CREDIT AGREEMENT

 

$190,000,000

 

 

CREDIT AGREEMENT

 

Dated as of March 4, 2005

 

 

among

 

RURAL/METRO OPERATING COMPANY, LLC,

as Borrower,

 

THE LENDERS REFERRED TO HEREIN,

 

CITICORP NORTH AMERICA, INC.,

as Administrative Agent,

 

JPMORGAN CHASE BANK, N.A.,

as Syndication Agent,

 

and

 

CITIGROUP GLOBAL MARKETS INC.

and

J.P. MORGAN SECURITIES INC.,

as Joint Lead Arrangers and Joint Lead Bookrunners

 

 

CAHILL GORDON & REINDEL LLP

80 Pine Street

New York, NY 10005

TABLE OF CONTENTS

 

 

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CREDIT AGREEMENT (this “ Agreement ”) dated as of March 4, 2005, among RURAL/METRO OPERATING COMPANY, LLC, a Delaware limited liability company (“ Borrower ”); the Lenders; CITIBANK, N.A., as LC Facility issuing bank (in such capacity, the “ LC Facility Issuing Bank ”); CITICORP NORTH AMERICA, INC., as administrative agent (in such capacity, the “ Administrative Agent ”) for the Lenders; JPMORGAN CHASE BANK, N.A. (“ JPMCB ”), as syndication agent (in such capacity, the “ Syndication Agent ”); and CITIGROUP GLOBAL MARKETS INC. (“ CGMI ”) and J.P. MORGAN SECURITIES INC. (“ JPMSI ”), as joint lead arrangers and joint lead bookrunners (in such capacities, the “ Joint Lead Arrangers ”).

 

The parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.01. Defined Terms . As used in this Agreement, the following terms shall have the meanings specified below:

 

“ ABR Borrowing ” means a Borrowing comprised of ABR Loans.

 

“ ABR Loan ” means any Loan bearing interest at a rate determined by reference to the Alternate Base Rate in accordance with the provisions of Article II.

 

“ Acquired Indebtedness ” means Indebtedness of a Person or any of its Subsidiaries existing at the time such Person becomes a Loan Party, or at the time it merges or consolidates with Borrower or any of the Loan Parties or Indebtedness assumed by Borrower or any Loan Party in connection with the acquisition of assets from such Person and in each case not incurred by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Loan Party or such acquisition, merger or consolidation.

 

“ Additional Collateral ” has the meaning assigned to such term in Section 5.11.

 

“ Adjusted LIBO Rate ” means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/1000 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

 

“ Administrative Agent ” has the meaning assigned to such term in the preamble hereto.

 

“ Administrative Questionnaire ” means an Administrative Questionnaire in the form of Exhibit A or another form supplied by the Administrative Agent.

 

“ Affiliate ” of any Person means any other Person which, directly or indirectly, controls, is controlled by or is under common control with such Person. A Person shall be deemed to be “controlled by” any other Person if such other Person possesses, directly or indirectly, power to direct or cause the direction of the management and policies of such Person whether by contract or otherwise; “control” and “controlling” shall have meanings correlative thereto.

“ Agent Fees ” has the meaning assigned to such term in Section 2.10(d).

 

“ Agent Parties ” has the meaning assigned to such term in Section 9.17(c).

 

“ Agents ” means the Administrative Agent and the Collateral Agent.

 

“ Aggregate Revolving Credit Exposure ” means the aggregate amount of the Revolving Lenders’ Revolving Credit Exposures.

 

“ Agreement ” has the meaning assigned to such term in the preamble hereto.

 

“ Alternate Base Rate ” or “ ABR ” means for any day, a rate per annum equal to the highest of (a) the Administrative Agent’s Base Rate in effect on such day, (b) 0.5% per annum above the latest three-week moving average of secondary market morning offering rates in the United States for three-month certificates of deposit of major United States money market banks, such three-week moving average being determined weekly on each Monday (or, if any such day is not a Business Day, on the next succeeding Business Day) for the three-week period ending on the next previous Friday by the Administrative Agent on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by the Administrative Agent from three New York certificate of deposit dealers of recognized standing selected by the Administrative Agent, in either case adjusted to the nearest 0.25% or, if there is no nearest 0.25%, to the next higher 0.25% (the “ Certificate of Deposit Rate ”), and (c) the Federal Funds Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change in the Base Rate, the Certificate of Deposit Rate or the Federal Funds Rate shall be effective as of the opening of business on the effective day of such change in the Base Rate, the Certificate of Deposit Rate or the Federal Funds Rate, respectively.

 

“ Anti-Terrorism Laws ” has the meaning assigned to such term in Section 3.22(a).

 

“ Applicable Margin ” means (i) with respect to Revolving Loans (x) that are Eurodollar Loans, 325 basis points and (y) that are ABR Loans, 225 basis points, (ii) with respect to Term Loans (x) that are Eurodollar Loans, 250 basis points and (y) that are ABR Loans, 150 basis points, and (iii) with respect to LC Facility Deposits, 250 basis points.

 

“ Approved Fund ” means any Fund that is administered or managed by (a) a Lender, (b) any Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

 

“ Arizona Blind Trust Act ” means The Blind Trust Act, Arizona Revised Statutes §33-404.

 

“ Asset Sale ” means any direct or indirect sale, transfer, lease, conveyance or other disposition by Parent or any of its Subsidiaries of any of its Property, including any sale or issuance of any Equity Interests of any Subsidiary of Parent.

 

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“ Assignment and Acceptance ” means an assignment and acceptance entered into by a Lender and an Eligible Assignee, and accepted by the Administrative Agent, in the form of Exhibit C or such other form as shall be approved by the Administrative Agent.

 

“ Authorized Officer ” means, with respect to Borrower, those of its officers whose signature and incumbency have been certified to the Administrative Agent and the Lenders pursuant to a certificate required by Section 4.01(h) or another certificate provided to the Administration Agent and the Lenders.

 

“ Available Revolving Credit Commitment ” means, as to any Revolving Lender, at any time of determination, an amount equal to such Revolving Lender’s Revolving Credit Commitment at such time minus such Revolving Lender’s Revolving Credit Exposure at such time.

 

“ Base Amount ” has the meaning assigned to such term in Section 6.17.

 

“ Base Rate ” means the rate of interest per annum publicly announced from time to time by the Administrative Agent as its base rate in effect at its principal office in New York City (the Base Rate not being intended to be the lowest rate of interest charged by the Administrative Agent in connection with extensions of credit to debtors). Any change in such rate announced by the Administrative Agent shall take effect at the opening of business on the day specified in the public announcement of such change.

 

“ Board ” means the Board of Governors of the Federal Reserve System of the United States.

 

“ Board of Directors ” means, with respect to any Person, (i) in the case of any corporation, the board of directors of such Person, (ii) in the case of any limited liability company, the board of managers of such Person, (iii) in the case of any partnership, the Board of Directors of the general partner of such Person and (iv) in any other case, the functional equivalent of the foregoing.

 

“ Borrower ” has the meaning ascribed to such term in the preamble to this Agreement.

 

“ Borrowing ” means a Loan or group of Loans of the same Class and Type made (including through a conversion or continuation) on a single date and as to which a single Interest Period is in effect.

 

“ Borrowing Date ” means any Business Day specified in a notice pursuant to Section 2.02 as a date on which any Borrower requests Loans to be made hereunder.

 

“ Borrowing Request ” has the meaning assigned to such term in Section 2.02(a).

 

“ Business Day ” means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close; provided that when used in connection with a Eurodollar Loan, “Business Day” also shall exclude any day on which dealings in foreign currencies and exchange between banks may not be carried on in London, England.

 

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“ Capital Expenditures ” means, for any period and with respect to any Person, any and all expenditures made by Borrower or any of its Subsidiaries in such period for assets added to or reflected in its property, plant and equipment accounts or other similar capital asset accounts or comparable items or any other capital expenditures that are, or should be, set forth as “additions to plant, property and equipment” on the consolidated financial statements of Borrower prepared in accordance with GAAP, whether such asset is purchased for cash or financed as an account payable or by the incurrence of Indebtedness, accrued as a liability or otherwise.

 

“ Capital Lease Obligations ” means all monetary or financial obligations of Borrower and its Subsidiaries under any leasing or similar arrangement conveying the right to use real or personal property, or a combination thereof, which, in accordance with GAAP, would or should be classified and accounted for as capital leases, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP and the stated maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date on which such lease may be terminated by the lessee without payment of a penalty.

 

“ Cash Interest Expense ” means, for any period and with respect to any Person, Consolidated Interest Expense of such Person for such period, less the sum of (a) interest on any Indebtedness paid by the increase in the principal amount or accreted value of such Indebtedness including by issuance of additional debt of such kind, (b) items described in clause (iii) or, other than to the extent paid in cash, clause (vii) of the definition of “Consolidated Interest Expense” and (c) gross interest income of such Person and its Subsidiaries for such period.

 

“ CERCLA ” means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended.

 

“ CERCLIS ” means the Comprehensive Environmental Response, Compensation and Liability Information System list promulgated by the U.S. Environmental Protection Agency pursuant to CERCLA.

 

“ CGMI ” has the meaning assigned to such term in the preamble to this Agreement.

 

“ Change in Control ” means (a) Parent shall fail to own, directly or indirectly, 100% of the Equity Interests of Borrower, (b) a change of control under any agreement or instrument governing any Material Indebtedness, (c) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause such person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of Voting Stock of Parent representing more than 30% of the total voting power of all outstanding Voting Stock of Parent or (d) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors

 

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of Parent (together with any new directors whose election to such Board of Directors or whose nomination for election was approved by a vote of a majority of the members of the Board of Directors of Parent, which members comprising such majority are then still in office and were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of Parent. For purposes of this definition, a Person shall not be deemed to have beneficial ownership of securities subject to a stock purchase agreement, merger agreement or similar agreement until the consummation of the transactions contemplated by such agreement.

 

“ Charges ” has the meaning assigned to such term in Section 9.09.

 

“ Citibank ” means Citibank, N.A., a national banking association.

 

“ Class ” when used in reference to any LC Facility Deposit, Loan or Borrowing, refers to whether such LC Facility Deposit, Loan, or the Loans comprising such Borrowing, are LC Facility Deposits, Revolving Loans, Term Loans or Swingline Loans and when used in reference to any Commitment refers to whether such Commitment is a Revolving Credit Commitment or Term Commitment, and when used in reference to any Lender, refers to whether such Lender is a Revolving Lender, a Term Lender or an LC Facility Lender.

 

“ Closing Certificate ” means a certificate substantially in the form of Exhibit F .

 

“ Closing Date ” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.08).

 

“ Code ” means the United States Internal Revenue Code of 1986, as amended from time to time.

 

“ Collateral ” means any and all “Collateral,” “Mortgaged Property,” “Pledged Securities” or “Trust Property,” as defined in any applicable Security Document and all other property of whatever kind and nature pledged as collateral under any Security Document.

 

“ Collateral Account ” means the collateral account or sub-account established and maintained by the Collateral Agent in its name as Collateral Agent for the benefit of the Secured Parties, in accordance with the provisions of the Security Agreement.

 

“ Collateral Agent ” means Citicorp North America, Inc., in its capacity as collateral agent for the Secured Parties under the Security Documents.

 

“ Commitment ” means, with respect to any Lender, such Lender’s Term Commitment or Revolving Credit Commitment or any combination thereof (as the context requires).

 

“ Commitment Fee ” has the meaning assigned to such term in Section 2.10(a).

 

“ Commitment Fee Average Daily Amount ” has the meaning assigned to such term in Section 2.10(a).

 

“ Commitment Fee Percentage ” means 0.50% per annum .

 

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“ Commitment Percentage ” means (i) with respect to any Revolving Lender, the percentage of the Total Revolving Credit Commitment represented by such Lender’s Revolving Credit Commitment; provided , however , that if the Revolving Credit Commitments have terminated or expired, the Commitment Percentage with respect to any Revolving Lender shall be determined based upon the Revolving Credit Commitments most recently in effect, giving effect to any assignments and (ii) with respect to any LC Facility Lender, the percentage of the Total LC Facility Deposits represented by the LC Facility Deposit made by such LC Facility Lender.

 

“ Communications ” has the meaning assigned to such term in Section 9.17(a).

 

“ Competitor ” means any Person identified on Schedule 1.01 or by Borrower to the Administrative Agent in writing as (i) a Person that is engaged in the provision of emergency and non-emergency medical transportation, fire protection and other safety services, or (ii) an Affiliate of any Person described in clause (i).

 

“ Consolidated Current Assets ” means, with respect to any Person as at any date of determination, the total assets of such Person and its Subsidiaries which should properly be classified as current assets on a consolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP.

 

“ Consolidated Current Liabilities ” means, with respect to any Person as at any date of determination, the total liabilities of such Person and its Subsidiaries which should properly be classified as current liabilities on a consolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP.

 

“ Consolidated EBITDA ” means, for any period and with respect to any Person, Consolidated Net Income of such Person and its Subsidiaries for such period plus (a) without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of (i) Consolidated Interest Expense of such Person and its Subsidiaries for such period, (ii) consolidated income tax expense of such Person and its Subsidiaries for such period, (iii) all amounts properly attributable to depreciation and amortization of such Person and its Subsidiaries for such period, and (iv) any non-cash deductions made in determining Consolidated Net Income of such Person and its Subsidiaries for such period (other than any deductions which require or represent the accrual of a reserve for the payment of cash charges in any future period or amortization of a prepaid cash expense that was paid in a prior period), minus (b) without duplication and to the extent included in determining such Consolidated Net Income of such Person and its Subsidiaries, any non-cash additions to Consolidated Net Income of such Person and its Subsidiaries for such period, minus (c) without duplication and to the extent included in determining such Consolidated Net Income of such Person and its Subsidiaries, any extraordinary non-cash gains (or plus extraordinary non-cash losses) for such period and any gains (or plus losses) realized in connection with any Asset Sale of such Person and its Subsidiaries during such period, all determined on a consolidated basis in accordance with GAAP. Borrower’s Consolidated EBITDA for the Fiscal Quarters ended June 30, September 30 and December 31, 2004, without giving effect to the next paragraph for any Permitted Acquisition or Asset Sale consummated after the Closing Date, are agreed to be $11.2 million, $14.9 million and $13.6 million, respectively.

 

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Other than for purposes of calculating Excess Cash Flow, Consolidated EBITDA shall be calculated on a Pro Forma Basis to give effect to any Permitted Acquisition and Asset Sales (other than any dispositions in the ordinary course of business) consummated at any time on or after the first day of the relevant period for which Consolidated EBITDA is being measured thereof as if each such Permitted Acquisition had been effected on the first day of such period and as if each such Asset Sale had been consummated on the day prior to the first day of such period.

 

“ Consolidated EBITDAR ” means, for any period and with respect to any Person, Consolidated EBITDA of such Person and its Subsidiaries for such period plus Consolidated Net Rental and Operating Lease Expense of such Person and its Subsidiaries for such period. Borrower’s Consolidated EBITDAR for the Fiscal Quarters ended June 30, September 30 and December 31, 2004, without giving effect to the next paragraph for any Permitted Acquisition or Asset Sale consummated after the Closing Date, are agreed to be $14.1 million, $18.0 million and $16.4 million, respectively.

 

Consolidated EBITDAR shall be calculated on a Pro Forma Basis to give effect to any Permitted Acquisition and Asset Sales (other than any dispositions in the ordinary course of business) consummated at any time on or after the first day of the relevant period for which Consolidated EBITDAR is being measured thereof as if each such Permitted Acquisition had been effected on the first day of such period and as if each such Asset Sale had been consummated on the day prior to the first day of such period.

