Exhibit 10.1


 


EXECUTION COPY


 




 





AMENDED AND RESTATED


 


CREDIT AGREEMENT


 


 


among


 


 


NATIONAL MENTOR HOLDINGS, INC.,


 


 


NATIONAL MENTOR, INC.,


 


as Borrower,


 


 


The Several Lenders from Time to Time Parties Hereto,


 


 


DYMAS FUNDING COMPANY, LLC, 


 


GENERAL ELECTRIC CAPITAL
CORPORATION,


 


MERRILL LYNCH CAPITAL and 


 


UBS SECURITIES LLC,


 


as Co-Documentation Agents,


 


 


BANK OF AMERICA, N.A.,


 


as Syndication Agent,


 


 


and


 


 


JPMORGAN CHASE BANK,


 


as Administrative Agent


 


 


Dated as of November 4, 2004




 





 





















 


J.P. MORGAN SECURITIES INC.

and

BANC OF AMERICA SECURITIES LLC, 

as Joint Lead Arrangers and Joint Bookrunners


 





















 


TABLE OF CONTENTS


 


	
  SECTION 1.

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Defined Terms

  	
   

  
	
  1.2

  	
  Other Definitional Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  AMOUNT AND TERMS OF COMMITMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Term Commitments

  	
   

  
	
  2.2

  	
  Procedure for Tranche B Term Loan
  Borrowing

  	
   

  
	
  2.3

  	
  Repayment of Tranche B Term Loans

  	
   

  
	
  2.4

  	
  Revolving Commitments

  	
   

  
	
  2.5

  	
  Procedure for Revolving Loan
  Borrowing

  	
   

  
	
  2.6

  	
  Swingline Commitment

  	
   

  
	
  2.7

  	
  Procedure for Swingline Borrowing;
  Refunding of Swingline Loans

  	
   

  
	
  2.8

  	
  Commitment Fees, etc.

  	
   

  
	
  2.9

  	
  Termination or Reduction of
  Revolving Commitments

  	
   

  
	
  2.10

  	
  Optional Prepayments

  	
   

  
	
  2.11

  	
  Mandatory Prepayments

  	
   

  
	
  2.12

  	
  Conversion and Continuation Options

  	
   

  
	
  2.13

  	
  Limitations on Eurodollar Tranches

  	
   

  
	
  2.14

  	
  Interest Rates and Payment Dates

  	
   

  
	
  2.15

  	
  Computation of Interest and Fees

  	
   

  
	
  2.16

  	
  Inability to Determine Interest Rate

  	
   

  
	
  2.17

  	
  Pro Rata Treatment and Payments

  	
   

  
	
  2.18

  	
  Requirements of
  Law

  	
   

  
	
  2.19

  	
  Taxes

  	
   

  
	
  2.20

  	
  Indemnity

  	
   

  
	
  2.21

  	
  Change of Lending
  Office

  	
   

  
	
  2.22

  	
  Replacement of
  Lenders

  	
   

  
	
  2.23

  	
  Limitation on
  Additional Amounts, etc

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  LETTERS
  OF CREDIT

  	
   

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  L/C Commitment

  	
   

  
	
  3.2

  	
  Procedure for
  Issuance of Letter of Credit

  	
   

  
	
  3.3

  	
  Fees and Other
  Charges

  	
   

  
	
  3.4

  	
  L/C Participations

  	
   

  
	
  3.5

  	
  Reimbursement
  Obligation of the Borrower

  	
   

  
	
  3.6

  	
  Obligations
  Absolute

  	
   

  
	
  3.7

  	
  Letter of Credit
  Payments

  	
   

  
	
  3.8

  	
  Applications

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Financial
  Condition

  	
   

  
	
  4.2

  	
  No Change

  	
   

  
	
  4.3

  	
  Existence;
  Compliance with Law

  	
   

  



 





















 


	
  4.4

  	
  Power;
  Authorization; Enforceable Obligations

  	
   

  
	
  4.5

  	
  No Legal Bar

  	
   

  
	
  4.6

  	
  Litigation

  	
   

  
	
  4.7

  	
  No Default

  	
   

  
	
  4.8

  	
  Ownership of
  Property; Liens

  	
   

  
	
  4.9

  	
  Licenses,
  Intellectual Property

  	
   

  
	
  4.10

  	
  Taxes

  	
   

  
	
  4.11

  	
  Federal
  Regulations

  	
   

  
	
  4.12

  	
  Labor Matters

  	
   

  
	
  4.13

  	
  ERISA

  	
   

  
	
  4.14

  	
  Investment Company
  Act; Other Regulations

  	
   

  
	
  4.15

  	
  Subsidiaries

  	
   

  
	
  4.16

  	
  Use of Proceeds

  	
   

  
	
  4.17

  	
  Environmental
  Matters

  	
   

  
	
  4.18

  	
  Accuracy of Information,
  etc

  	
   

  
	
  4.19

  	
  Security Documents

  	
   

  
	
  4.20

  	
  Solvency

  	
   

  
	
  4.21

  	
  Senior
  Indebtedness

  	
   

  
	
  4.22

  	
  Regulation H

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  CONDITIONS PRECEDENT

  	
   

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Conditions to
  Initial Extension of Credit

  	
   

  
	
  5.2

  	
  Conditions to Each
  Extension of Credit

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Financial
  Statements

  	
   

  
	
  6.2

  	
  Certificates;
  Other Information

  	
   

  
	
  6.3

  	
  Payment of
  Obligations

  	
   

  
	
  6.4

  	
  Maintenance of
  Existence; Compliance

  	
   

  
	
  6.5

  	
  Maintenance of
  Property; Insurance

  	
   

  
	
  6.6

  	
  Inspection of
  Property; Books and Records; Discussions

  	
   

  
	
  6.7

  	
  Notices

  	
   

  
	
  6.8

  	
  Environmental Laws

  	
   

  
	
  6.9

  	
  Additional
  Collateral, etc

  	
   

  
	
  6.10

  	
  Foreign
  Subsidiaries

  	
   

  
	
  6.11

  	
  Mortgage
  Amendments, Etc

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Financial
  Condition Covenants

  	
   

  
	
  7.2

  	
  Indebtedness

  	
   

  
	
  7.3

  	
  Liens

  	
   

  
	
  7.4

  	
  Fundamental
  Changes

  	
   

  
	
  7.5

  	
  Disposition of
  Property

  	
   

  
	
  7.6

  	
  Restricted
  Payments

  	
   

  
	
  7.7

  	
  Capital
  Expenditures

  	
   

  
	
  7.8

  	
  Investments

  	
   

  
	
  7.9

  	
  Optional Payments
  and Modifications of Certain Debt Instruments

  	
   

  
	
  7.10

  	
  Transactions with
  Affiliates

  	
   

  



 





















 


	
  7.11

  	
  Sales and
  Leasebacks

  	
   

  
	
  7.12

  	
  Swap Agreements

  	
   

  
	
  7.13

  	
  Changes in Fiscal
  Periods

  	
   

  
	
  7.14

  	
  Negative Pledge
  Clauses

  	
   

  
	
  7.15

  	
  Clauses
  Restricting Subsidiary Distributions

  	
   

  
	
  7.16

  	
  Lines of Business

  	
   

  
	
  7.17

  	
  Insurance
  Subsidiary Investments

  	
   

  
	
  7.18

  	
  Insurance
  Subsidiary

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  EVENTS
  OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  THE AGENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Appointment

  	
   

  
	
  9.2

  	
  Delegation of
  Duties

  	
   

  
	
  9.3

  	
  Exculpatory
  Provisions

  	
   

  
	
  9.4

  	
  Reliance by
  Administrative Agent

  	
   

  
	
  9.5

  	
  Notice of Default

  	
   

  
	
  9.6

  	
  Non-Reliance on
  Agents and Other Lenders

  	
   

  
	
  9.7

  	
  Indemnification

  	
   

  
	
  9.8

  	
  Agent in Its
  Individual Capacity

  	
   

  
	
  9.9

  	
  Successor
  Administrative Agent

  	
   

  
	
  9.10

  	
  Co-Documentation
  Agents and Syndication Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Amendments and
  Waivers

  	
   

  
	
  10.2

  	
  Notices

  	
   

  
	
  10.3

  	
  No Waiver;
  Cumulative Remedies

  	
   

  
	
  10.4

  	
  Survival
  of Representations and Warranties

  	
   

  
	
  10.5

  	
  Payment of
  Expenses and Taxes

  	
   

  
	
  10.6

  	
  Successors and
  Assigns; Participations and Assignments

  	
   

  
	
  10.7

  	
  Adjustments;
  Set-off

  	
   

  
	
  10.8

  	
  Counterparts

  	
   

  
	
  10.9

  	
  Severability

  	
   

  
	
  10.10

  	
  Integration

  	
   

  
	
  10.11

  	
  GOVERNING
  LAW

  	
   

  
	
  10.12

  	
  Submission
  To Jurisdiction; Waivers

  	
   

  
	
  10.13

  	
  Acknowledgements

  	
   

  
	
  10.14

  	
  Releases
  of Guarantees and Liens

  	
   

  
	
  10.15

  	
  Confidentiality

  	
   

  
	
  10.16

  	
  WAIVERS
  OF JURY TRIAL

  	
   

  
	
  10.17

  	
  USA PATRIOT Act

  	
   

  
	
  10.18

  	
  Certain
  Matters Relating to the Existing Credit Agreement

  	
   

  
	
  10.19

  	
  No Novation

  	
   

  



 





















 


	
  SCHEDULES:

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1A

  	
  Commitments

  	
   

  
	
  4.4

  	
  Consents, Authorizations, Filings and Notices

  	
   

  
	
  4.6

  	
  Litigation

  	
   

  
	
  4.7

  	
  No Default

  	
   

  
	
  4.8

  	
  Real Property

  	
   

  
	
  4.9

  	
  Licenses

  	
   

  
	
  4.15(a)

  	
  Organizational Structure

  	
   

  
	
  4.15(b)

  	
  Subsidiaries

  	
   

  
	
  4.19(a)

  	
  UCC Filing Jurisdictions

  	
   

  
	
  6.11

  	
  Existing Mortgage Collateral Properties

  	
   

  
	
  7.2(d)

  	
  Existing Indebtedness

  	
   

  
	
  7.3(f)

  	
  Existing Liens

  	
   

  
	
  7.8(g)

  	
  Existing Investments

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  
	
   

  	
   

  	
   

  
	
  A-1

  	
  Form of Guarantee and Security Agreement

  	
   

  
	
  A-2

  	
  Form of Borrower Security Agreement

  	
   

  
	
  B

  	
  Form of Compliance Certificate

  	
   

  
	
  C

  	
  Form of Closing Certificate

  	
   

  
	
  D

  	
  RESERVED

  	
   

  
	
  E

  	
  Form of Assignment and Assumption

  	
   

  
	
  F

  	
  Form of Legal Opinion of Kirkland & Ellis LLP

  	
   

  
	
  G

  	
  Form of Reinvestment Notice

  	
   

  
	
  H

  	
  Form of Exemption Certificate

  	
   

  
	
  I

  	
  Form of Subordination Provisions

  	
   

  
	
  J

  	
  Form of Lender Addendum

  	
   

  



 





















 


AMENDED AND
RESTATED CREDIT AGREEMENT (this “Agreement”), dated as of November 4,
2004, among National MENTOR Holdings, Inc., a Delaware corporation (“Holdings”),
National MENTOR, Inc., a Delaware corporation (the “Borrower”), the
several banks and other financial institutions or entities from time to time
parties to this Agreement (the “Lenders”), Dymas Funding Company, LLC,
General Electric Capital Corporation, Merrill Lynch Capital and UBS Securities
LLC, as co-documentation agents (in such capacity, the “Co-Documentation
Agents”), Bank of America, N.A., as syndication agent (in such capacity,
the “Syndication Agent”), and JPMorgan Chase Bank, as administrative
agent.


 


W I  T  N  E  S  S  E
T  H:


 


WHEREAS,
Holdings, National MENTOR, LLC (“NMLLC”), certain of the Lenders and the
Administrative Agent are parties to the Credit Agreement, dated as of May 1,
2003 (the “Existing Credit Agreement”);


 


WHEREAS,
Holdings, the Borrower and NMLLC have requested that the Existing Credit
Agreement be amended and restated to extend and restate the loans outstanding
under the Existing Credit Agreement and to amend certain terms and conditions
thereof;


 


WHEREAS, as a
condition to the amendment and restatement of the Existing Credit Agreement,
certain parties to the Existing Credit Agreement and certain of the Lenders
entered into Assignment and Assumption Agreements dated as of the date hereof
(the “Assignment Agreements”) pursuant to which certain lenders under
the Existing Credit Agreement assigned all their loans and certain of their
rights and obligations under the Existing Credit Agreement to certain Lenders. 


 


WHEREAS,
the Lenders are willing to amend and restate the Existing Credit Agreement
subject to the terms and conditions hereafter set forth; and


 


NOW,
THEREFORE, in consideration of the premises and the agreements hereinafter set
forth, the parties hereto hereby agree that, upon the effectiveness of this
Agreement, the Existing Credit Agreement is hereby amended and restated in its
entirety as follows:


 


SECTION 1.                                DEFINITIONS


 


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


 


“ABR”:  for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective Rate
in effect on such day plus 1⁄2 of 1%.  For
purposes hereof:  “Prime Rate”
shall mean the rate of interest per annum publicly announced from time to time
by JPMorgan Chase Bank as its prime rate in effect at its principal office in
New York City (the Prime Rate not being intended to be the lowest rate of
interest charged by JPMorgan Chase Bank in connection with extensions of credit
to debtors).  Any change in the ABR due
to a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective as of the opening of business on the effective day of such change in
the Prime Rate or the Federal Funds Effective Rate, respectively.


 


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


 





















 


“Acquired
EBITDA”: (i) EBITDA attributable to each Permitted Acquisition
consummated by the Borrower or any of its Subsidiaries plus (ii) the Pro
Forma Cost Reductions, if any, applicable to each such Permitted Acquisition. 


 


“Acquisition”:  any acquisition of all or substantially all
of the assets or over 80% of the equity interests of any Person or division
thereof.


 


“Adjustment
Date”:  as defined in the Pricing
Grid.


 


“Administrative
Agent”:  JPMorgan Chase Bank,
together with its affiliates, as the arranger of the Commitments and as the
administrative agent for the Lenders under this Agreement and the other Loan
Documents, together with any of its successors.


 


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


 


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


 


“Aggregate
Exposure”:  with respect to any
Lender at any time, an amount equal to (a) until the Closing Date, the
aggregate amount of such Lender’s Commitments at such time and (b) thereafter,
the sum of (i) the aggregate then unpaid principal amount of such Lender’s
Tranche B Term Loans and (ii) the amount of such Lender’s Revolving
Commitment then in effect or, if the Revolving Commitments have been
terminated, the amount of such Lender’s Revolving Extensions of Credit then
outstanding.


 


“Aggregate
Exposure Percentage”:  with respect
to any Lender at any time, the ratio (expressed as a percentage) of such Lender’s
Aggregate Exposure at such time to the Aggregate Exposure of all Lenders at
such time.


 


“Agreement”:  as defined in the preamble hereto.


 


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


 


	
   

  	
   

  	
  ABR Loans

  	
   

  	
  Eurodollar Loans

  	
   

  
	
  Revolving
  Loans and

  Swingline Loans

  	
   

  	
   

  	
  2.25

  	
  %

  	
  3.25

  	
  %

  
	
  Tranche B
  Term Loans

  	
   

  	
   

  	
  2.25

  	
  %

  	
  3.25

  	
  %

  



 


; provided, that on
and after the first Adjustment Date after the Closing Date, the Applicable
Margin with respect to Revolving Loans, Swingline Loans and Tranche B Term
Loans will be determined pursuant to the Pricing Grid.


 


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


 


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


 


2





















 


“Asset Sale”:  any Disposition of property or series of
related Dispositions of property (excluding any such Disposition permitted by
clause (a), (b), (c), (d), (g) or (h) of Section 7.5 or clause (b) of
Section 7.8) other than any Home Sale or Sale Leaseback Transaction that
yields gross proceeds to any Loan Party (valued at the initial principal amount
thereof in the case of non-cash proceeds consisting of notes or other debt
securities and valued at fair market value in the case of other non-cash
proceeds) in excess of $2,000,000 in the aggregate in any fiscal year.


 


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


 


“Assignment
Agreement”:  as defined in the
recitals hereto.


 


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


 


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


 


“Bank of
America”: Bank of America, N.A., in its individual capacity.


 


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


 


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


 


“Borrower”:  as defined in the preamble hereto.


 


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


 


“Borrower
Security Agreement”:  the Amended and
Restated Borrower Security Agreement executed and delivered by the Borrower in
favor of the Administrative Agent on behalf of the Lenders, substantially in
the form of Exhibit A-2, as the same may be amended, supplemented or
otherwise modified form time to time.


 


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


 


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


 


“Capital
Expenditures”:  for any period, with
respect to any Person, the aggregate of all expenditures by such Person and its
Subsidiaries during such period for the acquisition, rental, lease, purchase,
construction, replacement, repair or use of any property, the value of which
should be capitalized under GAAP on a consolidated balance sheet of such Person
and its Subsidiaries (including, without limitation, the aggregate principal
amount of Capital Lease Obligations incurred during such period).


 


“Capital
Lease Obligations”:  as to any
Person, the obligations of such Person to pay rent or other amounts under any
lease of (or other arrangement conveying the right to use) real or personal


 


3





















 


property, or a
combination thereof, to the extent such obligations are required to be
classified and accounted for as capital leases on a balance sheet of such
Person under GAAP and, for the purposes of this Agreement, the amount of such
obligations at any time shall be the capitalized amount thereof at such time
determined in accordance with GAAP.


 


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


 


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


 


“Cash Management
Obligations”:  any obligations owed
by Holdings, the Borrower or any of its Subsidiaries to any Lender or any
Affiliate of a Lender in respect of any overdraft and other liabilities arising
from treasury, depository and cash management services or any automated
clearing house transfers of funds and designated by Holdings or Borrower as
being secured under the Security Documents.


 


“Change of
Control”:  (i) prior to an
Initial Public Offering, for any reason (a) MDP Holder and its Affiliates
shall fail to have the right to appoint a majority of the board of directors of
Holdings and thereby control the management of Holdings, the Borrower and its
Subsidiaries; (b) (i) the Borrower shall cease to own of record and
beneficially 100% of the issued and outstanding voting power of all Capital
Stock of National Mentor, LLC on a fully diluted basis, or (ii) National
Mentor, LLC shall cease to own of record and beneficially, directly or
indirectly through one or more other Subsidiaries, all of the issued and outstanding
voting power of all Capital Stock of all of its Subsidiaries (including all
Subsidiary Guarantors) on a fully diluted basis except as otherwise permitted
to be disposed of or merged


 


4





















 


hereunder; (c) Holdings
shall cease to own, directly or indirectly, 100% of the outstanding voting
power of all Capital Stock of the Borrower on a fully diluted basis; or (d) MDP
Holder and its Affiliates shall cease to own and control of record and
beneficially, directly, on a fully diluted basis, at least 51% of the issued
and outstanding voting power of all Capital Stock of Holdings; and (ii) after
any Initial Public Offering, (a) any “person” or “group” (as such terms
are used in Sections 13(d) and 14(d) of the Exchange Act), other than
MDP Holder is or becomes the beneficial owner, directly or indirectly, of more
than 40% of the total voting power of all Capital Stock of Holdings; or (b) the
event in subclause (i)(c) of this definition shall occur.


 


“Closing
Costs”: non recurring out-of-pocket costs, fees and expenses, including
attorneys’ fees, investment banking fees and certain fees (i) due under
the Fee Letters or (ii) paid by any of the Loan Parties in connection with
this Agreement or the Senior Subordinated Notes Indenture at any time during
the period beginning on the Closing Date and ending 90 days thereafter.


 


“Closing
Date”:  the date on which the
conditions precedent set forth in Section 5.1 shall have been satisfied
(or waived by the Agents and the Lenders in accordance herewith), which date is
November 4, 2004.


 


“Co-Documentation
Agents”:  as defined in the preamble
hereto.


 


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


 


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


 


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


 


“Commitment
Fee Rate”: 1⁄2 of 1% per annum; provided, that on and after the first
Adjustment Date after the Closing Date, the Commitment Fee Rate will be
determined pursuant to the Pricing Grid.


 


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


 


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


 


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


 


5





















 


“Confidential
Information Memorandum”:  the
Confidential Information Memorandum dated October 2004 and furnished to
certain Lenders.


 


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


 


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


 


“Consolidated
EBITDA”:  for any period,
Consolidated Net Income for such period plus, without duplication, the
sum of (a) income (and franchise taxes in the nature of income taxes) and
foreign withholding tax expense for such period and any state single business
unitary or similar tax, (b) Consolidated Interest Expense, amortization or
writeoff of debt discount and debt issuance costs and commissions, discounts
and other fees and charges associated with Indebtedness (including the Loans), (c) depreciation
and amortization expense, (d) amortization of intangibles (including, but
not limited to, goodwill) and organization costs, (e) any extraordinary,
unusual or non-recurring non-cash expenses or losses (including, whether or not
otherwise includable as a separate item in the statement of such Consolidated
Net Income for such period, non-cash losses on sales of assets outside of the
ordinary course of business) (f) Closing Costs for such period, (g) Management
Fees paid in cash or accrued during such period to the extent permitted to be
paid hereunder, (h) Acquired EBITDA for such period, (i) proceeds of
business interruption insurance received during such period, (j) expenses
incurred to the extent covered by indemnification or refunding provisions in
any Permitted Acquisition document, any document pertaining to any acquisition
consummated prior to the Closing Date, or any insurance to the extent
reimbursed (or reasonably expected to be reimbursed within 120 days of the
incurrence thereof), (k) non cash losses from asset sales for such period
(other than non-cash losses from Home Sales and other than from sales of
inventory sold in the ordinary course of business), (l) Ordinary Course Real
Property Gains, (m) non cash expenses incurred in connection with the issuance
of stock options, warrants or other Permitted Capital Stock by Holdings to
employees of Holdings and its Subsidiaries and (n) any Transaction Bonuses; provided
that with respect to clauses (a) through (n) (other than clauses (h), (i) and
(l)), such amounts shall be added to Consolidated Net Income pursuant to this
definition only to the extent such amounts are deducted in determining
Consolidated Net Income, and minus, (a) to the extent included in
the statement of such Consolidated Net Income for such period, the sum of (i) any
extraordinary, unusual or non-recurring income or gains (including, whether or
not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, gains on the sales of assets outside
of the ordinary course of business), (ii) income tax credits (to the
extent not netted from income tax expense) and (iii) any other non-cash
income and (b) any cash payments made during such period in respect of
expenses or losses described in clause (e) above incurred or taken since
the date hereof, which cash payments are made subsequent to the fiscal quarter
in which the relevant expenses or losses were reflected as a charge in the
statement of Consolidated Net Income, but only to the extent that such cash
payments do not exceed such expenses or losses, all as determined on a
consolidated basis. In addition, Consolidated EBITDA shall be calculated
without giving effect to (w) any gains or losses (other than as expressly
provided in clauses (k) and (l) above) from sales of assets other than from
sales of inventory sold in the ordinary course of business, (x) purchase
accounting adjustments required or permitted by Accounting Principles Board
Opinion Nos. 16 (including non-cash write ups and non cash charges relating to
inventory and fixed assets, in each case arising in connection with any
Permitted


 


6





















 


Acquisition)
and 17 (including non cash charges relating to intangibles and goodwill arising
in connection with any Permitted Acquisition), (y) any gain or loss recognized
in determining Consolidated Net Income for such period in respect of
post-retirement benefits as a result of the application of FASB 106 and (z) any
gain or loss recognized in determining Consolidated Net Income for such period
resulting from the payment of earnout obligations.


 


“Consolidated
Interest Coverage Ratio”:  for any
period, the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated
Interest Expense for such period.


 


“Consolidated
Interest Expense”:  for any period,
total cash interest expense (including that attributable to Capital Lease
Obligations) of Holdings and its Subsidiaries for such period with respect to
all outstanding Indebtedness of Holdings and its Subsidiaries (including all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing and net costs under Swap Agreements
in respect of interest rates to the extent such net costs are allocable to such
period in accordance with GAAP).


 


“Consolidated
Leverage Ratio”:  as at the end of
any fiscal quarter, the ratio of (a) Consolidated Total Debt of Holdings
and its Subsidiaries on such day (excluding Subordinated PIK Debt permitted
hereunder and excluding the Magellan Note, to the extent funds have been
escrowed by Holdings for the payment thereof) to (b) Consolidated EBITDA
for the most recently completed four fiscal quarters of Holdings and its
Subsidiaries.


 


“Consolidated
Net Income”:  for any period, the
consolidated net income (or loss) of Holdings and its Subsidiaries, determined
on a consolidated basis in accordance with GAAP; provided that there
shall be excluded (a) the income (or deficit) of any Person accrued prior
to the date it becomes a Subsidiary of Holdings or is merged into or
consolidated with Holdings or any of its Subsidiaries, (b) the income (or
deficit) of any Person (other than a Subsidiary of Holdings) in which Holdings
or any of its Subsidiaries has an ownership interest, except to the extent that
any such income is actually received by Holdings or such Subsidiary in the form
of dividends or similar distributions and (c) the undistributed earnings of
any Subsidiary of Holdings 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 (other than under any Loan
Document) or Requirement of Law applicable to such Subsidiary.


