mortgage” means any mortgage, deed of trust or other document executed or required
herein to be executed by any Credit Party and granting a Lien over real property in favor of Agent
as security for the Obligations.




          “Mortgage Supporting Documents” means, with respect to any Mortgage for a parcel of
real property, each document (including title searches and evidence regarding recording and payment
of fees, property insurance premiums and taxes relating thereto) that Agent may reasonably request,
to create, register, or perfect a valid Lien on such parcel of real property in favor of Agent for
the benefit of the Lenders, subject only to Permitted Encumbrances and such other Liens as Agent
may approve.




          “Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of
ERISA, and to which any Credit Party or ERISA Affiliate is making, is obligated to make or has made
or been obligated to make, contributions on behalf of participants who are or were employed by any
of them.




          “Non-Funding Lender” has the meaning ascribed to it in Section 9.9(a)(ii).




          “Non-Guarantor Subsidiaries” means Odyssey Fort Worth, Odyssey Detroit, Odyssey
Manatee County, Odyssey Collier County, Odyssey Northwest Florida, Odyssey Austin, Odyssey
Hillsborough County, Odyssey Marion County, Odyssey Pinellas County, each JV Subsidiary and any
other Subsidiary that is formed solely for the purpose of acquiring any of the stock or assets of a
Target Company, has not yet consummated such acquisition and has been formed not more than sixty
(60) days prior to the date of such acquisition.




          “Notes” means, collectively, the Revolving Notes and the Term Notes.




          “Notice of Conversion/Continuation” has the meaning ascribed to it in
Section 1.5(e).




          “Notice of Revolving Credit Advance” has the meaning ascribed to it in
Section 1.1(a).




          “Obligations” means all loans, advances, debts, liabilities and obligations for the
performance of covenants, tasks or duties or for payment of monetary amounts (whether or not such
performance is then required or contingent, or such amounts are liquidated or determinable) owing
by any Credit Party to Agent, any Lender or any Secured Swap Provider, and all covenants and duties
regarding such amounts, of any kind or nature, present or future, whether or not evidenced by any
note, agreement, letter of credit agreement or other instrument, arising under the Agreement, any
of the other Loan Documents or any Secured Rate Contract. This term includes all principal,
interest (including all interest that accrues after the commencement of any case or proceeding by
or against any Credit Party in bankruptcy, whether or not allowed in such case or proceeding),
Fees, Charges, expenses, attorneys’ fees and any other sum chargeable to any Credit Party under the
Agreement or any of the other Loan Documents or any Secured Rate Contract.





Annex A — Page 20









 









          “Odyssey Augusta” means Odyssey HealthCare of Augusta, LLC, a Delaware limited
liability company.




          “Odyssey Austin” means Odyssey HealthCare Austin, LLC, a Delaware limited liability
company.




          “Odyssey Boston” means Odyssey HealthCare of Boston, LLC, a Delaware limited liability
company.




          “Odyssey Collier County” means Odyssey HealthCare of Collier County, Inc., a Delaware
corporation.




          “Odyssey Detroit” means Odyssey HealthCare Detroit, LLC, a Delaware limited liability
company.




          “Odyssey Fort Worth” means Odyssey HealthCare Fort Worth, LLC, a Delaware limited
liability company.




          “Odyssey GP” means Odyssey HealthCare GP, LLC, a Delaware limited liability company.




          “Odyssey Hillsborough County” means Odyssey HealthCare of Hillsborough County, Inc., a
Delaware corporation.




          “Odyssey Kansas City” means Odyssey HealthCare of Kansas City, LLC, a Delaware limited
liability company.




          “Odyssey LP” means Odyssey HealthCare LP, LLC, a Delaware limited liability company.




          “Odyssey Manatee County” means Odyssey HealthCare of Manatee County, Inc., a Delaware
corporation.




          “Odyssey Marion County” means Odyssey HealthCare of Marion County, Inc., a Delaware
corporation.




          “Odyssey Northwest Florida” means Odyssey HealthCare of Northwest Florida, Inc., a
Delaware corporation.




          “Odyssey Pinellas County” means Odyssey HealthCare of Pinellas County, Inc., a
Delaware corporation.




          “Odyssey Savannah” means Odyssey HealthCare of Savannah, LLC, a Delaware limited
liability company.




          “Odyssey St. Louis” means Odyssey HealthCare of St. Louis, LLC, a Delaware limited
liability company.




Annex A — Page 21










 








          “OpCoA” has the meaning ascribed thereto in the preamble to the Agreement.




          “OpCoB” has the meaning ascribed thereto in the preamble to the Agreement.




          “Palm Coast” has the meaning ascribed thereto in the preamble to the Agreement.




          “Parent” means Odyssey HealthCare Holding Company, a Delaware corporation.




          “Patent License” means rights under any written agreement now owned or hereafter
acquired by any Credit Party granting any right with respect to any invention on which a Patent is
in existence.




          “Patents” means all of the following in which any Credit Party now holds or hereafter
acquires any interest: (a) all letters patent of the United States or of any other country, all
registrations and recordings thereof, and all applications for letters patent of the United States
or of any other country, including registrations, recordings and applications in the United States
Patent and Trademark Office or in any similar office or agency of the United States, any State, or
any other country, and (b) all reissues, continuations, continuations-in-part or extensions
thereof.




          “Payoff Debt” means the Indebtedness described on Schedule 2.1(h), which shall be paid
or redeemed in full on the Closing Date




          “PBGC” means the Pension Benefit Guaranty Corporation.




          “Pension Plan” means a Plan described in Section 3(2) of ERISA.




          “Permitted Acquisition” has the meaning ascribed to it in Section 6.1.




          “Permitted Encumbrances” means the following encumbrances: (a) Liens for taxes or
assessments or other governmental Charges not yet due and payable or which are being contested in
accordance with Section 5.2(b); (b) pledges or deposits of money securing statutory
obligations under workmen’s compensation, unemployment insurance, social security or public
liability laws or similar legislation (excluding Liens under ERISA); (c) pledges or deposits of
money securing bids, tenders, contracts (other than contracts for the payment of money) or leases
to which any Credit Party is a party as lessee made in the ordinary course of business;
(d) inchoate and unperfected workers’, mechanics’ or similar liens arising in the ordinary course
of business, so long as such Liens attach only to Equipment, Fixtures and/or Real Estate;
(e) carriers’, warehousemen’s, suppliers’ or other similar possessory liens arising in the ordinary
course of business and securing liabilities in an outstanding aggregate amount not in excess of
$500,000 at any time, so long as such Liens attach only to Inventory; (f) deposits securing, or in
lieu of, surety, appeal or customs bonds in proceedings to which any Credit Party is a party; (g)
cash deposits, including certificates of deposit, securing reimbursement obligations in respect of
outstanding Permitted L/Cs in an amount not to exceed 105% of the face amount of such Permitted
L/Cs and in accounts segregated from any operating accounts or other accounts in which Agent has a
first priority perfected security interest; (h) any attachment or judgment lien not constituting an
Event of Default under Section 8.1(j); (i) zoning restrictions, easements,




Annex A — Page 22










 







licenses, or
other restrictions on the use of any Real Estate or other minor irregularities in title
(including leasehold title) thereto, so long as the same do not materially impair the use,
value, or marketability of such Real Estate; (j) presently existing or hereafter created Liens in
favor of Agent, on behalf of Lenders; and (k) Liens expressly permitted under clauses (b)
and (c) of Section 6.7 of the Agreement.




          “Permitted L/Cs” means the letters of credit in existence on the Closing Date and set
forth on Disclosure Schedule 6.3 having reimbursement obligations secured by no Liens other
then Permitted Encumbrances.




          “Person” means any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, limited liability company, institution,
public benefit corporation, other entity or government (whether federal, state, county, city,
municipal, local, foreign, or otherwise, including any instrumentality, division, agency, body or
department thereof).




          “Plan” means, at any time, an “employee benefit plan”, as defined in Section 3(3) of
ERISA, that any Credit Party or ERISA Affiliate maintains, contributes to or has an obligation to
contribute to or has a material liability, contingent or otherwise, with respect thereto, on behalf
of participants who are or were employed by any Credit Party or ERISA Affiliate.




