FORM OF CREDIT AGREEMENT dated as of August 21, 2009 among

Exhibit 10.1

FORM OF

CREDIT AGREEMENT

dated as of

August 21, 2009

among

AMERICAN DENTAL PARTNERS, INC.,

as Borrower

THE LENDING INSTITUTIONS NAMED HEREIN,

as Lenders,

and

KEYBANK NATIONAL ASSOCIATION,

as a Co-Lead Arranger and Administrative Agent

and

RBS SECURITIES INC.,

as a Co-Lead Arranger

and

BANC OF AMERICA SECURITIES LLC,

as a Co-Lead Arranger

BANK OF AMERICA, N.A.,

as Documentation Agent

and

RBS CITIZENS, N.A.,

as Syndication Agent

$50,000,000 Revolving Facility

$80,000,000 Term Loan Facility

 

TABLE OF CONTENTS

 

 

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THIS CREDIT AGREEMENT is entered into as of August 21, 2009 among the following: (i) AMERICAN DENTAL PARTNERS, INC., a Delaware corporation (the “ Borrower ”); (ii) the lenders from time to time party hereto (each a “ Lender ” and collectively, the “ Lenders ”); (iii) KEYBANK NATIONAL ASSOCIATION, as a co-lead arranger, sole bookrunner and administrative agent (the “ Administrative Agent ”); (iv) KBCM BRIDGE LLC, a Delaware limited liability company, as a Lender and the Swing Line Lender (as hereinafter defined); (v) RBS SECURITIES INC., as a co-lead arranger; (vi) BANK OF AMERICA, N.A., as documentation agent and a Lender; (vii) BANC OF AMERICA SECURITIES LLC, as a co-lead arranger, and (viii) RBS CITIZENS, N.A., as syndication agent and a Lender.

PRELIMINARY STATEMENTS:

(1) The Borrower has requested that the Lenders, the Swing Line Lender and each Letter of Credit Issuer (as hereafter defined) extend credit to the Borrower to refinance the Existing Facilities (as hereinafter defined) and to provide working capital and funds for other lawful purposes.

(2) Subject to and upon the terms and conditions set forth herein, the Lenders, the Swing Line Lender and each Letter of Credit Issuer are willing to extend credit and make available to the Borrower the credit facility provided for herein for the foregoing purposes.

AGREEMENT:

In consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows:

ARTICLE I.

DEFINITIONS AND TERMS

Section 1.1. Certain Defined Terms . As used herein, the following terms shall have the meanings herein specified unless the context otherwise requires:

“ Acquisition ” shall mean any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (i) any acquisition on a going concern basis (whether by purchase, lease or otherwise) of any facility and/or business or business unit operated by any person that is not a Subsidiary of the Borrower, (ii) the acquisition of a majority of the outstanding Equity Interest in any such person (whether by merger, stock purchase or otherwise), (iii) the affiliation with a dental group through the acquisition of selected assets consistent with the past practices of the Borrower, (iv) the acquisition of all or substantially all of the assets of any person, or any business or division of any person, (v) any transaction in which the Borrower or any Subsidiary enters into a Management Service Agreement or any similar agreement or affiliation and (vi) the acquisition of another person by a merger, consolidation, amalgamation or any other combination with such person.

“ Additional Security Document ” shall have the meaning provided in Section 8.11(a).

“ Adjusted Eurodollar Rate ” shall mean, with respect to each Interest Period for a Eurodollar Loan, the greater of: (i) (A) the rate per annum equal to the offered rate appearing on the applicable

electronic page of Reuters (or on the appropriate page of any successor to or substitute for such service, or, if such rate is not available, on the appropriate page of any generally recognized financial information service, as selected by the Administrative Agent from time to time) that displays an average British Bankers Association Interest Settlement Rate at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period, for deposits in Dollars with a maturity comparable to such Interest Period, divided (and rounded to the nearest one hundredth of 1%) by (B) a percentage equal to 100% minus the then stated maximum rate of all reserve requirements (including, without limitation, any marginal, emergency, supplemental, special or other reserves and without benefit of credits for proration, exceptions or offsets that may be available from time to time) applicable to any member bank of the Federal Reserve System in respect of Eurocurrency liabilities as defined in Regulation D (or any successor category of liabilities under Regulation D); provided , however , that in the event that the rate referred to in clause (A) above is not available at any such time for any reason, then the rate referred to in clause (A) shall instead be the interest rate per annum, as determined by the Administrative Agent, to be the average (rounded to the nearest ten thousandth of 1%) of the rates per annum at which deposits in Dollars in an amount equal to the amount of such Eurodollar Loan are offered to the Reference Banks in the London interbank market at approximately 11:00 a.m. (London time), two Business Days prior to the commencement of such Interest Period, for contracts that would be entered into at the commencement of such Interest Period for the same duration as such Interest Period and (ii) 2.00%. Notwithstanding the foregoing, the Adjusted Eurodollar Rate for the Hedged Portion of the Term Loan shall equal clause (i) above so long as the Hedge Condition is in effect.

“ Administrative Agent ” shall have the meaning provided in the first paragraph of this Agreement and shall include any successor to the Administrative Agent appointed pursuant to Section 11.9.

“ Affiliate ” shall mean, with respect to any person, any other person directly or indirectly controlling, controlled by, or under direct or indirect common control with such person, or, in the case of any Lender that is an investment fund, the investment advisor thereof and any investment fund having the same investment advisor. A person shall be deemed to control a second person if such first person possesses, directly or indirectly, the power (i) to vote 10% or more of the securities having ordinary voting power for the election of directors or managers of such second person or (ii) to direct or cause the direction of the management and policies of such second person, whether through the ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (x) a director, officer or employee of a person shall not, solely by reason of such status, be considered an Affiliate of such person; and (y) neither the Administrative Agent nor any Lender shall in any event be considered an Affiliate of the Borrower or any other Credit Party or any of their respective Subsidiaries.

“ Aggregate Credit Facility Exposure ” shall mean, at any time, the sum of (i) the Aggregate Revolving Facility Exposure at such time and (ii) the principal amount of Swing Loans outstanding at such time, and (iii) aggregate principal amount of the Term Loans outstanding at such time.

“ Aggregate Revolving Facility Exposure ” shall mean, at any time, the sum of (i) the principal amounts of all Revolving Loans made by all Lenders and outstanding at such time and (ii) the aggregate amount of the Letter of Credit Outstandings at such time.

“ Agreement ” shall mean this Credit Agreement, as the same may from time to time be amended, restated, supplemented or otherwise modified.

“ Anti-Terrorism Law ” shall mean the USA Patriot Act or any other law pertaining to the prevention of future acts of terrorism, in each case as such law may be amended from time to time.

 

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“ Applicable Commitment Fee Rate ” shall mean:

(i) On the Closing Date and thereafter, until changed hereunder in accordance with the provisions set forth in this definition, the Applicable Commitment Fee Rate shall be 62.50 basis points;

(ii) Commencing with the fiscal quarter of the Borrower ended on September 30, 2009, and continuing with each fiscal quarter thereafter, the Administrative Agent shall determine the Applicable Commitment Fee Rate in accordance with the following matrix, based on the Leverage Ratio:

 

(iii) Changes in the Applicable Commitment Fee Rate based upon changes in the Leverage Ratio shall become effective on the third Business Day following the receipt by the Administrative Agent pursuant to Section 8.1(a) or Section 8.1(b), as the case may be, of the financial statements of the Borrower for the Testing Period most recently ended, accompanied by a Compliance Certificate required pursuant to Section 8.1(c), demonstrating the computation of the Leverage Ratio. Notwithstanding the foregoing, during any period when (A) the Borrower has failed to timely deliver its consolidated financial statements referred to in Section 8.1(a) or Section 8.1(b), accompanied by a Compliance Certificate required pursuant to Section 8.1(c), (B) a Default under Section 10.1(a) has occurred and is continuing, or (C) an Event of Default has occurred and is continuing, the Applicable Commitment Fee Rate shall be the highest number of basis points indicated therefor in the above matrix, regardless of the Leverage Ratio at such time. Any changes in the Applicable Commitment Fee Rate shall be determined by the Administrative Agent in accordance with the provisions set forth in this definition and the Administrative Agent will promptly provide notice of such determinations to the Borrower and the Lenders. Any such determination by the Administrative Agent shall be conclusive and binding absent manifest error. The above matrix does not modify or waive, in any respect, the rights of the Administrative Agent and the Lenders to charge any default rate of interest or any of the other rights and remedies of the Administrative Agent and the Lenders hereunder.

(iv) In the event that any financial statement or Compliance Certificate delivered pursuant to Section 8.1(a) , (b)  or (c)  is shown to be inaccurate (regardless of whether this Agreement or the Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Commitment Fee Rate for an applicable period than the Applicable Commitment Fee Rate actually applied for such applicable period, then (i) the Borrower shall immediately deliver to the Administrative Agent a corrected Compliance Certificate for such applicable period, (ii) the Applicable Commitment Fee Rate shall be determined as if such corrected, higher Applicable Commitment Fee Rate were applicable for such period, and (iii) the Borrower shall immediately pay to the Administrative Agent, for the account of the applicable Lenders and/or the applicable Letter of Credit Issuers, the additional Commitment Fee owing (including for any retrospective periods) as a result of such higher Applicable Commitment Fee Rate for such period. This provision shall not limit the rights of the Administrative Agent and the Lenders with respect to any other provision of this Agreement. The Borrower’s obligations under this clause (iv) shall survive the termination of the Commitments and the repayment of all Obligations hereunder.

 

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“ Applicable Lending Office ” shall mean, with respect to each Lender, the office or offices designated by such Lender to the Administrative Agent as such Lender’s lending office or offices for purposes of this Agreement. A Lender may have a different Applicable Lending Office for Base Rate Loans and Eurodollar Loans.

“ Applicable Margin ” shall mean:

(i) On the Closing Date and thereafter, until changed hereunder in accordance with the following provisions, the Applicable Margin shall be (A) 550.00 basis points for Base Rate Loans, and (B) 600.00 basis points for Eurodollar Loans;

(ii) Commencing with the fiscal quarter of the Borrower ended on September 30, 2009, and continuing with each fiscal quarter thereafter, the Administrative Agent shall determine the Applicable Margin in accordance with the following matrix, based on the Leverage Ratio:

 

(iii) Changes in the Applicable Margin based upon changes in the Leverage Ratio shall become effective on the third Business Day following the receipt by the Administrative Agent pursuant to Section 8.1(a) or Section 8.1(b), as the case may be, of the financial statements of the Borrower for the Testing Period most recently ended, accompanied by a Compliance Certificate in accordance with Section 8.1(c), demonstrating the computation of the Leverage Ratio. Notwithstanding the foregoing provisions, during any period when (A) the Borrower has failed to timely deliver its consolidated financial statements referred to in Section 8.1(a) or Section 8.1(b), accompanied by a Compliance Certificate in accordance with Section 8.1(c), (B) a Default under Section 10.1(a) has occurred and is continuing, or (C) an Event of Default has occurred and is continuing, the Applicable Margin shall be the highest number of basis points indicated therefor in the above matrix, regardless of the Leverage Ratio at such time. Any changes in the Applicable Margin shall be determined by the Administrative Agent in accordance with the provisions set forth in this definition and the Administrative Agent will promptly provide notice of such determinations to the Borrower and the Lenders. Any such determination by the Administrative Agent shall be conclusive and binding absent manifest error. The above matrix does not modify or waive, in any respect, the rights of the Administrative Agent and the Lenders to charge any default rate of interest or any of the other rights and remedies of the Administrative Agent and the Lenders hereunder.

 

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(iv) In the event that any financial statement or Compliance Certificate delivered pursuant to Section 8.1(a) , (b)  or (c)  is shown to be inaccurate (regardless of whether this Agreement or the Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for an applicable period than the Applicable Margin actually applied for such applicable period, then (i) the Borrower shall immediately deliver to the Administrative Agent a corrected Compliance Certificate for such applicable period, (ii) the Applicable Margin shall be determined as if such corrected, higher Applicable Margin were applicable for such period, and (iii) the Borrower shall immediately pay to the Administrative Agent, for the account of the applicable Lenders and/or the applicable Letter of Credit Issuers, the accrued additional interest owing (including for any retrospective periods) as a result of such higher Applicable Margin for such period. This provision shall not limit the rights of the Administrative Agent and the Lenders with respect to any other provision of this Agreement. The Borrower’s obligations under this clause (iv) shall survive the termination of the Commitments and the repayment of all Obligations hereunder.

“ Approved Bank ” has the meaning provided in subpart (ii) of the definition of “Cash Equivalents.”

“ Approved Fund ” shall mean a fund that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit and that is administered or managed by a Lender or an Affiliate of a Lender.

“ Asset Sale ” shall mean the sale, lease, transfer or other disposition (including by means of Sale and Lease-Back Transactions, and by means of mergers, consolidations, amalgamations and liquidations of a corporation, partnership or limited liability company of the interests therein of the Borrower or any Subsidiary) by the Borrower or any Subsidiary to any person of any of the Borrower’s or such Subsidiary’s respective assets, provided that the term Asset Sale specifically excludes (i) any sales, transfers or other dispositions of inventory, or obsolete or excess furniture, fixtures, equipment or other property, real or personal, tangible or intangible, in each case in the ordinary course of business, and (ii) the actual or constructive total loss of any property or the use thereof resulting from any Event of Loss.

“ Assignment Agreement ” shall mean an Assignment Agreement substantially in the form of Exhibit D hereto.

“ Authorized Officer ” shall mean any of the following officers of the Borrower: the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, the Vice President-Planning and Investment or the Treasurer or any other officer of the Borrower performing a function similar to any of the foregoing that is acceptable to the Administrative Agent. Unless otherwise qualified, all references herein to an Authorized Officer shall refer to an Authorized Officer of the Borrower.

“ Bank Products ” means treasury management, cash management, deposit, disbursement or other bank account services, credit card or purchase card programs or other similar banking products.

“ Bank Product Creditor ” shall have the meaning provided in the Security Agreement.

“ Bank Product Document ” shall have the meaning provided in the Security Agreement.

“ Bank Product Obligations ” shall have the meaning provided in the Security Agreement.

“ Bankruptcy Code ” shall have the meaning provided in Section 10.1(h)(i).

 

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“ Base Rate ” shall mean, for any day, a fluctuating interest rate per annum as shall be in effect from time to time which rate per annum shall at all times be equal to the greatest of: (i) the rate of interest established by KeyBank in Cleveland, Ohio, from time to time, as its “prime rate,” whether or not publicly announced, which interest rate may or may not be the lowest rate charged by it for commercial loans or other extensions of credit; (ii) the Federal Funds Effective Rate in effect from time to time, determined one Business Day in arrears, plus  ¹ / 2 of 1.00% per annum; and (iii) the greater of (A) the Adjusted Eurodollar Rate for one month interest periods that would be applicable had the Borrower submitted on such day a Notice of Borrowing, Continuation or Conversion that requested the Borrowing, Continuation or Conversion of a Eurodollar Loan, and (B) 2.00%, in the case of each of subclauses (A) and (B) of this clause (iii), plus 1.00% per annum.

“ Base Rate Loan ” shall mean any Loan bearing interest at a rate based upon the Base Rate in effect from time to time.

“ Benefited Creditors ” shall mean, with respect to the Borrower Guaranteed Obligations pursuant to Article XII, each of the Administrative Agent, the Lenders, each Letter of Credit Issuer and the Swing Line Lender, each Designated Hedge Creditor and each Bank Product Creditor, and the respective successors and assigns of each of the foregoing (but in the case of a successor or assign of a Designated Hedge Creditor or a Bank Product Creditor, as applicable, solely to the extent such successor or assign meets the definition of a Designated Hedge Creditor or a Bank Product Creditor, as applicable).

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

“ Borrower Guaranteed Obligations ” has the meaning provided in Section 12.1.

“ Borrowing ” shall mean a Revolving Borrowing, a Term Borrowing or the incurrence of a Swing Loan.

“ Business Day ” shall mean (i) for all purposes other than as covered by clause (ii) below, any day excluding Saturday, Sunday or any other day that shall be in the city in which the Payment Office is located a legal holiday or a day on which banking institutions are authorized or required by law or other governmental actions to close and (ii) with respect to all notices and determinations in connection with, and payments of principal and interest on, Eurodollar Loans, any day that is a Business Day described in clause (i) and that is also a day for trading by and between banks in Dollar deposits in the London interbank market.

“ Capital Distribution ” shall mean a payment made, liability incurred or other consideration given for the purchase, acquisition, repurchase, redemption or retirement of any Equity Interest of the Borrower or any of its Subsidiaries or as a dividend, return of capital or other distribution in respect of the Borrower’s or such Subsidiary’s Equity Interest.

“ Capital Lease ” as applied to any person shall mean any lease of any property (whether real, personal or mixed) by that person as lessee that, in conformity with GAAP, should be accounted for as a capital lease on the balance sheet of that person.

“ Capitalized Lease Obligations ” shall mean all obligations under Capital Leases of the Borrower or any of its Subsidiaries in each case taken at the amount thereof accounted for as liabilities identified as “capital lease obligations” (or any similar words) on a consolidated balance sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP.

 

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“ Care For Kids Subsidiary ” shall mean Care For Kids – USA, LLC, a Delaware limited liability company, or any other Subsidiary formed from time to time at any time after the Closing Date by ADP-CFK, LLC, a Delaware limited liability company or any other Credit Party approved in writing by the Administrative Agent, primarily for purposes of operating dental practices (or providing administrative services thereto) specializing in the treatment of children, including children covered by the applicable State’s Medicaid program, and “ Care For Kids Subsidiaries ” shall mean, collectively, each such Care For Kids Subsidiary.

“ Cash Equivalents ” shall mean any of the following:

(i) securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) having maturities of not more than one year from the date of acquisition;

(ii) Dollar denominated time deposits, certificates of deposit and bankers’ acceptances of (x) any Lender, (y) any domestic commercial bank of recognized standing having capital and surplus in excess of $500,000,000 or (z) any bank (or the parent company of such bank) whose short-term commercial paper rating from S&P is at least A-1 or the equivalent thereof or from Moody’s is at least P-1 or the equivalent thereof (any such bank, an “ Approved Bank ”), in each case with maturities of not more than three months from the date of acquisition;

(iii) commercial paper issued by any Lender or Approved Bank or by the parent company of any Lender or Approved Bank and commercial paper issued by, or guaranteed by, any industrial or financial company with a short-term commercial paper rating of at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody’s, or guaranteed by any industrial company with a long-term unsecured debt rating of at least A or A-2, or the equivalent of each thereof, from S&P or Moody’s, as the case may be, and in each case maturing within 90 days after the date of acquisition;

(iv) fully collateralized repurchase agreements entered into with any Lender or Approved Bank having a term of not more than 30 days and covering securities described in clause (i) above;

(v) investments in money market funds substantially all the assets of which are comprised of securities of the types described in clauses (i) through (iv) above;

(vi) investments in money market funds access to which is provided as part of “sweep” accounts maintained with a Lender or an Approved Bank;

(vii) investments in industrial development revenue bonds that (A) “re-set” interest rates not less frequently than quarterly, (B) are entitled to the benefit of a remarketing arrangement with an established broker dealer, and (C) are supported by a direct pay letter of credit covering principal and accrued interest that is issued by an Approved Bank; and

(viii) investments in pooled funds or investment accounts consisting of investments of the nature described in the foregoing clause (vii).

“ Cash Proceeds ” shall mean, with respect to (i) any Asset Sale, the aggregate cash payments (including any cash received by way of deferred payment pursuant to a note receivable issued in connection with such Asset Sale, other than the portion of such deferred payment constituting interest, but

 

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only as and when so received) received by the Borrower or any Subsidiary from such Asset Sale, and (ii) any Event of Loss, the aggregate cash payments, including all insurance proceeds and proceeds of any award for condemnation or taking, received in connection with such Event of Loss.

“ CERCLA ” shall mean the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as the same may be amended from time to time, 42 U.S.C. § 9601 et seq.

