Credit Agreement

CREDIT AGREEMENT Among CDRT MERGER SUB, INC., and THE SUBSIDIARY BORROWERS PARTY HERETO, as Borrowers, THE LENDERS FROM TIME TO TIME PARTIES HERETO, DEUTSCHE BANK AG NEW YORK BRANCH, as an Issuing Lender, Swingline Lender, Administrative Agent and ...

Exhibit 10.3

 

$350,000,000

 

CREDIT AGREEMENT

 

among

 

CDRT MERGER SUB, INC.,
and
THE SUBSIDIARY BORROWERS PARTY HERETO,
as Borrowers,

 

THE LENDERS
FROM TIME TO TIME PARTIES HERETO,

 

DEUTSCHE BANK AG NEW YORK BRANCH,
as an Issuing Lender, Swingline Lender, Administrative Agent and Collateral Agent,

 

BANK OF AMERICA, N.A.
as an Issuing Lender,

 

BARCLAYS CAPITAL,
as Syndication Agent,

 

and

 

BANK OF AMERICA, N.A.,
MORGAN STANLEY SENIOR FUNDING, INC.,
RBC CAPITAL MARKETS, and
UBS SECURITIES LLC
,
as Documentation Agents,

 

DEUTSCHE BANK SECURITIES INC.,
BARCLAYS CAPITAL,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
MORGAN STANLEY SENIOR FUNDING, INC.,
RBC CAPITAL MARKETS, and
UBS SECURITIES LLC,
as Joint Lead Arrangers

and

DEUTSCHE BANK SECURITIES INC.,
BARCLAYS CAPITAL,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
MORGAN STANLEY SENIOR FUNDING, INC.,
RBC CAPITAL MARKETS,
UBS SECURITIES LLC,

CITIGROUP GLOBAL MARKETS INC.,

and

NATIXIS

as Joint Bookmanagers

 

dated as of May 25, 2011

 



 

Table of Contents

 

 

Page

 

 

SECTION 1 Definitions

2

 

 

 

1.1

Defined Terms

2

 

1.2

Other Definitional Provisions

82

 

 

 

 

SECTION 2 Amount and Terms of Commitments

84

 

 

 

2.1

Commitments

84

 

2.2

Procedure for Revolving Credit Borrowing

87

 

2.3

Termination or Reduction of Commitments

87

 

2.4

Swingline Commitments

88

 

2.5

Repayment of Loans

90

 

2.6

Incremental Facility

91

 

2.7

Refinancing Amendments

94

 

2.8

Extension of Commitments

95

 

 

 

 

SECTION 3 Letters of Credit

98

 

 

 

3.1

L/C Commitment

98

 

3.2

Procedure for Issuance of Letters of Credit

99

 

3.3

Fees, Commissions and Other Charges

100

 

3.4

L/C Participations

101

 

3.5

Reimbursement Obligation of the Borrowers

102

 

3.6

Obligations Absolute

102

 

3.7

L/C Disbursements

103

 

3.8

L/C Request

103

 

3.9

Cash Collateralization

104

 

3.10

Additional Issuing Lenders

104

 

3.11

Resignation or Removal of the Issuing Lender

104

 

 

 

 

SECTION 4 General Provisions Applicable to Loans and Letters of Credit

105

 

 

 

4.1

Interest Rates and Payment Dates

105

 

4.2

Conversion and Continuation Options

105

 

4.3

Minimum Amounts; Maximum Sets

106

 

4.4

Optional and Mandatory Prepayments

106

 

4.5

Commitment Fees; Administrative Agent’s Fee; Other Fees

108

 

4.6

Computation of Interest and Fees

109

 

4.7

Inability to Determine Interest Rate

109

 

4.8

Pro Rata Treatment and Payments

109

 

4.9

Illegality

111

 

4.10

Requirements of Law

111

 

4.11

Taxes

113

 

4.12

Indemnity

118

 

i



 

Table of Contents
(continued)

 

 

Page

 

 

 

 

 

4.13

Certain Rules Relating to the Payment of Additional Amounts

119

 

4.14

Controls on Prepayment if Aggregate Outstanding Credit Exceeds Aggregate Revolving Credit Loan Commitments

121

 

4.15

Defaulting Lenders

121

 

4.16

Cash Management

124

 

 

 

 

SECTION 5 Representations and Warranties

129

 

 

 

5.1

Financial Condition

129

 

5.2

No Change; Solvent

130

 

5.3

Corporate Existence; Compliance with Law

131

 

5.4

Corporate Power; Authorization; Enforceable Obligations

131

 

5.5

No Legal Bar

132

 

5.6

No Material Litigation

132

 

5.7

No Default

132

 

5.8

Ownership of Property; Liens

132

 

5.9

Intellectual Property

132

 

5.10

Taxes

132

 

5.11

Federal Regulations

133

 

5.12

ERISA

133

 

5.13

Collateral

134

 

5.14

Investment Company Act; Other Regulations

134

 

5.15

Subsidiaries

135

 

5.16

Purpose of Loans

135

 

5.17

Environmental Matters

135

 

5.18

No Material Misstatements

136

 

5.19

Labor Matters

136

 

5.20

Insurance

136

 

5.21

Eligible Accounts

136

 

5.22

Eligible Inventory

136

 

5.23

Anti-Terrorism

137

 

 

 

 

SECTION 6 Conditions Precedent

137

 

 

 

6.1

Conditions to Initial Extension of Credit

137

 

6.2

Conditions to Each Extension of Credit After the Closing Date

143

 

 

 

 

SECTION 7 Affirmative Covenants

144

 

 

 

7.1

Financial Statements

144

 

7.2

Certificates; Other Information

145

 

7.3

Payment of Obligations

148

 

7.4

Conduct of Business and Maintenance of Existence; Compliance with Contractual Obligations and Requirements of Law

148

 

ii



 

Table of Contents
(continued)

 

 

Page

 

 

 

 

 

7.5

Maintenance of Property; Insurance

148

 

7.6

Inspection of Property; Books and Records; Discussions

150

 

7.7

Notices

151

 

7.8

Environmental Laws

153

 

7.9

After-Acquired Real Property and Fixtures; Subsidiaries

154

 

7.10

Use of Proceeds

156

 

7.11

Accounting Changes

156

 

7.12

Post-Closing Security Perfection

157

 

7.13

Post-Closing Matters

157

 

 

 

 

SECTION 8 Negative Covenants

157

 

 

 

8.1

Financial Condition Covenant

157

 

8.2

Limitation on Fundamental Changes

158

 

8.3

Limitation on Restricted Payments

160

 

8.4

Limitations on Certain Acquisitions

162

 

8.5

Limitation on Dispositions of Collateral

162

 

8.6

Limitation on Optional Payments and Modifications of Restricted Indebtedness and Other Documents

163

 

8.7

[Reserved]

165

 

8.8

Limitation on Negative Pledge Clauses

165

 

8.9

Limitation on Lines of Business

167

 

8.10

Limitations on Currency, Commodity and Other Hedging Transactions

167

 

8.11

Limitations on Transactions with Affiliates

167

 

8.12

Limitations on Investments

170

 

8.13

Limitations on Indebtedness

170

 

8.14

Limitations on Liens

176

 

 

 

 

SECTION 9 Events of Default

180

 

 

 

9.1

Events of Default

180

 

9.2

Remedies Upon an Event of Default

183

 

9.3

Borrower’s Right to Cure

184

 

 

 

 

SECTION 10 The Agents and the Other Representatives

185

 

 

 

10.1

Appointment

185

 

10.2

The Administrative Agent and Affiliates

185

 

10.3

Action by an Agent

186

 

10.4

Exculpatory Provisions

186

 

10.5

Acknowledgement and Representations by Lenders

187

 

10.6

Indemnity; Reimbursement by Lenders

188

 

