CREDIT AGREEMENT dated as of August 26, 2009, among

Exhibit 10.1

EXECUTION COPY

CREDIT AGREEMENT

dated as of

August 26, 2009,

among

US ONCOLOGY HOLDINGS, INC.

US ONCOLOGY, INC.,

as Borrower

The Lenders Party Hereto,

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Administrative Agent and Collateral Agent

MORGAN STANLEY SENIOR FUNDING, INC.,

and

WELLS FARGO BANK, N.A.,

as Syndication Agents

and

JPMORGAN CHASE BANK, N.A.,

as Documentation Agent

 

DEUTSCHE BANK SECURITIES INC.,

as Co-Lead Arranger and Joint Bookrunner

J.P. MORGAN SECURITIES INC.,

as Co-Lead Arranger and Joint Bookrunner

MORGAN STANLEY SENIOR FUNDING, INC.,

as Co-Lead Arranger and Joint Bookrunner

WELLS FARGO SECURITIES, LLC,

as Co-Lead Arranger and Joint Bookrunner

TABLE OF CONTENTS

 

 

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Table of Contents (Cont.)

 

 

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Table of Contents (Cont.)

 

 

 

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Table of contents (cont.)

 

 

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CREDIT AGREEMENT dated as of August 26, 2009, among US ONCOLOGY HOLDINGS, INC., a Delaware corporation, US ONCOLOGY, INC., a Delaware corporation, the LENDERS party hereto, DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent and Collateral Agent, MORGAN STANLEY SENIOR FUNDING, INC., and WELLS FARGO BANK, N.A., as Syndication Agents and JPMORGAN CHASE BANK, N.A., as Documentation Agent.

The Borrower has requested that the Lenders extend credit in the form of Revolving Loans, Swingline Loans and Letters of Credit (each, as defined below) at any time and from time to time during the Availability Period, in an aggregate principal amount at any time outstanding not to exceed $120,000,000 (subject to increase as and to the extent provided in Section 2.20).

The proceeds of Revolving Loans, Swingline Loans and Letters of Credit will be used by the Borrower for working capital and general corporate purposes.

The Lenders are willing to extend such credit to the Borrower, and the Issuing Bank is willing to issue Letters of Credit for the account of the Borrower, on the terms and subject to the conditions set forth herein. Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

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

“ 9% Senior Notes ” means the senior notes due 2012 issued by the Borrower on August 20, 2004 in an aggregate principal amount of $300,000,000 and the Indebtedness represented thereby.

“ 9  ⁵ / 8 % Senior Subordinated Notes ” means the 9  ⁵ / 8 % Senior Subordinated Notes due 2012 issued by the Borrower on February 1, 2002 in the aggregate principal amount outstanding as of the Effective Date of $3,000,000 and the Indebtedness represented thereby.

“ 9  ⁵ / 8 % Senior Subordinated Notes Documents ” means the indenture dated as of February 1, 2002, among the Borrower, the Subsidiaries listed therein and Bank of New York Mellon, as trustee (as successor to JP Morgan Chase Bank), in respect of the 9  ⁵ / 8 % Senior Subordinated Notes and all other instruments, agreements and other documents evidencing or governing the 9  ⁵ / 8 % Senior Subordinated Notes or providing for any Guarantee or other right in respect thereof.

“ 10  ³ / 4 % Senior Subordinated Notes ” means the Senior Subordinated Notes due 2014 issued by the Borrower on August 20, 2004 in the aggregate principal amount of $275,000,000 and the Indebtedness represented thereby.

“ 10  ³ / 4 % Senior Subordinated Notes Documents ” means the indenture dated as of August 20, 2004, among the Borrower, the Subsidiaries listed therein and Wilmington Trust

FSB, as trustee (as successor to Bank of America, N.A. (as successor by merger to LaSalle Bank National Association)), in respect of the 10  ³ / 4 % Senior Subordinated Notes and all other instruments, agreements and other documents evidencing or governing the 10  ³ / 4 % Senior Subordinated Notes or providing for any Guarantee or other right in respect thereof.

“ ABR ”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.

“ Additional Lender ” has the meaning set forth in Section 2.20.

“ Additional Physician Affiliation ” means (a) (i) the execution of a Management Services Agreement between the Borrower or any Subsidiary and a physician or a physician practice or (ii) the addition of a physician or a physician practice to an existing Affiliated Practice and (b) the acquisition of any related assets.

“ Additional Physician Notes ” means subordinated notes issued by the Borrower to physicians in connection with a Management Services Agreement that (a) are subordinated to the Obligations on terms no less favorable to the Lenders than the terms of the Physician Notes, (b) will not mature prior to the date that is five years from the date of the issuance thereof and (c) contain other terms (including covenants, events of default, remedies, redemption provisions and sinking fund provisions, but excluding interest and amortization provisions and redemption premiums) not materially less favorable to the Lenders than the terms of the Physician Notes.

“ Additional Second Lien Debt ” means Indebtedness of the Borrower that (a) does not have a stated maturity date prior to the date that is 180 days after the Maturity Date, (b) does not require any scheduled payment of principal (including pursuant to a sinking fund obligation) or amortization prior to the date that is 180 days after the Maturity Date and (c) is secured as and to the extent permitted by Section 6.02(xv), provided that at the time of the Incurrence of such Indebtedness, (i) the Borrower and the Subsidiaries are in compliance with such Section 6.12 on a pro forma basis for such Incurrence in accordance with Section 1.05 and (ii) the Borrower has delivered to the Administrative Agent an officer’s certificate to such effect, together with all relevant financial information reasonably requested by the Administrative Agent.

“ Additional Subordinated Debt ” means unsecured Indebtedness of the Borrower that (a) does not have a stated maturity date prior to the date that is 180 days after the Maturity Date, (b) does not require any scheduled payment of principal (including pursuant to a sinking fund obligation) or amortization prior to the date that is 180 days after the Maturity Date and (c) is subordinated to the Obligations on terms no less favorable to the Lenders than the terms of the 10  ³ / 4 % Senior Subordinated Notes, provided that at the time of the Incurrence of such Indebtedness, (i) the Borrower and the Subsidiaries are in compliance with such Section 6.12 on a pro forma basis for such Incurrence in accordance with Section 1.05 and (ii) the Borrower has delivered to the Administrative Agent an officer’s certificate to such effect, together with all relevant financial information reasonably requested by the Administrative Agent.

 

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“ Adjusted LIBO Rate ” means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

“ Administrative Agent ” means Deutsche Bank Trust Company Americas, in its capacity as administrative agent for the Lenders under the Loan Documents.

“ Administrative Questionnaire ” means an administrative questionnaire in a form supplied by the Administrative Agent.

“ Affiliate ” means, with respect to a specified Person, any other Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by or is under common Control with the Person specified.

“ Affiliated Practice ” means any physician practice entity that is a party to, or employs, is owned by or whose member or members are physicians who are party to, a Management Services Agreement.

“ Agents ” means the Administrative Agent, the Collateral Agent, the Syndication Agents and the Documentation Agent.

“ Aggregate Exposures ” means, at any time, the sum of the Exposures of all Lenders at such time.

“ Agreement ” means this Credit Agreement, as the same may be renewed, extended, modified, supplemented or amended from time to time (including, without limitation, pursuant to an Incremental Facility Amendment).

“ Alternate Base Rate ” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the sum of 1.00% plus the one month Adjusted LIBO Rate for such day and (c) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Adjusted LIBO Rate or the Federal Funds Effective Rate shall be effective from and including the effective date of such change in the Prime Rate, the Adjusted LIBO Rate or the Federal Funds Effective Rate, respectively. For purposes of this definition, the Adjusted LIBO Rate shall be determined using the Adjusted LIBO Rate as otherwise determined by the Administrative Agent in accordance with the definition of Adjusted LIBO Rate, except that (x) if a given day is a Business Day, such determination shall be made on such day (rather than two Business Days prior to the commencement of an Interest Period) and (y) if a given day is not a Business Day, the Adjusted LIBO Rate for such day shall be the rate determined by the Administrative Agent pursuant to preceding clause (x) for the most recent Business Day preceding such day.

“ Applicable Percentage ” means, with respect to any Lender, the percentage of the aggregate Commitments represented by such Lender’s Commitment; provided that in the case of Section 2.04(d) and Section 2.05(b)(ii) when a Defaulting Lender shall exist, any such Defaulting Lender’s Commitment shall be disregarded in any calculation. If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments that occur thereafter.

 

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“ Applicable Rate ” means a percentage per annum equal to (i) in the case of Revolving Loans maintained as (A) ABR Loans, 3.50% and (B) Eurodollar Loans, 4.50%; and (ii) in the case of Swingline Loans, 3.50%.

“ Approved Fund ” has the meaning assigned to such term in Section 9.04.

“ Arranger ” means each of the financial institutions listed on the cover page to this Agreement with the title “Co-Lead Arranger and Joint Bookrunner”.

“ Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

“ Availability Period ” means the period from and including the Effective Date to but excluding the earlier of (a) the Maturity Date and (b) the date of termination of the Commitments.

“ Average Life ” means, as of any date of determination, with respect to any Indebtedness or preferred stock, the quotient obtained by dividing (x) the sum of the product of the number of years (rounded to the nearest one-twelfth of one year) from the date of determination to the dates of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such preferred stock multiplied by the amount of such payment by (y) the sum of all such payments.

“ Back-Stop Arrangements ” shall mean, collectively, Letter of Credit Back-Stop Arrangements and Swingline Back-Stop Arrangements.

“ Bankruptcy Code ” has the meaning set forth in Section 7.01(h).

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

“ Board of Directors ” means the Board of Directors of the Borrower or any committee thereof duly authorized to act on behalf of such board.

“ Board Resolution ” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Borrower to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification.

“ Borrower ” means US Oncology, Inc., a Delaware corporation.

“ Borrowing ” means (a) Revolving Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect, or (b) a Swingline Loan.

 

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“ Borrowing Request ” means a request by the Borrower for a Borrowing in accordance with Section 2.03, provided that a written Borrowing Request shall be substantially in the form of Exhibit E, or such other form as shall be approved by the Administrative Agent.

“ Business Day ” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed, provided that when used in connection with a Eurodollar Loan, the term “ Business Day ” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

“ Capital Lease Obligations ” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

“ Capital Stock Sale Proceeds ” means the aggregate cash proceeds received by the Borrower from the issuance or sale (other than to a subsidiary of Borrower or an employee stock ownership plan or trust established by the Borrower or any such subsidiary for the benefit of their employees) by the Borrower of its Equity Interests (other than Disqualified Preferred Stock) after the Effective Date, net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, discounts or commissions and brokerage, consultant and other fees actually incurred in connection with such issuance or sale and net of taxes paid or payable as a result thereof.