“ Change of Control ” shall occur if:

(i) during any period of two consecutive calendar years, individuals who at the beginning of such period constituted the Borrower’s Board of Directors (together with any new directors (x) whose election by the Borrower’s Board of Directors was, or (y) whose nomination for election by the Borrower’s shareholders was (prior to the date of the proxy or consent solicitation relating to such nomination), approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved), shall cease for any reason to constitute a majority of the directors then in office; or

(ii) any person or group (as such term is defined in Section 13(d)(3) of the 1934 Act), shall acquire, directly or indirectly, beneficial ownership (within the meaning of Rule 13d-3 and 13d-5 of the 1934 Act) of more than 30%, on a fully diluted basis, of the economic or voting interest in the Borrower’s capital stock.

“ Charges ” shall have the meaning provided in Section 13.22.

“ CIP Regulations ” shall have the meaning provided in Section 11.11.

“ Claims ” shall have the meaning set forth in the definition of “ Environmental Claims .”

“ Closing Date ” shall mean August 21, 2009.

“ Code ” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and the rulings issued thereunder. Section references to the Code are to the Code, as in effect at the Closing Date and any subsequent provisions of the Code, amendatory thereof, supplemental thereto or substituted therefor.

“ Co-Lead Arrangers ” means, collectively, KeyBank, Banc of America Securities LLC, and RBS Securities Inc., in their capacities as co-lead arrangers hereunder.

“ Collateral ” shall mean the “Collateral” as defined in the Security Agreement, together with any other collateral (whether real property or personal property) covered by any Security Document.

“ Commitment ” shall mean with respect to each Lender, (i) its Revolving Commitment or (ii) its Term Commitment, if any, or, in the case of such Lender, all of such Commitments.

“ Commitment Fees ” shall have the meaning provided in Section 4.1(a).

“ Compliance Certificate ” shall have the meaning provided in Section 8.1(c).

“ Confidential Information ” shall have the meaning provided in Section 13.14(b).

 

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“ Consideration ” shall mean, in connection with an Acquisition, the aggregate consideration paid, including borrowed funds, cash, the issuance of securities or notes, the assumption or incurring of liabilities (direct or contingent and including, without limitation, any earn-out payments), the payment of consulting fees or fees for a covenant not to compete and any other consideration paid in connection with such Acquisition.

“ Consolidated Capital Expenditures ” shall mean, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities and including in all events amounts expended or capitalized under Capital Leases and Synthetic Leases but excluding any amount representing capitalized interest) by the Borrower and its Subsidiaries during that period that, in conformity with GAAP, are or are required to be included in the property, plant or equipment reflected in the consolidated balance sheet of the Borrower and its Subsidiaries.

“ Consolidated Depreciation and Amortization Expense ” shall mean, for any period, all depreciation and amortization expenses of the Borrower and its Subsidiaries, all as determined for the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.

“ Consolidated EBITDA ” shall mean, for any period, Consolidated Net Income for such period, plus (i) the sum of the amounts for such period included in determining such Consolidated Net Income of, without duplication, (A) Consolidated Interest Expense, (B) Consolidated Income Tax Expense, (C) Consolidated Depreciation and Amortization Expense, (D) Non-Cash Compensation Charges, and (E) extraordinary and other non-recurring non-cash losses and charges, less (ii) gains on sales of assets and other extraordinary gains and other non-recurring gains; all as determined for the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP; provided, that Consolidated EBITDA for any Testing Period shall (x) include the appropriate financial items for any person or business unit that has been acquired by the Borrower or any of its Subsidiaries for any portion of such Testing Period prior to the date of acquisition (but excluding anticipated operating synergies), and (y) exclude the appropriate financial items for any person or business unit that has been disposed of by the Borrower or any of its Subsidiaries, for the portion of such Testing Period prior to the date of disposition. In the case of clauses (x) and (y) in the preceding sentence, such terms shall be subject to the Administrative Agent’s reasonable discretion and supporting documentation (a copy of which shall be provided to the Lenders) acceptable to the Administrative Agent.

“ Consolidated Income Tax Expense ” shall mean, for any period, all provisions for taxes based on the net income of the Borrower or any of its Subsidiaries (including, without limitation, any additions to such taxes, and any penalties and interest with respect thereto), all as determined for the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.

“ Consolidated Interest Expense ” shall mean, for any period, total interest expense (including, without limitation, that which is capitalized, that which is attributable to Capital Leases or Synthetic Leases and the pre-tax equivalent of dividends payable on Disqualified Equity Interests) of the Borrower and its Subsidiaries on a consolidated basis with respect to all outstanding Indebtedness of the Borrower and its Subsidiaries including, without limitation, all commissions, discounts and other fees and charges owed with respect to letters of credit and net costs under Hedge Agreements.

“ Consolidated Net Income ” shall mean for any period, the net income (or loss) of the Borrower and its Subsidiaries on a consolidated basis for such period taken as a single accounting period determined in conformity with GAAP.

“ Consolidated Net Rent Expense ” shall mean, for any period, the total amount of rent or similar obligations required to be paid during such period by the Borrower or any of its Subsidiaries in respect of

 

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Operating Leases, as determined on a consolidated basis for such period taken as a single accounting period determined in conformity with GAAP, but only to the extent such rent or similar obligations are not reimbursed to the Borrower or any of its Subsidiaries pursuant to the terms of a Management Service Agreement.

“ Consolidated Net Working Capital ” means current assets (excluding cash and Cash Equivalents), minus current liabilities, all as determined for the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.

“ Consolidated Net Worth ” shall mean at any time, all amounts that, in conformity with GAAP, would be included under the caption “total stockholders’ equity” (or any like caption) on a consolidated balance sheet of the Borrower at such time, provided that in no event shall Consolidated Net Worth include any amounts in respect of Disqualified Equity Interests.

“ Consolidated Revenue ” shall mean the line item captioned “net revenue” in the Borrower’s financial statements included in the Borrower’s most recently filed Form 10-K or 10-Q, as applicable.

“ Consolidated Total Debt ” shall mean the sum (without duplication) of all Indebtedness of the Borrower and of each of its Subsidiaries, all as determined on a consolidated basis.

“ Continue ,” “ Continuation ” and “ Continued ” each refers to a continuation of Eurodollar Loans for an additional Interest Period as provided in Section 2.12.

“ Control Agreements ” shall have the meaning set forth in the Security Agreement.

“ Convert ,” “ Conversion ” and “ Converted ” each refers to a conversion of Loans of one Type into Loans of another Type.

“ Credit Documents ” shall mean this Agreement, the Notes, the Subsidiary Guaranty, the Security Documents, the Fee Letter, each Letter of Credit, and each other Letter of Credit Document.

“ Credit Event ” shall mean the making of any Borrowing, any Conversion or Continuation or any Letter of Credit Issuance.

“ Credit Facility ” shall mean the credit facility established under this Agreement pursuant to which (i) the Lenders shall make Revolving Loans to the Borrower, and shall participate in Letters of Credit Issuances, under the Revolving Facility pursuant to the Revolving Commitment of each such Lender, (ii) each Lender with a Term Commitment shall make a Term Loan to the Borrower pursuant to such Term Commitment of such Lender, (iii) the Swing Line Lender shall make Swing Loans to the Borrower under the Swing Line Facility pursuant to the Swing Line Commitment, and (iv) each Letter of Credit Issuer shall issue Letters of Credit for the account of the Letter of Credit Obligors in accordance with the terms of this Agreement.

“ Credit Facility Exposure ” shall mean, for any Lender at any time, the sum of (i) such Lender’s Revolving Facility Exposure at such time, (ii) in the case of the Swing Line Lender, the principal amount of Swing Loans outstanding at such time, and (iii) the outstanding aggregate principal amount of the Term Loan made by such Lender, if any.

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

 

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“ Default ” shall mean any event, act or condition that with notice or lapse of time, or both, would constitute an Event of Default.

“ Default Rate ” shall mean, for any day, (i) with respect to any Loan, a rate per annum equal to two percent (2%) per annum above the interest rate that is or would be applicable from time to time to such Loan pursuant to Section 2.8(a)(i) or Section 2.8(b)(i), as applicable and (ii) with respect to any other amount, a rate per annum equal to 2% per annum above the rate that would be applicable to Revolving Loans that are Base Rate Loans pursuant to Section 2.8(a)(i).

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

“ Designated Hedge Agreement ” shall mean (a) any Hedge Agreement to which the Borrower or any other Credit Party is a party and as to which a Lender or any of its Affiliates is a counterparty and (b) that has been designated as a Designated Hedge Agreement by written notice to the Administrative Agent from the Borrower or such Lender or Affiliate so that the Borrower’s or such other Credit Party’s counterparty’s credit exposure thereunder will be entitled to share in the benefits of the Subsidiary Guaranty and the Security Documents.

“ Designated Hedge Creditor ” shall mean each Lender or Affiliate of a Lender that participates as a counterparty to any Credit Party pursuant to any Designated Hedge Agreement with such Lender or Affiliate of such Lender.

“ Disqualified Equity Interests ” shall mean, with respect to any person, any Equity Interest that (i) by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the first anniversary of the later of the Revolving Facility Termination Date and the Term Loan Maturity Date, (ii) is convertible into or exchangeable (unless at the sole option of the issuer thereof) for (A) debt securities or other Indebtedness or (B) any Equity Interest referred to in clause (i) above, in each case at any time on or prior to the first anniversary of the later of the Revolving Facility Termination Date and the Term Loan Maturity Date, (iii) contains any repurchase obligation that may come into effect prior to payment in full of all Obligations, (iv) requires cash dividend payments prior to the first anniversary of the later of the Revolving Facility Termination Date and the Term Loan Maturity Date, other than, in the case of a limited liability company, cash distributions required by the applicable Organizational Documents to be made to its members to enable each member to pay taxes allocable to such member based on such limited liability company’s net taxable income, but in each case only to the extent necessary to pay such taxes, (v) does not provide that any claims of any holder of such Equity Interest may have against the Borrower or any other Credit Party (including any claims as judgment creditor or other creditor in respect of claims for the breach of any covenant contained therein) shall be fully subordinated (including a full remedy bar) to the Obligations in a manner reasonably satisfactory to the Administrative Agent, (vi) provides the holders of such Equity Interests with any rights to receive any cash upon the occurrence of a change of control prior to the first anniversary date on which the Obligations have been irrevocably paid in full, unless (x) the rights to receive such cash are contingent upon the Obligations being irrevocably paid in full or (y) such holders are required by the applicable Organizational Documents to sell or otherwise transfer such Equity Interests in connection with such change of control, and then, only to the extent of the consideration paid by the purchaser of such Equity Interests to such holder, or (vii) is otherwise prohibited by the terms of this Agreement. Notwithstanding the foregoing, Equity Interests issued by (a) the Borrower and consisting solely of common stock or (b) a Care For Kids Subsidiary shall not be deemed to be “Disqualified Equity Interests” solely by virtue of such Equity Interests failing to meet the condition set forth in clause (v) above.

 

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“ Dollars ” and the sign “ $ ” each shall mean lawful money of the United States.

“ Domestic Subsidiary ” shall mean any Subsidiary organized under the laws of the United States of America, any State thereof, the District of Columbia, or any United States territory or possession.

“ Eligible Assignee ” shall mean (i) a Lender (other than a Defaulting Lender), (ii) an Affiliate of a Lender (other than a Defaulting Lender), (iii) an Approved Fund, (iv) the Administrative Agent and (v) any other person (other than a natural person) approved by (A) the Administrative Agent, (B) each Letter of Credit Issuer, and (C) unless an Event of Default has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “ Eligible Assignee ” shall not include the Borrower or any of the Borrower’s Affiliates or Subsidiaries.

“ Environmental Claims ” shall mean any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of non-compliance or violation, investigations or proceedings relating in any way to any Environmental Law or any permit issued under any such law (hereafter “ Claims ”), including, without limitation, (i) any and all Claims by any Governmental Authority for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law, and (ii) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from the storage, treatment or Release (as defined in CERCLA) of any Hazardous Materials or arising from alleged injury or threat of injury to health, safety or the environment.

“ Environmental Law ” shall mean any applicable Federal, state, foreign or local statute, law, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable written policy and rule of common law now or hereafter in effect and in each case as amended, and any binding and enforceable judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment issued to or rendered against the Borrower or any of its Subsidiaries relating to the environment, employee health and safety or Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq. ; the Clean Air Act, 42 U.S.C. § 7401 et seq. ; the Safe Drinking Water Act, 42 U.S.C. § 300f et seq. ; the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq. ; the Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C. § 11001 et seq. , the Hazardous Material Transportation Act, 49 U.S.C. § 5101 et seq. and the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq. (to the extent it regulates occupational exposure to Hazardous Materials); and any state and local or foreign counterparts or equivalents, in each case as amended from time to time.

“ Equity Financing ” shall have the meaning provided in Section 6.1(t).

“ Equity Financing Documents ” shall mean all agreements, documents, and instruments executed and delivered by a Credit Party in connection with the Equity Financing.

“ Equity Interest ” shall mean with respect to any person, any and all shares, interests, participations or other equivalents, including membership interests (however designated, whether voting or non-voting) of equity of such person, including, if such person is a partnership, partnership interests (whether general or limited) or any other interest or participation that confers on a person the right to receive a share of the profits and losses of, or distributions of assets of, such partnership, but in no event will Equity Interest include any debt securities convertible or exchangeable into equity unless and until actually converted or exchanged.

 

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“ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA, as in effect at the Closing Date and any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.

“ ERISA Affiliate ” shall mean each person (as defined in Section 3(9) of ERISA), which together with the Borrower or a Subsidiary, would be deemed to be a “single employer” (i) within the meaning of Section 414(b), (c), (m) or (o) of the Code or Section 4001(a)(14) or 4001(b)(1) of ERISA or (ii) as a result of the Borrower or a Subsidiary being or having been a general partner of such person.

“ Eurodollar Loan ” shall mean each Loan bearing interest at a rate based upon the Adjusted Eurodollar Rate.

“ Event of Default ” shall have the meaning provided in Section 10.1.

“ Event of Loss ” shall mean, with respect to any property, (i) the actual or constructive total loss of such property or the use thereof, resulting from destruction, damage beyond repair, or the rendition of such property permanently unfit for normal use from any casualty or similar occurrence whatsoever, (ii) the destruction or damage of a portion of such property from any casualty or similar occurrence whatsoever under circumstances in which such damage cannot reasonably be expected to be repaired, or such property cannot reasonably be expected to be restored to its condition immediately prior to such destruction or damage, within 90 days after the occurrence of such destruction or damage, (iii) the condemnation, confiscation or seizure of, or requisition of title to or use of, any property, or (iv) in the case of any property located upon a Leasehold, the termination or expiration of such Leasehold.

“ Excess Cash Flow ” shall mean, for any period, the excess of (i) Consolidated EBITDA for such period, over (ii) the sum for such period of (A) Consolidated Interest Expense, (B) Consolidated Income Tax Expense, (C) Consolidated Capital Expenditures, (D) the increase or decrease, as applicable, in Consolidated Net Working Capital, (E) scheduled or mandatory repayments, prepayments or redemptions of the principal of Indebtedness so long as in the case of any revolving credit facility there is a permanent reduction in the commitment thereunder, (F) without duplication of any amount included under the preceding clause (E), scheduled payments representing the principal portion of Capitalized Leases and Synthetic Leases, and (G) to the extent paid in cash during such period, Restricted Payments by the Borrower.

“ Excess Cash Flow Prepayment Amount ” has the meaning provided in Section 5.1(c)(iv).

“ Excluded Subsidiary ” shall mean American Dental Partners of Ohio, Inc., a Delaware corporation.

“ Exemption Certificates ” shall have the meaning provided in Section 5.3(b).

“ Existing Facilities ” shall mean those certain credit facilities established under (i) that certain Amended and Restated Credit Agreement, dated as of February 22, 2005, as amended by the Omnibus Amendment Agreement and Waiver, dated as of January 26, 2007, Amendment No. 2 to Amended and Restated Credit Agreement, dated as of February 21, 2007, Amendment No. 3 to Amended and Restated Credit Agreement, dated as of September 25, 2007, Amended and Restated Forbearance Agreement and Amendment No. 4 to Credit Agreement, dated as of January 11, 2008, Amendment No. 5 to Amended and Restated Credit Agreement and Waiver, dated as of February 21, 2008, Amendment No. 6 to Amended and Restated Credit Agreement, dated as of June 11, 2008, and Amendment No. 7 to Amended and Restated Credit Agreement, dated as of October 24, 2008, and (ii) that certain Term Loan Agreement,

 

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dated as of September 25, 2007, as amended by Amendment No. 1 to Term Loan Agreement and Waiver, dated as of February 21, 2008, Amendment No. 2 to Term Loan Agreement, dated as of June 11, 2008, and Amendment No. 3, dated as of October 24, 2008.

“ Existing Letters of Credit ” shall mean the letters of credit listed on Schedule 3 hereto.

“ Federal Funds Effective Rate ” shall mean, for any period, a fluctuating interest rate equal for each day during such period to the weighted average of the rates on overnight Federal Funds transactions with members of the Federal Reserve System arranged by Federal Funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal Funds brokers of recognized standing selected by the Administrative Agent.

“ Fee Letter ” shall mean, collectively, (i) the Fee Letter, dated as of July 8, 2009, between the Borrower and KeyBank, as amended by Amendment No. 1 to Fee Letter, dated August 3, 2009, and (ii) the Fee Letter, dated as of August 3, 2009, among the Borrower, RBS Securities Inc. and RBS Citizens, N.A.

“ Fees ” shall mean all amounts payable pursuant to, or referred to in, Section 4.1, together with any other fees payable pursuant to this Agreement or any other Credit Document.

“ Financial Projections ” shall have the meaning provided in Section 7.7(b).

“ Fixed Charge Coverage Ratio ” shall mean, for any Testing Period, the ratio of (a) the sum of (i) Consolidated EBITDA and (ii) Consolidated Net Rent Expense to (b) the sum of (i) Consolidated Interest Expense, (ii) Consolidated Income Tax Expense, (iii) Consolidated Capital Expenditures, (iv) scheduled or mandatory repayments or prepayments (excluding voluntary repayments or prepayments of any Loans without a corresponding permanent reduction of the Commitments) or redemptions of the principal of Indebtedness and the stated or liquidation value of Disqualified Equity Interests (including required reductions in committed credit facilities), (v) without duplication of any amount included under the preceding clause (iv), scheduled payments representing the principal portion of Capitalized Leases and Synthetic Leases, (vi) the aggregate amount of Capital Distributions made by the Borrower, if any, (vii) the aggregate amount of Share Repurchases made by the Borrower, if any, and (viii) Consolidated Net Rent Expense, in each case on a consolidated basis for the Borrower and its Subsidiaries for such Testing Period; provided that, notwithstanding anything to the contrary contained herein, the Borrower’s Fixed Charge Coverage Ratio for any Testing Period shall (x) include the appropriate financial items for any person or business unit that has been acquired by the Borrower for any portion of such Testing Period prior to the date of acquisition, including both items of expense and income and taking into account any Indebtedness incurred in connection with such acquisition (but excluding anticipated operating synergies), and (y) exclude the appropriate financial items for any person or business unit that has been disposed of by the Borrower, for the portion of such Testing Period prior to the date of disposition, including both items of expense and income, and in the case of clauses (x) and (y), subject to the Administrative Agent’s reasonable discretion and supporting documentation (a copy of which shall be provided to the Lenders) acceptable to the Administrative Agent; provided , for purposes of determining the scheduled repayments set forth in clause (iv) of subpart (b) above with respect to the Term Loans only, such amounts for each of the Testing Periods ending September 30, 2009, December 31, 2009, March 31, 2010 and June 30, 2010 shall be deemed to be $8,000,000 for each such Testing Period.