 


“Consolidated
Total Debt”:  at any date, the
aggregate principal amount of all Indebtedness of Holdings and its Subsidiaries
at such date, determined on a consolidated basis, required to be reflected on a
consolidated balance sheet of Holdings in accordance with GAAP.


 


“Consolidated
Working Capital”:  at any date, the
excess of Consolidated Current Assets on such date over Consolidated
Current Liabilities on such date.


 


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


 


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


 


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


 


7





















 


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


 


“Domestic
Subsidiary”:  any Subsidiary of the
Borrower organized under the laws of any jurisdiction within the United States.


 


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


 


“ECF
Percentage”:  50%; provided,
that, with respect to each fiscal year of the Borrower ending on or after September 30,
2005, the ECF Percentage shall be reduced to 25% if the Consolidated Leverage
Ratio as of the last day of such fiscal year is less than 3.50:1.00 but greater
than or equal to 2.50:1.00 on the last day thereof (after giving pro forma
effect to the making of any prepayment); provided further that the ECF
Percentage shall be reduced to 0% if the Consolidated Leverage Ratio as of the
last day of such fiscal year is less than 2.50:1.00 (after giving pro forma
effect to the making of any prepayment).


 


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


 


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


 


“Eurocurrency
Reserve Requirements”:  for any day
as applied to a Eurodollar Loan, the aggregate (without duplication) of the
maximum rates (expressed as a decimal fraction) of reserve requirements in
effect on such day (including basic, supplemental, marginal and emergency
reserves) under any regulations of the Board or other Governmental Authority
having jurisdiction with respect thereto dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board) maintained by a member bank of the
Federal Reserve System.


 


“Eurodollar
Base Rate”:  with respect to each day
during each Interest Period pertaining to a Eurodollar Loan, the rate per annum
determined on the basis of the rate for deposits in Dollars for a period equal
to such Interest Period commencing on the first day of such Interest Period
appearing on Page 3750 of the Telerate screen as of 11:00 A.M.,
London time, two Business Days prior to the beginning of such Interest
Period.  In the event that such rate does
not appear on Page 3750 of the Telerate screen (or otherwise on such
screen), the “Eurodollar Base Rate” shall be determined by reference to
such other comparable publicly available service for displaying eurodollar
rates as may be selected by the Administrative Agent or, in the absence of such
availability, by reference to the rate at which the Administrative Agent is
offered Dollar deposits at or about 11:00 A.M., New York City time, two
Business Days prior to the beginning of such Interest Period in the interbank
eurodollar market where its eurodollar and foreign currency and exchange
operations are then being conducted for delivery on the first day of such
Interest Period for the number of days comprised therein.


 


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


 


8





















 


“Eurodollar
Rate”:  with respect to each day
during each Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula (rounded
upward to the nearest 1/100th of 1%):


 




	
  Eurodollar Base Rate

  
	
  1.00 -
  Eurocurrency Reserve Requirements

  






 


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


 


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


 


“Excess
Cash Flow”:  as to any Person for any
period (a) Consolidated EBITDA for such period, plus (b) if
there was a net decrease in Consolidated Working Capital during such period,
the amount of such net decrease, minus (c) Consolidated Interest
Expense and payments and prepayments of the principal of any Indebtedness
during such period (other than Indebtedness that is repaid with the proceeds of
any issuance of Capital Stock or other Indebtedness incurred by any Loan
Party), but only to the extent that any such prepaid amounts cannot by their
terms be reborrowed or redrawn and do not occur in connection with a
refinancing of all or any portion of such Indebtedness for such period, minus
(e) Capital Expenditures (other than Capital Expenditures financed with
Indebtedness permitted hereunder and other Excluded Capital Expenditures), the
cash portion of Permitted Acquisitions and other Investments permitted
hereunder (other than Permitted Acquisitions and Investments financed with
Indebtedness or issuances of Capital Stock permitted hereunder), for such
period or, in the case of Permitted Acquisitions, payable within 30 days of the
end of such period (provided that amounts so deducted shall not be deducted in
any subsequent period), minus (f) cash taxes paid or payable for
such Person and its Subsidiaries for such period, minus (g) Closing
Costs for such period, minus (h) Management Fees paid or payable in
cash during such period to the extent permitted to be paid hereunder, minus
(i) expenses incurred to the extent covered by the indemnification or
refunding provisions in any document pertaining to an acquisition consummated
prior to the Closing Date, any Permitted Acquisition document or any insurance
to the extent actually reimbursed (or reasonably expected to be reimbursed with
120 days of the incurrence thereof) or (if required by GAAP to be reflected on
the income statement of Holdings and its Subsidiaries) to the extent of any
actual setoff against the Magellan Seller Notes, minus (j) Acquired
EBITDA for such period, minus (k) proceeds of business interruption
insurance received during such period, minus (l) noncash losses from
asset sales for such period (other than non cash losses from Home Sales), minus
(m) all cash losses for such period from sales of assets other than from sales
of inventory sold in the ordinary course of business, minus (n) Ordinary
Course Real Property Gains for such period, minus (o) if there was a net
increase in Consolidated Working Capital during such period the amount of such
net increase and minus (p) any Transaction Bonuses paid in such period.


 


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


 


“Excluded
Capital Expenditures”:  all Capital
Expenditures:


 


(i)                                     made
to restore, replace or rebuild property to the condition of such property
immediately prior to any damage, loss, destruction or condemnation of such
property, to the extent such expenditure is made with, or subsequently
reimbursed out of, insurance proceeds,


 


9





















 


indemnity payments, condemnation awards (or payments in lieu of) or
damage recovery proceeds relating to any such damage, loss, destruction or
condemnation;


 


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


 


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


 


(iv)                              made
with the proceeds of an issuance of Capital Stock (to the extent such proceeds
are permitted to be retained by Holdings or any of its Subsidiaries pursuant to
Section 2.11(d)).


 


“Existing
Credit Agreement”:  as defined in the
recitals hereto.


 


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


 


“Existing
Mortgage Collateral Properties”: as defined in Section 6.11.


 


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


 


“Facility”:  each of (a) the Tranche B Term
Commitments and the Tranche B Term Loans made thereunder (the “Tranche B
Term Facility”) and (b) the Revolving Commitments and the extensions
of credit made thereunder (the “Revolving Facility”).


 


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


 


“Fee
Letters”: the fee letter dated October 1, 2004 among the Borrower,
Holdings and the Agents, as amended by the Amendment dated October 13,
2004, and the fee letter dated October 1, 2004 among Borrower, Holdings
and the Administrative Agent.


 


“Fee
Payment Date”:  (a) the third
Business Day following the last day of each March, June, September and December and
(b) the last day of the Revolving Commitment Period.


 


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


 


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


 


10





















 


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


 


“GAAP”:  generally accepted accounting principles in
the United States as in effect from time to time, except that for purposes of Section 7.1,
GAAP shall be determined on the basis of such principles in effect on the date
hereof and consistent with those used in the preparation of the most recent
audited financial statements referred to in Section 4.1(b).  In the event that any “Accounting Change” (as
defined below) shall occur and such change results in a change in the method of
calculation of financial covenants, standards or terms in this Agreement, then
the Borrower, the Required Lenders and the Administrative Agent agree to enter
into negotiations in order to amend such provisions of this Agreement so as to
reflect equitably such Accounting Changes with the desired result that the
criteria for evaluating the Borrower’s financial condition shall be the same
after such Accounting Changes as if such Accounting Changes had not been
made.  Until such time as such an amendment
shall have been executed and delivered by the Borrower, the Administrative
Agent and the Required Lenders, all financial covenants, standards and terms in
this Agreement shall continue to be calculated or construed as if such
Accounting Changes had not occurred. 
“Accounting Changes” refers to 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, if applicable, the SEC.


 


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


 


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


 


“Guarantee
and Security Agreement”:  the Amended
and Restated Guarantee and Security Agreement dated as of the date hereof among
Holdings, and each Subsidiary Guarantor substantially in the form of Exhibit A-1.


 


“Guarantee
Obligation”:  as to any Person (the “guaranteeing
person”), any obligation, including a reimbursement, counterindemnity or
similar obligation, of the guaranteeing person that guarantees or in effect
guarantees, or which is given to induce the creation of a separate obligation
by another Person (including any bank under any letter of credit) that
guarantees or in effect guarantees, any Indebtedness, leases, dividends or
other obligations (the “primary obligations”) of any other third Person
(the “primary obligor”) in any manner, whether directly or indirectly,
including any obligation of the guaranteeing person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting
direct or indirect security therefor, (ii) to advance or supply funds (1) for
the purchase or payment of any such primary obligation or (2) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or
hold harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation
shall not include endorsements of instruments for deposit or collection in the
ordinary course of business.  The amount
of any Guarantee Obligation of any guaranteeing person shall be deemed to be
the lower of (a) an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Guarantee Obligation is


 


11





















 


made and (b) the
maximum amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless such
primary obligation and the maximum amount for which such guaranteeing person
may be liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person’s maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in good
faith.


 


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


 


“Holdings”:  as defined in the preamble hereto.


 


“Home Sale”:  any Disposition or series of Dispositions of
real property of any Loan Party in the ordinary course of business in a
transaction in which such real property is sold solely for its value as real
estate and not as a going concern in excess of $1,000,000 in the aggregate in
any fiscal year; provided that a Sale Lease Back Transaction shall not
be considered a Home Sale.


 


“Indebtedness”:  of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services (other than current trade payables and accrued expenses incurred in
the ordinary course of such Person’s business), (c) all obligations of
such Person evidenced by notes, bonds, debentures or other similar instruments,
(d) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such Person
(even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) the principal
portion of all Capital Lease Obligations of such Person, (f) all
obligations of such Person, contingent or otherwise, as an account party or
applicant under or in respect of acceptances, letters of credit, surety bonds
or similar arrangements, (g) the liquidation value of all mandatorily
redeemable preferred Capital Stock issued to parties other than Holdings or its
Subsidiaries of such Person, if the scheduled redemption date is prior to the
scheduled maturity date of the Tranche B Term Loans, (h) all Guarantee
Obligations of such Person in respect of obligations of the kind referred to in
clauses (a) through (g) above, (i) all obligations of the kind
referred to in clauses (a) through (h) above secured by (or for which
the holder of such obligation has an existing right, contingent or otherwise,
to be secured by) any Lien on property (including accounts and contract rights)
owned by such Person, whether or not such Person has assumed or become liable
for the payment of such obligation, (j) all Earnout Obligations; and (k) for
the purposes of Section 8(e) only, all obligations of such Person in
respect of Swap Agreements; provided that (i) the amount of Indebtedness
which is limited or non-recourse to such Person or for which recourse is
limited to an identified asset shall be equal to the lesser of (1) the
amount of such Indebtedness and (2) the fair market value of such asset as
at the date of determination, (ii) amounts which are reserved by such
Person for payment of insurance premiums due within twelve months of such date
shall not constitute Indebtedness and (iii) Indebtedness shall not include
obligations with respect to deferred compensation.  The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness expressly provide
that such Person is not liable therefor.


 


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


 


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


 


“Insolvent”:  pertaining to a condition of Insolvency.


 


12





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


13





















 


“Investments”:  as defined in Section 7.8.


 


“Issuing
Lender”:  JPMorgan Chase Bank or any
affiliate thereof, in its capacity as issuer of any Letter of Credit; provided
that Fleet National Bank, shall be the Issuing Lender solely with respect to
the Existing Letters of Credit.


 


“L/C
Commitment”:  $40,000,000.


 


“L/C
Obligations”:  at any time, an amount
equal to the sum of (a) the aggregate then undrawn and unexpired amount of
the then outstanding Letters of Credit and (b) the aggregate amount of
drawings under Letters of Credit that have not then been reimbursed pursuant to
Section 3.5.


 


“L/C
Participants”:  the collective
reference to all the Revolving Lenders other than the Issuing Lender.


 


“Lender
Addendum”:  an instrument,
substantially in the form of Exhibit J, by which a Lender becomes a party
to this Agreement as of the Closing Date.


 


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


 


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


 


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


 


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


 


“Loan
Documents”:  this Agreement, the
Security Documents, the Notes and any amendment, waiver, supplement or other
modification to any of the foregoing.


 


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


 


“Magellan
Note Documents”:  the Magellan Seller
Notes and any other agreements of any Loan Party relating thereto.


 


“Magellan
Purchase Agreement”:  the Stock
Purchase Agreement among National MENTOR, LLC, Holdings and the Magellan Seller
dated January 18, 2001, as amended, modified and supplemented from time to
time as permitted hereunder or in the Loan Documents.


 


“Magellan
Reserve”:  at any time of
determination, the then outstanding principal amount plus accrued and unpaid
interest on the Magellan Seller Notes.


 


“Magellan
Seller”:  Magellan Public Network, Inc.
and Magellan Health Services, Inc.


 


“Magellan
Seller Notes”:  that certain
subordinated indebtedness in the original principal amount of $10,000,000
issued by Holdings to the Magellan Seller.


 


14





















 


“Majority
Facility Lenders”:  with respect to
any Facility, the holders of more than 50% of the aggregate unpaid principal
amount of the Tranche B Term Loans or the Total Revolving Extensions of Credit,
as the case may be, outstanding under such Facility (or, in the case of the
Revolving Facility, prior to any termination of the Revolving Commitments, the
holders of more than 50% of the Total Revolving Commitments).


 


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


 


“Management
Fees”: as defined in Section 7.10.


 


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


 


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


 


“MDP Holder”:  Madison Dearborn Capital Partners III, L.P.


 


“Mortgage
Amendments”:  each of the amendments
to Mortgages in the form requested by the Administrative Agent, to be executed
by the applicable Loan Party in order to continue for the benefit of the
Administrative Agent, on behalf of the Lenders, the Liens created by the
Mortgages delivered under the Existing Credit Agreement on the Existing
Mortgage Collateral Properties.


 


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


 


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


 


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


 


“Net Cash
Proceeds”:  (a) in connection
with any Asset Sale, Home Sale, Sale Leaseback Transaction or any Recovery
Event, the proceeds thereof in the form of cash and Cash Equivalents (including
any such proceeds received by way of deferred payment of principal pursuant to
a note or installment receivable or purchase price adjustment receivable or
otherwise, but only as and when received), net of attorneys’ fees, accountants’
fees, investment banking fees, amounts required to be applied to the repayment
of Indebtedness (including, without limitation, principal, interest, premium
and penalties, if any) secured by a Lien expressly permitted hereunder on any
asset that is the subject of such


 


15





















 


Asset Sale,
Home Sale, Sale Leaseback Transaction or Recovery Event (other than any Lien
pursuant to a Security Document) and other related fees and expenses actually
incurred in connection therewith and net of taxes paid or reasonably estimated
to be payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements) and net of (i) any
reasonable reserves established in connection therewith, (ii) reasonable
holdbacks and (iii) reasonable indemnity obligations relating thereto, and (b) in connection with any
issuance or sale of Capital Stock or any incurrence of Indebtedness, the cash
proceeds received from such issuance or incurrence, net of attorneys’ fees,
investment banking fees, accountants’ fees, underwriting discounts and
commissions and other related fees and expenses actually incurred in connection
therewith; provided, however, that for purposes of determination of Net
Cash Proceeds under Section 2.11(d), any issuance or sale of (i) Capital
Stock of Holdings issued on or before the Closing Date; (ii) Capital Stock
of a Loan Party to any Person as consideration paid or otherwise issued in
connection with a Permitted Acquisition; (iii) Capital Stock of a Loan
Party issued to any director of the Loan Party required by applicable law in
connection with such Person acting in such capacity; (iv) Capital Stock of
a Loan Party issued to directors, management, employees and former employees of
such Loan Party whether pursuant to stock options or otherwise; (v) Capital
Stock issued by any Subsidiary of the Borrower to the Borrower or any other
Loan Party; (vi) Capital Stock of a Loan Party issued to any shareholder
of such Loan Party (and their respective Affiliates) who was a shareholder on
the Closing Date; and (vii) Capital Stock issued in connection with any
other transfers permitted under Section 7.4, shall not be included.


 


“Net
Payment Amount”:  in connection with
any Sale Leaseback Transaction, at any time of determination thereof, the
remaining aggregate amount of lease rental payments required to be made by a
Loan Party pursuant to the terms of the original lease agreements pursuant to
such Sale Leaseback Transaction, as appropriately discounted.


 


“NMLLC”:
as defined in the recitals hereto.


 


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


 


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


 


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


 


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


 


“Obligations”:  the unpaid principal of and interest on
(including interest accruing after the maturity of the Loans and Reimbursement
Obligations and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Loans and all other
obligations and liabilities of the Borrower to the Administrative Agent or to
any Lender (or, in the case of Specified Swap Agreements and Cash Management
Obligations, any affiliate of any Lender), whether direct or indirect, absolute
or contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, this Agreement, any other
Loan Document, the Letters of Credit, any Specified Swap Agreement, any
agreement governing Cash Management Obligations or any other document made,
delivered or given in connection herewith or therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including all fees, charges and disbursements of counsel to the


 


16





















 


Administrative
Agent or to any Lender that are required to be paid by the Borrower pursuant
hereto) or otherwise.


 


“Ordinary
Course Real Property Gains”:  actual
cash gains realized by the Borrower and its Subsidiaries from a Home Sale to
any Person which is not an Affiliate of the Borrower or any of its Subsidiaries
in an arm’s length transaction, in the aggregate not to exceed either (i) $1,500,000
for any period of four consecutive fiscal quarters or (ii) $500,000 for
any single fiscal quarter; provided, however, it being understood that for
purposes of calculating Consolidated EBITDA, any gains in excess of $500,000 in
any single fiscal quarter may be carried forward into subsequent fiscal
quarters and included in Consolidated EBITDA in such subsequent periods.


 


“Other
Taxes”:  any and all present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies arising from any payment made hereunder or from the
execution, delivery or enforcement of, or otherwise with respect to, this
Agreement or any other Loan Document.


 


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


 


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


 


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


 


(i)                                     the
Borrower shall have obtained the prior written approval of the Administrative
Agent and the Required Lenders if (i) such Acquisition involves a Total
Purchase Price of $50,000,000  or more in
the aggregate, or (ii) the aggregate Total Purchase Price of all
Acquisitions consummated since the Closing Date, after giving effect to such
Acquisitions, would equal or exceed $80,000,000; provided that such
prior written consent of the Administrative Agent and the Required Lenders
shall not be required if the Consolidated Leverage Ratio at the end of the
fiscal quarter most recently ended is less than 2.5 to 1.0 (after giving pro
forma effect to such Acquisition). 


 


(ii)                                  Target
EBITDA of the Target for its most recently ended four fiscal quarters shall
exceed $1.00;


 


(iii)                               (A) no
later than 15 days (or such shorter period as may be reasonably practicable, if
approved by the Administrative Agent) prior to the consummation of any such
Acquisition involving a Total Purchase Price of $10,000,000 or more in the aggregate
or, if earlier, 10 Business Days after the execution and delivery of the
related Purchase Agreement, the Borrower shall have delivered to the
Administrative Agent, copies of (or a summary of) such Purchase Agreement,
copies of the Target’s financial statements supplied to the Borrower, pro forma
covenant compliance calculations, and, to the extent provided to the board of
directors of Borrower, projections and due diligence summaries and, if
requested by the Administrative Agent, material agreements or instruments to be
executed at the closing thereunder (to the extent available), (B) 
promptly following a request therefor, the Borrower shall have delivered to the
Administrative Agent copies of such other information or documents relating to
such acquisition as the Administrative Agent shall have reasonably requested,
and (C) if requested by the Administrative Agent, promptly following the
consummation of such Acquisition, the Borrower shall have delivered to the
Administrative Agent copies of the agreements, instruments and documents
referred to above to the extent the same has been executed and delivered at the
closing under such Purchase Agreement;


 


17





















 


(iv)                              no
Loan Party shall, in connection with any such Acquisition, assume or remain
liable with respect to any Indebtedness of the related seller, except (A) to
the extent permitted under Section 7.2 or (B) unsecured obligations
of such seller incurred in the ordinary course of business and necessary or desirable
to the continued operation of the underlying properties; and any other such
liabilities or obligations not permitted to be assumed or otherwise supported
hereunder shall be paid in full or released as to the assets being so acquired
on or before the consummation of such Acquisition;


 


(v)                                 all
other assets and properties acquired in connection with any such Acquisition
shall be free and clear of any Liens other than as permitted under Section 7.3;


 


(vi)                              the
Loan Parties shall have complied as applicable with all of the provisions in Section 6.9,
including the execution and delivery of such additional Security Documents and
other agreements, instruments, certificates, opinions and other papers as the
Administrative Agent may reasonably require;


 


(vii)                           the
Acquisition must not be of a hostile nature, the Target’s business must be
primarily operated in the United States and the Target must be engaged
primarily in a business related to the businesses of the Borrower and its
Subsidiaries existing on the date of such Acquisition (to the extent permitted
hereunder);


 


(viii)                        no Event
of Default shall have occurred and be continuing or reasonably be expected to
result from such Acquisition;


 


(ix)                                without
limiting the generality of the foregoing, after giving effect to such
Acquisition, the Borrower shall be in compliance with the provisions of Section 7.1,
calculated on a pro forma basis as of the end of and for the quarter most
recently ended prior to the date of such Acquisition and, unless such
Acquisition involves a Total Purchase Price of $10,000,000 or less, at least 10
Business Days prior to the closing of such Acquisition, the Borrower shall
provide to the Administrative Agent a certificate signed by a Responsible
Officer demonstrating such compliance in reasonable detail; and


 


(x)                                   after
giving effect to such Acquisition, the Available Revolving Commitment plus the
amount of unrestricted cash and Cash Equivalents then owned by Borrower and its
Subsidiaries shall not be less than $25,000,000.


 


“Permitted
Capital Stock”:  (a) common
stock of Holdings and (b) any preferred stock of Holdings (or any equity
security of Holdings that is convertible into or exchangeable for any preferred
stock of Holdings), so long as the terms of any such preferred stock or equity
security of Holdings (i) do not provide any collateral security, (ii) do
not provide any guaranty or other support by the Borrower or any Subsidiaries
of the Borrower, (iii) do not contain any mandatory put, redemption,
repayment, sinking fund or other similar provision occurring before the eighth
anniversary of the Closing Date (other than as a result of a change of control
or similar event), (iv) do not require the cash payment of dividends or
interest, (v) do not contain any financial maintenance covenants, and (vii) to
the extent any such preferred stock or equity security does not otherwise
comply with clauses (b)(i) through (iv) hereof, such preferred stock
or equity security is otherwise reasonably satisfactory to Administrative
Agent.


 


“Permitted
Disposition”:  shall mean (i) any
sale or discount of past due isolated accounts receivable in the ordinary
course of business; (ii) (x) any lease as lessor (under a short term
lease) or license as licensor of isolated parcels of real property or isolated
items of personal property (including Intellectual Property) in the ordinary
course of business and (y) any grant of options to purchase, lease or acquire
isolated parcels of real property or isolated items of personal property
(including Intellectual Property) in the ordinary course of business; and (iii) any
sale or exchange of isolated specific items of


 


18





















 


equipment, so
long as the purpose of each sale or exchange is to acquire (and results within
180 days of such sale or exchange in the acquisition of) replacement items of
equipment which are, in the reasonable business judgment of the Borrower and
its Subsidiaries, the functional equivalent of the item of equipment so sold or
exchanged and provided Administrative Agent has at all times after such
acquisition a perfected Lien in the replacement property with the same priority
or better than the equipment being sold or exchanged.


 


“Permitted
Foreign Subsidiaries”:  any Foreign
Subsidiary which is organized under the laws of Canada or, in the case of any
Insurance Subsidiary, is organized under the laws of any jurisdiction other
than the United States.


 


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


 


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


 


“Pricing
Grid”:  the tables set forth below.


 


Pricing Grid
for Revolving Loans, Swingline Loans and the Commitment Fee Rate:


 


	
  Consolidated

  Leverage Ratio

  	
   

  	
  Applicable Margin for

  Eurodollar Loans

  	
   

  	
  Applicable Margin for

  ABR Loans

  	
   

  	
  Commitment Fee Rate

  	
   

  
	
  >3.50 to 1.00

  	
   

  	
  3.25

  	
  %

  	
  2.25

  	
  %

  	
  0.500

  	
  %

  
	
  £ 3.50 to 1.00 and 3
  3.25 to 1.00

  	
   

  	
  3.00

  	
  %

  	
  2.00

  	
  %

  	
  0.500

  	
  %

  
	
  < 3.25 to 1.00 and 3
  3.00 to 1.00

  	
   

  	
  2.75

  	
  %

  	
  1.75

  	
  %

  	
  0.500

  	
  %

  
	
  < 3.00 to 1.00

  	
   

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  	
  0.375

  	
  %

  



 


Pricing
Grid for Tranche B Term Loans:


 


	
  Consolidated

  Leverage Ratio

  	
   

  	
  Applicable Margin for

  Eurodollar Loans

  	
   

  	
  Applicable Margin for

  ABR Loans

  	
   

  
	
  >
  3.50 to 1.00

  	
   

  	
  3.25

  	
  %

  	
  2.25

  	
  %

  
	
  £
  3.50 to 1.00

  	
   

  	
  3.00

  	
  %

  	
  2.00

  	
  %

  



 


For the
purposes of the Pricing Grid, changes in the Applicable Margin resulting from
changes in the Consolidated Leverage Ratio shall become effective on the date
(the “Adjustment Date”) that is three Business Days after the date on
which financial statements are delivered to the Lenders pursuant to Section 6.1
and shall remain in effect until the next change to be effected pursuant to
this


 


19





















 


paragraph.  If any financial statements referred to above
are not delivered within the time periods specified in Section 6.1, then,
until the date that is three Business Days after the date on which such
financial statements are delivered, the highest rate set forth in each column
of the Pricing Grid shall apply.  In
addition, at all times while an Event of Default shall have occurred and be
continuing, the highest rate set forth in each column of the Pricing Grid shall
apply.  Each determination of the
Consolidated Leverage Ratio pursuant to the Pricing Grid shall be made in a
manner consistent with the determination thereof pursuant to Section 7.1.