          “Proceeds” means “proceeds,” as such term is defined in the Code, including (a) any
and all proceeds of any insurance, indemnity, warranty or guaranty payable to any Credit Party from
time to time with respect to any of the Collateral, (b) any and all payments (in any form
whatsoever) made or due and payable to any Credit Party from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral
by any Governmental Authority (or any Person acting under color of governmental authority), (c) any
claim of any Credit Party against third parties (i) for past, present or future infringement of any
Patent or Patent License, or (ii) for past, present or future infringement or dilution of any
Copyright, Copyright License, Trademark or Trademark License, or for injury to the goodwill
associated with any Trademark or Trademark License, (d) any recoveries by any Credit Party against
third parties with respect to any litigation or dispute concerning any of the Collateral including
claims arising out of the loss or nonconformity of, interference with the use of, defects in, or
infringement of rights in, or damage to, Collateral, (e) all amounts collected on, or distributed
on account of, other Collateral, including dividends, interest, distributions and Instruments with
respect to Investment Property and pledged Stock, and (f) any and all other amounts, rights to
payment or other property acquired upon the sale, lease, license, exchange or other disposition of
Collateral and all rights arising out of Collateral.




          “Pro Forma Acquisition EBITDA” means (i) EBITDA attributable to each Permitted
Acquisition (with such pro forma adjustments as are reasonably acceptable to Agent, as indicated by
its written approval thereof, based upon data presented to Agent to its reasonable satisfaction)
consummated during the one (1) year period preceding the date of determination calculated solely
for a number of months immediately preceding the consummation of the applicable Permitted
Acquisition, which number equals twelve (12) minus the number of months



Annex A — Page 23










 






following the
consummation of the applicable Permitted Acquisition for which financial statements of Holdings and
its Subsidiaries have been delivered to Agent pursuant to Section 4.1
and (ii) for purposes of determining compliance with Section 6.1, EBITDA of the Target Company
of any proposed Permitted Acquisition (adjusted with such pro forma adjustments as are reasonably
acceptable to Agent based upon data presented to Agent to its reasonable satisfaction) calculated
for the twelve (12) months immediately preceding the consummation of the proposed Permitted
Acquisition.




          “Projections” means Holdings’ and its Subsidiaries forecasted consolidated profit and
loss statements, all consistent with the historical Financial Statements of the Credit Parties,
together with appropriate supporting details and a statement of underlying assumptions.




          “Pro Rata Share” means with respect to all matters relating to any Lender, (a) with
respect to the Revolving Loan, the percentage obtained by dividing (i) the Revolving Loan
Commitment of that Lender by (ii) the aggregate Revolving Loan Commitments of all Lenders, (b) with
respect to the Term Loan, the percentage obtained by dividing (i) the Term Loan Commitment of that
Lender by (ii) the aggregate Term Loan Commitments of all Lenders, as any such percentages may be
adjusted by assignments permitted pursuant to Section 9.1, (c) with respect to all Loans,
the percentage obtained by dividing (i) the aggregate Commitments of that Lender by (ii) the
aggregate Commitments of all Lenders, and (d) with respect to all Loans on and after the Commitment
Termination Date, the percentage obtained by dividing (i) the aggregate outstanding principal
balance of the Loans held by that Lender, by (ii) the outstanding principal balance of the Loans
held by all Lenders.




          “Qualified Plan” means a Pension Plan that is intended to be tax-qualified under
Section 401(a) of the IRC.




          “Rate Contracts” means swap agreements (as such term is defined in Section 101 of the
Bankruptcy Code) and any other agreements or arrangements designed to provide protection against
fluctuations in interest or currency exchange rates.




          “Real Estate” has the meaning ascribed to it in Section 3.6.




          “Related Transactions” means, collectively, the consummation of the Acquisition
(including the Tender Offer and the Merger), the prepayment, redemption, refinancing or other
satisfaction of the Payoff Debt, the execution and delivery of all Related Transaction Documents
and the payment of all related fees, costs and expenses.




          “Related Transaction Documents” means, collectively, the Acquisition Agreement, the
documents relating to the repayment, redemption or other satisfaction of the Payoff Debt, and each
other document executed with respect to any of the foregoing or any Related Transaction.




          “Relationship Bank” has the meaning ascribed to it in Annex C.




          “Release” means any release, threatened release, spill, emission, leaking, pumping,
pouring, emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal,



Annex A — Page 24










 






dumping,
leaching or migration of Hazardous Material in the indoor or outdoor environment, including the
movement of Hazardous Material through or in the air, soil, surface water, ground water or
property.




          “Replacement Lender” has the meaning ascribed to it in Section 1.16(d).




          “Requisite Lenders” means Lenders having (a) more than fifty percent (50%) of the
Commitments of all Lenders, or (b) if the Commitments have been terminated, more than fifty percent
(50%) of the aggregate outstanding amount of all Loans.




          “Requisite Revolving Lenders” means Lenders having (a) more than fifty percent (50%)
of the Revolving Loan Commitments of all Lenders, or (b) if the Revolving Loan Commitments have
been terminated, more than fifty percent (50%) of the aggregate outstanding amount of the Revolving
Loan.




          “Requisite Term Lenders” means Lenders having (a) more than fifty percent (50%) of the
Term Loan Commitments of all Lenders, or (b) if the Term Loan Commitments have been terminated,
more than fifty percent (50%) of the aggregate outstanding amount of the Term Loan.




          “Restricted Payment” means, with respect to any Credit Party (a) the declaration or
payment of any dividend or the incurrence of any liability to make any other payment or
distribution of cash or other property or assets in respect of Stock; (b) any payment on account of
the purchase, redemption, defeasance, sinking fund or other retirement of such Credit Party’s Stock
or any other payment or distribution made in respect thereof, either directly or indirectly;
(c) any payment or prepayment of principal of, premium, if any, or interest, fees or other charges
on or with respect to, and any redemption, purchase, retirement, defeasance, sinking fund or
similar payment and any claim for rescission with respect to, any Subordinated Debt; (d) any
payment made to redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire Stock of such Credit Party now or
hereafter outstanding; (e) any payment of a claim for the rescission of the purchase or sale of, or
for material damages arising from the purchase or sale of, any shares of such Credit Party’s Stock
or of a claim for reimbursement, indemnification or contribution arising out of or related to any
such claim for damages or rescission; (f) any payment, loan, contribution, or other transfer of
funds or other property to any Stockholder of such Credit Party other than payment of compensation
in the ordinary course of business to Stockholders who are employees of such Person; and (g) any
payment of management fees (or other fees of a similar nature) by such Credit Party to any
Stockholder of such Credit Party or its Affiliates.




          “Retiree Welfare Plan” means, at any time, a Welfare Plan that provides for continuing
coverage or benefits for any participant or any beneficiary of a participant after such
participant’s termination of employment, other than continuation coverage provided pursuant to
Section 4980B of the IRC and at the sole expense of the participant or the beneficiary of the
participant.




Annex A — Page 25










 








          “Revolving Commitment Termination Date” means the earliest of (a) February 28, 2013,
(b) the date of termination of Revolving Lenders’ obligations to make Advances and to incur Letter
of Credit Obligations or permit existing Loans to remain outstanding pursuant to Section 8.2(b), and (c) the date of prepayment in full by Borrowers of the Loans and
the cancellation and return (or stand-by guarantee) of all Letters of Credit or the cash
collateralization of all Letter of Credit Obligations pursuant to Annex B, and the
permanent reduction of all Commitments to zero dollars ($0).


          “Revolving Credit Advance” has the meaning ascribed to it in
Section 1.1(a)(i).




          “Revolving Lenders” means, as of any date of determination, Lenders having a Revolving
Loan Commitment.