 

“ Consolidated Interest Expense ” means, for any period and with respect to any Person, the total consolidated interest expense of such Person and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP plus , without duplication (i) imputed interest on Capital Lease Obligations of such Person and its Subsidiaries for such period; (ii) commissions, discounts and other fees and charges owed by such Person or any of its Subsidiaries with respect to letters of credit securing financial obligations, bankers’ acceptance financing and receivables financings for such period; (iii) amortization of debt issuance costs, debt discount or premium and other financing fees and expenses incurred by such Person or any of its Subsidiaries for such period incurred in connection with Indebtedness (other than the write-off of deferred financing charges as a result of the Refinancing and the amortization of deferred financing charges arising from the Refinancing); (iv) cash contributions to any employee stock ownership plan or similar trust made by such Person or any of its Subsidiaries to the extent such contributions are used by such plan or trust to pay interest or fees to any Person (other than such Person or a wholly owned Subsidiary of such Person) in connection with Indebtedness incurred by such plan or trust for such period; (v) all interest paid or payable with respect to discontinued operations of such Person or any of its Subsidiaries for such period; (vi) the interest portion of any deferred payment obligations of such Person or any of its Subsidiaries for such period; and (vii) all interest on any Indebtedness of such Person or any of its Subsidiaries of the type described in clause (f) or (g) of the definition of “Indebtedness” for such period, to the extent actually paid by such Person or any of its Subsidiaries; provided that Consolidated Interest Expense shall be calculated after giving effect to Hedging Agreements and Non-Interest Rate Hedging Agreements (including associated costs), but excluding unrealized gains and losses with respect to Hedging Agreements and Non-Interest Rate Hedging Agreements.

 

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Consolidated Interest Expense shall be calculated on a Pro Forma Basis to give effect to any Indebtedness incurred, assumed or permanently repaid or extinguished during the relevant period in connection with any Permitted Acquisitions and Asset Sales (other than any dispositions in the ordinary course of business) as if such incurrence, assumption, repayment or extinguishment had been effected on the first day of such period.

 

“ Consolidated Net Income ” means, for any period and for any Person, the net income or loss of such Person and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided that (A) there shall be excluded for any such Person therefrom (i) the income or loss of any Person (other than consolidated Subsidiaries of such Person) in which any other Person (other than such Person or any of its Subsidiaries) has an interest, except to the extent of the amount of dividends or other distributions actually paid to such Person or any of its Subsidiaries by such Person during such period, (ii) the cumulative effect of a change in accounting principles during such period, (iii) the income or loss of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with such Person or any of its Subsidiaries or that Person’s assets are acquired by such Person or any of its Subsidiaries, (iv) gains and losses from the early extinguishment of Indebtedness and (v) the income or loss of businesses classified as discontinued operations of such Person or any of its Subsidiaries as of December 31, 2004 and (B) Consolidated Net Income of Borrower shall be reduced by any Dividends pursuant to Section 6.06(ii).

 

“ Consolidated Net Rental and Operating Lease Expense ” means, for any period and with respect to any Person, the gross rental and operating lease expense of such Person and its Subsidiaries less rental or operating lease income of Borrower and its Subsidiaries, all determined for such period on a consolidated basis in accordance with GAAP.

 

“ Contingent Lease Agreements ” means agreements that permit a Governmental Authority to lease or purchase existing inventory and equipment used in connection with emergency service contracts between Borrower or any Subsidiary and such Governmental Authority upon the early termination of such contracts for a period not to exceed twelve (12) months after such termination; provided that any such contingent lease agreement shall (i) have a lease price equal to the fair market value of the assets so leased, (ii) have fair and reasonable terms no less favorable than Borrower or such Subsidiary would obtain in a comparable arm’s length transaction and (iii) be in form and substance reasonably satisfactory to the Administrative Agent.

 

“ Contribution ” has the meaning assigned to such term in Section 4.01(e).

 

“ Contribution Agreement ” means the Contribution Agreement to be dated as of March 4, 2005 between Borrower and Parent effecting the Contribution.

 

“ Cost Amount ” has the meaning assigned to such term in Section 2.21(b).

 

“ Credit Event ” has the meaning assigned to such term in Section 4.02.

 

“ Credit-Linked Deposit Account ” means the account established by the Administrative Agent under its sole and exclusive control maintained at the office of Citibank, New York Branch or another branch of Citibank designated as the “Rural/Metro Credit-Linked Deposit Account”, which shall be used solely to hold LC Facility Deposits.

 

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“ Debt Incurrence ” means the incurrence of any Indebtedness (including debt securities which are convertible into, or exchangeable or exercisable for, any Equity Interest or Equity Rights), other than any issuance of Indebtedness permitted by Section 6.01(a).

 

“ Debt Service ” means, for any period, Cash Interest Expense of Borrower for such period plus scheduled principal amortization of all Indebtedness of Borrower or any of its Subsidiaries for such period.

 

“ Default ” means any Event of Default and any event or condition which upon notice, lapse of time or both would constitute an Event of Default.

 

“ Destruction ” means any and all damage to, or loss or destruction of, or loss of title to, all or any portion of the Property of Parent or any of its Subsidiaries.

 

“ Disqualified Capital Stock ” means any Equity Interest which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, (a) matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the first anniversary of the Term Loan Maturity Date, (b) is convertible into or exchangeable (unless at the sole option of the issuer thereof) for (i) debt securities or (ii) any Equity Interests referred to in (a) above, in each case at any time on or prior to the first anniversary of the Term Loan Maturity Date, or (c) contains any repurchase obligation which may come into effect prior to payment in full of all Obligations; provided , however , that any Equity Interests that would not constitute Disqualified Capital Stock but for provisions thereof giving holders thereof (or the holders of any security into or for which such Equity Interests is convertible, exchangeable or exercisable) the right to require the issuer thereof to redeem such Equity Interests upon the occurrence of a change in control or an asset sale occurring prior to the first anniversary of the Term Loan Maturity Date shall not constitute Disqualified Capital Stock if such Equity Interests provide that the issuer thereof will not redeem any such Equity Interests pursuant to such provisions prior to the repayment in full of the Obligations.

 

“ Distribution Date ” means each date fixed by the Collateral Agent for the distribution to Secured Parties of funds held in a Collateral Account.

 

“ Dividend ” with respect to any Person means that such Person has declared or paid a dividend or returned any equity capital to the holders of its Equity Interests or authorized or made any other distribution, payment or delivery of Property (other than Qualified Capital Stock of such Person) or cash to the holders of its Equity Interests as such, or redeemed, retired, purchased or otherwise acquired, directly or indirectly, for consideration any of its Equity Interests outstanding (or any Equity Rights), or set aside any funds for any of the foregoing purposes, or shall have permitted any of its Subsidiaries to purchase or otherwise acquire for consideration any of the Equity Interests of such Person outstanding (or any Equity Rights). Without limiting the foregoing, “Dividends” with respect to any Person shall also include all payments made or required to be made by such Person with respect to any stock appreciation rights, plans, equity incentive or achievement plans or any similar plans or setting aside of any funds for the foregoing purposes.

 

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“ Domestic Subsidiary ” means any Subsidiary of Borrower that is not a Foreign Subsidiary (other than a Foreign Subsidiary that (x) is a direct Subsidiary of Borrower or a Domestic Subsidiary and (y) is a disregarded entity for U.S. Federal income tax purposes).

 

“ Eligible Assignee ” means (a) if the assignment does not include assignment of a Revolving Commitment, (i) any Lender, (ii) any Affiliate of a Lender, (iii) an Approved Fund and (iv) any other Person approved by the Administrative Agent (such approval not to be unreasonably withheld or delayed) and (b) if the assignment includes assignment of a Revolving Commitment, (i) any Revolving Lender, (ii) an Affiliate of any Revolving Lender, (iii) an Approved Fund of a Revolving Lender and (iv) any other Person approved by the Administrative Agent, the Issuing Bank, the Swingline Lender and Borrower (each such approval not to be unreasonably withheld or delayed); provided that (x) no approval of Borrower shall be required during the continuance of a Default or prior to the completion of the primary syndication of the credit facilities provided for herein (as determined by the Joint Lead Arrangers), (y) ”Eligible Assignee” shall not include Borrower or any of its Affiliates or Subsidiaries, any natural Person or any Competitor and (z) if the assignment includes assignment of an LC Facility Participation, approval of the LC Facility Issuing Bank shall also be required (such approval not to be unreasonably withheld or delayed).

 

“ Embargoed Person ” has the meaning assigned to such term in Section 6.19.

 

“ Environment ” means ambient air, surface water and groundwater (including potable water and navigable water), the land surface or subsurface strata and natural resources such as flora and fauna.

 

“ Environmental Claim ” means any notice of violation, claim, demand, order, directive, cost recovery action or other cause of action or written allegation or accusation by, or on behalf of, any Governmental Authority or any other Person for damages, injunctive or equitable relief, personal injury (including sickness, disease or death), costs, liabilities, tangible or intangible property damage, natural resource damages, nuisance, pollution, any adverse effect on the Environment caused by any Hazardous Material, or for fines, penalties or restrictions, resulting from or based upon: (a) the existence, or the continuation of the existence, of a Release (including sudden or non-sudden, accidental or non-accidental Releases) or threatened Release; (b) exposure to any Hazardous Material; (c) the presence, use, generation, handling, transportation, storage, treatment or disposal of any Hazardous Material; or (d) the violation or alleged violation of any Environmental Law or Environmental Permit.

 

“ Environmental Laws ” means any and all applicable laws (including common law), rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions or binding agreements or treaties issued, promulgated or entered into by any Governmental Authority, relating in any way to the Environment, preservation or reclamation of natural resources, the management, Release or threatened Release of, or exposure to, any Hazardous Material or to health and safety matters related to the Environment.

 

“ Environmental Liability ” means any liability, contingent or otherwise (including, but not limited to, any liability for damages, natural resource damage, costs of environmental investigation, remediation and monitoring, administrative oversight costs, fines, penalties or indemnities),

 

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of the Parent or any of its Subsidiaries resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials or (d) the Release or threatened Release of any Hazardous Materials into the Environment.

 

“ Environmental Permit ” means any permit, approval, authorization, certificate, license, variance, filing or permission required by or from any Governmental Authority pursuant to any Environmental Law.

 

“ Equity Interests ” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person.

 

“ Equity Issuance ” means, without duplication, (i) any issuance or sale by Parent after the Closing Date of any Equity Interests in Parent (including any Equity Interests issued upon exercise of any warrant or option) or any Equity Rights or (ii) any contribution to the capital of Parent; provided , however , that an Equity Issuance shall not include (x) any Preferred Stock Issuance or Debt Incurrence or (y) any such sale or issuance by Parent of not more than an aggregate amount of 5.0% of its Equity Interests (including its Equity Interests issued upon exercise of any Equity Right or Equity Rights but excluding Disqualified Capital Stock), in each case, to directors, officers or employees of Parent or any of its Subsidiaries.

 

“ Equity Rights ” means all securities convertible or exchangeable for Equity Interests and all warrants, options or other rights to purchase or subscribe for any Equity Interests, whether or not presently convertible, exchangeable or exercisable.

 

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time.

 

“ ERISA Entity ” means any member of an ERISA Group.

 

“ ERISA Event ” means (a) any “reportable event,” as defined in Section 4043(c) of ERISA or the regulations issued thereunder, with respect to a Pension Plan (other than an event for which the 30-day notice period is waived by regulation); (b) the existence with respect to any Pension Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived, the failure to make by its due date a required installment under Section 412(m) of the Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Pension Plan; (d) the incurrence by any ERISA Entity of any liability under Title IV of ERISA (other than PBGC premiums payable in the ordinary course) with respect to any Pension Plan; (e) the receipt by any ERISA Entity from the PBGC of, any notice relating to an intention to terminate any Pension Plan, or to appoint a trustee to administer any Pension Plan, or the occurrence of any event or condition which could reasonably be expected to constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (f) the incurrence by any ERISA Entity of any liability under Title IV of ERISA with respect to the withdrawal or partial withdrawal from any Pension Plan or

 

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Multiemployer Plan; (g) the receipt by an ERISA Entity of any notice concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA; (h) the “substantial cessation of operations” within the meaning of Section 4062(e) of ERISA with respect to a Pension Plan subject thereto; (i) the making of any amendment to any Pension Plan which could result in the imposition of a lien or the posting of a bond or other security; or (j) the occurrence of a nonexempt prohibited transaction (within the meaning of Section 4975 of the Code or Section 406 of ERISA) which could result in liability to Parent or any of its Subsidiaries.

 

“ ERISA Group ” means Parent, its Subsidiaries and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with a Loan Party or any Subsidiary of any Loan Party, are treated as a single employer under Section 414(b) or (c) of the Code.

 

“ Eurodollar Borrowing ” means a Borrowing comprised of Eurodollar Loans.

 

“ Eurodollar Loan ” means any Loan bearing interest at a rate determined by reference to the Adjusted LIBO Rate in accordance with the provisions of Article II.

 

“ Event of Default ” has the meaning assigned to such term in Section 7.01.

 

“ Excess Cash Flow ” means, for any Excess Cash Flow Period, Consolidated EBITDA of Borrower for such Excess Cash Flow Period, minus , without duplication:

 

(a) Debt Service for such Excess Cash Flow Period;

 

(b) Capital Expenditures during such Excess Cash Flow Period (excluding Capital Expenditures made in such Excess Cash Flow Period where a certificate in the form contemplated by the following clause (c) was previously delivered) that are paid in cash;

 

(c) Capital Expenditures that Borrower or any of its Subsidiaries shall, during such Excess Cash Flow Period, become obligated to make but that are not made during such Excess Cash Flow Period; provided that Borrower shall deliver a certificate to the Administrative Agent not later than 90 days after the end of such Excess Cash Flow Period, signed by a Financial Officer of Borrower and certifying that such Capital Expenditures will be made in the following Excess Cash Flow Period;

 

(d) the aggregate amount of investments made in cash during such Excess Cash Flow Period pursuant to Section 6.04(ix), (x) and (xi);

 

(e) taxes of Borrower and its Subsidiaries that were paid in cash during such Excess Cash Flow Period or will be paid within six months after the end of such Excess Cash Flow Period and for which reserves have been established;

 

(f) Permitted Tax Distributions that are paid during such Excess Cash Flow Period or will be paid within six months after the close of such Excess Cash Flow Period;

 

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(g) the absolute value of the difference, if negative, of the amount of Net Working Capital at the end of the prior Excess Cash Flow Period over the amount of Net Working Capital at the end of such Excess Cash Flow Period;

 

(h) losses excluded from the calculation of Consolidated EBITDA by operation of clause (c) of the definition thereof that are paid in cash during such Excess Cash Flow Period; and

 

(i) to the extent added to determine Consolidated EBITDA, all items that did not result from a cash payment to Borrower or any of its Subsidiaries on a consolidated basis during such Excess Cash Flow Period;

 

provided that any amount deducted pursuant of any of the foregoing clauses that will be paid after the close of such Excess Cash Flow Period shall not be deducted again in a subsequent Excess Cash Flow Period; plus , without duplication:

 

(1) the difference, if positive, of the amount of Net Working Capital at the end of the prior Excess Cash Flow Period over the amount of Net Working Capital at the end of such Excess Cash Flow Period;

 

(2) all proceeds received during such Excess Cash Flow Period of any Indebtedness to the extent used to finance any Capital Expenditure (other than Indebtedness under this Agreement to the extent there is no corresponding deduction to Excess Cash Flow above in respect of the use of such borrowings);

 

(3) to the extent any Capital Expenditures referred to in clause (d) above do not occur in the Excess Cash Flow Period specified in the certificate of Borrower provided pursuant to clause (d) above, such amounts of Capital Expenditures that were not so made in the Excess Cash Flow Period specified in such certificates;

 

(4) any return on or in respect of investments received in cash during such Excess Cash Flow Period, which investments were made pursuant to Section 6.04(ix), (x) or (xi);

 

(5) income or gain excluded from the calculation of Consolidated EBITDA by operation of clause (c) of the definition thereof that is realized in cash during such Excess Cash Flow Period (except to the extent such gain is subject to reinvestment or repayment pursuant to Section 2.05(c)(ii) or (iii)); and

 

(6) to the extent subtracted in determining Consolidated EBITDA, all items that did not result from a cash payment by Borrower or any of its Subsidiaries on a consolidated basis during such Excess Cash Flow Period.