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

 

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

“ Governmental Authority ” shall mean any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“ Guaranty Obligations ” shall mean as to any person (without duplication) any obligation of such person guaranteeing any Indebtedness (“ primary Indebtedness ”) of any other person (the “ primary obligor ”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such person, whether or not contingent, (i) to purchase any such primary Indebtedness or any property constituting direct or indirect security therefor, (ii) to advance or supply funds for the purchase or payment of any such primary Indebtedness or to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary Indebtedness of the ability of the primary obligor to make payment of such primary Indebtedness, or (iv) otherwise to assure or hold harmless the owner of such primary Indebtedness against loss in respect thereof; provided, however, that the definition of Guaranty Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guaranty Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary Indebtedness (or stated portion thereof) in respect of which such Guaranty Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such person is required to perform thereunder) as determined by such person in good faith.

“ Hazardous Materials ” shall mean (i) any petrochemical or petroleum products, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, transformers or other equipment that contain dielectric fluid containing levels of polychlorinated biphenyls, and radon gas; and (ii) any chemicals, materials or substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “restricted hazardous materials,” “extremely hazardous wastes,” “restrictive hazardous wastes,” “toxic substances,” “toxic pollutants,” “contaminants” or “pollutants,” or words of similar meaning and regulatory effect, under any applicable Environmental Law.

“ Hedge Agreement ” shall mean (i) any interest rate swap agreement, any interest rate cap agreement, any interest rate collar agreement or other similar interest rate management agreement or arrangement, or (ii) any currency swap or option agreement, foreign exchange contract, forward currency purchase agreement or similar currency management agreement or arrangement.

“ Hedge Condition ” shall be deemed to exist so long as the ISDA Master Agreement, dated April 25, 2007, between KeyBank and the Borrower, together with the related Confirmation, dated May 4, 2007, is in effect without any default or event of termination relating to the Borrower or any of its Subsidiaries existing thereunder.

“ Hedged Portion ” shall mean an aggregate principal amount of the Term Loans equal to the lesser of (a) $20,000,000 and (b) the outstanding principal amount of the Term Loans.

“ Indebtedness ” of any person shall mean without duplication: (i) all indebtedness of such person for borrowed money; (ii) all bonds, notes, debentures and similar debt securities of such person; (iii) the deferred purchase price of capital assets or services that in accordance with GAAP would be shown on the liability side of the balance sheet of such person; (iv) the face amount of all letters of credit issued for

 

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the account of such person and, without duplication, all drafts drawn thereunder; (v) all obligations, contingent or otherwise, of such person in respect of bankers’ acceptances; (vi) all Indebtedness of a second person secured by any Lien on any property owned by such first person, whether or not such indebtedness has been assumed; (vii) all Capitalized Lease Obligations of such person; (viii) the present value, determined on the basis of the implicit interest rate, of all basic rental obligations under all Synthetic Leases of such person; (ix) all obligations of such person to pay a specified purchase price for goods or services whether or not delivered or accepted, i.e. , take-or-pay and similar obligations; (x) all net obligations of such person under Hedge Agreements; (xi) the full outstanding balance of trade receivables, notes or other instruments sold with full recourse (and the portion thereof subject to potential recourse, if sold with limited recourse), other than in any such case any thereof sold solely for purposes of collection of delinquent accounts; (xii) all Disqualified Equity Interests of such person; and (xiii) all Guaranty Obligations of such person (without duplication under clause (vi)); provided, however, that (x) neither trade payables nor other similar accrued expenses, in each case arising in the ordinary course of business (other than trade payables or other similar accrued expenses that are outstanding for more than 120 days after the date such trade payable or other similar accrued expense was created), nor obligations in respect of insurance policies or performance or surety bonds that themselves are not guarantees of Indebtedness (nor drafts, acceptances or similar instruments evidencing the same nor obligations in respect of letters of credit supporting the payment of the same), shall constitute Indebtedness; and (y) the Indebtedness of any person shall in any event include (without duplication) the Indebtedness of any other entity (including any general partnership in which such person is a general partner) to the extent such person is liable thereon as a result of such person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide expressly that such person is not liable thereon.

“ Indemnitees ” has the meaning provided in Section 13.1(f).

“ Insurance Subsidiary ” shall mean Edgewater Indemnity Company, a Vermont corporation.

“ Interest Period ” shall mean, with respect to each Eurodollar Loan, a period of one, two, three or six months as selected by the Borrower, provided that (i) the initial Interest Period for any Borrowing of such Eurodollar Loan shall commence on the date of such Borrowing (the date of a Borrowing resulting from a Conversion or Continuation shall be the date of such Conversion or Continuation) and each Interest Period occurring thereafter in respect of such Borrowing shall commence on the day on which the next preceding Interest Period expires; (ii) if any Interest Period begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period, such Interest Period shall end on the last Business Day of such calendar month; (iii) if any Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day, provided that if any Interest Period would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the next preceding Business Day; (iv) no Interest Period for any Eurodollar Loan may be selected that would end after the Revolving Facility Termination Date or the Term Loan Maturity Date, as the case may be; and (v) if, upon the expiration of any Interest Period, the Borrower has failed to (or may not) elect a new Interest Period to be applicable to the respective Borrowing of Eurodollar Loans as provided above, the Borrower shall be deemed to have elected to Convert such Borrowing to a Base Rate Loan effective as of the expiration date of such current Interest Period.

“ Investment ” shall mean: (i) any direct or indirect purchase or other acquisition by a person of any Equity Interest of any other person (other than a person that is, or after giving effect to such purchase or acquisition would be, a Subsidiary Guarantor); (ii) any loan, advance (other than deposits with financial institutions available for withdrawal on demand) or extension of credit to, guarantee or assumption of debt or purchase or other acquisition of any other debt of, any person (other than a person

 

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that is, or after giving effect to such loan, advance or capital contribution would be, a Subsidiary Guarantor); or (iii) the purchase, acquisition or investment of or in any stocks, bonds, mutual funds, notes, debentures or other securities, or any deposit account, certificate of deposit or other investment of any kind.

“ KBCM ” shall mean KBCM Bridge LLC, a Delaware limited liability company.

“ KeyBank ” shall mean KeyBank National Association, a national banking association, together with its successors and assigns.

“ Key Employee ” shall mean Gregory A. Serrao and Breht T. Feigh.

“ Landlord’s Agreement ” shall mean a landlord’s waiver or mortgagee’s waiver, each in form and substance satisfactory to the Administrative Agent, delivered by a Credit Party in connection with this Agreement, as the same may from time to time be amended, restated or otherwise modified.

“ Leaseholds ” of any person shall mean all the right, title and interest of such person as lessee or licensee in, to and under leases or licenses of land, improvements and/or fixtures.

“ Lender ” and “ Lenders ” shall have the meaning provided in the first paragraph of this Agreement and includes any other person that becomes a party hereto pursuant to an Assignment Agreement, other than any such person that ceases to be a party hereto pursuant to an Assignment Agreement. Unless the context otherwise requires, the term “ Lenders ” includes the Swing Line Lender.

“ Lender Default ” shall mean (i) the refusal (which has not been retracted) of a Lender in violation of the requirements of this Agreement to make available its portion of any incurrence of Loans, to fund its portion of the Swing Loan Participation or to fund its portion of any unreimbursed payment under Section 3.8(c), unless the same is the subject of a good faith dispute, or (ii) a Lender having notified the Administrative Agent that it does not intend to comply with the obligations under Section 2.2, Section 2.4 and/or Section 3.8(c), in the case of (ii) as a result of the appointment of a receiver or conservator with respect to such Lender at the direction or request of any regulatory agency or authority.

“ Lender Register ” shall have the meaning provided in Section 2.7(b).

“ Letter of Credit ” shall mean any Standby Letter of Credit issued (or deemed issued) by any Letter of Credit Issuer under this Agreement pursuant to Article III for the account of any Letter of Credit Obligor, including without limitation, the Existing Letters of Credit.

“ Letter of Credit Commitment Amount ” shall mean $4,500,000.

“ Letter of Credit Documents ” shall mean, with respect to any Letter of Credit, any documents executed in connection with such Letter of Credit, including the Letter of Credit itself.

“ Letter of Credit Fee ” shall mean any of the fees payable pursuant to Section 4.1(b) or Section 4.1(c) in respect of Letters of Credit.

“ Letter of Credit Issuance ” shall mean the issuance (or deemed issuance) of any Letter of Credit by any Letter of Credit Issuer for the account of a Letter of Credit Obligor in accordance with the terms of this Agreement, and shall include any amendment thereto that increases the Stated Amount thereof or extends the expiry date of such Letter of Credit.

 

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“ Letter of Credit Issuer ” shall mean (i) KeyBank or any of its Affiliates, or (ii) such other Lender that is requested, and agrees, to so act by the Borrower, and is approved by the Administrative Agent.

“ Letter of Credit Obligor ” shall mean, with respect to each Letter of Credit Issuance, the Borrower, the Subsidiary Guarantor or the Insurance Subsidiary for whose account such Letter of Credit is issued (or deemed issued).

“ Letter of Credit Outstandings ” shall mean, at any time, the sum, without duplication, of (i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings.

“ Letter of Credit Participant ” shall have the meaning provided in Section 3.8(a).

“ Letter of Credit Participation ” shall have the meaning provided in Section 3.8(a).

“ Letter of Credit Request ” shall have the meaning provided in Section 3.2.

“ Leverage Ratio ” shall mean, for any Testing Period, the ratio of (i) Consolidated Total Debt to (ii) Consolidated EBITDA, in each case on a consolidated basis for the Borrower and its Subsidiaries for such Testing Period.

“ Lien ” shall mean any mortgage, pledge, security interest, hypothecation, encumbrance, lien or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement or any lease in the nature thereof).

“ Loan ” shall mean any Revolving Loan, Term Loan or Swing Loan.

“ Management Service Agreement ” shall have the meaning provided in Section 7.21.

“ Management Service Agreement Termination Event ” shall mean, with respect to any Management Service Agreement, the occurrence of any event that allows any party to such Management Service Agreement the right to terminate such Management Service Agreement.

“ Margin Stock ” shall have the meaning provided in Regulation U.

“ Material Adverse Effect ” shall mean any or all of the following: (i) any material adverse effect on the business, operations, properties, assets, liabilities, financial or other condition, or prospects of, the Borrower or the Borrower and its Subsidiaries, taken as a whole; (ii) any material adverse effect on the ability of the Borrower or any other Credit Party to perform any of its obligations under the Credit Documents to which it is a party; (iii) any material adverse effect on the ability of the Borrower and its Subsidiaries, taken as a whole, to pay their liabilities and obligations as they mature or become due; or (iv) any material adverse effect upon any substantial portion of the Collateral or upon the validity, effectiveness or enforceability, as against any Credit Party, of any of the Credit Documents to which it is a party.

“ Maximum Rate ” shall have the meaning provided in Section 13.22.

“ Minimum Borrowing Amount ” shall mean, (i) with respect to any Base Rate Loan, $250,000, with minimum increments thereafter of $50,000, (ii) with respect to any Eurodollar Loan, $1,000,000, with minimum increments thereafter of $100,000 and (iii) with respect to any Swing Loan, $100,000, with minimum increments thereafter of $50,000.

 

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“ Minority Holder ” shall mean any holder (other than a Credit Party) of Equity Interests of any Care For Kids Subsidiary, and “ Minority Holders ” shall mean, collectively, each such Minority Holder.

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

“ Mortgage ” shall mean a Mortgage, Deed of Trust or other instrument, in form and substance reasonably satisfactory to the Administrative Agent, executed by a Credit Party with respect to a Mortgaged Real Property, as the same may from time to time be amended, restated or otherwise modified.

“ Mortgaged Real Property ” shall mean each parcel of Real Property that shall become subject to a Mortgage after the Closing Date, in each case together with all of such Credit Party’s right, title and interest in the improvements and buildings thereon and all appurtenances, easements or other rights belonging thereto.

“ Multiemployer Plan ” shall mean a multiemployer plan, as defined in Section 4001(a)(3) of ERISA to which the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate is making or accruing an obligation to make contributions or has within any of the preceding five plan years made or accrued an obligation to make contributions.

“ Multiple Employer Plan ” shall mean an employee benefit plan, other than a Multiemployer Plan, to which the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate, and one or more employers other than the Borrower or a Subsidiary of the Borrower or an ERISA Affiliate, is making or accruing an obligation to make contributions or, in the event that any such plan has been terminated, to which the Borrower or a Subsidiary of the Borrower or an ERISA Affiliate made or accrued an obligation to make contributions during any of the five plan years preceding the date of termination of such plan.

“ Net Cash Proceeds ” shall mean, with respect to: (i) any Asset Sale, the Cash Proceeds resulting therefrom net of (A) reasonable and customary expenses of sale incurred in connection with such Asset Sale, and other reasonable and customary fees and expenses incurred, and all state and local taxes paid or reasonably estimated to be payable by such person (after taking into account any available tax credits or deductions), as a consequence of such Asset Sale and the payment of principal, premium and interest of Indebtedness (other than the Obligations) secured by the asset that is the subject of the Asset Sale and required to be, and that is, repaid under the terms thereof as a result of such Asset Sale, (B) amounts of any distributions payable to holders of minority interests in the relevant person or in the relevant property or assets and (C) incremental federal, state and local income taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions); and (ii) any Event of Loss, the Cash Proceeds resulting therefrom net of (A) reasonable and customary expenses incurred in connection with such Event of Loss, and local taxes paid or reasonably estimated to be payable by such person, as a consequence of such Event of Loss and the payment of principal, premium and interest of Indebtedness (other than the Obligations) secured by the asset that is the subject of the Event of Loss and required to be, and that is, repaid under the terms thereof as a result of such Event of Loss, (B) amounts of any distributions payable to holders of minority interests in the relevant person or in the relevant property or assets and (C) incremental federal, state and local income taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions).

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

“ Non-Cash Compensation Charges ” means, for any period, non-cash compensation expenses or other non-cash charges arising from the grant of or issuance of stock options in connection with employee plans or other equity compensation arrangements.

 

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“ Non-Defaulting Lender ” shall mean each Lender other than a Defaulting Lender.

“ Note ” shall mean a Revolving Facility Note, a Term Note or a Swing Line Note, as applicable.

“ Notice of Borrowing ” shall have the meaning provided in Section 2.5(b).

“ Notice of Continuation or Conversion ” shall have the meaning provided in Section 2.12(b).

“ Notice of Swing Loan Refunding ” shall have the meaning provided in Section 2.4(b).

“ Notice Office ” shall mean the office of the Administrative Agent at Key Center, 127 Public Square, Cleveland, Ohio 44114, Attention: KCIB Healthcare Group (facsimile: (216) 689-8329), or such other office, located in a city in the United States Eastern Time Zone, as the Administrative Agent may designate to the Borrower from time to time.

“ Obligations ” shall mean all amounts, indemnities and reimbursement obligations, direct or indirect, contingent or absolute, of every type or description, and at any time existing, owing by the Borrower or any other Credit Party to the Administrative Agent, any Lender, the Swing Line Lender or any Letter of Credit Issuer pursuant to the terms of this Agreement or any other Credit Document (including, but not limited to, interest and fees that accrue after the commencement by or against any Credit Party of any insolvency proceeding, regardless of whether allowed or allowable in such proceeding or subject to an automatic stay under Section 362(a) of the Bankruptcy Code).

“ Operating Lease ” as applied to any person shall mean any lease of any property (whether real, personal or mixed) by that person as lessee that, in conformity with GAAP, is not accounted for as a Capital Lease on the balance sheet of that person.

“ Organizational Documents ” shall mean, with respect to any person (other than an individual), such person’s Articles (Certificate) of Incorporation, or equivalent formation documents, and Regulations (Bylaws), or equivalent governing documents, and, in the case of any partnership, includes any partnership agreement and any amendments to any of the foregoing.

“ Payment Office ” shall mean the office of the Administrative Agent at Key Center, 127 Public Square, Cleveland, Ohio 44114, Attention: KCIB Healthcare Group (facsimile: (216) 689-8329), or such other office, located in a city in the United States Eastern Time Zone, as the Administrative Agent may designate to the Borrower from time to time.

“ PBGC ” shall mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto.

“ Perfection Certificate ” has the meaning provided in the Security Agreement.

“ Permitted Acquisition ” shall mean any Acquisition as to which all of the following conditions are satisfied:

(i) such Acquisition (A) involves a line or lines of business that is or are complementary to the lines of business in which the Borrower and its Subsidiaries, considered as an entirety, are engaged on the Closing Date, and (B) involves a person or a line or lines of business that is or are located and operated in the United States;

 

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(ii) the Borrower has, after giving effect to such Acquisition, on a pro forma basis, $10,000,000 in Post-Acquisition Liquidity;

(iii) the aggregate Consideration for such Acquisition, when added together with the aggregate Consideration for all other Permitted Acquisitions made during the same fiscal year as such Acquisition, shall not exceed $25,000,000;

(iv) no Default or Event of Default shall exist prior to or immediately after giving effect to such Acquisition;

(v) the Borrower is, after giving effect to such Acquisition, on a pro forma basis (as determined in accordance with subpart (vi) below), in compliance with the financial covenants set forth in Section 9.7;

(vi) at least five Business Days prior to the consummation of any such Acquisition (other than an acquisition of patient records in which the aggregate Consideration is less than $500,000), the Borrower shall have delivered to the Administrative Agent and the Lenders (A) in the case of any Acquisition in which the aggregate Consideration to be paid is in excess of $3,000,000, a certificate of an Authorized Officer demonstrating, in reasonable detail, the computation of the financial covenants referred to in Section 9.7 on a pro forma basis, such pro forma ratios being determined as if (y) such Acquisition had been completed at the beginning of the most recent Testing Period for which financial information for the Borrower and the business or person to be acquired, is available, and (z) any such Indebtedness, or other Indebtedness incurred to finance such Acquisition, had been outstanding for such entire Testing Period, and (B) in the case of any Acquisition in which the aggregate Consideration is in excess of $7,500,000, historical financial statements relating to the business or person to be acquired, financial projections relating to the Borrower and its Subsidiaries after giving effect to such Acquisition and such other information as the Administrative Agent may reasonably request; and

(vii) any Management Service Agreement entered into by the Borrower or any of its Subsidiaries in connection with such Acquisition is collaterally assignable to the Administrative Agent without the consent of any party to such Management Service Agreement, subject to any restrictions under applicable law.

“ Permitted Lien ” shall mean any Lien permitted by Section 9.3.

“ person ” shall mean any individual, partnership, joint venture, firm, corporation, limited liability company, association, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof.

“ Plan ” shall mean any Multiemployer Plan or Single-Employer Plan.

“ Post-Acquisition Liquidity ” shall mean the sum of the Unused Total Revolving Commitment less the principal amount of Swing Loans outstanding plus any unencumbered cash balances of the Borrower and the Guarantors maintained in deposit accounts that are subject to Control Agreements.

“ primary Indebtedness ” shall have the meaning provided in the definition of “ Guaranty Obligations .”

“ primary obligor ” shall have the meaning provided in the definition of “ Guaranty Obligations .”

 

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“ Principal Party ” shall have the meaning provided in Section 10.1(h)(i).

“ Prohibited Transaction ” shall mean a transaction with respect to a Plan that is prohibited under Section 4975 of the Code or Section 406 of ERISA and not exempt under Section 4975 of the Code or Section 408 of ERISA.

“ Provider ” shall have the meaning given to such term in the applicable Management Service Agreement and shall include any similar term used in lieu thereof.

“ Purchase Date ” shall have the meaning provided in Section 2.4(c).

“ Quoted Rate ” shall mean, with respect to any Swing Loan, the interest rate quoted to the Borrower by the Swing Line Lender and agreed to by the Borrower as being the interest rate applicable to such Swing Loan.

“ RCRA ” shall mean the Resource Conservation and Recovery Act, as the same may be amended from time to time, 42 U.S.C. § 6901 et seq.

“ Real Property ” of any person shall mean all of the right, title and interest of such person in and to land, improvements and fixtures, including Leaseholds.

“ Reference Banks ” shall mean (i) KeyBank and (ii) any other Lender or Lenders selected as a Reference Bank by the Administrative Agent.