          “Revolving Loan” means, at any time, the sum of (i) the aggregate amount of Revolving
Credit Advances outstanding to Borrower plus (ii) the aggregate Letter of Credit
Obligations incurred on behalf of Borrower. Unless the context otherwise requires, references to
the outstanding principal balance of the Revolving Loan shall include the outstanding balance of
Letter of Credit Obligations.




          “Revolving Loan Commitment” means (a) as to any Lender, the aggregate commitment of
such Lender to make Revolving Credit Advances or incur Letter of Credit Obligations as set forth on
Annex I to the Agreement or in the most recent Assignment Agreement executed by such
Lender, as such amount may be adjusted, if at all, from time to time in accordance with this
Agreement, and (b) as to all Lenders, the aggregate commitment of all Lenders to make Revolving
Credit Advances or incur Letter of Credit Obligations, which aggregate commitment shall be
$30,000,000 on the Closing Date.




          “Revolving Loan Facility” means the Revolving Loan Commitments and the provisions
herein related to the Revolving Loans, Revolving Credit Advances and Letters of Credit.




          “Revolving Note” has the meaning ascribed to it in Section 1.12(e).




          “Security Agreement” means the Amended and Restated Security Agreement dated as of the
Closing Date entered into by and among Agent, on behalf of itself and Lenders, and each Credit
Party that is a signatory thereto.




          “Secured Rate Contract” means any Rate Contract between any Borrower and the
counterparty thereto which has been provided by any Lender or an Affiliate of any Lender or
provided or arranged by GE Capital or an Affiliate of GE Capital.




          “Secured Swap Provider” means a Person with whom any Borrower has entered into a
Secured Rate Contract provided by any Lender or an Affiliate of any Lender or provided or arranged
by GE Capital or an Affiliate of GE Capital, and any assignee thereof.



Annex A — Page 26










 







          “Senior Officer” means, with respect to any Person, the chairman of the board, the
president, the chief executive officer, the chief operating officer, the general counsel, or any
equivalent officer (regardless of his or her title), and, in respect of financial or accounting
matters, the chief financial officer, the vice president of finance, the treasurer, or any
equivalent officer (regardless of his or her title).




          “Settlement Date” has the meaning ascribed to it in Section 9.9(a)(ii).




          “Software” means all “software” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, other than software embedded in any category of Goods,
including all computer programs and all supporting information provided in connection with a
transaction related to any program.




          “Solvent” means, 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 contingent liabilities, of such Person; (b) the present fair salable 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 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 can be reasonably be expected to become an actual or matured liability.




          “SPV” means any special purpose funding vehicle identified as such in a writing by any
Lender to the Agent.




          “Stock” means 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 Securities Exchange Act of 1934).




          “Stockholder” means, with respect to any Person, each holder of Stock of such Person.




          “Subordinated Debt” means any Indebtedness of any Credit Party subordinated to the
Obligations in a manner and form satisfactory to Agent in its reasonable discretion, as to right
and time of payment and as to any other rights and remedies thereunder.




          “Subsidiary” means, with respect to any Person, (a) any corporation of which an
aggregate of more than fifty percent (50%) of the outstanding Stock having ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of whether,




Annex A — Page 27










 







at the
time, Stock of any other class or classes of such corporation shall have or might have voting power
by reason of the happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such Person, or with respect
to which any such Person has the right to vote or designate the vote of fifty percent (50%) or more
of such Stock whether by proxy, agreement, operation of law or otherwise, and (b) any partnership
or limited liability company in which such Person and/or one or more Subsidiaries of
such Person shall have an interest (whether in the form of voting or participation in profits
or capital contribution) of more than fifty percent (50%) or of which any such Person is a general
partner or may exercise the powers of a general partner. Unless the context otherwise requires,
each reference to a Subsidiary shall be a reference to a Subsidiary of a Borrower.




          “Supporting Obligations” means all “supporting obligations” as such term is defined in
the Code, including letters of credit and guaranties issued in support of Accounts, Chattel Paper,
Documents, General Intangibles, Instruments or Investment Property.




          “Target” means VistaCare, Inc., a Delaware corporation.




          “Target Company” has the meaning ascribed to it in Section 6.1.




          “Target Margin Stock” means any Target Shares or any other shares of capital stock of
the Target, in each case, that are margin stock (within the meaning of Regulation U of the Federal
Reserve Board).




          “Target Shares” means shares of Class A Common Stock, $0.01 par value per share, of
the Target.




          “Target Subsidiary Guarantors” means, collectively, Vista Hospice Care, Inc., a
Delaware corporation, VistaCare USA, Inc., a Delaware corporation, FHI Health Systems, Inc., a
Delaware corporation, CareNation, Inc., a Delaware corporation, FHI GP, Inc., a Texas corporation,
FHI LP, Inc., a Nevada corporation, Family Hospice, Ltd., a Texas limited partnership, and FHI
Management, Ltd., a Texas limited partnership.




          “Taxes” means taxes, levies, imposts, deductions, Charges or withholdings, and all
liabilities with respect thereto, excluding taxes imposed on or measured by the net income of Agent
or a Lender by the jurisdictions under the laws of which Agent and Lenders are organized or conduct
business or any political subdivision thereof.




          “Tender Offer” means the tender offer by AcquisitionCo to purchase all outstanding
Target Shares, at a price of $8.60 per share, in cash on the terms and subject to the conditions
set forth in the Acquisition Agreement pursuant to a Tender Offer Statement on Schedule TO
containing AcquisitionCo’s offer to purchase and related letter of transmittal and the related form
of summary advertisement, as filed with the United States Securities and Exchange Commission on
January 30, 2008, as amended from time to time.




Annex A — Page 28





 











 





          “Term Commitment Termination Date” means the earliest of (a) August 28, 2008, (b) the
Delayed Draw Funding Date and (c) the date of termination of Lenders’ obligations to make Advances
and to incur Letter of Credit Obligations or permit existing Loans to remain outstanding pursuant
to Section 8.2(b).




          “Term Lenders” means those Lenders having Term Loan Commitments.




          “Term Loan” means, collectively, the Initial Term Loan and the Delayed Draw Term Loan.




          “Term Loan Commitment” means (a) as to any Lender with a Term Loan Commitment, the
commitment of such Lender to make its Pro Rata Share of the Term Loan, and (b) as to all Lenders
with a Term Loan Commitment, the aggregate commitment of all Lenders to make the Term Loan, which
aggregate commitment shall be One Hundred Thirty Million Dollars ($130,000,000) on the Closing
Date. After advancing the Initial Term Loan and the Delayed Draw Term Loan, each reference to a
Lender’s Term Loan Commitment shall refer to that Lender’s Pro Rata Share of the outstanding Term
Loan.




          “Term Loan Facility” means the Term Loan Commitments and the provisions herein related
to the Term Loans.




          “Term Loan Maturity Date” means February 28, 2014.




          “Term Note” has the meaning assigned to it in Section 1.12(e).




          “Termination Date” means the date on which (a) the Loans have been indefeasibly repaid
in full, (b) all other Obligations under the Agreement and the other Loan Documents have been
completely discharged (c) all Letter of Credit Obligations have been cash collateralized, canceled
or backed by standby letters of credit in accordance with Annex B, and (d) none of
Borrowers shall have any further right to borrow any monies under the Agreement.




          “Threshold Acquisition” has the meaning ascribed to it in Section 6.1.




          “Title IV Plan” means a Pension Plan (other than a Multiemployer Plan), that is
subject to Title IV of ERISA or Section 412 of the IRC, and that any Credit Party or ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on behalf of participants
who are or were employed by any of them.




          “Trademark Security Agreements” means the Trademark Security Agreements made in favor
of Agent, on behalf of Lenders, by each applicable Credit Party.




          “Trademark License” means rights under any written agreement now owned or hereafter
acquired by any Credit Party granting any right to use any Trademark.