 

“ Excess Cash Flow Period ” means each Fiscal Year of Borrower beginning with the Fiscal Year ending June 30, 2006.

 

“ Excess LC Facility Deposits ” means, at any time, the excess, if any, of the Total LC Facility Deposit over the LC Facility LC Exposure at such time.

 

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“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

 

“ Excluded Taxes ” means any taxes imposed on or measured by the recipient’s net income (including branch profits taxes or any franchise taxes imposed in lieu of a net income tax) by a jurisdiction as a result of a present or former connection between such recipient and such jurisdiction (other than a connection arising solely by virtue of the transactions contemplated by the Loan Documents) and any liability for interest and penalties arising with respect to such taxes.

 

“ Executive Order ” has the meaning assigned to such term in Section 3.22(a).

 

“ Existing Credit Facility ” means the Second Amended and Restated Credit Agreement dated September 30, 2002, as amended through the date hereof, among Parent, the guarantors party thereto, the lenders party thereto and Wachovia Bank National Association, as agent for the lenders.

 

“ Existing Notes ” means Parent’s 7  ⁷ / 8 % Senior Notes due March 2008.

 

“ Federal Funds Rate ” means, for any day, the weighted average of the rates (rounded upwards, if necessary, to the nearest 1/100th of 1%) 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; provided that (a) if the day for which such rate is to be determined is not a Business Day, the Federal Funds Rate for such day shall be such rate for such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if such rate is not so published for any day which is a Business Day, the Federal Funds Rate for such day shall be the average of the quotations for the day of such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it.

 

“ Fee Letter ” means the Fee Letter dated February 2, 2005 among the Administrative Agent, CGMI, JPMorgan Chase Bank, N.A., JPMSI and Borrower, as amended and restated from time to time.

 

“ Fees ” means the Commitment Fees, the fees pursuant to Section 2.10(b), the Agent Fees and the Cost Amount.

 

“ Financial Covenants ” means those covenants and agreements of the Loan Parties set forth in Sections 6.14 through 6.17, inclusive.

 

“ Financial Officer ” of any corporation, partnership or other entity means the chief financial officer, the principal accounting officer, Treasurer or Controller of such corporation, partnership or other entity.

 

“ Financing Transactions ” means, collectively, the execution and delivery by each Loan Party of each of the Loan Documents, the Borrowing of the Term Loans and Revolving Loans, the making of the LC Facility Deposits hereunder, the issuance of the LC Facility Letters of Credit, the issuance of the Parent Notes and the issuance of the Senior Subordinated Notes, in each case on the Closing Date.

 

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“ Fiscal Quarter ” means any quarter of a Fiscal Year.

 

“ Fiscal Year ” means any period of twelve consecutive calendar months ending on June 30. As an example, references to “2005 Fiscal Year” mean the Fiscal Year ending on June 30, 2005.

 

“ Fixed Charge Coverage Ratio ” means, for any Test Period, the ratio of (x) Consolidated EBITDAR of Borrower and its Subsidiaries to (y) Fixed Charges of Borrower and its Subsidiaries, in each case, for such Test Period.

 

“ Fixed Charges ” means for any period and for any Person, the sum, without duplication of:

 

(a) Cash Interest Expense for such period;

 

(b) the aggregate amount of Capital Expenditures for such period;

 

(c) all cash payments in respect of income taxes and Permitted Tax Distributions made during such period (net of any cash refund in respect of income taxes actually received during such period);

 

(d) the amount of all principal payments on all Indebtedness (including the principal component of all Capital Lease Obligations but excluding such payments on Indebtedness incurred to finance Capital Expenditures included in clause (b) above in such period or any prior period) of such Person and its Subsidiaries for such period;

 

(e) Consolidated Net Rental and Operating Lease Expense of such Person and its Subsidiaries for such period; and

 

(f) dividends to Parent pursuant to Section 6.06(iv).

 

“ Foreign Subsidiary ” means any Subsidiary that is or becomes organized under the laws of a Non-U.S. Jurisdiction.

 

“ Fund ” means any Person that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

 

“ GAAP ” means, subject to Section 1.03, generally accepted accounting principles in the United States applied on a consistent basis.

 

“ Governmental Authority ” means any federal, state, provincial, territorial, local or foreign government, court or governmental agency, authority, branch, instrumentality or regulatory body, including any central bank or taxing authority.

 

“ Governmental Real Property Disclosure Requirements ” means any Requirement of Law of any Governmental Authority requiring notification of the buyer, lessee, mortgagee, assignee or other transferee of any Real Property, facility, establishment or business, or notification,

 

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registration or filing to or with any Governmental Authority, in connection with the sale, lease, mortgage, assignment or other transfer (including any transfer of control) of any Real Property, facility, establishment or business, of the actual or threatened presence or Release in or into the Environment, or the use, disposal or handling of Hazardous Material on, at, under or near the Real Property, facility, establishment or business to be sold, leased, mortgaged, assigned or transferred.

 

“ Government Reimbursement Programs ” has the meaning assigned to such term in Section 3.05.

 

“ Guarantee ” of or by any Person (the “ guarantor ”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof (including pursuant to a “synthetic lease”), (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of the obligation under any Guarantee 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 is made (including principal, interest and fees) and (b) the maximum amount for which such guarantor may be liable pursuant to the terms of the instrument embodying such Guarantee, unless such primary obligation and the maximum amount for which such guarantor may be liable are not stated or determinable, in which case the amount of the obligation under such Guarantee shall be such guarantor’s maximum reasonably anticipated liability in respect thereof as determined by the guarantor in good faith; irrespective, in any such case, of any amount thereof that would, in accordance with GAAP, be required to be reflected on a balance sheet of such Person.

 

“ Guarantee Agreement ” means the Guarantee Agreement, substantially in the form of Exhibit G , made by the Guarantors in favor of the Administrative Agent.

 

“ Guarantors ” means Parent and the Subsidiary Loan Parties.

 

“ Hazardous Materials ” means all pollutants, contaminants, wastes, substances, chemicals, materials and constituents, including without limitation, crude oil, petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls (“ PCBs ”) or PCB-containing materials or equipment of any nature, which can give rise to liability under, or are regulated pursuant to, any Environmental Law.

 

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“ Hedging Agreement ” means any interest rate protection agreement or other interest hedging arrangement designed to alter the risks of any Person arising from fluctuations in interest rates.

 

“ Hedging Exchanger ,” with respect to any Hedging Agreement, means any entity which was a Lender or an Affiliate of a Lender at the time it entered into such Hedging Agreement; provided such Person executes and delivers to the Administrative Agent a letter agreement in form and substance acceptable to the Administrative Agent pursuant to which such Person (i) appoints the Collateral Agent as its agent under the applicable Loan Documents and (ii) agrees to be bound by the provisions of Sections 9.05 and 9.15.

 

“ Impermissible Qualification ” means, relative to the opinion or certification of any independent public accountant as to any financial statement of Borrower, any qualification or exception to such opinion or certification:

 

(a) which is of a “going concern” or similar nature; or

 

(b) which relates to the limited scope of examination of matters relevant to such financial statement.

 

“ Increased Amount Date ” has the meaning assigned thereto in Section 2.22(a).

 

“ Increased Cost Lender ” has the meaning assigned thereto in Section 2.20.

 

“ Indebtedness ” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid (excluding obligations to pay salary or benefits under deferred compensation or other benefit programs), (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness (excluding prepaid interest thereon) of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, surety bonds and performance bonds, whether or not matured. 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 directly 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 provide that such Person is not liable therefor.

 

“ Indemnified Taxes ” has the meaning assigned to such term in Section 2.16(a).

 

“ Indemnitee ” has the meaning assigned to such term in Section 9.05(b).

 

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“ Information Memorandum ” means the Confidential Information Memorandum dated February 11, 2005 relating to the credit facilities provided hereby.

 

“ Installment Payment Date ” has the meaning assigned to such term in Section 2.05(d).

 

“ Intercompany Management Services Agreement ” means the Management Agreement dated on or about the Closing Date by and among Parent and Borrower, as in effect on the Closing Date, in form and substance satisfactory to the Administrative Agent.

 

“ Interest Expense Coverage Ratio ” means, for any Test Period, the ratio of (a) Consolidated EBITDA of Borrower and its Subsidiaries to (b) Consolidated Interest Expense of Borrower and its Subsidiaries, in each case for such Test Period.

 

“ Interest Payment Date ” means (a) with respect to any ABR Loan (including Swingline Loans), the last Business Day of each March, June, September and December to occur during any period in which such Loan is outstanding, (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Loan with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period, (c) with respect to any Revolving Loan or Swingline Loan, the Revolving Maturity Date or such earlier date on which the Revolving Commitments are terminated and (d) with respect to any Term Loan, the Term Loan Maturity Date.

 

“ Interest Period ” means (I) with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months (or, if each affected Lender so agrees, nine or twelve months) thereafter, as Borrower may elect; and (II) with respect to the investment of the LC Facility Deposits, (x) initially (subject to Section 2.21(b)), the period commencing on the Closing Date and ending on the first Business Day of the calendar month next succeeding the month in which the Closing Date occurs and (ii) thereafter, the period commencing on the first Business Day of each calendar month and ending on the first Business Day of the next succeeding calendar month (or, in the case of the final Interest Period, ending on the LC Facility Maturity Date); provided , in either case, that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period and (c) no Interest Period may end later than the Revolving Credit Maturity Date, the Term Loan Maturity Date or the LC Facility Maturity Date, as applicable. Interest shall accrue from and including the first day of an Interest Period to but excluding the last day of such Interest Period.

 

“ Investment ” has the meaning assigned to such term in Section 6.04.

 

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“ Issuing Bank ” means Citibank, N.A., in its capacity as an issuer of Revolving Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.06(i)(i), and any other Revolving Lender approved by the Administrative Agent and Borrower (such approval not to be unreasonably withheld). Each Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of such Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.

 

“ Joint Lead Arrangers ” has the meaning assigned to such term in the preamble hereto.

 

“ Joint Venture ” means any Person engaged in a Permitted Business in which Borrower or one or more Subsidiaries hold Equity Interests representing at least 20%, but not more than 50%, of the total outstanding Equity Interests of such Person, including San Diego Medical Services Enterprise L.L.C.

 

“ JPMCB ” has the meaning assigned to such term in the preamble to this Agreement.

 

“ JPMSI ” has the meaning assigned to such term in the preamble to this Agreement.

 

“ LC Disbursement ” means a Revolving LC Disbursement or an LC Facility LC Disbursement.

 

“ LC Facility Availability Period ” means the period from and including the Closing Date to but excluding the earliest of (i) five Business Days prior to the LC Facility Maturity Date and (ii) the date on which all of the LC Facility Deposits are returned to the LC Facility Lenders.

 

“ LC Facility Deposits ” means the cash deposits made by the LC Facility Lenders pursuant to Section 2.01(a)(iii) (and Section 2.22, as applicable), as such deposits may be reduced from time to time pursuant to Section 2.11. The initial aggregate amount of the LC Facility Deposits is $35,000,000.

 

“ LC Facility Issuing Bank ” has the meaning assigned to such term in the preamble to this Agreement.

 

“ LC Facility LC Disbursement ” means any payment made by the LC Facility Issuing Bank pursuant to an LC Facility Letter of Credit.

 

“ LC Facility LC Exposure ” means, at any time, the sum of (a) the aggregate undrawn amount of the outstanding LC Facility Letters of Credit at such time plus (b) the aggregate amount of all LC Facility LC Disbursements that have not yet been reimbursed by or on behalf of Borrower at such time. The LC Facility LC Exposure of any LC Facility Lender at any time shall be its Commitment Percentage of the total LC Facility LC Exposure at such time.

 

“ LC Facility LC Fees ” has the meaning assigned to such term in Section 2.10(c).

 

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“ LC Facility Lender ” means a Lender having an LC Facility Participation.

 

“ LC Facility Letter of Credit ” means, at any time, a Letter of Credit issued by the LC Facility Issuing Bank pursuant to Section 2.06(a)(i).

 

“ LC Facility Maturity Date ” means the sixth anniversary of the Closing Date.

 

“ LC Facility Participations ” means the obligations and agreements of the LC Facility Lenders under Section 2.06(d)(ii). The amount of the LC Facility Participation of each LC Facility Lender shall be as set forth on Schedule 2.01 , as such amount may be (a) reduced from time to time pursuant to Section 2.11 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The aggregate amount of the LC Facility Participations shall at all times equal the aggregate amount of the LC Facility Deposits.

 

“ Lenders ” means (a) the financial institutions listed on Schedule 2.01 and (b) any financial institution that has become a party hereto pursuant to an Assignment and Acceptance, other than, in each case, any such financial institution that has ceased to be a party hereto pursuant to an Assignment and Acceptance. Unless the context clearly indicates otherwise, the term “Lenders” shall include the Swingline Lender.

 

“ Letter of Credit ” means any Revolving Letter of Credit or any LC Facility Letter of Credit.

 

“ LIBO Rate ” means, for any Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on any successor or substitute page of such Service, or any successor to or substitute for such Service, providing rate quotations comparable to those currently provided on such page of such Service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to Dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, on the day that is two Business Days prior to the commencement of such Interest Period (the “ Quotation Date ”), as the rate for Dollar deposits of $5.0 million, with a maturity comparable to the applicable Interest Period. In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Interest Period shall be the rate at which Dollar deposits for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market approximately 11:00 a.m., London time on the Quotation Date.

 

“ Lien ” means, with respect to any asset, (a) any mortgage, deed of trust, deed to secure debt, lien, pledge, encumbrance, charge, assignment, hypothec, hypothecation, security interest or encumbrance of any kind or any arrangement to provide preference in or on such asset, including any easement, right of way or other encumbrance on title to Real Property, in each of the foregoing cases whether voluntary or imposed by law, and any agreement to give any of the foregoing, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement relating to such asset (or any financing lease having substantially the same economic effect as any of the foregoing), (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities, (d) in the case of any investment property or deposit account, any contract or other agreement, express or implied, under which any Person has the right to control such investment property or deposit account and (e) any other agreement intended to create any of the foregoing.

 

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“ Loan Documents ” means this Agreement, the Guarantee Agreement, the Security Documents, if requested by a Lender pursuant to Section 2.07(e), each Note and, solely for purposes of Section 7.01(a), the Fee Letter.

 

“ Loan Parties ” means Parent, Borrower and the Subsidiary Loan Parties.

 

“ Loan Party Information ” has the meaning assigned to such term in Section 9.16.

 

“ Loans ” means the Revolving Loans, the Term Loans and the Swingline Loans.

 

“ Material Adverse Effect ” means any change, effect, event, occurrence or state of condition that has had or could reasonably be expected to have a material adverse effect on (i) the business, assets, operations, properties, condition (financial or otherwise), contingent liabilities, or material agreements of Parent and its Subsidiaries, taken as a whole, or Borrower and its Subsidiaries, taken as a whole, (ii) the ability of Borrower or any Guarantor to perform its obligations under the Loan Documents or (iii) the ability of the Administrative Agent and the Lenders to enforce the Loan Documents.

 

“ Material Indebtedness ” means Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Hedging Agreements or Non-Interest Rate Hedging Agreements, of any one or more of Parent or any of its Subsidiaries, individually or in an aggregate principal amount exceeding $5.0 million. For purposes of determining Material Indebtedness, the “principal amount” of the obligations of Parent or any such Subsidiary in respect of any Hedging Agreement or Non-Interest Rate Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting arrangements) that Parent or such Subsidiary would be required to pay if such Hedging Agreement or Non-Interest Rate Hedging Agreement were terminated at such time.