10.7

Right to Request and Act on Instructions; Reliance

188

 

10.8

Collateral Matters

189

 

iii



 

Table of Contents
(continued)

 

 

Page

 

 

 

 

 

10.9

Successor Agent

191

 

10.10

Swingline Lender

192

 

10.11

Withholding Tax

192

 

10.12

Other Representatives

192

 

10.13

Appointment of Borrower Representatives

193

 

10.14

Application of Proceeds

193

 

 

 

 

SECTION 11 Miscellaneous

194

 

 

 

11.1

Amendments and Waivers

194

 

11.2

Notices

198

 

11.3

No Waiver; Cumulative Remedies

200

 

11.4

Survival of Representations and Warranties

200

 

11.5

Payment of Expenses and Taxes

200

 

11.6

Successors and Assigns; Participations and Assignments

201

 

11.7

Adjustments; Set-off; Calculations; Computations

209

 

11.8

Judgment

210

 

11.9

Counterparts

211

 

11.10

Severability

211

 

11.11

Integration

211

 

11.12

Governing Law

211

 

11.13

Submission to Jurisdiction; Waivers

211

 

11.14

Acknowledgements

212

 

11.15

Waiver of Jury Trial

212

 

11.16

Confidentiality

213

 

11.17

Incremental Indebtedness; Additional Indebtedness

214

 

11.18

USA Patriot Act Notice

214

 

11.19

Electronic Execution of Assignments and Certain Other Documents

214

 

11.20

Reinstatement

214

 

11.21

Joint and Several Liability; Postponement of Subrogation

215

 

11.22

Designated Cash Management Agreements and Designated Hedging Agreements

215

 

iv



 

Table of Contents
(continued)

 

SCHEDULES

 

A

Commitments and Addresses

1.1(a)

Assumed Indebtedness

1.1(b)

Disposition of Certain Assets

1.1(c)

Existing Financing Leases

1.1(d)

Existing Letters of Credit

1.1(e)

Fiscal Periods

1.1(f) 

Existing Investments

4.16

Part 1 - Related Corporation DDAs

4.16

Part 2 - Related Corporation Concentration Accounts

4.16

Part 3 - Loan Party DDAs

4.16

Part 4 - Loan Party Concentration Accounts

4.16

Part 5 - Restricted Bank Accounts

4.16

Part 6 — Loan Party DDAs not automatically swept at Closing

5.1

Financial Condition

5.2

Material Adverse Effect Disclosure

5.3

Good Standing Disclosure

5.4

Consents Required

5.6

Litigation

5.8

Real Property

5.9

Intellectual Property Claims

5.15

Subsidiaries

5.17

Environmental Matters

5.20

Insurance

7.2

Website Address for Electronic Financial Reporting

7.12

Post-Closing Collateral Requirements

8.11

Affiliate Transactions

8.13(d)

Closing Date Existing Indebtedness

8.14(b)

Existing Liens

 

 

 

EXHIBITS

 

A-1

Form of Revolving Credit Note

A-2

Form of Swingline Note

B

Form of Guarantee and Collateral Agreement

C

Form of Mortgage

D

Form of U.S. Tax Compliance Certificate

E

Form of Assignment and Acceptance

F

Form of Swingline Loan Participation Certificate

G

Form of Secretary’s Certificate

H

Form of Officer’s Certificate

I

Form of Solvency Certificate

 

v



 

Table of Contents
(continued)

 

J

Form of L/C Request

K

Form of Borrowing Base Certificate

L

Form of Lender Joinder Agreement

M-1

Opinion of Debevoise & Plimpton LLP, Special New York Counsel to the Loan Parties

M-2

Opinions of Richards, Layton & Finger, P.A., Special Delaware Counsel to Certain of the Loan Parties

M-3

Opinion of Brownstein Hyatt Farber Schreck, LLP, Special Nevada Counsel to Certain of the Loan Parties

M-4

Opinion of Greenberg Traurig LLP, Special Massachusetts, Connecticut and Pennsylvania Counsel to Certain of the Loan Parties

M-5

Opinion of Holme Roberts & Owen LLP, Special California and Colorado Counsel to Certain of the Loan Parties

M-6

Opinion of Stoel Rives LLP, Special Oregon Counsel to Certain of the Loan Parties

M-7

Opinion of Bryan Cave LLP, Special Arizona and Missouri Counsel to Certain of the Loan Parties

N

Form of Subsidiary Borrower Joinder

O

Form of ABL/Term Loan Intercreditor Agreement

P

Form of Junior Lien Intercreditor Agreement

Q

Form of Compliance Certificate

R

Form of Affiliated Lender Assignment and Assumption

 

vi



 

CREDIT AGREEMENT, dated as of May 25, 2011, among CDRT Merger Sub, Inc. (“Merger Sub” and, at any time prior to the consummation of the Merger (as defined below), the “Parent Borrower”), a Delaware corporation that is to be merged with and into Emergency Medical Services Corporation (and as further defined in Subsection 1.1, the “Company” and, upon and at any time after the consummation of the Merger, the “Parent Borrower”), a Delaware corporation, the Subsidiary Borrowers from time to time party hereto (together with the Parent Borrower, collectively, the “Borrowers” and each individually, a “Borrower”), the several banks and other financial institutions from time to time party hereto (as further defined in Subsection 1.1, the “Lenders”), DEUTSCHE BANK AG NEW YORK BRANCH, as swingline lender (in such capacity, the “Swingline Lender”), as an issuing lender (in such capacity, an “Issuing Lender”), as administrative agent (in such capacity and as further defined in Subsection 1.1, the “Administrative Agent”) for the Lenders hereunder and as collateral agent (in such capacity and as further defined in Subsection 1.1, the “Collateral Agent”) for the Secured Parties (as defined below) and the Issuing Lenders, BANK OF AMERICA, N.A., as an issuing lender (in such capacity, an “Issuing Lender”), BARCLAYS CAPITAL,  the investment banking division of BARCLAYS BANK PLC, as Syndication Agent, BANK OF AMERICA, N.A., MORGAN STANLEY SENIOR FUNDING, INC., RBC CAPITAL MARKETS, and UBS SECURITIES LLC, as Documentation Agent and DEUTSCHE BANK SECURITIES INC., BARCLAYS CAPITAL, the investment banking division of BARCLAYS BANK PLC, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, MORGAN STANLEY SENIOR FUNDING, INC., RBC CAPITAL MARKETS, the marketing name for the investment banking activities of ROYAL BANK OF CANADA, and UBS SECURITIES LLC, as Joint Lead Arrangers, and DEUTSCHE BANK SECURITIES INC.,  BARCLAYS CAPITAL, the investment banking division of BARCLAYS BANK PLC, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, MORGAN STANLEY SENIOR FUNDING, INC., RBC CAPITAL MARKETS, the marketing name for the investment banking activities of ROYAL BANK OF CANADA, UBS SECURITIES LLC, CITIGROUP GLOBAL MARKETS INC. and NATIXIS, as Joint Bookmanagers.