“ Regulation D ” shall mean Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof establishing reserve requirements.

“ Regulation U ” shall mean Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof establishing margin requirements.

“ Related Parties ” shall mean, with respect to any person, such person’s Affiliates and the directors, officers, employees, agents and advisors of such person and of such person’s Affiliates.

“ Reportable Event ” shall mean an event described in Section 4043 of ERISA or the regulations thereunder with respect to a Plan, other than those events as to which the notice requirement is waived under subsections .22, .23, .25, .27, .28, .29, .30, .31, .32, .34, .35, .62, .63, .64, .65 or .67 of PBGC Regulation Section 4043.

“ Required Lenders ” shall mean Non-Defaulting Lenders whose Credit Facility Exposure and Unused Revolving Commitments constitute greater than 50% of the sum of the Aggregate Credit Facility Exposure (excluding the Credit Facility Exposure of each Defaulting Lender for purposes of determining the Aggregate Credit Facility Exposure) and the Unused Total Revolving Commitment (excluding the Revolving Commitment and the Revolving Facility Exposure of each Defaulting Lender for purposes of determining the Unused Total Revolving Commitment); provided, however, if any two (2) Non-Defaulting Lenders collectively hold more than 50% of the sum of the Aggregate Credit Facility Exposure and the Unused Total Revolving Commitment, then the Required Lenders must include at least three (3) non-affiliated Non-Defaulting Lenders.

 

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“ Restricted Payment ” shall mean (i) any Capital Distribution, (ii) any Share Repurchase, (iii) any amount paid by the Borrower or any of its Subsidiaries in repayment, redemption (including, without limitation, any mandatory redemption or optional redemption), retirement, repurchase, direct or indirect, of any Subordinated Indebtedness, or (iv) the exercise of any right of legal defeasance or covenant defeasance or similar right with respect to any Subordinated Indebtedness.

“ Revolving Borrowing ” shall mean the incurrence of Revolving Loans consisting of one Type of Revolving Loan by the Borrower from all of the Lenders having Revolving Commitments in respect thereof on a pro rata basis on a given date (or resulting from Conversions or Continuations on a given date) having in the case of any Eurodollar Loans the same Interest Period.

“ Revolving Commitment ” shall mean, with respect to each Lender, the amount set forth opposite such Lender’s name in Schedule 1 hereto as its “Revolving Commitment” or in the case of any Lender that becomes a party hereto pursuant to an Assignment Agreement, the amount set forth in such Assignment Agreement, as such commitment may be reduced from time to time pursuant to Section 4.2(c) or adjusted from time to time as a result of assignments to or from such Lender pursuant to Section 13.5.

“ Revolving Facility ” shall mean the credit facility established under Section 2.2 pursuant to the Revolving Commitment of each Lender.

“ Revolving Facility Availability Period ” shall mean the period from the Closing Date until the Revolving Facility Termination Date.

“ Revolving Facility Exposure ” shall mean, for any Lender at any time, the sum of (i) the principal amount of Revolving Loans made by such Lender and outstanding at such time, and (ii) such Lender’s share of the Letter of Credit Outstandings at such time.

“ Revolving Facility Note ” shall mean a promissory note substantially in the form of Exhibit A-1 hereto.

“ Revolving Facility Percentage ” shall mean, at any time for any Lender, the percentage obtained by dividing such Lender’s Revolving Commitment by the Total Revolving Commitment, provided, however , that if the Total Revolving Commitment has been terminated, the Revolving Facility Percentage for each Lender shall be determined by dividing such Lender’s Revolving Commitment immediately prior to such termination by the Total Revolving Commitment immediately prior to such termination. The Revolving Facility Percentage of each Lender as of the Closing Date is set forth on Schedule 1 hereto.

“ Revolving Facility Termination Date ” shall mean the earlier of (i) August 21, 2012, or (ii) the date that the Commitments have been terminated pursuant to Section 10.2.

“ Revolving Loan ” shall mean, with respect to each Lender, any loan made by such Lender pursuant to Section 2.2.

“ Sale and Lease-Back Transaction ” shall mean any arrangement with any person providing for the leasing by the Borrower or any Subsidiary of any property (except for temporary leases for a term, including any renewal thereof, of not more than one year and except for leases between the Borrower and a Subsidiary or between Subsidiaries), which property has been or is to be sold or transferred by the Borrower or such Subsidiary to such person.

 

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

“ Schedule 4 Affiliations ” shall mean, collectively, the affiliations commonly known as “Arizona’s Tooth Doctor,” “Carus Dental,” “Forward Dental,” “Metro Dentalcare” and “Western New York Dental Group,” as referred to on Schedule 4 to this Agreement.

“ Scheduled Repayment ” shall have the meaning provided in Section 5.1(b).

“ Scheduled Subsidiary ” shall mean those Subsidiaries set forth on Schedule 4 hereto, and shall include all successors and assigns of any such Subsidiary.

“ SEC ” shall mean the United States Securities and Exchange Commission.

“ SEC Regulation D ” shall mean Regulation D as promulgated under the Securities Act of 1933, as amended, as the same may be in effect from time to time.

“ Secured Creditors ” shall have the meaning provided in the Security Agreement.

“ Security Agreement ” shall have the meaning provided in Section 6.1(e).

“ Security Documents ” shall mean the Security Agreement, each Mortgage (if any), each Landlord’s Agreement, each Additional Security Document, any UCC financing statement, any Control Agreement, any Perfection Certificate and any other document pursuant to which any Lien is granted or perfected by any Credit Party to the Administrative Agent as security for any of the Obligations.

“ Share Repurchase ” shall mean the purchase, acquisition, repurchase, redemption or retirement by the Borrower or any of its Subsidiaries of any issued and outstanding capital stock or other equity interests of the Borrower or any of its Subsidiaries.

“ Single Employer Plan ” shall mean a single employer plan, as defined in Section 4001(a)(15) of ERISA, to which the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate is making or accruing an obligation to make contributions or, in the event that any such plan has been terminated, to which the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate made or accrued an obligation to make contributions during any of the five plan years preceding the date of termination of such plan.

“ Standard Permitted Lien ” shall mean any of the following:

(i) Liens for taxes not yet delinquent or Liens for taxes, assessments or governmental charges being contested in good faith and by appropriate proceedings for which adequate reserves in accordance with GAAP have been established;

(ii) Liens in respect of property or assets imposed by law that were incurred in the ordinary course of business, such as carriers’, suppliers’, warehousemen’s, materialmen’s and mechanics’ Liens and other similar Liens arising in the ordinary course of business, that do not in the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business of the Borrower or any Subsidiary and do not secure any Indebtedness;

(iii) Liens created by this Agreement or the other Credit Documents;

(iv) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 10.1(g);

 

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(v) Liens (other than any Lien imposed by ERISA) incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, and mechanic’s Liens, carrier’s Liens, and other Liens to secure the performance of tenders, statutory obligations, contract bids, government contracts, surety, appeal, customs, performance and return-of-money bonds and other similar obligations, incurred in the ordinary course of business (exclusive of obligations in respect of the payment for borrowed money), whether pursuant to statutory requirements, common law or consensual arrangements;

(vi) Leases or subleases granted in the ordinary course of business to others not interfering in any material respect with the business of the Borrower or any of its Subsidiaries and any interest or title of a lessor under any lease not in violation of this Agreement;

(vii) easements, rights-of-way, zoning or other restrictions, charges, encumbrances, defects in title, prior rights of other persons, and obligations contained in similar instruments, in each case that do not secure Indebtedness and do not involve, and are not likely to involve at any future time, either individually or in the aggregate, (A) a substantial and prolonged interruption or disruption of the business activities of the Borrower and its Subsidiaries, or (B) a Material Adverse Effect;

(viii) Liens arising from the rights of lessors under leases (including financing statements regarding property subject to lease) permitted pursuant to this Agreement, provided that such Liens are only in respect of the property subject to, and secure only, the respective lease (and any other lease with the same or an affiliated lessor);

(ix) items listed on Schedule B to any Title Policy approved by the Administrative Agent and delivered pursuant to Section 8.17(a); and

(x) rights of consignors of goods, whether or not perfected by the filing of a financing statement under the UCC.

“ Standby Letter of Credit ” shall mean any standby letter of credit issued for the purpose of supporting workers compensation, liability insurance, releases of contract retention obligations, contract performance guarantee requirements and other bonding obligations or for other lawful purposes.

“ Stated Amount ” of each Letter of Credit shall mean the maximum amount available to be drawn thereunder (regardless of whether any conditions or other requirements for drawing could then be met).

“ Subordinated Indebtedness ” shall mean any Indebtedness that (i) has been subordinated to the prior payment in full of all of the Obligations pursuant to a written agreement or written terms acceptable to the Administrative Agent and (ii) has amortization terms acceptable to the Administrative Agent.

“ Subsidiary ” of any person shall mean (i) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary Voting Power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have Voting Power by reason of the happening of any contingency) is at the time owned by such person directly or indirectly through Subsidiaries, and (ii) any partnership, limited liability company, association, joint venture or other entity in which such person directly or indirectly through Subsidiaries, owns more than 50% of the Equity Interests of such person at the time or in which such person, one or more other Subsidiaries of such person or such person and one or more Subsidiaries of such person, directly or indirectly, has the power to direct the policies, management and

 

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affairs thereof; provided , however , that notwithstanding the foregoing, the Excluded Subsidiary shall not be deemed a Subsidiary hereunder unless or until the Excluded Subsidiary is required to become a Subsidiary Guarantor pursuant to Section 8.10 hereof. Unless otherwise expressly provided, all references herein to “Subsidiary” shall mean a Subsidiary of the Borrower.

“ Subsidiary Guarantor ” shall mean any Subsidiary that is or hereafter becomes a party to the Subsidiary Guaranty. Schedule 2 hereto lists each Subsidiary Guarantor as of the Closing Date.

“ Subsidiary Guaranty ” shall have the meaning provided in Section 6.1(d).

“ Swing Line Commitment ” shall mean $5,000,000.

“ Swing Line Facility ” shall mean the credit facility established under Section 2.4 pursuant to the Swing Line Commitment of the Swing Line Lender.

“ Swing Line Lender ” shall mean KBCM, and it successor and assigns, or any other person that becomes the Swing Line Lender pursuant to an Assignment Agreement.

“ Swing Line Note ” shall mean a promissory note substantially in the form of Exhibit A-2 hereto.

“ Swing Line Participation Amount ” shall have the meaning provided in Section 2.4(c).

“ Swing Loan ” shall mean any loan made by the Swing Line Lender under the Swing Line Facility pursuant to Section 2.4.

“ Swing Loan Maturity Date ” shall mean, with respect to any Swing Loan, the earlier of (i) the last day of the period for such Swing Loan as established by the Swing Line Lender and agreed to by the Borrower, which shall be less than 15 days, and (ii) the Revolving Facility Termination Date.

“ Swing Loan Participation ” has the meaning provided in Section 2.4(c).

“ Synthetic Lease ” shall mean any lease (i) that is accounted for by the lessee as an Operating Lease, and (ii) under which the lessee is intended to be the “owner” of the leased property for Federal income tax purposes.

“ Taxes ” shall have the meaning provided in Section 5.3(a).

“ Term Borrowing ” shall mean the incurrence of Term Loans consisting of one Type of Term Loan by the Borrower from all of the Lenders having Term Commitments in respect thereof on a pro rata basis on a given date (or resulting from Conversions or Continuations on a given date), having in the case of Eurodollar Loans the same Interest Period.

“ Term Commitment ” shall mean, with respect to each Lender, the amount, if any, set forth opposite such Lender’s name in Schedule 1 hereto as its “Term Commitment.”

“ Term Loan ” shall mean, with respect to each Lender that has a Term Commitment, any loan made by such Lender pursuant to Section 2.3.

“ Term Loan Maturity Date ” shall mean August 21, 2012.

“ Term Note ” shall mean a promissory note substantially in the form of Exhibit A-3 hereto.

 

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“ Testing Period ” shall mean a single period consisting of the four consecutive fiscal quarters of the Borrower then last ended (whether or not such quarters are all within the same fiscal year), except that if a particular provision of this Agreement indicates that a Testing Period shall be of a different specified duration, such Testing Period shall consist of the particular fiscal quarter or quarters then last ended that are so indicated in such provision.

“ Title Company ” shall have the meaning provided in Section 8.17.

“ Title Policy ” shall have the meaning provided in Section 8.17.

“ Total Credit Facility Amount ” shall mean the aggregate of the Total Revolving Commitment and the Total Term Loan Commitment. As of the Closing Date, the Total Credit Facility Amount is $130,000,000.

“ Total Revolving Commitment ” shall mean the sum of the Revolving Commitments of the Lenders as the same may be decreased pursuant to Section 4.2(c) hereof. As of the Closing Date, the amount of the Total Revolving Commitment is $50,000,000.

“ Total Term Loan Commitment ” shall mean the sum of the Term Commitments of the Lenders. As of the Closing Date, the amount of the Total Term Loan Commitment is $80,000,000.

“ Type ” shall mean any type of Loan determined with respect to the interest option applicable thereto, i.e ., a Base Rate Loan or a Eurodollar Loan.

“ UCC ” shall mean the Uniform Commercial Code as in effect from time to time. Unless otherwise specified, the UCC shall refer to the UCC as in effect in the State of Ohio.

“ Unfunded Benefit Liabilities ” of any Plan means the amount, if any, of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.

“ United States ” and “ U.S. ” each means United States of America.

“ Unpaid Drawing ” shall mean, with respect to any Letter of Credit, the aggregate Dollar amount of the draws made on such Letter of Credit that have not been reimbursed by the Borrower or the applicable Letter of Credit Obligor or converted to a Revolving Loan pursuant to Section 3.7(a), and, in each case, all interest that accrues thereon pursuant to this Agreement.

“ Unused Revolving Commitment ” shall mean, for any Lender at any time, the excess of (i) such Lender’s Revolving Commitment at such time over (ii) such Lender’s Revolving Facility Exposure at such time.

“ Unused Total Revolving Commitment ” shall mean, at any time, the excess of (i) the Total Revolving Commitment at such time over (ii) the Aggregate Revolving Facility Exposure at such time.

“ USA Patriot Act ” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act) Act of 2001.

“ Voting Power ” shall mean, with respect to any person, the exclusive ability to control, through the ownership of shares of capital stock, partnership interests, membership interests or otherwise, the election of members of the board of directors or other similar governing body of such person, and the holding of a designated percentage of Voting Power of a person means the ownership of shares of capital

 

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stock, partnership interests, membership interests or other interests of such Person sufficient to control exclusively the election of that percentage of the members of the board of directors or similar governing body of such Person.

Section 1.2. Computation of Time Periods . In this Agreement in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including,” the words “to” and “until” each mean “to but excluding” and the word “through” means “through and including.”

Section 1.3. Accounting Terms . Except as otherwise specifically 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 and the Lenders that the Borrower wishes to amend any covenant in Article IX to eliminate the effect of any change in GAAP that occurs after the Closing Date on the operation of such covenant (or if the Administrative Agent notifies the Borrower that the Required Lenders wish to amend Article IX for such purpose), then the Borrower’s compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower, the Administrative Agent and the Required Lenders, the Borrower, the Administrative Agent and the Lenders agreeing to enter into negotiations to amend any such covenant promptly upon receipt from any party entitled to send such notice.

Section 1.4. 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, restated, 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 Sections, Schedules and Exhibits shall be construed to refer to Sections of, and Schedules and Exhibits to, this Agreement, (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all Real Property, tangible and intangible assets and properties, including cash, securities, accounts and contract rights, and interests in any of the foregoing and (f) any reference to a statute, rule or regulation is to that statute, rule or regulation as now enacted or as the same may from time to time be amended, re-enacted or expressly replaced.

ARTICLE II.

AMOUNT AND TERMS OF LOANS

Section 2.1. Establishment of the Credit Facility . On the Closing Date, and subject to and upon the terms and conditions set forth in this Agreement and the other Credit Documents, the Administrative Agent, the Lenders, the Swing Line Lender and each Letter of Credit Issuer agree to establish the Credit Facility for the benefit of the Borrower; provided , however, that at no time will (i) the Aggregate Credit Facility Exposure exceed the Total Credit Facility Amount, or (ii) the Credit Facility Exposure of any Lender exceed the aggregate amount of such Lender’s Commitment. The Revolving

 

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Commitments (and the Revolving Commitment of each Lender) shall terminate on the Revolving Facility Termination Date and the Term Commitments (and the Term Commitment of each Lender) shall terminate on the Term Loan Maturity Date.

Section 2.2. Revolving Facility . During the Revolving Facility Availability Period, each Lender severally agrees, on the terms and conditions set forth in this Agreement, to make a Revolving Loan or Revolving Loans to the Borrower from time to time pursuant to such Lender’s Revolving Commitment, which Revolving Loans (i) may, except as set forth herein, at the option of the Borrower, be incurred and maintained as, or Converted into, Revolving Loans that are Base Rate Loans or Eurodollar Loans, in each case denominated in Dollars, provided that all Revolving Loans made as part of the same Revolving Borrowing shall consist of Revolving Loans of the same Type; (ii) may be repaid or prepaid and reborrowed in accordance with the provisions hereof; and (iii) shall not be made if, after giving effect to any such Revolving Loan, (A) the Revolving Facility Exposure of any Lender would exceed such Lender’s Revolving Commitment, (B) the Aggregate Revolving Facility Exposure plus the principal amount of Swing Loans would exceed the Total Revolving Commitment, or (C) the Borrower would be required to prepay Loans or cash collateralize Letters of Credit pursuant to Section 5.1(c). The Revolving Loans to be made by each Lender will be made by such Lender on a pro rata basis based upon such Lender’s Revolving Facility Percentage of each Revolving Borrowing, in each case in accordance with Section 2.6 hereof.

Section 2.3. Term Loan . On the Closing Date, each Lender that has a Term Commitment severally agrees, on the terms and conditions set forth in this Agreement, to make a Term Loan to the Borrower pursuant to such Lender’s Term Commitment, which Term Loans: (i) can only be incurred on the Closing Date in the entire amount of each Lender’s Term Commitment; (ii) once prepaid or repaid, may not be reborrowed, (iii) may, except as set forth herein, at the option of the Borrower, be incurred and maintained as, or Converted into, Term Loans that are Base Rate Loans or Eurodollar Loans, in each case denominated in Dollars, provided that all Term Loans made as part of the same Term Borrowing shall consist of Term Loans of the same Type; (iv) shall be repaid in accordance with Section 5.1(b); and (v) shall not exceed (A) for any Lender at the time of incurrence thereof the aggregate principal amount of such Lender’s Term Commitment, if any, and (B) for all the Lenders at the time of incurrence thereof the Total Term Loan Commitment. The Term Loans to be made by each Lender will be made by such Lender in the aggregate amount of its Term Commitment in accordance with Section 2.6 hereof.

Section 2.4. Swing Line Facility .

(a) Swing Loans . During the Revolving Facility Availability Period, the Swing Line Lender agrees, on the terms and conditions set forth in this Agreement, to make a Swing Loan or Swing Loans to the Borrower from time to time, which Swing Loans (i) shall be payable on the Swing Loan Maturity Date applicable to each such Swing Loan; (ii) shall be made only in Dollars; (iii) may be repaid or prepaid and reborrowed in accordance with the provisions hereof; (iv) may only be made if after giving effect thereto (A) the aggregate principal amount of Swing Loans outstanding does not exceed the Swing Line Commitment, and (B) the Aggregate Revolving Facility Exposure plus the principal amount of Swing Loans would not exceed the Total Revolving Commitment; (v) shall not be made if, after giving effect thereto, the Borrower would be required to prepay Loans or cash collateralize Letters of Credit pursuant to Section 5.1(c) hereof; (vi) shall not be made if the proceeds thereof would be used to repay, in whole or in part, any outstanding Swing Loan; and (vii) at no time shall there be more than five (5) Borrowings of Swing Loans outstanding hereunder.