 

“ Maximum Rate ” has the meaning assigned to such term in Section 9.09.

 

“ Medicaid Regulations ” means, collectively, (a) all federal statutes (whether set forth in Title XIX of the Social Security Act or elsewhere) affecting the medical assistance program established by Title XIX of the Social Security Act (42 U.S.C. §§ 1396 et seq .) and any statutes succeeding thereto, (b) all applicable provisions of all federal rules, regulations, manuals and orders of all Governmental Authorities promulgated pursuant to or in connection with the statutes described in clause (a) above and all federal administrative, reimbursement and other guidelines of all Governmental Authorities having the force of law promulgated pursuant to or in connection with the statutes described in clause (a) above, (c) all state statutes and plans for medical assistance enacted in connection with the statutes and provisions described in clauses (a) and (b) above, and (d) all applicable provisions of all rules, regulations, manuals and orders of all Governmental Authorities promulgated pursuant to or in connection with the statutes described in clause (c) above and all state administrative, reimbursement and other guidelines of all Governmental Authorities having the force of law promulgated pursuant to or in connection with the statutes described in clause (c) above, in each case as may be amended or supplemented.

 

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“ Medicare Regulations ” means, collectively, all federal statutes (whether set forth in Title XVIII of the Social Security Act or elsewhere) affecting the health insurance program for the aged and disabled established by Title XVIII of the Social Security Act (42 U.S.C. §§ 1395 etseq .) and any statutes succeeding thereto; together with all applicable provisions of all rules, regulations, manuals and orders and administrative, reimbursement and other guidelines having the force of law of all Governmental Authorities (including, without limitation, Health and Human Services, its Office of the Inspector General, the Centers for Medicare & Medicaid Services, or any Person succeeding to the functions of any of the foregoing) promulgated pursuant to or in connection with any of the foregoing having the force of law, as each may be amended or supplemented.

 

“ Moody’s ” means Moody’s Investors Service, Inc.

 

“ Mortgage ” means an agreement, including, but not limited to a mortgage, deed of trust, assignment of leases and rents, leasehold mortgage or other security document creating and evidencing a Lien on any Mortgaged Property to secure the Secured Obligations, including any amendment thereto. Each Mortgage shall be substantially in the form of Exhibit L or otherwise satisfactory in form and substance to the Collateral Agent, in each case, with such schedules and including such provisions as shall be necessary to conform such document to applicable local or foreign law or as shall be customary under applicable local or foreign law.

 

“ Mortgaged Property ” means, initially, each parcel of Real Property identified as Mortgaged Property on Schedule 3.11(b) , and each other parcel of Real Property with respect to which a Mortgage is subsequently granted pursuant to Section 5.11, 5.12 or 5.15.

 

“ Motor Vehicles ” means all owned ambulances, alternative transportation vehicles, fire vehicles, trucks, trailers, tractors, service vehicles, automobiles and other registered vehicles of the Loan Parties.

 

“ Multiemployer Plan ” means a multiemployer plan within the meaning of Section 4001(a)(3) of ERISA (i) to which any ERISA Entity is then making or has an obligation to make contributions, (ii) to which any ERISA Entity has within the preceding five plan years made contributions, including any Person which ceased to be an ERISA Entity during such five year period, or (iii) as to which any ERISA Entity may have liability.

 

“ Net Proceeds ” means

 

(a) with respect to any Asset Sale (other than any issuance or sale of Equity Interests), the cash proceeds received by Parent or any of its Subsidiaries (including cash proceeds subsequently received (as and when received by Parent or any of its Subsidiaries) in respect of non-cash consideration initially received) net of (i) selling expenses (including reasonable brokers’ fees or commissions, legal, accounting and other professional and transactional fees, transfer and similar taxes and Borrower’s good faith estimate of income taxes paid or payable in connection with such sale); (ii) amounts provided as a reserve, in accordance with GAAP, against (x) any liabilities under any indemnification obligations associated with such Asset Sale or (y) any other liabilities retained by Parent or any of its Subsidiaries associated with the properties sold in such Asset Sale ( provided

 

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that, to the extent and at the time any such amounts are released from such reserve, such amounts shall constitute Net Proceeds); (iii) Borrower’s good faith estimate of payments required to be made with respect to unassumed liabilities relating to the properties sold within 90 days of such Asset Sale ( provided that, to the extent such cash proceeds are not used to make payments in respect of such unassumed liabilities within 90 days of such Asset Sale, such cash proceeds shall constitute Net Proceeds); and (iv) the principal amount, premium or penalty, if any, interest and other amounts on any Indebtedness for borrowed money which is secured by a Lien on the properties sold in such Asset Sale (so long as such Lien was permitted to encumber such properties under the Loan Documents at the time of such sale) and which is repaid with such proceeds (other than any such Indebtedness assumed by the purchaser of such properties);

 

(b) with respect to any Debt Incurrence, any Preferred Stock Issuance, any Equity Issuance or any other issuance or sale of Equity Interests by Parent or any of its Subsidiaries, the cash proceeds thereof, net of customary fees, commissions, costs and other expenses incurred in connection therewith; and

 

(c) with respect to any Destruction or Taking, the cash insurance proceeds, condemnation awards and other compensation received in respect thereof, net of all reasonable costs and expenses incurred in connection with the collection of such proceeds, awards or other compensation in respect of such Destruction or Taking.

 

“ Net Working Capital ” means, at any time, Consolidated Current Assets at such time minus Consolidated Current Liabilities at such time.

 

“ New LC Facility Deposits ” has the meaning assigned thereto in Section 2.22.

 

“ New LC Facility Lender ” has the meaning assigned thereto in Section 2.22.

 

“ Non-Consenting Lender ” has the meaning assigned to such term in Section 9.08(e).

 

“ Non-Interest Rate Hedging Agreement ” means any foreign currency exchange agreement, commodity price protection agreement or other currency exchange rate or commodity price hedging arrangement and all other similar agreements or arrangements relating to currency values or commodity prices.

 

“ Non-U.S. Jurisdiction ” means each jurisdiction of organization of a Subsidiary of Borrower other than the United States (or any State thereof) or the District of Columbia.

 

“ Non-U.S. Lender ” has the meaning assigned to such term in Section 2.16(d)(i).

 

“ Non-U.S. Pledge Agreements ” means one or more pledge agreements in form and substance reasonably satisfactory to the Collateral Agent covering (i) 100% of the Equity Interests owned by a Loan Party in any Foreign Subsidiary that (x) is a direct Subsidiary of Borrower or a Domestic Subsidiary and (y) is a disregarded entity for U.S. federal income tax purposes and (ii) 65% of the Equity Interests owned by a Loan Party in any Foreign Subsidiary that is a direct Subsidiary of Borrower or a Domestic Subsidiary.

 

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“ Note ” means a note substantially in the form of Exhibit E-1 , E-2 or E-3 .

 

“ Obligations ” means the unpaid principal of and interest on (including interest accruing after the maturity of the Loans and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization, winding-up, arrangement, or like proceeding, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loans or LC Disbursements made pursuant to Letters of Credit and all Fees and other obligations and liabilities of Borrower to any Agent, the Joint Lead Arrangers, the Syndication Agent, any Issuing Bank, the LC Facility Issuing Bank, any Lender or any other Secured Party, 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 or any other document made, delivered or given in connection herewith.

 

“ Officers’ Certificate ” means a certificate executed by the chairman of the Board of Directors (if an officer), the chief executive officer or the president and one of the Financial Officers, each in his or her official (and not individual) capacity.

 

“ Organic Document ” means (i) relative to each Person that is a corporation, its charter, articles of incorporation, amalgamation or amendment, as applicable, its by-laws or other constitutional document and all shareholder agreements, voting trusts and similar arrangements applicable to any of its authorized shares of capital stock, (ii) relative to each Person that is a partnership, its partnership agreement and any other similar arrangements applicable to any partnership or other equity interests in the Person and (iii) relative to any Person that is any other type of legal entity, such documents as shall be comparable to the foregoing.

 

“ Other Taxes ” has the meaning assigned to such term in Section 2.16(b).

 

“ Parent ” means Rural/Metro Corporation, a Delaware corporation.

 

“ Parent Note Agreement ” means any indenture, note purchase agreement or other agreement pursuant to which the Parent Notes are issued as in effect on the date hereof and thereafter amended from time to time subject to the requirements of this Agreement.

 

“ Parent Note Documents ” means the Parent Notes, the Parent Note Agreement and all other documents executed and delivered with respect to the Parent Notes.

 

“ Parent Notes ” means $93.5 million aggregate principal amount at maturity (approximately $50.2 million aggregate gross proceeds) of Parent’s 12  ³ / 4 % Discount Notes due 2016 and any registered notes issued by Parent in exchange for, and as contemplated by, such notes with substantially identical terms as such notes.

 

“ Participant ” has the meaning assigned to such term in Section 9.04(d).

 

“ PBGC ” means the United States Pension Benefit Guaranty Corporation or any successor thereto.

 

“ Pension Plan ” means a “pension plan,” as such term is defined in Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a Multiemployer Plan) and to which

 

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any ERISA Entity may have liability, including any liability by reason of having been a substantial employer within the meaning of Section 4063 of ERISA at any time during the preceding five years, or by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.

 

“ Perfection Certificate ” means, a certificate in the form of Annex I to the Security Agreement or any other form approved by the Collateral Agent.

 

“ Permitted Acquisition ” means any transaction or series of related transactions for the direct or indirect (a) acquisition of all or substantially all of the property of any Person, or of any business or division of any Person; (b) acquisition of more than 50% of the Equity Interests of any Person, and otherwise causing such Person to become a Subsidiary of such Person; or (c) merger or consolidation or any other combination with any Person, if each of the following conditions is met:

 

(1) no Default then exists or would result therefrom;

 

(2) after giving effect to such transaction on a Pro Forma Basis, Borrower shall be in compliance with the Financial Covenants as of the end of the Fiscal Quarter most recently ended prior to the date of such acquisition (assuming, for purposes of such sections, that such transaction, and all other Permitted Acquisitions consummated since the first day of the Test Period for each of the Financial Covenants ending on or prior to the date of such transaction, had occurred on the first day of such Test Period);

 

(3) the Person or business to be acquired shall be, or shall be engaged in, a Permitted Business;

 

(4) at least 10 Business Days prior to the proposed date of consummation of the transaction, Borrower shall have delivered to the Administrative Agent an Officers’ Certificate certifying that such transaction complies with this definition (which shall have attached thereto reasonably detailed backup data and calculations showing such compliance), and such additional information that the Administrative Agent may reasonably request; and

 

(5) the amount of the acquisition consideration for any Permitted Acquisition shall not exceed $5.0 million and the aggregate amount of the acquisition consideration for all Permitted Acquisitions since the Closing Date shall not exceed $20.0 million.

 

“ Permitted Businesses ” mean those businesses in which Borrower and its Subsidiaries are engaged on the Closing Date as described in the Information Memorandum (or, in the good faith judgment of the Board of Directors of Borrower, which are reasonably related thereto or are reasonable extensions thereof).

 

“ Permitted Investments ” means:

 

(1) marketable direct obligations issued by, or unconditionally guaranteed by, the United States Government or issued by any agency or instrumentality thereof and backed by the full faith and credit of the United States of America, in each case maturing within one year from the date of acquisition thereof;

 

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(2) marketable direct obligations issued by any State of the United States of America or any political subdivision of any such State or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either S&P or Moody’s;

 

(3) commercial paper maturing no more than one year from the date of creation thereof and having a rating of at least A-1 from S&P or at least P-1 from Moody’s;

 

(4) (x) time deposits, demand deposits, certificates of deposit, Eurodollar time deposits or bankers’ acceptances, in each case, maturing within one year from the date of acquisition thereof or (y) overnight bank deposits, in each case, issued by (i) any bank organized under the laws of the United States of America or any State thereof or the District of Columbia having at the date of acquisition thereof combined capital and surplus of not less than $500.0 million or (ii) any bank organized under the laws of any member state of the European Union, as of the date hereof, or Switzerland having combined capital and surplus in excess of the applicable foreign currency equivalent of $500.0 million;

 

(5) repurchase obligations with a term of not more than 90 days for underlying securities of the types described in clause (1) above entered into with any bank meeting the qualifications specified in clause (4) above; and

 

(6) investments in money market funds which invest substantially all their assets in securities of the types described in clauses (1) through (5) above.

 

“ Permitted Joint Venture ” means any joint venture or other business enterprise entered into between Borrower or a Loan Party and a county, city, municipality, fire district, other governmental entity (or agency thereof) or health services business in the United States for the purpose of engaging in a Permitted Business and approved by a majority of the disinterested members of the Board of Directors of Parent.

 

“ Permitted Lien ” has the meaning assigned to such term in Section 6.02.

 

“ Permitted Refinancing ” means, with respect to any Indebtedness, any refinancing thereof; provided , however , that (i) any such refinancing Indebtedness shall (a) not be on financial and other terms that, taken as a whole, are more onerous in the aggregate than the Indebtedness being refinanced and shall not have defaults, rights or remedies, taken as a whole, more burdensome in the aggregate to the obligor than the Indebtedness being refinanced, (b) not have a final maturity or a Weighted Average Life to Maturity that is shorter than the Indebtedness being refinanced, (c) be at least as subordinate to the Obligations as the Indebtedness being refinanced (and unsecured if the refinanced Indebtedness is unsecured), and (d) be in principal amount that does not exceed the principal amount so refinanced, plus all accrued and unpaid interest thereon, plus the stated amount of any premium and other payments required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness being refinanced, plus in either case, the amount of reasonable expenses of Borrower or any of its Subsidiaries incurred

 

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in connection with such refinancing, and (ii) the sole obligors and/or guarantors on such refinancing Indebtedness shall be the obligors and/or guarantors on such Indebtedness being refinanced.

 

“ Permitted Tax Distributions ” means payments, dividends or distributions by Borrower to Parent in order to pay consolidated, combined or other federal, foreign, state or local taxes not payable directly by Borrower or any of its Subsidiaries to the extent such taxes are attributable to the income of Borrower and its Subsidiaries.

 

“ Person ” means any natural person, corporation, trust, joint venture, association, company, partnership, limited liability company or government, or any agency or political subdivision thereof.

 

“ Platform ” has the meaning assigned to such term in Section 9.17(b).

 

“ Pledge Agreement ” means the Pledge Agreement, substantially in the form of Exhibit H , among the Loan Parties and the Collateral Agent for the benefit of the Secured Parties.

 

“ Pledged Securities ” has the meaning provided in the Pledge Agreement.

 

“ Preferred Stock ” means, with respect to any Person, any and all preferred or preference Equity Interests (however designated) of such Person whether or not outstanding or issued on the Closing Date.

 

“ Preferred Stock Issuance ” means the issuance or sale after the Closing Date by Parent or any of its Subsidiaries of any Preferred Stock that constitutes Disqualified Capital Stock (other than Preferred Stock issued to Borrower or any Subsidiary Loan Party).

 

“ Prepayment Date ” has the meaning assigned to such term in Section 2.05(f).

 

“ Pro Forma Balance Sheets ” has the meaning assigned to such term in Section 3.06(b).

 

“ Pro Forma Basis ” means on a basis in accordance with GAAP and Regulation S-X promulgated under the Securities Act of 1933 or otherwise reasonably satisfactory to the Administrative Agent.

 

“ Projections ” has the meaning assigned to such term in Section 3.06(c).

 

“ Property ” means any right, title or interest in or to property or assets of any kind whatsoever, whether real, personal, immovable, movable or mixed and whether tangible or intangible and including Equity Interests or any other ownership interests of any Person.

