CREDIT AGREEMENT

Exhibit 4.1

 

EXECUTION VERSION

 

 

$75,000,000

 

CREDIT AGREEMENT

 

among

 

AMEDISYS, INC.,

as Borrower,

 

THE MATERIAL DOMESTIC SUBSIDIARIES

OF THE BORROWER

FROM TIME TO TIME PARTIES HERETO,

as Guarantors,

 

THE LENDERS FROM TIME TO TIME PARTIES HERETO,

 

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent

 

and

 

GENERAL ELECTRIC CAPITAL CORPORATION,

as Syndication Agent

 

Dated as of July 11, 2005

 

WACHOVIA CAPITAL MARKETS, LLC,

as Co-Lead Arranger and Sole Book Runner

 

and

 

GECC CAPITAL MARKETS GROUP, INC.,

as Co-Lead Arranger

 

TABLE OF CONTENTS

 

 

i

 

ii

 

iii

 

iv

Schedules

 

 

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This CREDIT AGREEMENT , dated as of July 11, 2005, is by and among AMEDISYS, INC., a Delaware corporation (the “ Borrower ”), those Material Domestic Subsidiaries of the Borrower identified as a “Guarantor” on the signature pages hereto and such other Material Domestic Subsidiaries of the Borrower as may from time to time become a party hereto (each a “ Guarantor ” and, collectively, the “ Guarantors ”), the several banks and other financial institutions as are, or may from time to time become, parties to this Agreement (each a “ Lender ” and, collectively, the “ Lenders ”), and WACHOVIA BANK, NATIONAL ASSOCIATION , a national banking association, as administrative agent for the Lenders hereunder (in such capacity, the “ Administrative Agent ”).

 

W I T N E S S E T H :

 

WHEREAS , the Borrower has requested that the Lenders make loans and other financial accommodations to the Borrower in the amount of up to $75,000,000, as more particularly described herein; and

 

WHEREAS , the Lenders have agreed to make such loans and other financial accommodations to the Borrower on the terms and conditions contained herein.

 

NOW, THEREFORE , in consideration of the premises and the mutual covenants contained herein, the parties hereto hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1 Defined Terms .

 

As used in this Agreement, terms defined in the preamble to this Agreement have the meanings therein indicated, and the following terms have the following meanings:

 

“ ABR Default Rate ” shall mean the Alternate Base Rate plus the Applicable Percentage with respect to Alternate Base Rate Loans plus 2%.

 

“ Accessible Borrowing Availability ” means, as of any date of determination, the amount that the Borrower is able to borrow on such date under the Revolving Committed Amount without a Default or Event of Default occurring or existing after giving pro forma effect to such borrowing.

 

“ Account Designation Letter ” shall mean the Account Designation Letter dated as of the Closing Date from the Borrower to the Administrative Agent substantially in the form attached hereto as Schedule 1.1-1 .

 

“ Acquired Company ” shall mean HMR Acquisition, Inc., a Delaware corporation.

“ Acquisition ” shall mean the purchase of the outstanding Capital Stock of the Acquired Company by the Borrower.

 

“ Acquisition Documents ” shall mean (a) that certain Stock Purchase Agreement dated as of June 30, 2005 by and among the Borrower, as the purchaser, the Acquired Company, and the holders of all options and warrants to purchase common stock of the Acquired Company, as the sellers, and (b) any other material agreement, document or instrument executed in connection with the foregoing, in each case as amended, modified or supplemented from time to time.

 

“ Additional Credit Party ” shall mean each Person that becomes a Guarantor by execution of a Joinder Agreement in accordance with Section 5.10.

 

“ Administrative Agent ” shall have the meaning set forth in the first paragraph of this Agreement and shall include any successors in such capacity.

 

“ Affiliate ” shall mean as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, a Person shall be deemed to be “controlled by” a Person if such Person possesses, directly or indirectly, power either (a) to vote 10% or more of the Capital Stock having ordinary voting power for the election of directors of such Person or (b) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

 

“ Agreement ” or “ Credit Agreement ” shall mean this Credit Agreement, as amended, modified, restated, amended and restated, extended, replaced, increased or supplemented from time to time in accordance with its terms.

 

“ Aircraft Security Agreement ” shall mean the Aircraft Security Agreement dated as of the Closing Date executed by the Borrower in favor of the Administrative Agent, as amended, modified or supplemented from time to time in accordance with its terms.

 

“ Alternate Base Rate ” shall mean, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof: “ Prime Rate ” shall mean, at any time, the rate of interest per annum publicly announced from time to time by Wachovia at its principal office in Charlotte, North Carolina as its prime rate. Each change in the Prime Rate shall be effective as of the opening of business on the day such change in the Prime Rate occurs. The parties hereto acknowledge that the rate announced publicly by Wachovia as its Prime Rate is an index or base rate and shall not necessarily be its lowest or best rate charged to its customers or other banks; and “ Federal Funds Effective Rate ” shall mean, for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published on the next succeeding Business Day, 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. If for any reason the Administrative Agent shall have determined (which determination shall be conclusive in the

 

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absence of manifest error) that it is unable to ascertain the Federal Funds Effective Rate, for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms thereof, the Alternate Base Rate shall be determined without regard to clause (b) of the first sentence of this definition, as appropriate, until the circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the opening of business on the date of such change.

 

“ Alternate Base Rate Loans ” shall mean Loans that bear interest at an interest rate based on the Alternate Base Rate.

 

“ Applicable Percentage ” shall mean, for any day, the rate per annum set forth below opposite the applicable Level then in effect (based on the Borrower’s Leverage Ratio), it being understood that the Applicable Percentage for (i) Alternate Base Rate Loans shall be the percentage set forth under the column “Alternate Base Rate Margin”, (ii) LIBOR Rate Loans shall be the percentage set forth under the column “LIBOR Rate Margin and Letter of Credit Fee”, (iii) the Letter of Credit Fee shall be the percentage set forth under the column “LIBOR Rate Margin and Letter of Credit Fee”, and (iv) the Commitment Fee shall be the percentage set forth under the column “Commitment Fee”:

 

 

The Applicable Percentage shall, in each case, be determined and adjusted quarterly on the date five (5) Business Days after the date on which Administrative Agent has received from the Borrower the quarterly financial information and certifications required to be delivered to Administrative Agent and Lenders in accordance with the provisions of Sections 5.1(a), 5.1(b) and 5.2(b) (each an “ Interest Determination Date ”). Subject to the last sentence of this definition, such Applicable Percentage shall be effective from an Interest Determination Date until the next Interest Determination Date. Notwithstanding the foregoing, the initial Applicable Percentages shall be set at Level II until the first Interest Determination Date occurring after September 30, 2005. If Borrower shall fail to provide the quarterly financial information and certifications in accordance with the provisions of Sections 5.1(a) and 5.1(b), the Applicable Percentage shall, on the date five (5) Business Days after the date by which Borrower was so required to provide such financial information and certifications to Administrative Agent and Lenders, be based on Level III until such time as such information and certifications are provided, whereupon the Level shall be determined by the then current Leverage Ratio.

 

“ Approved Fund ” shall mean, with respect to any Lender, any fund or trust or entity that invests in commercial bank loans in the ordinary course of business and is advised or managed

 

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by (i) such Lender, (ii) an Affiliate of such Lender, (iii) any other Lender or any Affiliate thereof or (iv) the same investment advisor as any Person described in clauses (i) – (iii).

 

“ Arranger ” shall mean Wachovia Capital Markets, LLC, as Sole Lead Arranger and Sole Book Runner, together with its successors and/or assigns.

 

“ Asset Disposition ” shall mean the disposition of any or all of the assets (including, without limitation, the Capital Stock of a Subsidiary or any ownership interest in a joint venture) of any Credit Party or any Subsidiary whether by sale, lease, transfer or otherwise, in a single transaction or in a series of transactions. The term “Asset Disposition” shall not include (i) the sale, lease, transfer or other disposition of assets permitted by Section 6.4(a)(i), (ii), (iii)(A), (iv) or (v) hereof or (ii) any Equity Issuance.

 

“ Bankruptcy Code ” shall mean the Bankruptcy Code in Title 11 of the United States Code, as amended, modified, succeeded or replaced from time to time.

 

“ Bankruptcy Event ” shall mean the occurrence of an Event of Default under Section 7.1(f).

 

“ Borrower ” shall have the meaning set forth in the first paragraph of this Agreement.

 

“ Borrowing Date ” shall mean, in respect of any Loan, the date such Loan is made.

 

“ Business ” shall have the meaning set forth in Section 3.10.

 

“ Business Day ” shall mean a day other than a Saturday, Sunday or other day on which commercial banks in Charlotte, North Carolina or New York, New York are authorized or required by law to close; provided , however , that when used in connection with a rate determination, borrowing or payment in respect of a LIBOR Rate Loan, the term “Business Day” shall also exclude any day on which banks in London, England are not open for dealings in Dollar deposits in the London interbank market.

 

“ Capital Lease ” shall mean any lease of property, real or personal, the obligations with respect to which are required to be capitalized on a balance sheet of the lessee in accordance with GAAP.

 

“ Capital Lease Obligations ” shall mean the capitalized lease obligations relating to a Capital Lease determined in accordance with GAAP.

 

“ Capital Stock ” shall mean (i) in the case of a corporation, capital stock, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, (iii) in the case of a partnership, partnership interests (whether general or limited), (iv) in the case of a limited liability company, membership interests and (v) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

 

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“ Carry Over Amount ” shall have the meaning set forth in Section 5.9(c).

 

“ Cash Equivalents ” shall mean (i) securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) having maturities of not more than twelve months from the date of acquisition (“ Government Obligations ”), (ii) Dollar denominated (or foreign currency fully hedged) time deposits, certificates of deposit, Eurodollar time deposits and Eurodollar certificates of deposit of (y) any domestic commercial bank of recognized standing having capital and surplus in excess of $250,000,000 or (z) any bank whose short-term commercial paper rating from S&P is at least A-1 or the equivalent thereof or from Moody’s is at least P-1 or the equivalent thereof (any such bank being an “ Approved Bank ”), in each case with maturities of not more than 364 days from the date of acquisition, (iii) commercial paper and variable or fixed rate notes issued by any Approved Bank (or by the parent company thereof) or any variable rate notes issued by, or guaranteed by any domestic corporation rated A-1 (or the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or better by Moody’s and maturing within six months of the date of acquisition, (iv) repurchase agreements with a bank or trust company (including a Lender) or a recognized securities dealer having capital and surplus in excess of $500,000,000 for direct obligations issued by or fully guaranteed by the United States of America, (v) obligations of any state of the United States or any political subdivision thereof for the payment of the principal and redemption price of and interest on which there shall have been irrevocably deposited Government Obligations maturing as to principal and interest at times and in amounts sufficient to provide such payment, and (vi) auction preferred stock rated in the highest short-term credit rating category by S&P or Moody’s.

 

“ CHAMPUS ” shall mean the United States Department of Defense Civilian Health and Medical Program of the United States or any successor thereto, including without limitation, TRICARE.

 

“ Change of Control ” shall mean the occurrence of any of the following: (a) any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rule l3d-3 under the Securities Exchange Act of 1934) of more than 30% of then outstanding Voting Stock of the Borrower, measured by voting power rather than the number of shares; (b) Continuing Directors shall cease for any reason to constitute a majority of the members of the board of directors of the Borrower then in office; or (c) the occurrence of a “Change of Control” (or any comparable term) under, and as defined in, the documents evidencing or governing any Subordinated Indebtedness.

 

“ CIA ” shall mean the Corporate Integrity Agreement among the Borrower, Amedisys Specialized Medical Services, Inc. and the OIG, dated August 11, 2003, as in effect from time to time.

 

“ Closing Date ” shall mean the date of this Agreement.

 

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“ CMS ” shall mean the Centers for Medicare and Medicaid Services and any successor thereto or predecessor thereof, including without limitation the United States Health Care Financing Administration.

 

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

 

“ Collateral ” shall mean a collective reference to the collateral which is identified in, and at any time will be covered by, the Security Documents and any other collateral that may from time to time secure the Credit Party Obligations.

 

“ Commitment ” shall mean the Revolving Commitment, the LOC Commitment, the Term Loan Commitment and the Swingline Commitment, individually or collectively, as appropriate.

 

“ Commitment Fee ” shall have the meaning set forth in Section 2.6(a).

 

“ Commitment Percentage ” shall mean the Revolving Commitment Percentage and/or the Term Loan Commitment Percentage, as appropriate.

 

“ Commitment Period ” shall mean (a) with respect to Revolving Loans, the period from and including the Closing Date to but excluding the Revolving Commitment Termination Date and (b) with respect to Letters of Credit, the period from and including the Closing Date to but excluding the date that is thirty days prior to the Revolving Commitment Termination Date.

 

“ Commitment Transfer Supplement ” shall mean a Commitment Transfer Supplement, substantially in the form of Schedule 9.6(c) .