(b) Swing Loan Refunding . The Swing Line Lender may at any time, in its sole and absolute discretion, direct that the Swing Loans owing to it be refunded by delivering a notice to such effect to the Administrative Agent, specifying the aggregate principal amount thereof (a “ Notice of Swing Loan

 

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Refunding ”); provided, however, that if the Swing Line Lender and the Administrative Agent are the same person or are Affiliates, a Notice of Swing Loan Refunding shall not be required to be delivered and the Administrative Agent shall be permitted to act as though such Notice of Swing Loan Refunding had been delivered. Promptly upon receipt of a Notice of Swing Loan Refunding, the Administrative Agent shall give notice of the contents thereof to the Lenders with Revolving Commitments and, unless an Event of Default specified in Section 10.1(h) in respect of the Borrower has occurred, the Borrower. Each such Notice of Swing Loan Refunding shall be deemed to constitute delivery by the Borrower of a Notice of Borrowing requesting Revolving Loans consisting of Base Rate Loans in the amount of the Swing Loans to which it relates. Each Lender with a Revolving Commitment (including the Swing Line Lender) hereby unconditionally agrees (notwithstanding that any of the conditions specified in Section 6.2 or elsewhere in this Agreement shall not have been satisfied, but subject to the provisions of paragraph (d) below) to make a Revolving Loan to the Borrower in the amount of such Lender’s Revolving Facility Percentage of the aggregate amount of the Swing Loans to which such Notice of Swing Loan Refunding relates. Each such Lender shall make the amount of such Revolving Loan available to the Administrative Agent in immediately available funds at the Payment Office not later than 4:00 P.M. (local time at the Payment Office), if such notice is received by such Lender prior to 12:00 Noon. (local time at its Domestic Lending Office), or not later than 4:00 P.M. (local time at the Payment Office) on the next Business Day, if such notice is received by such Lender after such time. The proceeds of such Revolving Loans shall be made immediately available to the Swing Line Lender and applied by it to repay the principal amount of the Swing Loans to which such Notice of Swing Loan Refunding relates.

(c) Swing Loan Participation . If prior to the time a Revolving Loan would otherwise have been made as provided above as a consequence of a Notice of Swing Loan Refunding, any of the events specified in Section 10.1(h) shall have occurred in respect of the Borrower or one or more of the Lenders with Revolving Commitments shall determine that it is legally prohibited from making a Revolving Loan under such circumstances, each Lender (other than the Swing Line Lender), or each Lender (other than such Swing Line Lender) so prohibited, as the case may be, shall, on the date such Revolving Loan would have been made by it (the “ Purchase Date ”), purchase an undivided participating interest (a “ Swing Loan Participation ”) in the outstanding Swing Loans to which such Notice of Swing Loan Refunding relates, in an amount (the “ Swing Loan Participation Amount ”) equal to such Lender’s Revolving Facility Percentage of such outstanding Swing Loans. On the Purchase Date, each such Lender or each such Lender so prohibited, as the case may be, shall pay to the Swing Line Lender, in immediately available funds, such Lender’s Swing Loan Participation Amount, and promptly upon receipt thereof the Swing Line Lender shall, if requested by such other Lender, deliver to such Lender a participation certificate, dated the date of the Swing Line Lender’s receipt of the funds from, and evidencing such Lender’s Swing Loan Participation in, such Swing Loans and its Swing Loan Participation Amount in respect thereof. If any amount required to be paid by a Lender to the Swing Line Lender pursuant to the above provisions in respect of any Swing Loan Participation is not paid on the date such payment is due, such Lender shall pay to the Swing Line Lender on demand interest on the amount not so paid at the overnight Federal Funds Effective Rate from the due date until such amount is paid in full. Whenever, at any time after the Swing Line Lender has received from any other Lender such Lender’s Swing Loan Participation Amount, the Swing Line Lender receives any payment from or on behalf of the Borrower on account of the related Swing Loans, the Swing Line Lender will promptly distribute to such Lender its ratable share of such amount based on its Revolving Facility Percentage of such amount on such date on account of its Swing Loan Participation (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s participating interest was outstanding and funded); provided, however , that if such payment received by the Swing Line Lender is required to be returned, such Lender will return to the Swing Line Lender any portion thereof previously distributed to it by the Swing Line Lender.

(d) Obligations Unconditional . Each Lender’s obligation to make Revolving Loans pursuant to Section 2.4(b) and/or to purchase Swing Loan Participations in connection with a Notice of Swing

 

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Loan Refunding shall be subject to the conditions that (i) such Lender shall have received, subject to the terms of Section 2.4(b), a Notice of Swing Loan Refunding complying with the provisions hereof and (ii) at the time the Swing Loans that are the subject of such Notice of Swing Loan Refunding were made, the Swing Line Lender making the same had no actual written notice from another Lender that an Event of Default had occurred and was continuing, but otherwise shall be absolute and unconditional, shall be solely for the benefit of the Swing Line Lender that gives such Notice of Swing Loan Refunding, and shall not be affected by any circumstance, including, without limitation, (A) any set-off, counterclaim, recoupment, defense or other right that such Lender may have against any other Lender, any Credit Party, or any other person, or any Credit Party may have against any Lender or other person, as the case may be, for any reason whatsoever; (B) the occurrence or continuance of a Default or Event of Default; (C) any event or circumstance involving a Material Adverse Effect; (D) any breach of any Credit Document by any party thereto; or (E) any other circumstance, happening or event, whether or not similar to any of the foregoing.

Section 2.5. Notice of Borrowing .

(a) Time of Notice . Each Borrowing of a Loan (other than a Continuation or Conversion) shall be made upon notice in the form provided for below, which notice shall be provided by the Borrower to the Administrative Agent at its Notice Office not later than (i) in the case of each Borrowing of a Eurodollar Loan, 12:00 Noon (local time at its Notice Office) at least three Business Days’ prior to the date of such Borrowing, (ii) in the case of each Borrowing of a Base Rate Loan, 12:00 Noon (local time at its Notice Office) on the proposed date of such Borrowing, and (iii) in the case of any Borrowing under the Swing Line Facility, 1:00 p.m. (local time at its Notice Office) on the proposed date of such Borrowing.

(b) Notice of Borrowing . Each request for a Borrowing (other than a Continuation or Conversion) shall be made by an Authorized Officer of the Borrower by delivering written notice of such request substantially in the form of Exhibit B-1 hereto (each such notice, a “ Notice of Borrowing ”) or by telephone (to be confirmed immediately in writing by delivery by an Authorized Officer of the Borrower of a Notice of Borrowing), and in any event each such request shall be irrevocable and shall specify (i) the aggregate principal amount of the Loans to be made pursuant to such Borrowing (which shall be in the Minimum Borrowing Amount), (ii) the date of the Borrowing (which shall be a Business Day), (iii) the Type of Loans such Borrowing will consist of, and (iv) if applicable, the initial Interest Period and the Swing Loan Maturity Date (which shall be less than 15 days). Without in any way limiting the obligation of the Borrower to confirm in writing any telephonic notice permitted to be given hereunder, the Administrative Agent may act prior to receipt of written confirmation without liability upon the basis of such telephonic notice believed by the Administrative Agent in good faith to be from an Authorized Officer of the Borrower entitled to give telephonic notices under this Agreement on behalf of the Borrower. In each such case, the Administrative Agent’s record of the terms of such telephonic notice shall be conclusive absent manifest error.

(c) Minimum Borrowing Amount . The aggregate principal amount of each Borrowing by the Borrower shall not be less than the Minimum Borrowing Amount. No partial Conversion of a Borrowing of Eurodollar Loans shall reduce the outstanding principal amount of the Eurodollar Loans made pursuant to such Borrowing to less than the Minimum Borrowing Amount applicable thereto.

(d) Maximum Borrowings . More than one Borrowing may be incurred by the Borrower on any day, provided that (i) if there are two or more Borrowings on a single day (other than with respect to a Term Borrowing made on the Closing Date) by the Borrower that consist of Eurodollar Loans, each such Borrowing shall have a different initial Interest Period, and (ii) at no time shall there be more than six Borrowings of Eurodollar Loans outstanding hereunder.

 

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Section 2.6. Funding Obligations; Disbursement of Funds .

(a) Several Nature of Funding Obligations . The Commitments of each Lender hereunder and the obligation of each Lender to make Loans, acquire and fund Swing Loan Participations and Letter of Credit Participations, as the case may be, are several and not joint obligations. No Lender shall be responsible for any default by any other Lender in its obligation to make Loans or fund any participation hereunder and each Lender shall be obligated to make the Loans provided to be made by it and fund its participations required to be funded by it hereunder, regardless of the failure of any other Lender to fulfill any of its Commitments hereunder. Nothing herein and no subsequent termination of the Commitments pursuant to Section 4.2 shall be deemed to relieve any Lender from its obligation to fulfill its commitments hereunder and in existence from time to time or to prejudice any rights that the Borrower may have against any Lender as a result of any default by such Lender hereunder.

(b) Borrowings Pro Rata . Except with respect to the making of Swing Loans by the Swing Line Lender, all Loans hereunder shall be made as follows: (i) all Revolving Loans made, and Letter of Credit Participations acquired by each Lender, shall be made or acquired, as the case may be, on a pro rata basis based upon each Lender’s Revolving Facility Percentage of the amount of such Revolving Borrowing or Letter of Credit in effect on the date the applicable Revolving Borrowing is to be made or the Letter of Credit is to be issued (or is deemed issued), and (ii) all Term Loans shall be made by the Lenders having Term Commitments pro rata on the basis of their respective Term Commitments.

(c) Funding of Loans .

(i) Loans Generally . No later than 4:00 P.M. (local time at the Payment Office) on the date specified in each Notice of Borrowing, each Lender will make available its amount, if any, of each Borrowing requested to be made on such date to the Administrative Agent at the Payment Office in Dollars and in immediately available funds, and the Administrative Agent promptly will make available to the Borrower by depositing to its account at the Payment Office (or such other account as the Borrower shall specify) the aggregate of the amounts so made available in the type of funds received.

(ii) Swing Loans . No later than 2:00 P.M. (local time at the Payment Office) on the date specified in each Notice of Borrowing, the Swing Line Lender will make available to the Borrower by depositing to its account at the Payment Office (or such other account as the Borrower shall specify) the aggregate amount of Swing Loans requested in such Notice of Borrowing.

(d) Advance Funding . Unless the Administrative Agent shall have been notified by any Lender prior to the date of Borrowing that such Lender does not intend to make available to the Administrative Agent its portion of the Borrowing or Borrowings to be made on such date, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on such date of Borrowing, and the Administrative Agent, in reliance upon such assumption, may (in its sole discretion and without any obligation to do so) make available to the Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent by such Lender and the Administrative Agent has made the same available to the Borrower, the Administrative Agent shall be entitled to recover such corresponding amount from such Lender. If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Administrative Agent. The Administrative Agent shall also be entitled to recover from such Lender or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made

 

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available by the Administrative Agent to the Borrower to the date such corresponding amount is recovered by the Administrative Agent at a rate per annum equal to (i) if paid by such Lender, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Section 2.8, for the respective Loans (but without any requirement to pay any amounts in respect thereof pursuant to Section 2.10).

(e) Notice to Lenders . The Administrative Agent shall promptly give each Lender written notice (or telephonic notice promptly confirmed in writing) of each proposed Borrowing, or Conversion or Continuation thereof, and Letter of Credit Issuance, and of such Lender’s proportionate share thereof or participation therein and of the other matters covered by the Notice of Borrowing, Notice of Continuation or Conversion, or Letter of Credit Request, as the case may be, relating thereto.

Section 2.7. Evidence of Obligations .

(a) Loan Accounts of Lenders . The Obligations of the Borrower owing to each Lender hereunder shall be evidenced by, and each Lender shall maintain in accordance with its usual practice, an account or accounts evidencing the Obligations of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(b) Loan Accounts of Administrative Agent; Lender Register . The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan and Borrowing made hereunder, the Type thereof, the Interest Period and applicable interest rate and, in the case of a Swing Loan, the Swing Loan Maturity Date applicable thereto, (ii) the amount and other details with respect to each Letter of Credit issued (or deemed issued) hereunder, (iii) the amount of any principal due and payable or to become due and payable from the Borrower to each Lender hereunder, (iv) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof, and (v) the other details relating to the Loans, Letters of Credit and other Obligations. In addition, the Administrative Agent shall maintain a register (the “ Lender Register ”) on or in which it will record the names and addresses of the Lenders and the Commitments from time to time of each of the Lenders. The Administrative Agent will make the Lender Register available to any Lender or the Borrower upon its request.

(c) Effect of Loan Accounts, etc . The entries made in the accounts maintained pursuant to Section 2.7(b) shall be prima facie evidence of the existence and amounts of the Obligations recorded therein; provided , that the failure of the Administrative Agent to maintain such accounts or any error (other than manifest error) therein shall not in any manner affect the obligation of any Credit Party to repay or prepay the Loans or the other Obligations in accordance with the terms of this Agreement.

(d) Notes . Upon request of any Lender or the Swing Line Lender, the Borrower will execute and deliver to such Lender or the Swing Line Lender, as the case may be, (i) a Revolving Facility Note with blanks appropriately completed in conformity herewith to evidence the Borrower’s obligation to pay the principal of, and interest on, the Revolving Loans made to it by such Lender, (ii) a Term Note with blanks appropriately completed in conformity herewith to evidence its obligation to pay the principal of, and interest on, the Term Loan made to it by such Lender, and (iii) a Swing Line Note with blanks appropriately completed in conformity herewith to evidence the Borrower’s obligation to pay the principal of, and interest on, the Swing Loans made to it by the Swing Line Lender; provided, however, that the decision of any Lender or the Swing Line Lender to not request a Note shall in no way detract from the Borrower’s obligation to repay the Loans and other amounts owing by the Borrower to such Lender or the Swing Line Lender.

 

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Section 2.8. Interest; Default Rate .

(a) Interest on Revolving Loans . The outstanding principal amount of each Revolving Loan made by each Lender shall bear interest at a fluctuating rate per annum that shall at all times be equal to (i) during such periods as such Revolving Loan is a Base Rate Loan, the Base Rate plus the Applicable Margin in effect from time to time, and (ii) during such periods as such Revolving Loan is a Eurodollar Loan, the relevant Adjusted Eurodollar Rate for such Eurodollar Loan for the applicable Interest Period plus the Applicable Margin in effect from time to time.

(b) Interest on Term Loans . The outstanding principal amount of each Term Loan made by each Lender shall bear interest at a fluctuating rate per annum that shall at all times be equal to (i) during such periods as such Term Loan is a Base Rate Loan, the Base Rate plus the Applicable Margin in effect from time to time, and (ii) during such periods as such Term Loan is a Eurodollar Loan, the relevant Adjusted Eurodollar Rate for such Eurodollar Loan for the applicable Interest Period plus the Applicable Margin in effect from time to time.

(c) Interest on Swing Loans . The outstanding principal amount of each Swing Loan shall bear interest from the date of the Borrowing at a rate per annum that shall be equal to the Quoted Rate applicable thereto.

(d) Default Interest . Notwithstanding the above provisions, if a Default under Section 10.1(a) or an Event of Default is in existence, (i) all outstanding amounts of principal and, to the extent permitted by law, all overdue interest, in respect of each Loan shall bear interest, payable on demand, at a rate per annum equal to the Default Rate, and (ii) the Letter of Credit Fees shall be increased by an additional 2% per annum in excess of the Letter of Credit Fees otherwise applicable thereto. In addition, if any amount (other than amounts as to which the foregoing subparts (i) and (ii) are applicable) payable by the Borrower under the Credit Documents is not paid when due, such amount shall bear interest, payable on demand, at a rate per annum equal to the Default Rate.

(e) Accrual and Payment of Interest . Interest shall accrue from and including the date of any Borrowing to but excluding the date of any prepayment or repayment thereof and shall be payable by the Borrower:

(i) in respect of each Base Rate Loan, quarterly in arrears on the last Business Day of each March, June, September and December,

(ii) in respect of each Eurodollar Loan, on the last day of each Interest Period applicable thereto and, in the case of an Interest Period in excess of three months, on the dates that are successively three months after the commencement of such Interest Period,

(iii) in respect of any Swing Loan, on the Swing Loan Maturity Date applicable thereto, and

(iv) in respect of all Loans, other than Revolving Loans accruing interest at a Base Rate, on any repayment, prepayment or Conversion (on the amount repaid, prepaid or Converted), at maturity (whether by acceleration or otherwise), and, after such maturity or, in the case of any interest payable pursuant to Section 2.8(d), on demand.

(f) Computations of Interest . All computations of interest on Eurodollar Loans and Swing Loans hereunder shall be made on the actual number of days elapsed over a year of 360 days. All computations of interest on Base Rate Loans and Unpaid Drawings hereunder shall be made on the actual number of days elapsed over a year of 365 or 366 days, as applicable.

 

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(g) Information as to Interest Rates . The Administrative Agent, upon determining the interest rate for any Borrowing, shall promptly notify the Borrower and the Lenders thereof. Any changes in the Applicable Margin shall be determined by the Administrative Agent in accordance with the provisions set forth in the definition of “Applicable Margin” and the Administrative Agent will promptly provide notice of such determinations to the Borrower and the Lenders. Any such determination by the Administrative Agent shall be conclusive and binding absent manifest error.

Section 2.9. Increased Costs, Illegality, etc .

(a) In the event that (y) in the case of clause (i) below, the Administrative Agent or (z) in the case of clauses (ii) and (iii) below, any Lender, shall have determined on a reasonable basis (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto):

(i) on any date for determining the interest rate applicable to any Eurodollar Loan for any Interest Period that, by reason of any changes arising after the Closing Date, adequate and fair means do not exist for ascertaining the applicable interest rate on the basis provided for in this Agreement for such Eurodollar Loan; or

(ii) at any time, that such Lender shall incur increased costs or reductions in the amounts received or receivable by it hereunder in an amount that such Lender deems material with respect to any Eurodollar Loans (other than any increased cost or reduction in the amount received or receivable resulting from the imposition of or a change in the rate of taxes or similar charges) because of (x) any change since the Closing Date in any applicable law, governmental rule, regulation, guideline, order or request (whether or not having the force of law), or in the interpretation or administration thereof and including the introduction of any new law or governmental rule, regulation, guideline, order or request (such as, for example, but not limited to, a change in official reserve requirements, but, in all events, excluding reserves already includable in the interest rate applicable to such Eurodollar Loan pursuant to this Agreement) or (y) other circumstances adversely affecting the London interbank market or the position of such Lender in any such market; or

(iii) at any time, that the making or continuance of any Eurodollar Loan has become unlawful by compliance by such Lender in good faith with any change since the Closing Date in any law, governmental rule, regulation, guideline or order, or the interpretation or application thereof, or would conflict with any thereof not having the force of law but with which such Lender customarily complies, or has become impracticable as a result of a contingency occurring after the Closing Date that materially adversely affects the London interbank market;

then , and in each such event, such Lender (or the Administrative Agent in the case of clause (i) above) shall (1) on or promptly following such date or time and (2) within 10 Business Days of the date on which such event no longer exists give notice (by telephone confirmed in writing) to the Borrower and to the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no longer be available until such time as the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice by the Administrative Agent no longer exist, and any Notice of Borrowing or Notice of Continuation or Conversion given by the Borrower with respect to Eurodollar Loans that have not yet been incurred, Converted or Continued shall be deemed rescinded by the Borrower or, in the case of a Notice of Borrowing shall, at the option of the Borrower, be deemed

 

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converted into a Notice of Borrowing for Base Rate Loans to be made on the date of Borrowing contained in such Notice of Borrowing, (y) in the case of clause (ii) above, the Borrower shall pay to such Lender, upon written demand therefor, such additional amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender shall determine) as shall be required to compensate such Lender for such increased costs or reductions in amounts receivable hereunder (a written notice as to the additional amounts owed to such Lender, showing the basis for the calculation thereof, which basis must be reasonable, submitted to the Borrower by such Lender shall, absent manifest error, be final and conclusive and binding upon all parties hereto) and (z) in the case of clause (iii) above, the Borrower shall take one of the actions specified in Section 2.9(b) as promptly as possible and, in any event, within the time period required by law.