 

“ Qualified Capital Stock ” of any Person means any Equity Interests of such Person that are not Disqualified Capital Stock

 

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“ Real Property ” means all right, title and interest of any Loan Party or any of its respective Subsidiaries in and to a parcel of real property or immovable property owned, leased (including, without limitation, any leasehold, mineral or other estate) or operated by any Loan Party or any of its respective Domestic Subsidiaries together with, in each case, all improvements and appurtenant fixtures, easements, hereditaments and other real property and rights incidental to the ownership, lease or operation thereof.

 

“ Refinancing ” means (i) the payment in full of all amounts outstanding under the Existing Credit Facility, the termination of all commitments thereunder and the termination, cash collateralization or support by a Letter of Credit of all letters of credit issued thereunder and (ii) the purchase and/or the call for redemption of the Existing Notes, the delivery of the purchase and/or redemption price therefor to the trustee for the Existing Notes and the discharge of the indenture governing the Existing Notes, all in accordance with the terms of the indenture governing the Existing Notes.

 

“ Register ” has the meaning assigned to such term in Section 9.04(c).

 

“ Regulation U ” means Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

 

“ Regulation X ” means Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

 

“ Related Parties ” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents, trustees and advisors of such Person and such Person’s Affiliates.

 

“ Release ” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing, emanating or migrating of any Hazardous Material in, into, onto or through the Environment.

 

“ Remedial Action ” means (a) ”remedial action” as such term is defined in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions required or voluntarily undertaken to: (i) clean up, remove, treat, abate, monitor or otherwise take corrective action to address any Hazardous Material in the Environment; (ii) prevent the Release or threat of Release, or minimize the further Release of any Hazardous Material so it does not migrate or endanger or threaten to endanger public health, welfare or the Environment; or (iii) perform studies and investigations in connection with, or as a precondition to, (i) or (ii) above.

 

“ Requirement of Law ” means, as to any Person, 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.

 

“ Requisite Class Lenders ” means, at any time, (i) with respect to Revolving Lenders, Revolving Lenders having more than 50% of the aggregate Revolving Credit Commitments, or after the Revolving Credit Maturity Date, the Revolving Credit Exposure; (ii) with respect to LC Facility Lenders, LC Facility Lenders having more than 50% of the aggregate LC Facility Participations and (iii) with respect to Term Lenders, Term Lenders having more than 50% of the aggregate outstanding amount of all Term Loans.

 

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“ Requisite Lenders ” means, at any time, Lenders having more than 50% of the sum of (i) the aggregate Revolving Credit Commitments or, after the Revolving Credit Maturity Date, the Revolving Credit Exposure, (ii) the aggregate LC Facility Participations and (iii) the aggregate outstanding amount of all Term Loans.

 

“ Revolving Credit Borrowing ” means a Borrowing comprised of Revolving Loans.

 

“ Revolving Credit Borrowing Request ” means a Borrowing Request for a Revolving Credit Borrowing.

 

“ Revolving Credit Commitment ” means, with respect to each Revolving Lender, the commitment of such Revolving Lender to make Revolving Loans and to acquire participations in Revolving Letters of Credit and Swingline Loans hereunder, expressed in each case as an amount representing the maximum principal amount of such Revolving Lender’s Revolving Credit Exposure hereunder, as the same may be reduced from time to time pursuant to the provisions of this Agreement. The amount of each Revolving Lender’s Revolving Credit Commitment on the Closing Date is set forth on Schedule 2.01 . The aggregate amount of the Revolving Lenders’ Revolving Credit Commitments as of the Closing Date is $20.0 million.

 

“ Revolving Credit Commitment Period ” means the period from but not including the Closing Date to but not including the Revolving Credit Maturity Date (or, for purposes of Section 2.06(a)(ii), five Business Days prior to such date) or any earlier date on which the Revolving Credit Commitments to make Revolving Loans pursuant to Section 2.01 shall terminate as provided herein.

 

“ Revolving Credit Exposure ” means with respect to any Revolving Lender at any time, the sum of (a) the aggregate principal amount at such time of all outstanding Revolving Loans of such Revolving Lender, plus (b) such Revolving Lender’s Revolving LC Exposure at such time, plus (c) such Revolving Lender’s Swingline Exposure at such time.

 

“ Revolving Credit Maturity Date ” means the fifth anniversary of the Closing Date.

 

“ Revolving LC Disbursement ” means a payment made by the Issuing Bank pursuant to a Revolving Letter of Credit.

 

“ Revolving LC Exposure ” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Revolving Letters of Credit at such time plus (b) the aggregate amount of all Revolving LC Disbursements that have not yet been reimbursed by or on behalf of Borrower at such time. The Revolving LC Exposure of any Revolving Lender at any time shall be its Commitment Percentage of the total Revolving LC Exposure at such time.

 

“ Revolving LC Fees ” has the meaning assigned to such term in Section 2.10(b).

 

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“ Revolving Lender ” means a Lender with a commitment to make Revolving Loans or with any Revolving Credit Exposure, in its capacity as such.

 

“ Revolving Letter of Credit ” means Letters of Credit issued pursuant to Section 2.06(a)(ii).

 

“ Revolving Loans ” means the loans made pursuant to Section 2.01(a)(ii).

 

“ S&P ” means Standard & Poor’s, a division of The McGraw-Hill Companies.

 

“ SEC ” means the Securities and Exchange Commission.

 

“ Section 2.16(d) Certificate ” has the meaning assigned to such term in Section 2.16(d)(i).

 

“ Secured Obligations ” means (i) the Obligations, (ii) all obligations in respect of overdrafts and related liabilities owed to any Lender, any Affiliate of a Lender or any Agent arising from treasury, depositary and cash management services or in connection with any automated clearinghouse transfer of funds, and (iii) all obligations under any Hedging Agreement entered into with a Hedging Exchanger whether on account of principal, interest, fees, indemnities, costs or expenses (including, without limitation, all reasonable fees, charges and disbursements of counsel), or otherwise.

 

“ Secured Parties ” means the Agents, the Lenders, each Issuing Bank, the LC Facility Issuing Bank, the Syndication Agent, the Joint Lead Arrangers and any Hedging Exchangers.

 

“ Security Agreement ” means the Security Agreement, substantially in the form of Exhibit I , among the Loan Parties and the Collateral Agent for the benefit of the Secured Parties.

 

“ Security Documents ” means the Security Agreement, the Pledge Agreement, the Mortgages and the Perfection Certificate executed by the Loan Parties and the Collateral Agent and each other security agreement or other instrument or document executed and delivered pursuant to Section 5.11, 5.12 or 5.15 to secure any of the Secured Obligations.

 

“ Senior Subordinated Note Agreement ” means any indenture, note purchase agreement or other agreement pursuant to which the Senior Subordinated Notes are issued as in effect on the date hereof and thereafter amended from time to time subject to the requirements of this Agreement.

 

“ Senior Subordinated Note Documents ” means the Senior Subordinated Notes, the Senior Subordinated Note Agreement, the Senior Subordinated Note Guarantees and all other documents executed and delivered with respect to the Senior Subordinated Notes or the Senior Subordinated Note Agreement.

 

“ Senior Subordinated Note Guarantees ” means the guarantees of the Guarantors pursuant to the Senior Subordinated Note Agreement.

 

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“ Senior Subordinated Notes ” means $125.0 million aggregate principal amount of the 9  ⁷ / 8 % Senior Subordinated Notes due 2015 issued by Borrower and the Senior Subordinated Notes Co-Issuer, jointly and severally, pursuant to the Senior Subordinated Note Agreement and any registered notes issued by Borrower and the Senior Subordinated Notes Co-Issuer in exchange for, and as contemplated by, such notes with substantially identical terms as such notes.

 

“ Senior Subordinated Notes Co-Issuer ” means Rural Metro (Delaware) Inc., a Delaware corporation and wholly owned Subsidiary of Borrower.

 

“ Statutory Reserve Rate ” means a fraction (expressed as a decimal) the numerator of which is the number one and the denominator of which is the number one minus the aggregate (expressed as a decimal) of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) established by the Board with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under Regulation D or any comparable regulation and without regard to whether any Lender actually obtains or maintains eurocurrency funding for its Eurodollar Loans. The Statutory Reserve Rate shall be adjusted automatically on and as of the Closing Date of any change in any reserve percentage.

 

“ Subordinated Indebtedness ” means Indebtedness of Borrower or any Guarantor that is by its terms subordinated in right of payment to the Obligations of Borrower or such Guarantor, as applicable, including the Senior Subordinated Notes.

 

“ Subsidiary ” means, with respect to any Person (herein referred to as the “ parent ”), any other Person (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power are, at the time any determination is being made, directly or indirectly, owned, controlled or held or (b) the accounts of which would be consolidated with those of the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP.

 

“ Subsidiary Loan Party ” means each Domestic Subsidiary that guarantees the obligations pursuant to the Guarantee Agreement, including Subsidiaries identified as a “Subsidiary Loan Party” on Schedule 3.10 .

 

“ Survey ” means a survey of any Mortgaged Property (and, except as otherwise agreed between Borrower and the Collateral Agent, all improvements thereon): (i) prepared by a surveyor or engineer licensed to perform surveys in the state where such Mortgaged Property is located, (ii) dated (or redated) not earlier than six (6) months prior to the date of delivery thereof unless there shall have occurred within six (6) months prior to such date of delivery any exterior construction on the site of such Mortgaged Property or any easement, right of way or other interest in the Mortgaged Property has been granted or become effective through operation of law or otherwise with respect to such Mortgaged Property which, in either case, can be depicted on a survey, in which events, as applicable, such survey shall be dated (or redated) after the completion

 

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of such construction or if such construction shall not have been completed as of such date of delivery, not earlier than 20 days prior to such date of delivery, or after the grant or effectiveness of any such easement, right of way or other interest in the Mortgaged Property, (iii) certified by the surveyor (in a manner reasonably acceptable to the Collateral Agent) to the Collateral Agent and the Title Company, (iv) complying in all respects with the minimum detail requirements of the American Land Title Association as such requirements are in effect on the date of preparation of such survey and (v) sufficient for the Title Company to remove all standard survey exceptions from the title insurance policy and issue a survey endorsement in accordance with the provisions of the Loan Documents and otherwise acceptable to the Collateral Agent.

 

“ Swingline Exposure ” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of any Revolving Lender at any time shall be its Commitment Percentage of the total Swingline Exposure at such time.

 

“ Swingline Lender ” means Citicorp North America, Inc., in its capacity as Lender of Swingline Loans.

 

“ Swingline Loan ” has the meaning assigned to such term in Section 2.04(a).

 

“ Swingline Sublimit ” has the meaning assigned to such term as Section 2.04(a).

 

“ Syndication Agent ” has the meaning assigned to such term in the preamble to this Agreement.

 

“ Taking ” means any taking of any Property of Parent or any Subsidiary or any portion thereof, in or by condemnation, expropriation or other eminent domain proceedings pursuant to any law, general or special, or by reason of the temporary requisition or use of any Property of Parent or any Subsidiary or any portion thereof, by any Governmental Authority, civil or military, including any transaction permitted by Section 6.05(viii).

 

“ Taxes ” means (i) any and all present or future taxes, duties, levies, imposts, assessments, deductions, withholdings or other charges imposed by any Governmental Authority, whether computed on a separate, consolidated, unitary, combined or other basis and any and all liabilities (including interest, fines, penalties or additions to tax) with respect to the foregoing, and (ii) any transferee, successor, joint and several, contractual or other liability (including liability pursuant to Treasury Regulation § 1.1502-6 (or any similar provision of state, local or non-U.S. law)) in respect of any item described in clause (i).

 

“ Term Borrowing ” means a Borrowing comprised of Term Loans on the Closing Date.

 

“ Term Borrowing Request ” means a Borrowing Request in connection with a Term Borrowing made on the Closing Date.

 

“ Term Commitment ” means, with respect to each Lender, the commitment, if any, of such Lender to make a Term Loan hereunder on the Closing Date, expressed as an amount representing the maximum principal amount of the Term Loan to be made by such Lender hereunder, as the same may be reduced from time to time pursuant to the provisions of

 

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this Agreement. The amount of each Lender’s Term Commitment on the Closing Date is set forth on Schedule 2.01 . The initial aggregate amount of the Lenders’ Term Commitments is $135.0 million.

 

“ Term Lender ” means a Lender with a Term Commitment or an outstanding Term Loan, in its capacity as such.

 

“ Term Loan Maturity Date ” means the sixth anniversary of the Closing Date.

 

“ Term Loans ” means the loans made pursuant to Section 2.01(a)(i).

 

“ Test Period ” means, on any date of determination, the period of four consecutive Fiscal Quarters of Borrower (taken as one accounting period) ending with the latest Fiscal Quarter or the Fiscal Year for which financial statements pursuant to Section 5.01(a) or (b) have been, or should have been, delivered.

 

“ Title Company ” means Fidelity National Title Insurance Company or such other title insurance or abstract company as shall be retained by Borrower and approved by the Collateral Agent.

 

“ Total Debt ” means, as of any date, consolidated Indebtedness of Borrower and its Subsidiaries outstanding as of such date of the type described in clauses (a), (b), (e), (f), (g), (h), (i) (excluding undrawn amounts under outstanding Letters of Credit) and (j) (but only if drawn) of the definition thereof.

 

“ Total LC Facility Deposit ” means, at any time, the sum of all LC Facility Deposits at such time, as the same may be reduced from time to time pursuant to Section 2.11 or increased pursuant to Section 2.22.

 

“ Total Leverage Ratio ” means, for any date of determination, the ratio of (a) Total Debt as of such date to (b) Consolidated EBITDA of Borrower for the Test Period.

 

“ Total Revolving Credit Commitment ” means, at any time, the aggregate amount of the Revolving Credit Commitments, as in effect at such time.

 

“ Transaction Documents ” means the Loan Documents, the Parent Note Documents, the Senior Subordinated Note Documents, the Contribution Agreement and the definitive documentation pertaining to the Refinancing.

 

“ Transactions ” means the Financing Transactions, the Refinancing, the Contribution and the payment of fees, expenses and prepayment premiums in connection therewith.

 

“ Transferee ” has the meaning ascribed to such term in Section 2.16(a).

 

“ Type ,” when used in respect of any Loan or Borrowing, refers to the Rate by reference to which interest on such Loan or on the Loans comprising such Borrowing is determined. For purposes hereof, “ Rate ” shall include the Adjusted LIBO Rate and the Alternate Base Rate.

 

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“ UCC ” means the Uniform Commercial Code as in effect in the applicable state or jurisdiction.

 

“ USA Patriot Act ” has the meaning assigned to such term in Section 3.22(a).

 

“ U.S. Bankruptcy Law ” means Title 11, United States Code, or any similar U.S. Federal or state law.

 

“ U.S. Dollars ,” “ Dollars ” or “ $ ” means lawful money of the United States of America.

 

“ U.S. Lender ” has the meaning assigned to such term in Section 2.16(d)(ii).

 

“ Voting Stock ” means, with respect to any Person, any class or classes of Equity Interests pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the Board of Directors of such Person.

 

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

 

“ Withdrawal Liability ” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part 1 of Subtitle E of Title IV of ERISA.

 

SECTION 1.02. Classification of Loans and Borrowings . For purposes of this Agreement, Loans may be classified and referred to by Class ( e.g ., a “ Revolving Loan ”) or by Type ( e.g ., a “ Eurodollar Loan ”) or by Class and Type ( e.g ., a “ Eurodollar Revolving Loan ”). Borrowings also may be classified and referred to by Class ( e.g ., a “ Revolving Credit Borrowing ”) or by Type ( e.g ., a “ Eurodollar Borrowing ”) or by Class and Type ( e.g ., a “ Eurodollar Revolving Credit Borrowing ”).