 

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

 

“ Consolidated Capital Expenditures ” shall mean, for any period, all capital expenditures of the Borrower and its Subsidiaries on a consolidated basis for such period, as determined in accordance with GAAP; provided that the following shall not be considered Consolidated Capital Expenditures for purposes of this Credit Agreement: (i) capital expenditures made by the Borrower in connection with its purchase of 2002 Cessna 525 CJ1, bearing United States Aircraft Registration Number N111GJ and Senior Number 525-0500, on January 21, 2005 for the amount of $3,500,000, (ii) capital expenditures made by the Borrower or one of its Subsidiaries during the second fiscal quarter of 2005 in connection with its purchase of the land located at its headquarters in Baton Rouge, Louisiana (the “ Headquarters ”) for the amount of $4,300,000 and (iii) capital expenditures made by the Borrower and its Subsidiaries prior to December 31, 2006 with respect to the upfit of the buildings and other improvements located at the Headquarters (except for capital expenditures consisting of ordinary course maintenance and improvements to the Headquarters) in an aggregate amount up to $7,500,000.

 

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“ Consolidated EBITDA ” shall mean, for any period, the sum of (i) Consolidated Net Income for such period, plus (ii) an amount which, in the determination of Consolidated Net Income for such period, has been deducted for (A) Consolidated Interest Expense, (B) total federal, state, local and foreign income, value added and similar taxes, (C) noncash charges (including depreciation and amortization expense), (D) amortized debt discount and (E) grants of Capital Stock to members of management of the Borrower and its Subsidiaries, all as determined in accordance with GAAP, minus (iii) an amount which, in the determination of Consolidated Net Income for such period, has been added for (A) cash charges related to noncash charges deducted from Consolidated Net Income in determining Consolidated EBITDA for a prior period, (B) income tax credits, (C) any aggregate net gain (but not any aggregate net loss) arising from the sale, exchange or other disposition of capital assets by the Borrower or any of its Subsidiaries (including any fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets and all securities) and (D) any other cash gains that have been added in determining Consolidated Net Income for such period, all as determined in accordance with GAAP, plus (iv) Pro Forma Acquisition EBITDA; provided that, for purposes of determining Consolidated EBITDA for any period prior to the Closing Date, Consolidated EBITDA of the Acquired Company and its Subsidiaries for such period shall be the amount set forth on Schedule 1.1-4 .

 

“ Consolidated Interest Expense ” shall mean, for any period, all interest expense of the Borrower and its Subsidiaries (including, without limitation, the interest component under Capital Leases and any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product, but excluding interest income), as determined in accordance with GAAP.

 

“ Consolidated Net Income ” shall mean, for any period, net income after taxes for such period of the Borrower and its Subsidiaries on a consolidated basis (excluding (a) extraordinary items, (b) the income (or deficit) of any other Person (other than a Subsidiary) in which the Borrower or any of its Subsidiaries has an ownership interest, except to the extent any such income has actually been received by the Borrower or any of its Subsidiaries in the form of cash dividends or distributions and (c) any write-up of an asset), as determined in accordance with GAAP.

 

“ Consolidated Rent Expense ” shall mean, for any period, all cash rent expense under Operating Leases of the Borrower and its Subsidiaries on a consolidated basis for such period other than cash rent expense attributable to a Permitted Acquisition consummated during the one year period preceding the date of determination.

 

“ Consolidated Working Capital ” shall mean, for any period, (i) all current assets of the Borrower and its Subsidiaries on a consolidated basis minus (ii) all current liabilities of the Borrower and its Subsidiaries on a consolidated basis, as determined in accordance with GAAP.

 

“ Continuing Directors ” shall mean, during any period of up to twenty four consecutive months commencing after the Closing Date, individuals who at the beginning of such twenty four month period were directors of the Borrower (together with any new director whose election by the Borrower’s board of directors or whose nomination for election by the Borrower’s

 

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shareholders was approved by a vote of at least a majority of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved).

 

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

 

“ Copyright Licenses ” shall mean any written agreement naming any Credit Party as licensor and granting any right under any Copyright including, without limitation, any thereof referred to in Schedule 3.16 .

 

“ Copyrights ” shall mean (a) all copyrights of the Credit Parties and their Subsidiaries in all Works, now existing or hereafter created or acquired, all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, registrations, recordings and applications in the United States Copyright Office or in any similar office or agency of the United States, any state thereof or any other country or any political subdivision thereof, or otherwise including, without limitation, any thereof referred to in Schedule 3.16 , and (b) all renewals thereof including, without limitation, any thereof referred to in Schedule 3.16 .

 

“ Credit Documents ” shall mean this Agreement, each of the Notes, any Joinder Agreement, the LOC Documents and the Security Documents.

 

“ Credit Party ” shall mean any of the Borrower or the Guarantors.

 

“ Credit Party Obligations ” shall mean, without duplication, (a) all of the obligations, indebtedness and liabilities of the Credit Parties to the Lenders (including the Issuing Lender) and the Administrative Agent, whenever arising, under this Credit Agreement, the Notes or any of the other Credit Documents (including principal, interest, fees, reimbursements and indemnification obligations and other amounts and any interest accruing after the occurrence of a filing of a petition of bankruptcy under the Bankruptcy Code with respect to any Credit Party, regardless of whether such interest is an allowed claim under the Bankruptcy Code) and (b) solely for purposes of the Security Documents and the Guaranty, all liabilities and obligations, whenever arising, owing from any Credit Party or any of their Subsidiaries to any Hedging Agreement Provider arising under any Secured Hedging Agreement.

 

“ Debt Issuance ” shall mean the issuance of any Indebtedness for borrowed money by any Credit Party or any of its Subsidiaries (excluding, for purposes hereof, any Equity Issuance or any Indebtedness of any Credit Party and its Subsidiaries permitted to be incurred pursuant to Sections 6.1 hereof).

 

“ Default ” shall mean any event which would constitute an Event of Default, whether or not any requirement for the giving of notice or the lapse of time, or both, or any other condition with respect to such Event of Default, has been satisfied.

 

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“ Defaulting Lender ” shall mean, at any time, any Lender that, at such time (a) has failed to make a Loan required pursuant to the terms of this Credit Agreement, including the funding of a Participation Interest in accordance with the terms hereof, (b) has failed to pay to the Administrative Agent or any Lender an amount owed by such Lender pursuant to the terms of this Credit Agreement, or (c) has been deemed insolvent or has become subject to a bankruptcy or insolvency proceeding or to a receiver, trustee or similar official.

 

“ Dollars ” and “ $ ” shall mean dollars in lawful currency of the United States of America.

 

“ Domestic Lending Office ” shall mean, initially, the office of each Lender designated as such Lender’s Domestic Lending Office shown on Schedule 9.2 ; and thereafter, such other office of such Lender as such Lender may from time to time specify to the Administrative Agent and the Borrower as the office of such Lender at which Alternate Base Rate Loans of such Lender are to be made.

 

“ Domestic Subsidiary ” shall mean any Subsidiary that is organized and existing under the laws of the United States or any state or commonwealth thereof or under the laws of the District of Columbia.

 

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

 

“ Equity Issuance ” shall mean any issuance by any Credit Party or any Subsidiary to any Person which is not a Credit Party of (a) shares or interests of its Capital Stock, (b) any shares or interests of its Capital Stock pursuant to the exercise of options or warrants or other similar rights, (c) any shares or interests of its Capital Stock pursuant to the conversion of any debt securities to equity or (d) warrants or options or other similar rights which are exercisable for or convertible into shares or interests of its Capital Stock. The term “Equity Issuance” shall not include (i) any Asset Disposition, (ii) any Debt Issuance, (iii) any equity issuance to officers or employees of any Credit Party, or (iv) any equity issued as consideration for a Permitted Acquisition or any other acquisition consented to by the Required Lenders.

 

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

 

“ Eurodollar Reserve Percentage ” shall mean for any day, the percentage (expressed as a decimal and rounded upwards, if necessary, to the next higher 1/100th of 1%) which is in effect for such day as prescribed by the Federal Reserve Board (or any successor) for determining the maximum reserve requirement (including without limitation any basic, supplemental or emergency reserves) in respect of Eurocurrency liabilities, as defined in Regulation D of such Board as in effect from time to time, or any similar category of liabilities for a member bank of the Federal Reserve System in New York City.

 

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“ Event of Default ” shall mean any of the events specified in Section 7.1; provided , however , with respect to any such event, that any requirement for the giving of notice or the lapse of time, or both, or any other condition with respect thereto, has been satisfied.

 

“ Excess Cash Flow ” shall mean, with respect to any fiscal year of the Borrower, for the Borrower and its Subsidiaries on a consolidated basis, an amount equal to (a) Consolidated EBITDA for such period minus (b) Consolidated Capital Expenditures for such period minus (c) Scheduled Funded Debt Payments made during such period minus (d) Consolidated Interest Expense (excluding any Consolidated Interest Expense associated with intercompany indebtedness) for such period minus (e) amounts paid in cash in respect of federal, state, local and foreign income taxes of the Borrower and its Subsidiaries with respect to such period minus (f) increases in Consolidated Working Capital plus (g) decreases in Consolidated Working Capital minus (h) optional prepayments of the Term Loan and of the Revolving Loans (to the extent accompanied by a corresponding reduction of the Revolving Commitments).

 

“ Exclusion Event ” shall mean an event or related events resulting in the exclusion of any Credit Party from participation in any Medical Reimbursement Program.

 

“ Extension of Credit ” shall mean, as to any Lender, the making of a Loan by such Lender or the issuance of, or participation in, a Letter of Credit by such Lender.

 

“ Federal Funds Effective Rate ” shall have the meaning set forth in the definition of “Alternate Base Rate”.

 

“ Fee Letter ” shall mean the letter agreement dated June 16, 2005 addressed to the Borrower from Wachovia Investment Holdings, LLC and WCM, as amended, modified or otherwise supplemented.

 

“ Fixed Charge Coverage Ratio ” shall mean, with respect to the Borrower and its Subsidiaries on a consolidated basis for the twelve-month period ending on the last day of any fiscal quarter of the Borrower, the ratio of (i) Consolidated EBITDA for such period minus Pro Forma Acquisition EBITDA for such period minus Consolidated Capital Expenditures for such period minus total federal, state, local and foreign income, value added and similar taxes paid or payable in cash during such period plus Consolidated Rent Expense for such period, to (ii) the sum of Consolidated Interest Expense for such period plus Scheduled Funded Debt Payments for such period plus Restricted Payments made during such period plus Consolidated Rent Expense for such period.

 

“ Flood Hazard Property ” shall have the meaning set forth in Section 4.1(e)(iv).

 

“ Foreign Subsidiary ” shall mean any Subsidiary that is not a Domestic Subsidiary.

 

“ Fronting Fee ” shall have the meaning set forth in Section 2.6(b).

 

“ Funded Debt ” shall mean, with respect to any Person, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such person evidenced by

 

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bonds, debentures, notes or similar instruments, or upon which interest payments are customarily made, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business), (d) all obligations (including, without limitation, earnout obligations) of such Person incurred, issued or assumed as the deferred purchase price of property or services purchased by such Person (other than trade debt incurred in the ordinary course of business and due within six months of the incurrence thereof) which would appear as liabilities on a balance sheet of such Person, (e) the principal portion of all obligations of such Person under Capital Leases, (f) all obligations of such Person under Hedging Agreements, excluding any portion thereof which would be accounted for as interest expense under GAAP, (g) the maximum amount of all letters of credit issued or bankers’ acceptances facilities created for the account of such Person and, without duplication, all drafts drawn thereunder (to the extent unreimbursed), (h) all preferred Capital Stock or other equity interests issued by such Person and which by the terms thereof could be (at the request of the holders thereof or otherwise) subject to mandatory sinking fund payments, redemption or other acceleration, (i) the principal balance outstanding under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product, (j) all Indebtedness of others of the type described in clauses (a) through (i) hereof secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from, property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (k) all Guaranty Obligations of such Person with respect to Indebtedness of another Person of the type described in clauses (a) through (i) hereof, and (l) all Indebtedness of the type described in clauses (a) through (i) hereof of any partnership or unincorporated joint venture in which such Person is a general partner or a joint venturer; provided , however , that with respect to Funded Debt of the Borrower and its Subsidiaries, Funded Debt shall not include Subordinated Indebtedness among the Borrower and the Guarantors to the extent such Indebtedness would be eliminated on a consolidated basis.

 

“ GAAP ” shall mean generally accepted accounting principles in effect in the United States of America applied on a consistent basis, subject , however , in the case of determination of compliance with the financial covenants set out in Section 5.9 to the provisions of Section 1.3.

 

“ Government Acts ” shall have the meaning set forth in Section 2.20.

 

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

 

“ Guarantor ” shall have the meaning set forth in the first paragraph of this Agreement.

 

“ Guaranty Obligations ” shall mean, with respect to any Person, without duplication, any obligations of such Person (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) guaranteeing or intended to guarantee any Indebtedness of any other Person in any manner, whether direct or indirect, and including without limitation any obligation, whether or not contingent, (i) to purchase any such Indebtedness or any property constituting security therefor, (ii) to advance or provide funds or other support for the payment or

 

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purchase of any such Indebtedness or to maintain working capital, solvency or other balance sheet condition of such other Person (including without limitation keep well agreements, maintenance agreements, comfort letters or similar agreements or arrangements) for the benefit of any holder of Indebtedness of such other Person, (iii) to lease or purchase Property, securities or services primarily for the purpose of assuring the holder of such Indebtedness, or (iv) to otherwise assure or hold harmless the holder of such Indebtedness against loss in respect thereof. The amount of any Guaranty Obligation hereunder shall (subject to any limitations set forth therein) be deemed to be an amount equal to the outstanding principal amount (or maximum principal amount, if larger) of the Indebtedness in respect of which such Guaranty Obligation is made.