(b) At any time that any Eurodollar Loan is affected by the circumstances described in Section 2.9(a)(ii) or (iii), the Borrower may (and in the case of a Eurodollar Loan affected pursuant to Section 2.9(a)(iii) the Borrower shall) either (i) if the affected Eurodollar Loan is then being made pursuant to a Borrowing, by giving the Administrative Agent telephonic notice (confirmed promptly in writing) thereof on the same date that the Borrower was notified by a Lender pursuant to Section 2.9(a)(ii) or (iii), cancel said Borrowing, or, in the case of any Borrowing, convert the related Notice of Borrowing into one requesting a Borrowing of Base Rate Loans or require the affected Lender to make its requested Loan as a Base Rate Loan, or (ii) if the affected Eurodollar Loan is then outstanding, upon at least one Business Day’s notice to the Administrative Agent, require the affected Lender to Convert each such Eurodollar Loan into a Base Rate Loan; provided, however, that if more than one Lender is affected at any time, then all affected Lenders must be treated the same pursuant to this Section 2.9(b).

(c) If any Lender shall have determined that after the Closing Date, the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged by law with the interpretation or administration thereof, or compliance by such Lender or its parent corporation with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank, or comparable agency, in each case made subsequent to the Closing Date, has or would have the effect of reducing by an amount reasonably deemed by such Lender to be material to the rate of return on such Lender’s or its parent corporation’s capital or assets as a consequence of such Lender’s commitments or obligations hereunder to a level below that which such Lender or its parent corporation could have achieved but for such adoption, effectiveness, change or compliance (taking into consideration such Lender’s or its parent corporation’s policies with respect to capital adequacy), then from time to time, within 15 days after demand by such Lender (with a copy to the Administrative Agent), the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or its parent corporation for such reduction. Each Lender, upon determining in good faith that any additional amounts will be payable pursuant to this Section 2.9(c), will give prompt written notice thereof to the Borrower, which notice shall set forth, in reasonable detail, the basis of the calculation of such additional amounts, which basis must be reasonable, although the failure to give any such notice shall not release or diminish any of the Borrower’s obligations to pay additional amounts pursuant to this Section 2.9(c) upon the subsequent receipt of such notice.

(d) Notwithstanding anything in this Agreement to the contrary, (i) no Lender shall be entitled to compensation or payment or reimbursement of other amounts under Section 2.9 or Section 3.9 for any amounts incurred or accruing more than 120 days prior to the giving of notice to the Borrower of additional costs or other amounts of the nature described in such Sections, and (ii) no Lender shall demand compensation for any reduction referred to in Section 2.9(c) or payment or reimbursement of other amounts under Section 3.9 if it shall not at the time be the general policy or practice of such Lender to demand such compensation, payment or reimbursement in similar circumstances under comparable provisions of other credit agreements.

 

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Section 2.10. Breakage Compensation . The Borrower shall compensate each Lender (including the Swing Line Lender), upon its written request (which request shall set forth the detailed basis for requesting and the method of calculating such compensation), for all reasonable losses, costs, expenses and liabilities (including, without limitation, any loss, cost, expense or liability incurred by reason of the liquidation or reemployment of deposits or other funds required by such Lender to fund its Eurodollar Loans or Swing Loans) which such Lender may sustain in connection with any of the following: (i) if for any reason (other than a default by such Lender or the Administrative Agent) a Borrowing of Eurodollar Loans or Swing Loans does not occur on a date specified therefor in a Notice of Borrowing or a Notice of Continuation or Conversion (whether or not withdrawn by the Borrower or deemed withdrawn pursuant to Section 2.9(a)); (ii) if any repayment, prepayment, Conversion or Continuation of any Eurodollar Loan occurs on a date that is not the last day of an Interest Period applicable thereto or any Swing Loan is paid prior to the Swing Loan Maturity Date applicable thereto; (iii) if any prepayment of any of its Eurodollar Loans is not made on any date specified in a notice of prepayment given by the Borrower; (iv) as a result of an assignment by a Lender of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto pursuant to a request by the Borrower pursuant to Section 2.11(b); or (v) as a consequence of (y) any other default by the Borrower to repay or prepay any Eurodollar Loans when required by the terms of this Agreement or (z) an election made pursuant to Section 2.11(b). Such loss, cost, expense and liability to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest that would have accrued on the principal amount of such Loan had such event not occurred, at the interest rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to effect a Borrowing, Conversion or Continuation, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest that would accrue on such principal amount for such period at the interest rate that such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such request within 10 days after receipt thereof.

Section 2.11. Change of Lending Office; Replacement of Lenders .

(a) Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Sections 2.9(a)(ii) or (iii), 2.9(c), 5.3 or 3.9 requiring the payment of additional amounts to the Lender, such Lender will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another Applicable Lending Office for any Loans or Commitments affected by such event; provided, however, that such designation is made on such terms that such Lender and its Applicable Lending Office suffer no economic, legal or regulatory disadvantage, with the object of avoiding the consequence of the event giving rise to the operation of any such Section.

(b) If (i) any Lender requests any compensation, reimbursement or other payment under Sections 2.9(a)(ii) or (iii), 2.9(c) or 3.9 with respect to such Lender, or (ii) the Borrower is required to pay any additional amount to any Lender or Governmental Authority pursuant to Section 5.3, or if any Lender is a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with the restrictions contained in Section 13.5(c)), all its interests, rights and obligations under this Agreement to an Eligible Assignee that shall assume such obligations; provided, however, that (1) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not be unreasonably withheld or delayed, (2) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and

 

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accrued interest and fees) or the Borrower (in the case of all other amounts, including any breakage compensation under Section 2.10 hereof), and (3) in the case of any such assignment resulting from a claim for compensation, reimbursement or other payments required to be made under Section 2.9(a)(ii) or (iii), Section 2.9(c) or Section 3.9 with respect to such Lender, or resulting from any required payments to any Lender or Governmental Authority pursuant to Section 5.3, such assignment will result in a reduction in such compensation, reimbursement or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

(c) Nothing in this Section 2.11 shall affect or postpone any of the obligations of the Borrower or the right of any Lender provided in Sections 2.9, 3.9 or 5.3.

Section 2.12. Conversion and Continuation of Loans .

(a) Conversion and Continuation of Revolving Loans . The Borrower shall have the right, subject to the terms and conditions of this Agreement, to (i) Convert all or a portion of the outstanding principal amount of Loans of one Type made to it into a Borrowing or Borrowings of another Type of Loans that can be made to it pursuant to this Agreement and (ii) Continue a Borrowing of Eurodollar Loans at the end of the applicable Interest Period as a new Borrowing of Eurodollar Loans with a new Interest Period; provided, however, that any Conversion of Eurodollar Loans into Base Rate Loans shall be made on, and only on, the last day of an Interest Period for such Eurodollar Loans.

(b) Notice of Continuation and Conversion . Each Continuation or Conversion of a Loan shall be made upon notice in the form provided for below provided by the Borrower to the Administrative Agent at its Notice Office not later than (i) in the case of each Continuation of or Conversion into a Eurodollar Loan, prior to 12:00 noon (local time at its Notice Office) at least three Business Days’ prior to the date of such Continuation or Conversion, and (ii) in the case of each Conversion to a Base Rate Loan, prior to 12:00 noon (local time at its Notice Office) on the proposed date of such Conversion. Each such request shall be made by an Authorized Officer of the Borrower delivering written notice of such request substantially in the form of Exhibit B-2 hereto (each such notice, a “ Notice of Continuation or Conversion ”) or by telephone (to be confirmed immediately in writing by delivery by an Authorized Officer of the Borrower of a Notice of Continuation or Conversion), and in any event each such request shall be irrevocable and shall specify (A) the Borrowings to be Continued or Converted, (B) the date of the Continuation or Conversion (which shall be a Business Day), and (C) the Interest Period or, in the case of a Continuation, the new Interest Period. Without in any way limiting the obligation of the Borrower to confirm in writing any telephonic notice permitted to be given hereunder, the Administrative Agent may act prior to receipt of written confirmation without liability upon the basis of such telephonic notice believed by the Administrative Agent in good faith to be from an Authorized Officer of the Borrower entitled to give telephonic notices under this Agreement on behalf of the Borrower. In each such case, the Administrative Agent’s record of the terms of such telephonic notice shall be conclusive absent manifest error.

ARTICLE III.

LETTERS OF CREDIT

Section 3.1. Letter of Credit Issuances . On the Closing Date, each Existing Letter of Credit shall be deemed to have been issued hereunder. During the Revolving Facility Availability Period, the Borrower may request a Letter of Credit Issuer at any time and from time to time to issue, for the account of the Borrower or any Subsidiary Guarantor, and subject to and upon the terms and conditions herein set

 

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forth, each Letter of Credit Issuer agrees to issue from time to time Letters of Credit denominated and payable in Dollars and in such form as may be approved by such Letter of Credit Issuer and the Administrative Agent; provided , however , that notwithstanding the foregoing, no Letter of Credit Issuance shall be made if, after giving effect thereto, (i) the Letter of Credit Outstandings would exceed the Letter of Credit Commitment Amount, (ii) the Revolving Facility Exposure of any Lender would exceed such Lender’s Revolving Commitment, (iii) the Aggregate Revolving Facility Exposure plus the principal amount of Swing Loans outstanding would exceed the Total Revolving Commitment, or (iv) the Borrower would be required to prepay Loans or cash collateralize Letters of Credit pursuant to Section 5.1(c) hereof. Subject to Section 3.4 below, each Letter of Credit shall have an expiry date (including any renewal periods) occurring not later than the earlier of (y) one year from the date of issuance thereof, or (z) 30 Business Days prior to the Revolving Facility Termination Date. Notwithstanding the foregoing, in the event a Lender Default exists, no Letter of Credit Issuer shall be required to issue any Letter of Credit unless either (i) such Letter of Credit Issuer has entered into arrangements satisfactory to it and the Borrower to eliminate such Letter of Credit Issuer’s risk with respect to the participation in Letters of Credit of the Defaulting Lender or Lenders, including by cash collateralizing such Defaulting Lender’s or Lenders’ Revolving Facility Percentage of the Letter of Credit Outstandings; or (ii) the issuance of such Letter of Credit, taking into account the potential failure of the Defaulting Lender or Lenders to risk participate therein, will not cause the Letter of Credit Issuer to incur aggregate credit exposure hereunder with respect to Loans and Letter of Credit Outstandings in excess of its Commitment, and the Borrower has undertaken, for the benefit of such Letter of Credit Issuer, pursuant to an instrument satisfactory in form and substance to such Letter of Credit Issuer, not to thereafter incur Loans or Letter of Credit Outstandings hereunder that would cause the Letter of Credit Issuer to incur aggregate credit exposure hereunder with respect to Loans and Letter of Credit Outstandings in excess of its Commitment.

Section 3.2. Letter of Credit Requests . Whenever the Borrower desires that a Letter of Credit be issued for its account or the account of any eligible Letter of Credit Obligor, the Borrower shall give the Administrative Agent and the applicable Letter of Credit Issuer written or telephonic notice (in the case of telephonic notice, promptly confirmed in writing if so requested by the Administrative Agent) which, if in the form of written notice, shall be substantially in the form of Exhibit B-3 (each such request, a “ Letter of Credit Request ”), or transmit by electronic communication (if arrangements for doing so have been approved by the applicable Letter of Credit Issuer), prior to 12:00 noon (local time at the Notice Office) at least three Business Days (or such shorter period as may be acceptable to the relevant Letter of Credit Issuer) prior to the proposed date of issuance (which shall be a Business Day), which Letter of Credit Request shall include such supporting documents that such Letter of Credit Issuer customarily requires in connection therewith (including, in the case of a Letter of Credit for an account party other than the Borrower, an application for, and if applicable a reimbursement agreement with respect to, such Letter of Credit). In the event of any inconsistency between any of the terms or provisions of any Letter of Credit Document and the terms and provisions of this Agreement respecting Letters of Credit, the terms and provisions of this Agreement shall control.

Section 3.3. Notice of Letter of Credit Issuance . Each Letter of Credit Issuer shall, on the date of each Letter of Credit Issuance by it (other than on the Closing Date with respect to the Existing Letters of Credit), give the Administrative Agent, each applicable Lender and the Borrower written notice of such Letter of Credit Issuance, accompanied by a copy to the Administrative Agent of the Letter of Credit or Letters of Credit issued by it. Each Letter of Credit Issuer shall provide to the Administrative Agent a quarterly (or monthly if requested by any applicable Lender) summary describing each Letter of Credit issued (or deemed issued) by such Letter of Credit Issuer and then outstanding and an identification for the relevant period of the daily aggregate Letter of Credit Outstandings represented by Letters of Credit issued (or deemed issued) by such Letter of Credit Issuer.

 

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Section 3.4. Auto-Renewal Letters of Credit . If a Letter of Credit Obligor so requests in any applicable Letter of Credit Request, each Letter of Credit Issuer shall agree to issue a Letter of Credit that has automatic renewal provisions; provided , however , that any Letter of Credit that has automatic renewal provisions must permit such Letter of Credit Issuer to prevent any such renewal at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Once any such Letter of Credit that has automatic renewal provisions has been issued (or deemed issued), the Lenders shall be deemed to have authorized (but may not require) such Letter of Credit Issuer to permit the renewal of such Letter of Credit at any time to an expiry date not later than 30 Business Days prior to the Revolving Facility Termination Date; provided , however , that such Letter of Credit Issuer shall not permit any such renewal if (i) such Letter of Credit Issuer has determined that it would have no obligation at such time to issue such Letter of Credit in its renewed form under the terms hereof, or (ii) it has received notice (which may be by telephone or in writing) on or before the day that is two Business Days before the date that such Letter of Credit Issuer is permitted to send a notice of non-renewal from the Administrative Agent, any Lender or the Borrower that one or more of the applicable conditions specified in Section 6.2 is not then satisfied.

Section 3.5. Applicability of ISP98 . Unless otherwise expressly agreed by the applicable Letter of Credit Issuer and the applicable Letter of Credit Obligor, when a Letter of Credit is issued (or deemed issued), the rules of the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each Standby Letter of Credit.

Section 3.6. [ Intentionally Omitted ]

Section 3.7. Reimbursement Obligations .

(a) The Borrower hereby agrees to reimburse (or cause any Letter of Credit Obligor for whose account a Letter of Credit was issued (or deemed issued) to reimburse) each Letter of Credit Issuer, by making payment directly to such Letter of Credit Issuer in immediately available funds at the payment office of such Letter of Credit Issuer, for any Unpaid Drawing with respect to any Letter of Credit immediately after, and in any event on the date on which, such Letter of Credit Issuer notifies the Borrower (or any such other Letter of Credit Obligor for whose account such Letter of Credit was issued (or deemed issued)) of such payment or disbursement (which notice to the Borrower (or such other Letter of Credit Obligor) shall be delivered reasonably promptly after any such payment or disbursement), such payment to be made in Dollars, with interest on the amount so paid or disbursed by such Letter of Credit Issuer, to the extent not reimbursed prior to 1:00 P.M. (local time at the payment office of the applicable Letter of Credit Issuer) on the date of such payment or disbursement, from and including the date paid or disbursed to but not including the date such Letter of Credit Issuer is reimbursed therefor at a rate per annum that shall be the rate then applicable to Revolving Loans pursuant to Section 2.8(a)(i) that are Base Rate Loans or, if not reimbursed on the date of such payment or disbursement, at the Default Rate, any such interest also to be payable on demand. If by 11:00 A.M. on the Business Day immediately following notice to it of its obligation to make reimbursement in respect of an Unpaid Drawing, the Borrower or the relevant Letter of Credit Obligor has not made such reimbursement out of its available cash on hand or, in the case of the Borrower, a contemporaneous Borrowing hereunder (if such Borrowing is otherwise available to the Borrower), (x) the Borrower will in each case be deemed to have given a Notice of Borrowing for Revolving Loans that are Base Rate Loans in an aggregate principal amount sufficient to reimburse such Unpaid Drawing (and the Administrative Agent shall promptly give notice to the Lenders of such deemed Notice of Borrowing), (y) the Lenders shall, unless they are legally prohibited from doing so, make the Revolving Loans contemplated by such deemed Notice of Borrowing (which Revolving Loans shall be considered made under Section 2.2), and (z) the proceeds of such Revolving Loans shall

 

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be disbursed directly to the applicable Letter of Credit Issuer to the extent necessary to effect such reimbursement and repayment of the Unpaid Drawing, with any excess proceeds to be made available to the Borrower in accordance with the applicable provisions of this Agreement.

(b) Obligations Absolute . Each Letter of Credit Obligor’s obligation under this Section 3.7 to reimburse, or cause another Letter of Credit Obligor to reimburse, each Letter of Credit Issuer with respect to Unpaid Drawings (including, in each case, interest thereon) shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment that the Borrower or any other Letter of Credit Obligor may have or have had against such Letter of Credit Issuer, the Administrative Agent, any other Letter of Credit Issuer or any Lender, including, without limitation, any defense based upon the failure of any drawing under a Letter of Credit to conform to the terms of the Letter of Credit or any non-application or misapplication by the beneficiary of the proceeds of such drawing; provided , however, that neither the Borrower nor any other Letter of Credit Obligor shall be obligated to reimburse a Letter of Credit Issuer for any wrongful payment made by such Letter of Credit Issuer under a Letter of Credit as a result of acts or omissions constituting willful misconduct or gross negligence on the part of such Letter of Credit Issuer.

Section 3.8. Letter of Credit Participations .

(a) Immediately upon each Letter of Credit Issuance, the Letter of Credit Issuer of such Letter of Credit shall be deemed to have sold and transferred to each Lender with a Revolving Commitment, and each such Lender (each a “ Letter of Credit Participant ”) shall be deemed irrevocably and unconditionally to have purchased and received from such Letter of Credit Issuer, without recourse or warranty, an undivided interest and participation (an “ Letter of Credit Participation ”), to the extent of such Lender’s Revolving Facility Percentage of the Stated Amount of such Letter of Credit in effect at such time of issuance, in such Letter of Credit, each substitute Letter of Credit, each drawing made thereunder, the obligations of any Letter of Credit Obligor under this Agreement with respect thereto (although Letter of Credit Fees relating thereto shall be payable directly to the Administrative Agent for the account of the Lenders as provided in Section 4.1 and the Letter of Credit Participants shall have no right to receive any portion of any fees of the nature contemplated by Section 4.1(c) or Section 4.1(e)), the obligations of any Letter of Credit Obligor under any Letter of Credit Documents pertaining thereto, and any security for, or guaranty pertaining to, any of the foregoing.

(b) In determining whether to pay under any Letter of Credit, a Letter of Credit Issuer shall not have any obligation relative to the Letter of Credit Participants other than to determine that any documents required to be delivered under such Letter of Credit have been delivered and that they appear to comply on their face with the requirements of such Letter of Credit. Any action taken or omitted to be taken by a Letter of Credit Issuer under or in connection with any Letter of Credit, if taken or omitted in the absence of gross negligence or willful misconduct, shall not create for such Letter of Credit Issuer any resulting liability.