“ Change in Control ” means:

(a) the acquisition of record ownership by any Person other than Holdings of any Equity Interests in the Borrower, other than the acquisition of record ownership of Equity Interests in the Borrower by a Succeeding Holdings subject to compliance with Section 5.16 hereof; or

(b) prior to an IPO, the failure by the Permitted Investors to own, directly or indirectly, beneficially and of record, Equity Interests in Holdings representing at least a majority of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests in Holdings; or

(c) after an IPO, (i) the acquisition of ownership, directly or indirectly, beneficially and of record, by any (A) Person (other than one or more Permitted Investors) or (B) Persons (other than one or more Permitted Investors) that are together a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934, as amended, or any successor provision) of Equity Interests in Holdings representing more than 35% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests in Holdings and (ii) the ownership, directly or indirectly, beneficially and of record, by the Permitted Investors of Equity Interests in Holdings representing in the aggregate a lesser percentage of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests in Holdings than such Person or group; or

 

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(d) occupation of a majority of the seats (other than vacant seats) on the Board of Directors of Holdings by Persons who were not (i) nominated by the Board of Directors of Holdings, (ii) appointed by directors so nominated or (iii) nominated by one or more of the Permitted Investors; or

(e) the occurrence of a “Change of Control”, as defined in any of the Senior Secured Notes Documents, the 10  ³ / 4 % Senior Subordinated Notes Documents, the Holdings Floating Rate Notes Documents, any indenture or other instrument, agreement or other document evidencing or governing any Additional Second Lien Debt, any Additional Subordinated Debt or any Qualified Holdings Notes or any certificate of designations relating to the Qualified Preferred Stock.

“ Change in Law ” means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement.

“ CLO ” has the meaning assigned to such term in Section 9.04.

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

“ Collateral ” means any and all “Collateral,” as defined in any applicable Security Document.

“ Collateral Agent ” means Deutsche Bank Trust Company Americas, in its capacity as collateral agent for the Lenders under this Agreement and any Security Document.

“ Collateral Agreement ” means the Guarantee and Collateral Agreement among the Loan Parties and the Collateral Agent, substantially in the form of Exhibit C.

“ Collateral and Guarantee Requirement ” means the requirement that:

(a) the Collateral Agent shall have received from each Loan Party either (i) a counterpart of the Collateral Agreement duly executed and delivered on behalf of such Loan Party or (ii) in the case of any Person that becomes a Loan Party after the Effective Date, a supplement to the Collateral Agreement, in the form specified therein, duly executed and delivered on behalf of such Loan Party;

(b) all outstanding Equity Interests of (i) the Borrower and (ii) each wholly-owned Subsidiary owned directly by any Loan Party shall have been pledged pursuant to the Collateral Agreement and the Collateral Agent shall have received certificates

 

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representing all such Equity Interests (to the extent certificated), together with undated stock powers or other instruments of transfer with respect thereto endorsed in blank; provided that (x) no Loan Party shall be required to pledge more than 65% of the issued and outstanding Equity Interests of any Foreign Subsidiary, (y) the creation and priority of security interests in Equity Interests of any Subsidiary shall be limited to the extent the pledge conflicts with or violates applicable law and, in the case of any Subsidiary other than a Loan Party, Liens permitted hereunder or other permitted agreements and (z) no Loan Party shall be required to pledge any Excluded Assets;

(c) all Indebtedness of Holdings, the Borrower and each Subsidiary that is owing to any Loan Party shall be evidenced by a promissory note and shall have been pledged pursuant to the Collateral Agreement, and the Collateral Agent shall have received all such promissory notes, together with undated instruments of transfer with respect thereto endorsed in blank;

(d) all documents and instruments, including Uniform Commercial Code financing statements, required by law or reasonably requested by the Collateral Agent to be filed, registered or recorded to create the Liens intended to be created by the Collateral Agreement and perfect such Liens to the extent required by the Collateral Agreement, shall have been filed, registered or recorded or delivered to the Collateral Agent for filing, registration or recording;

(e) subject to Section 5.15, the Collateral Agent shall have received (i) counterparts of a Mortgage with respect to each Mortgaged Property duly executed and delivered by the record owner of such Mortgaged Property, (ii) a policy or policies of title insurance issued by a nationally recognized title insurance company insuring the Lien of each such Mortgage as a valid first-priority Lien on the Mortgaged Property described therein, free of any other Liens except as expressly permitted by Section 6.02, together with such endorsements, coinsurance and reinsurance as the Collateral Agent or the Required Lenders may reasonably request, and (iii) such surveys, appraisals, legal opinions and other documents as the Collateral Agent or the Required Lenders may reasonably request with respect to any such Mortgage or Mortgaged Property;

(f) subject to Section 5.15, the Borrower and each Subsidiary Loan Party shall have entered into, and shall cause the bank with which such Deposit Account (other than an Excluded Deposit Account) is maintained to execute and deliver, one or more “control agreements” in form and substance acceptable to the Collateral Agent covering such Loan Party’s Deposit Accounts;

(g) If the applicable Subsidiary Loan Party has not sold the real property located at 1300 West Oak Street, Kissimmee, Florida by March 31, 2010, such Subsidiary Loan Party shall deliver or shall cause to be delivered, within sixty (60) Business Days following such date, unless waived or extended by the Collateral Agent in its discretion, a Mortgage encumbering such real property together with other items required by clause (e) of the Collateral and Guarantee Requirement; and

 

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(h) each Loan Party shall have obtained all material consents and approvals required to be obtained by it in connection with the execution and delivery of all Security Documents to which it is a party, the performance of its obligations thereunder and the granting by it of the Liens thereunder.

Notwithstanding anything to the contrary in this Agreement or any Security Document, no Loan Party shall be required to pledge or grant security interests in (i) any leasehold interests, (ii) motor vehicles and other assets subject to certificates of title, letter of credit rights and commercial tort claims (except for certain commercial tort claims subject to the requirements of the creation and perfection of security interests covenant on after-acquired property set forth in the Security Documents), (iii) pledges and security interests prohibited or limited by law and permitted agreements (including permitted Liens, leases and licenses) and (iv) those assets as to which the Administrative Agent reasonably determines (in consultation with the Borrower) that the costs of obtaining such a security interest or perfection thereof (including any mortgage, stamp, intangibles or other tax) are excessive in relation to the benefit to the Lenders of the security to be afforded thereby.

“ Commitment ” means, with respect to each Lender, the commitment of such Lender to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as an amount representing the maximum possible aggregate amount of such Lender’s Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.08, (b) increased from time to time pursuant to Section 2.20 and (c) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Lender’s Commitment is set forth on Schedule 2.01, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment, as applicable. The initial aggregate amount of the Lenders’ Commitments is $120,000,000.

“ Company ” shall mean any corporation, limited liability company, partnership or other business entity (or the adjectival form thereof, where appropriate).

“ Consolidated EBITDA ” means, for any period, an amount equal to, for the Borrower and its consolidated Subsidiaries, (a) the sum of Consolidated Net Income for such period, plus without duplication and to the extent reducing Consolidated Net Income for such period, (1) the provision for taxes based on income or profits or utilized in computing net loss, (2) Consolidated Interest Expense, (3) depreciation, (4) amortization of intangibles, (5) any other non-cash items (other than any such non-cash items to the extent that it represents an accrual or reserve for cash expenditures in any future period), (6) any non-recurring fees, charges or other expenses related to any offering of Capital Stock, Permitted Investment, acquisition or Incurrence of Indebtedness permitted hereunder (in each case whether or not consummated), (7) any restructuring charges or reserves (which, for the avoidance of doubt, shall include retention, severance, systems establishment cost, contract termination costs, including future lease commitments, and costs to consolidate facilities and relocate employees) so long as the Borrower has delivered to the Administration Agent calculations in reasonable detail setting forth such restructuring charges or reserves, provided that, solely for purposes of calculating the Leverage Ratio, the aggregate amount of restructuring charges or reserves added pursuant to this clause (7) shall not exceed $25,000,000 in any fiscal year during the term of this Agreement, minus (b) all

 

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non-cash items increasing Consolidated Net Income for such period (other than any such non-cash item to the extent that it (1) will result in the receipt of cash payments in any future period or (2) represent the reversal of a prior accrual or reserve previously excluded from being added back in calculating Consolidated EBITDA pursuant to clause (a)(5) above).

Notwithstanding the foregoing clause (a), the provision for taxes and depreciation, amortization and non-cash items of a Subsidiary shall be added to Consolidated Net Income to compute Consolidated EBITDA only to the extent (and in the same proportion, including by reason of minority interests) that the net income of such Subsidiary was included in calculating Consolidated Net Income and only if a corresponding amount would be permitted at the date of determination to be dividended without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to such Subsidiary or its shareholders.

“ Consolidated Interest Coverage Ratio ” means, as of any date of determination, the ratio of: (a) Consolidated EBITDA for the most recent four consecutive fiscal quarters for which internal financial statements of the Borrower are then available to (b) Consolidated Interest Expense for such four fiscal quarters.

“ Consolidated Interest Expense ” means, for any period, the total interest expense of the Borrower and its consolidated Subsidiaries (less, to the extent included in such total interest expense, financing fees relating to the Transactions), plus, to the extent not included in such total interest expense, and to the extent Incurred by the Borrower or its Subsidiaries,

(a) interest expense attributable to leases constituting part of a Permitted Sale and Leaseback Transaction and to Capital Lease Obligations,

(b) amortization of debt discount and debt issuance costs, including commitment fees (other than amortization of deferred financing fees relating to the Transactions),

(c) capitalized interest,

(d) non-cash interest expense,

(e) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing,

(f) net payments pursuant to Hedging Obligations,

(g) Disqualified Preferred Stock Dividends,

(h) Preferred Stock Dividends,

(i) interest Incurred in connection with Investments in discontinued operations,

(j) interest accruing on any Indebtedness of any other Person to the extent such Indebtedness is Guaranteed by, or secured by the assets of, the Borrower or any Subsidiary (other than interest accruing on any Indebtedness of any Permitted Joint

 

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Venture that is Guaranteed by, or secured by the assets of, the Borrower or any Subsidiary; provided , however , that such interest shall be included in “Consolidated Interest Expense” if either (A) such Indebtedness is in default or (B) the Borrower or any Subsidiary has ever previously made any payment of interest or principal in respect of such Indebtedness), and

(k) the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are used by such plan or trust to pay interest or fees to any Person (other than Holdings or the Borrower) in connection with Indebtedness Incurred by such plan or trust.

“ Consolidated Net Debt Ratio ” means, as of any date of determination, the ratio of (a) consolidated total Indebtedness of the Borrower and its Subsidiaries on the date of determination minus the amount of cash and cash equivalents of the Borrower and its Subsidiaries on the date of determination to (b) Consolidated EBITDA for the then most recent four consecutive fiscal quarters for which internal financial statements of the Borrower are available.