 

“ Guaranty ” shall mean the guaranty of the Guarantors set forth in Article X.

 

“ Hedging Agreement Provider ” shall mean any Person that enters into a Secured Hedging Agreement with a Credit Party or any of its Subsidiaries that is permitted by Section 6.1(e) to the extent such Person is a Lender, an Affiliate of a Lender or any other Person that was a Lender (or an Affiliate of a Lender) at the time it entered into the Secured Hedging Agreement but has ceased to be a Lender (or whose Affiliate has ceased to be a Lender) under the Credit Agreement; provided , in the case of a Secured Hedging Agreement with a Person who is no longer a Lender, such Person shall be considered a Hedging Agreement Provider only through the stated maturity date (without extension or renewal) of such Secured Hedging Agreement.

 

“ Hedging Agreements ” shall mean, with respect to any Person, any agreement entered into to protect such Person against fluctuations in interest rates, or currency or raw materials values, including, without limitation, any interest rate swap, cap or collar agreement or similar arrangement between such Person and one or more counterparties, any foreign currency exchange agreement, currency protection agreements, commodity purchase or option agreements or other interest or exchange rate or commodity price hedging agreements.

 

“ HIPAA ” shall mean the Health Insurance Portability and Accountability Act of 1996, as the same may be amended, modified or supplemented from time to time, and any successor statute thereto, and any and all rules or regulations promulgated from time to time thereunder, including without limitation 45 CFR Parts 160, 162 and 164.

 

“ Inactive Subsidiary ” shall mean each Subsidiary of the Borrower identified on Schedule 3.12 as an Inactive Subsidiary and for which the Credit Parties’ hereby represent and warrant that each Subsidiary (a) does not engage in any type of business activity, (b) does not create, incur, assume or permit to exist any Indebtedness or any Guaranty Obligations other than Permitted Non-Credit Party Indebtedness, and (c) does not own any of the Capital Stock of any Credit Party.

 

“ Incremental Facility ” shall have the meaning set forth in Section 2.5.

 

“ Indebtedness ” shall mean, with respect to any Person, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, or upon which interest payments are customarily made, (c) all obligations of such Person under conditional sale or other title retention agreements

 

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relating to property purchased by such Person (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business), (d) all obligations (including, without limitation, earnout obligations) of such Person issued or assumed as the deferred purchase price of property or services purchased by such Person (other than trade debt incurred in the ordinary course of business and due within six months of the incurrence thereof) which would appear as liabilities on a balance sheet of such Person, (e) all obligations of such Person under take-or-pay or similar arrangements or under commodities agreements, (f) all Indebtedness 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, or payable out of the proceeds of production from, property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (g) all Guaranty Obligations of such Person with respect to Indebtedness of another Person, (h) the principal portion of all obligations of such Person under Capital Leases plus any accrued interest thereon, (i) all obligations of such Person under Hedging Agreements, (j) the maximum amount of all letters of credit issued or bankers’ acceptances facilities created for the account of such Person and, without duplication, all drafts drawn thereunder (to the extent unreimbursed), (k) all preferred Capital Stock issued by such Person and which by the terms thereof could be (at the request of the holders thereof or otherwise) subject to mandatory sinking fund payments, redemption or other acceleration, (l) the principal balance outstanding under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product plus any accrued interest thereon, and (m) the Indebtedness of any partnership or unincorporated joint venture in which such Person is a general partner or a joint venturer.

 

“ Insolvency ” shall mean, with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of such term as used in Section 4245 of ERISA.

 

“ Insolvent ” shall mean being in a condition of Insolvency.

 

“ Intellectual Property ” shall mean, collectively, all Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks and Trademark Licenses.

 

“ Interest Payment Date ” shall mean (a) as to any Alternate Base Rate Loan or Swingline Loan, the last Business Day of each March, June, September and December during the term of this Agreement and on the applicable Maturity Date, (b) as to any LIBOR Rate Loan having an Interest Period of three months or less, the last day of such Interest Period, (c) as to any LIBOR Rate Loan having an Interest Period longer than three months, (i) each three month anniversary following the first day of such Interest Period and (ii) the last day of such Interest Period and (d) as to any Loan which is the subject of a mandatory prepayment required pursuant to Section 2.8(b) hereof, the date of such prepayment.

 

“ Interest Period ” shall mean, with respect to any LIBOR Rate Loan,

 

(i) initially, the period commencing on the Borrowing Date or conversion date, as the case may be, with respect to such LIBOR Rate Loan and ending one, two, three or six months thereafter, as selected by the Borrower in the Notice of Borrowing or Notice of Conversion given with respect thereto; and

 

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(ii) thereafter, each period commencing on the last day of the immediately preceding Interest Period applicable to such LIBOR Rate Loan and ending one, two, three or six months thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent not less than three Business Days prior to the last day of the then current Interest Period with respect thereto;

 

provided that the foregoing provisions are subject to the following:

 

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

 

(B) any Interest Period pertaining to a LIBOR Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the relevant calendar month;

 

(C) if the Borrower shall fail to give notice as provided above, the Borrower shall be deemed to have selected an Alternate Base Rate Loan to replace the affected LIBOR Rate Loan;

 

(D) any Interest Period in respect of any Loan that would otherwise extend beyond the applicable Maturity Date shall end on such Maturity Date, and further with regard to the Term Loan, no Interest Period shall extend beyond any principal amortization payment date unless the portion of such Term Loan consisting of Alternate Base Rate Loans together with the portion of such Term Loan consisting of LIBOR Rate Loans with Interest Periods expiring prior to or concurrently with the date such principal amortization payment date is due, is at least equal to the amount of such principal amortization payment due on such date; and

 

(E) no more than eight LIBOR Rate Loans may be in effect at any time; provided that, for purposes hereof, LIBOR Rate Loans with different Interest Periods shall be considered as separate LIBOR Rate Loans, even if they shall begin on the same date and have the same duration, although borrowings, extensions and conversions may, in accordance with the provisions hereof, be combined at the end of existing Interest Periods to constitute a new LIBOR Rate Loan with a single Interest Period.

 

“ Investment ” shall mean all investments made directly or indirectly in, to or from any Person, whether in cash or by acquisition of shares of Capital Stock, property, assets, indebtedness or other obligations or securities or by loan advance, capital contribution or otherwise.

 

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“ Issuing Lender ” shall mean Wachovia and any successor in such capacity.

 

“ Issuing Lender Fees ” shall have the meaning set forth in Section 2.6(c).

 

“ Joinder Agreement ” shall mean a Joinder Agreement substantially in the form of Schedule 5.10 , executed and delivered by an Additional Credit Party in accordance with the provisions of Section 5.10.

 

“ Lender ” shall have the meaning set forth in the first paragraph of this Agreement.

 

“ Lender Commitment Letter ” shall mean, with respect to any Lender, the letter (or other correspondence) to such Lender from the Administrative Agent notifying such Lender of its LOC Commitment, Revolving Commitment Percentage and/or Term Loan Commitment Percentage.

 

“ Letters of Credit ” shall mean any letter of credit issued by the Issuing Lender pursuant to the terms hereof, as such Letters of Credit may be amended, modified, extended, renewed or replaced from time to time.

 

“ Letter of Credit Fee ” shall have the meaning set forth in Section 2.6(b).

 

“ Leverage Ratio ” shall mean, with respect to the Borrower and its Subsidiaries on a consolidated basis for the twelve-month period ending on the last day of any fiscal quarter of the Borrower, the ratio of (a) Funded Debt of the Borrower and its Subsidiaries on the last day of such period to (b) Consolidated EBITDA for such period.

 

“ LIBOR ” shall mean, for any LIBOR Rate Loan for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 A.M. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period. If for any reason such rate is not available, the term “LIBOR” shall mean, for any LIBOR Rate Loan for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 A.M. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided , however , if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%). If, for any reason, neither of such rates is available, then “LIBOR” shall mean the rate per annum at which, as determined by the Administrative Agent, Dollars in an amount comparable to the Loans then requested are being offered to leading banks at approximately 11:00 A.M. London time, two Business Days prior to the commencement of the applicable Interest Period for settlement in immediately available funds by leading banks in the London interbank market for a period equal to the Interest Period selected.

 

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“ LIBOR Lending Office ” shall mean, initially, the office of each Lender designated as such Lender’s LIBOR Lending Office shown on Schedule 9.2 ; and thereafter, such other office of such Lender as such Lender may from time to time specify to the Administrative Agent and the Borrower as the office of such Lender at which the LIBOR Rate Loans of such Lender are to be made.

 

“ LIBOR Rate ” shall mean a rate per annum (rounded upwards, if necessary, to the next higher 1/100th of 1%) determined by the Administrative Agent pursuant to the following formula:

 

 

“ LIBOR Rate Loan ” shall mean Loans the rate of interest applicable to which is based on the LIBOR Rate.

 

“ Lien ” shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any Capital Lease having substantially the same economic effect as any of the foregoing).

 

“ Loan ” shall mean a Revolving Loan, the Term Loan, and/or a Swingline Loan, as appropriate.

 

“ LOC Commitment ” shall mean the commitment of the Issuing Lender to issue Letters of Credit and with respect to each Lender, the commitment of such Lender to purchase participation interests in the Letters of Credit up to such Lender’s LOC Commitment as specified in the Lender Commitment Letter or in the Register, as such amount may be reduced from time to time in accordance with the provisions hereof.

 

“ LOC Committed Amount ” shall mean, collectively, the aggregate amount of all of the LOC Commitments of the Lenders to issue and participate in Letters of Credit as referenced in Section 2.3 and, individually, the amount of each Lender’s LOC Commitment as specified in its Lender Commitment Letter or in the Commitment Transfer Supplement.

 

“ LOC Documents ” shall mean, with respect to any Letter of Credit, such Letter of Credit, any amendments thereto, any documents delivered in connection therewith, any application therefor, and any agreements, instruments, guarantees or other documents (whether general in application or applicable only to such Letter of Credit) governing or providing for (i) the rights and obligations of the parties concerned or (ii) any collateral security for such obligations.

 

“ LOC Obligations ” shall mean, at any time, the sum of (i) the maximum amount which is, or at any time thereafter may become, available to be drawn under Letters of Credit then outstanding, assuming compliance with all requirements for drawings referred to in such Letters

 

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of Credit plus (ii) the aggregate amount of all drawings under Letters of Credit honored by the Issuing Lender but not theretofore reimbursed.

 

“ Mandatory LOC Borrowing ” shall have the meaning set forth in Section 2.3(e).

 

“ Mandatory Swingline Borrowing ” shall have the meaning set forth in Section 2.4(b)(ii).

 

“ Material Adverse Effect ” shall mean a material adverse effect on (a) the business, operations, property, condition (financial or otherwise) or prospects of the Borrower or of the Credit Parties and their Subsidiaries taken as a whole, (b) the ability of the Borrower or any Guarantor to perform its obligations, when such obligations are required to be performed, under this Agreement, any of the Notes or any other Credit Document or (c) the validity or enforceability of this Agreement, any of the Notes or any of the other Credit Documents or the rights or remedies of the Administrative Agent or the Lenders hereunder or thereunder.

 

“ Material Contract ” shall mean any contract or other arrangement, whether written or oral, to which any Credit Party or any of its Subsidiaries is a party as to which the breach, nonperformance, cancellation or failure to renew by any party thereto could reasonably be expected to have a Material Adverse Effect.

 

“ Material Domestic Subsidiary ” shall mean any Domestic Subsidiary other than an Inactive Subsidiary or an Unrestricted Subsidiary.

 

“ Materials of Environmental Concern ” shall mean any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products or any hazardous or toxic substances, materials or wastes, defined or regulated as such in or under any Environmental Law, including, without limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.

 

“ Maturity Date ” shall mean the Revolving Commitment Termination Date or the Term Loan Maturity Date, as applicable.

 

“ Medicaid ” shall mean that entitlement program under Title XIX of the Social Security Act that provides federal grants to states for medical assistance based on specific eligibility criteria as set forth at Section 1396, et seq. of Title 42 of the United States Code, as amended, and any statute succeeding thereto.

 

“ Medicaid Certification ” shall mean certification by a state agency or other such entity administering the Medicaid program that a health care provider or supplier is in compliance with all the conditions of participation set forth in the Medicaid Regulations.

 

“ Medicaid Provider Agreement ” shall mean an agreement entered into between a state agency or other such entity administering the Medicaid program and a health care provider or supplier under which the health care provider or supplier agrees to provide services for Medicaid patients in accordance with the terms of the agreement and Medicaid Regulations.

 

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“ Medicaid Regulations ” shall mean, 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 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 (b) above, in each case as may be amended, supplemented or otherwise modified from time to time.

 

“ Medical Reimbursement Programs ” shall mean Medicare, Medicaid and CHAMPUS programs and any other healthcare program operated by or financed in whole or in part by any foreign, domestic, federal, state or local government and any other non-government funded third party payor programs.