(c) If a Letter of Credit Issuer makes any payment under any Letter of Credit and the Borrower shall not have reimbursed (or caused any applicable Letter of Credit Obligor shall not have reimbursed) such amount in full to such Letter of Credit Issuer pursuant to Section 3.7, such Letter of Credit Issuer shall promptly notify the Administrative Agent, and the Administrative Agent shall promptly notify each Letter of Credit Participant of such failure, and each Letter of Credit Participant shall promptly and unconditionally pay to the Administrative Agent for the account of such Letter of Credit Issuer, the amount of such Letter of Credit Participant’s Revolving Facility Percentage of such payment in Dollars and in same-day funds; provided , however , that no Letter of Credit Participant shall be obligated to pay to the Administrative Agent its Revolving Facility Percentage of such unreimbursed amount for any wrongful payment made by such Letter of Credit Issuer under a Letter of Credit as a result

 

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of acts or omissions constituting willful misconduct or gross negligence on the part of such Letter of Credit Issuer. If the Administrative Agent so notifies any Letter of Credit Participant required to fund a payment under a Letter of Credit prior to 11:00 A.M. (local time at its Notice Office) on any Business Day, such Letter of Credit Participant shall make available to the Administrative Agent for the account of the relevant Letter of Credit Issuer such Letter of Credit Participant’s Revolving Facility Percentage of the amount of such payment on such Business Day in same-day funds. If and to the extent such Letter of Credit Participant shall not have so made its Revolving Facility Percentage of the amount of such payment available to the Administrative Agent for the account of the relevant Letter of Credit Issuer, such Letter of Credit Participant agrees to pay to the Administrative Agent for the account of such Letter of Credit Issuer, forthwith on demand, such amount, together with interest thereon, for each day from such date until the date such amount is paid to the Administrative Agent for the account of such Letter of Credit Issuer at the Federal Funds Effective Rate. The failure of any Letter of Credit Participant to make available to the Administrative Agent for the account of the relevant Letter of Credit Issuer its Revolving Facility Percentage of any payment under any Letter of Credit shall not relieve any other Letter of Credit Participant of its obligation hereunder to make available to the Administrative Agent for the account of such Letter of Credit Issuer its Revolving Facility Percentage of any payment under any Letter of Credit on the date required, as specified above, but no Letter of Credit Participant shall be responsible for the failure of any other Letter of Credit Participant to make available to the Administrative Agent for the account of such Letter of Credit Issuer such other Letter of Credit Participant’s Revolving Facility Percentage of any such payment.

(d) Whenever a Letter of Credit Issuer receives a payment of a reimbursement obligation as to which the Administrative Agent has received for the account of such Letter of Credit Issuer any payments from the Letter of Credit Participants pursuant to subpart (c) above, such Letter of Credit Issuer shall pay to the Administrative Agent and the Administrative Agent shall promptly pay to each Letter of Credit Participant that has paid its Revolving Facility Percentage thereof, in same-day funds, an amount equal to such Letter of Credit Participant’s Revolving Facility Percentage of the principal amount thereof and interest thereon accruing after the purchase of the respective Letter of Credit Participations, as and to the extent so received.

(e) The obligations of the Letter of Credit Participants to make payments to the Administrative Agent for the account of each Letter of Credit Issuer with respect to Letters of Credit shall be irrevocable and not subject to counterclaim, set-off or other defense or any other qualification or exception whatsoever and shall be made in accordance with the terms and conditions of this Agreement under all circumstances, including, without limitation, any of the following circumstances:

(i) any lack of validity or enforceability of this Agreement or any of the other Credit Documents;

(ii) the existence of any claim, set-off defense or other right that the Borrower (or any other Letter of Credit Obligor) may have at any time against a beneficiary named in a Letter of Credit, any transferee of any Letter of Credit (or any person for whom any such transferee may be acting), the Administrative Agent, any Letter of Credit Issuer, any Lender, or other person, whether in connection with this Agreement, any Letter of Credit, the transactions contemplated herein or any unrelated transactions (including any underlying transaction between the Borrower (or any other Letter of Credit Obligor) and the beneficiary named in any such Letter of Credit), other than any claim that the Borrower (or any other Letter of Credit Obligor) may have against any applicable Letter of Credit Issuer for gross negligence or willful misconduct of such Letter of Credit Issuer in making payment under any applicable Letter of Credit;

 

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

(iv) the surrender or impairment of any security for the performance or observance of any of the terms of any of the Credit Documents; or

(v) the occurrence of any Default or Event of Default.

(f) To the extent any Letter of Credit Issuer is not indemnified by the Borrower or any Letter of Credit Obligor, the Letter of Credit Participants will reimburse and indemnify such Letter of Credit Issuer, in proportion to their respective Revolving Facility Percentages, for and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, costs, expenses or disbursements of whatsoever kind or nature that may be imposed on, asserted against or incurred by such Letter of Credit Issuer in performing its respective duties in any way related to or arising out of Letter of Credit Issuances by it; provided, however, that no Letter of Credit Participants shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, claims, actions, judgments, costs, expenses or disbursements resulting from such Letter of Credit Issuer’s gross negligence or willful misconduct.

Section 3.9. Increased Costs to Letter of Credit Issuers . If after the Closing Date, the adoption of any applicable law, rule or regulation, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Letter of Credit Issuer or any Lender with any request or directive (whether or not having the force of law) by any such authority, central bank or comparable agency (in each case made subsequent to the Closing Date) shall either (i) impose, modify or make applicable any reserve, deposit, capital adequacy or similar requirement against Letters of Credit issued (or deemed issued) by such Letter of Credit Issuer or such Lender’s participation therein, or (ii) impose on such Letter of Credit Issuer or any Lender any other conditions affecting this Agreement, any Letter of Credit or such Lender’s participation therein; and the result of any of the foregoing is to increase the cost to such Letter of Credit Issuer or such Lender of issuing, maintaining or participating in any Letter of Credit, or to reduce the amount of any sum received or receivable by such Letter of Credit Issuer or such Lender hereunder (other than any increased cost or reduction in the amount received or receivable resulting from the imposition of or a change in the rate of taxes or similar charges), then, upon demand to the Borrower by such Letter of Credit Issuer or such Lender (a copy of which notice shall be sent by such Letter of Credit Issuer or such Lender to the Administrative Agent), the Borrower shall pay to such Letter of Credit Issuer or such Lender such additional amount or amounts as will compensate any such Letter of Credit Issuer or such Lender for such increased cost or reduction. A certificate submitted to the Borrower by any Letter of Credit Issuer or any Lender, as the case may be (a copy of which certificate shall be sent by such Letter of Credit Issuer or such Lender to the Administrative Agent), setting forth, in reasonable detail, the basis for the determination of such additional amount or amounts necessary to compensate any Letter of Credit Issuer or such Lender as aforesaid shall be conclusive and binding on the Borrower absent manifest error, although the failure to deliver any such certificate shall not release or diminish the Borrower’s obligations to pay additional amounts pursuant to this Section 3.9.

 

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ARTICLE IV.

FEES AND COMMITMENTS

Section 4.1. Fees .

(a) Commitment Fees . The Borrower agrees to pay to the Administrative Agent, for the ratable benefit of each Non-Defaulting Lender based upon each such Lender’s Revolving Facility Percentage, as consideration for the Revolving Commitments of the Lenders, commitment fees (the “ Commitment Fees ”) for the period from the Closing Date to, but not including, the Revolving Facility Termination Date, computed for each day at a rate per annum equal to (i) the Applicable Commitment Fee Rate in effect on such day times (ii) the Unused Total Revolving Commitment in effect on such day. Accrued Commitment Fees shall be due and payable in arrears on the last Business Day of each March, June, September and December and on the Revolving Facility Termination Date.

(b) Letter of Credit Fees . The Borrower agrees to pay to the Administrative Agent, for the ratable benefit of each Non-Defaulting Lender with a Revolving Commitment based upon each such Non-Defaulting Lender’s Revolving Facility Percentage, a fee in respect of each Letter of Credit issued (or deemed issued) hereunder that is a Standby Letter of Credit payable on the date of issuance (or deemed issuance) (or on the date of any increase in the amount, or renewal or extension of the expiry date thereof), for the period from the date of issuance of such Letter of Credit until the expiration date thereof (including any extensions of such expiration date that may be made at the election of the account party or the beneficiary), computed for each day at a rate per annum equal to (A) the Applicable Margin for Revolving Loans that are Eurodollar Loans in effect on such day times (B) the Stated Amount of such Letter of Credit on such day. The foregoing accrued fees shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December and on the Revolving Facility Termination Date.

(c) Fronting Fees . The Borrower agrees to pay directly to each Letter of Credit Issuer, for its own account, any fronting fees agreed to in writing between the Borrower and such Letter of Credit Issuer in respect of each Letter of Credit issued (or deemed issued) by it, such fronting fees to be payable on the date of issuance (or any increase in the amount, or renewal or extension) thereof, computed at the rate of 1/8 of 1% per annum on the Stated Amount thereof for the period from the date of issuance (or increase, renewal or extension) to the expiration date thereof (including any extensions of such expiration date that may be made at the election of the beneficiary thereof). Accrued fronting fees shall be due and payable on the date or dates agreed to in writing between the Borrower and such Letter of Credit Issuer.

(d) Additional Charges of Letter of Credit Issuer . The Borrower agrees to pay directly to each Letter of Credit Issuer upon each Letter of Credit Issuance, drawing under, or amendment, extension, renewal or transfer of, a Letter of Credit issued (or deemed issued) by it such amount as shall at the time of such Letter of Credit Issuance, drawing under, amendment, extension, renewal or transfer be the processing charge that such Letter of Credit Issuer is customarily charging for issuances of, drawings under or amendments, extensions, renewals or transfers of, letters of credit issued (or deemed issued) by it.

(e) Fees . The Borrower shall pay to the Administrative Agent, on the Closing Date and thereafter, as applicable, the fees set forth in the Fee Letter.

(f) Computations and Determination of Fees . Any changes in the Applicable Commitment Fee Rate shall be determined by the Administrative Agent in accordance with the provisions set forth in the definition of “Applicable Commitment Fee Rate” and the Administrative Agent will promptly provide

 

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notice of such determination to the Borrower and the Lenders. Any such determination by the Administrative Agent shall be conclusive and binding absent manifest error. All computations of Commitment Fees, Letter of Credit Fees and other Fees hereunder shall be made on the actual number of days elapsed over a year of 360 days.

Section 4.2. Termination and Reduction of Revolving Commitments .

(a) Mandatory Termination of Revolving Commitments . All of the Revolving Commitments shall terminate on the Revolving Facility Termination Date.

(b) Mandatory Reduction of Revolving Commitments . On the date that any prepayment is to be made pursuant to Sections 5.1(c) (iv), (v), (vi), (vii) or (viii) is required to be applied to prepay the outstanding principal amount of Revolving Loans, then on such date the Total Revolving Commitment shall be permanently reduced on such date in an amount equal to the amount of such required prepayment and any such reduction shall apply to proportionately (based on each Lender’s Revolving Facility Percentage) and permanently reduce the Revolving Commitment of each Lender.

(c) Voluntary Termination of the Total Revolving Commitment . Upon at least three Business Days’ prior irrevocable written notice (or telephonic notice confirmed in writing) to the Administrative Agent at its Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders), the Borrower shall have the right to terminate in whole the Total Revolving Commitment, provided that (i) all outstanding Revolving Loans and Unpaid Drawings are contemporaneously prepaid in accordance with Section 5.1 and (ii) either (A) there are no outstanding Letters of Credit or (B) the Borrower shall contemporaneously either (x) cause all outstanding Letters of Credit to be surrendered for cancellation (any such Letters of Credit to be replaced by letters of credit issued by other financial institutions acceptable to each Letter of Credit Issuer and the Revolving Lenders), or (y) the Borrower shall pay to the Administrative Agent an amount in cash and/or Cash Equivalents equal to 103% of the Letter of Credit Outstandings, and the Administrative Agent shall hold such payment as security for the reimbursement obligations of the Borrower hereunder in respect of Letters of Credit pursuant to a cash collateral agreement to be entered into in form and substance reasonably satisfactory to the Administrative Agent, each Letter of Credit Issuer and the Borrower (which shall permit certain investments in Cash Equivalents satisfactory to the Administrative Agent, each Letter of Credit Issuer and the Borrower until the proceeds are applied to the secured obligations).

(d) Partial Reduction of Total Revolving Commitment . Upon at least three Business Days’ prior irrevocable written notice (or telephonic notice confirmed in writing) to the Administrative Agent at its Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders), the Borrower shall have the right to partially and permanently reduce the Unused Total Revolving Commitment; provided, however, that (i) any such reduction shall apply to proportionately (based on each Lender’s Revolving Facility Percentage) and permanently reduce the Revolving Commitment of each Lender, (ii) such reduction shall apply to proportionately and permanently reduce the Letter of Credit Commitment Amount, but only to the extent that the Unused Total Revolving Commitment would be reduced below any such limits, (iii) no such reduction shall be permitted if the Borrower would be required to make a mandatory prepayment of Loans or cash collateralize Letters of Credit pursuant to Section 5.1, and (iv) any partial reduction shall be in the amount of at least $5,000,000 (or, if greater, in integral multiples of $1,000,000).

 

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ARTICLE V.

PAYMENTS

Section 5.1. Voluntary, Scheduled and Mandatory Prepayments of Loans .

(a) Voluntary Prepayments . The Borrower shall have the right to prepay any of the Loans, in whole or in part, without premium or penalty, except as specified in subparts (e) and (f) below, from time to time. The Borrower shall give the Administrative Agent at the Notice Office written or telephonic notice (in the case of telephonic notice, promptly confirmed in writing if so requested by the Administrative Agent) of its intent to prepay the Loans, the amount of such prepayment and (in the case of Eurodollar Loans) the specific Borrowing(s) pursuant to which the prepayment is to be made, which notice shall be received by the Administrative Agent by (y) 12:00 noon (local time at the Notice Office) three Business Days prior to the date of such prepayment, in the case of any prepayment of Eurodollar Loans, or (z) 12:00 noon (local time at the Notice Office) one Business Day prior to the date of such prepayment, in the case of any prepayment of Base Rate Loans, and which notice shall promptly be transmitted by the Administrative Agent to each of the affected Lenders, provided that:

(i) each partial prepayment shall be in an aggregate principal amount of at least (A) in the case of any prepayment of a Eurodollar Loan, $5,000,000 (or, if less, the full amount of such Borrowing), or an integral multiple of $1,000,000 in excess thereof, (B) in the case of any prepayment of a Base Rate Loan, $1,000,000 (or, if less, the full amount of such Borrowing), or an integral multiple of $100,000 in excess thereof, and (C) in the case of any prepayment of a Swing Loan, in the full amount thereof;

(ii) no partial prepayment of any Loans made pursuant to a Borrowing shall reduce the aggregate principal amount of such Loans outstanding pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount applicable thereto, provided that the foregoing limitation shall not apply if such Loans are being prepaid in full; and

(iii) in the case of any prepayment of Term Loans, such prepayment shall be applied to the Scheduled Repayments in respect of the Term Loans in the inverse order of maturity; provided, however, such prepayment shall apply first , to Term Loans that do not constitute the Hedged Portion and second , to the Hedged Portion.

(b) Scheduled Repayments of Term Loans . On each of the dates set forth below, the Borrower shall repay the principal amount of the Term Loans (with amounts being deemed applied to the non-Hedged Portion of the Term Loan first) in the amount set forth opposite such date, except that the payment due on the Term Loan Maturity Date shall in any event be in the amount of the entire remaining principal amount of the outstanding Term Loans (each such repayment, as the same may be reduced by reason of the application of prepayments pursuant to Section 5.1(c), a “ Scheduled Repayment ”):

 

 

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(c) Mandatory Payments . The Loans shall be subject to mandatory repayment or prepayment (in the case of any partial prepayment conforming to the requirements as to the amounts of partial prepayments set forth in Section 5.1(a) above), and the Letter of Credit Outstandings shall be subject to cash collateralization requirements, in accordance with the following provisions:

(i) Revolving Facility Termination Date . The Borrower shall repay the entire principal amount of all outstanding Revolving Loans on the Revolving Facility Termination Date and, if any Letter of Credit Outstandings exist, then on such date the Borrower shall cause each Letter of Credit to be replaced or cash collateralized in accordance with the provisions of Section 5.1(c)(iii).

(ii) Loans Exceed the Commitments . If on any date (after giving effect to any other payments on such date) (A) the Aggregate Credit Facility Exposure exceeds the Total Credit Facility Amount, (B) the Revolving Facility Exposure of any Lender exceeds such Lender’s Revolving Commitment, (C) the Aggregate Revolving Facility Exposure plus the principal amount of Swing Loans exceeds the Total Revolving Commitment, or (D) the aggregate principal amount of Swing Loans outstanding exceeds the Swing Line Commitment, then , in the case of each of the foregoing, the Borrower shall, on such day, prepay on such date the principal amount of Loans and, after Loans have been paid in full, Unpaid Drawings, in an aggregate amount at least equal to such excess.

(iii) Letter of Credit Outstandings Exceed Letter of Credit Commitment If on any date the Letter of Credit Outstandings exceed the Letter of Credit Commitment Amount, then the applicable Letter of Credit Obligor or the Borrower shall, on such day, pay to the Administrative Agent an amount in cash equal to such excess and the Administrative Agent shall hold such payment as security for the reimbursement obligations of the applicable Letter of Credit Obligors hereunder in respect of Letters of Credit pursuant to a cash collateral agreement to be entered into in form and substance reasonably satisfactory to the Administrative Agent, each Letter of Credit Issuer and the Borrower (which shall permit certain investments in Cash Equivalents satisfactory to the Administrative Agent, each Letter of Credit Issuer and the Borrower until the proceeds are applied to any Unpaid Drawings or to any other Obligations in accordance with any such cash collateral agreement).

(iv) Excess Cash Flow . Within 90 days after each fiscal year of the Borrower, commencing with the fiscal year ended December 31, 2010, if the Borrower’s Leverage Ratio for any such fiscal year is equal to or greater than 2.0 to 1.0, the Borrower shall prepay the principal of the Loans in an aggregate amount (an “ Excess Cash Flow Prepayment Amount ”) at least equal to 50% of Excess Cash Flow for such fiscal year with such amount, if any, to be applied as set forth in Section 5.1(d) below.

 

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(v) Certain Proceeds of Asset Sales . If during any fiscal year of the Borrower, the Borrower and its Subsidiaries have received cumulative Cash Proceeds during such fiscal year from one or more Asset Sales of at least $500,000, not later than the third Business Day following the date of receipt of any Cash Proceeds in excess of such amount, an amount equal to 100% of the Net Cash Proceeds then received in excess of such amount from any Asset Sale shall be applied as a mandatory prepayment of the Loans in accordance with Section 5.1(d) below; provided , that (A) if no Default or Event of Default shall have occurred and be continuing, (B) the Borrower and its Subsidiaries have scheduled Consolidated Capital Expenditures to be made during the following 270 days, and (iii) the Borrower notifies the Administrative Agent of the amount and nature thereof and of its intention to reinvest all or a portion of such Net Cash Proceeds in such Consolidated Capital Expenditures during such 270 day period, then no such prepayment shall be required to the extent of the amount of such Net Cash Proceeds as to which the Borrower so indicates such reinvestment will take place. If at the end of any such 270 day period any portion of such Net Cash Proceeds has not been so reinvested, the Borrower will immediately make a prepayment of the Loans, as provided above.

(vi) Certain Proceeds of Equity Sales . Not later than the Business Day following the date of the receipt by any Credit Party or any of its Subsidiaries of the cash proceeds (net of underwriting discounts and commissions, placement agent fees and other customary fees and costs associated therewith) from any sale or issuance by the Borrower or any of its Subsidiaries of its own Equity Interests as the case may be, after the Closing Date (other than (A) any sale or issuance to management, employees (or key employees) or directors pursuant to stock option or similar plans for the benefit of management, employees (or key employees) or directors generally or (B) any sale or issuance to management or employees pursuant to stock purchase plans or similar plans for the benefit of management or employees (or key employees) generally, up to an aggregate amount of $550,000 per fiscal year), (C) the issuance or sale of any Equity Interests by any Subsidiary of the Borrower to the Borrower or any other Subsidiary of the Borrower or (D) the issuance or sale of any Equity Interests by the Borrower on or before the 30th day following the Closing Date pursuant to the Equity Financing Documents or (E) the issuance or sale by a Care For Kids Subsidiary to a Minority Holder of any Equity Interests in such Care For Kids Subsidiary to the extent permitted by Section 9.15), the Borrower will make a prepayment of the Loans in an amount equal to 100% of such net proceeds in accordance with Section 5.1(d) below.