 


“Pro Forma
Balance Sheet”:  as defined in Section 4.1(a).


 


“Pro Forma
Cost Reductions”:  to the extent
reasonably acceptable to the Administrative Agent and, so long as it is a
Lender, Bank of America, as Syndication Agent, and realizable within 90 days
after the applicable Acquisition, cost savings reasonably expected to result
from operational efficiencies expected to be created by employee terminations,
facilities consolidations and closings, standardization of employee benefits
and compensation policies, consolidation of property, casualty and other
insurance coverage and policies, reductions in taxes other than income taxes
and other cost savings reasonably expected to be realized for such period from
all acquisitions of an acquired entity or business.


 


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


 


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


 


“Purchase
Agreement”:  any of the asset and/or
equity purchase agreements relating to a Permitted Acquisition between the
Borrower or any Subsidiary Guarantor and the seller of such assets and/or
equity.


 


“Recovery
Event”:  any settlement of or payment
in respect of any property or casualty insurance claim or any condemnation
proceeding relating to any asset of any Loan Party, in excess of $1,000,000 in
the aggregate in any fiscal year.


 


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


 


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


 


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


 


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


 


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


 


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


 


“Reinvestment
Notice”:  a written notice executed
by a Responsible Officer (a) stating that (i) no Event of Default has
occurred and is continuing, (ii) after giving effect to such notice no
more than $5,000,000 in the
aggregate of Net Cash Proceeds subject to Section 2.11(b) have become
the subject of any such notice in the then current fiscal year, and (iii) the
Borrower (directly or indirectly


 


20





















 


through a
Subsidiary Guarantor intends and expects to use all or a specified portion of
the Net Cash Proceeds of a Home Sale, Asset Sale, Existing Property Sale
Leaseback Transaction or Recovery Event to acquire or repair assets useful in
its business or in connection with a Permitted Acquisition; and (b) directing
the Administrative Agent to apply the Reinvestment Deferred Amount with respect
to such Asset Sale, Home Sale, Existing Property Sale Leaseback Transaction or
Recovery Event to the Revolving Loans then outstanding, if any.


 


“Reinvestment
Prepayment Amount”:  with respect to
any Reinvestment Event, the Reinvestment Deferred Amount relating thereto less
any amount expended prior to the relevant Reinvestment Prepayment Date to
acquire or repair assets to be used in the Borrower’s or any Subsidiary
Guarantor’s business.


 


“Reinvestment
Prepayment Date”:  with respect to
any Reinvestment Event, the earlier of (a) the date occurring six months
after such Reinvestment Event and (b) the date on which the Borrower shall
have determined not to, or shall have otherwise ceased to, acquire or repair
assets to be used and useful in the Borrower’s or any Subsidiary Guarantor’s
business with all or any portion of the relevant Reinvestment Deferred Amount.


 


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


 


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


 


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


 


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


 


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


 


“Restricted
Payments”:  as defined in Section 7.6.


 


“Revolving
Commitment”:  as to any Lender, the
obligation of such Lender, if any, to make Revolving Loans and participate in
Swingline Loans and Letters of Credit in an aggregate principal and/or face
amount not to exceed the amount set forth under the heading “Revolving
Commitment” opposite such Lender’s name on Schedule 1.1A or in the
Assignment and Assumption pursuant to which such Lender became a party hereto,
as the same may be changed from time to time pursuant to the terms hereof.  The original amount of the Total Revolving
Commitments is $80,000,000.


 


21





















 


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


 


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


 


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


 


“Revolving
Lender”:  each Lender that has a
Revolving Commitment or that holds Revolving Loans.


 


“Revolving
Loans”:  as defined in Section 2.4(a).


 


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


 


“Revolving
Termination Date”:  November 4,
2010.


 


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


 


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


 


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


 


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


 


“Senior
Subordinated Notes”:  the
subordinated notes of the Borrower issued on the Closing Date pursuant to the
Senior Subordinated Note Indenture.


 


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


 


“Solvent”:  when used with respect to any Person, means
that, as of any date of determination, (a) the amount of the “fair value”
of the assets of such Person will, as of such date, exceed


 


22





















 


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


 


“Specified
Change of Control”:  a “Change of
Control” (or any other defined term having a similar purpose) as defined in the
Senior Subordinated Note Indenture.


 


“Specified
Swap Agreement”:  any Swap Agreement
entered into by the Borrower and any Lender or affiliate thereof in respect of
interest rates.  


 


“Subordinated
PIK Debt”:  any subordinated
Indebtedness or redeemable preferred stock of Holdings incurred after the
Closing Date (including any subordinated debt which extends, renews, replaces
or is in exchange for existing subordinated debt of Holdings) to the extent
permitted hereunder; provided that (i) such Indebtedness or redeemable
preferred stock has no scheduled principal payments prior to the date that is
twelve months after the scheduled maturity date of the Tranche B Term Loans and
the interest on such Indebtedness or the dividends payable in respect of such
redeemable preferred stock is not required to be paid in cash prior to such
date, (ii) any such
Indebtedness is subject to subordination provisions substantially to the effect
of Exhibit I or otherwise in form reasonably satisfactory to the
Administrative Agent and (iii) any such Indebtedness is on other terms and
conditions reasonably satisfactory to the Administrative Agent.


 


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


 


“Subsidiary
Guarantor”:  each direct or indirect
Subsidiary of the Borrower other than any Permitted Foreign Subsidiary, Non
Profit Entity or Insurance Subsidiary.


 


“Swap
Agreement”:  any agreement with respect to any swap, forward, future or derivative
transaction or option or similar agreement involving, or settled by reference
to, one or more rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any
combination of these transactions; provided that no phantom stock
or similar plan providing for payments


 


23





















 


only on
account of services provided by current or former directors, officers,
employees or consultants of the Borrower or any of its Subsidiaries shall be a
“Swap Agreement”.


 


“Swingline
Commitment”:  the obligation of the
Swingline Lender to make Swingline Loans pursuant to Section 2.6 in an
aggregate principal amount at any one time outstanding not to exceed
$10,000,000.


 


“Swingline
Lender”:  JPMorgan Chase Bank, in its
capacity as the lender of Swingline Loans.


 


“Swingline
Loans”:  as defined in Section 2.6.


 


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


 


“Syndication
Agent”:  as defined in the preamble
hereto.


 


“Target”:  any Person or any division of a Person, all
or at least 80% of the outstanding Capital Stock or all or substantially all of
the assets of which, are proposed to be acquired by the Borrower or any of the
Subsidiary Guarantors in connection with a Permitted Acquisition.


 


“Target
EBITDA”:  for any period, as to a
Target, net income for such period plus, without duplication and to the extent
reflected as a charge in the statement of such net income for such period, the
sum of (a) income (and franchise taxes in the nature of income taxes) and
foreign withholding tax expense for such period and any state single business
unitary or similar tax, (b) interest expense, (c) depreciation and
amortization expense, all calculated in accordance with generally accepted
accounting principles consistently applied, subject to normalized adjustments
reasonably acceptable to the Administrative Agent, and (d) Pro Forma Cost
Reductions, if any, applicable to such Target as a result of the Permitted
Acquisition in question.


 


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


 


“Total Purchase
Price”:  the “purchase price” for any
Acquisition including, without limitation, but without duplication, (a) except
as provided in clauses (b) and (f)(1) below all cash payable by any
Loan Party to the seller or Affiliate of the seller at the closing of the
Acquisition; (b) all Indebtedness (other than any Subordinated PIK Debt
issued to MDP Holder or any of its Affiliates and other than up to $10,000,000
Subordinated PIK Debt issued to any other Person, in each case to the extent
permitted by Section 7.2(n), including, without duplication, the Net Cash
Proceeds of any issuance of any such Subordinated PIK Debt) incurred by any Loan Party in favor of any
seller or Affiliate of any seller; (c) all Indebtedness related to the
Target that is assumed by any Loan Party, or subject to which the acquired
assets are acquired, or (in the case of Capital Stock purchase or merger) that
remain unpaid at the closing of the Acquisition; (d) amounts payable under
noncompetition agreements; (e) amounts payable under consulting or other
similar agreements entered into in connection with the Acquisition, the payment
and amount of which are not conditioned on the performance of reasonable
services; and (f) the maximum amount of all contingent future payments or
other consideration reasonably expected to be due or owing during the period
covered by the projections delivered in connection with any such Acquisition
and not otherwise described in this definition, including without limitation (1) any
Capital Stock and warrants, options and other rights to acquire Capital Stock,
valued in accordance with the fair market value of such securities (but
excluding any Capital Stock of any Loan Party and warrants or options to


 


24





















 


acquire the
same which have no right to any cash distribution or other Restricted Payment
in cash prior to the payment in full of all Obligations and, without
duplication, the net cash proceeds of the issuance of any such Capital Stock or
warrants or options which would constitute Net Cash Proceeds but for clause (b)(ii) of
the definition thereof, in an aggregate amount up to $30,000,000 less the
principal amount of any outstanding Subordinated PIK Debt described in clause (b) above
(without giving effect to any interest thereon paid in kind or through
accretion or capitalization)) and (2) ”earn-out” payments and amounts
payable upon disposition of the acquired business (unless the Required Lenders
shall otherwise agree), and (g) all other payments and obligations which
constitute in substance purchase price rather than payment for services.  For purposes of clauses (e) and (g) of
the preceding sentence, the amount of any payment or other consideration
specified therein shall be the amount reasonably estimated by the Borrower on
the basis of assumptions and calculations provided in writing to the
Administrative Agent.  (Any amounts
included in clauses (d), (e) or (f) payable after the 12-month period
following the closing of the Acquisition shall be calculated on a net present
value basis discounted at the then current U.S. treasury rate with a maturity
substantially the same as the final payment thereunder).


 


“Total
Revolving Commitments”:  at any time,
the aggregate amount of the Revolving Commitments then in effect.


 


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


 


“Tranche B
Term Commitment”:  as to any Lender,
the obligation of such Lender, if any, to make a Tranche B Term Loan to the
Borrower in a principal amount not to exceed the amount set forth under the
heading “Tranche B Term Commitment” opposite such Lender’s name on Schedule 1.1A
or on such Lender’s Lender Addendum.  The
original aggregate amount of the Tranche B Term Commitments is $175,000,000.


 


“Tranche B
Term Facility”:  as defined in the
definition of “Facility”.


 


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


 


“Tranche B Term
Loan”:  as defined in Section 2.1.


 


“Tranche B
Term Percentage”:  as to any Tranche
B Term Lender at any time, the percentage which such Lender’s Tranche B Term
Commitment then constitutes of the aggregate Tranche B Term Commitments (or, at
any time after the Closing Date, the percentage which the aggregate principal
amount of such Lender’s Tranche B Term Loans then outstanding constitutes of
the aggregate principal amount of the Tranche B Term Loans then outstanding).


 


“Transaction
Bonuses”:  any bonuses payable to any
officer or employee of Holdings or any of its Subsidiaries (including any
Person who becomes an officer or employee of any Group Member in connection
with a Permitted Acquisition) in connection with any Permitted Acquisition in
an aggregate amount not exceeding $1,000,000; provided that the amount
of all such bonuses payable in connection with all Permitted Acquisitions shall
not exceed $3,000,000 in the aggregate.


 


“Transferee”:  any Assignee or Participant.


 


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


 


“United
States”:  the United States of
America.


 


25





















 


“U.S. Bank
Facility”:  the Term Loan Agreement,
dated as of August 4, 2004, by and among Holdings, NMLLC, certain
Subsidiaries of NMLLC party thereto as borrowers and U.S. Bank National
Association, as amended, supplemented or otherwise modified or renewed or
replaced or added to in whole or in part from time to time (including any
similar facility).  


 


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


 


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


 


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


 


(b)  As
used herein and in the other Loan Documents, and any certificate or other
document made or delivered pursuant hereto or thereto, (i) accounting
terms relating to any Group Member not defined in Section 1.1 and
accounting terms partly defined in Section 1.1, to the extent not defined,
shall have the respective meanings given to them under GAAP, (ii) the
words “include”, “includes” and “including” shall be deemed to be followed by
the phrase “without limitation”, (iii) the word “incur” shall be construed
to mean incur, create, issue, assume, become liable in respect of or suffer to
exist (and the words “incurred” and “incurrence” shall have correlative meanings),
(iv) the words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, Capital Stock, securities, revenues, accounts,
leasehold interests and contract rights, (v) references to agreements or
other Contractual Obligations shall, unless otherwise specified, be deemed to
refer to such agreements or Contractual Obligations as amended, supplemented,
restated or otherwise modified from time to time and (vi) the word
“knowledge” when used with respect to any Loan Party shall be deemed to be a
reference to the knowledge of any Responsible Officer.


 


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


 


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


 


SECTION 2.                                AMOUNT AND TERMS OF COMMITMENTS


 


2.1                                 Term
Commitments.  Subject to the terms
and conditions hereof, each Tranche B Term Lender severally agrees to continue
the term loans held by it under the Existing Credit Agreement, including any
such term loan assigned to it pursuant to the Assignment Agreements and to make
a new term loan (each such continuing or new term loan, a “Tranche B Term
Loan”) to the Borrower on the Closing Date in an amount equal to the
difference (if any) between the amount of the Tranche B Term Commitment of such
Lender and such term loans held by it. 
The Tranche B Term Loans may from time to time be Eurodollar Loans or
ABR Loans, as determined by the Borrower and notified to the Administrative
Agent in accordance with Sections 2.2 and 2.12.


 


26





















 


2.2                                 Procedure
for Tranche B Term Loan Borrowing. 
The Borrower shall give the Administrative Agent irrevocable notice
(which notice must be received by the Administrative Agent prior to 4:00 P.M.,
New York City time, one Business Day prior to the anticipated Closing Date)
requesting that the Tranche B Term Lenders continue the term loans held by them
under the Existing Credit Agreement as, or make new term loans as, the Tranche
B Term Loans on the Closing Date.  The
Tranche B Term Loans shall initially be ABR Loans.  Upon receipt of such notice the
Administrative Agent shall promptly notify each Tranche B Term Lender thereof.  Not later than 12:00 Noon, New York City
time, on the Closing Date each Tranche B Term Lender shall make available to
the Administrative Agent at the Funding Office an amount in immediately
available funds equal to its new term loan being made as a Tranche B Term
Loan.  The Administrative Agent shall
credit the account of the Borrower on the books of such office of the
Administrative Agent with the aggregate of the amounts made available to the
Administrative Agent by the Tranche B Term Lenders in immediately available
funds.  Concurrently therewith, the term
loans held by the Tranche B Term Lenders under the Existing Credit Agreement
shall become Tranche B Term Loans hereunder.


 


2.3                                 Repayment
of Tranche B Term Loans.  The Tranche
B Term Loan of each Tranche B Term Lender shall mature in 28 consecutive
quarterly installments, the first of which shall be due and payable on December 31,
2004, and, each of which shall be in an amount equal to such Lender’s Tranche B
Term Percentage multiplied by the amount set forth below opposite such
installment; provided that any such installment may be reduced as a
result of a prepayment in accordance with Section 2.17(b):


 




	
  Installment

  	
   

  	
  Principal Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  2

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  3

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  4

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  5

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  6

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  7

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  8

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  9

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  10

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  11

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  12

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  13

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  14

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  15

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  16

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  17

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  18

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  19

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  20

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  21

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  22

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  23

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  24

  	
   

  	
  $

  	
  437,500

  	
   

  
	
  25

  	
   

  	
  $

  	
  41,125,000

  	
   

  
	
  26

  	
   

  	
  $

  	
  41,125,000

  	
   

  
	
  27

  	
   

  	
  $

  	
  41,125,000

  	
   

  
	
  28

  	
   

  	
  $

  	
  41,125,000

  	
   

  






 


27





















 


2.4                                 Revolving
Commitments.  (a) Subject to the
terms and conditions hereof, each Revolving Lender severally agrees to make
revolving credit loans (“Revolving Loans”) to the Borrower from time to
time during the Revolving Commitment Period in an aggregate principal amount at
any one time outstanding which, when added to such Lender’s Revolving
Percentage of the sum of (i) the L/C Obligations then outstanding, (ii) the
Magellan Reserve, and (iii) the aggregate principal amount of the
Swingline Loans then outstanding, does not exceed the amount of such Lender’s
Revolving Commitment provided however, notwithstanding the foregoing
each Revolving Lender shall make Revolving Loans to the Borrower during the
Revolving Commitment Period in an amount not to exceed such Lender’s Revolving
Percentage of the Magellan Reserve to the extent that the Borrower utilizes
such Revolving Loans to repay, or fund in escrow with respect to, amounts owing
under the Magellan Seller Notes.  During
the Revolving Commitment Period the Borrower may use the Revolving Commitments
by borrowing, prepaying the Revolving Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof.  The Revolving Loans may from time to time be
Eurodollar Loans or ABR Loans, as determined by the Borrower and notified to
the Administrative Agent in accordance with Sections 2.5 and 2.12.


 


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


 


2.5                                 Procedure
for Revolving Loan Borrowing.  The
Borrower may borrow under the Revolving Commitments during the Revolving
Commitment Period on any Business Day, provided that the Borrower shall
give the Administrative Agent irrevocable notice (which notice must be received
by the Administrative Agent prior to 12:00 Noon, New York City time, (a) three
Business Days prior to the requested Borrowing Date, in the case of Eurodollar
Loans, or (b) one Business Day prior to the requested Borrowing Date, in
the case of ABR Loans) (provided that any such notice of a borrowing of
ABR Loans under the Revolving Facility to finance payments required by Section 3.5
may be given not later than 10:00 A.M., New York City time, on the date of
the proposed borrowing), specifying (i) the amount and Type of Revolving
Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in
the case of Eurodollar Loans, the respective amounts of each such Type of Loan
and the respective lengths of the initial Interest Period therefor.  Any Revolving Loans made on the Closing Date
(including any revolving loans outstanding under the Existing Credit Agreement
that are continued as Revolving Loans hereunder) shall initially be ABR
Loans.  Each borrowing under the
Revolving Commitments shall be in an amount equal to (x) in the case of ABR
Loans, $1,000,000 or a whole multiple of $100,000 over such amount (or, if the
then aggregate Available Revolving Commitments are less than $1,000,000, such
lesser amount) and (y) in the case of Eurodollar Loans, $1,000,000 or a whole
multiple of $100,000 in excess thereof; provided, that the Swingline
Lender may request, on behalf of the Borrower, borrowings under the Revolving
Commitments that are ABR Loans in other amounts pursuant to Section 2.7.  Upon receipt of any such notice from the
Borrower, the Administrative Agent shall promptly notify each Revolving Lender
thereof.  Each Revolving Lender will make
the amount of its pro  rata share of each borrowing available to
the Administrative Agent for the account of the Borrower at the Funding Office
prior to 12:00 Noon, New York City time, on the Borrowing Date requested by the
Borrower in funds immediately available to the Administrative Agent.  Such borrowing will then be made available to
the Borrower by the Administrative Agent crediting the account of the Borrower
on the books of such office with the aggregate of the amounts made available to
the Administrative Agent by the Revolving Lenders and in like funds as received
by the Administrative Agent.  As of the
Closing Date any revolving credit loans held by the Revolving Lenders outstanding
under the Existing Credit Agreement shall become Revolving Loans
hereunder.  The revolving credit
commitments under the Existing Credit Agreement are hereby restated as set
forth on Schedule 1.1A.


 


28





















 


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


 


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


 


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


 


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


 


(c)  If
prior to the time a Revolving Loan would have otherwise been made pursuant to Section 2.7(b),
one of the events described in Section 8(f) shall have occurred and
be continuing with


 


29





















 


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


 


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


 


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


 


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


 


(b)  The
Borrower agrees to pay to the Administrative Agent the fees in the amounts and
on the dates as set forth in the Fee Letters and to perform any other
obligations contained therein.


 


2.9                                 Termination
or Reduction of Revolving Commitments. 
The Borrower shall have the right, upon not less than three Business
Days’ notice to the Administrative Agent, to terminate the Revolving
Commitments or, from time to time, to reduce the amount of the Revolving
Commitments;


 


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provided
that no such termination or reduction of Revolving Commitments shall be
permitted if, after giving effect thereto and to any prepayments of the
Revolving Loans and Swingline Loans made on the effective date thereof, the
Total Revolving Extensions of Credit would exceed the Total Revolving
Commitments.  Any such reduction shall be
in an amount equal to $1,000,000, or a whole multiple thereof, and shall reduce
permanently the Revolving Commitments then in effect.


 


2.10                           Optional
Prepayments.  The Borrower may at any
time and from time to time prepay the Loans, in whole or in part, without
premium or penalty, upon irrevocable notice delivered to the Administrative
Agent no later than 12:00 Noon, New York City time, three Business Days prior
thereto, in the case of Eurodollar Loans, and no later than 12:00 Noon, New
York City time, one Business Day prior thereto, in the case of ABR Loans (or on
the same day in the case of Swingline Loans), which notice shall specify the
date and amount of prepayment and whether the prepayment is of Eurodollar Loans
or ABR Loans; provided, that if a Eurodollar Loan is prepaid on any day
other than the last day of the Interest Period applicable thereto, the Borrower
shall also pay any amounts owing pursuant to Section 2.20.  Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof.  If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified
therein, together with (except in the case of Revolving Loans that are ABR
Loans and Swingline Loans) accrued interest to such date on the amount
prepaid.  Partial prepayments of Tranche
B Term Loans and Revolving Loans shall be in an aggregate principal amount of
$1,000,000 or a whole multiple thereof. 
Partial prepayments of Swingline Loans shall be in an aggregate
principal amount of $100,000 or a whole multiple thereof.


 


2.11                           Mandatory
Prepayments.  (a) If
Indebtedness shall be issued or incurred by any Loan Party (excluding any
Indebtedness incurred in accordance with Section 7.2, other than
Indebtedness incurred under the U.S. Bank Facility to the extent that any such
Indebtedness relates to real property owned by any Loan Party as of the date
hereof that is subject to a Mortgage), an amount equal to 100% of the Net Cash
Proceeds thereof shall be applied as soon as practicable but in any event
within five Business Days after such issuance or incurrence toward the
prepayment of the Tranche B Term Loans, the Revolving Loans and the L/C Obligations
as set forth in Section 2.11(e).


 


(b)  If
on any date any Loan Party shall receive Net Cash Proceeds from any Asset Sale,
Home Sale (other than any Home Sales pursuant to Section 7.5(j) and Section 7.11(c)),
Existing Property Sale Lease Back Transaction or Recovery Event, then, unless a
Reinvestment Notice shall be delivered in respect thereof, such Net Cash
Proceeds shall be applied as soon as practicable but in any event within ten
days after the date of receipt thereof toward the prepayment of the Tranche B
Term Loans, the Revolving Loans and the L/C Obligations as set forth in Section 2.11(e);
provided, that, notwithstanding the foregoing, (i) the aggregate
Net Cash Proceeds of Asset Sales, Home Sales, Existing Property Sale Lease Back
Transactions and Recovery Events that may be excluded from the foregoing
requirement pursuant to a Reinvestment Notice shall not exceed $5,000,000 in
any fiscal year of the Borrower and (ii) on each Reinvestment Prepayment
Date, an amount equal to the Reinvestment Prepayment Amount with respect to the
relevant Reinvestment Event shall be applied toward the prepayment of the
Tranche B Term Loans, the Revolving Loans and the L/C Obligations as set forth
in Section 2.11(e).


 


(c)  If,
for any fiscal year of the Borrower commencing with the fiscal year ending September 30,
2005, there shall be Excess Cash Flow, the Borrower shall, on the relevant
Excess Cash Flow Application Date, apply the ECF Percentage of such Excess Cash
Flow toward the prepayment of the Tranche B Term Loans, the Revolving Loans and
the L/C Obligations as set forth in Section 2.11(e).  Each such prepayment and commitment reduction
shall be made on a date (an “Excess Cash Flow Application Date”) no
later than five Business Days after the earlier of (i) the date on which
the financial statements of the Borrower referred to in Section 6.1(a),
for the fiscal year with respect to which such


 


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prepayment is made, are
required to be delivered to the Lenders and (ii) the date such financial
statements are actually delivered.


 


(d)  If
any Loan Party receives Net Cash Proceeds from any issuance of Capital Stock
(other than equity interests or warrants, rights or options issued in
connection with the exercise by present or former employees, officers or
directors under a stock incentive plan, stock option plan or other equity based
compensation plan or arrangement), an amount equal to 50% of such Net Cash
Proceeds thereof shall be applied as soon as practicable but in any event
within five Business Days after the date of such receipt toward the prepayment
of the Tranche B Term Loans, the Revolving Loans and the L/C Obligations as set
forth in Section 2.11(e).