 

The parties hereto hereby agree as follows:

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly-owned Subsidiary of Holdings;

 

WHEREAS, to fund a portion of the Merger consideration, it is intended that CD&R Fund VIII and certain other Permitted Holders will contribute an amount in cash to Holdings and/or a direct or indirect parent thereof in exchange for Capital Stock (which cash will be contributed to the Parent Borrower in exchange for Capital Stock of the Parent Borrower) (such contribution, the “Equity Financing”), which when combined with the fair market value of the equity of management and existing shareholders of the Company being rolled over or invested (in an amount not to exceed $100,000,000) in connection with the Transactions (together with the Equity Financing, the “Equity Contribution”), shall be no less than 25.0% of the pro forma total capitalization of Holdings and its Subsidiaries after giving effect to the Transactions (the “Minimum Equity Amount”);

 



 

WHEREAS, to consummate the Transactions it is intended that the Parent Borrower will (A) enter into the Term Loan Facility to borrow (unless reduced in accordance with Subsection 6.1(b)) term loans in an aggregate principal amount of $1,440,000,000 and (B) issue senior unsecured notes in sales pursuant to Rule 144A and Regulation S under the Securities Act (the “Senior Notes Offering”), under the Senior Notes Indenture, generating (unless reduced in accordance with Subsection 6.1(b)) aggregate gross proceeds of up to $950,000,000, to finance a portion of the Transactions; and

 

WHEREAS, in order to (i) effect the Refinancing of Existing Debt and to finance a portion of the other Transactions, including the payments of fees and expenses relating thereto and (ii) finance the working capital, capital expenditures and other general corporate purposes of the Parent Borrower and its Subsidiaries following the consummation of the Merger, the Parent Borrower and the Subsidiary Borrowers have requested that the Lenders make the Loans and issue and participate in the Letters of Credit provided for herein.

 

Defined terms used in these Recitals and not previously defined are as defined below.

 

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

 

SECTION 1

 

Definitions

 

1.1           Defined Terms.  As used in this Agreement, the following terms shall have the following meanings:

 

30-Day Excess Availability”:  the quotient obtained by dividing (a) the sum of each day’s Excess Availability during the thirty (30) consecutive day period immediately preceding any Specified Transaction (calculated on a pro forma basis to include the borrowing or repayment of any Loans or issuance or cancellation of any Letters of Credit in connection with such Specified Transaction) by (b) thirty (30) days.

 

ABL Priority Collateral”:  as defined in the ABL/Term Loan Intercreditor Agreement whether or not the same remains in full force and effect.

 

ABL Term Loans”:  Incremental ABL Term Loans, Extended ABL Term Loans and Other ABL Term Loans.

 

ABL/Term Loan Intercreditor Agreement”:  the intercreditor agreement, dated as of the date hereof, between the Collateral Agent and the Term Loan Agent (in its capacity as collateral agent under the Term Loan Documents), and acknowledged by certain of the Loan Parties in the form attached hereto as Exhibit O, as the same may be amended, supplemented, waived or otherwise modified from time to time in accordance with the terms hereof and thereof.

 

2



 

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

 

ABR Loans”:  Loans to which the rate of interest applicable is based upon the Alternate Base Rate.

 

Acceleration”:  as defined in Subsection 9.1(e).

 

Account Debtor”:  each Person who is obligated on an Account, chattel paper or a General Intangible.

 

Accounts”:  “accounts” as defined in the UCC (including any “health-care-insurance receivables” as defined in the UCC) and, with respect to any Person, all such Accounts of such Person, whether now existing or existing in the future, including (a) all accounts receivable of such Person (whether or not specifically listed on schedules furnished to the Administrative Agent), including all accounts receivable created by or arising from all of such Person’s sales of goods or rendition of services made under any of its trade names, or through any of its divisions, (b) all unpaid rights of such Person (including rescission, replevin, reclamation and stopping in transit) relating to the foregoing or arising therefrom, (c) all rights to any goods represented by any of the foregoing, including returned or repossessed goods, (d) all reserves and credit balances held by such Person with respect to any such accounts receivable of any Obligors, (e) all letters of credit, guarantees or collateral for any of the foregoing and (f) all insurance policies or rights relating to any of the foregoing.

 

Acquisition Consideration”:  the purchase consideration for any acquisition and all other payments by the Parent Borrower or any of its Restricted Subsidiaries in exchange for, or as part of, or in connection with, any acquisition, consisting of cash or by exchange of property (other than Capital Stock of Holdings or any Parent Entity) or the assumption of Indebtedness payable at or prior to the consummation of such acquisition or deferred for payment at any future time (provided that any such future payment is not subject to the occurrence of any contingency). For purposes of the foregoing, any Acquisition Consideration consisting of property shall be valued at the Fair Market Value thereof.

 

Additional ABL Agent”:  as defined in the ABL/Term Loan Intercreditor Agreement.

 

Additional Assets”:  (a) any property or assets that replace the property or assets that are the subject of an Asset Sale; (b) any property or assets (other than Indebtedness and Capital Stock) used or to be used by the Parent Borrower or a Restricted Subsidiary or otherwise useful in a business permitted by Subsection 8.9 (including any capital expenditures on any property or assets already so used); (c) the Capital Stock of a Person that is engaged in a business permitted by Subsection 8.9 and becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Parent Borrower or another Restricted Subsidiary; or (d) Capital Stock of any Person that at such time is a Restricted Subsidiary acquired from a third party.

 

Additional Indebtedness”:  as defined in the ABL/Term Loan Intercreditor Agreement or the Junior Lien Intercreditor Agreement, as applicable.

 

3



 

Additional Lender”:  as defined in Subsection 2.6(a).

 

Additional Obligations”:  subordinated or senior Indebtedness (which Indebtedness may be (x) unsecured, (y) secured by a Lien ranking pari passu to the Lien securing the First Lien Term Obligations or (z) secured by a Lien ranking junior to the Lien securing the First Lien Term Obligations), including customary bridge financings, in each case issued or incurred by the Parent Borrower or a Guarantor in compliance with Subsection 8.13.

 

Additional Obligations Documents”: any document or instrument (including any guarantee, security agreement or mortgage and which may include any or all of the Term Loan Documents) issued or executed and delivered with respect to any Additional Obligations by any Loan Party.

 

Additional Term Credit Facility”:  as defined in the ABL/Term Loan Intercreditor Agreement.

 

Adjusted LIBOR Rate”:  with respect to any Borrowing of Eurodollar Loans for any Interest Period, an interest rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1.00%) determined by the Administrative Agent to be equal to (a) the LIBOR Rate for such Borrowing of Eurodollar Loans in effect for such Interest Period divided by (b) 1 minus the Statutory Reserves (if any) for such Borrowing of Eurodollar Loans for such Interest Period.

 

Administrative Agent”:  as defined in the Preamble hereto and shall include any successor to the Administrative Agent appointed pursuant to Subsection 10.9.

 

Affected Eurodollar Rate”:  as defined in Subsection 4.7.

 

Affected Loans”:  as defined in Subsection 4.9.

 

Affiliate”:  as to any specified Person, any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person.  For the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

Affiliated Debt Fund”:  any Affiliated Lender that is primarily engaged in, or advises funds or other investment vehicles that are engaged in, making, purchasing, holding or otherwise investing in commercial loans, notes, bonds and similar extensions of credit or securities in the ordinary course, so long as (i) any such Affiliated Lender is managed as to day-to-day matters (but excluding, for the avoidance of doubt, as to strategic direction and similar matters) independently from the Sponsor and any Affiliate of the Sponsor that is not primarily engaged in the investing activities described above, (ii) any such Affiliated Lender has in place customary information screens between it and the Sponsor and any Affiliate of the Sponsor that is not primarily engaged in the investing activities described above, and (iii) neither Holdings nor any of its Subsidiaries directs or causes the direction of the investment policies of such entity.

 

Affiliated Lender”:  any Lender that is a Permitted Affiliated Assignee.

 

4



 

Affiliated Lender Assignment and Assumption”:  as defined in Subsection 11.6(h)(i)(1).

 

Agent Advance”:  as defined in Subsection 2.1(c).

 

Agent Advance Period”:  as defined in Subsection 2.1(c).

 

Agents”:  the collective reference to the Administrative Agent and the Collateral Agent and “Agent” shall mean any of them.

 

Aggregate Lender Exposure”:  the sum of (a) the aggregate principal amount of all Revolving Credit Loans then outstanding, (b) the aggregate amount of all L/C Obligations at such time and (c) the aggregate amount of all Swingline Exposure at such time.