(vii) Certain Proceeds of Indebtedness . Not later than the Business Day following the date of the receipt by any Credit Party of the cash proceeds (net of underwriting discounts and commissions, placement agent fees and other customary fees and costs associated therewith) from any sale or issuance of any Indebtedness (other than any Indebtedness incurred pursuant to Section 9.4 after the Closing Date, the Borrower will make a prepayment of the Loans in an amount equal to 100% of such net proceeds in accordance with Section 5.1(d) below.

(viii) Certain Proceeds of an Event of Loss . If during any fiscal year of the Borrower, any Credit Party has received cumulative Cash Proceeds during such fiscal year from one or more Events of Loss of at least $500,000, not later than the third Business Day following the date of receipt of any Cash Proceeds in excess of such amount, the Borrower will make a prepayment of the Loans with an amount equal to 100% of the Net Cash Proceeds then received in excess of such amount from any Event of Loss in accordance with Section 5.1(d) below. Notwithstanding the foregoing, in the event any property suffers an Event of Loss and (A) the Cash Proceeds received in any fiscal year as a result of such Event of Loss are less than $500,000, (B) no Default or Event of Default has occurred and is continuing, and (C) the Borrower notifies the Administrative Agent and the Lenders in writing that it intends to rebuild or restore the affected property, that such rebuilding or restoration can be accomplished within 270 days out of such Cash Proceeds and other funds available to the Borrower, then no such prepayment of the Loans

 

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shall be required if the Borrower immediately deposits such Cash Proceeds in a cash collateral deposit account over which the Administrative Agent shall have sole dominion and control, and which shall constitute part of the Collateral under the Security Documents and may be applied as provided in Section 10.3 if an Event of Default occurs and is continuing. So long as no Default or Event of Default has occurred and is continuing, the Administrative Agent is authorized to disburse amounts from such cash collateral deposit account to or at the direction of the Borrower for application to the costs of rebuilding or restoration of the affected property. Any amounts not so applied to the costs of rebuilding or restoration or as provided in Section 10.3 shall be applied to the prepayment of the Loans as provided above.

(d) Applications of Certain Prepayment Proceeds . Each prepayment required to be made pursuant to Sections 5.1(c)(iv), (v), (vi), (vii) or (viii) above shall be applied as a mandatory prepayment of principal of first , the outstanding Term Loans, with such amounts being applied to the Scheduled Repayments thereof in the inverse order of their maturity; provided, however, such prepayment shall first apply to Term Loans that do not constitute the Hedged Portion and secondly, to the Hedged Portion, second , after no Term Loans are outstanding, the outstanding Swing Loans, and third , the outstanding Revolving Loans, and the Total Revolving Commitment shall be permanently reduced on the date of any such prepayment of the Swing Loans or the Revolving Loans, as applicable, by an amount equal to such prepayment in accordance with Section 4.2(b).

(e) Particular Loans to be Prepaid . With respect to each repayment or prepayment of Loans made or required by this Section, the Borrower shall designate the Types of Loans that are to be repaid or prepaid and the specific Borrowing(s) pursuant to which such repayment or prepayment is to be made; provided, however, that (i) the Borrower shall first so designate all Loans that are Base Rate Loans and Eurodollar Loans with Interest Periods ending on the date of repayment or prepayment prior to designating any other Eurodollar Loans for repayment or prepayment, and (ii) if the outstanding principal amount of Eurodollar Loans made pursuant to a Borrowing is reduced below the applicable Minimum Borrowing Amount as a result of any such repayment or prepayment, then all the Loans outstanding pursuant to such Borrowing shall be Converted into Base Rate Loans. In the absence of a designation by the Borrower as described in the preceding sentence, the Administrative Agent shall, subject to the above, make such designation in its sole discretion with a view, but no obligation, to minimize breakage costs owing under Section 2.10.

(f) Breakage and Other Compensation . Any prepayment made pursuant to this Section 5.1 shall be accompanied by any amounts payable in respect thereof under Section 2.9, Section 2.10, Section 3.9 and Section 5.3.

Section 5.2. Method and Place of Payment .

(a) Generally . All payments made by the Borrower hereunder (including any payments made with respect to the Borrower Guaranteed Obligations under Article XII) under any Note or any other Credit Document, shall be made without setoff, counterclaim or other defense.

(b) Application of Payments . Except as specifically set forth elsewhere in this Agreement and subject to Section 10.3, (i) all payments and prepayments of Revolving Loans and Unpaid Drawings with respect to Letters of Credit shall be applied by the Administrative Agent on a pro rata basis based upon each Lender’s Revolving Facility Percentage of the amount of such prepayment, (ii) all payments and prepayments of Term Loans shall be applied by the Administrative Agent to reduce the principal amount of the Term Loans made by each Lender with a Term Commitment, pro rata on the basis of their respective Term Commitments, and (iii) all payments or prepayments of Swing Loans shall be applied by the Administrative Agent to pay or prepay such Swing Loans.

 

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(c) Payment of Obligations . Except as otherwise specifically provided herein, all payments under this Agreement shall be made to the Administrative Agent on the date when due and shall be made at the Payment Office in immediately available funds and shall be made in Dollars.

(d) Timing of Payments . Any payments under this Agreement that are made by a Credit Party later than 12:00 noon (local time at the Payment Office) shall be deemed to have been made on the next succeeding Business Day. Whenever any payment to be made hereunder shall be stated to be due on a day that is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest shall be payable during such extension at the applicable rate in effect immediately prior to such extension.

(e) Distribution to Lenders . Upon the Administrative Agent’s receipt of payments hereunder, the Administrative Agent shall promptly distribute to each Lender or the applicable Letter of Credit Issuer, as the case may be, its ratable share, if any, of the amount of principal, interest, and Fees received by it for the account of such Lender. Payments received by the Administrative Agent in Dollars shall be delivered to the Lenders or the applicable Letter of Credit Issuer, as the case may be, in Dollars in immediately available funds; provided, however, that if at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, Unpaid Drawings, interest and Fees then due hereunder then, except as specifically set forth elsewhere in this Agreement and subject to Section 10.3, such funds shall be applied, first , towards payment of interest and Fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and Fees then due to such parties, and second , towards payment of principal and Unpaid Drawings then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and Unpaid Drawings then due to such parties.

Section 5.3. Net Payments .

(a) Except as provided for in Section 5.3(b), all payments made by the Borrower hereunder, under any Note or any other Credit Document, including all payments made by the Borrower pursuant to its guaranty obligations under Article XII, will be made free and clear of, and without deduction or withholding for, any present or future taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein with respect to such payments (but excluding, except as provided in this Section 5.3(a), any tax imposed on or measured by the net income or net profits of a Lender pursuant to the laws of the jurisdiction under which such Lender is organized or the jurisdiction in which the principal office or Applicable Lending Office of such Lender, as applicable, is located or any subdivision thereof or therein) and all interest, penalties or similar liabilities with respect to such non-excluded taxes, levies imposts, duties, fees, assessments or other charges (all such non-excluded taxes, levies, imposts, duties, fees, assessments or other charges being referred to collectively as “ Taxes ”). If any Taxes are so levied or imposed, the Borrower agrees to pay the full amount of such Taxes and such additional amounts (including additional amounts to compensate for withholding on amounts paid pursuant to this Section 5.3) as may be necessary so that every payment by it of all amounts due hereunder, under any Note or under any other Credit Document, after withholding or deduction for or on account of any Taxes will not be less than the amount provided for herein or in such Note or in such other Credit Document. If any amounts are payable in respect of Taxes pursuant to this Section 5.3(a), the Borrower agrees to reimburse each Lender, upon the written request of such Lender, for taxes imposed on or measured by the net income or profits of such Lender pursuant to the laws of the jurisdiction in which such Lender is organized or in which the principal office or Applicable Lending Office of such Lender is located, as the case may be, or under the laws of any political subdivision or taxing authority therein, and for any withholding of income or similar taxes as such Lender shall determine are payable by, or withheld from, such Lender in respect of such amounts so paid to or on behalf of such Lender pursuant to the preceding

 

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sentence and in respect of any amounts paid to or on behalf of such Lender pursuant to this sentence, which request shall be accompanied by a statement from such Lender setting forth, in reasonable detail, the computations used in determining such amounts. The Borrower will furnish to the Administrative Agent within 45 days after the date the payment of any Taxes, or any withholding or deduction on account thereof, is due pursuant to applicable law certified copies of tax receipts, or other evidence satisfactory to the respective Lender, evidencing such payment by the Borrower. The Borrower will indemnify and hold harmless the Administrative Agent and each Lender, and reimburse the Administrative Agent or such Lender upon its written request, for the amount of any Taxes so levied or imposed and paid or withheld by such Lender.

(b) Each Lender that is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for Federal income tax purposes and that is entitled to claim an exemption from or reduction in United States withholding tax with respect to a payment by Borrower agrees to provide to the Borrower and the Administrative Agent on or prior to the Closing Date, or in the case of a Lender that is an assignee or transferee of an interest under this Agreement pursuant to Section 13.5 (unless the respective Lender was already a Lender hereunder immediately prior to such assignment or transfer and such Lender is in compliance with the provisions of this Section), on the date of such assignment or transfer to such Lender, and from time to time thereafter if required by the Borrower or the Administrative Agent: (i) two accurate and complete original signed copies of Internal Revenue Service Forms W-8BEN, W-8ECI, W-8EXP or W-8IMY (or successor, substitute or other appropriate forms and, in the case of Form W-8IMY, complete with accompanying Forms W-8BEN with respect to beneficial owners of the payment) certifying to such Lender’s entitlement to exemption from or a reduced rate of withholding of United States withholding tax with respect to payments to be made under this Agreement, any Note or any other Credit Document, or (ii) if the Lender cannot deliver the appropriate Internal Revenue Service Forms referred to in clause (i) above, (x) a certificate in form and substance satisfactory to the Administrative Agent (any such certificate, an “ Exemption Certificate ”) and (y) other appropriate documentation certifying to such Lender’s entitlement to a complete exemption from, or reduced rate of withholding from, United States withholding tax with respect to payments of interest to be made under this Agreement, any Note or any other Credit Document. In addition, each Lender agrees that from time to time after the Closing Date, when a lapse in time or change in circumstances renders the previous certification obsolete or inaccurate in any material respect, it will deliver to the Borrower and the Administrative Agent two new accurate and complete original signed copies of the applicable Internal Revenue Service Form, or an Exemption Certificate and related documentation, as the case may be, and such other forms as may be required in order to confirm or establish the entitlement of such Lender to a continued exemption from or reduction in United States withholding tax with respect to payments under this Agreement, any Note or any other Credit Document, or it shall immediately notify the Borrower and the Administrative Agent of its inability to deliver any such Form or Exemption Certificate and related documentation, in which case such Lender shall not be required to deliver any such Form or Exemption Certificate and related documentation pursuant to this Section 5.3(b). Notwithstanding anything to the contrary contained in Section 5.3(a), but subject to Section 13.5(c) and the immediately succeeding sentence, (x) the Borrower shall be entitled, to the extent it is required to do so by law, to deduct or withhold income or other similar taxes imposed by the United States (or any political subdivision or taxing authority thereof or therein) from interest, fees or other amounts payable hereunder for the account of any Lender that is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for United States federal income tax purposes and that has not provided to the Borrower such Forms or such Exemption Certificate and related documentation that establish a complete exemption from or reduction in the rate of such deduction or withholding and (y) the Borrower shall not be obligated pursuant to Section 5.3(a) hereof to gross-up payments to be made to a Lender in respect of income or similar taxes imposed by the United States or any additional amounts with respect thereto (i) if such Lender has not provided to the Borrower the Internal Revenue Service forms required to be provided to the Borrower pursuant to this Section 5.3(b) or (ii) in the case of a payment other than interest, to a

 

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Lender described in clause (ii) above, to the extent that such forms do not establish a complete exemption from withholding of such taxes. Notwithstanding anything to the contrary contained in Section 5.3(a), but subject to Section 13.5(c) and the immediately succeeding sentence, (x) the Borrower shall be entitled, to the extent it is required to do so by law, to deduct or withhold income or other similar taxes imposed by the United States (or any political subdivision or taxing authority thereof or therein) from interest, fees or other amounts payable hereunder for the account of any Lender that is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for United States federal income tax purposes and that has not provided to the Borrower such forms that establish a complete exemption from such deduction or withholding and (y) the Borrower shall not be obligated pursuant to Section 5.3(a) hereof to gross-up payments to be made to a Lender in respect of income or similar taxes imposed by the United States or any additional amounts with respect thereto (i) if such Lender has not provided to the Borrower the Internal Revenue Service forms required to be provided to the Borrower pursuant to this Section 5.3(b) or (ii) in the case of a payment other than interest, to a Lender described in clause (ii) above, to the extent that such forms do not establish a complete exemption from withholding of such taxes. Notwithstanding anything to the contrary contained in the preceding sentence or elsewhere in this Section 5.3 and except as specifically provided for in Section 13.5(c), the Borrower agrees to pay additional amounts and indemnify each Lender in the manner set forth in Section 5.3(a) (without regard to the identity of the jurisdiction requiring the deduction or withholding) in respect of any Taxes deducted or withheld by it as described in the previous sentence as a result of any changes after the Closing Date in any applicable law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof, relating to the deducting or withholding of income or similar Taxes.

(c) If any Lender, in its sole opinion, determines that it has finally and irrevocably received or been granted a refund in respect of any Taxes as to which indemnification has been paid by the Borrower pursuant to this Section 5.3, it shall promptly remit such refund (including any interest received in respect thereof), net of all actual out-of-pocket costs and expenses to the Borrower; provided, however, that the Borrower agrees to promptly return any such refund (plus interest) to such Lender in the event such Lender is required to repay such refund to the relevant taxing authority. Any such Lender shall provide the Borrower with a copy of any notice of assessment from the relevant taxing authority (redacting any unrelated confidential information contained therein) requiring repayment of such refund. Nothing contained herein shall impose an obligation on any Lender to apply for any such refund.

ARTICLE VI.

CONDITIONS PRECEDENT

Section 6.1. Conditions Precedent at Closing Date . The obligation of the Lenders to make Loans, and of any Letter of Credit Issuer to issue Letters of Credit, is subject to the satisfaction of each of the following conditions on or prior to the Closing Date:

(a) Credit Agreement . This Agreement shall have been executed by the Borrower, the Administrative Agent, each Letter of Credit Issuer and each of the Lenders.

(b) Notes . The Borrower shall have executed and delivered to the Administrative Agent the appropriate Note or Notes for the account of each Lender that has requested the same.

(c) Fees, etc . The Borrower shall have paid or caused to be paid all fees required to be paid by it on the Closing Date pursuant to Section 4.1 hereof and all reasonable fees and expenses of the Administrative Agent and of special counsel to the Administrative Agent that have been invoiced on or prior to such date in connection with the preparation, negotiation, execution and delivery of this Agreement and the other Credit Documents and the consummation of the transactions contemplated hereby and thereby.

 

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(d) Subsidiary Guaranty . The Subsidiary Guarantors shall have duly executed and delivered a Guaranty of Payment (the “ Subsidiary Guaranty ”), substantially in the form attached hereto as Exhibit C-1 .

(e) Security Agreement . The Borrower and each Subsidiary Guarantor shall have duly executed and delivered a Pledge and Security Agreement (the “ Security Agreement ”), substantially in the form attached hereto as Exhibit C-2 , and shall have executed and delivered all of the following in connection therewith, each of which shall be in form and substance satisfactory to the Administrative Agent: (A) the Control Agreements required pursuant to the terms of the Security Agreement, duly executed by the appropriate depositary institution, securities intermediary or issuer as the case may be; (B) a Perfection Certificate; (C) the Collateral Assignment Agreements (as defined in the Security Agreement) required pursuant to the terms of the Security Agreement; and (D) the Collateral Assignment of Contracts (as defined in the Security Agreement).

(f) Corporate Resolutions and Approvals . The Administrative Agent shall have received certified copies of the resolutions of the Board of Directors of the Borrower approving the Equity Financing Documents and of the Board of Directors of the Borrower and each other Credit Party approving the Credit Documents to which the Borrower or any such other Credit Party, as the case may be, is or may become a party, and of all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to the execution, delivery and performance by the Borrower or any such other Credit Party of the Equity Financing Documents and the Credit Documents to which it is or may become a party.

(g) Incumbency Certificates . The Administrative Agent shall have received a certificate of the Secretary or an Assistant Secretary of the Borrower and of each other Credit Party, certifying the names and true signatures of the officers of the Borrower or such other Credit Party, as the case may be, authorized to sign the Credit Documents to which the Borrower or such other Credit Party is a party and any other documents to which the Borrower or any such other Credit Party is a party that may be executed and delivered in connection herewith.

(h) Opinions of Counsel . The Administrative Agent and the Co-Lead Arrangers shall have received such opinions of counsel from counsel to the Borrower and the other Credit Parties as the Administrative Agent and the Co-Lead Arrangers shall request, each of which shall be addressed to the Administrative Agent and the Co-Lead Arrangers and each of the Lenders and dated the Closing Date and shall be in form and substance satisfactory to the Administrative Agent and the Co-Lead Arrangers.

(i) Recordation of Security Documents, Delivery of Collateral, Taxes, etc . The Security Documents (or proper notices or UCC financing statements in respect thereof) shall have been duly recorded, published and filed in such manner and in such places as is required by law to establish, perfect, preserve and protect the rights, Liens and security interests of the parties thereto and their respective successors and assigns, all Collateral items required to be physically delivered to the Administrative Agent thereunder shall have been so delivered, accompanied by any appropriate instruments of transfer, and all taxes, fees and other charges then due and payable in connection with the execution, delivery, recording, publishing and filing of such instruments and the issuance and delivery of the Notes shall have been paid in full.

 

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(j) Evidence of Insurance . The Administrative Agent shall have received certificates of insurance and other evidence, satisfactory to it, of compliance with the insurance requirements of this Agreement and the Security Documents.

(k) Search Reports . The Administrative Agent and the Co-Lead Arrangers shall have received the results of UCC and other search reports from one or more commercial search firms acceptable to the Administrative Agent and the Co-Lead Arrangers, listing all of the effective financing statements and other Liens filed against any Credit Party (i) in the jurisdiction in which each such Credit Party is organized or formed, (ii) in any jurisdiction in which such Credit Party maintains an office or (iii) in any jurisdiction in which any Collateral of such Credit Party is located, together with copies of such financing statements.

(l) Organizational Documents and Good Standing Certificates . The Administrative Agent shall have received: (i) an original certified copy of the Certificate or Articles of Incorporation or equivalent formation document of each Credit Party, and any and all amendments and restatements thereof, certified as of a recent date by the relevant Secretary of State; (ii) a copy of each Credit Party’s by-laws, agreement of limited partnership or other similar document, as applicable, certified by the Secretary or Assistant Secretary of such Credit Party as being true, complete and correct and in full force and effect; (iii) an original good standing certificate from the Secretary of State of the state of incorporation or formation, as applicable, dated as of a recent date, listing all charter documents affecting such Credit Party and certifying as to the good standing of such Credit Party; and (iv) original certificates of good standing from each other jurisdiction in which each Credit Party is authorized or qualified to do business.

(m) Solvency Certificate . The Administrative Agent and the Co-Lead Arrangers shall have received a duly executed solvency certificate, in form and substance reasonably satisfactory to the Administrative Agent, dated as of the Closing Date, and executed by an Authorized Officer of the Borrower.

(n) Borrower’s Closing Certificate . The Administrative Agent shall have received a certificate, in form and substance reasonably satisfactory to the Administrative Agent, dated the Closing Date, of an Authorized Officer of the Borrower to the effect that, at and as of the Closing Date and both before and after giving effect to the initial Borrowings hereunder and the application of the proceeds thereof: (w) no Default or Event of Default has occurred and is continuing; (x) all representations and warranties of the Credit Parties contained herein and in the other Credit Documents are true and correct as of the Closing Date; (y) all written information and projections provided to the Administrative Agent and the Co-Lead Arrangers is complete and correct in all material respects; and (z) there exist no undisclosed contingencies relating to the Borrower and its Subsidiaries as of the Closing D