“ Consolidated Net Income ” means, for any period, the net income (loss) of the Borrower and its consolidated subsidiaries, provided , however , that there shall be excluded from Consolidated Net Income (a) any net income (loss) of any Person (other than the Borrower) if such Person is not a Subsidiary, except that, subject to the exclusion contained in clause (c) below, to the extent such cash has not previously been included in Consolidated Net Income, Consolidated Net Income shall be increased by the aggregate amount of cash distributed by such Person during such period to the Borrower or a Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution to a Subsidiary, to the limitations contained in clause (b) below), (b) any net income (loss) of any Subsidiary, if such Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of distributions, directly or indirectly, to the Borrower, except that: (1) subject to the exclusion contained in clause (c) below, to the extent such cash has not previously been included in Consolidated Net Income, Consolidated Net Income shall be increased by the aggregate amount of cash distributed by such Subsidiary during such period to the Borrower or other Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution to another Subsidiary, to the limitation contained in this clause) and (2) the Borrower’s equity in a net loss of any such Subsidiary for such period shall be included in determining such Consolidated Net Income, (c) any gain or loss realized upon the sale or disposition of any Property of the Borrower or any of its consolidated subsidiaries (including pursuant to any Sale and Leaseback Transaction) that is not sold or otherwise disposed of in the ordinary course of business, (d) any extraordinary gain or loss, (e) any after-tax effect of income (loss) from disposed, or discontinued operations and any net after-tax gains or losses on disposal of disposed or discontinued operations or any after-tax effect of income (loss) resulting from application of Statement of Financial Accounting Standards No. 141R for items that would have been included in goodwill under Statement of Financial Accounting Standards No. 141, (f) any non-cash compensation expense realized for grants of restricted stock, performance shares, stock options or other rights to officers, directors and employees of the Borrower or any Subsidiary, provided that such shares, options or other rights can be redeemed at the option of the holder only for Equity Interests of Holdings or the Borrower (other than Disqualified Preferred Stock), (g) any non-cash

 

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impairment and restructuring charges resulting from the application of Statements of Financial Accounting Standards No. 142, No. 144 and No. 146, or any valuation allowance with respect to deferred tax assets resulting from the application of Statement of Financial Accounting Standards No. 109, (h) any net after-tax gains or losses attributable to the early extinguishment of Indebtedness, (i) all unrealized gains and losses relating to financial instruments to which fair market value accounting is applied, (j) any non-recurring fees, charges or other expenses made or incurred in connection with (x) the Transactions, (y) any repayment or extinguishment of Indebtedness or (z) without duplication, disposed or discontinued operations, (k) fees paid to the Sponsor or any Sponsor Affiliates pursuant to Section 6.09(h) and (l) any net income (or loss) of any Person acquired by the Borrower or a subsidiary in a pooling of interests transaction for any period prior to the date of such acquisition, provided , further , that, notwithstanding the foregoing, (i) for purposes of the calculation of the Leverage Ratio, the income of any Permitted Joint Venture shall be included in Consolidated Net Income during any four-quarter period to the extent of the amount of cash dividends or other cash distributions of such income actually paid to the Borrower or any Subsidiary prior to the date financial statements are required to be delivered pursuant to Section 5.01(a) or (b) for the most recent fiscal period (unless the income of the Subsidiary receiving such dividend or distribution would be excluded from Consolidated Net Income pursuant to this proviso) and (ii) any unrealized gains or losses resulting from the application of Statement of Financial Accounting Standards No. 159 (or any similar accounting principle), shall be excluded.

“ Consolidated Net Secured Debt Ratio ” means, as of any date of determination, the ratio of (a) consolidated total Indebtedness of the Borrower and its Subsidiaries on the date of determination consisting of (1) Capital Lease Obligations, (2) Indebtedness for borrowed money that is secured by Liens on any Property of the Borrower or any Subsidiary and (3) Indebtedness evidenced by promissory notes and similar instruments that is secured by Liens on any Property of the Borrower or any Subsidiary, minus the amount of cash and cash equivalents of the Borrower and its Subsidiaries on the date of determination to (b) Consolidated EBITDA for the then most recent four consecutive fiscal quarters for which internal financial statements of the Borrower are available.

“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “ Controlling ” and “ Controlled ” have meanings correlative thereto.

“ Currency Exchange Protection Agreement ” means, in respect of a Person, any foreign exchange contract, currency swap agreement, currency option or other similar agreement or arrangement for the purpose of fixing, hedging or swapping currency exchange rates.

“ Debtor Relief Law ” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

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“ Default ” means any event or condition that constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“ Default Excess ” means, with respect to any Defaulting Lender, the excess, if any, of such Defaulting Lender’s pro rata share of the aggregate outstanding principal amount of Loans of all Lenders (calculated as if all Defaulting Lenders (including such Defaulting Lender) had funded all of their respective Defaulted Loans) over the aggregate outstanding principal amount of all Loans of such Defaulting Lender.

“ Default Period ” means, with respect to any Defaulting Lender, the period commencing on the date of the applicable Funding Default and ending on the earliest of the following dates: (i) the date on which all Commitments are cancelled or terminated and/or the Obligations are declared or become immediately due and payable, (ii) the date on which (a) the Default Excess with respect to such Defaulting Lender shall have been reduced to zero (whether by the funding by such Defaulting Lender of any Defaulted Loans of such Defaulting Lender or by the non-pro rata application of any voluntary or mandatory prepayments of the Loans in accordance with the terms of Section 2.21) or (b) such Defaulting Lender shall have delivered to the Borrower and the Administrative Agent a written reaffirmation of its intention to honor its obligations hereunder with respect to its Commitments and (iii) the date on which the Borrower, the Administrative Agent and the Required Lenders waive all Funding Defaults of such Defaulting Lender in writing.

“ Defaulted Loan ” has the meaning set forth in Section 2.21

“ Defaulting Lender ” means any Lender with respect to which a Lender Default is in effect.

“ Deposit Accounts ” shall mean all “deposit accounts” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“ Designated Non-Cash Consideration ” means the Fair Market Value of non-cash consideration received by the Borrower or a Subsidiary in connection with a Disposition pursuant to Section 6.05 that is designated as Designated Non-Cash Consideration pursuant to a certificate of a Financial Officer, setting forth the basis of such valuation (which amount will be reduced by the Fair Market Value of the portion of the non-cash consideration converted to cash within 180 days following the consummation of the applicable Disposition).

“ Disposition ” or “ Dispose ” means the sale, transfer, license, lease or other disposition (including any sale-leaseback transaction and any sale or issuance of Equity Interests of a Subsidiary (but excluding the Equity Interests of the Borrower)) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith; provided that no transaction or series of related transactions shall be considered a “Disposition” for purposes of Section 6.05 unless the Net Proceeds resulting from such transaction or series of transactions shall exceed $5,000,000.

 

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“ Disqualified Preferred Stock ” means, with respect to any Person, any Preferred Stock other than Qualified Preferred Stock, provided that the amount of any Disqualified Preferred Stock that does not have a fixed redemption, repayment or repurchase price will be calculated in accordance with the terms of such Disqualified Preferred Stock as if such Disqualified Preferred Stock were redeemed, repaid or repurchased on any date on which the amount of such Disqualified Preferred Stock is to be determined pursuant to this Agreement; provided further , however , that if such Disqualified Preferred Stock could not be required to be redeemed, repaid or repurchased at the time of such determination, the redemption, repayment or repurchase price will be the book value of such Disqualified Preferred Stock as reflected in the most recent financial statements of such Person.

“ Disqualified Preferred Stock Dividends ” means all dividends with respect to Disqualified Preferred Stock held by Persons other than a Subsidiary of the Person which has issued such Disqualified Preferred Stock (except to the extent paid in Equity Interests (other than Disqualified Preferred Stock)). The amount of any such dividend shall be equal to the quotient of such dividend divided by the difference between one and the maximum statutory federal income tax rate (expressed as a decimal number between 1 and 0) then applicable to the Borrower.

“ Documentation Agent ” means JPMorgan Chase Bank, N.A.

“ dollars ” or “ $ ” refers to lawful money of the United States of America.

“ Domestic Subsidiary ” means any Subsidiary incorporated or organized under the laws of the United States of America, any State thereof or the District of Columbia.

“ Effective Date ” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).

“ Effective Date Refinancing ” means the termination of commitments and repayment of all principal, interest and fees owing under the Existing Credit Agreement and the release of all liens and other security interests in respect thereof.

“ Environmental Laws ” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by or with any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the presence, management, Release or threatened Release of any Hazardous Material, or to health and safety matters.

“ Environmental Liability ” means liabilities, obligations, damages, claims, actions, suits, judgments, orders, fines, penalties, fees, expenses and costs, (including administrative oversight costs, natural resource damages and medical monitoring, investigation or remediation costs), whether contingent or otherwise, arising out of or relating to (a) compliance or non-compliance with any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

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“ Equity Interests ” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest from the issuer thereof.

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

“ ERISA Affiliate ” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414 of the Code.

“ ERISA Event ” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30 day notice period is waived), (b) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived, (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan, (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan, (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

“ Eurodollar ”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.

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

“ Excluded Assets ” has the meaning set forth in the Collateral Agreement.

“ Excluded Deposit Account ” means any Deposit Account (i) for which the Collateral Agent is the depository or securities intermediary, as applicable, (ii) for which all or substantially all of the funds on deposit are used solely to fund payroll, 401(k) and other retirement plans and employee benefits or health care benefits and (iii) holding less at all times than $500,000 individually or $1,000,000 in the aggregate, together with all such other Deposit Accounts excluded pursuant to this clause (iii).

“ Excluded Taxes ” means, with respect to the Administrative Agent, any Lender, the Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any

 

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Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction described in clause (a) above, (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 2.19(b)), any withholding tax that is in effect and would apply to amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to any withholding tax pursuant to Section 2.17(a) and (d) any withholding tax that is attributable to a Foreign Lender’s failure to comply with Section 2.17(e).

“ Existing Credit Agreement ” means the Credit Agreement, dated as of August 20, 2004 and as amended from time to time, among Holdings, the Borrower, the lenders party thereto from time to time, JPMorgan Chase Bank, as administrative agent and collateral agent, Wachovia Bank, National Association, as syndication agent, and Citicorp North America, Inc. as documentation agent.

“ Existing Lender ” has the meaning assigned to such term in Section 2.20.

“ Existing Letter of Credit ” means each letter of credit previously issued for the account of the Borrower pursuant to the Existing Credit Agreement that (a) is outstanding on the Effective Date and (b) is listed on Schedule 2.05.

“ Existing Senior Subordinated Notes ” means the 9  ⁵ / 8 % Senior Subordinated Notes and the 10-3/4% Senior Subordinated Notes.

“ Exposure ” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Revolving Loans and its LC Exposure and Swingline Exposure at such time.

“ Fair Market Value ” means, with respect to any Property, the price that could be negotiated in an arm’s-length free market transaction, for cash, between a willing seller and a willing buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair Market Value shall be determined, except as otherwise provided,

(a) if such Property has a Fair Market Value equal to or less than $25,000,000, by a majority of the Board of Directors and evidenced by a Board Resolution, or

(b) if such Property has a Fair Market Value in excess of $25,000,000, by an Independent Financial Advisor and evidenced by a written opinion from such Independent Financial Advisor, dated within 30 days of the relevant transaction, delivered to the Administrative Agent.

“ Federal Funds Effective Rate ” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

 

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“ Final Offering Memorandum ” means the Offering Memorandum dated June 4, 2009 with respect to the offering of the Senior Secured Notes.

“ Financial Officer ” means the chief financial officer, principal accounting officer, treasurer or controller or other similar officer performing similar functions of the Borrower, in each case in his or her capacity as such.

“ Financial Performance Covenant ” means the covenant of the Borrower set forth in Section 6.12.

“ Foreign Lender ” means any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is located. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“ Foreign Subsidiary ” means any Subsidiary that is not a Domestic Subsidiary.

“ Funding Default ” has the meaning set forth in Section 2.21.

“ GAAP ” means generally accepted accounting principles in the United States of America, as in effect from time to time.

“ Government Programs ” means (i) the Medicare and Medicaid Programs, (ii) the United States Department of Defense Civilian Health Program for Uniformed Services and (iii) other similar foreign or domestic Federal, state or local reimbursement or governmental health care programs.

“ Governmental Authority ” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“ Guarantee ” of or by any Person (the “ guarantor ”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party or applicant in respect of any letter of

 

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credit or letter of guaranty issued to support such Indebtedness or obligation, provided that the term Guarantee shall not include (1) endorsements for collection or deposit in the ordinary course of business or (2) a contractual commitment by one Person to invest in another Person for so long as such Investment will constitute a Permitted Investment under clause (b) of the definition of “Permitted Investment”. The amount of any Guarantee of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which the Guarantee is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee.