 

Aggregate Outstanding Credit”:  as to any Revolving Credit Lender at any time, an amount equal to the sum of (a) the aggregate principal amount of all Revolving Credit Loans made by such Revolving Credit Lender then outstanding, (b) the aggregate amount equal to such Revolving Credit Lender’s Commitment Percentage of the L/C Obligations then outstanding and (c) the aggregate amount equal to such Revolving Credit Lender’s Commitment Percentage, if any, of the Swingline Loans then outstanding.

 

Agreement”:  this Credit Agreement, as amended, supplemented, waived or otherwise modified, from time to time.

 

AHYDO Payment”: a payment in respect of Indebtedness in an amount sufficient to ensure that such Indebtedness will not be an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Code.

 

Alternate Base Rate”:  for any day, a fluctuating rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1.00%) equal to the greatest of (a) the Base Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 0.50% and (c) the Adjusted LIBOR Rate for an Interest Period of one month beginning on such day (or if such day is not a Business Day, on the immediately preceding Business Day) plus 1.00%.  If the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate or the Adjusted LIBOR Rate for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms of the definition thereof, the Alternate Base Rate shall be determined without regard to clause (b) or (c) above, as the case may be, of the preceding sentence until the circumstances giving rise to such inability no longer exist.  Any change in the Alternate Base Rate due to a change in the Base Rate, the Federal Funds Effective Rate or the Adjusted LIBOR Rate shall be effective on the effective date of such change in the Base Rate, the Federal Funds Effective Rate or the Adjusted LIBOR Rate, respectively.

 

Amendment”:  as defined in Subsection 8.8(d).

 

AMR Accounts Historical Collection Analysis”: the Parent Borrower’s analysis of write-offs and collectability of AMR Service Accounts by payor type consistent with the past

 

5



 

practice of the Parent Borrower or otherwise in a form and level of detail reasonably acceptable to the Administrative Agent.

 

AMR Business”: the provision of ambulance services to communities, government agencies, healthcare providers and insurers, other Persons and individuals and at sporting events, concerts and other events and of training services, dispatch services, management services and other services, including to communities, joint ventures and public safety agencies and other Persons and individuals, and other businesses of a similar type or reasonably related thereto and any business related thereto.

 

AMR Other Accounts”:  all other Accounts relating to the AMR Business that are not AMR Service Accounts, including Accounts for ambulance services at sporting events and concerts, air ambulance services, services for public safety agencies, receivables for government subsidies and capitated contract receivables.

 

AMR Self-Pay Accounts Collection Rate”: as of any date of determination, based on the applicable part of the most recent AMR Accounts Historical Collection Analysis (referred to by the Company as the “Closed Accounts Analysis”), a historical collection percentage in respect of Self-Pay Accounts that are Closed Accounts calculated as follows: the amount produced by dividing (i) the amount of total collections made on Closed Accounts that are Self-Pay Accounts during the eighteen (18) consecutive month period ending on the date that is one (1) month prior to the date of determination, in respect of Closed Accounts that are Self-Pay Accounts billed during the twelve (12) consecutive month period ending on the date that is seven (7) months prior to the date of determination by (ii) the aggregate amount billed in respect of Closed Accounts that are Self-Pay Accounts during the twelve (12) consecutive month period ending on the date that is seven (7) months prior to the date of determination, or a collection percentage calculated in another manner reasonably satisfactory to the Administrative Agent.

 

AMR Service Accounts”:  all Accounts relating to the provision of 911 emergency and non-emergency ambulance and other services of the kind reported in the Parent Borrower’s accounts receivables financial reporting systems under the categories “AM2000”, “Non-AM2000” and “Unbilled Receivables” (or any successor categories in the current accounts receivables financial reporting systems of the Parent Borrower or any successor accounts receivables financial reporting system).

 

AMR Service Eligible Accounts”:  those AMR Service Accounts created by a Loan Party in the ordinary course of business, that comply in all material respects with each of the representations and warranties respecting Eligible Accounts made in the Loan Documents, and that are not excluded as ineligible by virtue of one or more of the excluding criteria set forth below.  AMR Service Eligible Accounts shall not include the following:

 

(a)           Excluded Accounts Receivable;

 

(b)           if applicable, an amount equal to the amount of any reductions made to the gross amount invoiced or to be invoiced to Account Debtors reflecting contractual allowances provided to Account Debtors in respect of Accounts that would otherwise be AMR Service Eligible Accounts;

 

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(c)           Accounts that have not been billed by the date that is 30 days after the earlier of (i) the Service Date or (ii) the date as of which such Account is first included in the Borrowing Base Certificate or otherwise reported to the Administrative Agent as Collateral;

 

(d)           billed Accounts that Account Debtors have failed to pay within one hundred and eighty (180) days after the original Service Date;

 

(e)           (i) Accounts that have been written off, (ii) Accounts that the Administrative Agent, in its Permitted Discretion, believes to be doubtful by reason of the Account Debtor’s financial condition, upon notice thereof to the Borrower Representative or (iii) AMR Service Third Party Payor Accounts (that would otherwise be AMR Service Eligible Accounts) and Self-Pay Accounts (that would otherwise be AMR Service Eligible Accounts) up to an amount equal to the bad debt allowance applicable to such AMR Service Third Party Payor Accounts and such Self-Pay Accounts calculated in a manner consistent with the most recently completed field exam (but excluding from such calculation any AMR Service Third Party Payor Accounts and/or Self-Pay Accounts that Account Debtors have failed to pay within one hundred and eighty (180) days);

 

(f)            an amount equal to the amount of any unallocated cash or unapplied cash relating to AMR Service Accounts that has not been applied to or posted to any AMR Service Account;

 

(g)           an amount equal to (i) the aggregate amount of Self-Pay Accounts (that would otherwise be AMR Service Eligible Accounts but ignoring for this purpose clause (e) above and this clause (g)) minus (ii) the product of the amount calculated in clause (i) multiplied by the most recent AMR Self-Pay Accounts Collection Rate, provided that the amount of Self-Pay Accounts that are included as AMR Service Eligible Accounts, when aggregated with the amount of Self-Pay Accounts that are included as EmCare General Adjusted Eligible Accounts, does not at any time exceed ten percent (10%) of the Borrowing Base (calculated for this purpose excluding the amount of any Self-Pay Accounts that would otherwise be included in the calculation thereof);

 

(h)           Accounts with respect to which the Account Debtor is (i) an Affiliate of any Loan Party or (ii) an employee or agent of any Loan Party or any Affiliate of such Loan Party, in each case, other than Accounts arising from the provision of medical care, including ambulance services, delivered in the ordinary course of business; provided that Accounts of a portfolio company of any of the CD&R Investors or their respective Affiliates or an employee or agent thereof shall not be excluded by virtue of this clause (h);

 

(i)            Accounts that are not payable in Dollars;

 

(j)            Accounts with respect to which the Account Debtor is insolvent, is subject to a proceeding related thereto, has gone out of business, or as to which a Loan Party has received notice of an imminent proceeding related to such Account Debtor being or alleged to be insolvent or which proceeding is reasonably likely to result in a material impairment of the financial condition of such Account Debtor;

 

7



 

(k)           Accounts with respect to which the applicable Loan Party’s right to receive payment is deferred or otherwise is not absolute or is contingent upon the fulfillment of any condition whatsoever (other than the preparation and delivery of an invoice), provided that any such Accounts shall be included as AMR Service Eligible Accounts once the related services have been rendered or all conditions have been met and such Accounts are otherwise not excluded under clauses (a) to (u) of this definition;

 