 

“ Medicare ” shall mean that government-sponsored entitlement program under Title XVIII of the Social Security Act that provides for a health insurance system for eligible elderly and disabled individuals, as set forth at Section 1395, et seq . of Title 42 of the United States Code, as amended, and any statute succeeding thereto.

 

“ Medicare Certification ” shall mean certification by CMS or an entity under contract with CMS that the health care provider or supplier is in compliance with all of the conditions of participation set forth in the Medicare Regulations.

 

“ Medicare Provider Agreement ” shall mean an agreement entered into between CMS or other such entity administering the Medicare program on behalf of CMS, and a health care provider or supplier under which the health care provider or supplier agrees to provide services for Medicare patients in accordance with the terms of the agreement and Medicare Regulations.

 

“ Medicare Regulations ” shall mean, 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 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, the United States Department of Health and Human Services (“ HHS ”), CMS, the Office of the Inspector General for HHS (the “ OIG ”), 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, supplemented or otherwise modified from time to time.

 

“ Moody’s ” shall mean Moody’s Investors Service, Inc.

 

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“ Mortgage Instrument ” shall mean any mortgage, deed of trust or deed to secure debt executed by a Credit Party in favor of the Administrative Agent, for the benefit of the Lenders, pursuant to the terms of Section 4.1(e)(i), 5.10 or 5.12, as the same may be amended, modified, restated or supplemented from time to time.

 

“ Mortgage Policy ” shall mean, with respect to any Mortgage Instrument, an ALTA mortgagee title insurance policy issued by a title company acceptable to the Administrative Agent in such amount as reasonably approved by the Administrative Agent, assuring the Administrative Agent that such Mortgage Instrument creates a valid and enforceable first priority mortgage lien on the applicable Mortgaged Property, free and clear of all defects and encumbrances except Permitted Liens, which Mortgage Policy shall be in form and substance reasonably satisfactory to the Administrative Agent and shall provide for affirmative insurance and such reinsurance as the Administrative Agent may reasonably request.

 

“ Mortgaged Property ” shall mean any owned or leased real property of a Credit Party with respect to which such Credit Party executes a Mortgage Instrument in favor of the Administrative Agent.

 

“ Multiemployer Plan ” shall mean a Plan which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

 

“ Net Cash Proceeds ” shall mean the aggregate cash proceeds received by any Credit Party or any Subsidiary in respect of any Asset Disposition, Equity Issuance or Debt Issuance, net of (a) direct costs paid or payable as a result thereof (including, without limitation, reasonable legal, accounting and investment banking fees, and sales commissions) and (b) taxes paid or payable as a result thereof; it being understood that “Net Cash Proceeds” shall include, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received by any Credit Party or any Subsidiary in respect of any Asset Disposition, Equity Issuance or Debt Issuance.

 

“ Note ” or “ Notes ” shall mean the Revolving Notes, the Term Notes and/or the Swingline Note, collectively, separately or individually, as appropriate.

 

“ Notice of Borrowing ” shall mean a request for a Revolving Loan borrowing pursuant to Section 2.1(b)(i) or a Swingline Loan borrowing pursuant to Section 2.4(b)(i), as appropriate, in substantially the form attached as Schedule 2.1(b)(i) .

 

“ Notice of Conversion/Extension ” shall mean the written notice of extension or conversion as referenced and defined in Section 2.11.

 

“ Obligations ” shall mean, collectively, Loans and LOC Obligations.

 

“ Operating Lease ” shall mean, as applied to any Person, any lease (including, without limitation, leases which may be terminated by the lessee at any time) of any property (whether real,

 

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personal or mixed) which is not a Capital Lease other than any such lease in which that Person is the lessor.

 

“ Participant ” shall have the meaning set forth in Section 9.6(b).

 

“ Participant Register ” shall have the meaning set forth in Section 9.6(d).

 

“ Participation Interest ” shall mean the purchase by a Revolving Lender of a participation interest in Letters of Credit as provided in Section 2.3 and in Swingline Loans as provided in Section 2.4.

 

“ Patent License ” shall mean all agreements, whether written or oral, providing for the grant by or to a Credit Party of any right to manufacture, use or sell any invention covered by a Patent, including, without limitation, any thereof referred to in Schedule 3.16 .

 

“ Patents ” shall mean (a) all letters patent of the United States or any other country and all reissues and extensions thereof, including, without limitation, any thereof referred to in Schedule 3.16 , and (b) all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof, including, without limitation, any thereof referred to in Schedule 3.16 .

 

“ PBGC ” shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA.

 

“ Permitted Acquisition ” shall mean an acquisition or any series of related acquisitions by a Credit Party of (a) all or substantially all of the assets or a majority of the outstanding Voting Stock or economic interests of a Person that is incorporated, formed or organized in the United States or (b) any division, line of business or other business unit of a Person that is incorporated, formed or organized in the United States (such Person or such division, line of business or other business unit of such Person shall be referred to herein as the “ Target ”), in each case that is a type of business (or assets used in a type of business) permitted to be engaged in by the Credit Parties and their Subsidiaries pursuant to Section 6.3 hereof, so long as (i) no Default or Event of Default shall then exist or would exist after giving effect thereto, (ii) the Credit Parties shall demonstrate to the reasonable satisfaction of the Administrative Agent and the Required Lenders that, after giving effect to the acquisition on a Pro Forma Basis, the Credit Parties are in compliance with each of the financial covenants set forth in Section 5.9, (iii) the Administrative Agent, on behalf of the Lenders, shall have received (or shall receive in connection with the closing of such acquisition) a first priority perfected security interest in all property (including, without limitation, Capital Stock) acquired with respect to the Target (subject to Permitted Liens) in accordance with the terms of Sections 5.10 and 5.12 and the Target, if a Person, shall have executed a Joinder Agreement in accordance with the terms of Section 5.10, (iv) the Administrative Agent and the Lenders shall have received (A) a description of the material terms of such acquisition, (B) audited financial statements (or, if unavailable, management-prepared financial statements) of the Target for its two most recent fiscal years and for any fiscal quarters ended within the fiscal year to date (“ Target Audited Financials ”), (C) consolidated projected income statements of the Borrower and its consolidated Subsidiaries

 

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(giving effect to such acquisition), all in form and substance reasonably satisfactory to the Administrative Agent, and (D) a certificate from a Responsible Officer of the Borrower to the effect that (w) the Credit Parties will be Solvent upon the consummation of the Permitted Acquisition, (x) the Target Audited Financials fairly present the financial condition of the Borrower and its Subsidiaries (on a consolidated basis) as of the date thereof after giving effect to the Permitted Acquisition, (y) the Borrower and its Subsidiaries have completed their due diligence investigation with respect to the Target and such Permitted Acquisition, which investigation was conducted in a manner similar to that which would have been conducted by a prudent purchaser of a comparable business and the results of which investigation have been delivered to the Administrative Agent and (z) on or prior to the date of such Permitted Acquisition, the Administrative Agent shall have received copies of the acquisition agreement and related agreements and instruments, in form and substance reasonably satisfactory to the Administrative Agent, (v) such acquisition shall not be a “hostile” acquisition and shall have been approved by the Board of Directors and/or shareholders of the applicable Credit Party and the Target, (vi) after giving effect to such acquisition, there shall be at least $10,000,000 of Accessible Borrowing Availability under the Revolving Committed Amount and (vii) the aggregate consideration (including without limitation equity consideration, earn outs or deferred compensation or non-competition arrangements and the amount of Indebtedness and other liabilities assumed by the Credit Parties and their Subsidiaries) paid by the Credit Parties and their Subsidiaries (A) in connection with any individual acquisition shall not exceed $25,000,000 and (B) for all acquisitions made during the term of this Credit Agreement shall not exceed $60,000,000.

 

“ Permitted Non-Credit Party Indebtedness ” shall mean, with respect to all Inactive Subsidiaries, Indebtedness in an aggregate amount not to exceed $25,000 and, with respect to all Unrestricted Subsidiaries, Indebtedness in an aggregate amount not to exceed $25,000.

 

“ Permitted Investments ” shall mean:

 

(i) cash and Cash Equivalents;

 

(ii) receivables owing to the Borrower or any of its Subsidiaries or any receivables and advances to suppliers, in each case if created, acquired or made in the ordinary course of business and payable or dischargeable in accordance with customary trade terms;

 

(iii) Investments in and loans by any Credit Party to any other Credit Party;

 

(iv) loans and advances to employees in the ordinary course of business in an aggregate amount not to exceed $1,000,000 at any time outstanding and not in violation of the Sarbanes-Oxley Act of 2002 or any other Requirement of Law;

 

(v) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business;

 

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(vi) Investments, acquisitions or transactions permitted under Section 6.4(b);

 

(vii) Investments existing as of the Closing Date, as set forth on Schedule 1.1-2 ; and

 

(viii) Permitted Acquisitions; and

 

(ix) additional loan advances and/or Investments of a nature not contemplated by the foregoing clauses hereof, provided that such loans, advances and/or Investments made pursuant to this clause shall not exceed an aggregate amount of $1,000,000.

 

“ Permitted Liens ” shall mean:

 

(i) Liens created by or otherwise existing, under or in connection with this Agreement or the other Credit Documents in favor of the Lenders;

 

(ii) Liens in favor of a Hedging Agreement Provider in connection with a Secured Hedging Agreement, but only if such Hedging Agreement Provider and the Administrative Agent, on behalf of the Lenders, shall share pari passu in the collateral subject to such Liens;

 

(iii) Liens securing purchase money Indebtedness and Capital Lease Obligations to the extent permitted under Section 6.1(c) and Indebtedness assumed in connection with a Permitted Acquisition to the extent permitted under Section 6.1(j) and to the extent such Liens are not granted in contemplation of such Permitted Acquisition; provided, that (A) any such Lien attaches to such property concurrently with or within thirty days after the acquisition thereof and (B) such Lien attaches solely to the property so acquired in such transaction;

 

(iv) Liens for taxes, assessments, charges or other governmental levies not yet due or as to which the period of grace (not to exceed sixty days), if any, related thereto has not expired or which are being contested in good faith by appropriate proceedings, provided that adequate reserves with respect thereto are maintained on the books of the any Credit Party or its Subsidiaries, as the case may be, in conformity with GAAP;

 

(v) carriers’, warehousemen’s, landlord’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business which are not overdue for a period of more than sixty days or which are being contested in good faith by appropriate proceedings;

 

(vi) pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation and deposits securing liability to insurance carriers under insurance or self-insurance arrangements incurred in the ordinary course of business;

 

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

 

(viii) any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any Lien referred to in the foregoing clauses; provided that such extension, renewal or replacement Lien shall be limited to all or a part of the property which secured the Lien so extended, renewed or replaced;

 

(ix) Liens existing on the Closing Date and set forth on Schedule 1.1-3 ; provided that (a) no such Lien shall at any time be extended to cover property or assets other than the property or assets subject thereto on the Closing Date and (b) the principal amount of the Indebtedness secured by such Liens shall not be extended, renewed, refunded or refinanced;

 

(x) easements, rights-of-way, restrictions (including zoning restrictions), minor defects or irregularities in title and other similar charges or encumbrances not, in any material respect, impairing the use of the encumbered Property for its intended purposes;

 

(xi) Liens on equipment arising from precautionary UCC financing statements relating to the lease of such equipment to the extent permitted by this Agreement;

 

(xii) first priority Liens securing Permitted Seller Indebtedness incurred in connection with, and constituting all or a portion of the consideration for, a Permitted Acquisition; provided that (A) such Liens attach solely to the assets (excluding Capital Stock of any Person acquired pursuant to such Permitted Acquisition and any accounts receivable) acquired in connection with such Permitted Acquisition and (B) the aggregate amount of Permitted Seller Indebtedness secured by such Liens shall not exceed $5,500,000 at any time outstanding; and

 

(xiii) other Liens securing Indebtedness not exceeding $1,000,000 in the aggregate at any time outstanding, so long as such Liens do not attach to any accounts or inventory of the Credit Parties and their Subsidiaries.

 

“ Permitted Seller Indebtedness ” shall have the meaning set forth in Section 6.1(k).

 

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

 

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

 

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“ Pledge Agreement ” shall mean the Pledge Agreement dated as of the Closing Date executed by the Credit Parties in favor of the Administrative Agent, as amended, modified, restated or supplemented from time to time.

 

“ Prime Rate ” shall have the meaning set forth in the definition of Alternate Base Rate.

 

“ Pro Forma Acquisition EBITDA ” shall mean Consolidated EBITDA attributable to each Permitted Acquisition (with such pro forma adjustments as are permitted pursuant to Section 210.11 of Regulation S-X and as are reasonably acceptable to the Administrative Agent based upon data presented to the Administrative Agent to its reasonable satisfaction) consummated during the one year period preceding the date of determination calculated solely for a number of months immediately preceding the consummation of the applicable Permitted Acquisition, which number equals twelve minus the number of months following the consummation of the applicable Permitted Acquisition for which financial statements of the Borrower and its Subsidiaries have been delivered to the Administrative Agent pursuant to Section 5.1.