“ Hazardous Materials ” means all explosive, radioactive, infectious, chemical, biological, medical, hazardous or toxic materials, substances, wastes or other pollutants, including petroleum or petroleum byproducts, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas and all other materials, substances or wastes of any nature regulated pursuant to any Environmental Law.

“ Hedging Obligations ” of any Person means any obligation of such Person pursuant to any Swap Agreement or any other similar agreement or arrangement.

“ Holding Company Restructuring Transaction ” has the meaning set forth in Section 5.16 .

“ Holdings ” means (i) US Oncology Holdings, Inc., a Delaware corporation or (ii) except as provided in Section 5.16, any other entity that becomes the immediate parent of the Borrower pursuant to Section 5.16 hereof.

“ Holdings Floating Rate Notes ” means the Senior Unsecured Floating Rate Toggle Notes due 2012 issued by US Oncology Holdings, Inc. on March 13, 2007 (and not supported by any Guarantee) in the initial aggregate principal amount of $425,000,000 and the Indebtedness represented thereby.

“ Holdings Floating Rate Notes Documents ” means the indenture dated as of March 13, 2007, between US Oncology Holdings, Inc. and LaSalle Bank National Association, as trustee, in respect of the Holdings Floating Rate Notes and all other instruments, agreements and other documents evidencing or governing the Holdings Floating Rate Notes.

“ Inactive Subsidiary ” means a Subsidiary that (a) conducts no business operations, (b) has total assets with a Fair Market Value, when combined with the Fair Market Value of the total assets of all other Inactive Subsidiaries at such time, of not more than $10,000,000 in the aggregate and (c) has no Indebtedness outstanding.

“ Incremental Extensions of Credit ” has the meaning set forth in Section 2.20.

“ Incremental Facility Amendment ” has the meaning set forth in Section 2.20.

“ Incremental Facility Closing Date ” has the meaning set forth in Section 2.20.

 

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“ Incur ” means, with respect to any Indebtedness or other obligation of any Person, to create, issue, incur (by merger, conversion, exchange or otherwise), extend, assume, Guarantee or become liable in respect of such Indebtedness or other obligation or the recording, as required pursuant to GAAP or otherwise, of any such Indebtedness or obligation on the balance sheet of such Person (and “Incurrence” and “Incurred” shall have meanings correlative to the foregoing); provided , however , that any Indebtedness or other obligations of a Person existing at the time such Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Subsidiary at the time it becomes a Subsidiary. Solely for purposes of determining compliance with Section 6.01, the following will not be deemed to be the Incurrence of Indebtedness:

(1) amortization of debt discount or the accretion of principal with respect to a non-interest bearing or other discount security,

(2) the payment of regularly scheduled interest in the form of additional Indebtedness of the same instrument or the payment of regularly scheduled dividends on Equity Interests in the form of additional Equity Interests of the same class and with the same terms,

(3) the obligation to pay a premium in respect of Indebtedness arising in connection with the issuance of a notice of redemption or the making of a mandatory offer to purchase such Indebtedness, and

(4) a change in GAAP that results in an obligation of such Person that exists at such time, and is not theretofore classified as Indebtedness, becoming Indebtedness.

“ Indebtedness ” of any Person means, 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, (c) all obligations of such Person issued or assumed as the deferred purchase price of Property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business), except any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP, (d) all Capital Lease Obligations of such Person, (e) all obligations of such Person for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction (other than obligations with respect to letters of credit securing obligations (other than obligations described in (a) through (c) above) entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the fifth Business Day following receipt by such Person of a demand for reimbursement following payment on the letter of credit), (f) the amount of all obligations of such Person with respect to the Repayment of any Disqualified Preferred Stock or, with respect to any subsidiary of such Person, any Preferred Stock (but excluding, in each case, any accrued dividends); and (g) to the extent not otherwise included in this definition, Hedging Obligations of such Person; if and to the extent that any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP.

 

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In addition, the term “Indebtedness” shall include (A) all obligations of the type referred to in clauses (a) through (g) of other Persons and all dividends of other Persons for the payment of which, in either case, such Person is responsible or liable, directly or indirectly, as obligor, guarantor or otherwise, including by means of any Guarantee; and (B) all obligations of the type referred to in clauses (a) through (g) and in clause (A) of this sentence of other Persons secured by any Lien on any Property of such Person (whether or not such obligation is assumed by such Person), the amount of such obligation being deemed to be the lesser of the value of such Property or the amount of the obligation so secured.

The amount of Indebtedness represented by a Hedging Obligation shall be equal to:

(1) except for purposes of calculating the Leverage Ratio, zero if such Hedging Obligation has been Incurred pursuant to clause (xiv) of paragraph (b) of Section 6.01, or

(2) otherwise, the fair value of such Hedging Obligation.

Notwithstanding the foregoing, Indebtedness shall be calculated without giving effect to any election under the Statement of Financial Accounting Standards 159 (or any similar accounting principle).

“ Indemnified Taxes ” means Taxes other than Excluded Taxes.

“ Independent Financial Advisor ” means an investment banking or accounting firm of national standing or any third party appraiser of national standing, provided that such firm or appraiser is not an Affiliate of the Borrower.

“ Insurance Subsidiary ” means a wholly owned subsidiary of the Borrower established for the sole purpose of providing insurance benefits to the Borrower, the subsidiaries and the Affiliated Practices (including members of such Affiliated Practices).

“ Intercreditor Agreement ” means an Intercreditor Agreement substantially in the form of Exhibit I hereto, as same may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof.

“ Interest Election Request ” means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.07, provided that a written Interest Election Request shall be substantially in the form of Exhibit F, or such other form as shall be approved by the Administrative Agent.

“ Interest Payment Date ” means (a) with respect to any ABR Loan (including a Swingline Loan), the last day of each March, June, September and December and (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period.

 

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“ Interest Period ” means, with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter (or nine or twelve months thereafter if, at the time of the relevant Borrowing, all Lenders participating therein agree to make an interest period of such duration available), as the Borrower may elect, provided that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

“ Interest Rate Agreement ” means, for any Person, any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar agreement for the purpose of fixing, hedging or swapping interest rates.

“ Investment ” by any Person means any direct or indirect loan (other than advances to customers in the ordinary course of business that are recorded as accounts receivable on the balance sheet of such Person), advance or other extension of credit or capital contribution (by means of transfers of cash or other Property to others or payments for Property or services for the account or use of others, or otherwise) to, or Incurrence of a Guarantee of any obligation of, or purchase or acquisition of Equity Interests, bonds, notes, debentures or other securities or evidence of Indebtedness issued by, any other Person. In determining the amount of any Investment made by transfer of any Property other than cash, such Property shall be valued at its Fair Market Value at the time of such Investment. For purposes of Section 5.17 and Section 6.08 and the definition of “Restricted Payment”, “Investment” shall include the portion (proportionate to the Borrower’s equity interest in such Permitted Joint Venture) of the Fair Market Value of the net assets of any Permitted Joint Venture that is a Subsidiary at the time that such Permitted Joint Venture is no longer designated as a Subsidiary; provided , however , that upon a redesignation of such Permitted Joint Venture as Subsidiary, the Borrower shall be deemed to continue to have a permanent “Investment” in a Permitted Joint Venture of an amount (if positive) equal to:

(a) the Borrower’s “Investment” in such Permitted Joint Venture at the time of such redesignation, less

(b) the portion (proportionate to the Borrower’s equity interest in such Permitted Joint Venture) of the Fair Market Value of the net assets of such Permitted Joint Venture at the time of such redesignation.

“ IPO ” means a bona fide underwritten initial public offering of Equity Interests of Holdings or any Parent, in each case, after the Effective Date.

 

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“ Issuing Bank ” means (a) Deutsche Bank Trust Company Americas, (b) any other Lender acceptable to the Borrower which agrees in writing to issue Letters of Credit hereunder and (c) with respect to the Existing Letters of Credit only, JPMorgan Chase Bank, N.A. Any Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of such Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.

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

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

“ Lender Default ” means, as to any Lender, (i) the wrongful refusal (which has not been retracted) of such Lender or failure of such Lender to make available its portion of any Borrowing (including any Borrowing requested by the Swingline Lender pursuant to Section 2.04(c)) or to fund its portion of any unreimbursed payment with respect to a Letter of Credit pursuant to Section 2.05(d) or 2.05(e), (ii) such Lender having been deemed insolvent or having become the subject of a bankruptcy or insolvency proceeding or a takeover by a regulatory authority, or (iii) such Lender having notified the Administrative Agent, the Swingline Lender, any Issuing Bank and/or any Loan Party (x) that it does not intend to comply with its obligations under Sections 2.01, 2.04(a) or (c), or 2.05 in circumstances where such non-compliance would constitute a breach of such Lender’s obligations under the respective Section or (y) of the events described in preceding clause (ii); provided that, for purposes of (and only for purposes of) Section 2.04(d), Section 2.05(b), Section 2.11(e) and any documentation entered into pursuant to the Back-Stop Arrangements (and the term “ Defaulting Lender ” as used therein), the term “Lender Default” shall also include, as to any Lender, (i) any Affiliate of such Lender that has “Control” (within the meaning provided in the definition of “ Affiliate ”) of such Lender having been deemed insolvent or having become the subject of a bankruptcy or insolvency proceeding or a takeover by a regulatory authority, (ii) any previously cured “Lender Default” of such Lender under this Agreement, unless such Lender Default has ceased to exist for a period of at least 90 consecutive days, (iii) any default by such Lender with respect to its obligations under any other credit facility to which it is a party and which the Swingline Lender, any Issuing Bank or the Administrative Agent believes in good faith has occurred and is continuing, and (iv) the failure of such Lender to make available its portion of any Borrowing (including any Borrowing requested by the Swingline Lender pursuant to Section 2.04(c)) or to fund its portion of any unreimbursed payment with respect to a Letter of Credit pursuant to Section 2.05(d) or 2.05(e) within one (1) Business Day of the date (x) the Administrative Agent (in its capacity as a Lender) or (y) Lenders constituting the Required Lenders with Commitments has or have, as applicable, funded its or their portion thereof.

“ Lenders ” means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption or an Incremental Facility Amendment, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption. Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender.

 

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“ Letter of Credit ” means (a) any letter of credit issued pursuant to this Agreement and (b) each Existing Letter of Credit.

“ Letter of Credit Back-Stop Arrangements ” shall have the meaning provided in Section 2.05(b).

“ Letter of Credit Request ” means a letter of credit request substantially in the form attached hereto as Exhibit G or in such other form as is reasonably satisfactory to an Issuing Lender.

“ Leverage Ratio ” means, as of any date of determination, the ratio of (a) Total Indebtedness of the Borrower and its Subsidiaries on the date of determination to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters of the Borrower ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal quarter of the Borrower most recently ended prior to such date).

“ LIBO Rate ” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Reuters Page LIBOR01 (or on any successor or substitute page of such Service, or any successor to or substitute for such Service, providing rate quotations comparable to those currently provided on such page of such Service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the “ LIBO Rate ” with respect to such Eurodollar Borrowing for such Interest Period shall be the rate at which dollar deposits for a comparable amount and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

“ Lien ” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset or other arrangement to provide priority or preference with respect to such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party (other than customary rights of first refusal and tag, drag and similar rights in joint venture agreements (other than any such agreement in respect of any Subsidiary or any Permitted Real Estate Joint Venture)) with respect to such securities.