(l)            Accounts with respect to which the Account Debtor is a Person other than a Governmental Authority unless:  (i) the Account Debtor (A) is a natural person with a billing address in the United States, (B) maintains its Chief Executive Office in the United States, or (C) is organized under the laws of the United States or any state, territory or subdivision thereof; (ii) the Account Debtor is a Third Party Payor (excluding for this purpose Government Accounts), or (iii) (A) the Account is supported by an irrevocable letter of credit satisfactory to the Administrative Agent, in its Permitted Discretion (as to form, substance, and issuer or domestic confirming bank), that has been delivered to the Administrative Agent and is directly drawable by the Administrative Agent, or (B) the Account is covered by credit insurance in form, substance, and amount, and by an insurer, satisfactory to the Administrative Agent, in its Permitted Discretion;

 

(m)          Accounts with respect to which the Account Debtor is the government of any country or sovereign state other than the United States, or of any state, municipality or other political subdivision thereof, or of any department, agency, public corporation, or other instrumentality thereof, unless (i) the Account is supported by an irrevocable letter of credit satisfactory to the Administrative Agent, in its Permitted Discretion (as to form, substance, and issuer or domestic confirming bank) that has been delivered to the Administrative Agent and is directly drawable by the Administrative Agent, or (ii) the Account is covered by credit insurance in form, substance, and amount, and by an insurer, satisfactory to the Administrative Agent, in its Permitted Discretion;

 

(n)           Accounts with respect to which the Account Debtor is the federal government of the United States or any department, agency or instrumentality of the United States (exclusive, however, of (i) Accounts with respect to which the applicable Loan Party has complied, to the reasonable satisfaction of the Administrative Agent, with the Assignment of Claims Act of 1940 (31 USC Section 3727) and (ii) Government Accounts, to the extent that these would otherwise be AMR Service Eligible Accounts);

 

(o)           (i) Accounts with respect to which the Account Debtor is a creditor of any Loan Party, and such Account Debtor has or has asserted a right of setoff, or has disputed its obligation to pay all or any portion of the Account, to the extent of such claim, right of setoff, or dispute, (ii) Accounts which are subject to a rebate that has been earned but not taken or a chargeback, to the extent of such rebate or chargeback, (iii) Accounts that comprise service charges or finance charges, or (iv) Accounts with respect to which the applicable Loan Party is not able to bring suit or otherwise enforce its remedies against the Account Debtor through judicial process;

 

(p)           Accounts that are not owned by a Loan Party;

 

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(q)           Accounts which have been redated or extended (provided that this shall not apply to any Accounts that have been re-categorized from one payor type to another payor type in the ordinary course of business);

 

(r)            Accounts that are not subject to a valid and perfected first priority Lien in favor of the Collateral Agent, as applicable, pursuant to a Security Document (as and to the extent provided therein (provided that in no event shall any Excluded Assets be deemed to be AMR Service Eligible Accounts hereunder));

 

(s)           Accounts that exceed the amount such Loan Party is entitled to receive under any capitation arrangement, fee schedule, discount formula, cost-based reimbursement or other adjustment or limitation to such Loan Party’s usual charges (to the extent of such excess);

 

(t)            Accounts with respect to which the services giving rise to such Account have not yet been performed;

 

(u)           Accounts that were acquired or originated by a Person acquired in a Permitted Acquisition consisting either of (x) receivables of a type substantially different from those in the Borrowing Base at such time, or (y) receivables of a type substantially similar to those in the Borrowing Base at such time, provided that in the case of clause (y) only, such Accounts with an aggregate net book value in an amount not exceeding 10% of the aggregate Borrowing Base at the time of such Permitted Acquisition shall not be excluded, provided, further, that this clause (u) shall cease to exclude any Accounts of the type listed under clause (x) or (y) above at the time the Parent Borrower delivers to the Administrative Agent a field exam in form and substance reasonably satisfactory to the Administrative Agent prepared by a third party field examiner reasonably satisfactory to the Administrative Agent with respect to such acquired Accounts, or such field exam requirement is waived by the Administrative Agent.

 

Notwithstanding the foregoing, the Administrative Agent may, from time to time, in the exercise of its Permitted Discretion, on not less than ten (10) Business Days’ prior notice to the Parent Borrower, change the criteria for AMR Service Eligible Accounts as reflected on the Borrowing Base Certificate based on either:  (i) an event, condition or other circumstance arising after the Closing Date, or (ii) an event, condition or other circumstance existing on the Closing Date to the extent the Administrative Agent had no knowledge thereof on or prior to the Closing Date, in either case under clause (i) or (ii), which adversely affects, or would reasonably be expected to adversely affect, AMR Service Eligible Accounts in any material respect as determined by the Administrative Agent in the exercise of its Permitted Discretion.  Any such change in criteria shall have a reasonable relationship to the event, condition or other circumstance that is the basis for such change.  Upon delivery of the notice of such change pursuant to the foregoing sentence, the Administrative Agent shall be available to discuss the proposed change, and the applicable Borrower may take such action as may be required so that the event, condition or circumstance that is the basis for such change no longer exists, in a manner and to the extent reasonably satisfactory to the Administrative Agent in the exercise of its Permitted Discretion.  Any Accounts of the Loan Parties that are not AMR Service Eligible Accounts shall nevertheless be part of the Collateral as and to the extent provided in the Security Documents.

 

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AMR Service Third Party Payor Accounts”: AMR Service Accounts with respect to which the Account Debtor is a Third Party Payor.

 

Applicable Commitment Fee Rate”:  with respect to commitment fees payable hereunder, (a) initially a percentage per annum equal to 0.500% and (b) from and after the date that is three (3) months after the Closing Date, a rate per annum equal to the rate set forth below opposite the applicable Average Daily Used Percentage:

 

Level

 

Average Daily Used
Percentage

 

Commitment Fee
Rate

 

 

 

 

 

 

 

I

 

< 50%

 

0.500

%

 

 

 

 

 

 

II

 

> 50%

 

0.375

%

 

Applicable Margin”:  a rate per annum equal to the rate set forth below for the applicable type of Loan and opposite the applicable Average Daily Excess Availability:

 

 

 

Average Daily

 

Applicable Margin

 

Level

 

Excess
Availability

 

Base Rate

 

Adjusted
LIBOR

 

 

 

 

 

 

 

 

 

I

 

Less than or equal to 33%

 

1.75

%

2.75

%

 

 

 

 

 

 

 

 

II

 

Greater than 33% but less than or equal to 66%

 

1.50

%

2.50

%

 

 

 

 

 

 

 

 

III

 

Greater than 66%

 

1.25

%

2.25

%

 

Each change in the Applicable Margin resulting from a change in Average Daily Excess Availability shall be effective with respect to all Loans and Letters of Credit outstanding on and after the date of delivery to the Administrative Agent of the Borrowing Base Certificate required by Subsection 7.2(f) indicating such change until the date immediately preceding the next date of delivery of such Borrowing Base Certificate indicating another such change.  Notwithstanding the foregoing, Average Daily Excess Availability (i) shall be deemed to be in Level II from the Closing Date to the date of delivery to the Administrative Agent of the Borrowing Base Certificate required by Subsection 7.2(f) for the Fiscal Period ended at least three (3) months after the Closing Date and (ii) shall be deemed to be in Level I at any time (after the expiration of the applicable cure period) during which the Parent Borrower has failed to deliver the Borrowing Base Certificate required by Subsection 7.2(f).

 

In addition, at all times while an Event of Default known to the Parent Borrower shall have occurred and be continuing, the Applicable Margin shall not decrease from that previously in effect as a result of the delivery of such Borrowing Base Certificate.

 

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A/R Availability Aged < 180 Days”: 85% of the following amount: the sum of (i) the aggregate amount of AMR Service Eligible Accounts, plus (ii) the aggregate EmCare General Adjusted Eligible Accounts, plus (iii) the aggregate amount of Other Eligible Accounts.