 

“ Pro Forma Basis ” shall mean, with respect to any transaction, that such transaction shall be deemed to have occurred as of the first day of the twelve-month period ending as of the most recent month end preceding the date of such transaction.

 

“ Properties ” shall have the meaning set forth in Section 3.10(a).

 

“ Purchasing Lender ” shall have the meaning set forth in Section 9.6(c).

 

“ Rating Agencies ” shall have the meaning set forth in Section 9.6(i).

 

“ Recovery Event ” shall mean the receipt by any Credit Party or any of its Subsidiaries of any cash insurance proceeds or condemnation award payable by reason of theft, loss, physical destruction or damage, taking or similar event with respect to any of their property or assets.

 

“ Register ” shall have the meaning set forth in Section 9.6(d).

 

“ Reimbursement Obligation ” shall mean the obligation of the Borrower to reimburse the Issuing Lender pursuant to Section 2.3(d) for amounts drawn under Letters of Credit.

 

“ Regulation S-X ” shall mean Regulation S-X of the Securities Exchange Act or any successor regulation thereto.

 

“ Reorganization ” shall mean, with respect to any Multiemployer Plan, the condition that such Plan is in reorganization within the meaning of such term as used in Section 4241 of ERISA.

 

“ Reportable Event ” shall mean any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty-day notice period is waived under PBGC Reg. §4043.

 

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“ Required Lenders ” shall mean, (a) at any time at which there is no more than two Lenders, Lenders holding at least 66 2/3% and (b) at any time at which there are more than two Lenders, Lenders holding at least 51% of (i) the outstanding Revolving Commitments and Term Loan or (ii) if the Commitments have been terminated, the outstanding Loans and Participation Interests; provided , however , that if any Lender shall be a Defaulting Lender at such time, then there shall be excluded from the determination of Required Lenders, Obligations (including Participation Interests) owing to such Defaulting Lender and such Defaulting Lender’s Commitments, or after termination of the Commitments, the principal balance of the Obligations owing to such Defaulting Lender.

 

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

 

“ Responsible Officer ” shall mean, for any Credit Party, any duly authorized officer thereof.

 

“ Restricted Payments ” shall mean (a) any dividend or other distribution, direct or indirect, on account of any shares of any class of Capital Stock of the Borrower or any of its Subsidiaries, now or hereafter outstanding, (b) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of Capital Stock of the Borrower or any of its Subsidiaries, now or hereafter outstanding, (c) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of Capital Stock of the Borrower or any of its Subsidiaries, now or hereafter outstanding, (d) any payment with respect to any earnout obligation, (e) any payment or prepayment of principal of, premium, if any, or interest on, redemption, purchase, retirement, defeasance, sinking fund or similar payment with respect to, any Subordinated Indebtedness or (f) the payment by the Borrower or any of its Subsidiaries of any management, advisory or consulting fee to any Person or of any salary, bonus or other form of compensation to any Person who is directly or indirectly a significant partner, shareholder, owner or executive officer of any such Person, to the extent such salary, bonus or other form of compensation is not included in the corporate overhead of the Borrower or such Subsidiary.

 

“ Revolving Commitment ” shall mean, with respect to each Revolving Lender, the commitment of such Revolving Lender to make Revolving Loans in an aggregate principal amount at any time outstanding up to an amount equal to such Revolving Lender’s Revolving Commitment Percentage of the Revolving Committed Amount.

 

“ Revolving Commitment Percentage ” shall mean, for each Lender, the percentage identified as its Revolving Commitment Percentage in its Lender Commitment Letter or in the Commitment Transfer Supplement pursuant to which such Lender became a Lender hereunder, as such percentage may be modified in connection with any assignment made in accordance with the provisions of Section 9.6(c).

 

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“ Revolving Commitment Termination Date ” shall mean July 11, 2008.

 

“ Revolving Committed Amount ” shall have the meaning set forth in Section 2.1(a).

 

“ Revolving Lender ” shall mean, as of any date of determination, a Lender holding a Revolving Commitment on such date.

 

“ Revolving Loans ” shall have the meaning set forth in Section 2.1.

 

“ Revolving Note ” or “ Revolving Notes ” shall mean the promissory notes of the Borrower in favor of each of the Revolving Lenders evidencing the Revolving Loans provided pursuant to Section 2.1(e), individually or collectively, as appropriate, as such promissory notes may be amended, modified, restated, supplemented, extended, renewed or replaced from time to time.

 

“ S&P ” shall mean Standard & Poor’s Ratings Group, a division of McGraw Hill, Inc.

 

“ Scheduled Funded Debt Payments ” shall mean, as of any date of determination for the Borrower and its Subsidiaries, the sum of all scheduled payments of principal on Funded Debt for the applicable period ending on the date of determination (including the principal component of payments due on Capital Leases during the applicable period ending on the date of determination).

 

“ SEC ” shall mean the Securities and Exchange Commission or any successor Governmental Authority.

 

“ Secured Hedging Agreement ” shall mean any Hedging Agreement between a Credit Party and a Hedging Agreement Provider, as amended, modified, supplemented, extended or restated from time to time.

 

“ Securities Exchange Act ” shall mean the Securities Exchange Act of 1934, together with any amendment thereto or replacement thereof and any rules or regulations promulgated thereunder.

 

“ Securitization ” shall have the meaning set forth in Section 9.6(i).

 

“ Security Agreement ” shall mean the Security Agreement dated as of the Closing Date executed by the Credit Parties in favor of the Administrative Agent, as amended, modified or supplemented from time to time in accordance with its terms.

 

“ Security Documents ” shall mean the Security Agreement, the Pledge Agreement, Aircraft Security Agreement, the Mortgage Instruments and such other documents executed and delivered and/or filed in connection with the attachment and perfection of the Administrative Agent’s security interests and liens arising thereunder, including, without limitation, UCC financing statements and patent, trademark and copyright filings.

 

“ Single Employer Plan ” shall mean any Plan which is not a Multiemployer Plan.

 

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“ Subordinated Indebtedness ” shall mean any Indebtedness incurred by any Credit Party on terms and conditions acceptable to the Administrative Agent, which Indebtedness shall be specifically subordinated in right of payment to the prior payment of the Credit Party Obligations on terms acceptable to the Administrative Agent and the Required Lenders.

 

“ Subsidiary ” shall mean, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower and, except as expressly stated otherwise, and except for financial covenant calculations, Unrestricted Subsidiaries shall not be deemed to be Subsidiaries of the Credit Parties hereunder.

 

“ Swingline Commitment ” shall mean the commitment of the Swingline Lender to make Swingline Loans in an aggregate principal amount at any time outstanding up to the Swingline Committed Amount, and the commitment of the Revolving Lenders to purchase participation interests in the Swingline Loans as provided in Section 2.4(b)(ii), as such amounts may be reduced from time to time in accordance with the provisions hereof.

 

“ Swingline Committed Amount ” shall mean the amount of the Swingline Lender’s Swingline Commitment as specified in Section 2.4(a).

 

“ Swingline Lender ” shall mean Wachovia.

 

“ Swingline Loan ” or “ Swingline Loans ” shall have the meaning set forth in Section 2.4(a).

 

“ Swingline Note ” shall mean the promissory note of the Borrower in favor of the Swingline Lender evidencing the Swingline Loans provided pursuant to Section 2.4(d), as such promissory note may be amended, modified, supplemented, extended, renewed or replaced from time to time.

 

“ Tax Exempt Certificate ” shall have the meaning set forth in Section 2.19(b).

 

“ Taxes ” shall have the meaning set forth in Section 2.19.

 

“ Term Loan ” shall have the meaning set forth in Section 2.2(a).

 

“ Term Loan Commitment ” shall mean, with respect to each Term Loan Lender, the commitment of such Term Loan Lender to make its portion of the Term Loan in a principal amount equal to such Term Loan Lender’s Term Loan Commitment Percentage of the Term

 

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Loan Committed Amount (and for purposes of making determinations of Requisite Lenders hereunder after the Closing Date, the principal amount outstanding on the Term Loan).

 

“ Term Loan Commitment Percentage ” shall mean, for any Term Loan Lender, the percentage identified as its Term Loan Commitment Percentage as specified in its Lender Commitment Letter or in the Commitment Transfer Supplement pursuant to which such Lender became a Lender hereunder, as such percentage may be modified in connection with any assignment made in accordance with the provisions of Section 9.6.

 

“ Term Loan Committed Amount ” shall have the meaning set forth in Section 2.2(a).

 

“ Term Loan Lender ” shall mean, as of any date of determination, any Lender that holds a portion of the outstanding Term Loan on such date.

 

“ Term Loan Maturity Date ” shall mean July 11, 2010.

 

“ Term Note ” or “ Term Notes ” shall mean the promissory notes of Borrower in favor of each of the Term Loan Lenders evidencing the portion of the Term Loan provided pursuant to Section 2.2(d), individually or collectively, as appropriate, as such promissory notes may be amended, modified, restated, supplemented, extended, renewed or replaced from time to time.

 

“ Trademark License ” shall mean any agreement, written or oral, providing for the grant by or to a Credit Party of any right to use any Trademark, including, without limitation, any thereof referred to in Schedule 3.16 .

 

“ Trademarks ” shall mean (a) all trademarks, trade names, corporate names, company names, business names, fictitious business names, service marks, elements of package or trade dress of goods or services, logos and other source or business identifiers, together with the goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise, including, without limitation, any thereof referred to in Schedule 3.16 to this Credit Agreement, and (b) all renewals thereof, including, without limitation, any thereof referred to in Schedule 3.16 to this Credit Agreement.

 

“ Tranche ” shall mean the collective reference to LIBOR Rate Loans whose Interest Periods begin and end on the same day. A Tranche may sometimes be referred to as a “LIBOR Tranche”.

 

“ Transfer Effective Date ” shall have the meaning set forth in each Commitment Transfer Supplement.

 

“ TRICARE ” shall mean the United States Department of Defense health care program for service families including, but not limited to, TRICARE Prime, TRICARE Extra and TRICARE Standard, and any successor to or predecessor thereof (including without limitation CHAMPUS).

 

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“ Type ” shall mean, as to any Loan, its nature as an Alternate Base Rate Loan or LIBOR Rate Loan, as the case may be.

 

“ UCC ” shall mean the Uniform Commercial Code as in effect from time to time in the State of New York.

 

“ Unrestricted Subsidiary ” shall mean Amedisys Home Health, Inc. of Texas, a Texas corporation, Alliance Home Health, Inc., an Oklahoma corporation, and Housecall Contract Management, Inc., a Delaware corporation.

 

“ Voting Stock ” shall mean, with respect to any Person, Capital Stock issued by such Person the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even though the right so to vote may be or have been suspended by the happening of such a contingency.

 

“ Wachovia ” shall mean Wachovia Bank, National Association, a national banking association, together with its successors and/or assigns.

 

“ WCM ” shall mean, Wachovia Capital Markets, LLC, together with its successors and/or assigns.

 

“ Works ” shall mean all works which are subject to copyright protection pursuant to Title 17 of the United States Code.

 

Section 1.2 Other Definitional Provisions .

 

(a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the Notes or other Credit Documents or any certificate or other document made or delivered pursuant hereto.

 

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

 

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

 

Section 1.3 Accounting Terms .

 

Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP applied on a basis consistent with the most recent audited consolidated financial statements of the Borrower delivered to the Lenders; provided that, if the Borrower notifies the Administrative Agent that it wishes to amend any covenant in Section 5.9 to eliminate the effect of any change in GAAP on the operation of

 

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such covenant (or if the Administrative Agent notifies the Borrower that the Required Lenders wish to amend Section 5.9 for such purpose), then the Borrower’s compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower and the Required Lenders.

 

The Borrower shall deliver to the Administrative Agent and each Lender at the same time as the delivery of any annual or quarterly financial statements given in accordance with the provisions of Section 5.1, (i) a description in reasonable detail of any material change in the application of accounting principles employed in the preparation of such financial statements from those applied in the most recently preceding quarterly or annual financial statements as to which no objection shall have been made in accordance with the provisions above and (ii) a reasonable estimate of the effect on the financial statements on account of such changes in application.

 

For purposes of computing the financial covenants set forth in Section 5.9 for any applicable test period, any Permitted Acquisition or permitted sale of assets (including a stock sale) shall have been deemed to have taken place as of the first day of such applicable test period.

 

Section 1.4 Time References .

 

Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

 

ARTICLE II

 

THE LOANS; AMOUNT AND TERMS

 

Section 2.1 Revolving Loans .

 

(a) Revolving Commitment . During the Commitment Period, subject to the terms and conditions hereof, each Revolving Lender severally, but not jointly, agrees to make revolving credit loans (“ Revolving Loans ”) to the Borrower from time to time in an aggregate principal amount of up to TWENTY-FIVE MILLION DOLLARS ($25,000,000) (as such aggregate maximum amount may be reduced from time to time as provided in Section 2.7, the “ Revolving Committed Amount ”) for the purposes hereinafter set forth; provided , however , that (i) with regard to each Revolving Lender individually, the sum of such Revolving Lender’s Revolving Commitment Percentage of the aggregate principal amount of outstanding Revolving Loans plus outstanding Swingline Loans plus LOC Obligations shall not exceed such Revolving Lender’s Revolving Commitment and (ii) with regard to the Revolving Lenders collectively, the sum of the outstanding Revolving Loans plus outstanding Swingline Loans plus LOC Obligations shall not exceed the Revolving Committed Amount. Revolving Loans may consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as

 

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the Borrower may request, and may be repaid and reborrowed in accordance with the provisions hereof; provided , however , Revolving Loans made on the Closing Date or on any of the three Business Days following the Closing Date may only consist of Alternate Base Rate Loans. LIBOR Rate Loans shall be made by each Revolving Lender at its LIBOR Lending Office and Alternate Base Rate Loans at its Domestic Lending Office.