 

SECTION 1.03. Terms Generally . The definitions in Section 1.01 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require. Except as otherwise expressly provided herein, (i) any reference in this Agreement to any Loan Document means such document as amended, restated, supplemented or otherwise modified from time to time, (ii) any reference in this Agreement to any agreement or document means such agreement or document as amended, restated, supplemented or otherwise modified from time to time after the date hereof in accordance with the terms of this Agreement; and (iii) all terms of an accounting or financial nature shall be construed

 

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in accordance with GAAP, as in effect from time to time; provided , however , that if Borrower notifies the Administrative Agent that Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Closing Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent or the Requisite Lenders notify Borrower that the Administrative Agent or the Requisite Lenders request an amendment to any provision hereof for such purpose), within 60 days of any such change becoming effective (or in the case of any requested amendment by the Administrative Agent or the Requisite Lenders, within 60 days of the date on which Borrower notifies the Administrative Agent of such change), then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective, until such provision is amended in a manner satisfactory to Borrower, the Administrative Agent and the Requisite Lenders.

 

ARTICLE II

 

THE CREDITS

 

SECTION 2.01. Credit Commitments .

 

(a) Subject to the terms and conditions hereof, (i) each Term Lender severally agrees to make a term loan in Dollars to Borrower on the Closing Date in a principal amount equal to its Term Commitment, (ii) each Revolving Lender severally agrees to make revolving loans in Dollars to Borrower, from time to time during the Revolving Credit Commitment Period and (iii) each LC Facility Lender severally agrees to make an LC Facility Deposit on the Closing Date in the amount set forth opposite such LC Facility Lender’s name on Schedule 2.01 . Amounts repaid in respect of Term Loans may not be reborrowed. During the Revolving Credit Commitment Period, Borrower may use the Revolving Credit Commitments by borrowing, prepaying the Revolving Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof. Notwithstanding anything to the contrary contained in this Agreement, in no event may Revolving Loans be borrowed under this Article II if, after giving effect thereto (and to any concurrent repayment or prepayment of Loans), (i) the Aggregate Revolving Credit Exposure would exceed the Total Revolving Credit Commitment then in effect or (ii) the Revolving Credit Exposure of any Revolving Lender would exceed such Revolving Lender’s Revolving Credit Commitment.

 

(b) The Revolving Loans and Term Loans may from time to time be (i) Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof, as determined by Borrower and notified to the Administrative Agent in accordance with Sections 2.02 and 2.03.

 

(c) Each Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the same Class and Type made by the Lenders ratably in accordance with their respective Commitments of the applicable Class. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.

 

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SECTION 2.02. Procedure for Borrowing .

 

(a) In order to borrow under the Revolving Credit Commitments or the Term Commitments, Borrower must give the Administrative Agent notice substantially in the form of Exhibit B (a “ Borrowing Request ”), which notice must be received by the Administrative Agent prior to (a) 11:00 a.m., New York City time, three Business Days prior to the requested Borrowing Date, in the case of a Eurodollar Borrowing or (b) 11:00 a.m., New York City time, on the Business Day prior to the requested Borrowing Date, in the case of an ABR Borrowing. The Borrowing Request for each Borrowing shall specify (i) whether the requested Borrowing is to be a Revolving Credit Borrowing or a Term Borrowing, (ii) the amount to be borrowed, (iii) the requested Borrowing Date (which must be the Closing Date, in the case of a Term Borrowing), (iv) whether the Borrowing is to be of Eurodollar Loans or ABR Loans, (v) if the Borrowing is to be of Eurodollar Loans, the length of the initial Interest Period therefor, and (vi) the location and number of Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of this Agreement. If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Borrowing, then Borrower shall be deemed to have selected an Interest Period of one month’s duration.

 

(b) Each Borrowing shall be in a minimum aggregate principal amount of (i) in the case of a Term Borrowing, $5.0 million or an integral multiple of $1.0 million in excess thereof, or (ii) in the case of a Revolving Credit Borrowing, $1.0 million or an integral multiple of $1.0 million in excess thereof or, if less, the aggregate amount of the then Available Revolving Credit Commitments.

 

(c) Upon receipt of the Term Borrowing Request, the Administrative Agent shall promptly notify each Term Lender of the aggregate amount of the Term Borrowing. Each Term Lender will make the amount of its Term Commitment available to the Administrative Agent for the account of Borrower at the office of the Administrative Agent specified in Section 9.01 prior to 10:00 a.m., New York City time, on the Closing Date in funds immediately available to the Administrative Agent. Amounts so received by the Administrative Agent will promptly be made available to Borrower by the Administrative Agent crediting the account of Borrower on the books of such office with the aggregate of the amounts made available to the Administrative Agent by the Term Lenders and in like funds as received by the Administrative Agent.

 

(d) Upon receipt of a Revolving Credit Borrowing Request, the Administrative Agent shall promptly notify each Revolving Lender of the aggregate amount of such Revolving Credit Borrowing and of the amount of such Revolving Lender’s pro rata portion thereof, which shall be based on the respective Available Revolving Credit Commitments of all the Revolving Lenders. Each Revolving Lender will make the amount of its pro rata portion of each such Revolving Credit Borrowing available to the Administrative Agent for the account of Borrower at the office of the Administrative Agent specified in Section 9.01 prior to 12:00 noon, New York City time, on the Borrowing Date requested by Borrower in funds immediately available to the Administrative Agent. Amounts so received by the Administrative Agent will promptly be made available to Borrower by the Administrative Agent crediting the account of 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; provided , however , that if on the Borrowing Date of any Revolving Loans to be

 

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made to Borrower, any Swingline Loans made to Borrower or any Revolving LC Disbursements shall be then outstanding, the proceeds of such Revolving Loans shall first be applied to pay in full such Swingline Loans or Revolving LC Disbursements, with any remaining proceeds to be made available to Borrower as provided above; and provided , further , that ABR Revolving Loans made to finance the reimbursement of a Revolving LC Disbursement as provided in Section 2.06(e) shall be remitted by the Administrative Agent to the Issuing Bank.

 

SECTION 2.03. Conversion and Continuation Options for Loans .

 

(a) Borrower may elect from time to time to convert (x) Eurodollar Loans to ABR Loans by giving the Administrative Agent prior notice of such election not later than 11:00 a.m., New York City time, on the Business Day prior to a requested conversion or (y) ABR Loans to Eurodollar Loans by giving the Administrative Agent prior notice of such election not later than 11:00 a.m., New York City time, three Business Days prior to a requested conversion; provided that if any such conversion of Eurodollar Loans is made other than on the last day of an Interest Period with respect thereto, Borrower shall pay any amounts due to the Lenders pursuant to Section 2.17 as a result of such conversion. Any such notice of conversion to Eurodollar Loans shall specify the length of the initial Interest Period or Interest Periods therefor. Upon receipt of any such notice the Administrative Agent shall promptly notify each Lender thereof. All or any part of the outstanding Eurodollar Loans or ABR Loans may be converted as provided herein; provided that no Loan may be converted into a Eurodollar Loan (i) when any Default has occurred and is continuing, or (ii) after the date that is one month prior to the Revolving Credit Maturity Date or the Term Loan Maturity Date, as applicable.

 

(b) Any Eurodollar Loans may be continued as such upon the expiration of the then current Interest Period with respect thereto by Borrower giving prior notice to the Administrative Agent, not later than 11:00 a.m., New York City time, three Business Days prior to a requested continuation setting forth the length of the next Interest Period to be applicable to such Loans; provided that no Eurodollar Loan may be continued as such (i) when any Default has occurred and is continuing, or (ii) after the date that is one month prior to the Revolving Credit Maturity Date or the Term Loan Maturity Date, as applicable; provided , further , that if Borrower shall fail to give any required notice as described above in this Section 2.03 or if such continuation is not permitted pursuant to the preceding proviso, then such Loans shall be automatically converted to ABR Loans on the last day of such then expiring Interest Period (in which case the Administrative Agent shall notify Borrower of such conversion).

 

(c) In connection with any Eurodollar Loans, there shall be no more than four (4) Interest Periods outstanding at any time with respect to the Term Loans and no more than six (6) Interest Periods outstanding at any time with respect to the Revolving Loans.

 

(d) This Section 2.03 shall not apply to Swingline Loans.

 

SECTION 2.04. Swingline Loans .

 

(a) Subject to the terms and conditions hereof, the Swingline Lender agrees to make swingline loans (individually, a “ Swingline Loan ” and collectively, the “ Swingline Loans ”) to Borrower from time to time during the Revolving Credit Commitment Period in accordance

 

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with the procedures set forth in this Section 2.04; provided that (i) the aggregate principal amount of all Swingline Loans shall not exceed $5.0 million (the “ Swingline Sublimit ”) at any one time outstanding, (ii) the principal amount of any borrowing of Swingline Loans may not exceed the aggregate amount of the Available Revolving Credit Commitments of all Revolving Lenders immediately prior to such borrowing or result in the Aggregate Revolving Credit Exposure then outstanding exceeding the Total Revolving Credit Commitment then in effect, and (iii) in no event may Swingline Loans be borrowed hereunder if a Default shall have occurred and be continuing. Amounts borrowed under this Section 2.04 may be repaid and, up to but excluding the Revolving Credit Maturity Date, reborrowed. All Swingline Loans shall at all times be ABR Loans. Borrower shall give the Administrative Agent notice of any Swingline Loan requested hereunder (which notice must be received by the Administrative Agent prior to 11:00 a.m., New York City time, on the requested Borrowing Date) specifying (A) the amount to be borrowed, and (B) the requested Borrowing Date. Upon receipt of such notice, the Administrative Agent shall promptly notify the Swingline Lender of the aggregate amount of such borrowing. Not later than 2:00 p.m., New York City time, on the Borrowing Date specified in such notice, the Swingline Lender shall make such Swingline Loan available to the Administrative Agent for the account of Borrower at the office of the Administrative Agent set forth in Section 9.01 in funds immediately available to the Administrative Agent. Amounts so received by the Administrative Agent will promptly be made available to Borrower by the Administrative Agent crediting the account of Borrower on the books of such office with the amount made available to the Administrative Agent by the Swingline Lender (or, in the case of a Swingline Loan made to finance the reimbursement of a Revolver LC Disbursement as provided in Section 2.06(e), by remittance to the Issuing Bank) and in like funds as received by the Administrative Agent. Each Borrowing pursuant to this Section 2.04 shall be in a minimum principal amount of $500,000 or an integral multiple of $100,000 in excess thereof.

 

(b) Notwithstanding the occurrence of any Default or noncompliance with the conditions precedent set forth in Article IV or the minimum borrowing amounts specified in Section 2.02, if any Swingline Loan shall remain outstanding at 10:00 a.m., New York City time, on the seventh Business Day following the Borrowing Date thereof and if by such time on such seventh Business Day the Administrative Agent shall have received neither (i) a notice of borrowing delivered by Borrower pursuant to Section 2.02 requesting that Revolving Loans be made pursuant to Section 2.01 on the immediately succeeding Business Day in an amount at least equal to the aggregate principal amount of such Swingline Loan, nor (ii) any other notice satisfactory to the Administrative Agent indicating Borrower’s intent to repay such Swingline Loan on the immediately succeeding Business Day with funds obtained from other sources, the Administrative Agent shall be deemed to have received a notice from Borrower pursuant to Section 2.02 requesting that ABR Revolving Loans be made pursuant to Section 2.01 on such immediately succeeding Business Day in an amount equal to the amount of such Swingline Loan, and the procedures set forth in Section 2.02 shall be followed in making such ABR Revolving Loans; provided that for the purposes of determining each Revolving Lender’s Commitment Percentage with respect to such Borrowing, the Swingline Loan to be repaid with the proceeds of such Borrowing shall be deemed to not be outstanding. The proceeds of such ABR Revolving Loans shall be applied to repay such Swingline Loan.

 

(c) If, for any reason, ABR Revolving Loans may not be, or are not, made pursuant to paragraph (b) of this Section 2.04 to repay any Swingline Loan as required by such

 

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paragraph, effective on the date such ABR Revolving Loans would otherwise have been made, each Revolving Lender severally, unconditionally and irrevocably agrees that it shall, without regard to the occurrence of any Default, purchase a participating interest in such Swingline Loan (an “ Unrefunded Swingline Loan ”) in an amount equal to such Revolving Lender’s Commitment Percentage of the aggregate amount of the ABR Revolving Loan which would otherwise have been made pursuant to paragraph (b) of this Section 2.04. Each Revolving Lender will immediately transfer to the Administrative Agent, in immediately available funds, the amount of its participation, and the proceeds of such participations shall be distributed by the Administrative Agent to the Swingline Lender. All payments by the Revolving Lenders in respect of Unrefunded Swingline Loans and participations therein shall be made in accordance with Section 2.13.

 

(d) Notwithstanding the foregoing, a Lender shall not have any obligation to acquire a participation in a Swingline Loan pursuant to the foregoing paragraphs if a Default shall have occurred and be continuing at the time such Swingline Loan was made and such Lender shall have notified the Swingline Lender in writing, prior to the time such Swingline Loan was made, that such Default has occurred and that such Lender will not acquire participations in Swingline Loans made while such Default is continuing.

 

SECTION 2.05. Optional and Mandatory Prepayments of Loans; Repayments of Term Loans .

 

(a) Borrower may at any time and from time to time prepay the Loans (subject to compliance with the terms of Section 2.17), in whole or in part, subject to Section 2.05(e), upon irrevocable notice to the Administrative Agent not later than 12:00 noon, New York City time, three (3) Business Days prior to the date of such prepayment (or, in the case of ABR Loans, on the date of such prepayment), specifying (i) the date and amount of prepayment, and (ii) the Class of Loans to be prepaid and whether the prepayment is of Eurodollar Loans, ABR Loans, or a combination thereof (including in the case of Eurodollar Loans, the Borrowing to which such prepayment is to be applied and, if of a combination thereof, the amount allocable to each). 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 accrued interest to such date on the amount prepaid. Partial prepayments of Loans (other than Swingline Loans) shall be in an aggregate principal amount of $1.0 million or a whole multiple of $1.0 million in excess thereof (or, if less, the remaining outstanding principal amount thereof). Partial prepayments of Swingline Loans shall be in an aggregate principal amount of $500,000 or a whole multiple of $100,000 in excess thereof (or, if less, the remaining outstanding principal amount thereof).

 

(b) In the event and on such occasion that the Aggregate Revolving Credit Exposure exceeds the Total Revolving Credit Commitment, Borrower shall immediately prepay Revolving Credit Borrowings (or, if no such Borrowings are outstanding, deposit cash collateral in the account established with the Administrative Agent in accordance with the procedures described in Section 2.06(j) in an aggregate amount equal to such excess.

 

(c) (i) If Parent or any of its Subsidiaries shall receive Net Proceeds from any Debt Incurrence or any Preferred Stock Issuance, an amount equal to 100% of such Net Proceeds shall be applied within five (5) Business Days after receipt thereof in accordance with Section 2.05(e).

 

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(ii) If Parent or any of its Subsidiaries shall receive Net Proceeds from any Asset Sale (other than any Asset Sale permitted by Section 6.05(i), (ii), (iv), (vi) or (vii) or any Asset Sale to Parent or any of its Subsidiaries), an amount equal to 100% of such Net Proceeds shall be applied within five (5) Business Days after receipt thereof in accordance with Section 2.05(e); provided that no such application shall be required with respect to any Net Proceeds to the extent that (A) the Net Proceeds of all Asset Sales in any Fiscal Year do not exceed $1.0 million in the aggregate or (B) so long as no Default then exists or would arise therefrom, Borrower delivers an Officers’ Certificate to the Administrative Agent promptly following the date of receipt of such Net Proceeds stating that such Net Proceeds will be reinvested in fixed or capital assets used or usable in the business of Borrower or any Subsidiary within 365 days following the receipt of such Net Proceeds (it being understood that no such Officers’ Certificate shall be required unless the Net Proceeds of all Asset Sales in any Fiscal Year exceed $1.0 million); provided that, if all or any portion of such Net Proceeds not so applied as provided herein is not so used within such 365-day period, an amount equal to such remaining portion shall be applied on the last day of such period as specified in this Section 2.05(c)(ii); provided , further , if the Property subject to such Asset Sale constituted Collateral under the Security Documents, then any property purchased with the Net Proceeds thereof pursuant to this Section 2.05(c)(ii) shall be mortgaged or pledged, as the case may be, to the Collateral Agent, for its benefit and for the benefit of the other Secured Parties in accordance with Section 5.11.