 

A/R Availability Aged 180—360 Days”: 85% of the following amount: the sum of (i) the aggregate amount of Accounts that would otherwise be AMR Service Eligible Accounts that Account Debtors have failed to pay within one hundred and eighty (180) days after the original Service Date but which are not unpaid more than three hundred and sixty (360) days after the original Service Date, plus (ii) the following amount: (A) (i) an amount equal to the aggregate amount of Accounts that would otherwise be EmCare General Eligible Accounts that Account Debtors have failed to pay within one hundred and eighty (180) days after the original Service Date but which are not unpaid more than three hundred and sixty (360) days after the original Service Date multiplied by (ii) the most recent EmCare Projected Collection Rate for 180-360 Days, minus (B) an amount equal to the sum of (i) any unreconciled differences plus (ii) an amount equal to the product of (x) unapplied cash relating to such EmCare General Accounts that have not been applied to, or posted to, any such EmCare General Accounts multiplied by (y) the Cash Eligible Account Rate applicable to such EmCare General Eligible Accounts.

 

Asset Sale”:  any sale, issuance, conveyance, transfer, lease or other disposition, (a “Disposition”), by the Parent Borrower or any other Loan Party in one or a series of related transactions, of any real or personal, tangible or intangible, property (including Capital Stock) of the Parent Borrower or any of its Restricted Subsidiaries, other than:

 

(a)           the sale or other Disposition of obsolete, worn-out or surplus property, whether now owned or hereafter acquired, in the ordinary course of business;

 

(b)           the sale or other Disposition of any property (including Inventory) in the ordinary course of business;

 

(c)           the sale or discount without recourse of accounts receivable or notes receivable arising in the ordinary course of business, or the conversion or exchange of accounts receivable into or for notes receivable, in connection with the compromise or collection thereof; provided that, in the case of any Foreign Subsidiary of the Parent Borrower, any such sale or discount may be with recourse if such sale or discount is consistent with customary practice in such Foreign Subsidiary’s country of business;

 

(d)           as permitted by Subsection 8.2(b) or pursuant to any Exempt Sale and Leaseback Transaction;

 

(e)           subject to any applicable limitations set forth in Subsection 8.2, Dispositions of any assets or property by the Parent Borrower or any of its Restricted Subsidiaries to the Parent Borrower or any Wholly Owned Subsidiary of the Parent Borrower;

 

(f)            (i) the abandonment or other Disposition of patents, trademarks or other intellectual property that are, in the reasonable judgment of the Parent Borrower, no longer economically practicable to maintain or useful in the conduct of the business of the Parent

 

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Borrower and its Restricted Subsidiaries taken as a whole and (ii) licensing of Intellectual Property in the ordinary course of business;

 

(g)           any Disposition by the Parent Borrower or any of its Restricted Subsidiaries for aggregate consideration not to exceed $25,000,000;

 

(h)           any Disposition set forth on Schedule 1.1(b);

 

(i)            any Minority Business Disposition or Minority Business Offering; provided that at the time of any such Minority Business Disposition or Minority Business Offering (x) the Payment Condition is satisfied and (y) no Specified Default exists or would arise therefrom; and

 

(j)            any disposition arising from foreclosure or similar action with respect to any property or assets subject to a Municipal Contract Lien.

 

Assignee”:  as defined in Subsection 11.6(b)(i).

 

Assignment and Acceptance”:  an Assignment and Acceptance, substantially in the form of Exhibit E hereto.

 

Assumed Indebtedness”:  Indebtedness for borrowed money of the Parent Borrower and its Restricted Subsidiaries outstanding on the Closing Date and disclosed on Schedule 1.1(a).

 

Auto-Renewal L/C”:  as defined in Subsection 3.1(c).

 

Availability”:  the lesser of (x) the total Commitments as in effect at such time and (y) the Borrowing Base at such time (based on the Borrowing Base Certificate last delivered).

 

Availability Reserves”:  without duplication of any other reserves or items that are otherwise addressed or excluded through eligibility criteria (including collection rates or collection percentages), (a) any Cash Management Reserve, (b) any Designated Hedging Reserve, (c) any Dilution Reserve, and (d) such reserves, subject to Subsection 2.1(b), as the Administrative Agent, in its Permitted Discretion, determines as being appropriate to reflect any impairment to (i) the value, or the collectability in the ordinary course of business, of Eligible Accounts (including, without limitation, on account of bad debts, dilution and changes in “historical collection percentages” or “projected collection percentages” applied to Eligible Accounts by payor type, as applicable) or the value (based on cost and quantity) of Eligible Inventory, or (ii) the enforceability or priority of the Lien on the Collateral consisting of Eligible Accounts or Eligible Inventory included in the Borrowing Base (including claims that the Administrative Agent determines will need to be satisfied in connection with the realization upon such Collateral).

 

Available Excluded Contribution Amount Basket”:  as of any date, the excess, if any, of (a) the Net Proceeds from Excluded Contributions received by the Parent Borrower as of such date over (b) the Net Proceeds from Excluded Contributions as of such date designated or

 

12



 

applied prior to such date, or on such date in a separate designation or application, to an Investment made pursuant to Subsection 8.12, cash consideration for acquisitions made pursuant to clause (c)(ii)(y) of the definition of “Permitted Acquisitions” a Restricted Payment made pursuant to Subsection 8.3(f) or (g) or any payments, prepayments, repurchases or redemptions of Restricted Indebtedness made pursuant to Subsection 8.6(a).

 

Available Incremental Amount”:  at any time, without duplication, an amount equal to the sum produced by calculating the difference between (a) the sum of (x) the Commitments plus (y) the sum of the aggregate principal amount of all Incremental ABL Term Loans made plus all Incremental Revolving Commitments established in each case prior to such date pursuant to Subsection 2.6 and (b) $550,000,000; provided that the sum of (x) plus (y) may not at any time exceed $550,000,000.

 

Average Daily Excess Availability”:  for any period, the percentage derived by dividing (a) the sum of the aggregate amount of Excess Availability for each day during such period by (b) the number of days in such period.

 

Average Daily Used Percentage”:  for any Fiscal Quarter, the percentage derived by dividing (a) the sum of (x) the average daily principal balance of all Loans (other than the principal balance of any Swingline Loans) during such Fiscal Quarter plus (y) the average daily undrawn amount of all outstanding Letters of Credit by (b) the average daily amount of the aggregate Commitments during such Fiscal Quarter.

 

Bank Products Affiliate”:  as defined in the ABL/Term Loan Intercreditor Agreement.

 

Bank Products Agreement”:  any agreement pursuant to which a bank or other financial institution agrees to provide (a) treasury services, (b) credit card, merchant card, purchasing card or stored value card services (including, without limitation, the processing of payments and other administrative services with respect thereto), (c) cash management services (including, without limitation, controlled disbursements, automated clearinghouse transactions, return items, netting, overdrafts, depository, lockbox, stop payment, electronic funds transfer, information reporting, wire transfer and interstate depository network services) and (d) other banking products or services as may be requested by any Restricted Subsidiary (other than letters of credit and other than loans and advances except indebtedness arising from services described in clauses (a) through (c) of this definition).

 

Bankruptcy Proceeding”: as defined in Subsection 11.6(h)(iv).

 

Base Rate”:  for any day, a rate per annum that is equal to the corporate base rate of interest established by the Administrative Agent as its “prime rate” in effect at its principal office in New York City from time to time; each change in the Base Rate shall be effective on the date such change is effective.  The corporate base rate is not necessarily the lowest rate charged by the Administrative Agent to its customers.

 

Benefited Lender”:  as defined in Subsection 11.7(a).

 

Blocked Account”:  as defined in Subsection 4.16(b)(iv).

 

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Blocked Account Agreement”:  as defined in Subsection 4.16(b)(iv).

 

Board”:  the Board of Governors of the Federal Reserve System.