 


(e) 
Amounts to be applied in connection with prepayments made pursuant to Section 2.11
shall be applied; first, to the prepayment of the Tranche B Term Loans
in accordance with Section 2.17(b); second, to repay unreimbursed
draws under the Letters of Credit; third, to the repayment of Swingline
Loans; fourth, to the prepayment of Revolving Loans; and fifth,
upon the occurrence and continuance of an Event of Default, to be held by the
Administrative Agent as cash collateral pursuant to the Security Documents to
secure L/C Obligations.  The application
of any prepayment pursuant to Section 2.11 shall be made, first, to
ABR Loans and, second, to Eurodollar Loans.  Each prepayment of the Loans under Section 2.11
(except in the case of Revolving Loans that are ABR Loans and Swingline Loans)
shall be accompanied by accrued interest to the date of such prepayment on the
amount prepaid and by any amounts payable pursuant to Section 2.20.


 


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


 


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


 


2.13                           Limitations
on Eurodollar Tranches. 
Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions and continuations of Eurodollar Loans and all
selections of Interest Periods shall be in such amounts and be made pursuant to
such elections so that, (a) after giving


 


32





















 


effect
thereto, the aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $1,000,000 or a whole multiple of $100,000
in excess thereof and (b) no more than eight Eurodollar Tranches shall be
outstanding at any one time.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


the Administrative Agent
shall give telecopy or telephonic notice thereof to the Borrower and the
relevant Lenders as soon as practicable thereafter.  If such notice is given (x) any Eurodollar
Loans under the relevant Facility requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (y) any Loans under the
relevant Facility that were to have been converted on the first day of such
Interest Period to Eurodollar Loans shall be continued as ABR Loans and (z) any
outstanding Eurodollar Loans under the relevant Facility shall be converted, on
the last day of the then-current Interest Period, to ABR Loans.  Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans under the relevant Facility
shall be made or continued as such, nor shall the Borrower have the right to
convert Loans under the relevant Facility to Eurodollar Loans.


 


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


 


(b)  Each
payment (including each prepayment) by the Borrower on account of principal of and
interest on the Tranche B Term Loans shall be made pro  rata
according to the respective outstanding principal amounts of the Tranche B Term
Loans then held by the Tranche B Term Lenders. 
The amount of each principal prepayment of the Tranche B Term Loans
shall be applied to reduce the then remaining installments of the
Tranche B Term Loans, as the case may be, pro  rata based
upon the respective then remaining principal amounts thereof.  Amounts prepaid on account of the Tranche B
Term Loans may not be reborrowed.


 


(c)  Each
payment (including each prepayment) by the Borrower on account of principal of
and interest on the Revolving Loans shall be made pro  rata
according to the respective outstanding principal amounts of the Revolving
Loans then held by the Revolving Lenders.


 


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


 


34










 


 










 


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


 


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


 


2.18                           Requirements
of Law.  (a)   If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:


 


(i)  shall subject any Lender to any tax
of any kind whatsoever with respect to this Agreement, any Letter of Credit,
any Application or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for Non-Excluded
Taxes covered by Section 2.19 and changes in the rate of tax on the
overall net income of such Lender);


 


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


 


35





















 


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


 


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


 


(b)  If
any Lender shall have determined that the adoption of or any change in any
Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Lender or any corporation controlling
such Lender with any request or directive regarding capital adequacy (whether
or not having the force of law) from any Governmental Authority made subsequent
to the date hereof shall have the effect of reducing the rate of return on such
Lender’s or such corporation’s capital as a consequence of its obligations
hereunder or under or in respect of any Letter of Credit to a level below that
which such Lender or such corporation could have achieved but for such adoption,
change or compliance (taking into consideration such Lender’s or such
corporation’s policies with respect to capital adequacy) by an amount
reasonably deemed by such Lender to be material and to the extent reasonably
determined such increase in capital to be allocable to the existence of such
Lender’s Commitments hereunder, then from time to time, after submission by
such Lender to the Borrower (with a copy to the Administrative Agent) of a
written request therefor, the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or such corporation for such
reduction.


 


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



 


2.19                           Taxes.  (a) All payments made by the Borrower
under this Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Administrative Agent or any Lender
as a result of a present or former connection between the Administrative Agent
or such Lender and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from the Administrative Agent or such
Lender having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any other Loan Document).  If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded
Taxes”) or Other Taxes are required to be withheld from any amounts payable
to the Administrative Agent or any Lender hereunder, the amounts so payable to
the Administrative Agent or such Lender shall be increased to the extent
necessary to yield to the Administrative Agent or such Lender (after payment of
all Non-Excluded Taxes and Other Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement, provided,
however, that the Borrower shall not be required to increase any such
amounts payable to any Lender with respect to any Non-Excluded Taxes (i) that
are attributable to such Lender’s failure to comply with the requirements of
paragraph (d) or (e) of this Section or (ii) that are
United States withholding taxes imposed on amounts payable to such Lender at
the time such Lender becomes a party to this Agreement, except to the extent
that such Lender’s assignor (if any) was entitled, at the time of assignment,
to receive additional amounts from the Borrower with respect


 


36





















 


to
such Non-Excluded Taxes pursuant to this paragraph. Nothing contained in this Section 2.19(a) shall
require the Administrative Agent or any Lender to make available its tax
returns (or any information relating to its taxes which it deems confidential)
to the Borrower or any other Person.


 


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


 


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


 


(d)  Each
Lender (or Transferee) that is not a “U.S. Person” as defined in Section 7701(a)(30)
of the Code (a “Non-U.S. Lender”) shall deliver to the Borrower and the
Administrative Agent (or, in the case of a Participant, to the Lender from
which the related participation shall have been purchased) two copies of either
U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or, in the
case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax
under Section 871(h) or 881(c) of the Code with respect to
payments of “portfolio interest”, a statement substantially in the form of Exhibit H
and a Form W-8BEN, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan
Documents.  Such forms shall be delivered
by each Non-U.S. Lender on or before the date it becomes a party to this
Agreement (or, in the case of any Participant, on or before the date such
Participant purchases the related participation).  In addition, each Non-U.S. Lender shall
deliver such forms promptly upon the obsolescence or invalidity of any form
previously delivered by such Non-U.S. Lender. 
Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose).  Notwithstanding any other provision of this
paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant
to this paragraph that such Non-U.S. Lender is not legally able to deliver.


 


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


 


(f)  If the Administrative Agent or any Lender
determines, in its sole discretion, that it has received a refund of any
Non-Excluded Taxes or Other Taxes as to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section 2.19, it shall pay over such refund to the
Borrower (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrower under this Section 2.19 with respect to the
Non-Excluded Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent


 


37





















 


or such
Lender and without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided, that the Borrower,
upon the request of the Administrative Agent or such Lender, agrees to repay
the amount paid over to the Borrower (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to the Administrative
Agent or such Lender in the event the Administrative Agent or such Lender is
required to repay such refund to such Governmental Authority but only if such
repayment is required because the initial refund was permitted in error. This
paragraph shall not be construed to require the Administrative Agent or any
Lender to make available its tax returns (or any other information relating to
its taxes which it deems confidential) to the Borrower or any other Person.


 


(g)  Upon
the reasonable request of the Borrower or the Administrative Agent, each Lender
(or Transferee) that is a “U.S. Person” within the meaning of Section 7701(a)(30)
of the Code shall deliver, within thirty (30) days of such request to the Borrower
and the Administrative Agent two duly signed completed copies of IRS Form W-9.  If such Lender fails to deliver such forms,
then the Administrative Agent may, notwithstanding Section 2.19(a), deduct
and withhold from any interest payment to such Lender or Transferee an amount
equivalent to the applicable back-up withholding tax imposed by the Code.


 


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


 


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


 


2.21                           Change
of Lending Office.  Each Lender
agrees that, upon the occurrence of any event giving rise to the operation of Section 2.18
or 2.19(a) with respect to such Lender, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to file any certificate or document reasonably requested by the
Borrower or designate another lending office for any Loans affected by such
event with the object of eliminating or reducing amounts payable pursuant to Section 2.18
or 2.19(a); provided, that the making of such filing or such designation
is made on terms that, in the reasonable judgment of such Lender, cause such
Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage (except to a de minimis
extent), and


 


38





















 


provided,
further, that nothing in this Section shall affect or postpone any
of the obligations of the Borrower or the rights of any Lender pursuant to Section 2.18
or 2.19(a).


 


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


 


(b)  If,
in connection with any proposed amendment, modification, waiver or termination
pursuant to Section 10.1 (a “Proposed Change”) requiring the
consent of all affected Lenders, the consent of the Required Lenders is
obtained, but the consent of other Lenders whose consent is required is not
obtained (any such Lender whose consent is not obtained as described in this
clause (b) being referred to as a “Non-Consenting Lender”), then,
so long as Administrative Agent is not a Non-Consenting Lender, at the Borrower’s
request the Administrative Agent, or a Person reasonably acceptable to the
Administrative Agent, shall have the right with the Administrative Agent’s
consent and in the Administrative Agent’s reasonable discretion (but shall have
no obligation) to purchase from such Non-Consenting Lenders, and such
Non-Consenting Lenders agree that they shall, upon the Administrative Agent’s
request, sell and assign to the Administrative Agent or such Person, all of the
Loans and Commitments of such Non-Consenting Lenders for an amount equal to the
principal balance of all Loans held by the Non-Consenting Lenders and all
accrued interest and fees with respect thereto through the date of sale, such
purchase and sale to be consummated at par pursuant to an Assignment and
Acceptance Agreement.


 


2.23                           Limitation
on Additional Amounts, etc. 
Notwithstanding anything to the contrary contained in Sections 2.18 and
2.19(a) of this Agreement, unless the Administrative Agent or a Lender
gives notice to the Borrower that it is obligated to pay an amount under any
such Section within 180 days after the later of (x) the date the Lender
incurs the respective increased costs, Non-Excluded Taxes, Other Taxes, loss,
expense or liability, reduction in amounts received or receivable or reduction
in return on capital or (y) the date such Lender has actual knowledge of its
incurrence of the respective increased costs, Non-Excluded Taxes, Other Taxes,
loss, expense or liability reductions in amounts received or receivable or
reduction in return on capital, then such Lender shall only be entitled to be
compensated for such amount by the Borrower pursuant to Sections 2.18 and
2.19(a), as the case may be, to the extent the costs, Non-Excluded Taxes, Other
Taxes, loss, expense or liability, reduction in amounts received or receivable
or reduction in return on capital are incurred or suffered on or after the date
which occurs 180 days prior to such Lender giving notice to the Borrower that
it is obligated to pay the


 


39





















 


respective
amounts pursuant to Sections 2.18 and 2.19(a), as the case may be.  This Section 2.23 shall have no
applicability to any Section of this Agreement other than Sections 2.18
and 2.19(a).


 


SECTION 3.                                LETTERS OF CREDIT


 


3.1                                 L/C
Commitment.  (a) Subject to the
terms and conditions hereof, the Issuing Lender, in reliance on the agreements
of the other Revolving Lenders set forth in Section 3.4(a), agrees to
issue letters of credit (“Letters of Credit”) for the account of the
Borrower on any Business Day during the Revolving Commitment Period in such
form as may be reasonably approved from time to time by the Issuing Lender; provided
that the Issuing Lender shall have no obligation to issue any Letter of Credit
if, after giving effect to such issuance, (i) the L/C Obligations would
exceed the L/C Commitment or (ii) the sum of the L/C Obligations and the
aggregate principal amount of all outstanding Revolving Loans, Swingline Loans
and the Magellan Reserve would exceed the Total Revolving Commitments.  Each Letter of Credit shall (i) be
denominated in Dollars and (ii) expire no later than the earlier of (x)
the first anniversary of its date of issuance and (y) the date that is five
Business Days prior to the Revolving Termination Date, provided that any
Letter of Credit with a one-year term may provide for the renewal thereof for
additional one-year periods (which shall in no event extend beyond the date
referred to in clause (y) above).


 


(b)  The
Issuing Lender shall not at any time be obligated to issue any Letter of Credit
if such issuance would conflict with, or cause the Issuing Lender or any L/C
Participant to exceed any limits imposed by, any applicable Requirement of Law.


 


(c)  The
letters of credit issued under the Existing Credit Agreement (the “Existing
Letters of Credit”) shall for all purposes constitute Letters of Credit
hereunder.


 


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


 


3.3                                 Fees
and Other Charges.  (a) The
Borrower will pay a fee on all outstanding Letters of Credit at a per annum
rate equal to the Applicable Margin then in effect with respect to Eurodollar
Loans under the Revolving Facility, shared ratably among the Revolving Lenders
and payable quarterly in arrears on each Fee Payment Date after the issuance
date.  In addition, the Borrower shall
pay to the Issuing Lender for its own account a fronting fee of 0.25% per annum
on the undrawn and unexpired amount of each Letter of Credit, payable quarterly
in arrears on each Fee Payment Date after the issuance date.


 


40





















 


(b)  In
addition to the foregoing fees, the Borrower shall pay or reimburse the Issuing
Lender for such normal and customary costs and expenses as are incurred or
charged by the Issuing Lender in issuing, negotiating, effecting payment under,
amending or otherwise administering any Letter of Credit.


 


3.4                                 L/C
Participations.  (a) The Issuing
Lender irrevocably agrees to grant and hereby grants to each L/C Participant,
and, to induce the Issuing Lender to issue Letters of Credit, each L/C
Participant irrevocably agrees to accept and purchase and hereby accepts and
purchases from the Issuing Lender, on the terms and conditions set forth below,
for such L/C Participant’s own account and risk an undivided interest equal to
such L/C Participant’s Revolving Percentage in the Issuing Lender’s obligations
and rights under and in respect of each Letter of Credit and the amount of each
draft paid by the Issuing Lender thereunder. 
Each L/C Participant agrees with the Issuing Lender that, if a draft is
paid under any Letter of Credit for which the Issuing Lender is not reimbursed
in full by the Borrower in accordance with the terms of this Agreement, such
L/C Participant shall pay to the Issuing Lender upon demand at the Issuing
Lender’s address for notices specified herein an amount equal to such L/C
Participant’s Revolving Percentage of the amount of such draft, or any part
thereof, that is not so reimbursed.  Each
L/C Participant’s obligation to pay such amount shall be absolute and
unconditional and shall not be affected by any circumstance, including (i) any
setoff, counterclaim, recoupment, defense or other right that such L/C
Participant may have against the Issuing Lender, the Borrower or any other
Person for any reason whatsoever, (ii) the occurrence or continuance of a
Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5, (iii) any adverse change in the
condition (financial or otherwise) of the Borrower, (iv) any breach of
this Agreement or any other Loan Document by the Borrower, any other Loan Party
or any other L/C Participant or (v) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing


 


(b)  If
any amount required to be paid by any L/C Participant to the Issuing Lender
pursuant to Section 3.4(a) in respect of any unreimbursed portion of
any payment made by the Issuing Lender under any Letter of Credit is paid to the
Issuing Lender within three Business Days after the date such payment is due,
such L/C Participant shall pay to the Issuing Lender on demand an amount equal
to the product of (i) such amount, times (ii) the daily average
Federal Funds Effective Rate during the period from and including the date such
payment is required to the date on which such payment is immediately available
to the Issuing Lender, times (iii) a fraction the numerator of which is
the number of days that elapse during such period and the denominator of which
is 360.  If any such amount required to
be paid by any L/C Participant pursuant to Section 3.4(a) is not made
available to the Issuing Lender by such L/C Participant within three Business
Days after the date such payment is due, the Issuing Lender shall be entitled
to recover from such L/C Participant, on demand, such amount with interest
thereon calculated from such due date at the rate per annum applicable to ABR
Loans under the Revolving Facility.  A
certificate of the Issuing Lender submitted to any L/C Participant with respect
to any amounts owing under this Section shall be conclusive in the absence
of manifest error.


 


(c)  Whenever,
at any time after the Issuing Lender has made payment under any Letter of
Credit and has received from any L/C Participant its pro  rata
share of such payment in accordance with Section 3.4(a), the Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise, including proceeds of collateral applied
thereto by the Issuing Lender), or any payment of interest on account thereof,
the Issuing Lender will distribute to such L/C Participant its pro  rata
share thereof; provided, however, that in the event that any such
payment received by the Issuing Lender shall be required to be returned by the
Issuing Lender, such L/C Participant shall return to the Issuing Lender the
portion thereof previously distributed by the Issuing Lender to it.


 


3.5                                 Reimbursement
Obligation of the Borrower.  If any
draft is paid under any Letter of Credit, the Borrower shall reimburse the
Issuing Lender with respect to each draft presented under any


 


41





















 


Letter
of Credit and paid by the Issuing Lender for the amount of (a) the draft
so paid and (b) any taxes, fees, charges or other costs or expenses
incurred by the Issuing Lender in connection with such payment, not later than
1:00 P.M., New York City time, on (i) the Business Day that the
Borrower receives notice of such draft, if such notice is received on such day
prior to 1:00 P.M., New York City time, or (ii) if clause (i) above
does not apply, the Business Day immediately following the day that the
Borrower receives such notice.  Each such
payment shall be made to the Issuing Lender at its address for notices referred
to herein in Dollars and in immediately available funds.  Interest shall be payable on any such amounts
from the date on which the relevant draft is paid until payment in full at the
rate set forth in (x) until the second Business Day following the date of the
applicable drawing, Section 2.14(b) and (y) thereafter, Section 2.14(c).


 


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


 


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


 


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


 


SECTION 4.                                REPRESENTATIONS AND WARRANTIES


 


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


 


4.1                                 Financial
Condition.  (a) The unaudited pro
forma consolidated balance sheet of Holdings and its consolidated
Subsidiaries as at September 30, 2004 (including the notes thereto) (the “Pro
Forma Balance Sheet”), a copy of which has heretofore been furnished to
each Lender, has been prepared giving effect (as if such events had occurred on
such date) to (i) the Loans to be made and the


 


42





















 


Senior
Subordinated Notes to be issued on the Closing Date and the use of proceeds
thereof and (ii) the payment of fees and expenses in connection with the
foregoing.  The Pro Forma Balance Sheet
has been prepared in good faith by Holdings, and presents fairly on a pro
forma basis the estimated financial position of Holdings and its
consolidated Subsidiaries as at September 30, 2004 assuming that the
events specified in the preceding sentence had actually occurred at such date.


 


(b) The
audited consolidated balance sheets of Holdings and its Subsidiaries as at September 30,
2003 and September 30, 2002, and the related consolidated statements of
income and of cash flows for the fiscal years ended on such dates, reported on
by and accompanied by an unqualified report from Ernst & Young,
present fairly in all material respects the consolidated financial condition of
Holdings and its Subsidiaries as at such date, and the consolidated results of
its operations and its consolidated cash flows for the respective fiscal years
then ended.  The unaudited consolidated
balance sheet of Holdings and its Subsidiaries as at June 30, 2004, and
the related unaudited consolidated statements of income and cash flows for the
nine-month period ended on such date, present fairly the consolidated financial
condition of Holdings and its Subsidiaries as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
three-month period then ended (subject to normal year-end audit
adjustments).  All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as approved by the aforementioned firm of accountants and
disclosed therein).  Except as set forth
on the Pro-forma Financial Statements, during the period from June 30,
2004 to and including the date hereof there has been no Disposition by any
Group Member of any material part of its business or property.


 


(c) Except as
set forth on Schedule 7.2(d), as of the Closing Date, no Group Member has
any material Guarantee Obligations, contingent liabilities and liabilities for
taxes, or any long-term leases or unusual forward or long-term commitments,
including any Swap Agreements or foreign currency swap or exchange transactions
or other obligations in respect of derivatives, that are not reflected in the
audited financial statements described in clause (b) above.


 


4.2                                 No
Change.  Since September 30,
2003, there has been no development or event that has had or would reasonably
be expected to have a Material Adverse Effect.


 


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


 


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


 


43





















 


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


 


4.5                                 No
Legal Bar.  The execution, delivery
and performance of this Agreement and the other Loan Documents, the issuance of
Letters of Credit, the borrowings hereunder and the use of the proceeds thereof
will not violate any Requirement of Law or any material Contractual Obligation
of any Group Member (other than the Magellan Note Documents) and will not
result in, or require, the creation or imposition of any Lien on any of their
respective properties or revenues pursuant to any Requirement of Law or any
such Contractual Obligation (other than the Liens created by the Security
Documents).


 


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


 


4.7                                 No
Default.  Except as set forth on Schedule 4.7,
no Group Member is in default under or with respect to any of its Contractual
Obligations in any respect that would reasonably be expected to have a Material
Adverse Effect.  No Event of Default has
occurred and is continuing.


 


4.8                                 Ownership
of Property; Liens.  Each Group
Member has marketable title to, or a valid leasehold interest in, all its real
property, and marketable title to, or a valid leasehold interest in, all its
material other property, and none of such property is subject to any Lien
except as permitted by Section 7.3. 
As of the date hereof and as of the date of delivery of the financial
statements delivered pursuant to Section 6.1(a) and as of the date of
delivery of the statements for the month of June each year delivered
pursuant to Section 6.1(b), set forth on Schedule 4.8 is a complete
and correct list of all real property (including street address) (other than
condominiums or co-ops) located in the United States and owned by any Loan
Party or any of its Subsidiaries and all leases (other than apartment leases)
material to the operation of any Loan Party or any of its Subsidiaries.


 


4.9                                 Licenses,
Intellectual Property.  Except as in
the aggregate would not reasonably be expected to have a Material Adverse
Effect or as set forth in Schedule 4.9 (all of which items set forth in Schedule 4.9
in the aggregate would not reasonably be expected to have a Material Adverse
Effect), each Group Member has all necessary licenses, permits, franchises,
rights to participate in, or the benefit of valid agreements to participate in
material Third Party Payor Programs and other rights necessary for the conduct
of its business and for the intended use of its properties and assets to the
extent necessary to ensure no material interruption in cash flow.  Each Group Member owns, or is licensed to
use, all Intellectual Property necessary for the conduct of its business as
currently conducted except to the extent


 


44





















 


that a
failure would not reasonably be expected to have a Material Adverse
Effect.  No material claim has been
asserted and is pending by any Person challenging or questioning the use of any
Intellectual Property or the validity or effectiveness of any Intellectual
Property, nor does Holdings or the Borrower have knowledge of any valid basis
for any such claim.  Except as would not
reasonably be expected to result in a Material Adverse Effect, the use of
Intellectual Property by each Group Member does not infringe on the rights of
any Person in any material respect.


 


4.10                           Taxes.  Each Group Member has filed or caused to be
filed all Federal, material state and other material tax returns that are
required to be filed and has paid all material taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than any the amount or validity
of which are currently being contested in good faith by appropriate proceedings
and with respect to which reserves in conformity with GAAP have been provided
on the books of the relevant Group Member); no tax Lien has been filed (other
than Permitted Liens), and, to the knowledge of Holdings and the Borrower, no
claim is being asserted, with respect to any such tax, fee or other charge.


 


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


 


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


 


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


 


4.14                           Investment
Company Act; Other Regulations.  No
Loan Party is an “investment company”, or a company “controlled” by an “investment
company”, within the meaning of the


 


45





















 


Investment
Company Act of 1940, as amended.  No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.


 


4.15                           Subsidiaries.  Attached hereto as Schedule 4.15(a) is
an organization chart of each Loan Party and its Subsidiaries as of the Closing
Date.  Except as disclosed to the
Administrative Agent by the Borrower in writing from time to time after the
Closing Date, (a) Schedule 4.15(b) sets forth the name and
jurisdiction of incorporation of each Subsidiary and, as to each such
Subsidiary, the percentage of each class of Capital Stock owned by any Loan
Party and (b) there are no outstanding subscriptions, options, warrants,
calls, rights or other agreements or commitments (other than stock options
granted to employees or directors and directors’ qualifying shares) of any
nature relating to any Capital Stock of the Borrower or any Subsidiary, except
as created by the Loan Documents.  All of the Subsidiaries which are a part of
such consolidated group are Guarantors except for (i) Insurance Subsidiaries
and Permitted Foreign Subsidiaries created or acquired after the Closing Date;
and (ii) the Non-Profit Entities. 
There are no Foreign Subsidiaries as of the Closing Date.


 


4.16                           Use
of Proceeds.  The proceeds of the
Tranche B Term Loans and a portion of the Revolving Loans shall be used to
repay amounts owing under the Existing Credit Agreement as set forth in the
Assignment Agreements, the notes issued by Holdings to the MDP Holder and to
the REM Sellers (as defined in the Existing Credit Agreement), to redeem
certain Capital Stock of Holdings, to pay certain deferred compensation
obligations and to pay related fees and expenses.  The remainder of the proceeds of the
Revolving Loans and the Swingline Loans, and the Letters of Credit, shall be used
for general corporate purposes of any Group Member (including Permitted
Acquisitions and other lawful purposes).