          “Trademarks” means all of the following now owned or hereafter existing or adopted or
acquired by any Credit Party: (a) all trademarks, trade names, corporate names,




Annex A — Page 29




 









 




business names,
trade styles, service marks, logos, other source or business identifiers, prints and labels on
which any of the foregoing have appeared or appear, designs and general intangibles of like nature
(whether registered or unregistered), all registrations and recordings thereof, and all
applications in connection therewith, including registrations, recordings and applications in the
United States Patent and Trademark Office or in any similar office or agency of the United States,
any state or territory thereof, or any other country or any political subdivision thereof; (b) all
reissues, extensions or renewals thereof; and (c) all goodwill associated with or symbolized by any
of the foregoing.




          “Unfunded Pension Liability” means, at any time, the aggregate amount, if any, of the
sum of (a) the amount by which the present value of all accrued benefits under each Title IV Plan
exceeds the fair market value of all assets of such Title IV Plan allocable to such benefits in
accordance with Title IV of ERISA, all determined as of the most recent valuation date for each
such Title IV Plan using the actuarial assumptions for funding purposes in effect under such Title
IV Plan, and (b) for a period of five years following a transaction which might reasonably be
expected to be covered by Section 4069 of ERISA, the liabilities (whether or not accrued) that
could be avoided by any Credit Party or any ERISA Affiliate as a result of such transaction.




          “Welfare Plan” means a Plan described in Section 3(1) of ERISA.




          “Working Capital” means, as of any date, Borrowers’ Current Assets at such date
less Borrowers’ Current Liabilities at such date.




          Rules of construction with respect to accounting terms used in the Agreement or the other Loan
Documents shall be as set forth in Annex F. All other undefined terms contained in any of
the Loan Documents shall, unless the context indicates otherwise, have the meanings provided for by
the Code to the extent the same are used or defined therein; in the event that any term is defined
differently in different Articles or Divisions of the Code, the definition contained in Article or
Division 9 shall control. Unless otherwise specified, references in the Agreement or any of the
Appendices to a Section, subsection or clause refer to such Section, subsection or clause as
contained in the Agreement. The words “herein,” “hereof” and “hereunder” and other words of
similar import refer to the Agreement as a whole, including all Annexes, Exhibits and Schedules, as
the same may from time to time be amended, restated, modified or supplemented, and not to any
particular section, subsection or clause contained in the Agreement or any such Annex, Exhibit or
Schedule.




          Wherever from the context it appears appropriate, each term stated in either the singular or
plural shall include the singular and the plural, and pronouns stated in the masculine, feminine or
neuter gender shall include the masculine, feminine and neuter genders. The words “including”,
“includes” and “include” shall be deemed to be followed by the words “without limitation”; the word
“or” is not exclusive; references to Persons include their respective successors and assigns (to
the extent and only to the extent permitted by the Loan Documents) or, in the case of governmental
Persons, Persons succeeding to the relevant functions of such Persons; and all references to
statutes and related regulations shall include any amendments of the same and any successor
statutes and regulations. Whenever any provision in any Loan




Annex A — Page 30




 









 




Document refers to the knowledge (or
an analogous phrase) of any Credit Party, such words are intended to signify that such Credit Party
has actual knowledge or awareness of a particular fact or circumstance or that such Credit Party,
if it had exercised reasonable diligence, would have known or been aware of such fact or
circumstance.




Annex A — Page 31




 









 





ANNEX B (Section 1.2)

to

SECOND AMENDED AND RESTATED CREDIT AGREEMENT




LETTERS OF CREDIT




          (a) Issuance. Subject to the terms and conditions of the Agreement, Agent and
Revolving Lenders agree to incur, from time to time prior to the Revolving Commitment Termination
Date, upon the request of any Borrower, Letter of Credit Obligations by causing Letters of Credit
to be issued by GE Capital or a Subsidiary thereof or a bank or other legally authorized Person
selected by or acceptable to Agent and Borrowers, in each case in their reasonable discretion
(each, an “L/C Issuer”) for Borrowers’ account on behalf of a Credit Party and guaranteed by Agent;
provided, that if the L/C Issuer is a Revolving Lender, then such Letters of Credit shall
not be guaranteed by Agent but rather each Revolving Lender shall, subject to the terms and
conditions hereinafter set forth, purchase (or be deemed to have purchased) risk participations in
all such Letters of Credit issued with the written consent of Agent, as more fully described in
paragraph (b)(ii) below. The aggregate amount of all such Letter of Credit Obligations
shall not at any time exceed the lesser of (i) $15,000,000 (the “L/C Sublimit”) and (ii) the
Maximum Amount less the aggregate outstanding principal balance of the Revolving Credit Advances.
No such Letter of Credit shall have an expiry date that is more than one year following the date of
issuance thereof, unless otherwise determined by the Agent, in its sole discretion, and neither
Agent nor Revolving Lenders shall be under any obligation to incur Letter of Credit Obligations in
respect of, or purchase risk participations in, any Letter of Credit having an expiry date that is
later than five (5) Business Days prior to the Revolving Commitment Termination Date; provided,
that any Letter of Credit may provide for a renewal thereof for additional one (1) year periods
(which shall in no event extend beyond the date which is five (5) Business Days prior to the
Revolving Commitment Termination Date).




          (b) Advances Automatic; Participations.





          (i) In the event that Agent or any Revolving Lender shall make any payment on or
pursuant to any Letter of Credit Obligation, such payment shall then be deemed automatically
to constitute a Revolving Credit Advance under Section 1.1(a) of the Agreement
regardless of whether a Default or Event of Default has occurred and is continuing and
notwithstanding any Borrower’s failure to satisfy the conditions precedent set forth in
Section 2, and each Revolving Lender shall be obligated to pay its Pro Rata Share
thereof in accordance with the Agreement. The failure of any Revolving Lender to make
available to Agent for Agent’s own account its Pro Rata Share of any such Revolving Credit
Advance or payment by Agent under or in respect of a Letter of Credit shall not relieve any
other Revolving Lender of its obligation hereunder to make available to Agent its Pro Rata
Share thereof, but no Revolving Lender shall be responsible for the failure of any other
Revolving Lender to make available such other Revolving Lender’s Pro Rata Share of any such
payment.



Annex B — Page 1




 









 






          (ii) If it shall be illegal or unlawful for any Borrower to incur Revolving Credit
Advances as contemplated by paragraph (b)(i) above because of an Event of Default
described in Sections 8.1(h) or (i) or otherwise or if it shall be illegal
or unlawful for any Revolving Lender to be deemed to have assumed a ratable share of the
reimbursement obligations owed to an L/C Issuer, or if the L/C Issuer is a Revolving Lender,
then (A) immediately and without further action whatsoever, each Revolving Lender shall be
deemed to have irrevocably and unconditionally purchased from Agent (or such L/C Issuer, as
the case may be) an undivided interest and participation equal to such Revolving Lender’s
Pro Rata Share (based on the Revolving Loan Commitments) of the Letter of Credit Obligations
in respect of all Letters of Credit then outstanding and (B) thereafter, immediately upon
issuance of any Letter of Credit, each Revolving Lender shall be deemed to have irrevocably
and unconditionally purchased from Agent (or such L/C Issuer, as the case may be) an
undivided interest and participation in such Revolving Lender’s Pro Rata Share (based on the
Revolving Loan Commitments) of the Letter of Credit Obligations with respect to such Letter
of Credit on the date of such issuance. Each Revolving Lender shall fund its participation
in all payments or disbursements made under the Letters of Credit in the same manner as
provided in the Agreement with respect to Revolving Credit Advances.



          (c) Cash Collateral.





          (i) If Borrowers are required to provide cash collateral for any Letter of Credit
Obligations pursuant to the Agreement, including Section 8.2 of the Agreement, prior
to the Revolving Commitment Termination Date, Borrowers will pay to Agent for the ratable
benefit of itself and Revolving Lenders cash or Cash Equivalents acceptable to Agent in an
amount equal to one hundred five percent (105%) of the maximum amount then available to be
drawn under each applicable Letter of Credit outstanding for the benefit of Borrowers. Such
funds or Cash Equivalents shall be held by Agent in a cash collateral account (the “Cash
Collateral Account”) maintained at a bank or financial institution acceptable to Agent. The
Cash Collateral Account shall be in the name of Borrowers and shall be pledged to, and
subject to the control of, Agent, for the benefit of Agent and Lenders, in a manner
satisfactory to Agent. Each Borrower hereby pledges and grants to Agent, on behalf of
itself and Lenders, a security interest in all such funds and Cash Equivalents held in the
Cash Collateral Account from time to time and all proceeds thereof, as security for the
payment of all amounts due in respect of the Letter of Credit Obligations and other
Obligations, whether or not then due. The Agreement, including this Annex B, shall
constitute a security agreement under applicable law.