 

(b) Revolving Loan Borrowings .

 

(i) Notice of Borrowing . The Borrower shall request a Revolving Loan borrowing by delivering a written Notice of Borrowing (or telephone notice promptly confirmed in writing by delivery of a written Notice of Borrowing, which delivery may be by facsimile) to the Administrative Agent not later than 11:00 A.M. on the Business Day prior to the date of the requested borrowing in the case of Alternate Base Rate Loans, and on the third Business Day prior to the date of the requested borrowing in the case of LIBOR Rate Loans. Each such Notice of Borrowing shall be irrevocable and shall specify (A) that a Revolving Loan is requested, (B) the date of the requested borrowing (which shall be a Business Day), (C) the aggregate principal amount to be borrowed, (D) whether the borrowing shall be comprised of Alternate Base Rate Loans, LIBOR Rate Loans or a combination thereof, and if LIBOR Rate Loans are requested, the Interest Period(s) therefor. If the Borrower shall fail to specify in any such Notice of Borrowing (I) an applicable Interest Period in the case of a LIBOR Rate Loan, then such notice shall be deemed to be a request for an Interest Period of one month, or (II) the type of Revolving Loan requested, then such notice shall be deemed to be a request for an Alternate Base Rate Loan hereunder. The Administrative Agent shall give notice to each Revolving Lender promptly upon receipt of each Notice of Borrowing, the contents thereof and each such Revolving Lender’s share thereof (but in no event later than 5:00 P.M. on the date such Notice of Borrowing is received by the Administrative Agent).

 

(ii) Minimum Amounts . Each Revolving Loan that is made as an Alternate Base Rate Loan shall be in a minimum aggregate amount of $1,000,000 and in integral multiples of $500,000 in excess thereof (or the remaining amount of the Revolving Committed Amount, if less). Each Revolving Loan that is made as a LIBOR Rate Loan shall be in a minimum aggregate amount of $2,000,000 and integral multiples of $1,000,000 in excess thereof (or the remaining amount of the Revolving Committed Amount, if lees).

 

(iii) Advances . Each Revolving Lender will make its Revolving Commitment Percentage of each Revolving Loan borrowing available to the Administrative Agent for the account of the Borrower at the office of the Administrative Agent specified in Section 9.2, or at such other office as the Administrative Agent may designate in writing, by 1:00 P.M. on the date specified in the applicable Notice of Borrowing in Dollars and in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the Borrower by the Administrative Agent by crediting the

 

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account of the Borrower on the books of such office with the aggregate of the amounts made available to the Administrative Agent by the Revolving Lenders and in like funds as received by the Administrative Agent.

 

(c) Repayment . The principal amount of all Revolving Loans shall be due and payable in full on the Revolving Commitment Termination Date, unless accelerated sooner pursuant to Section 7.2.

 

(d) Interest . Subject to the provisions of Section 2.10, Revolving Loans shall bear interest as follows:

 

(i) Alternate Base Rate Loans . During such periods as Revolving Loans shall be comprised of Alternate Base Rate Loans, each such Alternate Base Rate Loan shall bear interest at a per annum rate equal to the sum of the Alternate Base Rate plus the Applicable Percentage; and

 

(ii) LIBOR Rate Loans . During such periods as Revolving Loans shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear interest at a per annum rate equal to the sum of the LIBOR Rate plus the Applicable Percentage.

 

Interest on Revolving Loans shall be payable in arrears on each Interest Payment Date.

 

(e) Revolving Notes; Covenant to Pay . The Borrower’s obligation to pay each Revolving Lender’s Revolving Loans shall be evidenced by a duly executed promissory note of the Borrower to such Revolving Lender in substantially the form of Schedule 2.1(e) . The Borrower covenants and agrees to pay the Revolving Loans in accordance with the terms of this Credit Agreement and the Revolving Notes.

 

Section 2.2 Term Loan .

 

(a) Term Loan . Subject to the terms and conditions hereof and in reliance upon the representations and warranties set forth herein, each Term Loan Lender severally agrees to make available to the Borrower on the Closing Date such Term Loan Lender’s Term Loan Commitment Percentage of a term loan in Dollars (the “ Term Loan ”) in the aggregate principal amount of FIFTY MILLION DOLLARS ($50,000,000) (the “ Term Loan Committed Amount ”) for the purposes hereinafter set forth. The Term Loan may consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as Borrower may request; provided that on the Closing Date the Term Loan shall bear interest at the Alternate Base Rate. LIBOR Rate Loans shall be made by each Term Loan Lender at its LIBOR Lending Office and Alternate Base Rate Loans at its Domestic Lending Office. Amounts repaid or prepaid on the Term Loan may not be reborrowed.

 

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(b) Repayment of Term Loan . The principal amount of the Term Loan shall be repaid in twenty consecutive quarterly installments (as reduced pursuant to Section 2.8) unless accelerated sooner pursuant to Section 7.2 as follows:

 

 

(c) Interest on the Term Loan . Subject to the provisions of Section 2.10, the Term Loan shall bear interest as follows:

 

(i) Alternate Base Rate Loans . During such periods as the Term Loan shall be comprised of Alternate Base Rate Loans, each such Alternate Base Rate Loan shall bear interest at a per annum rate equal to the sum of the Alternate Base Rate plus the Applicable Percentage; and

 

(ii) LIBOR Rate Loans . During such periods as the Term Loan shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear interest at a per annum rate equal to the sum of the LIBOR Rate plus the Applicable Percentage.

 

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(d) Term Notes; Covenant to Pay . The Borrower’s obligation to pay each Term Loan Lender’s Term Loan shall be evidenced, upon such Term Loan Lender’s request, by a Term Note made payable to such Lender in substantially the form of Schedule 2.2(d) . The Borrower covenants and agrees to pay the Term Loan in accordance with the terms of this Credit Agreement and the Term Notes.

 

Section 2.3 Letter of Credit Subfacility .

 

(a) Issuance . Subject to the terms and conditions hereof and of the LOC Documents, if any, and any other terms and conditions which the Issuing Lender may reasonably require, during the Commitment Period the Issuing Lender shall issue, and the Revolving Lenders shall participate in, Letters of Credit for the account of the Borrower from time to time upon request in a form acceptable to the Issuing Lender; provided , however , that (i) the aggregate amount of LOC Obligations shall not at any time exceed ONE MILLION DOLLARS ($1,000,000) (the “ LOC Committed Amount ”), (ii) the sum of the aggregate principal amount of outstanding Revolving Loans plus outstanding Swingline Loans plus LOC Obligations shall not at any time exceed the Revolving Committed Amount, (iii) all Letters of Credit shall be denominated in Dollars and (iv) Letters of Credit shall be issued for lawful corporate purposes and may be issued as standby letters of credit, including in connection with workers’ compensation and other insurance programs. Except as otherwise expressly agreed upon by all the Revolving Lenders, no Letter of Credit shall have an original expiry date more than twelve months from the date of issuance; provided , however , so long as no Default or Event of Default has occurred and is continuing and subject to the other terms and conditions to the issuance of Letters of Credit hereunder, the expiry dates of Letters of Credit may be extended annually or periodically from time to time on the request of the Borrower or by operation of the terms of the applicable Letter of Credit to a date not more than twelve months from the date of extension; provided , further , that no Letter of Credit, as originally issued or as extended, shall have an expiry date extending beyond the date that is thirty days prior to the Revolving Commitment Termination Date. Each Letter of Credit shall comply with the related LOC Documents. The issuance and expiry date of each Letter of Credit shall be a Business Day. Any Letters of Credit issued hereunder shall be in a minimum original face amount of $100,000 or such lesser amount as approved by the Issuing Lender and the Administrative Agent. Wachovia shall be the Issuing Lender on all Letters of Credit issued on or after the Closing Date.

 

(b) Notice and Reports . The request for the issuance of a Letter of Credit shall be submitted to the Issuing Lender at least five Business Days prior to the requested date of issuance. The Issuing Lender will promptly upon request provide to the Administrative Agent for dissemination to the Revolving Lenders a detailed report specifying the Letters of Credit which are then issued and outstanding and any activity with respect thereto which may have occurred since the date of any prior report, and including therein, among other things, the account party, the beneficiary, the face amount, expiry date as well as any payments or expirations which may have occurred. The Issuing Lender will further provide to the Administrative Agent promptly upon request copies of the Letters of Credit. The Issuing Lender will provide to the

 

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Administrative Agent promptly upon request a summary report of the nature and extent of LOC Obligations then outstanding.

 

(c) Participations . Each Revolving Lender upon issuance of a Letter of Credit shall be deemed to have purchased without recourse a risk participation from the Issuing Lender in such Letter of Credit and the obligations arising thereunder and any collateral relating thereto, in each case in an amount equal to its Revolving Commitment Percentage of the obligations under such Letter of Credit and shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to the Issuing Lender therefor and discharge when due, its Revolving Commitment Percentage of the obligations arising under such Letter of Credit; provided that any Person that becomes a Revolving Lender after the Closing Date shall be deemed to have purchased a risk participation in all outstanding Letters of Credit on the date it becomes a Revolving Lender hereunder and any Letter of Credit issued on or after such date, in each case in accordance with the foregoing terms. Without limiting the scope and nature of each Revolving Lender’s participation in any Letter of Credit, to the extent that the Issuing Lender has not been reimbursed as required hereunder or under any LOC Document, each such Revolving Lender shall pay to the Issuing Lender its Revolving Commitment Percentage of such unreimbursed drawing in same day funds pursuant to and in accordance with the provisions of subsection (d) hereof. The obligation of each Revolving Lender to so reimburse the Issuing Lender shall be absolute and unconditional and shall not be affected by the occurrence of a Default, an Event of Default or any other occurrence or event. Any such reimbursement shall not relieve or otherwise impair the obligation of the Borrower to reimburse the Issuing Lender under any Letter of Credit, together with interest as hereinafter provided.

 

(d) Reimbursement . In the event of any drawing under any Letter of Credit, the Issuing Lender will promptly notify the Borrower and the Administrative Agent. The Borrower shall reimburse the Issuing Lender on the day of drawing under any Letter of Credit (with the proceeds of a Revolving Loan obtained hereunder or otherwise) in same day funds as provided herein or in the LOC Documents. If the Borrower shall fail to reimburse the Issuing Lender as provided herein, the unreimbursed amount of such drawing shall bear interest at a per annum rate equal to the ABR Default Rate. Unless the Borrower shall immediately notify the Issuing Lender and the Administrative Agent of its intent to otherwise reimburse the Issuing Lender, the Borrower shall be deemed to have requested a Revolving Loan in the amount of the drawing as provided in subsection (e) hereof, the proceeds of which will be used to satisfy the Reimbursement Obligations. The Borrower’s Reimbursement Obligations hereunder shall be absolute and unconditional under all circumstances irrespective of any rights of set-off, counterclaim or defense to payment the Borrower may claim or have against the Issuing Lender, the Administrative Agent, the Lenders, the beneficiary of the Letter of Credit drawn upon or any other Person, including without limitation any defense based on any failure of the Borrower to receive consideration or the legality, validity, regularity or unenforceability of the Letter of Credit. The Issuing Lender will promptly notify the other Revolving Lenders of the amount of any unreimbursed drawing and each Revolving Lender shall promptly pay to the Administrative Agent for the account of the Issuing Lender in

 

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Dollars and in immediately available funds, the amount of such Revolving Lender’s Revolving Commitment Percentage of such unreimbursed drawing. Such payment shall be made on the day such notice is received by such Revolving Lender from the Issuing Lender if such notice is received at or before 2:00 P.M., otherwise such payment shall be made at or before 12:00 Noon on the Business Day next succeeding the day such notice is received. If such Revolving Lender does not pay such amount to the Issuing Lender in full upon such request, such Revolving Lender shall, on demand, pay to the Administrative Agent for the account of the Issuing Lender interest on the unpaid amount during the period from the date of such drawing until such Revolving Lender pays such amount to the Issuing Lender in full at a rate per annum equal to, if paid within two Business Days of the date of drawing, the Federal Funds Effective Rate and thereafter at a rate equal to the Alternate Base Rate. Each Revolving Lender’s obligation to make such payment to the Issuing Lender, and the right of the Issuing Lender to receive the same, shall be absolute and unconditional, shall not be affected by any circumstance whatsoever and without regard to the termination of this Agreement or the Commitments hereunder, the existence of a Default or Event of Default or the acceleration of the Credit Party Obligations hereunder and shall be made without any offset, abatement, withholding or reduction whatsoever.