 


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


 


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


 


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


 


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


 


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


 


46





















 


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


 


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


 


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


 


4.18                           Accuracy
of Information, etc.  No statement or
factual information with respect to any Loan Party or any of its Subsidiaries
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum or any other factual document, certificate or statement
(other than any projections, pro formas or other estimates with respect to any
Loan Party or any of its Subsidiaries) furnished by or by Persons directed on
behalf of any Loan Party to the Administrative Agent or the Lenders, or any of
them, for use in connection with the transactions contemplated by this
Agreement or the other Loan Documents, when taken as a whole, contained as of
the date such statement, information, document or certificate was so furnished
(or, in the case of the Confidential Information Memorandum, as of the date of
this Agreement), any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements contained herein or therein not
materially misleading.  The projections
and pro  forma financial information contained in the materials
referenced above were, and the projections hereafter delivered, when delivered,
will be based upon good faith estimates and assumptions believed by management
of each Loan Party to be reasonable at the time made and no Loan Party knows as
of the date hereof any fact making such estimates and assumptions no longer
true in any material respects, it being recognized by the Administrative Agent
and the Lenders that such financial information as it relates to future events
is not to be viewed as fact and that actual results during the period or
periods covered by such financial information may differ from the projected
results set forth therein by a material amount. 
There is no fact known to any Loan Party that could reasonably be
expected to have a Material Adverse Effect that has not been expressly
disclosed herein, in the other Loan Documents or in the Confidential
Information Memorandum.


 


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4.19                           Security
Documents.  (a) The Guarantee
and Security Agreement and the Borrower Security Agreement are effective to
create in favor of the Administrative Agent, for the benefit of the Lenders,
legally, valid and enforceable (subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws affecting
creditors’ rights) security interests in the Collateral described therein and
proceeds thereof.  In the case of the
Pledged Stock described in any of the Security Documents, when stock
certificates representing such Pledged Stock are delivered to the
Administrative Agent together with the necessary endorsements, and in the case
of the other Collateral described in the any of the Security Documents, when
financing statements and other filings specified on Schedule 4.19(a) in
appropriate form are filed in the offices specified on Schedule 4.19(a),
the Borrower Security Agreement and the Guarantee and Security Agreement shall
constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in such Collateral and the proceeds
thereof, as security for their respective Obligations (as defined in the
Guarantee and Security Agreement) to the extent a Lien on such Collateral
(other than the Pledged Stock) can be perfected pursuant to such financing
statements and such other filings, in each case prior and superior in right to
any other Person (except, in the case of Collateral other than Pledged Stock,
Liens permitted by Section 7.3).


 


(b)  Each
of the Mortgages is effective to create in favor of the Administrative Agent,
for the benefit of the Lenders, a legal, valid and enforceable (subject to the
effect of bankruptcy, insolvency, reorganization, receivership, moratorium and
other similar laws affecting creditors’ rights) Lien on the Mortgaged
Properties described therein and proceeds thereof, and when the Mortgages are
filed in the appropriate recording offices, each such Mortgage shall constitute
a fully perfected Lien on, and security interest in, all right, title and
interest of the Loan Parties in the Mortgaged Properties and the proceeds
thereof, as security for the Obligations (as defined in the relevant Mortgage),
in each case prior and superior in right to any other Person (except that the
security interest created in such real property and the Mortgaged Property may
be subject to the Permitted Liens related thereto).


 


4.20                           Solvency.  The Loan Parties on a consolidated basis are,
and after giving effect to the incurrence of all Indebtedness and obligations
being incurred in connection herewith will be and will continue to be, Solvent.


 


4.21                           Senior
Indebtedness.  The Obligations
constitute “Senior Debt” of the Borrower under and as defined in the Senior
Subordinated Note Indenture.  The
obligations of each Subsidiary Guarantor under the Guarantee and Security
Agreement constitute “Senior Debt” of such Subsidiary Guarantor under and as
defined in the Senior Subordinated Note Indenture.


 


4.22                           Regulation
H.  No Mortgage encumbers improved
real property that is located in an area that has been identified by the
Secretary of Housing and Urban Development as an area having special flood
hazards and in which flood insurance has been made available under the National
Flood Insurance Act of 1968. 


 


SECTION 5.                                CONDITIONS PRECEDENT


 


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


 


(a)                                  Credit
Agreement; Security Documents.  The
Administrative Agent shall have received (i) this Agreement or a Lender
Addendum, as applicable, executed and delivered by the


 


48





















 


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


 


In the event
that any one or more Lenders have not executed and delivered this Agreement or
a Lender Addendum, as applicable, on the date scheduled to be the Closing Date
(each such Person being referred to herein as a “Non-Executing Person”),
the condition referred to in clause (i) above shall nevertheless be deemed
satisfied if on such date the Borrower and the Administrative Agent shall have
designated one or more Persons (the “Designated Lenders”) to assume, in
the aggregate, all of the Commitments that would have been held by the
Non-Executing Persons (subject to each such Designated Lender’s consent and its
execution and delivery of this Agreement). 
Schedule 1.1A shall automatically be deemed to be amended as
necessary to reflect the respective Commitments of the Designated Lenders and
the omission of the Non-Executing Persons as Lenders hereunder.


 


(b)                                 Senior
Subordinated Note Issuance and Existing Credit Agreement.  The following transactions shall have been
consummated, in each case on terms and conditions reasonably satisfactory to
the Lenders:


 


(i)  the Borrower shall have received at
least $150,000,000 in gross cash proceeds from the issuance of the Senior
Subordinated Notes; and


 


(ii)  (i) The Administrative Agent
shall have received reasonably satisfactory evidence that all amounts under the
Existing Credit Agreement to the extent required to be paid by the Assignment
Agreements, shall have been paid in full, except for the outstanding
obligations under any letters of credit issued thereunder, which letters of
credit shall be deemed to be Letters of Credit issued hereunder; 


 


(c)                                  Pro
Forma Balance Sheet; Financial Statements. 
The Lenders shall have received (i) the Pro Forma Balance Sheet, (ii) audited
consolidated financial statements of Holdings and its Subsidiaries for the September 30,
2002 and 2003 fiscal years and (iii) unaudited interim consolidated financial
statements of Holdings and its Subsidiaries for each fiscal quarter ended at
least 45 days before the Closing Date, and such financial statements shall not,
in the reasonable judgment of the Agents, reflect any material adverse change
in the consolidated financial condition of Holdings and its Subsidiaries, as
reflected in the financial statements or projections contained in the
Confidential Information Memorandum. 


 


(d)                                 Approvals.  All material governmental and third party
approvals (including landlords’ and other consents) necessary in connection
with the continuing operations of the Group Members and the transactions
contemplated hereby shall have been obtained and be in full force and effect,
and all applicable waiting periods shall have expired without any action being
taken or threatened by any competent authority that would restrain, prevent or
otherwise impose adverse conditions on the financing contemplated hereby.


 


(e)                                  Lien
Searches.  The Administrative Agent
shall have received the results of a recent lien search in each of the
jurisdictions where assets of the Loan Parties are located, and such search
shall reveal no liens on any of the assets of the Loan Parties except for liens
permitted by Section 7.3 or discharged on or prior to the Closing Date
pursuant to documentation reasonably satisfactory to the Administrative Agent.


 


49





















 


(f)                                    Insurance.  The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 5.2 of the
Guarantee and Security Agreement and Section 4.2 of the Borrower Security
Agreement.


 


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


 


(h)                                 Closing
Certificate; Certified Certificate of Incorporation; Good Standing Certificates.  The Administrative Agent shall have received (i) a
certificate of each Loan Party, dated the Closing Date, substantially in the
form of Exhibit C or in such other form as may be acceptable to the
Administrative Agent, with appropriate insertions and attachments, including
the certificate of incorporation of each Loan Party that is a corporation
certified by the relevant authority of the jurisdiction of organization of such
Loan Party, and (ii) a good standing certificate for each Loan Party from
its jurisdiction of organization.


 


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


 


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


 


(ii) the legal opinion of such other special and
local counsel as may be required by the Administrative Agent.


 


Each such legal opinion shall cover such other matters
incident to the transactions contemplated by this Agreement as the
Administrative Agent may reasonably require.


 


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


 


(k)                                  Filings,
Registrations and Recordings.  Each
document (including any Uniform Commercial Code financing
statement) required by the Security Documents or under law or reasonably
requested by the Administrative Agent to be filed, registered or recorded in
order to create in favor of the Administrative Agent, for the benefit of the
Lenders, a perfected Lien on the Collateral described therein, prior and
superior in right to any other Person (other than with respect to Liens
expressly permitted by Section 7.3), shall be in proper form for filing,
registration or recordation.


 


(l)                                     Solvency
Certificate.  The Administrative
Agent and the Lenders shall have received a solvency certification signed by a
Responsible Officer of Holdings dated as of the Closing Date with respect to
Holdings and its consolidated Subsidiaries, taken as a whole, in form and
substance reasonably satisfactory to the Administrative Agent, certifying that
Holdings and its


 


50





















 


consolidated Subsidiaries, taken as a whole, are
Solvent as of the Closing Date, both before and after giving effect to the
initial Loans hereunder.


 


(m)                               Maximum
Consolidated Leverage Ratio.  The
Administrative Agent shall have received a certificate of a Responsible Officer
certifying that the Consolidated Leverage Ratio of Holdings and its
Subsidiaries for the twelve month period ended September 30, 2004,
adjusted to give pro forma effect to (with such adjustments to be reasonably
acceptable to the Administrative Agent) (A) the issuance of the Senior
Subordinated Notes, (B) the
Loans to be made (or which are otherwise outstanding) on the Closing Date, (C) the
escrow of funds with respect to the Magellan Note, and (D) the payment of
fees and expenses in connection with the foregoing, in each case as if the same had occurred on the last day of
such twelve month period, is less than 5.85 to 1.0.


 


5.2                                 Conditions
to Each Extension of Credit.  The
agreement of each Lender to make any extension of credit requested to be made
by it on any date (including its initial extension of credit) is subject to the
satisfaction or waiver of the following conditions precedent:


 


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


 


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


 


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


 


SECTION 6.                                AFFIRMATIVE COVENANTS


 


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


 


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


 


(a)                                  as
soon as available, but in any event within 90 days after the end of each
fiscal year of Holdings, a copy of the audited consolidated balance sheet of
Holdings and its consolidated Subsidiaries as at the end of such year and the
related audited consolidated statements of income and of cash flows for such
year, setting forth in each case in comparative form the figures for the
previous year, reported on without a “going concern” or like qualification or
exception, or qualification arising out of the scope of the audit, by Ernst &
Young LLP or other independent certified public accountants of nationally
recognized standing;


 


(b)                                 as
soon as available, but in any event not later than 45 days after the end of
each of the first three quarterly periods of each fiscal year of Holdings, the
unaudited consolidated balance sheet of Holdings and its consolidated
Subsidiaries as at the end of such quarter and the


 


51





















 


related unaudited consolidated statements of income
and of cash flows for such quarter and the portion of the fiscal year through
the end of such quarter, setting forth in each case in comparative form the
figures for the same quarter in the previous year, certified by a Responsible
Officer as being fairly stated in all material respects (subject to normal year-end
audit adjustments and the absence of footnotes); and 


 


(c)                                  as
soon as available, but in any event not later than 45 days after the end of
each month occurring during each fiscal year of Holdings (other than the third,
sixth, ninth and twelfth such month), the unaudited consolidated balance sheet
of Holdings and its Subsidiaries as at the end of such month and the related
unaudited consolidated statements of income and of cash flows for such month
and the portion of the fiscal year through the end of such month, setting forth
in each case in comparative form the figures for the same month in the previous
year, certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments and the absence of
footnotes). 


 


All such financial
statements shall be complete and correct in all material respects and shall be
prepared in reasonable detail and in accordance with GAAP applied (except as
approved by such accountants or a Responsible Officer, as the case may be, and
disclosed in reasonable detail therein) consistently throughout the periods
reflected therein and with prior periods. 
With regard to interim financial statements, such interim financial
statements will not include all of the information and footnotes required by
GAAP for complete financial statements. 
However, all adjustments (consisting of normal, recurring accrual)
considered necessary for a fair presentation will be included therein.


 


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


 


(a)                                  If
requested by the Administrative Agent, concurrently with the delivery of the
financial statements referred to in Section 6.1(a), a certificate of the
independent certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge was
obtained of any Default or Event of Default, except as specified in such
certificate;


 


(b)                                 concurrently
with the delivery of any financial statements pursuant to Section 6.1(a) and
(b), (i) a certificate of a Responsible Officer stating that, to the best
of each such Responsible Officer’s knowledge, each Loan Party during such
period has observed or performed all of its covenants and other agreements, and
satisfied every condition contained in this Agreement and the other Loan
Documents to which it is a party to be observed, performed or satisfied by it,
and that such Responsible Officer has obtained no knowledge of any Default or
Event of Default except as specified in such certificate and (ii) (x) a
Compliance Certificate containing all information and calculations necessary
for determining compliance by each Group Member with the provisions of this
Agreement referred to therein (including detail with respect to any calculation
of Consolidated EBITDA, including, without limitation, detailed information
with respect to any add-backs, including any such add-backs for anticipated
payments or reimbursements which were not paid or reimbursed) as of the last
day of the fiscal quarter or fiscal year of the Borrower, as the case may be,
and (y) to the extent not previously disclosed to the Administrative Agent, a
description of any change in the jurisdiction of organization of any Loan Party
and a list of any Intellectual Property acquired by any Loan Party since the
date of the most recent report delivered pursuant to this clause (y) (or, in
the case of the first such report so delivered, since the Closing Date);


 


52





















 


(c)                                  as
soon as available, and in any event no later than 60 days after the end of each
fiscal year of Holdings and its Subsidiaries, a detailed consolidated budget
for the following fiscal year (and no later than 90 days after the end of each
fiscal year of Holdings, a detailed projected consolidated balance sheet of
Holdings and its consolidated Subsidiaries as of the end of the following
fiscal year, the related consolidated statements of projected cash flow,
projected changes in financial position and projected income and a description
of the underlying assumptions applicable thereto), and, as soon as available,
significant revisions, if any, of such budget and projections with respect to
such fiscal year (collectively, the “Projections”), which Projections
shall be prepared in a manner so that the representations and warranties set
forth in Section 4.18 are true and correct in all material respects;


 


(d)                                 no
later than 10 Business Days prior to the effectiveness thereof, copies of
substantially final drafts of any proposed amendment, supplement, waiver or
other modification with respect to the Senior Subordinated Note Indenture; 


 


(e)                                  within
five Business Days after the same are sent, copies of all financial statements
and reports that Holdings or the Borrower sends to the holders of any class of
its debt securities other than the Lenders (including, without limitation, the
holders of the Magellan Seller Notes) or public equity securities and, within
five Business Days after the same are filed, copies of all financial statements
and reports that Holdings or the Borrower may make to, or file with, the SEC; 


 


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


 


6.3                                 Payment
of Obligations.  Pay, discharge or
otherwise satisfy at or before maturity or before they become delinquent, as
the case may be, all its material obligations of whatever nature, except where (i) the
amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of the relevant Group Member or (ii) the failure to pay would reasonably be
expected to result in a Material Adverse Effect.  As to the Borrower and each of its direct and
indirect Subsidiaries, cause their direct and indirect Subsidiaries to make
dividends, distributions and other payments to the Borrower from time to time
as may be necessary to ensure that the Borrower is able to pay the Obligations
as and when the same become due.


 


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


 


6.5                                 Maintenance
of Property; Insurance.  (a) 
Keep all material property useful and necessary in its business in good working
order and condition, ordinary wear and tear and ordinary damage by casualty
excepted and (b) maintain with financially sound and reputable insurance
companies insurance (or pursuant to self-insurance to the extent commercially
reasonable) on all its property (other than vehicles) in at least such amounts
and against at least such risks (but including in any event public


 


53





















 


liability,
product liability and business interruption) as are required by the Security
Documents and as are usually insured against in the same general area by
companies engaged in the same or a similar business and of similar size; provided
that the insurance amount for general liability insurance of the Borrower shall
in no event be less than $4,000,000 (which shall be available after any
reasonable self-insurance or effective deductibles, which at the date hereof
are $1,000,000 per occurrence and $2,000,000 for all occurrences).  Keep all of its insurable properties now or
hereafter owned adequately insured at all times against loss or damage by fire
or other casualty to the extent customary with respect to like properties of
companies conducting similar businesses and of a similar size and to the extent
reasonably required by Administrative Agent; maintain general liability,
professional liability, business interruption and workers’ compensation
insurance insuring each Loan Party and each Subsidiary thereof to the extent
customary with respect to companies conducting similar businesses and of a
similar size, all by financially sound and reputable insurers (or pursuant to
self insurance to the extent commercially reasonable) and furnish to the
Lenders satisfactory evidence of the same (including, if requested by
Administrative Agent, certification by a Responsible Officer of the timely
renewal of, and timely payment of all insurance premiums payable under, all
such policies), notify each of the Lenders of any material reduction in the
insurance maintained on its properties in the aggregate after the date hereof
and furnish each of the Lenders reasonably satisfactory evidence of any such
change; and provide that each insurance policy maintained or required to be
maintained by any Loan Party shall (a) name the Administrative Agent, on
behalf of the Lenders, as loss payee pursuant to a so-called “standard
mortgagee clause” or “Lender’s loss payable endorsement”, with respect to
property coverage of such Loan Party, and shall name the Administrative Agent
on behalf of the Lenders as an additional insured, with respect to general
liability coverage, (b) provide that no action of any Loan Party or any
Subsidiary or any other Person shall void any such policy as to the
Administrative Agent or the Lenders, (c) provide that the insurer(s) shall
endeavor to notify the Administrative Agent of any proposed cancellation of
such policy at least 30 days in advance thereof (unless such proposed
cancellation arises by reason of non-payment of insurance premiums in which
case such notice shall be given at least 10 days in advance thereof) and that
the Administrative Agent or the Lenders will have the opportunity to correct
any deficiencies justifying such proposed cancellation and (d) cause any
Insurance Subsidiary to (i) conduct its insurance business in compliance
with all applicable insurance laws, rules, regulations and orders and using
sound actuarial principles and (ii) maintain usual and customary stop-loss
coverage and excess coverage reinsurance for individual claims.  The insurance premiums and other expenses
charged by any Insurance Subsidiary to the Borrower and its Subsidiaries shall
be reasonable and customary.  The Borrower
will provide the Administrative Agent (A) copies of any outside actuarial
reports prepared with respect to any projection, valuation or appraisal of any
Insurance Subsidiary promptly after receipt thereof and (B) once each year
promptly after receipt thereof, an actuarial opinion with respect to any
Insurance Subsidiary from a recognized actuarial firm reasonably satisfactory
to the Administrative Agent.


 


6.6                                 Inspection
of Property; Books and Records; Discussions.  (a)  Keep proper books of records and
account in which full, true and correct entries in conformity with GAAP and all
material Requirements of Law shall be made of all dealings and transactions in
relation to its business and activities, and (b) permit representatives of
any Lender to visit and inspect any of its properties and examine and make
abstracts from any of its books and records (other than materials protected by
the attorney-client privilege and materials which such person may not disclose
without violation of a confidentiality obligation binding upon it) at any
reasonable time (and upon reasonable notice unless an Event of Default exists)
and as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of the Group Members
with officers and employees of the Group Members and with their independent
certified public accountants (provided
the Borrower is given an opportunity to be present at such meetings).


 


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


 


54





















 


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


 


(b)                                 any
(i) default or event of default under any Contractual Obligation of any
Group Member or (ii) litigation, investigation or proceeding that may
exist at any time between any Group Member and any Governmental Authority, that
in either case, if not cured or if adversely determined, as the case may be,
could reasonably be expected to have a Material Adverse Effect;


 


(c)                                  any
litigation or proceeding affecting any Group Member (i) in which the
amount involved would be reasonably expected to result in a liability or
judgment of is $5,000,000 or more in excess of that fully covered by insurance
or (ii) in which injunctive or similar relief is sought (if such
injunctive or similar relief would reasonably be expected to result in a Material Adverse Effect);


 


(d)                                 the
following events, as soon as possible and in any event within 30 days after any
Responsible Officer of the Borrower knows or has reason to know thereof:  (i) the occurrence of any Reportable
Event with respect to any Plan, a failure to make any required contribution to
a Single Employer or Multiemployer Plan, the creation of any Lien in favor of
the PBGC or a Plan or any withdrawal from, or the termination, Reorganization
or Insolvency of, any Multiemployer Plan or (ii) the institution of
proceedings or the taking of any other action by the PBGC or the Borrower or
any Commonly Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the termination, Reorganization or Insolvency of, any
Single Employer or Multiemployer Plan; provided, however that notice shall only
be required for any event described in (i) or (ii) that would
reasonably be expected to result in a liability or judgment of $5,000,000 or
more; and


 


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


 


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


 


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


 


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


 


55





















 


and pursuit of any other such
challenges, could not reasonably be expected to have a Material Adverse Effect
or to materially and adversely affect the value of the property secured by any
of the Mortgages.


 


6.9                                 Additional
Collateral, etc.  (a)  With
respect to any personal property or intellectual property acquired after the
Closing Date by any Loan Party (other than any motor vehicles, or any tangible
personal property evidenced by a title certificate or any other type of
property expressly excluded by the Security Documents) as to which the
Administrative Agent, for the benefit of the Lenders, does not have a perfected
Lien, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Security Agreement or such other documents as
the Administrative Agent reasonably deems necessary or advisable to grant to
the Administrative Agent, for the benefit of the Lenders, a security interest
in such property, subject to Liens permitted under Section 7.3, and (ii) take
all actions necessary or advisable to grant to the Administrative Agent, for
the benefit of the Lenders, a perfected first priority security interest in
such property, including the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be reasonably required by the Guarantee
and Security Agreement or by law or as may be requested by the Administrative
Agent.


 


(b)  With
respect to any fee interest in any real property having a value (together with
improvements thereof) of at least $125,000 acquired after the Closing Date by
any Loan Party (other than any such real property subject or to be subject to a
Lien permitted by Section 7.3(g)), on a quarterly basis reasonably
promptly after delivery of the financial statements delivered pursuant to Section 6.1
(i) execute and deliver a first priority mortgage or deed of trust in a form
substantially similar to the existing Mortgages and satisfactory to the
Administrative Agent, in favor of the Administrative Agent, for the benefit of
the Lenders, covering such real property, (ii) if requested by the
Administrative Agent, provide the Administrative Agent with a recent title
search relating to such real property, each of the foregoing in form and
substance reasonably satisfactory to the Administrative Agent, and (iii) if
reasonably requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to
the Administrative Agent. 


 


(c)  With
respect to any new Subsidiary created or acquired after the Closing Date by any
Loan Party, promptly (i) execute and deliver to the Administrative Agent
such amendments to the Borrower Security Agreement and the Guarantee and
Security Agreement as the Administrative Agent reasonably deems necessary to
grant to the Administrative Agent, for the benefit of the Lenders, a perfected
first priority security interest subject to Liens permitted pursuant to Section 7.3
in the Capital Stock of such new Subsidiary that is owned by any Loan Party (provided,
such security interest shall be limited (a) in the case of a Permitted
Foreign Subsidiary, to 66% of such Capital Stock in such Permitted Foreign
Subsidiary, (b) in the case of any Insurance Subsidiary, to the lesser of
the amount of such Insurance Subsidiary’s Capital Stock which can be pledged
pursuant to the applicable law governing such Insurance Subsidiary or if such
Insurance Subsidiary is a Permitted Foreign Subsidiary, the amount which is
required to be otherwise pledged hereunder and (c) in the case of any Non-Profit
Entity formed after the Closing Date, to the amount of such entity’s Capital
Stock that can be pledged pursuant to the applicable law or regulations
governing such entity), (ii) deliver to the Administrative Agent the
certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
relevant Loan Party, (iii) cause such new Subsidiary (if not a Permitted
Foreign Subsidiary, an Insurance Subsidiary or a Non-Profit Entity) (A) to
become a party to the Guarantee and Security Agreement, (B) to take such
actions necessary or advisable to grant to the Administrative Agent for the
benefit of the Lenders a perfected first priority security interest subject to
the Liens permitted under Section 7.3 in the Collateral described in the
Guarantee and Security Agreement with respect to such new Subsidiary, including
the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Security Agreement or by
law or as may be requested by the Administrative Agent and (C) to deliver
to the Administrative Agent


 


56





















 


a certificate of such
Subsidiary, substantially in the form of Exhibit C or in such other form
as may be acceptable to the Administrative Agent, with appropriate insertions
and attachments, and (iv) if requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions relating to the matters
described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.


 


6.10                           Foreign
Subsidiaries.  No Loan Party shall
have a Foreign Subsidiary other than a Permitted Foreign Subsidiary.


 


6.11                           Mortgage
Amendments, Etc.  Within sixty (60)
days following the Closing Date, the Administrative Agent shall have received, (a) with
respect to each parcel of real property listed on Schedule 6.11 (the “Existing
Mortgage Collateral Properties”), (i) a Mortgage Amendment, executed
and delivered by a duly authorized officer of the applicable Loan Party (which
Borrower shall, it its own cost and expense, cause to be recorded in the
appropriate land records) and (ii) a title search dated within sixty (60)
days of the Closing Date, which shows no Liens other than those permitted by Section 7.3
and (b) with respect to each parcel of real estate owned by a Loan Party
(other than any such real property subject to or to be subject to a Lien
permitted by Section 7.3(g)) on or prior to the date hereof as to which a
mortgage or deed of trust in favor of Fleet National Bank, as administrative
agent under the Existing Credit Agreement has not been filed, a Mortgage,
executed and delivered by a duly authorized officer of the applicable Loan
Party (which Borrower shall, it its own cost and expense, cause to be recorded
in the appropriate land records).