“ Limitation ” means a revocation, suspension, termination, impairment, probation, limitation, nonrenewal, forfeiture, declaration of ineligibility, loss of status as a participating provider in any Third Party Payor Arrangement, and the loss of any other rights.

 

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“ Loan Documents ” means this Agreement, the promissory notes, if any, executed and delivered pursuant to Section 2.09(e), any Incremental Facility Amendment, the Collateral Agreement and the other Security Documents.

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

“ Loans ” means the loans made by the Lenders to the Borrower pursuant to this Agreement.

“ Long Term Incentive Plan ” means the US Oncology Holdings, Inc. 2004 Equity Incentive Plan, as in effect on March 10, 2005.

“ Management Services Agreement ” means any agreement (including any amendment, supplement, modification, extension, renewal, substitution or replacement thereof) between the Borrower or any Subsidiary and any Affiliated Practice or any owner, member or employee of an Affiliated Practice pursuant to which the Borrower or Subsidiary provides services to physicians or physician practices, including management and financial services, medical oncology services, cancer care centers and cancer research services.

“ Material Adverse Effect ” means a material adverse effect on (a) the business, operations, assets, liabilities, financial condition or results of operations of Holdings, the Borrower and the Subsidiaries, taken as a whole, (b) the ability of any Loan Party to perform any material obligation under any Loan Document or (c) the rights of or benefits available to the Lenders under any Loan Document.

“ Material Indebtedness ” means Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Swap Agreements, of any one or more of Holdings, the Borrower and the Subsidiaries in an aggregate principal amount exceeding $25,000,000. For purposes of determining Material Indebtedness, the “principal amount” of the obligations of Holdings, the Borrower or any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that Holdings, the Borrower or such Subsidiary would be required to pay if such Swap Agreement were terminated at such time. For the avoidance of doubt, the penultimate sentence of the definition of “Indebtedness” shall be disregarded for purposes of determining the principal amount (as defined in this definition) of any Swap Agreement.

“ Maturity Date ” means August 31, 2012.

“ Medicare and Medicaid Programs ” means the programs established under Title XVIII and XIX of the Social Security Act and any successor programs performing similar functions.

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

“ Mortgage ” means a mortgage, deed of trust, assignment of leases and rents, leasehold mortgage or other security document granting a Lien on any Mortgaged Property to secure the Obligations. Each Mortgage shall be reasonably satisfactory in form and substance to the Collateral Agent.

 

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“ Mortgaged Property ” means, initially, each parcel of real property and the improvements thereto owned by a Loan Party and identified on Schedule 1.01 and includes each other parcel of real property owned by a Loan Party and improvements thereto with respect to which a Mortgage is granted pursuant to Section 5.12 or 5.13.

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

“ Net Proceeds ” means, with respect to any event, (a) the cash proceeds received in respect of such event including (i) any cash received in respect of any non-cash proceeds (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but excluding any interest payments), but only as and when received, (ii) in the case of a casualty, insurance proceeds and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid to third parties (other than Affiliates) in connection with such event, (ii) in the case of a sale, transfer or other disposition of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation or similar proceeding), the amount of all payments required to be made as a result of such event to repay Indebtedness (other than Loans) secured by such asset or otherwise subject to mandatory prepayment as a result of such event and (iii) the amount of all taxes paid (or reasonably estimated to be payable) and the amount of any reserves established to fund liabilities reasonably estimated to be payable, in each case during the year that such event occurred or the next succeeding year and that are directly attributable to such event (as determined reasonably and in good faith by a Financial Officer).

“ Obligations ” has the meaning assigned to such term in the Collateral Agreement.

“ Other Taxes ” means any and all present or future recording, stamp, documentary, excise, transfer, sales, property or similar taxes, charges or levies of the United States or any political subdivision thereof arising from any payment made under any Loan Document or from the execution, delivery or enforcement of, or from the filing or recording of or otherwise with respect to the exercise by the Administrative Agent of the Lender of their rights under, any Loan Document.

“ Parent ” means Holdings and any other direct or indirect parent of the Borrower.

“ Parent Board ” means the board of directors of Parent or any committee thereof duly authorized to act on behalf of such board.

“ Participant ” has the meaning set forth in Section 9.04.

“ PBGC ” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

“ Perfection Certificate ” means a certificate in the form of Exhibit D or any other form approved by the Collateral Agent.

 

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“ Permitted Encumbrances ” means:

(a) Liens imposed by law for taxes that are not yet due or are being contested in compliance with Section 5.05;

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in compliance with Section 5.05;

(c) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;

(d) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature;

(e) judgment liens in respect of judgments that do not constitute an Event of Default under paragraph (k) of Section 7.01;

(f) easements, zoning restrictions, rights-of-way, minor defects or irregularities of title and other similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not either detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary, in each case in any material respect;

(g) landlords’ and lessors’ and other like Liens in respect of rent not in default; and

(h) Liens arising from the filing Uniform Commercial Code financing statements regarding leases or consignments;

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.

“ Permitted Hospital Joint Venture ” means any investment by which the Borrower or any Subsidiary Loan Party acquires at least 30% but less than 100% of the Equity Interests of any Person, provided that the primary business of such Person is to own, lease, operate or provide medical oncology services, cancer center services, cancer research services or any related services to a hospital or other healthcare facility.

“ Permitted Investment ” means any Investment by Holdings (subject to the restrictions set forth in Section 6.04(b)), the Borrower or a Subsidiary in:

(a) the Borrower, any Subsidiary or any Person that will, upon the making of such Investment or designation pursuant to Section 5.17, become a Subsidiary, provided that the primary business of such Subsidiary is a business related, ancillary or complementary to the businesses of the Borrower and its Subsidiaries on the Effective Date, provided further that (A) to the extent required by the terms thereof, any newly acquired, created or

 

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designated Subsidiary (other than a Permitted Joint Venture that is designated as Subsidiary pursuant to Section 5.17) complies with the terms of Sections 5.12 and 5.13, (B) any such Equity Interests (other than Equity Interests in a Permitted Joint Venture that is designated as a Subsidiary pursuant to Section 5.17) held by a Loan Party shall be pledged pursuant to the Collateral Agreement (subject to the limitations applicable to Equity Interests of a Foreign Subsidiary referred to in the definition of “Collateral and Guarantee Requirement”), (C) Investments that constitute loans and advances made by a Loan Party shall be evidenced by a promissory note pledged pursuant to the Collateral Agreement and (D) the aggregate amount of Investments made pursuant to this clause (a), together with the aggregate amount of Investments made pursuant to clause (b) below, in each case in Subsidiaries which do not become Subsidiary Loan Parties, shall not exceed $150,000,000 in any fiscal year and $250,000,000 in the aggregate;

(b) any Person if as a result of such Investment such Person is merged or consolidated with or into, or transfers or conveys all or substantially all its Property to, the Borrower or a Subsidiary, provided that such Person’s primary business is a business related, ancillary or complementary to the businesses of the Borrower and its Subsidiaries on the Effective Date, provided further that (A) to the extent required by the terms thereof, any newly acquired or created Subsidiary complies with the terms of Sections 5.12 and 5.13, (B) any such Equity Interests held by a Loan Party shall be pledged pursuant to the Collateral Agreement (subject to the limitations applicable to Equity Interests of a Foreign Subsidiary referred to in the definition of “Collateral and Guarantee Requirement”), (C) Investments that constitute loans and advances made by a Loan Party shall be evidenced by a promissory note pledged pursuant to the Collateral Agreement and (D) the aggregate amount of Investments made pursuant to this clause (b), together with the aggregate amount of Investments made pursuant to clause (a) above, in each case in Subsidiaries which do not become Subsidiary Loan Parties, shall not exceed $150,000,000 in any fiscal year and $250,000,000 in the aggregate;

(c) cash and Temporary Cash Investments;

(d) receivables or other trade payables owing to the Borrower or a Subsidiary or Affiliated Practice, if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided , however , that such trade terms may include such concessionary trade terms as the Borrower or such Subsidiary deems reasonable under the circumstances;

(e) payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;

(f) loans and advances to employees made in the ordinary course of business consistent with past practices of the Borrower or such Subsidiary, as the case may be; provided , however , that such loans and advances do not exceed $3,000,000 at any one time outstanding;

 

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(g) stock, obligations or other securities received in settlement of delinquent accounts of and disputes with customers and suppliers and debts, in each case created in the ordinary course of business and owing to the Borrower or a Subsidiary or in satisfaction of judgments;

(h) any Person where such Investment was acquired by the Borrower or any of its Subsidiaries (a) in exchange for any other Investment or accounts receivable held by the Borrower or any such Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable or (b) as a result of a foreclosure by the Borrower or any of its Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

(i) any Person to the extent such Investment represents the non-cash portion of the consideration received in connection with a Disposition permitted hereunder;

(j) any Person to the extent such Investment is made by the Borrower or a Subsidiary for consideration consisting only of Equity Interests (other than Disqualified Preferred Stock) of Holdings;

(k) any Person to the extent such Investment existed on the Effective Date and any Investment that replaces, refinances or refunds such an Investment, provided that the new Investment is in an amount that does not exceed the amount replaced, refinanced or refunded and is made in the same Person as the Investment replaced, refinanced or refunded;

(l) any Person to the extent such Investment consists of Hedging Obligations incurred pursuant to Section 6.01 or Guarantees thereof;

(m) in Permitted Joint Ventures and loans and advances to, or guarantees of obligations of, Affiliated Practices, in an aggregate amount outstanding at any one time not to exceed the greater of (a) $100,000,000 and (b) 7.5% of Total Tangible Assets (with each Investment being valued as of the date made and without regard to subsequent changes in value);

(n) in any Permitted Joint Venture to the extent such Investment consists of a Guarantee of Indebtedness of such Permitted Joint Venture permitted to be Incurred pursuant to Section 6.01(b)(xx) and (xxi);

(o) investments, loans and advances by the Borrower or any Subsidiary to any Insurance Subsidiary or any Risk Retention Subsidiary in an aggregate amount not exceeding $10,000,000 at any time outstanding;

(p) Additional Physician Affiliations; provided that the aggregate purchase price of such Additional Physician Affiliations, which shall be deemed to include any amounts actually paid pursuant to any post-closing payment adjustments, earn-outs or non-compete payments shall not exceed $140,000,000 plus the aggregate principal amount of Additional Physician Notes issued to finance Additional Physician Affiliation; and

 

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(q) other Investments made for Fair Market Value that do not exceed $50,000,000 outstanding at any one time in the aggregate.

The amount of Investments outstanding at any time pursuant to clause (a), (b), (m), (o), (p) or (q) above shall be reduced by (A) the net reduction after the Effective Date in Investments made after the Effective Date pursuant to such clause resulting from dividends, repayments of loans or advances or other transfers of Property, proceeds realized on the sale of any such Investment and proceeds representing the return of the capital, in each case to the Borrower or any Subsidiary in respect of any such Investment, less the cost of the disposition of any such Investment, and (B) the portion (proportionate to the Borrower’s equity interest in such Permitted Joint Venture) of the Fair Market Value of the net assets of a Permitted Joint Venture that was designated after the Effective Date as no longer a Subsidiary pursuant to clause (m), (o) or (p) at the time such Permitted Joint Venture is designated a Subsidiary pursuant to Section 5.17; provided , however , that the foregoing amount shall not exceed, in the case of any Person, the amount of Investments previously made by the Borrower or any Subsidiary pursuant to clause (a), (b), (m), (o), (p) or (q) in such Person after the Effective Date.