 

(iii) If Parent or any of its Subsidiaries shall receive Net Proceeds from insurance or condemnation recoveries (other than from business interruption insurance) in respect of any Destruction or any proceeds or awards in respect of any Taking other than any recovery in respect of Motor Vehicles aggregating Net Proceeds of less than $1.0 million in any Fiscal Year, an amount equal to 100% of the Net Proceeds thereof shall be applied within five (5) Business Days after receipt thereof in accordance with Section 2.05(e); provided that no such application shall be required with respect to any Net Proceeds to the extent that, so long as no Default then exists or would arise therefrom, Borrower delivers an Officers’ Certificate to the Administrative Agent promptly following the receipt of such Net Proceeds stating that such proceeds shall be used to (1) repair, replace or restore any Property in respect of which such Net Proceeds were paid or (2) fund the acquisition of fixed or capital assets used or usable in the business of Borrower or any Subsidiary, in each case within 365 days following the date of the receipt of such Net Proceeds (it being understood that no such Officers’ Certificate shall be required in respect of recoveries for Motor Vehicles unless the Net Proceeds of all such recoveries in any Fiscal Year exceed $1.0 million); provided that if all or any portion of such Net Proceeds not so applied is not so used within such 365-day period, an amount equal to such remaining portion shall be applied on the last day of such period as specified in this Section 2.05(c)(iii); provided , further , if the Property subject to such Destruction or Taking constituted Collateral under the Security Documents, then any Property purchased, repaired or restored with the Net Proceeds thereof pursuant to this subsection shall be, or continue to be, mortgaged or pledged, as the case may be, to the Collateral Agent, for its benefit and for the benefit of the other Secured Parties in accordance with Section 5.11.

 

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(iv) If, for any Fiscal Year of Borrower commencing with its Fiscal Year ending on June 30, 2006, there shall be Excess Cash Flow for such Fiscal Year, an amount equal to 75% of such Excess Cash Flow shall be applied by Borrower, not later than 90 days after the end of such Fiscal Year, in accordance with Section 2.05(e); provided that any such amounts payable shall be reduced by an amount equal to the amount of any prepayment of Term Loans pursuant to Section 2.05(a) during such Fiscal Year or prior to the date of the payment required by this clause (iv) which has not been applied to the reduction of any prepayment pursuant to this proviso in any other Fiscal Year (and is not already reflected in Debt Service).

 

(v) If Parent shall receive Net Proceeds from any Equity Issuance, an amount equal to 50% of such Net Proceeds shall be applied within five (5) Business Days after receipt thereof in accordance with Section 2.05(e).

 

(d) The Term Loans shall be repaid in consecutive quarterly installments on the dates set forth below (each such day, an “ Installment Payment Date ”), in an aggregate amount equal to the amount specified below for each such Installment Payment Date.

 

 

(e) Prepayments of Loans pursuant to Section 2.05(a) shall be applied as elected by Borrower. Prepayments of Loans pursuant to Section 2.05(c) shall be applied, first , to installments of principal in respect of outstanding Term Loans due on Installment Payment Dates

 

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within 12 months of the date of such prepayment, in direct order of maturity; second , to the installments of principal in respect of the Term Loans under Section 2.05(d), pro rata , among the remaining Installment Payment Dates; third , to reduce the Revolving Credit Commitments ratably among the Revolving Lenders in accordance with their applicable Revolving Credit Commitments (and comply with Section 2.05(b) to the extent applicable); and fourth , to reduce the Total LC Facility Deposit in accordance with Section 2.11(d). Except as otherwise may be directed by Borrower, any prepayment of Loans pursuant to this Section 2.05 shall be applied, first , to any ABR Loans then outstanding and the balance of such prepayment, if any, to the Eurodollar Loans then outstanding.

 

(f) If on any day on which Loans would otherwise be required to be prepaid pursuant to this Section 2.05, but for the operation of this Section 2.05(f) (each, a “ Prepayment Date ”), the amount of such required prepayment exceeds the then outstanding aggregate principal amount of ABR Loans which are of the Type required to be prepaid (an “ Excess Amount ”), only the portion of the amount of such prepayment as is equal to the amount of such outstanding ABR Loans shall be immediately prepaid and, at the election of Borrower, the Excess Amount shall be either (A) deposited in the Collateral Account and applied to the prepayment of Eurodollar Loans on the last day of the then next-expiring Interest Period for Eurodollar Loans; provided that (i) interest in respect of such Excess Amount shall continue to accrue thereon at the rate provided hereunder for the Loans which such Excess Amount is intended to repay until such Excess Amount shall have been used in full to repay such Loans and (ii) at any time while a Default has occurred and is continuing, the Administrative Agent may, and upon written direction from the Requisite Lenders shall, apply any or all proceeds then on deposit to the payment of such Loans in an amount equal to such Excess Amount or (B) prepaid immediately, together with any amounts owing to the Lenders under Section 2.17.

 

SECTION 2.06. Letters of Credit .

 

(a) General . Subject to the terms and conditions set forth herein, Borrower may request the issuance of (and the applicable Issuing Bank or the LC Facility Issuing Bank shall issue) (i) LC Facility Letters of Credit, at any time and from time to time during the LC Facility Availability Period, and (ii) Revolving Letters of Credit, at any time and from time to time during the Revolving Credit Commitment Period, in each case for the account of Borrower or any other Loan Party, in a form reasonably acceptable to the Administrative Agent and the relevant Issuing Bank or the LC Facility Issuing Bank, as the case may be. For purposes hereof, a Letter of Credit shall at all times and from time to time be deemed to be an LC Facility Letter of Credit unless after giving effect to the issuance of such LC Facility Letter of Credit, the LC Facility LC Exposure would exceed the Total LC Facility Deposit. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by Borrower or any Subsidiary Loan Party to, or entered into by Borrower or any Subsidiary Loan Party with, an Issuing Bank or the LC Facility Issuing Bank, as applicable, relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

 

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions . To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), Borrower shall hand deliver or telecopy (or transmit by electronic

 

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communication, if arrangements for doing so have been approved by the applicable Issuing Bank or the LC Facility Issuing Bank, as applicable) to the applicable Issuing Bank or the LC Facility Issuing Bank, as applicable, and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with Section 2.06(c), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to issue, amend, renew or extend such Letter of Credit. If requested by the applicable Issuing Bank or the LC Facility Issuing Bank, as applicable, Borrower shall also submit a letter of credit application on such Issuing Bank’s or the LC Facility Issuing Bank’s standard form in connection with any request for a Letter of Credit. A Letter of Credit shall not be issued, amended, renewed or extended if (and upon issuance, amendment, renewal or extension of each Letter of Credit Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension, (x) with respect to Revolving Letters of Credit, (I) the total Revolving LC Exposure would exceed $10.0 million or (II) the total Revolving Credit Exposures would exceed the total Revolving Credit Commitments and (y) with respect to LC Facility Letters of Credit, the LC Facility LC Exposure would exceed the Total LC Facility Deposit. Upon the issuance of any Letter of Credit or amendment, renewal or extension of a Letter of Credit, the Issuing Bank or LC Facility Issuing Bank shall promptly notify the Administrative Agent, who shall promptly notify each Revolving Lender or LC Facility Lender thereof, as the case may be, which notice shall be accompanied by a copy of such Letter of Credit or amendment, renewal, extension or modification to a Letter of Credit and the amount of such Lender’s respective participation in such Letter of Credit pursuant to Section 2.06(d). On the first Business Day of each calendar month, each Issuing Bank and the LC Facility Issuing Bank shall provide to the Administrative Agent a report listing all outstanding Letters of Credit issued by it and the amounts and beneficiaries thereof and the Administrative Agent shall promptly provide such report to each Revolving Lender or LC Facility Lender, as applicable.

 

(c) Expiration Date . Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit or, in the case of any renewal or extension thereof, one year after such renewal or extension; provided , that if Borrower and the applicable Issuing Bank so agree, any Letter of Credit may provide for the automatic renewal of such Letter of Credit for successive one year terms (subject to clause (ii)) and (ii) (x) with respect to any Revolving Letter of Credit, the date that is five Business Days prior to the Revolving Credit Maturity Date and (y) with respect to any LC Facility Letter of Credit, the date that is five Business Days prior to the LC Facility Maturity Date.

 

(d) Participations .

 

(i) By the issuance of a Revolving Letter of Credit (or an amendment to a Revolving Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank issuing such Revolving Letter of Credit or the Lenders, each Issuing Bank hereby grants to each Revolving Lender, and each Revolving Lender hereby acquires from each Issuing Bank, a participation in each such Letter of Credit

 

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equal to such Lender’s Commitment Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the applicable Issuing Bank, such Revolving Lender’s Commitment Percentage of each Revolving LC Disbursement made by such Issuing Bank and not reimbursed by Borrower on the date due as provided in Section 2.06(e) or of any reimbursement payment required to be refunded to Borrower. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Revolving Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Revolving Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Revolving Credit Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.

 

(ii) By the issuance of an LC Facility Letter of Credit (or an amendment to an LC Facility Letter of Credit increasing the amount thereof), without any further action on the part of the LC Facility Issuing Bank or the LC Facility Lenders, the LC Facility Issuing Bank hereby grants to each LC Facility Lender, and each LC Facility Lender hereby acquires from the LC Facility Issuing Bank, a participation in each LC Facility Letter of Credit equal to such LC Facility Lender’s Commitment Percentage of the aggregate amount available to be drawn under such LC Facility Letter of Credit. The aggregate purchase price for the participations of each LC Facility Lender in LC Facility Letters of Credit shall equal the amount of the LC Facility Deposit of such LC Facility Lender. Each LC Facility Lender hereby absolutely and unconditionally agrees that if the LC Facility Issuing Bank makes an LC Facility LC Disbursement which is not reimbursed by Borrower on the date due as provided in Section 2.06(e), or is required to refund any reimbursement payment in respect of an LC Facility LC Disbursement to Borrower for any reason, the Administrative Agent shall reimburse the LC Facility Issuing Bank for the amount of such LC Facility LC Disbursement from the Credit-Linked Deposit Account in accordance with Section 2.06(e)(iii). Each LC Facility Lender acknowledges and agrees that its authorization granted hereby and obligations hereunder are unconditional and irrevocable and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any LC Facility Letter of Credit or the occurrence and continuance of a Default or the return of the LC Facility Deposits. Without limiting the foregoing, the LC Facility Lenders irrevocably authorize the Administrative Agent to apply the LC Facility Deposits as provided in this Section 2.06(d)(ii).

 

(e) Reimbursement .

 

(i) If an Issuing Bank or the LC Facility Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than the Business Day immediately following the day that Borrower receives notice that an LC Disbursement has been made; provided that, so long as no Default is continuing of which the Administrative Agent has been notified and subject to the availability of unused Revolving Credit Commitments, Borrower, each Issuing Bank, the

 

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Administrative Agent and the Lenders hereby agree that in the event an Issuing Bank makes any LC Disbursement under a Revolving Letter of Credit and Borrower shall not have reimbursed such amount pursuant to this Section 2.06(e)(i), such unreimbursed LC Disbursement and all obligations of Borrower relating thereto shall be satisfied when due and payable by the borrowing of one or more Revolving Loans that are ABR Loans, which Borrower hereby acknowledges are requested and the Lenders hereby agree to fund; provided , further , that prior to any such Revolving Loans being made, the Administrative Agent may, but shall not be required to, confirm with Borrower that the conditions set forth in Section 4.02 are met, and if Borrower does not confirm that such condition shall be met then the Administrative Agent shall be under no obligation to cause such Revolving Loans to be made.

 

(ii) If Borrower fails to make any payment due under Section 2.06(e)(i) with respect to a Revolving Letter of Credit when due, the Administrative Agent shall notify each Revolving Lender of the applicable Revolving LC Disbursement, the payment then due from Borrower in respect thereof and such Lender’s Commitment Percentage thereof. Promptly following receipt of such notice, each Revolving Lender shall pay to the Administrative Agent its Commitment Percentage of the payment then due from Borrower, in the same manner as provided in Section 2.02 with respect to Loans made by such Lender (and Section 2.02 shall apply, mutatis mutandis , to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank that has made the Revolving LC Disbursement the amounts so received by it from the Revolving Lenders. Promptly following receipt by the Administrative Agent of any payment from Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the applicable Issuing Bank or, to the extent that Revolving Lenders have made payments pursuant to this paragraph to reimburse such Issuing Bank, then to such Lenders and the applicable Issuing Bank as their interests may appear. Any payment made by a Revolving Lender pursuant to this paragraph to reimburse an Issuing Bank for any Revolving LC Disbursement (other than the funding of ABR Revolving Loans or Swingline Loans as contemplated above) shall not constitute a Loan and shall not relieve Borrower of its obligation to reimburse such LC Disbursement.

 

(iii) If Borrower fails to make any payment due under Section 2.06(d)(i) with respect to an LC Facility Letter of Credit (or if the LC Facility Issuing Bank would be required to make an LC Facility LC Disbursement and so requests), the Administrative Agent shall notify each LC Facility Lender of the applicable LC Facility LC Disbursement, the payment then due from Borrower in respect thereof and such Lender’s Commitment Percentage thereof, and the Administrative Agent shall promptly pay to the LC Facility Issuing Bank each LC Facility Lender’s Commitment Percentage of such LC Facility LC Disbursement from the LC Facility Deposits. Promptly following receipt by the Administrative Agent of any payment by Borrower in respect of any LC Facility LC Disbursement, the Administrative Agent shall distribute such payment to the LC Facility Issuing Bank or, to the extent payments have been made from the LC Facility Deposits, to the Credit-Linked Deposit Account to be added to the LC Facility Deposits of the LC Facility Lenders in accordance with their respective Commitment Percentages. Borrower acknowledges that each payment made pursuant to this Section 2.06(d)(iii) in respect of any LC Facility LC Disbursement is required to be made for the benefit of the distributees

 

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indicated in the immediately preceding sentence. Any payment made from the Credit-Linked Deposit Account, or from funds of the Administrative Agent, pursuant to this paragraph or Section 2.21(c) to pay the LC Facility Issuing Bank for any LC Facility LC Disbursement shall not constitute a Loan and shall not relieve Borrower of its obligation to reimburse such LC Disbursement.

 

(f) Obligations Absolute . Borrower’s obligation to reimburse LC Disbursements as provided in Section 2.06(e) shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by an Issuing Bank or the LC Facility Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit (except as otherwise provided below), or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section 2.06, constitute a legal or equitable discharge of, or provide a right of setoff against, Borrower’s obligations hereunder. Neither the Administrative Agent, the Lenders, the Issuing Banks nor the LC Facility Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the applicable Issuing Bank or the LC Facility Issuing Bank, as applicable; provided that the foregoing shall not be construed to excuse the Issuing Bank or the LC Facility Issuing Bank, as applicable from liability to Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by Borrower to the extent permitted by applicable law) suffered by Borrower that are caused by such Issuing Bank’s or such LC Facility Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of an Issuing Bank or the LC Facility Issuing Bank, as applicable (as finally determined by a court of competent jurisdiction), an Issuing Bank or the LC Facility Issuing Bank, as applicable, shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the applicable Issuing Bank or the LC Facility Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

 

(g) Disbursement Procedures . An Issuing Bank or the LC Facility Issuing Bank, as applicable, shall, promptly following its receipt thereof, subject to the terms of the applicable Letter of Credit, examine all documents purporting to represent a demand for payment

 

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under a Letter of Credit. An Issuing Bank or the LC Facility Issuing Bank as applicable, shall promptly notify the Administrative Agent and the Administrative Agent shall notify Borrower by telephone of such demand for payment and whether such Issuing Bank or such LC Facility Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve Borrower of its obligation to reimburse the applicable Issuing Bank or LC Facility Issuing Bank and the Revolving Lenders or LC Facility Lenders with respect to any such LC Disbursement.