          (ii) If any Letter of Credit Obligations, whether or not then due and payable, shall
for any reason be outstanding on the Revolving Commitment Termination Date, Borrowers shall
either (A) provide cash collateral therefor in the manner described above, or (B) cause all
such Letters of Credit and guaranties thereof, if any, to be canceled and returned, or
(C) deliver a stand-by letter (or letters) of credit in guaranty of such Letter of Credit
Obligations, which stand-by letter (or letters) of credit shall be of like tenor and
duration (plus 30 additional days) as, and in an amount equal to one



Annex B — Page 2




 









 





hundred five percent
(105%) of, the aggregate maximum amount then available to be drawn under, the Letters of
Credit to which such outstanding Letter of Credit Obligations relate and shall be issued by
a Person, and shall be subject to such terms and conditions, as are satisfactory to Agent in
its reasonable discretion.



          (iii) From time to time after funds are deposited in the Cash Collateral Account by any
Borrower, whether before or after the Revolving Commitment Termination Date, Agent may apply
such funds or Cash Equivalents then held in the Cash Collateral Account to the payment of
any amounts, and in such order as Agent may elect, as shall be or shall become due and
payable by such Borrower to Agent and Lenders with respect to such Letter of Credit
Obligations of such Borrower and, upon the satisfaction in full of all Letter of Credit
Obligations of such Borrower, to any other Obligations of any Borrower then due and payable.




          (iv) No Borrower nor any Person claiming on behalf of or through any Borrower shall
have any right to withdraw any of the funds or Cash Equivalents held in the Cash Collateral
Account, except that upon the termination of all Letter of Credit Obligations and the
payment of all amounts payable by Borrowers to Agent and Lenders in respect thereof, any
funds remaining in the Cash Collateral Account shall be applied to other Obligations then
due and owing and upon payment in full of such Obligations, any remaining amount shall be
paid to Borrowers or as otherwise required by law. Interest earned on deposits in the Cash
Collateral Account shall be for the account of Borrowers.



          (d) Fees and Expenses. Borrowers agree to pay to Agent for the benefit of Revolving
Lenders, as compensation to such Lenders for Letter of Credit Obligations incurred hereunder,
(i) all costs and expenses incurred by Agent or any Lender on account of such Letter of Credit
Obligations, and (ii) for each month during which any Letter of Credit Obligation shall remain
outstanding, a fee (the “Letter of Credit Fee”) in an amount equal to the Applicable Revolver LIBOR
Margin. Such fee shall be paid to Agent for the benefit of the Revolving Lenders in arrears, on
the first day of each month and on the Revolving Commitment Termination Date. In addition,
Borrowers shall pay to any L/C Issuer, on demand, such fees (excluding all per annum fees), charges
and expenses of such L/C Issuer in respect of the issuance, negotiation, acceptance, amendment,
transfer and payment of such Letter of Credit or otherwise payable pursuant to the application and
related documentation under which such Letter of Credit is issued.




          (e) Request for Incurrence of Letter of Credit Obligations. Borrowers shall give
Agent at least 2 Business Days’ prior written notice requesting the incurrence of any Letter of
Credit Obligation. The notice shall be accompanied by the form of the Letter of Credit (which
shall be acceptable to the L/C Issuer) and a completed application for standby Letter of Credit or
application and agreement for documentary Letter of Credit or application for documentary Letter of
Credit (as applicable), each to be in form and substance satisfactory to Agent, in its reasonable
discretion. Notwithstanding anything contained herein to the contrary, Letter of Credit
applications by Borrowers and approvals by Agent and the L/C Issuer may be made and




Annex B — Page 3




 









 




transmitted
pursuant to electronic codes and security measures mutually agreed upon and established by and
among Borrowers, Agent and the L/C Issuer.




          (f) Obligation Absolute. The obligation of Borrowers to reimburse Agent and Revolving
Lenders for payments made with respect to any Letter of Credit Obligation shall be absolute,
unconditional and irrevocable, without necessity of presentment, demand, protest or other
formalities, and the obligations of each Revolving Lender to make payments to Agent with respect to
Letters of Credit shall be unconditional and irrevocable. Such obligations of Borrowers and
Revolving Lenders shall be paid strictly in accordance with the terms hereof under all
circumstances including the following:





          (i) any lack of validity or enforceability of any Letter of Credit or the Agreement or
the other Loan Documents or any other agreement;




          (ii) the existence of any claim, setoff, defense or other right that any Borrower or
any of their respective Affiliates or any Lender may at any time have against a beneficiary
or any transferee of any Letter of Credit (or any Persons or entities for whom any such
transferee may be acting), Agent, any Lender, or any other Person, whether in connection
with the Agreement, the Letter of Credit, the transactions contemplated herein or therein or
any unrelated transaction (including any underlying transaction between any Borrower or any
of their respective Affiliates and the beneficiary for which the Letter of Credit was
procured);




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




          (iv) payment by Agent (except as otherwise expressly provided in
paragraph (g)(ii)(C) below) or any L/C Issuer under any Letter of Credit or guaranty
thereof against presentation of a demand, draft or certificate or other document that does
not comply with the terms of such Letter of Credit or such guaranty;




          (v) any other circumstance or event whatsoever, that is similar to any of the
foregoing; or




          (vi) the fact that a Default or an Event of Default has occurred and is continuing.



          (g) Indemnification; Nature of Lenders’ Duties.





          (i) In addition to amounts payable as elsewhere provided in the Agreement, Borrowers
hereby agree to pay and to protect, indemnify, and save harmless Agent and each Lender from
and against any and all claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys’ fees and allocated costs of internal counsel) that
Agent or any Lender may incur or be subject to as a consequence, direct or indirect, of
(A) the issuance of any Letter of Credit or guaranty



Annex B — Page 4




 









 





thereof, or (B) the failure of Agent or
any Lender seeking indemnification or of any L/C Issuer to honor a demand for payment under
any Letter of Credit or guaranty thereof as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto government or
Governmental Authority, in each case other than to the extent solely as a result of the bad
faith, gross negligence or willful misconduct of Agent or such Lender (as finally determined
by a court of competent jurisdiction).





          (ii) As between Agent and any Lender and Borrowers, Borrowers assume all risks of the
acts and omissions of, or misuse of any Letter of Credit by beneficiaries, of any Letter of
Credit. In furtherance and not in limitation of the foregoing, to the fullest extent
permitted by law, neither Agent nor any Lender shall be responsible for: (A) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document issued by any
party in connection with the application for and issuance of any Letter of Credit, even if
it should in fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (B) the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (C) failure of the beneficiary of any Letter of Credit to comply
fully with conditions required in order to demand payment under such Letter of Credit;
provided, that in the case of any payment by Agent under any Letter of Credit or
guaranty thereof, Agent shall be liable to the extent such payment was made solely as a
result of its bad faith, gross negligence or willful misconduct (as finally determined by a
court of competent jurisdiction) in determining that the demand for payment under such
Letter of Credit or guaranty thereof complies on its face with any applicable requirements
for a demand for payment under such Letter of Credit or guaranty thereof; (D) errors,
omissions, interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they may be in cipher; (E) errors in
interpretation of technical terms; (F) any loss or delay in the transmission or otherwise of
any document required in order to make a payment under any Letter of Credit or guaranty
thereof or of the proceeds thereof; (G) the credit of the proceeds of any drawing under any
Letter of Credit or guaranty thereof; and (H) any consequences arising from causes beyond
the control of Agent or any Lender. None of the above shall affect, impair, or prevent the
vesting of any of Agent’s or any Lender’s rights or powers hereunder or under the Agreement.