“ Permitted Investors ” means the Sponsor and any Sponsor Affiliate.

“ Permitted Joint Venture ” means any Permitted Hospital Joint Venture and any Permitted Real Estate Joint Venture.

“ Permitted Joint Venture Loan Party ” means any Permitted Joint Venture which (x) is a subsidiary of the Borrower or any Subsidiary Loan Party and (y) satisfies the terms of the Collateral and Guarantee Requirement.

“ Permitted Real Estate Joint Venture ” means any investment by which the Borrower or any Subsidiary Loan Party acquires at least 51% but not more than 80% of the Equity Interests of any Person that owns real property used in cancer care services by the Borrower, any Subsidiary or any Affiliated Practice, provided that (a) any Equity Interests of such Permitted Real Estate Joint Venture not owned by the Borrower or any Subsidiary Loan Party are purchased for cash consideration by one or more physicians who are owners, members or employees of such Affiliated Practice, (b) such Permitted Real Estate Joint Venture is not engaged in any business or activity other than the ownership of such real property and activities incidental thereto (which activities may not include operating or providing medical oncology services, cancer center services or cancer research services), (c) such Permitted Real Estate Joint Venture shall incur no Indebtedness other than Indebtedness incurred to finance the acquisition of the property from the Borrower or the Subsidiary and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof (including the principal and any accrued but unpaid interest or premium in respect thereof) and (d) solely in the case of any Permitted Real Estate Joint Venture that acquires property from the Borrower or any Subsidiary pursuant to clauses (i) or (j) of Section 6.05, if at the time of such transfer, the Permitted Real Estate Joint Venture incurs no Indebtedness from a Person other than the Borrower or any Subsidiary Loan Party, at least 35% of the Equity Interests of the Permitted Real Estate Joint Venture shall be owned by one or more physicians who are owners, members or employees of such Affiliated Practice.

 

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“ Permitted Refinancing Debt ” means any Indebtedness that Refinances any other Indebtedness, including any successive Refinancings, so long as:

(a) such Indebtedness is in an aggregate principal amount (or if Incurred with original issue discount, an aggregate issue price) not in excess of the sum of:

(1) the aggregate principal amount (or if Incurred with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being Refinanced, and

(2) an amount necessary to pay any fees and expenses, including premiums and defeasance costs, related to such Refinancing,

(b) the Average Life of such Indebtedness is equal to or greater than the Average Life of the Indebtedness being Refinanced,

(c) the Stated Maturity of such Indebtedness is no earlier than the Stated Maturity of the Indebtedness being Refinanced,

(d) except to the extent such Indebtedness directly or indirectly Refinances the Existing Senior Subordinated Notes (or any Permitted Refinancing Debt in respect thereof), the new Indebtedness shall not be senior in right of payment to the Indebtedness that is being Refinanced ( provided that the Existing Senior Subordinated Notes may only be Refinanced with senior Indebtedness if on a pro forma basis after giving effect to such Refinancing the Consolidated Interest Coverage Ratio would be greater than 1.75 to 1.00), and

(e) to the extent such Indebtedness directly or indirectly Refinances Indebtedness of a Subsidiary Incurred pursuant to Section 6.01(b)(ix), such Refinancing Debt shall be Incurred only by such Subsidiary;

provided , however , that Permitted Refinancing Debt shall not include:

(x) Indebtedness of a Subsidiary that is not a Subsidiary Loan Party that Refinances Indebtedness of the Borrower or a Subsidiary Loan Party, or

(y) Indebtedness of the Borrower or a Subsidiary that Refinances Indebtedness of a Permitted Joint Venture.

“ Permitted Sale and Leaseback Transaction ” has the meaning set forth in Section 6.06.

“ Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“ Physician Notes ” mean the notes issued by the Borrower to physicians in connection with a Management Services Agreement and listed on Schedule 3.16.

 

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“ Plan ” means any employee pension benefit plan subject to the provisions of Title IV or Section 302 of ERISA or Section 412 of the Code, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“ PPM Asset Disposition ” means the sale of assets to any Affiliated Practice that is a party to a Management Services Agreement pursuant to the requirements set forth in or in connection with the termination of the applicable Management Services Agreement in effect on the Effective Date.

“ Preferred Stock ” means any Equity Interests of a Person, however designated, which entitles the holder thereof to a preference with respect to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of any other class of Equity Interests issued by such Person.

“ Preferred Stock Dividends ” means all dividends with respect to Preferred Stock of Subsidiaries held by Persons other than the Borrower or a Subsidiary (except to the extent paid in Equity Interests (other than Disqualified Preferred Stock)). The amount of any such dividend shall be equal to the quotient of such dividend divided by the difference between one and the maximum statutory Federal income rate (expressed as a decimal number between 1 and 0) then applicable to the issuer of such Preferred Stock.

“ Prime Rate ” means the rate of interest per annum publicly announced from time to time by Deutsche Bank Trust Company Americas as its prime rate in effect for dollars at its principal office in New York City; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

“ Property ” means, with respect to any Person, any interest of such Person in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, including Equity Interests in, and other securities of, any other Person. For purposes of any calculation required pursuant to this Agreement, the value of any Property shall be its Fair Market Value.

“ Qualified Preferred Stock ” means preferred stock of any Person that (a) does not mature or is not mandatorily redeemable pursuant to a sinking fund obligation or otherwise prior to the date that is 180 days after the Maturity Date (other than upon an event of default, asset sale or change in control, provided that any such payment is subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments) and (b) is convertible only into common equity of Holdings or Equity Interests of such Person that would constitute Qualified Preferred Stock.

“ Qualified Holdings Notes ” means Indebtedness issued by Holdings that (i) does not benefit from any Guarantee by the Borrower or any of its Subsidiaries, (ii) will not mature prior to the date that is 180 days after the Maturity Date, (iii) has no scheduled amortization or payments of principal (it being understood that such Indebtedness may have mandatory prepayment, repurchase or redemption provisions satisfying the requirements of clause (v) hereof), (iv) does not permit any payments in cash of interest prior to the earlier of (A) 180 days after the Maturity Date and (B) the fifth anniversary of the date of issuance or incurrence thereof,

 

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other than payments in cash to the extent such cash may be received by Holdings from the Borrower permitted under Section 6.08, (v) has no mandatory prepayment, repurchase or redemption, covenant or default or remedy provisions other than those customary for senior, unsecured, non-Guaranteed discount notes of an issuer that is the parent of a borrower under senior secured credit facilities, and in any event, with respect to covenant, default and remedy provisions, not materially adverse to the Lenders taken as a whole, and (vi) contains provisions with respect to paid-in-kind interest which are customary for senior, unsecured, non-Guaranteed discount notes of an issuer that is the parent of a borrower under senior secured credit facilities.

“ Refinance ” means, in respect of any Indebtedness, to refinance, extend, renew, refund, repay, prepay, repurchase, redeem, defease or retire, or to issue other Indebtedness, in exchange or replacement for, such Indebtedness. “ Refinanced ” and “ Refinancing ” shall have correlative meanings.

“ Register ” has the meaning set forth in Section 9.04.

“ Reimbursement Approvals ” means, with respect to all Government Programs, any and all certifications, provider numbers, provider agreements, participation agreements, accreditations and any other similar agreements with or approvals by any Governmental Authority or other Person.

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

“ Release ” means any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the environment or within or upon any building, structure, facility or fixture.

“ Repay ” means, in respect of any Indebtedness, to repay, prepay, repurchase, redeem, legally defease or otherwise retire such Indebtedness. “Repayment” and “Repaid” shall have correlative meanings.

“ Required Lenders ” means, at any time, Lenders having Exposures and unused Commitments representing more than 50% of the Aggregate Exposures and unused Commitments at such time.

“ Requirement of Law ” means, with respect to any Person, (i) the charter, articles or certificate of organization or incorporation and bylaws or other organizational or governing documents of such Person and (ii) any statute, law, treaty, rule, regulation, order, decree, writ, injunction or determination of any arbitrator or 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.

“ Restricted Payment ” means (a) any dividend or distribution (whether made in cash, securities or other Property) declared or paid on or with respect to any shares of Equity Interests of Holdings, the Borrower or any Subsidiary (including any payment in connection with any merger or consolidation with or into the Borrower or any Subsidiary), except for any

 

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dividend or distribution that is made solely to the Borrower or a Subsidiary (and, if the Subsidiary making such dividend or distribution is not a wholly owned Subsidiary, such dividend or distribution is made to the other holders of Equity Interests of such Subsidiary on a pro rata basis or on a basis that results in the receipt by the Borrower or a Subsidiary of dividends or distributions of greater value than it would receive on a pro rata basis) or any dividend or distribution payable solely in shares of Equity Interests (other than Disqualified Preferred Stock) of Holdings or the Borrower, (b) the purchase, repurchase, redemption, acquisition or retirement for value of any Equity Interests of Holdings, the Borrower or any Subsidiary (other than from the Borrower or a Subsidiary) or any securities exchangeable for or convertible into any such Equity Interests, including (1) in connection with any merger, consolidation or amalgamation and (2) the exercise of any option to exchange any Equity Interests (other than for or into Equity Interests of Holdings or the Borrower that is not Disqualified Preferred Stock), (c) the purchase, repurchase, redemption, acquisition or retirement for value, prior to the date for any scheduled maturity, sinking fund or amortization or other installment payment, of any Subordinated Obligation, or in the case of Holdings, the Holdings Floating Rate Notes (other than (1) the purchase, repurchase or other acquisition of any Subordinated Obligation (or, in the case of Holdings, the Holdings Floating Rate Notes) purchased in anticipation of satisfying a scheduled maturity, sinking fund or amortization or other installment obligation, in each case due within one year of the date of acquisition or (2) the redemption of the subordinated physician notes in connection with conversions of physician management practice entities and/or physicians affiliated with such physician management practice entities to the service line structure or the termination of a Management Services Agreement as in effect on the Effective Date), (d) any Investment (other than Permitted Investments) in any Person or (e) the issuance, sale or other disposition of Equity Interests of any Subsidiary to a Person other than Holdings, the Borrower or another Subsidiary if the result thereof is that such Subsidiary shall cease to be a Subsidiary, in which event the amount of such “Restricted Payment” shall be the Fair Market Value of the remaining interest, if any, in such former Subsidiary held by the Borrower and the other Subsidiaries, unless such issuance, sale or other disposition is classified as a Permitted Investment.

“ Revolving Loan ” means a Loan made pursuant to Section 2.01.

“ Risk Retention Subsidiary ” shall mean any Subsidiary established for the sole purpose of retaining risks relating to the operations of the Borrower, the Subsidiaries and the Affiliated Practices (including members of such Affiliated Practices), provided that any Equity Interests of such Subsidiary that are not owned by the Borrower are owned by Subsidiaries and Affiliated Practices (including members of such Affiliated Practices).

“ S&P ” means Standard & Poor’s Ratings Group, Inc.

“ SEC ” means the Securities and Exchange Commission or any Governmental Authority succeeding to any of its principal functions.

“ Secured Parties ” has the meaning set forth in the Security Documents.

“ Securities Act ” means the Securities Act of 1933.

 

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“ Security Documents ” means the Collateral Agreement, the Intercreditor Agreement, the Mortgages and each other security agreement or other instrument or document executed and delivered pursuant to Section 5.12 or 5.13 to secure any of the Obligations.