 

Board of Directors”:  for any Person, the board of directors or other governing body of such Person or, if such Person does not have such a board of directors or other governing body and is owned or managed by a single entity, the Board of Directors of such entity, or, in either case, any committee thereof duly authorized to act on behalf of such Board of Directors. Unless otherwise provided, “Board of Directors” means the Board of Directors of the Parent Borrower.

 

Borrower Representative”: means the Parent Borrower in its capacity as Borrower Representative pursuant to the provisions of Subsection 10.13.

 

Borrowers”:  as defined in the Preamble hereto.

 

Borrowing”:  the borrowing of one Type of Loan of a single Tranche by the Borrowers (on a joint and several basis), from all the Lenders having Commitments of the respective Tranche on a given date (or resulting from a conversion or conversions on such date) having in the case of Eurodollar Loans the same Interest Period.

 

Borrowing Base”:  as of any date of determination, shall equal the sum of:

 

(a)           85% of the amount of AMR Service Eligible Accounts; plus

 

(b)           85% of the amount of EmCare General Adjusted Eligible Accounts; plus

 

(c)           85% of the amount of Other Eligible Accounts; plus

 

(d)           the lesser of:

 

(i)                                     A/R Availability Aged 180-360 Days; and

 

(ii)                                  5% of A/R Availability Aged < 180 days; plus

 

(e)           the lesser of:

 

(i)                                     50% of the Eligible Inventory of the Loan Parties, valued at the lower of (x) cost, calculated on a first-in, first-out basis, and (y) fair market value; and

 

(ii)                                  5% of A/R Availability Aged < 180 Days; minus

 

(f)            the amount of all Availability Reserves; minus

 

(g)           the outstanding principal amount of any ABL Term Loans.

 

Borrowing Base Certificate”:  as defined in Subsection 7.2(f).

 

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Borrowing Date”:  any Business Day specified in a notice pursuant to Subsections 2.2, 2.4, or 3.2 as a date on which the Borrower Representative requests the Lenders to make Loans hereunder or an Issuing Lender to issue Letters of Credit hereunder.

 

Business Day”:  a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York (or with respect only to Letters of Credit issued by an Issuing Lender not located in the City of New York, the location of such Issuing Lender) are authorized or required by law to close, except that, when used in connection with a Eurodollar Loan, “Business Day” shall mean any Business Day on which dealings in Dollars between banks may be carried on in London, England and New York, New York.

 

Business Development Amount”:  an amount at any time not exceeding $5,000,000 (or a greater amount, as agreed by the Administrative Agent in its reasonable discretion), the application of which shall apply solely for the purpose of developing or retaining business by any Loan Party or Related Corporation with respect to demonstration of financial condition.

 

Capital Expenditures”:  with respect to any Person for any period, the aggregate of all expenditures by such Person and its consolidated Restricted Subsidiaries during such period (exclusive of (i) expenditures made for Permitted Investments (ii) expenditures made for acquisitions permitted by Subsection 8.4), (iii) interest capitalized during such period to the extent relating to Capital Expenditures or (iv) expenditures made with the proceeds of any equity securities issued or capital contributions received, or Indebtedness incurred, by the Parent Borrower or any of its consolidated Restricted Subsidiaries) which, in accordance with GAAP, are or should be included in “capital expenditures”.

 

Capital Stock”:  as to any Person, any and all shares of, rights to purchase, warrants or options for, or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity.

 

Captive Insurance Subsidiary”:  any Subsidiary of the Parent Borrower that is subject to regulation as an insurance company (or any Subsidiary thereof), including EMCA Insurance Company Ltd.

 

Cash Analysis”: the Parent Borrower’s analysis of historical unallocated and unapplied cash allocation applicable to (a) EmCare General Eligible Accounts versus EmCare General Accounts and/or (b) Other Eligible Accounts that are EmCare Other Accounts versus EmCare Other Accounts, in each case in a form, substance, level of detail and historical time period reasonably satisfactory to the Administrative Agent.

 

Cash Eligible Account Rate”: as of any date of determination the number determined by dividing (a) the historical unallocated and unapplied cash amount that is attributable to an EmCare General Eligible Account or, as the case may be, an Other Eligible Account that is an EmCare Other Account by (b) the historical unallocated and unapplied cash amount that is attributable to the corresponding EmCare General Account or EmCare Other Account, as the case may be, in each case as determined by the Parent Borrower in a Cash

 

15



 

Analysis, provided that if a Cash Analysis has not been agreed with the Administrative Agent, the Cash Eligible Account Rate shall be deemed to be 1.

 

Cash Equivalents”:  any of the following: (1) money and (2)(a) securities issued or fully guaranteed or insured by the United States of America or a member state of the European Union or any agency or instrumentality of any thereof, (b) time deposits, certificates of deposit or bankers’ acceptances of (i) any bank or other institutional lender under this Agreement or the Term Loan Facility or any affiliate thereof or (ii) any commercial bank having capital and surplus in excess of $500,000,000 (or the foreign currency equivalent thereof as of the date of such investment) and the commercial paper of the holding company of which is rated at least A-2 or the equivalent thereof by Standard & Poor’s Ratings Group (a division of The McGraw Hill Companies Inc.) or any successor rating agency (“S&P”) or at least P-2 or the equivalent thereof by Moody’s Investors Service, Inc. or any successor rating agency (“Moody’s”) (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency), (c) repurchase obligations with a term of not more than seven (7) days for underlying securities of the types described in clauses (2)(a) and (b) above entered into with any financial institution meeting the qualifications specified in clause (2)(b) above, (d) money market instruments, commercial paper or other short-term obligations rated at least A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody’s (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency), (e) investments in money market funds subject to the risk limiting conditions of Rule 2a-7 or any successor rule of the SEC under the Investment Company Act of 1940, as amended, (f) investments similar to any of the foregoing denominated in foreign currencies approved by the Board of Directors of the Parent Borrower, and (g) solely with respect to any Captive Insurance Subsidiary, any investment that person is permitted to make in accordance with applicable law.

 

Cash Management Arrangements”:  any agreement or arrangement relating to any service provided pursuant to a Bank Products Agreement.

 

Cash Management Party”: any Bank Products Affiliate party to a Bank Products Agreement.

 

Cash Management Reserves”:  such reserves as the Administrative Agent determines in its Permitted Discretion as being appropriate to reflect the then reasonably anticipated monetary obligations of the Loan Parties under any Designated Cash Management Agreements owing to any Cash Management Party. Such anticipated monetary obligations shall be the amount calculated by the relevant Cash Management Party and provided to the Administrative Agent, the relevant Loan Party and the Parent Borrower together with the supporting calculations therefor (a) on or prior to the date on which the applicable Bank Products Agreement is designated as a Designated Cash Management Agreement and (b) thereafter promptly (but in any case not later than three (3) Business Days) following (x) the last calendar day of each calendar month and (y) such other date on which a request was made by the Administrative Agent, the relevant Loan Party or the Parent Borrower, as applicable.

 

CD&R”:  Clayton, Dubilier & Rice, LLC and any successor in interest thereto, and any successor to its investment management business.

 

16



 

CD&R Fund VIII”:  Clayton, Dubilier & Rice Fund VIII, L.P., a Cayman Islands exempted limited partnership, and any successor in interest thereto.

 

CD&R Indemnification Agreement”:  the Indemnification Agreement to be dated as of the Closing Date among CDRT Parent, the Company, CD&R Fund VIII, CD&R EMS Co-Investor, L.P., a Cayman Islands exempted limited partnership, CD&R Advisor Fund VIII Co-Investor, L.P., a Cayman Islands exempted limited partnership, CD&R Friends and Family Fund VIII, L.P., a Cayman Islands exempted partnership and CD&R as amended, supplemented, waived or otherwise modified from time to time.