 


SECTION 7.                                NEGATIVE COVENANTS


 


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


 


7.1                                 Financial
Condition Covenants.


 


(a)  Consolidated Leverage Ratio.  Permit the Consolidated Leverage Ratio as at
the last day of any period of four consecutive fiscal quarters of the Borrower
(or, if less, the number of full fiscal quarters subsequent to the Closing
Date) ending with any fiscal quarter set forth below to exceed the ratio set
forth below opposite such fiscal quarter:


 




	
  Fiscal Quarter

  	
   

  	
  Consolidated

  Leverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2004 to March 31,
  2005

  	
   

  	
  5.85 to 1.00

  	
   

  
	
  June 30, 2005 to December 31,
  2005

  	
   

  	
  5.75 to 1.00

  	
   

  
	
  March 31, 2006 to June 30, 2006

  	
   

  	
  5.50 to 1.00

  	
   

  
	
  September 30, 2006 to December 31,
  2006

  	
   

  	
  5.25 to 1.00

  	
   

  
	
  March 31, 2007  to June 30, 2007

  	
   

  	
  5.00 to 1.00

  	
   

  
	
  September 30, 2007 to December 31,
  2007

  	
   

  	
  4.75 to 1.00

  	
   

  
	
  March 31, 2008 to June 30,
  2008

  	
   

  	
  4.50 to 1.00

  	
   

  
	
  September 30, 2008 to December 31,
  2008

  	
   

  	
  4.25 to 1.00

  	
   

  
	
  March 31, 2009 to June 30,
  2009

  	
   

  	
  4.00 to 1.00

  	
   

  
	
  September 30, 2009 to December 31,
  2009

  	
   

  	
  3.75 to 1.00

  	
   

  
	
  March 31, 2010 to June 30,
  2010

  	
   

  	
  3.50 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2010

  	
   

  	
  3.25 to 1.00

  	
   

  
	
  December 31, 2010 to September 30,
  2011

  	
   

  	
  3.00 to 1.00

  	
   

  






 


57





















 


(b)  Consolidated
Interest Coverage Ratio.  Permit the
Consolidated Interest Coverage Ratio for any period of four consecutive fiscal
quarters of the Borrower (or, if less, the number of full fiscal quarters
subsequent to the Closing Date) ending with any fiscal quarter set forth below
to be less than the ratio set forth below opposite such fiscal quarter:


 




	
  Fiscal Quarter

  	
   

  	
  Consolidated Interest

  Coverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2004 to December 31, 2005

  	
   

  	
  2.10 to 1.00

  	
   

  
	
  March 31, 2006 to December 31, 2006

  	
   

  	
  2.20 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2007

  	
   

  	
  2.25 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2007

  	
   

  	
  2.30 to 1.00

  	
   

  
	
  September 30, 2007 to December 31, 2007

  	
   

  	
  2.35 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2008

  	
   

  	
  2.40 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2008

  	
   

  	
  2.45 to 1.00

  	
   

  
	
  September 30, 2008 to March 31, 2009

  	
   

  	
  2.50 to 1.00

  	
   

  
	
  June 30, 2009 to March 31, 2010

  	
   

  	
  2.75 to 1.00

  	
   

  
	
  June 30, 2010 to September 30, 2011

  	
   

  	
  3.00 to 1.00

  	
   

  






 


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


 


58





















 


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


 


(b)  Indebtedness of the Borrower to any
Subsidiary and of any Wholly Owned Subsidiary Guarantor to the Borrower or any
other Subsidiary;


 


(c)  Guarantee Obligations incurred in the
ordinary course of business by Holdings or any of its Subsidiaries of
obligations of any Wholly Owned Subsidiary Guarantor;


 


(d)  Indebtedness outstanding on the date hereof
and listed on Schedule 7.2(d) and any refinancings, refundings, renewals
or extensions thereof (without increasing, or shortening the maturity of, the
principal amount thereof);


 


(e)  Indebtedness (including, without limitation,
Capital Lease Obligations and Indebtedness under the U.S. Bank Facility)
secured by Liens permitted by Section 7.3(g) in an aggregate
principal amount not to exceed the sum of $20,000,000 at any one time
outstanding;


 


(f)  (i) Indebtedness of the Borrower in
respect of the Senior Subordinated Notes in an aggregate principal amount not
to exceed $150,000,000; and (ii) Guarantee Obligations of any Subsidiary
Guarantor in respect of such Indebtedness, provided that such Guarantee
Obligations are subordinated to the same extent as the obligations of the
Borrower in respect of the Senior Subordinated Notes; 


 


(g)  Indebtedness of the Borrower or any of its
Subsidiaries acquired or assumed pursuant to a Permitted Acquisition, which
Indebtedness was in existence at the time of such Permitted Acquisition and not
incurred in contemplation thereof subject to the limitations specified in
clause (h) of Section 7.2


 


(h)  any other Indebtedness of the Borrower or
any of its Subsidiaries (including any Indebtedness of the types referred to in
clause (l) of this Section 7.2 in excess of $5,000,000 permitted
thereunder), and any refinancings, refundings, renewals or extensions of any
such Indebtedness, in an aggregate amount as to Indebtedness incurred pursuant
to clauses (g) and (h) of this Section 7.2 (plus the then
outstanding aggregate amount of any refinancings, refundings, renewals or
extensions of such Indebtedness and the Net Payment Amount of any outstanding
Sale Leaseback Transactions entered into pursuant to Section 7.11) not exceeding $30,000,000 at any one time
outstanding; provided, however, in no event shall any Indebtedness of
Permitted Foreign Subsidiaries, together with Investments made pursuant to Section 7.8(x),
exceed $3,000,000 at any one time outstanding; 


 


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


 


(j)  Indebtedness
under performance, surety, statutory or appeal bonds or with respect to worker’s
compensation claims or other bonds permitted under Section 7.3;


 


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


 


(l)  Indebtedness
consisting of Earnout Obligations and promissory notes or similar obligations
issued by any Loan Party relating to licenses to be acquired in connection with
a


 


59





















 


Permitted Acquisition that cannot be transferred to
such Loan Party prior to or concurrently with the consummation of such
Permitted Acquisition, in an aggregate amount (valuing Earnout Obligations only
to the extent then required to be included on a consolidated balance sheet of
Holdings) not exceeding $5,000,000 at any one time outstanding;


 


(m)  Indebtedness
consisting of promissory notes issued by Holdings or Borrower to officers,
directors and employees of Holdings, the Borrower or any Subsidiary of the
Borrower to purchase or redeem Capital Stock of the Borrower or Holdings to the
extent permitted hereunder, in an aggregate amount not exceeding $1,000,000 at
any time outstanding to the extent not constituting Subordinated PIK Debt;


 


(n)  Subordinated
PIK Debt of Holdings in an aggregate amount not exceeding $30,000,000 at any
one time outstanding incurred by it in connection with Permitted Acquisitions
or Investments permitted hereunder, plus the aggregate amount of interest on
such Subordinated PIK Debt paid in kind or through accretion or capitalization;
provided that for purposes of this Section 7.2(n), any Subordinated
PIK Debt in the form of redeemable preferred stock of Holdings shall be deemed
to constitute Indebtedness;


 


(o)  Indebtedness
under Swap Agreements permitted pursuant to Section 7.12 and Cash
Management Obligations; and


 


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


 


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


 


(a)  Liens for taxes, assessments, charges or
other governmental levies not yet due or that are being contested in good faith
by appropriate proceedings, provided that adequate reserves with respect
thereto are maintained on the books of the Borrower or its Subsidiaries, as the
case may be, in conformity with GAAP;


 


(b)  carriers’, warehousemen’s, mechanics’,
materialmen’s, repairmen’s or other like Liens arising in the ordinary course
of business that are not overdue for a period of more than 60 days or that are
bonded off and being contested in good faith by appropriate proceedings;


 


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


 


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


 


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


 


60





















 


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


 


(g)  Liens securing Indebtedness of the Borrower
or any of its Subsidiaries incurred pursuant to Section 7.2(e) solely
to finance the acquisition or construction of new equipment, fixed assets or
real property or the refinancing of real property (including any Indebtedness
under the U.S. Bank Facility), provided that, (i) such Liens shall
be created (other than in connection with real property refinancings) within 90
days after the acquisition of such new equipment, fixed assets or real property
and (ii) such Liens do not at any time encumber any property other than
the equipment, fixed assets or real property financed by such Indebtedness;


 


(h)  Liens created pursuant to the Security
Documents;


 


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


 


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


 


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


 


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


 


(m)  Liens
securing Indebtedness permitted hereunder on property or assets acquired
pursuant to a Permitted Acquisition or permitted Investment, or on property or
assets of a Subsidiary of the Borrower in existence at the time such Subsidiary
is acquired pursuant to a Permitted Acquisition or permitted Investment, provided
that such Liens are not incurred in connection with or in anticipation of such
Permitted Acquisition or permitted Investment and do not attach to any other
asset of the Borrower or any of its Subsidiaries;


 


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


 


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


 


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


 


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


 


(r)  Liens
arising out of judgments or awards not constituting an Event of Default under Section 8(h);


 


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


 


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


 


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


 


(v)  Liens incurred in the ordinary course of
business of the Borrower or any Subsidiary not otherwise permitted by this Section so
long as neither (i) the aggregate outstanding principal amount of the
obligations secured thereby nor (ii) the aggregate fair market value
(determined as of the date such Lien is incurred) of the assets subject thereto
exceeds (as to the Borrower and all Subsidiaries) $5,000,000 at any one time;
and


 


(w)  any escrow
arrangement in respect of the obligations of Holdings and its Subsidiaries
under the Magellan Note Documents, so long as the funds funded into escrow do
not exceed the amount outstanding under the Magellan Note plus interest
expected to accrue thereon during a period not to exceed two years. 


 


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


 


(a)  any Subsidiary of the Borrower may be merged
or consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or with or into any
Subsidiary Guarantor (provided that the Subsidiary Guarantor shall be
the continuing or surviving corporation); 


 


(b)  any Subsidiary of the Borrower may Dispose
of any or all of its assets (i) to the Borrower or any Subsidiary
Guarantor (upon voluntary liquidation or otherwise) or (ii) pursuant to a
Disposition permitted by Section 7.5; and


 


(c)  any Investment expressly permitted by Section 7.8
may be structured as a merger, consolidation or amalgamation.


 


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


 


(a)  the Disposition of obsolete or worn out
property in the ordinary course of business;


 


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


 


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


 


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


 


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(e)  the Disposition of other property (other
than a Home Sale) in the aggregate having a book value not exceeding (i) 10%
of the consolidated tangible assets of the Borrower and its Subsidiaries in any
fiscal year of the Borrower or (ii) 15% of the consolidated tangible
assets of the Borrower and its Subsidiaries in the aggregate from and after the
Closing Date (with consolidated tangible assets being determined at the time of
any such Disposition by reference to the most recent consolidated financial
statements delivered pursuant to Section 6.1); provided that not
less than 75% of the total consideration for any such Disposition shall be paid
to the Borrower in cash or within 180 days after the consummation of such
disposition is reasonably expected to and shall be converted into cash;


 


(f)  Home Sales and Asset Sales by Borrower or
any of its Subsidiaries the Net Cash Proceeds of which do not exceed $5,000,000
in the aggregate in any fiscal year;


 


(g)  any of the Borrower and its Subsidiaries may
transfer assets to the Borrower or any Subsidiary Guarantor; 


 


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


 


(i)  any of the Borrower and its Subsidiaries
shall be permitted to sell or otherwise dispose of property and other assets in
connection with Sale Leaseback Transactions permitted hereunder; and


 


(j)  other Home
Sales involving real property sold in the sale-leaseback type transactions that
do not qualify as a Sale Leaseback Transaction hereunder so long as such real
property has been acquired by any Loan Party after the date hereof and the Net
Cash Proceeds of such Home Sales are used to make prepayments of any
outstanding Revolving Loans.


 


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


 


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


 


(a)  any Subsidiary may make Restricted Payments
to the Borrower or any Wholly Owned Subsidiary Guarantor;


 


(b)  (i) so long as no Default or Event of
Default shall have occurred and be continuing, the Borrower may pay dividends
to Holdings to permit Holdings to purchase Holdings’ Capital Stock from present
or former officers or employees of any Group Member, their estates and their
heirs upon the death, disability or termination of employment of such officer
or employee, provided, that the aggregate amount of payments under this
clause (i) after the date hereof (net of any proceeds received by Holdings
and contributed to the Borrower after the date hereof in connection with
resales of any Capital Stock) shall not exceed either (x) $3,000,000 in cash in the


 


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aggregate during any fiscal
year plus (A) the balance of any such $3,000,000 limit not used in any
fiscal year (which may be used in any subsequent fiscal year), (B) the
amount of any equity contribution made to the Borrower for the purpose of such
repurchase, and (C) the proceeds of any key-man life insurance with
respect to such employee paid to Holdings, the Borrower or any of its
Subsidiaries; or (y) $10,000,000 in cash in the aggregate for 2004 and all
fiscal years thereafter and (ii) the Borrower may pay dividends to
Holdings to permit Holdings to pay Management Fees.  


 


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


 


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


 


(e)  Holdings or the Borrower may make other
Restricted Payments made with Net Cash Proceeds of the issuance by it of
Permitted Capital Stock not required to be applied to the prepayment of Loans
pursuant to Section 2.11;


 


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


 


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


 


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


 


(i)  the Borrower may make Restricted Payments to
Holdings to enable it to redeem, and Holdings may redeem, for cash up to all of
Holdings’ issued and outstanding Class A Preferred Stock, par value $.01
per share; provided that redemption notices shall have been delivered on
or about the Closing Date .


 


7.7                                 Capital
Expenditures.  Make or commit to make
any Capital Expenditure, (a) except (a) Capital Expenditures of the
Borrower and its Subsidiaries not exceeding $20,000,000 in fiscal year 2005;
not exceeding $22,500,000 in fiscal year 2006; not exceeding $25,000,000 for
fiscal year 2007; not exceeding $27,500,000 in fiscal year 2008, and not
exceeding $30,000,000 in any fiscal year thereafter; provided, that (i) up
to 100% of any such amount referred to above, if not so expended in the fiscal
year for which it is permitted, may be carried over for expenditure in the next
succeeding fiscal year and (ii) Capital Expenditures made pursuant to this
clause (a) during any fiscal year shall be deemed made, first, in
respect of amounts carried over from the prior fiscal year pursuant to clause (i) above
and, second, in respect of amounts permitted for such fiscal year as
provided above, (b) Capital Expenditures made with the proceeds of any
Reinvestment Deferred Amount, (c) Capital Expenditures made with the
proceeds of equity contributions; and (d) Capital Expenditures made with
proceeds obtained through third party financing permitted hereunder.


 


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7.8                                 Investments.  Make any advance, loan, extension of credit
(by way of guaranty or otherwise) or capital contribution to, or purchase any
Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting a business unit of, or make any other investment in, any
Person (all of the foregoing, “Investments”), except in the case of
Holdings and any of its Subsidiaries (other than any Insurance Subsidiary
unless otherwise expressly included in this Section 7.8 or permitted by Section 7.17):


 


(a)  accounts
receivable and other extensions of trade credit by the Borrower and its
Subsidiaries in the ordinary course of business and advances made to Alliance
Human Services in the ordinary course of business;


 


(b)  Investments
in Cash Equivalents;


 


(c)  Guarantee
Obligations permitted by Section 7.2;


 


(d)  Investments
in assets useful in the business of the Borrower and its Subsidiaries made by
the Borrower or any of its Subsidiaries with the proceeds of any Reinvestment
Deferred Amount;


 


(e)  intercompany
Investments by any Group Member in the Borrower or any Person that, prior to
such investment, is a Wholly Owned Subsidiary Guarantor; 


 


(f)  existing
Investments as listed on Schedule 7.8(g);


 


(g)  Capital
Expenditures to the extent permitted under this Agreement; 


 


(h)  Permitted
Acquisitions;


 


(i)  the
formation of and Investments in new Subsidiaries of the Borrower (other than
Permitted Foreign Subsidiaries and Insurance Subsidiaries) and in connection
with Permitted Acquisitions, provided that (i) such Subsidiary is
owned by the Borrower or a Subsidiary Guarantor, (ii) the Borrower shall
have notified the Administrative Agent at least ten Business Days prior to the
formation or acquisition of any such Subsidiary, (iii) such Subsidiary
shall be engaged in a permitted business of the Borrower or its Subsidiaries
hereunder and (iv) as of the date of the formation or acquisition of any
such Subsidiary and the Investment therein, and after giving effect thereto, (A) such
new Subsidiary and its parent shall have entered into any and all agreements
(in form and substance reasonably satisfactory to the Administrative Agent)
necessary to comply with Section 6.9, and the Administrative Agent shall
be satisfied that all Liens required to be granted in the assets and ownership
interests of such new Subsidiary under such Section 6.9 have been granted
or pledged and have been perfected and are subject only to permitted Liens
hereunder, and (B) without limiting the generality of the foregoing, no
Event of Default shall have occurred and be continuing;


 


(j)  Investments by Holdings, the Borrower or any
of their respective Subsidiaries in the Borrower or any Person that is a
Subsidiary Guarantor;


 


(k)  the Borrower and its Subsidiaries may receive
and own Capital Stock or other investments acquired as non-cash consideration
pursuant to dispositions permitted under Section 7.5;


 


(l)  the Borrower and its Subsidiaries may make
pledges and deposits permitted under Section 7.3;


 


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(m)  the Borrower and its Subsidiaries may make
investments and guarantees expressly permitted under Sections 7.2, 7.4, 7.5 and
7.6;


 


(n)  the Borrower and its Subsidiaries may make an
advance or an investment that could otherwise be made as a Restricted Payment
to the extent the related advance or investment would be permitted under Section 7.6
(it being understood that any such advance or investment shall be deemed to be
and shall count as a Restricted Payment for purposes of Section 7.6);


 


(o)  the Borrower and its Subsidiaries may hold
Investments to the extent such Investments reflect an increase in the value of
Investments and would otherwise exceed the limitations herein;


 


(p)  Investments consisting of endorsements for
collection or deposit in the ordinary course of business;


 


(q)  Investments in deposit accounts opened and
maintained in the ordinary course of business;


 


(r)  Holdings and the Borrower may acquire and
hold promissory notes of employees of Holdings or its Subsidiaries in
connection with such Person’s purchase of Permitted Capital Stock of Holdings;


 


(s)  Investments received in connection with any
bankruptcy or reorganization of, or any good faith settlement of delinquent
accounts and disputes with, any customer or supplier arising in the ordinary
course of business;


 


(t)  the Borrower may enter into Swap Agreements
that are not speculative in nature to the extent permitted hereunder;


 


(u)  any Investments relating to deferred
compensation of Holdings, the Borrower and their respective Subsidiaries;


 


(v)  Investments
by the Borrower and its Subsidiaries in Permitted Acquisitions made with the
proceeds of any Reinvestment Deferred Amounts;


 


(w)  Investments by the Borrower or any Subsidiary
of the Borrower in any Permitted Foreign Subsidiary (including the formation
thereof), which, together with Indebtedness of Foreign Subsidiaries permitted
to be outstanding pursuant to Section 7.2(h) does not exceed
$3,000,000 at any time outstanding; 


 


(x)  Investments by the Borrower or any
Wholly-Owned Subsidiary in any Insurance Subsidiary (including in respect of
the formation thereof) solely to the extent permitted by Section 7.18(b); 


 


(y)  other Investments not listed above,
including, without limitation other credit and other extensions of credit
arising in the ordinary course of the Borrower’s business, in an aggregate
amount not to exceed the sum of $10,000,000 at any one time; provided
that any such Investment which later qualifies as a Permitted Acquisition shall
not be counted against such amount but shall be counted towards Permitted
Acquisition amounts; provided further that Investments representing
loans and advances to employees of any Group Member (including for travel,
entertainment and relocation expenses) shall not exceed $2,000,000 in the
aggregate at any one time outstanding; and


 


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(z)  Investments in connection with escrow
arrangements permitted pursuant to Section 7.3(w).


 


The amount of
any Investment shall be the initial amount of such Investment and any addition
thereto and distributions received in respect of such Investment.


 


7.9                                 Optional
Payments and Modifications of Certain Debt Instruments.  (a) 
Make or offer to make any optional or voluntary payment, prepayment, repurchase
or redemption of or otherwise optionally or voluntarily defease or segregate
funds with respect to the Senior Subordinated Notes or any Subordinated PIK
Debt; provided that the Borrower may pay, prepay, repurchase or redeem
the Senior Subordinated Notes with Net Cash Proceeds received by it from the
issuance of Capital Stock that are not required to be used to prepay the
Tranche B Loans, the Revolving Loans and the L/C Obligations pursuant to Section 2.11(d);
(b) amend, modify, waive or otherwise change, or consent or agree to any
material amendment, modification, waiver or other change to, any of the terms
of the Senior Subordinated Notes that is materially adverse to the Lenders; or (c) designate
any Indebtedness (other than obligations of the Loan Parties pursuant to the Loan
Documents) as “Designated Senior Debt” (or any other defined term having a
similar purpose) for the purposes of the Senior Subordinated Note Indenture.


 


7.10                           Transactions
with Affiliates.  Enter into any
transaction, including any purchase, sale, lease or exchange of property, the
rendering of any service or the payment of any management, advisory or similar
fees, with any Affiliate (other than Holdings, the Borrower or any Wholly Owned
Subsidiary Guarantor) unless such transaction is (a) otherwise permitted
under this Agreement, (b) in the ordinary course of business of the
relevant Group Member, and (c) upon fair and reasonable terms no less
favorable to the relevant Group Member than it would obtain in a comparable arm’s
length transaction with a Person that is not an Affiliate.  Notwithstanding the foregoing, (i) Holdings
and its Subsidiaries may pay to MDP Holder fees pursuant to a management
agreement approved by the board of directors of Holdings in an aggregate amount
not to exceed $250,000 in any fiscal year of Holdings (the “Management Fees”)
and expenses and indemnities in connection therewith (which fees, but not
expenses or indemnities, may only be paid when no Event of Default has occurred
and is continuing) and the Borrower and its Subsidiaries may pay customary fees
to, and the out-of-pocket expenses of its board of directors and may provide
customary corporate indemnities for the benefit of members of its board of
directors.


 


7.11                           Sales
and Leasebacks.  Enter into any
arrangement with any Person providing for the leasing by any Group Member of
any real property for a term of more than five years or containing an
obligation of such Group Member to repurchase such real property from such
Person, which real property has been or is to be sold or transferred by such Group Member to such Person or to
any other Person to whom funds have been or are to be advanced by such Person
on the security of such property or rental obligations of such Group Member
(any such transaction a “Sale Leaseback Transaction”) except any Sale
Leaseback Transaction (a) the Net Payment Amount in respect of which,
together with the aggregate Net Payment Amount of all other Sale Leaseback
Transactions since the date hereof and Indebtedness then outstanding pursuant
to Section 7.2(g) and (h), does not exceed $30,000,000, (b) which,
if such Sale Leaseback Transaction involves real property owned by any Loan
Party on the date hereof (an “Existing Property Sale Leaseback Transaction”),
(i) includes sale consideration for such real property of not less than
75% of the fair market value thereof and (ii) is accompanied by a
prepayment to the extent required by Section 2.11(b), and (c) which,
if such Sale Leaseback Transaction involves real property acquired by any Loan
Party after the date hereof, is accompanied by a voluntary prepayment of any
Revolving Loans outstanding equal to the Net Cash Proceeds realized therefrom
(or, if less, the aggregate principal amount of such Revolving Loans).


 


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7.12                           Swap
Agreements.  Enter into any Swap Agreement, except (a) Swap
Agreements entered into to hedge or mitigate risks to which the Borrower or any
Subsidiary has actual exposure (other than those in respect of Capital Stock
or, except as provided in clause (b) below, the Senior Subordinated Notes)
and (b) Swap Agreements entered into in order to effectively cap, collar
or exchange interest rates (from fixed to floating rates, from one floating
rate to another floating rate or otherwise) with respect to any
interest-bearing liability or investment of the Borrower or any Subsidiary.


 


7.13                           Changes
in Fiscal Periods.  Permit the fiscal
year of the Borrower or Holdings to end on a day other than September 30
or change the Borrower’s or Holdings’ method of determining fiscal quarters.


 


7.14                           Negative
Pledge Clauses.  Enter into or suffer
to exist or become effective any agreement that prohibits or limits the ability
of any Group Member to create, incur, assume or suffer to exist any Lien upon
any of its property or revenues, whether now owned or hereafter acquired, to
secure its obligations under the Loan Documents to which it is a party other
than (a) this Agreement and the other Loan Documents and (b) any
agreements governing any Indebtedness secured by Liens permitted hereby (in
which case, any prohibition or limitation shall only be effective against the
assets subject to such Lien).


 


7.15                           Clauses
Restricting Subsidiary Distributions. 
Enter into or suffer to exist or become effective any consensual encumbrance
or restriction on the ability of any Subsidiary of the Borrower to (a) make
Restricted Payments in respect of any Capital Stock of such Subsidiary held by,
or pay any Indebtedness owed to, the Borrower or any other Subsidiary of the
Borrower, (b) make loans or advances to, or other Investments in, the
Borrower or any other Subsidiary of the Borrower or (c) transfer any of
its assets to the Borrower or any other Subsidiary of the Borrower, except for
such encumbrances or restrictions existing under or by reason of (i) any
restrictions existing under the Loan Documents, the Senior Subordinated Notes
Indenture and the U.S. Bank Facility and
(ii) any restrictions with respect to a Subsidiary imposed pursuant to an
agreement that has been entered into in connection with the Disposition of all
or substantially all of the Capital Stock or assets of such Subsidiary.