 

(e) Repayment with Revolving Loans . On any day on which the Borrower shall have requested, or been deemed to have requested, a Revolving Loan to reimburse a drawing under a Letter of Credit, the Administrative Agent shall give notice to the Revolving Lenders that a Revolving Loan has been requested or deemed requested in connection with a drawing under a Letter of Credit, in which case a Revolving Loan borrowing comprised entirely of Alternate Base Rate Loans (each such borrowing, a “ Mandatory LOC Borrowing ”) shall be made (without giving effect to any termination of the Commitments pursuant to Section 7.2) pro rata based on each Revolving Lender’s respective Revolving Commitment Percentage (determined before giving effect to any termination of the Commitments pursuant to Section 7.2) and the proceeds thereof shall be paid directly to the Issuing Lender for application to the respective LOC Obligations. Each Revolving Lender hereby irrevocably agrees to make such Revolving Loans on the day such notice is received by the Revolving Lenders from the Administrative Agent if such notice is received at or before 2:00 P.M., otherwise such payment shall be made at or before 12:00 Noon on the Business Day next succeeding the date such notice is received, in each case notwithstanding (i) the amount of Mandatory LOC Borrowing may not comply with the minimum amount for borrowings of Revolving Loans otherwise required hereunder, (ii) whether any conditions specified in Section 4.2 are then satisfied, (iii) whether a Default or an Event of Default then exists, (iv) the failure of any such request or deemed request for Revolving Loan to be made by the time otherwise required in Section 2.1(b), (v) the date of such Mandatory LOC Borrowing, or (vi) any reduction in the Revolving Committed Amount after any such Letter of Credit may have been drawn upon; provided , however , that in the event any such Mandatory LOC Borrowing should be less than the minimum amount for borrowings of Revolving Loans otherwise provided in Section 2.1(b)(ii), the Borrower shall pay to the Administrative Agent for its own account an administrative fee of $500. In the event that any Mandatory LOC Borrowing cannot for any reason be made on the date otherwise required above

 

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(including, without limitation, the occurrence of a Bankruptcy Event), then each such Revolving Lender hereby agrees that it shall forthwith fund (as of the date the Mandatory LOC Borrowing would otherwise have occurred, but adjusted for any payments received from the Borrower on or after such date and prior to such purchase) its Participation Interests in the LOC Obligations; provided , further , that in the event any Revolving Lender shall fail to fund its Participation Interest on the day the Mandatory LOC Borrowing would otherwise have occurred, then the amount of such Revolving Lender’s unfunded Participation Interest therein shall bear interest payable by such Revolving Lender to the Issuing Lender upon demand, at the rate equal to, if paid within two Business Days of such date, the Federal Funds Effective Rate, and thereafter at a rate equal to the Alternate Base Rate.

 

(f) Modification, Extension . The issuance of any supplement, modification, amendment, renewal, or extension to any Letter of Credit shall, for purposes hereof, be treated in all respects the same as the issuance of a new Letter of Credit hereunder.

 

(g) ISP98 . Unless otherwise expressly agreed by the Issuing Lender and the Borrower, the rules of the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each standby Letter of Credit.

 

(h) Conflict with LOC Documents . In the event of any conflict between this Credit Agreement and any LOC Document (including any letter of credit application), this Credit Agreement shall control.

 

(i) Designation of Subsidiaries as Account Parties . Notwithstanding anything to the contrary set forth in this Agreement, including without limitation Section 2.3(a), a Letter of Credit issued hereunder may contain a statement to the effect that such Letter of Credit is issued for the account of a Subsidiary of the Borrower; provided that, notwithstanding such statement, the Borrower shall be the actual account party for all purposes of this Agreement for such Letter of Credit and such statement shall not affect the Borrower’s Reimbursement Obligations hereunder with respect to such Letter of Credit.

 

Section 2.4 Swingline Loan Subfacility .

 

(a) Swingline Commitment . During the Commitment Period, subject to the terms and conditions hereof, the Swingline Lender, in its individual capacity, agrees to make certain revolving credit loans to the Borrower (each a “ Swingline Loan ” and, collectively, the “ Swingline Loans ”) for the purposes hereinafter set forth; provided , however , (i) the aggregate principal amount of Swingline Loans outstanding at any time shall not exceed TWO MILLION FIVE HUNDRED DOLLARS ($2,500,000) (the “ Swingline Committed Amount ”), and (ii) the sum of the aggregate principal amount of outstanding Revolving Loans plus outstanding Swingline Loans plus LOC Obligations shall not exceed the Revolving Committed Amount. Swingline Loans hereunder may be repaid and reborrowed in accordance with the provisions hereof. Such Swingline Loan

 

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borrowing will then be made available to the Borrower by the Swingline Lender, through the Administrative Agent, on the date (which shall be a Business Day) specified in the applicable Notice of Borrowing (by the end of such Business Day) by funding to the account of the Borrower set forth in the Account Designation Letter the aggregate amount of Swingline Loans requested.

 

(b) Swingline Loan Borrowings .

 

(i) Notice of Borrowing and Disbursement . The Swingline Lender will make Swingline Loans available to the Borrower on any Business Day upon delivery of a Notice of Borrowing by the Borrower to the Administrative Agent not later than 2:00 P.M. on such Business Day. Swingline Loan borrowings hereunder shall be made in minimum amounts of $100,000 and in integral amounts of $100,000 in excess thereof. Such borrowing will then be made available to the Borrower by the Swingline Lender on the date (which shall be a Business Day) specified in the applicable Notice of Borrowing (by the end of such Business Day) by funding the account of the Borrower set forth in the Account Designation Letter the aggregate amount of the Swingline Loans requested.

 

(ii) Repayment of Swingline Loans . Each Swingline Loan borrowing shall be due and payable on the Revolving Commitment Termination Date. The Swingline Lender may, at any time, in its sole discretion, by written notice to the Borrower and the Administrative Agent, demand repayment of its Swingline Loans by way of a Revolving Loan borrowing, in which case the Borrower shall be deemed to have requested a Revolving Loan borrowing comprised entirely of Alternate Base Rate Loans in the amount of such Swingline Loans; provided , however , that, in the following circumstances, any such demand shall also be deemed to have been given one Business Day prior to each of (A) the Revolving Commitment Termination Date, (B) the occurrence of a Bankruptcy Event, (C) upon acceleration of the Credit Party Obligations hereunder, whether on account of a Bankruptcy Event or any other Event of Default, and (D) the exercise of remedies in accordance with the provisions of Section 7.2 hereof (each such Revolving Loan borrowing made on account of any such deemed request therefor as provided herein being hereinafter referred to as “ Mandatory Swingline Borrowing ”). Each Revolving Lender hereby irrevocably agrees to make such Revolving Loans promptly upon any such request or deemed request on account of each Mandatory Swingline Borrowing in the amount and in the manner specified in the preceding sentence on the date such notice is received by the Revolving Lenders from the Administrative Agent if such notice is received at or before 2:00 P.M., otherwise such payment shall be made at or before 12:00 Noon on the Business Day next succeeding the date such notice is received notwithstanding (1) the amount of Mandatory Swingline Borrowing may not comply with the minimum amount for borrowings of Revolving Loans otherwise required hereunder, (2) whether any conditions specified in Section 4.2 are then satisfied, (3) whether a Default or an Event of Default then exists, (4) failure of

 

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any such request or deemed request for Revolving Loans to be made by the time otherwise required in Section 2.1(b)(i), (5) the date of such Mandatory Swingline Borrowing, or (6) any reduction in the Revolving Committed Amount or termination of the Revolving Commitments immediately prior to such Mandatory Swingline Borrowing or contemporaneously therewith. In the event that any Mandatory Swingline Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code), then each Revolving Lender hereby agrees that it shall forthwith purchase (as of the date the Mandatory Swingline Borrowing would otherwise have occurred, but adjusted for any payments received from the Borrower on or after such date and prior to such purchase) from the Swingline Lender such Participation Interest in the outstanding Swingline Loans as shall be necessary to cause each such Revolving Lender to share in such Swingline Loans ratably based upon its respective Revolving Commitment Percentage (determined before giving effect to any termination of the Commitments pursuant to Section 7.2); provided that (x) all interest payable on the Swingline Loans shall be for the account of the Swingline Lender until the date as of which the respective Participation Interest is purchased, and (y) at the time any purchase of a Participation Interest pursuant to this sentence is actually made, the purchasing Revolving Lender shall be required to pay to the Swingline Lender interest on the principal amount of such Participation Interest purchased for each day from and including the day upon which the Mandatory Swingline Borrowing would otherwise have occurred to but excluding the date of payment for such Participation Interest, at the rate equal to, if paid within two Business Days of the date of the Mandatory Swingline Borrowing, the Federal Funds Effective Rate, and thereafter at a rate equal to the Alternate Base Rate.

 

(c) Interest on Swingline Loans . Subject to the provisions of Section 2.10, Swingline Loans shall bear interest at a per annum rate equal to the Alternate Base Rate plus the Applicable Percentage for Revolving Loans that are Alternate Base Rate Loans. Interest on Swingline Loans shall be payable in arrears on each Interest Payment Date.

 

(d) Swingline Note; Covenant to Pay . The Swingline Loans shall be evidenced by a duly executed promissory note of the Borrower to the Swingline Lender in the original amount of the Swingline Committed Amount and substantially in the form of Schedule 2.4(d) . The Borrower covenants and agrees to pay the Swingline Loans in accordance with the terms of this Credit Agreement and the Swingline Note.

 

Section 2.5 Incremental Facility .

 

Subject to the terms and conditions set forth herein, the Borrower shall have the right, at any time after completion of the syndication of the Commitments (as determined by WCM) until the date that is the second anniversary of the Closing Date, on a one-time basis, to incur additional Indebtedness under this Agreement in the form of an addition to the Term Loan (the “ Incremental Facility ”) by an aggregate amount of up to $25,000,000.

 

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The following terms and conditions shall apply to the Incremental Facility: (a) the loans made under the Incremental Facility shall constitute Obligations and Credit Party Obligations and will be secured and guaranteed with the other Loans on a pari passu basis, (b) the weighted average life and final maturity applicable to such Incremental Facility shall be determined at the time such Incremental Facility is made available; provided that (i) such Incremental Facility shall mature no earlier than the Term Loan Maturity Date and (ii) the weighted average life to maturity of the Incremental Facility shall be longer than or substantially similar to the weighted average life to maturity of the Term Loan, (c) the interest rate margin applicable to such Incremental Facility shall be the same as the Applicable Percentage for the Term Loan, (d) such Incremental Facility shall be entitled to the same voting rights as the existing Loans and shall be entitled to receive proceeds of prepayments on the same basis as the existing Term Loans, (e) such Incremental Facility shall be obtained from existing Lenders or from other banks, financial institutions or investment funds, in each case in accordance with the terms set forth below, (f) the proceeds of such Incremental Facility will be used for purposes consistent with Section 3.11 hereof, (g) the conditions to Extensions of Credit in Section 4.2 shall have been satisfied, (h) the Administrative Agent and the Lenders shall have received from the Borrower updated financial projections and an Officers’ Certificate, in each case in form and substance satisfactory to Administrative Agent, demonstrating that, after giving effect to any such Incremental Facility, no Default or Event of Default shall have occurred and be continuing and that the Borrower will be in pro forma compliance with the financial covenants set forth in Section 5.9 and (i) the Administrative Agent shall have received such other documentation as it may reasonably request, including without limitation, an opinion of counsel to the Borrower and organizational documents and resolutions from the Credit Parties, all in form and substance satisfactory to the Administrative Agent. Participation in the Incremental Facility hereunder shall be offered first to each of the existing Lenders, but each such Lender shall have no obligation to provide all or any portion of such Incremental Facility. If, upon the date that is fifteen Business Days after the existing Lenders are invited by the Administrative Agent to participate in such Incremental Facility, the amount of the Incremental Facility shall exceed the commitments that the existing Lenders are willing to provide with respect to the Incremental Facility, then the Borrower may invite other banks, financial institutions and investment funds reasonably acceptable to the Administrative Agent to join this Agreement as Lenders hereunder for the portion of such Incremental Facility not taken by existing Lenders, provided that such other banks, financial institutions and investment funds shall enter into such joinder agreements to give effect thereto as the Administrative Agent and the Borrower may reasonably request. The Administrative Agent is authorized to enter into, on behalf of the Lenders, any amendment to this Agreement or any other Credit Document as may be necessary to incorporate the terms of the new Incremental Facility therein, solely to the extent such terms are consistent with the terms as set forth in this Section 2.5.

 

Section 2.6 Fees .

 

(a) Commitment Fee . In consideration of the Revolving Commitments, the Borrower agrees to pay to the Administrative Agent for the ratable benefit of the

 

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Revolving Lenders a commitment fee (the “ Commitment Fee ”) in an amount equal to the Applicable Percentage per annum on the average daily unused amount of the Revolving Committed Amount. For purposes of computation of the Commitment Fee, LOC Obligations shall be considered usage of the Revolving Committed Amount but Swingline Loans shall not be considered usage of the Revolving Committed Amount. The Commitment Fee shall be payable quarterly in arrears on the last Business Day of each calendar quarter.