          (iii) Nothing contained herein shall be deemed to limit or to expand any waivers,
covenants or indemnities made by Borrowers in favor of any L/C Issuer in any letter of
credit application, reimbursement agreement or similar document, instrument or agreement
between or among Borrowers and such L/C Issuer.



Annex B — Page 5




 









 





ANNEX C (Section 1.8)

to

SECOND AMENDED AND RESTATED CREDIT AGREEMENT




CASH MANAGEMENT SYSTEMS




          Borrowers shall, and shall cause their respective Subsidiaries to, establish and maintain the
Cash Management Systems described below:




          (a) Borrowers may maintain, in their names, one or more accounts (each a “Disbursement
Account” and collectively, the “Disbursement Accounts”) at a bank reasonably acceptable to Agent
into which (i) Agent shall, from time to time, deposit proceeds of Revolving Credit Advances made
to Borrowers and (ii) proceeds of any checks, cash or other items of payment received by any
Borrower shall be deposited.




          (b) On or before the Closing Date, each bank where a Disbursement Account is maintained and
all other banks identified in Disclosure Schedule 3.19 (each, a “Relationship Bank”) shall
have entered into tri-party deposit account control agreements with Agent, for the benefit of
itself and Lenders, and Borrowers and the applicable Subsidiaries thereof, as applicable, in form
and substance reasonably acceptable to Agent, which shall become operative on or prior to the
Closing Date. Each such deposit account control agreement shall provide, among other things, that
(i) the bank executing such agreement has no rights of setoff or recoupment or any other claim
against such account, as the case may be, other than for payment of its service fees and other
charges directly related to the administration of such account and for returned checks or other
items of payment and as may otherwise be agreed to by Agent and (ii) the bank party thereto shall
agree to comply with Agent’s instructions directing disposition of funds on deposit without further
consent of any Borrower or the applicable Subsidiary (as applicable). Agent hereby agrees with
each Credit Party that (A) Agent shall not deliver to any bank described above any notice directing
disposition of funds on deposit unless and until the occurrence and continuance of an Event of
Default and (B) promptly upon the cure or waiver of the Event of Default that gave rise to the
notice in the preceding clause (A), so long as no other Event of Default has occurred and is
continuing at such time, Agent shall deliver written notice to the applicable bank described above
notifying such bank that the funds on deposit shall thereafter be disposed of as directed by the
Credit Parties; provided, that in the event the applicable bank refuses to dispose of funds
on deposit as directed by the Credit Parties after receipt of such written notice, the Agent agrees
to terminate the applicable tri-party deposit account control agreement with such bank so long as
prior to such termination such bank has executed and delivered to Agent a replacement tri-party
deposit account control agreement, in form and substance described above.




          (c) So long as no Event of Default has occurred and is continuing, any Borrower may amend
Disclosure Schedule 3.19 to add or replace a Relationship Bank or replace any Disbursement
Account; provided, that (i) Agent shall have consented in writing in advance to the opening
of such account with the relevant bank and (ii) prior to the time of the opening of such account,
Borrowers or their Subsidiaries, as applicable, and such bank shall have executed




Annex C — Page 1




 









 




and delivered to
Agent a tri-party deposit account control agreement, in the form and substance described above.
Borrowers or their applicable Subsidiaries shall close any of their accounts (and establish
replacement accounts in accordance with the foregoing sentence) promptly and in any event within 30
days following written notice from Agent that the creditworthiness of any bank holding an account
is no longer acceptable in Agent’s reasonable judgment, or as promptly as practicable and in any
event within 60 days following written notice from Agent that the operating performance, funds
transfer or availability procedures or performance with respect to accounts of the bank holding
such accounts or Agent’s liability under any tri-party deposit account control agreement with such
bank is no longer acceptable in Agent’s reasonable judgment.




          (d) Following the occurrence and during the continuance of an Event of Default, at the request
of Agent or Requisite Lenders Borrowers shall (i) establish lock boxes (“Lock Boxes”) and/or
blocked accounts (“Blocked Accounts”) at one or more of the banks set forth in Disclosure
Schedule 3.19, and shall request in writing and otherwise take such reasonable steps to ensure
that all Account Debtors forward payment directly to such Lock Boxes, (ii) deposit and cause their
Subsidiaries to deposit or cause to be deposited promptly, and in any event no later than the first
Business Day 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 Collateral (whether or
not otherwise delivered to a Lock Box) into one or more Blocked Accounts in such Borrower’s name or
any such Subsidiary’s name and at a Relationship Bank and (iii) deliver to each Relationship Bank
instructions, revocable only upon Agent’s express written authorization, directing each
Relationship Bank to immediately forward all amounts on deposit to the Collection Account through
daily sweeps from such accounts into the Collection Account.




          (e) The Disbursement Accounts, each account maintained with a Relationship Bank and the Lock
Boxes and Blocked Accounts (if any) shall be cash collateral accounts, with all cash, checks and
other similar items of payment in such accounts securing payment of the Loans and all other
Obligations, and in which each Borrower and each Subsidiary thereof shall have granted a Lien to
Agent, on behalf of itself and Lenders, pursuant to the Security Agreement.




          (f) All amounts deposited in the Collection Account shall be deemed received by Agent in
accordance with Section 1.10 and shall be applied (and allocated) by Agent in accordance
with Section 1.11. In no event shall any amount be so applied unless and until such amount
shall have been credited in immediately available funds to the Collection Account.




          (g) Each Borrower shall and shall cause its officers, employees, or other Persons acting for
or in concert with such Borrower (each a “Related Person”) to (i) at any time after the Agent or
Requisite Lenders make the request referred to in paragraph (d) of this Annex C and during
the continuance of an Event of Default, hold in trust for Agent, for the benefit of itself and
Lenders, all checks, cash and other items of payment received by any Borrower or any such Related
Person and (ii) within 1 Business Day after receipt by such Borrower or any such Related Person of
any checks, cash or other items of payment, deposit the same into a deposit










Annex C — Page 2




 









 




account subject to a
deposit account control agreement described herein. Each Borrower and each Related Person thereof
acknowledges and agrees that all cash, checks or other items of payment constituting proceeds of
Collateral are part of the Collateral. All proceeds of the sale or other disposition of any
Collateral, shall be deposited directly into a deposit
account subject to a deposit account control
agreement described herein.




Annex C — Page 3





 












 





ANNEX D (Section 2.1(a))

to

SECOND AMENDED AND RESTATED CREDIT AGREEMENT




CLOSING CHECKLIST




          In addition to, and not in limitation of, the conditions described in Section 2.1 of
the Agreement, pursuant to Section 2.1(a), the following items must be received by Agent in
form and substance satisfactory to Agent on or prior to the Closing Date (each capitalized term
used but not otherwise defined herein shall have the meaning ascribed thereto in Annex A to
the Agreement):




     A. Appendices. All Appendices to the Agreement, in form and substance satisfactory to
Agent.



     B. Revolving and Term Notes. If requested by any Lender, duly executed original of a
Revolving Note and/or a Term Note, as applicable, for such Lender, dated the Closing Date.



     C. Security Agreement. Duly executed originals of the Security Agreement, dated the
Closing Date, and all instruments, documents and agreements executed pursuant thereto.



     D. Insurance. Satisfactory evidence that the insurance policies required by
Section 5.4 are in full force and effect, together with appropriate evidence showing loss
payable and/or additional insured clauses or endorsements, as requested by Agent, in favor of
Agent, on behalf of Lenders.



     E. Security Interests and Code Filings. Evidence satisfactory to Agent that Agent
(for the benefit of itself and Lenders) has a valid and perfected first priority security interest
in the Collateral, subject only to Permitted Encumbrances, including (i) such documents duly
executed by each Credit Party as Agent may request in order to perfect its security interests in
the Collateral, and (ii) copies of Code search reports listing all effective financing statements
that name any Credit Party as debtor, together with copies of such financing statements, none of
which shall cover the Collateral.