 


7.16                           Lines
of Business.  Enter into any
business, either directly or through any Subsidiary, except for those
businesses in which the Borrower and its Subsidiaries are engaged on the date
of this Agreement or that are reasonably related or ancillary thereto, it being
understood and acknowledged that any Insurance Subsidiary shall be the only
entity conducting insurance business (and business reasonably related thereto)
and that any Insurance Subsidiary shall be engaged for the underwriting of
insurance policies for the Borrower and its Subsidiaries and each of such
Person’s respective employees, officers or directors.  As to Holdings, enter into any business
except for holding all of the Capital Stock of the Borrower and other
transactions specifically permitted hereunder. 
In connection therewith, Holdings shall have no liabilities other than
its liabilities under the Loan Documents and other transactions specifically
permitted hereunder, tax liabilities incurred in the ordinary course of
business, and administrative expenses incurred in the ordinary course of
business.


 


7.17                           Insurance
Subsidiary Investments.  Permit the
Insurance Subsidiary to make any Investment in any Person except:


 


(a)  Investments
in Cash Equivalents;


 


(b)  Investments
in deposit accounts opened and maintained in the ordinary course of business;
and


 


(c)  Investments
in accounts receivable in the ordinary course of business; and


 


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(d)  Investments
in notes or bonds (including interest only notes or bonds) in an aggregate
amount up to $5,000,000 that are rated at least BBB- by S&P or Baa3 by
Moody’s at the time of purchase; provided that an aggregate amount up to
$3,000,000 of such Investments shall have a rating of at least A by S&P or
A2 by Moody’s at the time of purchase. 


 


7.18                           Insurance
Subsidiary.  (a)   Permit the Insurance Subsidiary to enter into
any (or renew, extend or materially modify any existing) reinsurance or
stop-loss insurance arrangements except in the ordinary course of business with
reinsurers rated as least “A-” by A.M. Best & Co. or reinsurers
whose obligations to the Insurance Subsidiary are secured by letters of credit
or other collateral reasonably acceptable to the board of directors of the
Insurance Subsidiary or (b) permit any Investment in the Insurance
Subsidiary, except for Investments in an aggregate amount not in excess of
$10,000,000; provided that such amount may be increased by non-material
amounts in the discretion and with the approval of the Administrative Agent
and, so long as it is a Lender, Bank of America, as Syndication Agent (for the
avoidance of doubt, such Investments shall exclude any expenses and premiums
paid to the Insurance Subsidiary by any Group Member in the ordinary course of
such Group Member’s business). 


 


SECTION 8.                                EVENTS OF DEFAULT


 


If any of the
following events shall occur and be continuing:


 


(a)  the Borrower shall fail to pay any principal
of any Loan or Reimbursement Obligation when due in accordance with the terms
hereof; or the Borrower shall fail to pay any interest on any Loan or
Reimbursement Obligation, or any other amount payable hereunder or under any
other Loan Document, within three Business Days after any such interest or
other amount becomes due in accordance with the terms hereof; or


 


(b)  any representation or warranty made or
deemed made by any Loan Party herein or in any other Loan Document or that is contained
in any certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been inaccurate in any materially adverse respect
on or as of the date made or deemed made; or


 


(c)  any Loan Party shall default in the
observance or performance of any agreement contained in clause (i) or (ii) of
Section 6.4(a) (with respect to Holdings and the Borrower only), Section 6.7(a) or
Section 7 of this Agreement or Sections 5.5 and 5.7(b) of the
Guarantee and Security Agreement; or


 


(d)  any Loan Party shall default in the
observance or performance of any other agreement contained in this Agreement or
any other Loan Document (other than as provided in paragraphs (a) through (c) of
this Section), and such default shall continue unremedied for a period of 30
days after the earlier of knowledge thereof by a Responsible Officer of a Loan
Party or notice to the Borrower from the Administrative Agent or the Required
Lenders; or


 


(e)  any Group Member shall (i) default in
making any payment of any principal of any Indebtedness (including any
Guarantee Obligation, but excluding the Loans and L/C Obligations and the
Magellan Note) on the scheduled or original due date with respect thereto; or (ii) default
in making any payment of any interest on any such Indebtedness (excluding the
Loans and L/C Obligation and the Magellan Note), beyond the period of grace, if
any, provided in the instrument or agreement under which such Indebtedness was
created and such default has not been waived; or (iii) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness or contained in any instrument or agreement evidencing,
securing or


 


69





















 


relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee
or agent on behalf of such holder or beneficiary) to cause, with the giving of
notice if required, such Indebtedness to become due prior to its stated
maturity or (in the case of any such Indebtedness constituting a Guarantee
Obligation) to become payable and such default has not been waived; provided,
that a default, event or condition described in clause (i), (ii) or (iii) of
this paragraph (e) shall not at any time constitute an Event of Default
unless, at such time, one or more defaults, events or conditions of the type
described in clauses (i), (ii) and (iii) of this paragraph (e) shall
have occurred and be continuing with respect to Indebtedness the outstanding
principal amount of which exceeds in the aggregate $12,000,000; or


 


(f)  (i) any Group Member shall commence any
case, proceeding or other action (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial part
of its assets, or any Group Member shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against any
Group Member any case, proceeding or other action of a nature referred to in
clause (i) above that (A) results in the entry of an order for relief
or any such adjudication or appointment or (B) remains undismissed or
undischarged for a period of 60 days; or (iii) there shall be commenced
against any Group Member any case, proceeding or other action seeking issuance
of a warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets that results in the entry of an order for
any such relief that shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or (iv) any
Group Member shall take any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) any Group Member shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay its debts
as they become due; or


 


(g)  (i) any Person shall engage in any
non-exempt “prohibited transaction” (as defined in Section 406 of ERISA or
Section 4975 of the Code) involving any Plan, (ii) any “accumulated
funding deficiency” (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or any Lien in favor of the PBGC
or a Plan shall arise on the assets of any the Borrower or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to,
or proceedings shall commence to have a trustee appointed, or a trustee shall
be appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is,
in the reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other similar event or condition shall
occur or exist with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such events
or conditions, if any, would, in the reasonable opinion of the Required
Lenders, reasonably be expected to have a Material Adverse Effect; or


 


(h)  one or more judgments or decrees shall be
entered against any Group Member involving in the aggregate a liability (not
paid or fully covered by insurance as to which the relevant insurance company
has acknowledged coverage) of $7,500,000 or more, and all such


 


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judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 45 days from the entry
thereof; or


 


(i)  any of the Security Documents shall cease,
for any reason, to be in full force and effect, or any Loan Party or any
Affiliate of any Loan Party shall so assert, or any Lien created by any of the
Security Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or


 


(j)  the
guarantee contained in Section 2 of the Guarantee and Security Agreement
shall cease, for any reason, to be in full force and effect or any Loan Party
or any Affiliate of any Loan Party shall so assert; or


 


(k)  a Change of
Control or a Specified Change of Control shall occur; or


 


(l)  the Senior
Subordinated Notes or the guarantees thereof shall cease, for any reason, to be
validly subordinated to the Obligations or the obligations of the Subsidiary
Guarantors under the Guarantee and Security Agreement, as the case may be, as
provided in the Senior Subordinated Note Indenture, or any Loan Party, any
Affiliate of any Loan Party, the trustee in respect of the Senior Subordinated
Notes or the holders of at least 25% in aggregate principal amount of the
Senior Subordinated Notes shall so assert; 


 


(m)  any
Governmental Authority shall commence a hearing on the renewal of any material
license, consent, authorization, permit, certificate, franchise held by any the
Borrower, any of its Subsidiaries, or professional employee, officer, director
or contractor of any the Borrower or any of its Subsidiaries if there is a
significant probability that the result thereof will be the termination,
revocation, suspension or material adverse amendment of any such license,
consent, authorization, permit, certificate, franchise that would have a
Material Adverse Effect; 


 


(n)  any
Governmental Authority shall commence a formal proceeding seeking the
termination, suspension or revocation of any license, consent, authorization,
permit, certificate, franchise held by the Borrower, any of its Subsidiaries,
or professional employee, officer, director or contractor of the Borrower or
any Subsidiary of the Borrower if the result thereof is reasonably likely to be
the termination, suspension or revocation of any license, consent,
authorization, permit, certificate, franchise that would have a Material
Adverse Effect; or


 


(o)  or any
Insurance Subsidiary shall become subject to any conservation, rehabilitation,
liquidation order, directive or mandate issued by any Governmental Authority
which could reasonably be expected to have a Material Adverse Effect;


 


then, and in any such event,
(A) if such event is an Event of Default specified in clause (i) or (ii) of
paragraph (f) above with respect to the Borrower, automatically the
Commitments shall immediately terminate and the Loans (with accrued interest
thereon) and all other amounts owing under this Agreement and the other Loan
Documents (including all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) shall immediately become due and payable, and (B) if
such event is any other Event of Default, either or both of the following
actions may be taken:  (i) with the
consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower declare the Revolving Commitments to be terminated forthwith,
whereupon the Revolving Commitments shall immediately terminate; and (ii) with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Loans (with accrued interest thereon)


 


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and all other amounts owing
under this Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters
of Credit shall have presented the documents required thereunder) to be due and
payable forthwith, whereupon the same shall immediately become due and
payable.  With respect to all Letters of
Credit with respect to which presentment for honor shall not have occurred at
the time of an acceleration pursuant to this paragraph, the Borrower shall at
such time deposit in a cash collateral account opened by the Administrative
Agent an amount equal to the aggregate then undrawn and unexpired amount of
such Letters of Credit.  Amounts held in
such cash collateral account shall be applied by the Administrative Agent to
the payment of drafts drawn under such Letters of Credit, and the unused
portion thereof after all such Letters of Credit shall have expired or been
fully drawn upon, if any, shall be applied to repay other obligations of the
Borrower hereunder and under the other Loan Documents.  After all such Letters of Credit shall have
expired or been fully drawn upon, all Reimbursement Obligations shall have been
satisfied and all other obligations of the Borrower hereunder and under the
other Loan Documents shall have been paid in full, the balance, if any, in such
cash collateral account shall be returned to the Borrower (or such other Person
as may be lawfully entitled thereto).  Except
as expressly provided above in this Section, presentment, demand, protest and
all other notices of any kind are hereby expressly waived by the Borrower.


 


SECTION 9.                                THE AGENTS


 


9.1                                 Appointment.  Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents and
to exercise such powers and perform such duties as are expressly delegated to
the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental
thereto.   Notwithstanding any provision
to the contrary elsewhere in this Agreement, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein,
or any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.


 


9.2                                 Delegation
of Duties.  The Administrative Agent
may execute any of its duties under this Agreement and the other Loan Documents
by or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties.  The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys in-fact
selected by it with reasonable care.


 


9.3                                 Exculpatory
Provisions.  Neither any Agent nor
any of their respective officers, directors, employees, agents, attorneys-in-fact
or affiliates shall be (i) liable for any action lawfully taken or omitted
to be taken by it or such Person under or in connection with this Agreement or
any other Loan Document (except to the extent that any of the foregoing are
found by a final and nonappealable decision of a court of competent jurisdiction
to have resulted from its or such Person’s own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by any Loan Party
or any officer thereof contained in this Agreement or any other Loan Document
or in any certificate, report, statement or other document referred to or
provided for in, or received by the Agents under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of any Loan Party a party thereto to perform its
obligations hereunder or thereunder.  The
Agents shall not be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or


 


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conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Loan Party.


 


9.4                                 Reliance
by Administrative Agent.  The
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any instrument, writing, resolution, notice, consent, certificate,
affidavit, letter, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including counsel to Holdings or the
Borrower), independent accountants and other experts selected by the
Administrative Agent.  The Administrative
Agent may deem and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the Administrative Agent.  The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action.  The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
and the other Loan Documents in accordance with a request of the Required
Lenders (or, if so specified by this Agreement, all Lenders), and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Loans.


 


9.5                                 Notice
of Default.  The Administrative Agent
shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default unless the Administrative Agent has received notice
from a Lender, Holdings or the Borrower referring to this Agreement, describing
such Default or Event of Default and stating that such notice is a “notice of
default”.  In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders.  The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders (or,
if so specified by this Agreement, all Lenders); provided that unless
and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.


 


9.6                                 Non-Reliance
on Agents and Other Lenders.  Each
Lender expressly acknowledges that neither the Agents nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
any Agent hereafter taken, including any review of the affairs of a Loan Party
or any affiliate of a Loan Party, shall be deemed to constitute any
representation or warranty by any Agent to any Lender.  Each Lender represents to the Agents that it
has, independently and without reliance upon any Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and
their affiliates and made its own decision to make its Loans hereunder and
enter into this Agreement.  Each Lender
also represents that it will, independently and without reliance upon any 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 analysis,
appraisals and decisions in taking or not taking action under this Agreement
and the other Loan Documents, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and creditworthiness of the Loan Parties and their
affiliates.  Except for notices, reports
and other documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or


 


73





















 


otherwise),
prospects or creditworthiness of any Loan Party or any affiliate of a Loan
Party that may come into the possession of the Administrative Agent or any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates.


 


9.7                                 Indemnification.  The Lenders agree to indemnify each Agent in
its capacity as such (to the extent not reimbursed by Holdings or the Borrower
and without limiting the obligation of Holdings or the Borrower to do so),
ratably according to their respective Aggregate Exposure Percentages in effect
on the date on which indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with such Aggregate Exposure Percentages immediately prior to such date), from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (whether before or after the payment of the
Loans) be imposed on, incurred by or asserted against such Agent in any way
relating to or arising out of, the Commitments, this Agreement, any of the
other Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by such Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements that are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from such Agent’s gross negligence, bad faith or willful misconduct.  The agreements in this Section shall
survive the payment of the Loans and all other amounts payable hereunder.


 


9.8                                 Agent
in Its Individual Capacity.  Each
Agent and its affiliates may make loans to, accept deposits from and generally
engage in any kind of business with any Loan Party as though such Agent were
not an Agent.  With respect to its Loans
made or renewed by it and with respect to any Letter of Credit issued or
participated in by it, each Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any Lender and may exercise the
same as though it were not an Agent, and the terms “Lender” and “Lenders” shall
include each Agent in its individual capacity.


 


9.9                                 Successor
Administrative Agent.  The
Administrative Agent may resign as Administrative Agent upon 30 days’ notice to
the Lenders and the Borrower.  If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from
among the Lenders a successor agent for the Lenders, which successor agent
shall (unless an Event of Default under Section 8(a) or Section 8(f) with
respect to the Borrower shall have occurred and be continuing) be subject to
approval by the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers
and duties of the Administrative Agent, and the term “Administrative Agent”
shall mean such successor agent effective upon such appointment and approval,
and the former Administrative Agent’s rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Loans. 
If no successor agent has accepted appointment as Administrative Agent
by the date that is 30 days following a retiring Administrative Agent’s notice
of resignation, the retiring Administrative Agent’s resignation shall
nevertheless thereupon become effective, and the Lenders shall assume and
perform all of the duties of the Administrative Agent hereunder until such
time, if any, as the Required Lenders and Borrower, as applicable, appoint a
successor agent as provided for above. 
After any retiring Administrative Agent’s resignation as Administrative
Agent, 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 Administrative
Agent under this Agreement and the other Loan Documents.  Notwithstanding the foregoing, the retiring
Administrative Agent shall continue to hold the Collateral created by the Loan
Documents for the benefit of the Lenders until the successor Administrative
Agent has been effectively appointed pursuant to this paragraph.


 


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9.10                           Co-Documentation
Agents and Syndication Agent. 
Neither the Co-Documentation Agents nor the Syndication Agent shall have
any duties or responsibilities hereunder in its capacity as such.


 


SECTION 10.                          MISCELLANEOUS


 


10.1                           Amendments
and Waivers.  Neither this Agreement,
any other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this Section 10.1.  The Required Lenders and each Loan Party
party to the relevant Loan Document may, or, with the written consent of the
Required Lenders, the Administrative Agent and each Loan Party party to the
relevant Loan Document may, from time to time, (a) enter into written
amendments, supplements or modifications hereto and to the other Loan Documents
for the purpose of adding any provisions to this Agreement or the other Loan
Documents or changing in any manner the rights of the Lenders or of the Loan
Parties hereunder or thereunder or (b) waive, on such terms and conditions
as the Required Lenders or the Administrative Agent, as the case may be, may
specify in such instrument, any of the requirements of this Agreement or the
other Loan Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or
modification shall (i) forgive the principal amount or extend the final
scheduled date of maturity of any Loan, extend the scheduled date of any
amortization payment (but not prepayment) in respect of any Tranche B Term
Loan, reduce the stated rate of any interest or fee payable hereunder (except
(x) in connection with the waiver of applicability of any post-default increase
in interest rates (which waiver shall be effective with the consent of the
Majority Facility Lenders of each adversely affected Facility) and (y) that any
amendment or modification of defined terms used in the financial covenants in
this Agreement shall not constitute a reduction in the rate of interest or fees
for purposes of this clause (i)) or extend the scheduled date of any payment
thereof, or increase the amount or extend the expiration date of any Lender’s
Revolving Commitment, in each case without the written consent of each Lender
(it being understood that waivers or modifications of conditions precedent,
covenants, Defaults or Events of Default or of any mandatory reductions of
Commitments shall not constitute an increase of Commitment of any Lender and
that an increase in the available portion of any Commitment of any Lender shall
not constitute an increase in the Commitment of any Lender) directly affected
thereby; (ii) eliminate or reduce the voting rights of any Lender under
this Section 10.1 without the written consent of such Lender; (iii) reduce
any percentage specified in the definition of Required Lenders, consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents, release all or substantially
all of the Collateral or release all or substantially all of the Subsidiary
Guarantors (or Subsidiary Guarantors owning all or substantially all of the
Collateral) from their obligations under the Guarantee and Security Agreement
or the Borrower from its obligations under the Borrower Security Agreement, in
each case without the written consent of all Lenders; (iv) amend, modify
or waive any provision of Section 2.17 without the written consent of the
Majority Facility Lenders in respect of each Facility adversely affected
thereby; (v) reduce the percentage specified in the definition of Majority
Facility Lenders with respect to any Facility without the written consent of
all Lenders under such Facility; (vi) amend, modify or waive any provision
of Section 9 without the written consent of the Administrative Agent; (vii) amend,
modify or waive any provision of Section 2.6 or 2.7 without the written
consent of the Swingline Lender; (viii) amend, modify or waive any
provision of Section 3 without the written consent of the Issuing Lender
or (ix) alter the required application of any prepayments or repayments
(or commitment reductions), as between the various Facilities pursuant to Section 2.11(e) (although
the Required Lenders may waive in whole or in part, any such prepayment,
repayment or commitment reduction so long as the application, as among the
various Facilities, of any such prepayment, repayment or commitment reduction
which is still required to be made is not altered), without the consent of the
Majority Facility Lenders of each Facility which is being allocated a lesser
prepayment, repayment or commitment reduction. 
Any such waiver and any such amendment, supplement or modification shall
apply equally to each of the Lenders and shall be binding upon the Loan


 


75





















 


Parties,
the Lenders, the Administrative Agent and all future holders of the Loans.  In the case of any waiver, the Loan Parties,
the Lenders and the Administrative Agent shall be restored to their former
position and rights hereunder and under the other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.


 


Notwithstanding
the foregoing, this Agreement may be amended (or amended and restated) with the
written consent of the then Required Lenders, the Majority Facility Lenders,
the Administrative Agent and the Borrower (a) to add one or more
additional credit facilities to this Agreement and to permit the extensions of
credit from time to time outstanding thereunder and the accrued interest and
fees in respect thereof to share ratably in the benefits of this Agreement and
the other Loan Documents with the Tranche B Term Loans and Revolving Extensions
of Credit and the accrued interest and fees in respect thereof and (b) to
include appropriately the Lenders holding such credit facilities in any
determination of the Required Lenders and Majority Facility Lenders. 


 


In addition,
notwithstanding the foregoing, this Agreement may be amended with the written
consent of the Administrative Agent, the Borrower and the Lenders providing the
relevant Replacement Tranche B Term Loans (as defined below) to permit the
refinancing, replacement or modification of all outstanding Tranche B Term
Loans (“Refinanced Tranche B Term Loans”) with a replacement “B” term
loan tranche hereunder (“Replacement Tranche B Term Loans”), provided
that (a) the aggregate principal amount of such Replacement Tranche B Term
Loans (with appropriate adjustments to take into account any upfront fees or
original issue discount) shall not exceed the aggregate principal amount of
such Refinanced Tranche B Term Loans, (b) the Applicable Margin for such
Replacement Tranche B Term Loans shall not be higher than the Applicable Margin
for such Refinanced Tranche B Term Loans, (c) the weighted average life to
maturity of such Replacement Tranche B Term Loans shall not be shorter than the
weighted average life to maturity of such Refinanced Tranche B Term Loans at
the time of such refinancing, and (d) the Lenders providing the relevant
Replacement Tranche B Term Loans shall have the same relative rights and
priorities under the Loan Documents as the Lenders of the Refinanced Tranche B
Term Loans at the time of such refinancing.


 


If the
Borrower wishes to replace the Loans or Commitments under any Facility with
ones having different terms, it shall have the option, with the consent of the
Administrative Agent and subject to at least three Business Days’ advance
notice to the Lenders under such Facility, instead of prepaying the Loans or
reducing or terminating the Commitments to be replaced, to (i) require the
Lenders under such Facility to assign such Loans or Commitments to the Administrative
Agent or its designees and (ii) amend the terms thereof in accordance with
this Section 10.1 (with such replacement, if applicable, being deemed to
have been made pursuant to this Section 10.1).  Pursuant to any such assignment, all Loans
and Commitments to be replaced shall be purchased at par (allocated among the
Lenders under such Facility in the same manner as would be required if such
Loans were being optionally prepaid or such Commitments were being optionally
reduced or terminated by the Borrower), accompanied by payment of any accrued
interest and fees thereon and any amounts owing pursuant to Section 2.20
or 10.6.  By receiving such purchase
price, the Lenders under such Facility shall automatically be deemed to have
assigned the Loans or Commitments under such Facility pursuant to the terms of
the form of Assignment and Assumption attached hereto as Exhibit E, and
accordingly no other action by such Lenders shall be required in connection
therewith.  The provisions of this
paragraph are intended to facilitate the maintenance of the perfection and
priority of existing security interests in the Collateral during any such
replacement.


 


10.2                           Notices.  All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after


 


76





















 


being
deposited in the mail, postage prepaid, or, in the case of telecopy notice,
when received, addressed as follows in the case of Holdings, the Borrower and
the Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:


 


	
  Holdings and Borrower:

  	
  National Mentor, Inc.

  313 Congress Street

  Boston, MA  02210

  
	
   

  	
  Attention:  Edward M. Murphy,
  President

  
	
   

  	
  Telecopy:  (617) 790-4271

  
	
   

  	
  Telephone: (617) 790-4800

  
	
   

  	
   

  
	
   

  	
  Madison Dearborn Partners, Inc.

  3 First National Plaza

  Chicago, IL  60603

  
	
   

  	
  Attention:  Nicholas W. Alexos

  
	
   

  	
  Telecopy:  (312) 895-1256

  
	
   

  	
  Telephone: (312) 895-1100

  
	
   

  	
   

  
	
   

  	
  Kirkland & Ellis LLP

  200 East Randolph Drive

  Chicago, IL  60601

  
	
   

  	
  Attention:  Sanford E. Perl,
  P.C.

  
	
   

  	
  Telecopy:  (312) 861-2291

  
	
   

  	
  Telephone: (312) 861-2298

  
	
   

  	
   

  
	
  Administrative
  Agent:

  	
  JPMorgan Chase Bank

  1111 Fannin Street 10th Floor

  Houston, TX 77002

  
	
   

  	
  Attention: Cherry Arnaez, Loan and Agency Services

  
	
   

  	
  Telecopy:  713-750-2789 

  
	
   

  	
  Telephone: 713-750-2782

  
	
   

  	
   

  
	
   

  	
  JPMorgan Chase Bank

  270 Park Avenue

  New York, NY 10017

  Fax: 212-270-3279

  Phone: 212-270-2472

  Attention: Dawn Lee Lum

  Email: dawn.leelum@jpmorgan.com 

  



 


provided that any
notice, request or demand to or upon the Administrative Agent or the Lenders
shall not be effective until received.


 


Notices
and other communications to the Lenders hereunder may be delivered or furnished
by electronic communications pursuant to procedures approved by the Administrative
Agent; provided that the foregoing shall not apply to notices pursuant
to Section 2 unless otherwise agreed by the


 


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Administrative Agent and the
applicable Lender.  The Administrative
Agent or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may
be limited to particular notices or communications.


 


10.3                           No
Waiver; Cumulative Remedies.  No
failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder or under the other Loan Documents shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.


 


10.4                           Survival
of Representations and Warranties. 
All representations and warranties made hereunder, in the other Loan
Documents and in any document, certificate or statement delivered pursuant
hereto or in connection herewith shall survive the execution and delivery of
this Agreement and the making of the Loans and other extensions of credit
hereunder.