 

(h) Interim Interest . If an Issuing Bank or the LC Facility Issuing Bank, as applicable, shall make any LC Disbursement, then, unless Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date Borrower (or any other account party) reimburses such LC Disbursement, at (1) in the case of a Revolving LC Disbursement, the rate per annum then applicable to ABR Revolving Loans and (2) in the case of an LC Facility LC Disbursement, the rate per annum that would be applicable to Eurodollar Term Loans with a one month Interest Period commencing on the date of such LC Disbursement; provided that, if Borrower fails to reimburse (or cause another account party to reimburse) such LC Disbursement when due pursuant to Section 2.06(e), then Section 2.08(c) shall apply. Interest accrued pursuant to this paragraph shall be for the account of the Issuing Bank making such LC Disbursement or the LC Facility Issuing Bank, as applicable, except that interest accrued on and after the date of payment by any Revolving Lender pursuant to Section 2.06(e)(ii) to reimburse an Issuing Bank or from the LC Facility Deposit of any LC Facility Lender pursuant to Section 2.06(e)(iii) to reimburse the LC Facility Issuing Bank, as applicable, shall be for the account of such Lender to the extent of such payment.

 

(i) Replacement of Issuing Banks and the LC Facility Issuing Bank .

 

(i) An Issuing Bank may be replaced at any time by written agreement among Borrower, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent shall notify the Revolving Lenders of any such replacement of an Issuing Bank. At the time any such replacement shall become effective, Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.10(b). From and after the Closing Date of any such replacement, (1) the successor Issuing Bank shall have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (2) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.

 

(ii) The LC Facility Issuing Bank may be replaced at any time by written agreement among Borrower, the Administrative Agent, the replaced LC Facility Issuing Bank and the successor LC Facility Issuing Bank. The Administrative Agent shall notify the LC Facility Lenders of any such replacement of the LC Facility Issuing Bank. At the

 

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time any such replacement shall become effective, Borrower shall pay all unpaid fees accrued for the account of the replaced LC Facility Issuing Bank pursuant to Section 2.10(c). From and after the Closing Date of any such replacement, (1) the successor LC Facility Issuing Bank shall have all the rights and obligations of the LC Facility Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (2) references herein to the term “LC Facility Issuing Bank” shall be deemed to refer to such successor or to any previous LC Facility Issuing Bank, or to such successor and all previous LC Facility Issuing Banks, as the context shall require. After the replacement of the LC Facility Issuing Bank hereunder, the replaced LC Facility Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of the LC Facility Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.

 

(j) Cash Collateralization . If any Event of Default shall occur and be continuing, on the Business Day that Borrower receives notice from the Administrative Agent or the Requisite Lenders (or, if the maturity of the Loans has been accelerated, LC Facility Lenders with LC Facility LC Exposure representing greater than 50% of the total LC Facility LC Exposure and/or Revolving Lenders with Revolving LC Exposure representing greater than 50% of the total Revolving LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, Borrower shall deposit in an account which shall by established at such time by the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders, an amount in cash equal to the LC Facility LC Exposure and/or the Revolving LC Exposure, as applicable, as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to Borrower described in Section 7.01(i). Each such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of Borrower under this Agreement and shall be invested in Permitted Investments selected by the Administrative Agent in its sole discretion (it being understood that the Administrative Agent shall in no event be liable for the selection of such Permitted Investments or for investment losses with respect thereto, including losses incurred as a result of the liquidation of such Permitted Investments prior to stated maturity). The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Other than any interest earned on the investment of such deposits, which investments shall be made at Borrower’s risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank or the LC Facility Issuing Bank, as applicable, for LC Disbursements for which they have not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of Borrower for the LC Facility LC Exposure and/or Revolving LC Exposure, as applicable, at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of LC Facility Lenders representing greater than 50% of the LC Facility LC Exposure and/or Revolving Lenders with Revolving LC Exposure representing greater than 50% of the Revolving LC Exposure), be applied to satisfy other obligations of Borrower under this Agreement. If Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to Borrower within three Business Days after all Events of Default have been cured or waived. If Borrower is required to provide an amount of cash collateral

 

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hereunder pursuant to Section 2.05(b), such amount (to the extent not applied as aforesaid) shall be returned to Borrower as and to the extent that, after giving effect to such return, Borrower would remain in compliance with Section 2.05(b) and no Default shall have occurred and be continuing.

 

(k) Assignment . The parties acknowledge and agree that (a) Citibank, N.A., as Issuing Bank, may, without the consent of any party hereto, assign to an Affiliate all right, title and interest of Citibank, N.A. (the “ Affiliate Assigned Rights ”) in, to and under any and all obligations of Borrower under Section 2.06(e) to reimburse the Issuing Bank for Revolving LC Disbursements (the “ Reimbursement Obligations ”), (b) in respect of all such Reimbursement Obligations constituting Affiliate Assigned Rights, for all purposes of this Agreement such Affiliate shall be deemed the “Issuing Bank”, (c) the obligations of the Revolving Lenders and Borrower to Citibank, N.A. shall, in the case of the Affiliate Assigned Rights, inure to the benefit of the Affiliate acquiring or having acquired such Affiliate Assigned Rights and be enforceable by such Affiliate and/or by the Issuing Bank on behalf of such Affiliate and (d) all payments made by Borrower and/or any Revolving Lender to such Affiliate acquiring or having acquired such Affiliate Assigned Rights shall discharge all such obligations otherwise owing to Citibank, N.A. as Issuing Bank, to the extent so paid. The foregoing shall not otherwise affect the rights and obligations of Citibank N.A., as Issuing Bank hereunder.

 

SECTION 2.07. Repayment of Loans; Evidence of Debt .

 

(a) Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of the relevant Lenders (i) on the Revolving Credit Maturity Date (or such earlier date as, and to the extent that, such Revolving Loan becomes due and payable pursuant to Section 2.05 or Article VII), the unpaid principal amount of, and all other amounts outstanding under, each Revolving Loan and each Swingline Loan made to it by each such Lender and (ii) on the Term Loan Maturity Date (or such earlier date as, and to the extent that, such Term Loan becomes due and payable pursuant to Section 2.05 or Article VII), the unpaid principal amount of each Term Loan held by each such Lender. Borrower hereby further agrees to pay interest in immediately available funds at the applicable office of the Administrative Agent (as specified in Section 2.13(a)) on the unpaid principal amount of the Revolving Loans, Swingline Loans and Term Loans made to it from time to time from the date hereof until payment in full thereof at the rates per annum , and on the dates, set forth in Section 2.08.

 

(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of Borrower to the appropriate lending office of such Lender resulting from each Loan made by such lending office of such Lender from time to time, including the amounts of principal and interest payable and paid to such lending office of such Lender from time to time under this Agreement.

 

(c) The Administrative Agent shall maintain the Register pursuant to Section 9.04, and a subaccount for each Lender, in which Register and subaccounts (taken together) shall be recorded (i) the amount of each LC Facility Participation and Loan, and the Class and Type of each such Loan and the Interest Period applicable thereto, (ii) the amount of LC Facility LC Fees and amounts payable pursuant to Section 2.21(b) in respect of each such LC Facility Participation and any principal or interest due and payable or to become due and payable, and the

 

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amounts of any principal or interest paid, from Borrower to each Lender hereunder in respect of each such Loan and (iii) the amount of any reductions to the Total LC Facility Deposit and the reduction in the amount of LC Facility Participation of each LC Facility Lender as a result thereof and the amount of any sum received by the Administrative Agent hereunder from Borrower in respect of Loan and each Lender’s share thereof.

 

(d) The entries made in the Register and accounts maintained pursuant to paragraphs (b) and (c) of this Section 2.07 and the Notes maintained pursuant to paragraph (e) of this Section 2.07 shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of Borrower therein recorded; provided , however , that the failure of any Lender or the Administrative Agent to maintain such account, such Register or such subaccount, as applicable, or any error therein, shall not in any manner affect the obligation of Borrower to repay (with applicable interest) the Loans made to Borrower by such Lender in accordance with the terms of this Agreement.

 

(e) The Loans of each Class made by each Lender to Borrower shall, if requested by the applicable Lender (which request shall be made to the Administrative Agent), be evidenced by a single Note duly executed on behalf of Borrower, in substantially the form attached hereto as Exhibit E-1, E-2 or E-3 , as applicable, with the blanks appropriately filled, payable to the order of such Lender.

 

SECTION 2.08. Interest Rates and Payment Dates .

 

(a) Each Eurodollar Loan shall bear interest (computed on the basis of the actual number of days elapsed over a year of 360 days) for each day during each Interest Period with respect thereto at a rate per annum equal to (A) the Adjusted LIBO Rate determined for such Interest Period, plus (B) the Applicable Margin.

 

(b) Each ABR Loan (including each Swingline Loan) shall bear interest (computed on the basis of the actual number of days elapsed over a year of 365 or 366 days, as the case may be, or over a year of 360 days when the Alternate Base Rate is determined by reference to clause (c) of the definition of “Alternate Base Rate”) at a rate per annum equal to the Alternate Base Rate plus the Applicable Margin.

 

(c) Notwithstanding the foregoing, during an Event of Default, all Obligations shall, to the extent permitted by applicable law, bear interest, after as well as before judgment, at a per annum rate equal to (i) in the case of principal of or interest on any Loan, 200 basis points plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section 2.08, (ii) in the case of any LC Disbursement not reimbursed on the Business Day following the day Borrower receives notice that the LC Disbursement was made, 200 basis points plus the rate otherwise applicable to such LC Disbursement as provided in Section 2.06(i) or (iii) in the case of any other amount, 200 basis points plus the rate applicable to ABR Loans as provided in Section 2.08(b), in each case from the date of such nonpayment to (but excluding) the date on which such amount is paid in full.

 

(d) Interest shall be payable in arrears on each Interest Payment Date; provided that (i) interest accrued pursuant to Section 2.08(c) shall be payable on demand, (ii) in the

 

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event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan or repayment or prepayment of a Swingline Loan), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the date of such conversion. Interest in respect of each Loan shall accrue from and including the first day of an Interest Period to but excluding the last day of such Interest Period.

 

SECTION 2.09. Computation of Interest . Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on Borrower and the Lenders in the absence of manifest error.

 

SECTION 2.10. Fees .

 

(a) Borrower agrees to pay a commitment fee (a “ Commitment Fee ”) to each Revolving Lender, for which payment will be made in arrears through the Administrative Agent on the last Business Day of March, June, September and December, commencing on the first such date to occur after the Closing Date. The Commitment Fee shall accrue commencing on the Closing Date and shall cease to accrue on the date that the Revolving Credit Commitments shall be terminated as provided herein. The Commitment Fee accrued to each Revolving Lender shall equal the Commitment Fee Percentage multiplied by such Lender’s Commitment Fee Average Daily Amount (as defined below) for the applicable period. A Revolving Lender’s “ Commitment Fee Average Daily Amount ” with respect to a calculation period shall equal the average daily amount during such period calculated using the daily amount of such Revolving Lender’s Revolving Credit Commitment less such Revolving Lender’s Revolving Credit Exposure (excluding clause (c) of the definition thereof for purposes of determining the Commitment Fee Average Daily Amount only) for any applicable days during such Revolving Lender’s Revolving Credit Commitment Period. The Commitment Fee shall also be payable on each date of termination or reduction of the Revolving Credit Commitments on the amount of the Revolving Credit Commitments so terminated or reduced accrued to the date of such termination or reduction. All Commitment Fees shall be computed on the basis of the actual number of days elapsed in a year of 360 days.

 

(b) Borrower agrees to pay (i) to the Administrative Agent for the account of each Revolving Lender a participation fee with respect to its participations in Revolving Letters of Credit, which shall accrue at a per annum rate equal to the Applicable Margin for Revolving Loans accruing interest at the Adjusted LIBO Rate on the average daily amount of such Lender’s Revolving LC Exposure (excluding any portion thereof attributable to unreimbursed Revolving LC Disbursements) during the period from and including the Closing Date to but excluding the later of the date on which such Revolving Lender’s Revolving Credit Commitment terminates and the date on which such Revolving Lender ceases to have any Revolving LC Exposure, and (ii) to each Issuing Bank a fronting fee, which shall accrue at the rate of 0.25% per annum on the average daily amount of the Revolving LC Exposure or such lesser amount as shall be agreed to by the Issuing Bank (excluding any portion thereof attributable to unreimbursed Revolving LC Disbursements, which shall accrue interest pursuant to Section 2.06(j)) resulting from Letters of Credit issued by such Issuing Bank during the period from and including the Closing Date to but excluding the later of the date of termination of the Revolving Credit Commitments and the date

 

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on which there ceases to be any Revolving LC Exposure, as well as such Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Revolving Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees under this paragraph (collectively, “ Revolving LC Fees ”) accrued through and including the last day of March, June, September and December of each calendar year during the Revolving Credit Commitment Period shall be payable on the third Business Day following such last day, commencing on the first such date to occur after the Closing Date; provided that all such fees shall be payable on the date on which the Revolving Credit Commitments terminate and any such fees accruing after the date on which the Revolving Credit Commitments terminate shall be payable on demand. Any other fees payable to an Issuing Bank pursuant to this paragraph shall be payable within 10 days after demand therefor. All Revolving LC Fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

 

(c) Borrower agrees to pay (i) in addition to the fees payable to the LC Facility Lenders pursuant to Section 2.21(b), to the Administrative Agent for the ratable account of the LC Facility Lenders a participation fee accruing at a per annum rate equal to the Applicable Margin for LC Facility Deposits on the average daily amount of the Total LC Facility Deposit during the period from and including the Closing Date to but excluding the date on which the LC Facility Deposits are returned to the LC Facility Lenders, and (ii) to the LC Facility Issuing Bank a fronting fee, which shall accrue at the rate of 0.125% per annum on the average daily amount of the LC Facility LC Exposure or such lesser amount as shall be agreed to by the LC Facility Issuing Bank (excluding any portion thereof attributable to unreimbursed LC Facility LC Disbursements, which shall accrue interest pursuant to Section 2.06(j)) resulting from Letters of Credit issued by the LC Facility Issuing Bank during the period from and including the Closing Date to but excluding the later of the last day of the LC Facility Availability Period and the date on which there ceases to be any LC Facility LC Exposure, as well as the LC Facility Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees under this paragraph (collectively, the “ LC Facility LC Fees ”) accrued through and including the last day of March, June, September and December of each calendar year shall be payable on the third Business Day following such last day, commencing on the first such date to occur after the Closing Date; provided that all such fees shall be payable on the date on which the LC Facility Deposits are returned to the LC Facility Lenders and any such fees accruing after the date on which the LC Facility Deposits are returned to the LC Facility Lenders shall be payable on demand. Any other fees payable to the LC Facility Issuing Bank pursuant to this paragraph shall be payable within 10 days after demand. All LC Facility LC Fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

 

(d) Borrower agrees to pay to the Administrative Agent the administrative fee set forth in the Fee Letter (the “ Agent Fees ”).

 

(e) All Fees shall be paid on the dates due, in immediately available funds, to the Administrative Agent for distribution. Once paid, none of the Fees shall be refundable (unless there was an error in the computation thereof).

 

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SECTION 2.11. Termination or Reduction of Commitments or LC Facility Deposits .

 

(a) Unless previously terminated, the Term Commitments shall terminate on the Closing Date after the Term Loans are made on such date.

 

(b) Unless previously terminated, the Revolving Credit Commitments shall terminate on the Revolving Credit Maturity Date. Borrower shall have the right, upon one Business Day’s notice to the Administrative Agent, to terminate or, from time to time, reduce the amount of the Revol