     F. Payoff Letter; Termination Statements. Copies of duly executed payoff letter(s),
in form and substance reasonably satisfactory to Agent, by and between all parties to any Payoff
Debt loan documents evidencing repayment in full of all Payoff Debt, together with (a) UCC3 or
other appropriate termination statements, in form and substance satisfactory to Agent releasing all
liens of the holders of such Payoff Debt upon any of the personal property of each Credit Party,
and (b) termination of all blocked account agreements, bank agency agreements or other similar
agreements or arrangements or arrangements in favor of each holder of any Payoff Debt or relating
to any Payoff Debt.



     G. Intellectual Property Security Agreements. Duly executed originals of Trademark
Security Agreements, Copyright Security Agreements and Patent Security Agreements, each



Annex D — Page 1 









 







dated the
Closing Date and signed by each Credit Party which owns Trademarks, Copyrights
and/or Patents, as applicable, all in form and substance reasonably satisfactory to Agent,
together with all instruments, documents and agreements executed pursuant thereto.



     H. Guaranty. Originals of the Amended and Restated Guaranty in favor of Agent, dated
the Closing Date, duly executed by each Credit Party (other than the Borrowers, Target and Target’s
Subsidiaries) and all documents, instruments and agreements executed pursuant thereto.



     I. Letter of Direction. Duly executed originals of a letter of direction from the
Borrowers addressed to Agent, on behalf of itself and Lenders, with respect to the disbursement on
the Closing Date of the proceeds of the Term Loan to be made on the Closing Date.



     J. Cash Management System; Blocked Account Agreements. Evidence satisfactory to Agent
that, as of the Closing Date, Cash Management Systems complying with Annex C to the
Agreement have been established and are currently being maintained in the manner set forth in such
Annex C.



     K. Charter and Good Standing. For each Borrower and Guarantor, such Person’s
(a) charter and all amendments thereto, (b) good standing certificates (including verification of
tax status) in its state of incorporation and (c) good standing certificates (including
verification of tax status) and certificates of qualification to conduct business in each
jurisdiction where its ownership or lease of property or the conduct of its business requires such
qualification, each dated a recent date prior to the Closing Date and certified by the applicable
Secretary of State or other authorized Governmental Authority.



     L. Bylaws and Resolutions. For each Borrower and Guarantor, (a) such Person’s bylaws
(or analogous governing agreement), together with all amendments thereto and (b) resolutions of
such Person’s Board of Directors (or analogous governing board), approving and authorizing the
execution, delivery and performance of the Loan Documents to which such Person is a party and the
transactions to be consummated in connection therewith, each certified as of the Closing Date by
such Person’s corporate secretary or an assistant secretary as being in full force and effect
without any modification or amendment.



     M. Incumbency Certificates. For each Borrower and Guarantor, signature and incumbency
certificates of the officers of each such Person executing any of the Loan Documents, certified as
of the Closing Date by such Person’s corporate secretary or an assistant secretary as being true,
accurate, correct and complete.



     N. Opinions of Counsel. Duly executed originals of opinions of Vinson & Elkins LLP,
counsel for the Credit Parties, together with local counsel opinions of the Credit Parties’ Florida
local counsel, each in form and substance reasonably satisfactory to Agent and its counsel, dated
the Closing Date.



     O. Master Pledge Agreement. Duly executed originals of the Master Pledge Agreement
accompanied by (as applicable) (a) share certificates representing all of the



Annex D — Page 2 









 







outstanding
certificated Stock being pledged pursuant to the Master Pledge Agreement and stock
powers for such share certificates executed in blank and (b) the original instruments
evidencing Indebtedness, if any, being pledged pursuant to the Master Pledge Agreement, duly
endorsed in blank.



     P. Accountants’ Letters. A letter from the Credit Parties to their independent
auditors authorizing the independent certified public accountants of the Credit Parties to
communicate with Agent and Lenders in accordance with Section 4.2.



     Q. Officer’s Certificate. Agent shall have received duly executed originals of a
certificate of the chief financial officer of each Borrower, in his or her capacity as an officer
but not individually, dated the Closing Date, stating that, since December 31, 2006 (a) no event or
condition has occurred or is existing which could reasonably be expected to have a Material Adverse
Effect; (b) no Litigation has been commenced which, if successful, could reasonably be expected to
have a Material Adverse Effect or could challenge any of the transactions contemplated by the
Agreement and the other Loan Documents; and (c) there has been no material increase in liabilities,
liquidated or contingent, and no material decrease in assets of any Borrower or any of its
Subsidiaries.



     R. Audited Financials; Financial Condition. Agent shall have received the Financial
Statements, Projections and other materials set forth in Section 3.4, certified by
Holdings’ chief financial officer, in each case in form and substance reasonably satisfactory to
Agent, and Agent shall be satisfied, in its sole discretion, with all of the foregoing.



     S. Other Documents. Such other certificates, documents and agreements respecting any
Credit Party as Agent may reasonably request.



Annex D — Page 3 









 





ANNEX E (Section 4.1(a))

to

SECOND AMENDED AND RESTATED CREDIT AGREEMENT




FINANCIAL STATEMENTS AND PROJECTIONS—REPORTING




          Borrowers shall deliver or cause to be delivered to Agent or to Agent and Lenders, as
indicated, the following:




          (a) Quarterly Financials. To Agent and Lenders, within 45 days after the end of each
Fiscal Quarter, consolidated financial information regarding Holdings and its Subsidiaries,
certified by the chief financial officer of Holdings, including (i) unaudited balance sheets as of
the close of such Fiscal Quarter and the related statements of income and cash flow for that
portion of the Fiscal Year ending as of the close of such Fiscal Quarter and (ii) unaudited
statements of income and cash flows for such Fiscal Quarter, in each case setting forth in
comparative form the figures for the corresponding period in the prior year, all prepared in
accordance with GAAP (subject to normal year-end adjustments). Such financial information shall be
accompanied by (A) a statement in reasonable detail (each, a “Compliance Certificate”) showing the
calculations used in determining compliance with each of the Financial Covenants that is tested on
a quarterly basis and (B) the certification of the chief financial officer of Holdings that
(i) such financial information presents fairly in accordance with GAAP (subject to normal year-end
adjustments) the financial position, results of operations and statements of cash flows of Holdings
and its Subsidiaries, on both a consolidated basis, as at the end of such Fiscal Quarter and for
that portion of the Fiscal Year then ended, and (ii) any other information presented is true,
correct and complete in all material respects and that there was no Default or Event of Default in
existence as of such time or, if a Default or Event of Default has occurred and is continuing,
describing the nature thereof and all efforts undertaken to cure such Default or Event of Default.




          (b) Operating Plan. To Agent and Lenders, as soon as available, but not later than 45
days after the end of each Fiscal Year, an annual operating plan for Borrowers, on a consolidated
basis, approved by the Board of Directors of Borrowers, for the following Fiscal Year, which
(i) includes a statement of all of the material assumptions on which such plan is based,
(ii) includes monthly balance sheets, income statements and statements of cash flows for the
following year and (iii) integrates sales, gross profits, operating expenses, operating profit and
cash flow projections, all prepared on the same basis and in similar detail as that on which
operating results are reported (and in the case of cash flow projections, representing management’s
good faith estimates of future financial performance based on historical performance), and
including plans for personnel, Capital Expenditures and facilities.




          (c) Annual Audited Financials. To Agent and Lenders, within 120 days after the end of
each Fiscal Year, audited Financial Statements for Holdings and its Subsidiaries on a consolidated
basis, consisting of balance sheets and statements of income and retained earnings and cash flows,
setting forth in comparative form in each case the figures for the previous Fiscal




Annex E — Page 1









 







Year, which
Financial Statements shall be prepared in accordance with GAAP and certified
without qualification, by an independent certified public accounting firm of national standing
or otherwise acceptable to Agent. Such Financial Statements shall be accompanied by (i) a
statement prepared in reasonable detail showing the calculations used in determining compliance
with each of the Financial Covenants as of the end of such Fiscal Year, (ii) the annual letters to
such accountants in connection with their audit examination detailing contingent liabilities and
material litigation matters, and (iii) the certification of the chief executive officer or chief
financial officer of Borrowers that all such Financial Statements present fairly in accordance with
GAAP the financial position, results of operations and statements of cash flows of Holdings and its
Subsidiaries on a consolidated basis, as at the end of such Fiscal Year and for the period then
ended, and that there was no Default or Event of Default in existence as of such time or, if a
Default or Event of Default has occurred and is continuing, describing the nature thereof and all
efforts undertaken to cure such Default or Event of Default.