 


10.5                           Payment
of Expenses and Taxes.  The Borrower
agrees (a) to pay or reimburse the Administrative Agent for all its
reasonable out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation
and administration of the transactions contemplated hereby and thereby,
including the reasonable fees and disbursements of counsel to the
Administrative Agent and filing and recording fees and expenses, with
statements with respect to the foregoing to be submitted to the Borrower prior
to the Closing Date (in the case of amounts to be paid on the Closing Date) and
from time to time thereafter on a quarterly basis or such other periodic basis
as the Administrative Agent shall deem appropriate, (b) to pay or
reimburse each Lender and the Administrative Agent for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including the fees and disbursements of counsel to each Lender and
of counsel to the Administrative Agent, (c) to pay, indemnify, and hold
each Lender and the Administrative Agent harmless from, any and all recording
and filing fees and any and all liabilities with respect to, or resulting from
any delay in paying, stamp, excise and other taxes, if any, that may be payable
or determined to be payable in connection with the execution and delivery of,
or consummation or administration of any of the transactions contemplated by,
or any amendment, supplement or modification of, or any waiver or consent under
or in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent and their respective officers, directors, employees,
affiliates, agents and controlling persons (each, an “Indemnitee”)
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the other Loan
Documents and any such other documents, including any of the foregoing relating
to the use of proceeds of the Loans or the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of any
Group Member or any of the Properties and the reasonable fees and expenses of
legal counsel in connection with claims, actions or proceedings by any
Indemnitee against any Loan Party under any Loan Document (all the foregoing in
this clause (d), collectively, the “Indemnified Liabilities”), provided,
that the Borrower shall have no obligation hereunder to any Indemnitee with
respect to Indemnified Liabilities to the extent such Indemnified Liabilities
are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence, bad faith or willful
misconduct of such Indemnitee.  Without
limiting the foregoing, and to the extent permitted by applicable law, the
Borrower


 


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agrees
not to assert and to cause its Subsidiaries not to assert, and hereby waives
and agrees to cause its Subsidiaries to waive, all rights for contribution or
any other rights of recovery with respect to all claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of whatever kind
or nature, under or related to Environmental Laws, that any of them might have
by statute or otherwise against any Indemnitee, except to the extent such
claims, demands, penalties, fines, liabilities, settlements, damages, costs,
and expenses of whatever kind or nature, under or related to Environmental
Laws, are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence, bad faith or willful
misconduct of such Indemnitee. In the case of any investigation, litigation or
other proceeding to which the indemnity in clause (d) of this Section applies,
such indemnity shall be effective whether or not such investigation, litigation
or other proceeding is brought by a third party or any Group Member or an
Indemnified Party, and whether or not an Indemnified Party is otherwise a party
thereto.  All amounts due under this Section 10.5
shall be payable not later than 10 days after written demand therefor.  Statements payable by the Borrower pursuant
to this Section 10.5 shall be submitted to the address of the Borrower set
forth in Section 10.2, or to such other Person or address as may be
hereafter designated by the Borrower in a written notice to the Administrative
Agent.  The agreements in this Section 10.5
shall survive repayment of the Loans and all other amounts payable hereunder.


 


10.6                           Successors
and Assigns; Participations and Assignments.  (a)  
The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any affiliate of the Issuing Lender that issues any
Letter of Credit), except that (i) the Borrower may not assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by the
Borrower without such consent shall be null and void) and (ii) no Lender
may assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section.


 


(b)  (i) 
Subject to the conditions set forth in paragraph (b)(ii) below, any Lender
may assign to one or more assignees (each, an “Assignee”) all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans at the time owing to it) with the
prior written consent of:


 


(A) the
Borrower (such consent not to be unreasonably withheld or delayed), provided
that no consent of the Borrower shall be required for an assignment to a
Lender, an Affiliate of a Lender, an Approved Fund (as defined below) or, if an
Event of Default has occurred and is continuing, any other Person; 


 


(B) the
Administrative Agent (such consent not to be unreasonably withheld or delayed),
provided that no consent of the Administrative Agent shall be required
for an assignment to a Lender, an Affiliate of a Lender or an Approved Fund;
and


 


(C)  the
Issuing Lender, provided that no consent of the Issuing Lender shall be
required for an assignment of all or any portion of a Tranche B Term Loan.


 


(ii) Assignments
shall be subject to the following additional conditions: 


 


(A) except
in the case of an assignment to a Lender, an Affiliate of a Lender or an
Approved Fund or an assignment of the entire remaining amount of the assigning
Lender’s Commitments or Loans under any Facility, the amount of the Commitments
or Loans of the assigning Lender subject to each such assignment (determined as
of the date the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $5,000,000 (or,
in the case of the Tranche B Term Facility, $1,000,000) unless each of the
Borrower and the Administrative Agent otherwise consent, provided that (1) no
such


 


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consent of the Borrower shall be required if an Event of Default has
occurred and is continuing and (2) such amounts shall be aggregated in
respect of each Lender and its Affiliates or Approved Funds, if any; 


 


(B) the
parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption, together with a processing and recordation
fee of $3,500; and 


 


(C) the
Assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an administrative questionnaire.


 


For the purposes
of this Section 10.6, “Approved Fund” means any Person (other than
a natural person) that is engaged in making, purchasing, holding or investing
in bank loans and similar extensions of credit in the ordinary course of its
business and that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.


 


(iii) Subject
to acceptance and recording thereof pursuant to paragraph (b)(iv) below,
from and after the effective date specified in each Assignment and Assumption
the Assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of
Sections 2.18, 2.19, 2.20 and 10.5). 
Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this Section 10.6 shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.


 


(iv)  The
Administrative Agent, acting for this purpose as an agent of the Borrower,
shall maintain at one of its offices a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses
of the Lenders, and the Commitments of, and principal amount of the Loans and
L/C Obligations owing to, each Lender pursuant to the terms hereof from time to
time (the “Register”).  The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent, the Issuing Lender and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.


 


(v)  Upon its
receipt of a duly completed Assignment and Assumption executed by an assigning
Lender and an Assignee, the Assignee’s completed administrative questionnaire
(unless the Assignee shall already be a Lender hereunder), the processing and
recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register.  No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the Register as provided in
this paragraph.


 


(c)  (i) 
Any Lender may, without the consent of the Borrower or the Administrative
Agent, sell participations to one or more banks or other entities (a “Participant”)
in all or a portion of such Lender’s rights and obligations under this
Agreement (including all or a portion of its Commitments and the Loans owing to
it); provided that (A) such Lender’s obligations under this Agreement
shall remain unchanged, (B) such Lender shall remain solely responsible to
the other parties hereto for the


 


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performance of such obligations
and (C) the Borrower, the Administrative Agent, the Issuing Lender and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement.  Any agreement pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such agreement
may provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver that (1) requires the
consent of each Lender directly affected thereby pursuant to the proviso to the
second sentence of Section 10.1 and (2) directly affects such
Participant.  Subject to paragraph (c)(ii) of
this Section, the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 2.18, 2.19 and 2.20 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section.  To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 10.7(b) as
though it were a Lender, provided such Participant shall be subject to Section 10.7(a) as
though it were a Lender.


 


(ii)  A
Participant shall not be entitled to receive any greater payment under Section 2.18
or 2.19 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written
consent.  Any Participant that is a
Non-U.S. Lender shall not be entitled to the benefits of Section 2.19
unless such Participant complies with Section 2.19(d).  


 


(d)    Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Lender
(and any initial or subsequent pledgee or grantee, as the case may be, may in
turn at any time and from time to time pledge or grant a security interest in
all or any portion of such rights as collateral security to secure obligations
of such Person), including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge
or assignment of a security interest; provided that no such pledge or
assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or Assignee for such
Lender as a party hereto.


 


(e)    The Borrower, upon receipt of written notice
from the relevant Lender, agrees to issue Notes to any Lender requiring Notes
to facilitate transactions of the type described in paragraph (d) above.


 


(f)    Notwithstanding the foregoing, any Conduit
Lender may assign any or all of the Loans it may have funded hereunder to its
designating Lender without the consent of the Borrower or the Administrative
Agent and without regard to the limitations set forth in Section 10.6(b).  Each of Holdings, the Borrower, each Lender and
the Administrative Agent hereby confirms that it will not institute against a
Conduit Lender or join any other Person in instituting against a Conduit Lender
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding under any state bankruptcy or similar law, for one year and one day
after the payment in full of the latest maturing commercial paper note issued
by such Conduit Lender; provided, however, that each Lender designating
any Conduit Lender hereby agrees to indemnify, save and hold harmless each
other party hereto for any loss, cost, damage or expense arising out of its
inability to institute such a proceeding against such Conduit Lender during
such period of forbearance.


 


(g)    Notwithstanding anything to the contrary contained
herein, if at any time JPMorgan Chase Bank or Bank of America assigns all of
its Commitment and Loans pursuant to this Section, JPMorgan Chase Bank or Fleet
National Bank (in the event Bank of America assigns all of its Commitment and
Loans), as applicable, may, upon 90 days’ notice to the Borrower and the
Administrative Agent, resign as the Issuing Lender.  In the event of any such resignation as
Issuing Lender, the Borrower shall be entitled to appoint from among the
Lenders a successor Issuing Lender


 


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hereunder; provided,
however, that no failure by the Borrower to appoint any such successor shall
affect the resignation of JPMorgan Chase Bank or Fleet National Bank, as
applicable, as Issuing Lender.  If
JPMorgan Chase Bank or Fleet National Bank resigns as Issuing Lender, it shall
retain all the rights and obligations of the Issuing Lender hereunder with
respect to all Letters of Credit outstanding as of the effective date of its
resignation as Issuing Lender and all L/C Obligations with respect thereto
(including the right to require the Lenders to fund risk participations in
respect of any Letter of Credit pursuant to Section 3.4). 


 


10.7                           Adjustments;
Set-off.  (a)  Except to the
extent that this Agreement expressly provides for payments to be allocated to a
particular Lender or to the Lenders under a particular Facility, if any Lender
(a “Benefitted Lender”) shall, receive any payment of all or part of the
Obligations owing to it, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Section 8(f), or otherwise), in a greater
proportion than any such payment to or collateral received by any other Lender,
if any, in respect of the Obligations owing to such other Lender, such
Benefitted Lender shall purchase for cash from the other Lenders a
participating interest in such portion of the Obligations owing to each such
other Lender, or shall provide such other Lenders with the benefits of any such
collateral, as shall be necessary to cause such Benefitted Lender to share the
excess payment or benefits of such collateral ratably with each of the Lenders;
provided, however, that if all or any portion of such excess
payment or benefits is thereafter recovered from such Benefitted Lender, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest.


 


(b)  In
addition to any rights and remedies of the Lenders provided by law, each Lender
shall have the right after the occurrence and during the continuance of an
Event of Default, without prior notice to Holdings or the Borrower, any such
notice being expressly waived by Holdings and the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by
Holdings or the Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise), to set off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final other than payroll or trust accounts), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct
or indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit or
the account of Holdings or the Borrower, as the case may be.  Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such setoff and application
made by such Lender, provided that the failure to give such notice shall
not affect the validity of such setoff and application.


 


10.8                           Counterparts.  This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including Lender Addendums), and all of said counterparts taken together shall
be deemed to constitute one and the same instrument.  Delivery of an executed signature page of
this Agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.  A
set of the copies of this Agreement signed by all the parties shall be lodged
with the Borrower and the Administrative Agent.


 


10.9                           Severability.  Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.


 


10.10                     Integration.  This Agreement and the other Loan Documents
represent the entire agreement of Holdings, the Borrower, the Administrative
Agent and the Lenders with respect to the


 


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subject
matter hereof and thereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent or any Lender relative
to the subject matter hereof not expressly set forth or referred to herein or
in the other Loan Documents.


 


10.11                     GOVERNING
LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.


 


10.12                     Submission To Jurisdiction;
Waivers.  Each of Holdings and the
Borrower hereby irrevocably and unconditionally:


 


(a)  submits
for itself and its property in any legal action or proceeding relating to this
Agreement and the other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the non-exclusive
general jurisdiction of the courts of the State of New York, the courts of the
United States for the Southern District of New York, and appellate courts
from any thereof;


 


(b)  consents that any such action or proceeding
may be brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;


 


(c)  agrees that service of process in any such
action or proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage prepaid, to
Holdings or the Borrower, as the case may be at its address set forth in Section 10.2
or at such other address of which the Administrative Agent shall have been
notified pursuant thereto;


 


(d)  agrees that nothing herein shall affect the
right to effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction; and


 


(e)  waives, to the maximum extent not prohibited
by law, any right it may have to claim or recover in any legal action or
proceeding referred to in this Section any special, exemplary, punitive or
consequential damages.


 


10.13                     Acknowledgements.  Each of Holdings and the Borrower hereby
acknowledges that:


 


(a)  it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Loan
Documents;


 


(b)  neither the Administrative Agent nor any
Lender has any fiduciary relationship with or duty to Holdings or the Borrower
arising out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between Administrative Agent and Lenders, on
one hand, and Holdings and the Borrower, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and


 


(c)  no joint venture is created hereby or by the
other Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among Holdings, the Borrower and the
Lenders.


 


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10.14                     Releases of Guarantees and
Liens.  (a)  Notwithstanding
anything to the contrary contained herein or in any other Loan Document, the
Administrative Agent is hereby irrevocably authorized by each Lender (without
requirement of notice to or consent of any Lender except as expressly required
by Section 10.1) to take any action requested by the Borrower having the
effect of releasing any Collateral or guarantee obligations (i) to the
extent necessary to permit consummation of any transaction not prohibited by
any Loan Document or that has been consented to in accordance with Section 10.1
or (ii) under the circumstances described in paragraph (b) below.


 


(b)  At such time as the Loans, the Reimbursement
Obligations and the other obligations under the Loan Documents (other than
obligations under or in respect of Swap Agreements) shall have been paid in
full, the Commitments have been terminated and no Letters of Credit shall be
outstanding, the Collateral shall be released from the Liens created by the
Security Documents, and the Security Documents and all obligations (other than
those expressly stated to survive such termination) of the Administrative Agent
and each Loan Party under the Security Documents shall terminate, all without
delivery of any instrument or performance of any act by any Person.


 


10.15                     Confidentiality.  Each of the Administrative Agent and each
Lender agrees to keep confidential all non-public information provided to it by
or on behalf of any Loan Party, the Administrative Agent or any Lender pursuant
to or in connection with this Agreement; provided that nothing herein
shall prevent the Administrative Agent or any Lender from disclosing any such
information (a) to the Administrative Agent, any other Lender or any
affiliate thereof, (b) subject to an agreement to comply with the
provisions of this Section, to any actual or prospective Transferee or any
direct or indirect counterparty to any Swap Agreement (or any professional advisor
to such counterparty), (c) to its employees, directors, agents, attorneys,
accountants and other professional advisors or those of any of its affiliates, (d) upon
the request or demand of any Governmental Authority, (e) in response to
any order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (f) if requested or required
to do so in connection with any litigation or similar proceeding, (g) that
has been publicly disclosed, (h) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender’s investment
portfolio in connection with ratings issued with respect to such Lender, (i) in
connection with the exercise of any remedy hereunder or under any other Loan
Document or (j) with the consent of the Borrower; provided, however,
that with respect to disclosures pursuant to clauses (d), (e) and (f) of
this Section (other than disclosures pursuant to routine regulatory
examinations), unless prohibited by applicable Requirements of Law or court
order, each Lender, the Issuing Bank and the Administrative Agent shall (x)
notify the Borrower of any request by any Governmental Authority or representative
thereof or other Person for disclosure of confidential and non-public
information after receipt of such request and (y) if such disclosure of such
confidential or non-public information is legally required, furnish only such
portion of such information as it is legally compelled to disclose and exercise
commercially reasonable efforts to obtain an order or other reliable assurance
that confidential treatment will be accorded to the disclosed information.


 


10.16                     WAIVERS
OF JURY TRIAL.  HOLDINGS, THE BORROWER, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.


 


10.17                     USA PATRIOT Act.  Each Lender that is subject to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Act”) hereby notifies the Borrower
that pursuant to the requirements of the Act, it is required to obtain, verify
and record


 


84





















 


information
that identifies the Borrower, which information includes the name and address
of the Borrower and other information that will allow such Lender to identify
the Borrower in accordance with the Act.


 


10.18                     Certain
Matters Relating to the Existing Credit Agreement  (a) As of the date hereof, (i) NMLLC,
as borrower under the Existing Credit Agreement hereby assigns, transfers and
conveys to the Borrower all of its present and future right, title and interest
as such borrower (but not as grantor of collateral) in, under and with respect
to the Existing Credit Agreement and the other documents defined as “Loan
Documents” in the Existing Credit Agreement to which NMLLC is a party, (ii) the
Borrower hereby assumes all of the duties and obligations of NMLLC, as such
borrower pursuant to the Existing Credit Agreement and such other documents and
confirms that it shall be party to the Existing Credit Agreement and such other
documents and shall be bound by all the terms thereof as if named therein as “Borrower”,
(iii) NMLLC hereby agrees that it shall hereafter be a guarantor under the
“Guarantee and Security Agreement” as defined in the Existing Credit Agreement,
and (iv) each Lender hereby consents to the assignment and assumption
described in clauses (i) and (ii) above.


 


(b)  As
of the date hereof, (i) Fleet National Bank resigns as Administrative
Agent under the Existing Credit Agreement (the “Retiring Administrative
Agent”) and assigns, transfers and conveys all of its rights, title and
interest as “Administrative Agent” into and under the Existing Borrower
Security Agreement (as defined in the Borrower Security Agreement) and the
Existing Guaranty and Security Agreement (as defined in the Guaranty and
Security Agreement) to the Successor Administrative Agent (as defined below),
and (ii) each Lender hereby irrevocably designates and appoints JPMorgan
Chase Bank as Administrative Agent hereunder (the “Successor Administrative
Agent”). The Retiring Administrative Agent shall be entitled to (A) the
benefits of all covenants, representations, warranties, reimbursement
obligations and indemnities in its favor to which the Retiring Administrative
Agent would be entitled under Section 9 of the Existing Credit Agreement
upon its resignation as Administrative Agent and (B) the benefits of all
covenants, representations, warranties, reimbursement obligations and
indemnities in its favor which would, by the terms of the “Loan Documents” as
defined in the Existing Credit Agreement , survive the date of this Agreement
if the Existing Credit Agreement had been terminated on the date hereof and
without giving effect to the resignation of the Retiring Administrative Agent
provided for herein.  The Borrower, the
Retiring Administrative Agent, the Successor Administrative Agent, and each
Lender hereby consent to the resignation of the Retiring Administrative Agent
and the appointment of the Successor Administrative Agent and confirm that such
resignation and appointment shall be valid notwithstanding any non-compliance
with the provisions of the Existing Credit Agreement in connection therewith,
including, without limitation, the requirement that the Retiring Administrative
Agent give 30 days prior written notice of its resignation as required by Section 9.9
of the Existing Credit Agreement.


 


Each of the
Retiring Administrative Agent, the Successor Administrative Agent and the
Lenders hereby terminates (i) the Intercreditor and Subordination
Agreement dated as of May 1, 2003 among Holdings, NMLLC and Fleet National
Bank and (ii) the Affiliate Subordination Agreement dated as of May 1,
2003 among MDP Holder, the other entities listed as “Creditors” on the
signature pages thereto, Holdings, NMLLC and Fleet National Bank.


 


10.19                     No Novation.  This Agreement is an amendment and
restatement of the Existing Credit Agreement. 
The Notes delivered by the Borrower to the Lenders on the Closing Date
are given in renewal and rearrangement of, and substitution for, but not in
payment of, the “Notes” (as defined in the Existing Credit Agreement) issued to
the Lenders in their respective capacities as “Lenders” under (and as defined
in) the Existing Credit Agreement, whether as an original holder or as an
assignee thereof (the “Existing Notes”) it being acknowledged and agreed
that the Indebtedness evidenced by the Existing Credit Agreement and the
Existing Notes constitutes the same Indebtedness evidenced by this Agreement


 


85





















 


and
the Notes delivered pursuant hereto and that this Agreement and such Notes are
in no way intended to constitute a novation of the Existing Credit Agreement or
the Existing Notes or the principal amount of outstanding Indebtedness
evidenced thereby.


 


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


 


 


	
   

  	
  NATIONAL
  MENTOR HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/
  John W. Gillespie

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NATIONAL
  MENTOR, INC.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/
  John W. Gillespie

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


 


Amended and Restated Credit
Agreement


 





















 


	
   

  	
  JPMORGAN
  CHASE BANK, as Administrative

  
	
   

  	
  Agent, an
  Issuing Lender and as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Gary L. Spevack

  
	
   

  	
   

  	
  Name:  Gary L. Spevack

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
  JPMorgan
  Chase Bank

  



 


 


Amended and Restated Credit
Agreement


 





















 


	
   

  	
  BANK OF
  AMERICA, N.A., as Syndication Agent and 

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/
  Gabriela Millhorn

  
	
   

  	
   

  	
  Name:  Gabriela Millhorn

  
	
   

  	
   

  	
  Title:  Principal

  



 


 


Amended and Restated Credit
Agreement


 





















 


	
   

  	
  DYMAS
  FUNDING COMPANY, LLC, as

  
	
   

  	
  Co-Documentation
  Agent

  
	
   

  	
   

  
	
   

  	
  By: Dymas
  Capital Management Company, LLC

  
	
   

  	
  Its: Manager

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/
  Andrew D. Marek

  
	
   

  	
   

  	
  Name:  Andrew D. Marek

  
	
   

  	
   

  	
  Title:  Managing Director

  



 


 


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  GENERAL
  ELECTRIC CAPITAL CORPORATION, as 

  
	
   

  	
  Co-Documentation
  Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/
  Steve J. Warner

  
	
   

  	
   

  	
  Name:  Steve J. Warner

  
	
   

  	
   

  	
  Title:  Duly Authorized Signatory

  



 


 


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  UBS LOAN
  FINANCE LLC

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/
  Wilfred V. Saint

  
	
   

  	
   

  	
  Name:  Wilfred V. Saint

  
	
   

  	
   

  	
  Title:  

  	
  Director

  
	
   

  	
   

  	
   

  	
  Banking
  Products Services, US

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/
  Salloz Sikka

  
	
   

  	
   

  	
  Name:  Salloz Sikka

  
	
   

  	
   

  	
  Title:

  	
  Associate
  Director

  
	
   

  	
   

  	
   

  	
  Banking
  Products Services, US

  



 


 


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  MERRILL
  LYNCH CAPITAL, as Co-Documentation 

  
	
   

  	
  Agent and as
  a Lender

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/
  Clare Bailhe

  
	
   

  	
   

  	
  Name:  Clare Bailhe

  
	
   

  	
   

  	
  Title:  Director

  



 


 


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  FLEET
  NATIONAL BANK, a Bank of America

  Company, as an Issuing Lender and as administrative

  agent under the Existing Credit Agreement

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/
  Gabriela Millhorn

  
	
   

  	
   

  	
  Name:  Gabriela Millhorn

  
	
   

  	
   

  	
  Title:  Principal

  



 


 


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  [LENDER]

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/
  John D. Rogers

  
	
   

  	
   

  	
  Name:  John D. Rogers

  
	
   

  	
   

  	
  Title:  Senior Vice President

  



 


 


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  NATIONWIDE
  LIFE INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/
  Thomas S. Leggett

  
	
   

  	
   

  	
  Name:  Thomas S. Leggett

  
	
   

  	
   

  	
  Title:  Associate Vice President Public Bonds

  



 


 


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  NATIONWIDE
  MUTUAL INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/
  Thomas S. Leggett

  
	
   

  	
   

  	
  Name:  Thomas S. Leggett

  
	
   

  	
   

  	
  Title:  Associate Vice President Public Bonds

  



 


 


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  NATIONWIDE
  LIFE INSURANCE COMPANY

  
	
   

  	
  SEPARATE
  ACCOUNT-B RETIREMENT

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/
  Thomas S. Leggett

  
	
   

  	
   

  	
  Name:  Thomas S. Leggett

  
	
   

  	
   

  	
  Title:  Associate Vice President Public Bonds

  



 


 


Amended and Restated Credit Agreement


 





















 


	
   

  	
  CIBC INC.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/
  George Knight

  
	
   

  	
   

  	
  Name:  George Knight

  
	
   

  	
   

  	
  Title:  Managing Director, CIBC World Markets

  Corp., as agent

  



 


 


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  Denali
  Capital LLC, managing member of DC Funding 

  
	
   

  	
  Partners
  LLC, portfolio manager for

  
	
   

  	
  DENALI
  CAPITAL CLO I, LTD.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/
  Robert M. Coseo

  
	
   

  	
   

  	
  Name:  Robert M. Coseo

  
	
   

  	
   

  	
  Title:  Managing Director

  



 


 


Amended and Restated Credit
Agreement


 





















 


	
   

  	
  Denali
  Capital LLC, managing member of DC Funding

  
	
   

  	
  Partners
  LLC, portfolio manager for

  
	
   

  	
  DENALI
  CAPITAL CLO III, LTD.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/
  Robert M. Coseo

  
	
   

  	
   

  	
  Name:  Robert M. Coseo

  
	
   

  	
   

  	
  Title:  Managing Director

  



 


 


Amended and Restated Credit
Agreement