“ Senior Secured Notes ” means the Senior Secured Notes due 2017 issued by the Borrower on June 18, 2009 in an aggregate principal amount equal to $775,000,000 and the Indebtedness represented thereby.

“ Senior Secured Notes Documents ” means the Senior Secured Notes Indenture and all other instruments, agreements and other documents evidencing or governing the Senior Secured Notes or providing for any Guarantee or other right in respect thereof.

“ Senior Secured Notes Indenture ” means the indenture dated as of June 18, 2009, among the Borrower, the Subsidiaries listed therein, Wilmington Trust FSB, as trustee, in respect of the Senior Secured Notes.

“ Senior Secured Notes Security Documents ” means the “ Security Documents ” as defined in the Senior Secured Notes Indenture.

“ Senior Secured Notes Trustee ” means Wilmington Trust FSB or any successor trustee under the Senior Secured Notes Documents.

“ Specified Transactions ” means (a) Dispositions with an aggregate Fair Market Value equal to or in excess of $10,000,000, (b) an Investment (by merger or otherwise) in any Subsidiary (or any Person which becomes a Subsidiary) or (c) an acquisition of Property which constitutes all or substantially all of an operating unit of a business.

“ Sponsor ” means Welsh, Carson, Anderson & Stowe IX, L.P.

“ Sponsor Affiliate ” means (i) each Affiliate of the Sponsor that is neither an operating company nor a company controlled by an operating company, (ii) each partner, officer, director, principal or member of the Sponsor or any Sponsor Affiliate and (iii) any spouse, parent or lineal descendant (including by adoption) of any of the foregoing who are natural persons and any trust for the benefit of such persons.

“ Stated Maturity ” means, with respect to any security, the date specified in such security as the fixed date on which the payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred).

“ Statutory Reserve Rate ” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the bank serving as the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the

 

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Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

“ Subordinated Obligation ” means any Indebtedness of any Loan Party (whether outstanding on the Effective Date or thereafter Incurred) that is subordinate or junior in right of payment to the Obligations pursuant to a written agreement to that effect.

“ subsidiary ” means, with respect to any Person (the “ parent ”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held.

“ Subsidiary ” means any subsidiary of the Borrower, other than (a) any Permitted Joint Venture that is not a Permitted Joint Venture Loan Party, (b) any Insurance Subsidiary or (c) any Risk Retention Subsidiary, provided that for all purposes other than for purposes of calculating the Leverage Ratio, “Subsidiary” shall include each Permitted Joint Venture designated as a Subsidiary pursuant to Section 5.17.

“ Subsidiary Loan Party ” means any Domestic Subsidiary (other than any Inactive Subsidiary for which the Borrower has not satisfied (and is not required to satisfy) the Collateral and Guarantee Requirements).

“ Succeeding Holdings ” has the meaning set forth in Section 5.16

“ Supermajority Lenders ” means Lenders having Exposures and unused Commitments representing more than 75% of the Aggregate Exposures and unused Commitments at such time.

“ Swap Agreement ” means, with respect to any Person, any obligation of such Person pursuant to any Interest Rate Agreement or Currency Exchange Protection Agreement or any other similar agreement or arrangement.

“ Swingline Back-Stop Arrangements ” has the meaning assigned to such term in Section 2.04(d).

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

 

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“ Swingline Lender ” means Deutsche Bank Trust Company Americas, in its capacity as lender of Swingline Loans hereunder, and any successor Swingline Lender appointed pursuant to Section 2.04(e).

“ Swingline Loan ” means a Loan made pursuant to Section 2.04.

“ Syndication Agents ” means Morgan Stanley Senior Funding, Inc. and Wells Fargo Bank, N.A.

“ Taxes ” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“ Temporary Cash Investments ” means:

(a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

(b) investments in time deposit accounts, certificates of deposit and money market deposits maturing within 270 days of the date of acquisition thereof issued by a bank or trust company organized under the laws of the United States of America or any state thereof or any foreign country recognized by the United States of America, which bank or trust company has capital, surplus and undivided profits aggregating in excess of $500,000,000 and whose long-term debt is rated “A-3” or “A-” or higher according to Moody’s or S&P (or such similar equivalent rating by at least one “nationally recognized statistical rating organization” (as defined in Rule 436 under the Securities Act));

(c) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (a) entered into with:

(1) a bank meeting the qualifications described in clause (b) above, or

(2) any primary government securities dealer reporting to the Market Reports Division of the Federal Reserve Bank of New York;

(d) investments in commercial paper maturing not more than 90 days after the date of acquisition, issued by a corporation (other than an Affiliate of the Borrower) organized and in existence under the laws of the United States of America or any foreign country recognized by the United States of America with a rating at the time as of which any investment therein is made of “P-1” (or higher) according to Moody’s or “A-1” (or higher) according to S&P (or such similar equivalent rating by at least one “nationally recognized statistical rating organization” (as defined in Rule 436 under the Securities Act));

(e) direct obligations (or certificates representing an ownership interest in such obligations) of any state of the United States of America or any political subdivision

 

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thereof (including any agency or instrumentality of any such state or political subdivision thereof) for the payment of which the full faith and credit of such state is pledged and which are not callable or redeemable at the issuer’s option, provided that:

(1) the long-term debt of such state is rated “A-3” or “A-” or higher according to Moody’s or S&P (or such similar equivalent rating by at least one “nationally recognized statistical rating organization” (as defined in Rule 436 under the Securities Act)), and

(2) such obligations mature within 180 days of the date of acquisition thereof; and

(f) investments in funds which invest all or substantially all of their assets in Temporary Cash Investments of the kind described in clauses (a) through (e) of this definition.

“ Third Party Payor ” means any Government Program and any quasi-public agency, Blue Cross, Blue Shield and any managed care plans and organizations, including health maintenance organizations and preferred provider organizations and private commercial insurance companies and any similar third party arrangements, plans or programs for payment or reimbursement in connection with health care services, products or supplies.

“ Third Party Payor Arrangement ” means any arrangement, plan or program for payment or reimbursement by any Third Party Payor in connection with the provision of healthcare services, products or supplies.

“ Total Indebtedness ” means, as of any date, the aggregate principal amount of Indebtedness of the Borrower and the Subsidiaries outstanding as of such date, in the amount that would be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP.

“ Total Tangible Assets ” means, as of any date of determination, the sum of the amounts that would appear on a consolidated balance sheet of the Borrower and its consolidated Subsidiaries as the total assets (less, to the extent not deducted in the determination of total assets, accumulated depreciation and amortization, allowances for doubtful receivables, other applicable reserves and other properly deductible items) of the Borrower and its Subsidiaries, after giving effect to purchase accounting and after deducting therefrom, to the extent otherwise included, the amounts of (without duplication):

(a) the excess of cost over Fair Market Value of Property;

(b) any revaluation or other write-up in book value of assets subsequent to the last day of the fiscal quarter of the Borrower immediately preceding the Effective Date as a result of a change in the method of valuation in accordance with GAAP;

(c) unamortized debt discount and expenses and other unamortized deferred charges, goodwill, patents, trademarks, service marks, trade names, copyrights, licenses, organization or developmental expenses, Management Services Agreements and other intangible items as to which Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” applies;

 

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(d) minority interests in consolidated Subsidiaries held by Persons other than the Borrower or any Subsidiary;

(e) treasury stock; and

(f) cash or securities set aside and held in a sinking or other analogous fund established for the purpose of redemption or other retirement of Equity Interests.

“ Transaction Costs ” means the fees, expenses and other costs incurred in connection with the Transactions.

“ Transactions ” means (i) the consummation of the Effective Date Refinancing, (ii) the execution, delivery and performance by each Loan Party of the Senior Secured Notes Documents to which it is a party, the issuance of the Senior Secured Notes and the use of proceeds thereof, (iii) the execution, delivery and performance by each Loan Party of the Loan Documents to which it is to be a party, the borrowing of Loans on the Effective Date, if any, and the use of the proceeds thereof and the issuance of Letters of Credit hereunder, (iv) the repayment of all of the 9% Senior Notes and (v) the payment of the Transaction Costs.

“ Type ”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

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

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

SECTION 1.03. Terms Generally . The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

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SECTION 1.04. Accounting Terms; GAAP . Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time, provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision (including any definition) hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

SECTION 1.05. Pro Forma Calculations (a) Notwithstanding anything to the contrary herein, the Consolidated Interest Coverage Ratio, the Consolidated Net Debt Ratio, the Consolidated Net Secured Debt Ratio and the Leverage Ratio shall be calculated in the manner prescribed by this Section 1.05.

(b) In the event that since the beginning of the most recent four consecutive fiscal quarters for which internal financial statements of the Borrower are then available the Borrower or any Subsidiary since the beginning of such period has Incurred any Indebtedness that remains outstanding or Repaid any Indebtedness, or the transaction giving rise to the need to calculate the Consolidated Interest Coverage Ratio, Consolidated Net Debt Ratio, Consolidated Net Secured Debt Ratio or the Leverage Ratio is an Incurrence or Repayment of Indebtedness, Consolidated Interest Expense, Total Indebtedness and Consolidated EBITDA for such period shall be calculated after giving effect on a pro forma basis to such Incurrence or Repayment as if such Indebtedness was Incurred or Repaid on the first day of such period, provided that, in the event of any such Repayment of Indebtedness, Consolidated EBITDA for such period shall be calculated as if the Borrower or such Subsidiary had not earned any interest income actually earned during such period in respect of the funds used to Repay such Indebtedness.

(c) In the event that since the beginning of the most recent four consecutive fiscal quarters for which internal financial statements of the Borrower are then available (1) a Specified Transaction has occurred, (2) the transaction giving rise to the need to calculate the Consolidated Interest Coverage Ratio, Consolidated Net Debt Ratio, Consolidated Net Secured Debt Ratio or the Leverage Ratio is such a Specified Transaction, or (3) since the beginning of such period any Person (that subsequently became a Subsidiary or was merged with or into the Borrower or any Subsidiary since the beginning of such period) shall have made such a Specified Transaction, Consolidated EBITDA for such period shall be calculated after giving pro forma effect to such Specified Transactions as if such Specified Transactions occurred on the first day of such period.

 

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(d) If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness shall be calculated as if the base interest rate in effect for such floating rate of interest on the date of determination had been the applicable base interest rate for the entire period (taking into account any Swap Agreement applicable to such Indebtedness if such Swap Agreement has a remaining term in excess of 12 months). In the event the Equity Interests of any Subsidiary is sold during the period, the Borrower shall be deemed, for purposes of clause (b) above, to have Repaid during such period the Indebtedness of such Subsidiary to the extent the Borrower and its continuing Subsidiaries are no longer liable for such Indebtedness after such sale.

(e) Whenever pro forma effect is to be given to a Specified Transaction, the pro forma calculations shall be performed in accordance with Article XI of Regulation S-X promulgated under the Securities Act, as interpreted in good faith by the chief financial officer of the Borrower after consultation with the independent certified public accountants of the Borrower, except that any such pro forma calculation may include operating expense reductions for such period attributable to the transaction to which pro forma effect is being given (including, without limitation, operating expense reductions attributable to execution or termination of any contract, reduction of costs related to administrative functions, the termination of any employees or the closing (or the approval by the Board of Directors of the closing) of any facility) that have been realized or for which all steps necessary for the realization of which have been taken or (except in calculating the Leverage Ratio) are reasonably expected to be taken within six months following such transaction, provided , that such adjustments are set forth in an officers’ certificate which states (i) the amount of such adjustment or adjustments and (ii) that such adjustment or adjustments are based on the reasonable good faith beliefs of the Financial Officer executing such officers’ certificate.