 

(b) Letter of Credit Fees . In consideration of the LOC Commitments, the Borrower agrees to pay to the Administrative Agent, for the ratable benefit of the Revolving Lenders, a fee (the “ Letter of Credit Fee ”) equal to the Applicable Percentage per annum on the average daily maximum amount available to be drawn under each Letter of Credit from the date of issuance to the date of expiration. In addition to such Letter of Credit Fee, the Borrower agrees to pay to the Issuing Lender, for its own account and without sharing by the other Lenders, an additional fronting fee (the “ Fronting Fee ”) of one-quarter of one percent (0.25%) per annum on the average daily maximum amount available to be drawn under each such Letter of Credit issued by it. The Letter of Credit Fee and the Fronting Fee shall be payable quarterly in arrears on the last Business Day of each calendar quarter.

 

(c) Issuing Lender Fees . In addition to the Letter of Credit Fees and Fronting Fees payable pursuant to subsection (b) hereof, the Borrower shall pay to the Issuing Lender for its own account without sharing by the other Lenders the reasonable and customary charges from time to time of the Issuing Lender with respect to the amendment, transfer, administration, cancellation and conversion of, and drawings under, such Letters of Credit (collectively, the “ Issuing Lender Fees ”).

 

(d) Administrative Fee . The Borrower agrees to pay to the Administrative Agent the annual administrative fee as described in the Fee Letter.

 

Section 2.7 Commitment Reductions .

 

(a) Voluntary Reductions . The Borrower shall have the right to terminate or permanently reduce the unused portion of the Revolving Committed Amount at any time or from time to time upon not less than five Business Days’ prior notice to the Administrative Agent (which shall notify the Lenders thereof as soon as practicable) of each such termination or reduction, which notice shall specify the effective date thereof and the amount of any such reduction which shall be in a minimum amount of $2,000,000 or a whole multiple of $1,000,000 in excess thereof and shall be irrevocable and effective upon receipt by the Administrative Agent, provided that no such reduction or termination shall be permitted if after giving effect thereto, and to any prepayments of the Loans made on the effective date thereof, the sum of the outstanding Revolving Loans plus outstanding Swingline Loans plus LOC Obligations would exceed the Revolving Committed Amount.

 

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(b) Swingline Committed Amount . If the Revolving Committed Amount is reduced pursuant to Section 2.8(a) below the then Swingline Committed Amount, the Swingline Committed Amount shall automatically be reduced by an amount such that the Swingline Committed Amount equals the Revolving Committed Amount.

 

(c) Revolving Commitment Termination Date . The Revolving Commitment, the Swingline Commitment and the LOC Commitment shall automatically terminate on the Revolving Commitment Termination Date.

 

Section 2.8 Prepayments .

 

(a) Optional Prepayments . The Borrower shall have the right to prepay Loans in whole or in part from time to time; provided , however , that (i) each partial prepayment of a Revolving Loan and the Term Loan shall be in a minimum principal amount of $1,000,000 and integral multiples of $500,000 in excess thereof (or the remaining outstanding principal amount), and (ii) each partial prepayment of a Swingline Loan shall be in a minimum principal amount of $100,000 and integral multiples of $100,000 in excess thereof (or the remaining outstanding principal amount). The Borrower shall give at least three Business Days’ irrevocable notice in the case of LIBOR Rate Loans and at least one Business Day’s irrevocable notice in the case of Alternate Base Rate Loans, to the Administrative Agent (which shall notify the Lenders thereof as soon as practicable). Amounts prepaid under this Section 2.8(a) shall be applied to the outstanding Loans as the Borrower may elect; provided that (A) any prepayment of the Term Loan shall be applied pro rata to the remaining Term Loan amortization payments set forth in Section 2.2(b) and (B) each Lender shall receive its pro rata share (except with respect to prepayments of Swingline Loans) of any such prepayment based on its Revolving Commitment Percentage or Term Loan Commitment Percentage, as applicable. Within the foregoing parameters, prepayments under this Section shall be applied first to Alternate Base Rate Loans and then to LIBOR Rate loans in direct order of Interest Period maturities. All prepayments under this Section 2.8(a) shall be subject to Section 2.18, but otherwise without premium or penalty. Interest on the principal amount prepaid shall be payable on the next occurring Interest Payment Date that would have occurred had such Loans not been prepaid or, at the request of the Administrative Agent, interest on the principal amount prepaid shall be payable on any date that a prepayment is made hereunder through the date of prepayment. Amounts prepaid on the Revolving Loans and the Swingline Loans may be reborrowed in accordance with the terms hereof. Amounts prepaid on the Term Loans may not be reborrowed.

 

(b) Mandatory Prepayments .

 

(i) Revolving Committed Amount . If at any time after the Closing Date, the sum of the aggregate principal amount of outstanding Revolving Loans plus outstanding Swingline Loans plus LOC Obligations shall exceed the Revolving Committed Amount, the Borrower immediately shall prepay the Loans and cash collateralize the LOC Obligations in an amount sufficient to eliminate such excess (such prepayment to be applied as set forth in clause (vi) below).

 

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(ii) Asset Dispositions . Promptly following any Asset Disposition or related series of Asset Dispositions, the Borrower shall prepay the Loans and cash collateralize the LOC Obligations in an aggregate amount equal to 100% of the Net Cash Proceeds derived from such Asset Disposition (or related series of Asset Dispositions) (such prepayment to be applied as set forth in clause (vi) below); provided , however , that such Net Cash Proceeds shall not be required to be so applied to the extent the Borrower delivers to the Administrative Agent promptly following such Asset Disposition a certificate stating that it intends to use such Net Cash Proceeds to acquire like assets used in the business of the Borrower and its Subsidiaries within 180 days of the receipt of such Net Cash Proceeds, it being expressly agreed that any Net Cash Proceeds not so reinvested shall be applied to prepay the Loans and cash collateralize the LOC Obligations immediately thereafter (such prepayment to be applied as set forth in clause (vi) below).

 

(iii) Issuances . Immediately upon receipt by any Credit Party of proceeds from (A) any Debt Issuance, the Borrower shall prepay the Loans and cash collateralize the LOC Obligations in an aggregate amount equal to one hundred percent (100%) of the Net Cash Proceeds of such Debt Issuance to the Lenders (such prepayment to be applied as set forth in clause (vi) below) or (B) any Equity Issuance, if the Borrower’s Leverage Ratio as of the end of the most recent fiscal quarter for which the Administrative Agent has received an Officer’s Compliance Certificate pursuant to Section 5.2(b) is (a) equal to or greater than 1.0 to 1.0, the Borrower shall prepay the Loans and cash collateralize the LOC Obligations in an aggregate amount equal to 50% of the Net Cash Proceeds of such Equity Issuance and (b) less than 1.0 to 1.0, then no Equity Issuance prepayment shall be required (such prepayment to be applied as set forth in clause (vi) below).

 

(iv) Recovery Event . Immediately upon receipt by any Credit Party of proceeds from any Recovery Event, the Borrower shall prepay the Loans and cash collateralize the LOC Obligations in an aggregate amount equal to one hundred percent (100%) of such cash proceeds (such prepayment to be applied as set forth in clause (vi) below); provided , however , that, so long as no Default or Event of Default has occurred and is continuing at the time of such Recovery Event, any Net Cash Proceeds shall not be required to the extent the Borrower (A) pursues such repair or replacement in a diligent manner and (B) such repair or replacement is completed within 180 days of the receipt of such Net Cash Proceeds, it being expressly agreed that any Net Cash Proceeds not so reinvested by the end of the applicable period shall be applied to repay the Loans and/or cash collateralize the LOC Obligations immediately thereafter (such prepayment to be applied as set forth in clause (vi) below).

 

(v) Excess Cash Flow . Within 90 days after the end of each fiscal year (commencing with the fiscal year ending December 31, 2006), if the Borrower’s Leverage Ratio as of the end of such fiscal year is (i) equal to or greater than 1.0 to

 

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1.0, the Borrower shall prepay the Loans and cash collateralize the LOC Obligations in an aggregate amount equal to 50% of the Excess Cash Flow for such fiscal year and (b) less than 1.0 to 1.0, then no annual Cash Flow prepayment shall be required (such prepayments to be applied as set forth in clause (vi) below).

 

(vi) Application of Mandatory Prepayments . All amounts required to be paid pursuant to this Section 2.8(b) shall be applied as follows: (A) with respect to all amounts prepaid pursuant to Sections 2.8(b)(i), (1) first, to the outstanding Swingline Loans, (2) second, to the outstanding Revolving Loans and (3) third (after all Revolving Loans have been repaid), to a cash collateral account in respect of LOC Obligations, and (B) with respect to all amounts prepaid pursuant to Sections 2.8(b)(ii), (iii), (iv) and (v), (1) first, to the remaining Term Loan amortization payments set forth in Section 2.2(b) on pro rata basis, (2) second, to the outstanding Swingline Loans (without a corresponding permanent reduction in the Revolving Committed Amount), (3) third, to the outstanding Revolving Loans (without a corresponding permanent reduction in the Revolving Committed Amount) and (4) fourth (after all Revolving Loans have been repaid), to a cash collateral account in respect of LOC Obligations. Within the parameters of the applications set forth above, prepayments shall be applied first to Alternate Base Rate Loans and then to LIBOR Rate Loans in direct order of Interest Period maturities. Each Lender shall receive its pro rata share (except with respect to prepayments of Swingline Loans) of any such prepayment based on its Revolving Commitment Percentage or Term Loan Commitment Percentages, as applicable. All prepayments under this Section 2.8(b) shall be subject to Section 2.18 and be accompanied by interest on the principal amount prepaid through the date of prepayment.

 

(c) Hedging Obligations Unaffected . Any repayment or prepayment made pursuant to this Section 2.8 shall not affect the Borrower’s obligation to continue to make payments under any Secured Hedging Agreement, which shall remain in full force and effect notwithstanding such repayment or prepayment, subject to the terms of such Secured Hedging Agreement.

 

Section 2.9 Lending Offices .

 

LIBOR Rate Loans shall be made by each Lender at its LIBOR Lending Office and Alternate Base Rate Loans at its Domestic Lending Office.

 

Section 2.10 Default Rate .

 

Upon the occurrence, and during the continuance, of an Event of Default, at the discretion of the Required Lenders, the principal of and, to the extent permitted by law, interest on the Loans and any other amounts owing hereunder or under the other Credit Documents shall bear interest, payable on demand, at a per annum rate 2% greater than the rate which would otherwise be applicable (or if no rate is applicable, whether in respect of interest, fees or other amounts, then the ABR Default Rate).

 

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Section 2.11 Conversion Options .

 

(a) The Borrower may, in the case of Revolving Loans and the Term Loan, elect from time to time to convert all or any portion of an Alternate Base Rate Loan to a LIBOR Rate Loan by giving the Administrative Agent at least three Business Days’ prior irrevocable written notice of such election; provided that (i) no Alternate Base Rate Loan or portion thereof may be converted into a LIBOR Rate Loan when any Default or Event of Default has occurred and is continuing and (ii) conversions shall be in an aggregate principal amount of (A) in the case of Revolving Loans $1,000,000 or a whole multiple of $500,000 in excess thereof and (B) in the case of the Term Loan, $2,000,000 or a whole multiple of $1,000,000 in excess thereof. In addition, the Borrower may elect from time to time to convert all or any portion of a LIBOR Rate Loan to an Alternate Base Rate Loan by giving the Administrative Agent irrevocable written notice thereof by 11:00 A.M. one Business Day prior to the proposed date of conversion. A form of Notice of Conversion/Extension is attached as Schedule 2.11 . If the date upon which an Alternate Base Rate Loan is to be converted to a LIBOR Rate Loan is not a Business Day, then such conversion shall be made on the next succeeding Business Day and during the period from such last day of an Interest Period to such succeeding Business Day such Loan shall bear interest as if it were an Alternate Base Rate Loan. LIBOR Rate Loans may only be converted to Alternate Base Rate Loans on the last day of the applicable Interest Period. If the date upon which a LIBOR Rate Loan is to be converted to an Alternate Base Rate Loan is not a Business Day, then such conversion shall be made on the next succeeding Business Day and during the period from such last day of an Interest Period to such succeeding Business Day such Loan shall bear interest as if it were an Alternate Base Rate Loan.

 

(b) Any LIBOR Rate Loans may be continued as such upon the expiration of an Interest Period with respect thereto by compliance by the Borrower with the notice provisions contained in Section 2.11(a); provided , that no LIBOR Rate Loan may be continued as such when any Default or Event of Default has occurred and is continuing, in which case such Loan shall be automatically converted to an Alternate Base Rate Loan at the end of the applicable Interest Period with respect thereto. If the Borrower shall fail to give timely notice of an election to continue a LIBOR Rate Loan, or the continuation of LIBOR Rate Loans is not permitted hereunder, such LIBOR Rate Loans shall be automatically converted to Alternate Base Rate Loans at the end of the applicable Interest Period with respect thereto.

 

Section 2.12 Computation of Interest and Fees .

 

(a) Interest payable hereunder with respect to Alternate Base Rate Loans based on the Prime Rate shall be calculated on the basis of a year of 365 days (or 366 days, as applicable) for the actual days elapsed. All other fees, interest and all other amounts payable hereunder shall be calculated on the basis of a 360-day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Borrower