          (d) Management Letters. To Agent and Lenders, within 5 Business Days after receipt
thereof by any Credit Party, copies of all management letters, exception reports or similar letters
or reports received by such Credit Party from its independent certified public accountants.




          (e) Default Notices. To Agent and Lenders, as soon as practicable, and in any event
within 5 Business Days after an executive officer of any Borrower has actual knowledge of the
existence of any Default, Event of Default or other event that has had a Material Adverse Effect,
telephonic or telecopied notice specifying the nature of such Default or Event of Default or other
event, including the anticipated effect thereof, which notice, if given telephonically, shall be
promptly confirmed in writing on the next Business Day.




          (f) SEC Filings and Press Releases. To Agent and Lenders, promptly upon their
becoming available, copies of: (i) all Financial Statements, reports, notices and proxy statements
made publicly available by any Credit Party to its security holders; (ii) all regular and periodic
reports and all registration statements and prospectuses, if any, filed by any Credit Party with
any securities exchange or with the Securities and Exchange Commission or any governmental or
private regulatory authority; and (iii) all press releases and other statements made available by
any Credit Party to the public concerning material changes or developments in the business of any
such Person.




          (g) Subordinated Debt and Equity Notices. To Agent, as soon as practicable, copies of
all material written notices given or received by any Credit Party with respect to any Subordinated
Debt or Stock of such Person, and, within 2 Business Days after any Credit Party obtains knowledge
of any matured event of default with respect to any Subordinated Debt, notice of such event of
default.




          (h) Supplemental Schedules. To Agent, supplemental disclosures, if any, required by
Section 5.6.




          (i) Litigation. To Agent in writing, promptly upon learning thereof, notice of any
Litigation commenced or threatened against any Credit Party that (i) seeks damages in excess of
$1,000,000, (ii) seeks injunctive relief, (iii) is asserted or instituted against any Plan, its




Annex E — Page 2









 







fiduciaries or its assets or against any Credit Party or ERISA Affiliate in connection with any
Plan, (iv) alleges criminal misconduct by any Credit Party, or (v) alleges the violation of
any law regarding, or seeks remedies in connection with, any Environmental Liabilities.




          (j) Insurance Notices. To Agent, disclosure of losses or casualties required by
Section 5.4.




          (k) Investments. To Agent, notice of the transfer of any investments permitted under
Section 6.2(c) in an aggregate amount greater than $2,500,000 to any account not subject to
a Control Letter in effect on the Closing Date.




          (l) Other Documents. To Agent and Lenders, such other financial and other information
respecting any Credit Party’s business or financial condition as Agent or any Lender shall from
time to time reasonably request.





Annex E — Page 3









 








ANNEX F (Section 6.10)

to

SECOND AMENDED AND RESTATED CREDIT AGREEMENT




FINANCIAL COVENANTS




          Borrowers shall not breach or fail to comply with any of the following financial covenants,
each of which shall be calculated in accordance with GAAP consistently applied:




          (a) Minimum Fixed Charge Coverage Ratio. Holdings and its Subsidiaries shall have on
a consolidated basis at the end of each Fiscal Quarter set forth below, a Fixed Charge Coverage
Ratio for the twelve-month period then ended of not less than the following:



1.35:1.00 for the Fiscal Quarter ending June 30, 2008;

1.35:1.00 for the Fiscal Quarter ending September 30, 2008;

1.35:1.00 for the Fiscal Quarter ending December 31, 2008;

1.45:1.00 for the Fiscal Quarter ending March 31, 2009;

1.45:1.00 for the Fiscal Quarter ending June 30, 2009;

1.45:1.00 for the Fiscal Quarter ending September 30, 2009;

1.45:1.00 for the Fiscal Quarter ending December 31, 2009; and

1.50:1.00 for each Fiscal Quarter ending thereafter.




          (b) Maximum Leverage Ratio. Holdings and its Subsidiaries on a consolidated basis
shall have, at the end of each Fiscal Quarter set forth below, a Leverage Ratio as of the last day
of such Fiscal Quarter and for the twelve-month period then ended of not more than the following:



3.00:1.00 for the Fiscal Quarter ending June 30, 2008;

3.00:1.00 for the Fiscal Quarter ending September 30, 2008;

2.75:1.00 for the Fiscal Quarter ending December 31, 2008;

2.75:1.00 for the Fiscal Quarter ending March 30, 2009;

2.75:1.00 for the Fiscal Quarter ending June 30, 2009;

2.50:1.00 for the Fiscal Quarter ending September 30, 2009;

2.50:1.00 for the Fiscal Quarter ending December 31, 2009;

2.50:1.00 for the Fiscal Quarter ending March 31, 2010;

2.25:1.00 for the Fiscal Quarter ending June 30, 2010;

2.25:1.00 for the Fiscal Quarter ending September 30, 2010;

2.25:1.00 for the Fiscal Quarter ending December 31, 2010

2.00:1.00 for each Fiscal Quarter ending thereafter.




          Unless otherwise specifically provided herein, any accounting term used in the Agreement shall
have the meaning customarily given such term in accordance with GAAP, and all financial
computations hereunder shall be computed in accordance with GAAP consistently applied. That
certain items or computations are explicitly modified by the phrase “in accordance with GAAP” shall
in no way be construed to limit the foregoing. If any “Accounting Changes” (as defined below)
occur and such changes result in a change in the calculation of the financial




Annex F — Page 1









 







covenants, standards or terms used in the Agreement or any other Loan Document, then
Borrowers, Agent and Lenders agree to enter into negotiations in order to amend such provisions of
the Agreement so as to equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating Borrowers’ and their Subsidiaries’ financial condition shall be the same
after such Accounting Changes as if such Accounting Changes had not been made; provided,
however, that the agreement of Requisite Lenders to any required amendments of such
provisions shall be sufficient to bind all Lenders. “Accounting Changes” means (i) changes in
accounting principles required by the promulgation of any rule, regulation, pronouncement or
opinion by the Financial Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions), (ii) changes in accounting
principles concurred in by any Borrower’s certified public accountants; (iii) purchase accounting
adjustments under A.P.B. 16 or 17 and EITF 88-16, and the application of the accounting principles
set forth in FASB 109, including the establishment of reserves pursuant thereto and any subsequent
reversal (in whole or in part) of such reserves; and (iv) the reversal of any reserves established
as a result of purchase accounting adjustments. All such adjustments resulting from expenditures
made subsequent to the Closing Date (including capitalization of costs and expenses or payment of
pre-Closing Date liabilities) shall be treated as expenses in the period the expenditures are made
and deducted as part of the calculation of EBITDA in such period. If Agent, Borrowers and
Requisite Lenders agree upon the required amendments, then after appropriate amendments have been
executed and the underlying Accounting Change with respect thereto has been implemented, any
reference to GAAP contained in the Agreement or in any other Loan Document shall, only to the
extent of such Accounting Change, refer to GAAP, consistently applied after giving effect to the
implementation of such Accounting Change. If Agent, Borrowers and Requisite Lenders cannot agree
upon the required amendments within 30 days following the date of implementation of any Accounting
Change, then all Financial Statements delivered and all calculations of financial covenants and
other standards and terms in accordance with the Agreement and the other Loan Documents shall be
prepared, delivered and made without regard to the underlying Accounting Change. For purposes of
Section 8.1, a breach of a Financial Covenant contained in this Annex F shall be
deemed to have occurred as of the earlier of the date the Financial Statements reflecting such
breach are delivered to Agent or the date such Financial Statements were required to be delivered
to Agent.





Annex F — Page 2