(f) Notwithstanding anything to the contrary herein, when calculating the Leverage Ratio solely for the purposes of Section 6.12 (as opposed to any test of the Leverage Ratio as a condition or qualification to any permitted activity), the events described in this Section 1.05 that occurred subsequent to the end of the most recent four consecutive fiscal quarters shall not be given pro forma effect.

ARTICLE II

The Credits

SECTION 2.01. Commitments . Subject to the terms and conditions set forth herein, each Lender agrees to make Revolving Loans to the Borrower from time to time during the Availability Period in an aggregate principal amount that will not result in such Lender’s Exposure exceeding such Lender’s Commitment. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans.

SECTION 2.02. Loans and Borrowings . (a) Each Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the same Type made by the

 

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Lenders ratably in accordance with their respective Commitments. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder, provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.

(b) Subject to Section 2.14, each Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith, provided that all Borrowings made on the Effective Date must be made as ABR Borrowings. Each Swingline Loan shall be an ABR Loan. Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan, provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.

(c) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less than $2,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less than $1,000,000. Borrowings of more than one Type may be outstanding at the same time. There shall not at any time be more than a total of 10 Eurodollar Borrowings outstanding. Notwithstanding anything to the contrary herein, an ABR Borrowing or Swingline Loan may be in an aggregate amount (i) that is equal to the entire unused balance of the aggregate Commitments or (ii) that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.05(e).

(d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.

SECTION 2.03. Requests for Borrowings . To request a Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 2:00 pm, New York City time, three Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 2:00 pm, New York City time, one Business Day before the date of the proposed Borrowing, provided that any such notice of an ABR Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.05(e) may be given not later than 10:00 a.m., New York City time, on the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request signed by the Borrower. Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02:

(i) the aggregate amount of such Borrowing;

(ii) the date of such Borrowing, which shall be a Business Day;

 

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(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

(iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”; and

(v) the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.06.

If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

SECTION 2.04. Swingline Loans . (a) Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the Borrower from time to time during the Availability Period, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding $10,000,000 or (ii) the Aggregate Exposures exceeding the aggregate Commitments, provided that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans, provided that such Borrowings should be in an aggregate amount that is an integral multiple of $100,000 and not less than $500,000.

(b) To request a Swingline Loan, the Borrower shall notify the Administrative Agent of such request by telephone (confirmed by telecopy), not later than 2:00 p.m., New York City time, on the day of a proposed Swingline Loan. Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and the amount of the requested Swingline Loan. The Administrative Agent will promptly advise the Swingline Lender of any such notice received from the Borrower. The Swingline Lender shall make each Swingline Loan available to the Borrower by means of a credit to the general deposit account of the Borrower maintained with the Swingline Lender (or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.05(e), by remittance to the Issuing Bank) by 3:00 p.m., New York City time, on the requested date of such Swingline Loan.

(c) The Swingline Lender may by written notice given to the Administrative Agent not later than 12:00 noon, New York City time, on any Business Day require the Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding. Such notice shall specify the aggregate amount of Swingline Loans in which Lenders will participate. Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Lender,

 

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specifying in such notice such Lender’s Applicable Percentage of such Swingline Loan or Swingline Loans. Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such Lender’s Applicable Percentage of such Swingline Loan or Swingline Loans. Each Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis , to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Lenders. The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from the Borrower (or other party on behalf of the Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear, provided that any such payment so remitted shall be repaid to the Swingline Lender or to the Administrative Agent, as applicable, if and to the extent such payment is required to be refunded to the Borrower for any reason. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrower of any default in the payment thereof. On any Business Day, the Swingline Lender may, in its sole discretion, give notice requesting Revolving Lenders to make Revolving Loans that are ABR Loans on such funding date in an amount equal to the amount of such Swingline Loans. Each Swingline Loan will be repaid no later than every Friday (or the next succeeding Business Day).

(d) (i) Notwithstanding anything to the contrary contained in this Agreement, if any Swingline Exposure exists at the time a Lender becomes a Defaulting Lender then:

 

(a)

all or any part of such Swingline Exposure shall be reallocated (in whole or in part) among the non-Defaulting Lenders in accordance with their respective Applicable Percentages but only to the extent (x) the sum of all non-Defaulting Lenders’ Exposures plus such Defaulting Lender’s LC Exposure that is allocated pursuant to Section 2.05(b)(ii)(a) to the non-Defaulting Lenders and Swingline Exposure does not exceed the total of all non-Defaulting Lenders’ Commitments and (y) the conditions set forth in Section 4.02 are satisfied at such time (it being understood that the Administrative Agent shall provide the Borrower with the amounts reallocated; provided , that the failure to provide such notice shall not relieve the Borrower from its obligations set forth in this Section 2.04(d)); and

 

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(b)

if the reallocation described in clause (a) above cannot, or can only partially, be effected, within 3 Business Days after the Administrative Agent (or the Required Lenders) have sent notice to the Borrower that a Lender has become a Defaulting Lender the Borrower shall enter into arrangements satisfactory to it and the Swingline Lender cash collateralizing such Defaulting Lender’s Swingline Exposure (after giving effect to any partial reallocation pursuant to clause (a) above) (such arrangements, the “ Swingline Back-Stop Arrangements ”) for so long as such Swingline Exposure is outstanding.

(ii) So long as any Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan, unless the related exposure is 100% covered by the Commitments of the non-Defaulting Lenders or cash collateral is provided by the Borrower as set forth above and participating interests in any such newly made Swingline Loan shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.04(d) (and Defaulting Lenders shall not participate therein).

(e) Subject to the appointment and acceptance of a successor Swingline Lender as provided in this paragraph (except as provided in Section 8.01(f)), the Swingline Lender may resign at any time upon 15 days’ prior notice to the Lenders, the Administrative Agent and unless a Default or Event of Default exists, the Borrower. Upon any such resignation, the Required Lenders shall have the right to appoint a successor to the Swingline Lender which successor shall be consented to by the Borrower at all times other than during the existence of an Event of Default under Section 7.01(h), (i) or (j). If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 15 days after the resigning Swingline Lender gives notice of its resignation, then the retiring Swingline Lender may (but shall have no obligation to), on behalf of the Lenders and the Administrative Agent, appoint a successor Swingline Lender which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as Swingline Lender hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the resigning Swingline Lender (but the resigning Swingline Lender shall maintain all of its rights, powers and privileges with respect to Swingline Loans made by it prior to the date of such resignation.

SECTION 2.05. Letters of Credit . (a)  General . Upon satisfaction of the conditions specified in Section 4.01 on the Effective Date, each Existing Letter of Credit will, automatically and without any action on the part of any Person, be deemed to be a Letter of Credit issued hereunder for all purposes of this Agreement and the other Loan Documents. In addition, subject to the terms and conditions set forth herein, the Borrower may request the issuance of additional Letters of Credit for its own account (or for the account of any of its subsidiaries so long as the Borrower is a co-applicant), in a form reasonably acceptable to the

 

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Administrative Agent and the Issuing Bank, at any time and from time to time during the Availability Period. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions . (i) To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank (except that the Issuing Bank in respect of Existing Letters of Credit shall not issue additional Letters of Credit and shall not be required to renew or extend an Existing Letter of Credit unless agreed by it) and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a Letter of Credit Request requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. All Letters of Credit will be denominated in U.S. Dollars and will be payable on a sight basis. If requested by the Issuing Bank, the Borrower also shall submit a letter of credit application on the Issuing Bank’s standard form in connection with any request for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension the Aggregate Exposures shall not exceed the aggregate Commitments.

(ii) Notwithstanding anything to the contrary contained in this Agreement, if any LC Exposure exists at the time a Lender becomes a Defaulting Lender then:

 

(a)

all or any part of such LC Exposure shall be reallocated (in whole or in part) among the non-Defaulting Lenders in accordance with their respective Applicable Percentages but only to the extent (x) the sum of all non-Defaulting Lenders’ Exposures plus such Defaulting Lender’s LC Exposure and Swingline Exposure that is allocated pursuant to Section 2.04(d)(i)(a) to the non-Defaulting Lenders does not exceed the total of all non-Defaulting Lenders’ Commitments and (y) the conditions set forth in Section 4.02 are satisfied at such time (it being understood that the Administrative Agent shall provide the Borrower with the amounts reallocated; provided , that the failure to provide such notice shall not relieve the Borrower from its obligations set forth in this Section 2.05(b));

 

(b)

if the reallocation described in clause (a) above cannot, or can only partially, be effected, within 10 Business Days after the Administrative

 

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Agent (or the Required Lenders) have sent notice to the Borrower that a Lender has become a Defaulting Lender the Borrower shall enter into arrangements cash collateralizing such Defaulting Lender’s LC Exposure (after giving effect to any partial reallocation pursuant to clause (a) above) in accordance with the procedures set forth in Section 2.05(j) (such arrangements, the “ Letter of Credit Back-Stop Arrangements ”) for so long as such LC Exposure is outstanding;

 

(c)

if the Borrower cash collateralizes any portion of such Defaulting Lender’s LC Exposure pursuant to this Section 2.05(b), the Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.12 with respect to such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is cash collateralized;

 

(d)

if any of the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to this Section 2.05(b), then the fees payable to the Lenders pursuant to Section 2.12 shall be adjusted in accordance with such non-Defaulting Lenders’ Applicable Percentages; and

 

(e)

if any Defaulting Lender’s LC Exposure is neither cash collateralized nor reallocated pursuant to this Section 2.05(b), then without prejudice to any rights or remedies of any Issuing Bank or any Lender hereunder, all letter of credit fees payable under Section 2.12 with respect to such Defaulting Lender’s LC Exposure shall be payable to such Issuing Bank until such LC Exposure is cash collateralized or reallocated.

(iii) So long as any Lender is a Defaulting Lender, no Issuing Bank shall be required to issue, amend or increase any Letter of Credit, unless the related exposure is 100% covered by the Commitments of the non-Defaulting Lenders or cash collateral is provided by the Borrower in accordance with Section 2.05(b) and participating interests in any such newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.05(b) (and Defaulting Lenders shall not participate therein).

(c) Expiration Date . Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date that is one year after the date of the issuance of such Letter of Credit; provided that any Letter of Credit may provide for renewals or extensions thereof (automatic or otherwise) for additional periods of up to 12 months (which in no event shall extend beyond the date referred to in clause (ii)) and (ii) the date that is five Business Days prior to the Maturity Date.

(d) Participations . By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in

 

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

(e) Reimbursement . If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 3:00 p.m., New York City time, on the date that such LC Disbursement is made, if the Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such notice has not been received by the Borrower prior to such time on such date, then not later than (i) 3:00 p.m., New York City time, on the Business Day that the Borrower receives such notice, if such notice is received prior to 10:00 a.m., New York City time on the day of receipt, or (ii) 3:00 p.m., New York City time, on the Business Day immediately following the day that the Borrower receives such notice, if such notice is not received prior to such time on the day of receipt, provided that the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 or 2.04 that such payment be financed with an ABR Borrowing or Swingline Loan in an equivalent amount and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting ABR Borrowing or Swingline Loan. If the Borrower fails to make such payment when due, the Administrative Agent shall notify each Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such Lender’s Applicable Percentage thereof. Promptly following receipt of such notice and subject to Section 2.05(b)(ii), each Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the Borrower, in the same manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis , to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to this paragraph, the Administrative Agent shall distribut