 

CD&R Investors”:  collectively, (i) CD&R Fund VIII, (ii) CD&R Friends & Family Fund VIII, L.P., a Cayman Islands exempted limited partnership, and any successor in interest thereto, (iii) CD&R Advisor Fund VIII Co-Investor, L.P., a Cayman Islands exempted limited partnership, and any successor in interest thereto, (iv) CD&R EMS Co-Investor, L.P., a Cayman Islands exempted limited partnership, and any successor in interest thereto, and (v) any Affiliate of any CD&R Investor identified in clause (i) through (iv) of this definition.

 

CDRT Parent”:  CDRT Holding Corporation, a Delaware corporation, and any successor in interest thereto.

 

CHAMPVA”: collectively, the Civilian Health and Medical Program of the Department of Veteran Affairs, a program of medical benefits covering retirees and dependents of former members of the armed services administered by the United States Department of Veteran Affairs, and all laws, rules, regulations, manuals, orders, guidelines or requirements pertaining to such program including, without limitation, (a) all federal statutes (whether set forth in 38 U.S.C. § 1713 or elsewhere) affecting such program to the extent applicable to CHAMPVA and (b) all rules, regulations (including 38 C.F.R. § 17.54), manuals, orders and administrative, reimbursement and other guidelines of all Governmental Authorities promulgated in connection with such program (whether or not having the force of law), in each case as the same may be amended, supplemented or otherwise modified from time to time.

 

CHAMPVA Account”: an Account payable pursuant to CHAMPVA.

 

Change in Law”:  as defined in Subsection 4.11(a).

 

Change of Control”:  (a) (x) the Permitted Holders shall in the aggregate be the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act as in effect on the Closing Date) of (A) so long as Holdings is a Subsidiary of any Parent Entity, shares of Voting Stock having less than 35.0% of the total voting power of all outstanding shares of such Parent Entity (other than a Parent Entity that is a Subsidiary of another Parent Entity) and (B) if Holdings is not a Subsidiary of any Parent Entity, shares of Voting Stock having less than 35.0% of the total voting power of all outstanding shares of Holdings and (y) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act as in effect on the Closing Date), other than one or more Permitted Holders, shall be the “beneficial owner” of (A) so long as Holdings is a Subsidiary of any Parent Entity, shares of Voting Stock having more than 35.0% of the total voting power of all outstanding shares of such Parent Entity (other than a Parent Entity that is a Subsidiary of another Parent Entity) and (B) if Holdings is not a

 

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Subsidiary of any Parent Entity, shares of Voting Stock having more than 35.0% of the total voting power of all outstanding shares of Holdings; or (b) the Continuing Directors shall cease to constitute a majority of the members of the Board of Directors of Holdings; or (c) Holdings shall cease to own, directly or indirectly, 100.0% of the Capital Stock of the Parent Borrower (or any Successor Borrower); or (d) a “Change of Control” as defined in the Term Loan Credit Agreement or the Senior Notes Indenture (or any indenture or agreement governing refinancing Indebtedness in respect of the Senior Notes, in each case relating to Indebtedness in an aggregate principal amount equal to or greater than $50,000,000).  Notwithstanding anything to the contrary in the foregoing, the Transactions shall not constitute or give rise to a Change of Control.

 

Claim”:  as defined in Subsection 11.6(h)(iv).

 

Closed Accounts”: Accounts in relation to which the relevant Loan Party has fully closed and settled all amounts owing in respect of such Account and the remaining balance owing in respect of such Account is zero, either through payment and/or write-off.

 

Closing Date”:  the date on which all the conditions precedent set forth in Subsection 6.1 shall be satisfied or waived.

 

Closing Date Existing Indebtedness”:  as defined in Subsection 8.13(d).

 

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

 

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

 

Collateral Agent”:  as defined in the Preamble hereto, and shall include any successor to the Collateral Agent appointed pursuant to Subsection 10.9.

 

Commercial L/C”:  as defined in Subsection 3.1(b).

 

Commitment”:  as to any Lender, the commitment, if any, of such Lender to make Extensions of Credit to the Borrowers in the amount set forth opposite its name on Schedule A hereto or as may subsequently be set forth in the Register from time to time.  The original amount of the aggregate Commitments of the Lenders is $350,000,000.

 

Commitment Letter”:  the Commitment Letter (including the annexes and exhibits thereto) dated as of February 13, 2011, as amended by the letter agreement dated as of February 25, 2011, as further amended by the letter agreement dated as of March 7, 2011, and as further amended by the letter agreement dated as of March 25, 2011, among Barclays Bank PLC, Deutsche Bank AG New York Branch, Deutsche Bank AG Cayman Islands Branch, Deutsche Bank Securities Inc., Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley Senior Funding, Inc., Royal Bank of Canada, UBS Loan Finance LLC, UBS Securities LLC, Citigroup Global Markets Inc., Natixis and Merger Sub.

 

Commitment Percentage”:  of any Lender at any time shall be that percentage which is equal to a fraction (expressed as a percentage) the numerator of which is the

 

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Commitment of such Lender at such time and the denominator of which is the aggregate Commitments at such time; provided that for purposes of Subsection 4.15(d) and (e), “Commitment Percentage” shall mean the percentage of the total Commitments (disregarding the Commitment of any Defaulting Lender to the extent its Swingline Exposure or L/C Obligations is reallocated to the Non-Defaulting Lenders) represented by such Lender’s Commitment; provided, further, that if any such determination is to be made after the Commitments (and the related Commitments of the Lenders) has (or have) terminated, the determination of such percentages shall be made immediately before giving effect to such termination.

 

Commitment Period”:  the period from and including the Closing Date to but not including the Termination Date, or such earlier date as the Commitments shall terminate as provided herein.

 

Committed Lenders”:  Deutsche Bank AG New York Branch, Barclays Bank PLC, Bank of America, N.A., Morgan Stanley Senior Funding, Inc., Royal Bank of Canada, UBS Loan Finance LLC, Citibank, N.A. and Natixis.

 

Commonly Controlled Entity”:  an entity, whether or not incorporated, which is under common control with the Parent Borrower within the meaning of Section 4001 of ERISA or is part of a group which includes the Parent Borrower and which is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Sections 414(m) and (o) of the Code.

 

Company”:  Emergency Medical Services Corporation, a Delaware corporation, and any successor in interest thereto.

 

Company Material Adverse Effect”:  as defined in Subsection 6.1(o).

 

Compliance Certificate”:  as defined in Subsection 7.2(b).

 

Compliance Period”:  any period commencing upon any determination by the Administrative Agent that Specified Availability on any day is less than the greater of (x) 12.5% of Availability at such time and (y) the Excess Availability Floor; provided that the Administrative Agent has notified the Borrower Representative thereof.  The Compliance Period shall be deemed continuing notwithstanding that Specified Availability may thereafter exceed the amount set forth in the preceding sentence unless and until for thirty (30) consecutive days Specified Availability exceeds the greater of (x) 12.5% of Availability at such time and (y) the Excess Availability Floor at such time, in which event a Compliance Period shall no longer be deemed to be continuing.

 

Concentration Account”: any Loan Party Concentration Account and/or any Related Corporation Concentration Account, as the context requires.

 

Conduit Lender”:  any special purpose corporation organized and administered by any Lender for the purpose of making Loans otherwise required to be made by such Lender and designated by such Lender in a written instrument delivered to the Administrative Agent (a copy of which shall be provided by the Administrative Agent to the Borrower Representative on

 

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request); provided that the designation by any Lender of a Conduit Lender shall not relieve the designating Lender of any of its obligations under this Agreement, including its obligation to fund a Loan if, for any reason, its Conduit Lender fails to fund any such Loan, and the designating Lender (and not the Conduit Lender) shall have the sole right and responsibility to deliver all consents and waivers required or requested under this Agreement with respect to its Conduit Lender, and provided, further, that no Conduit Lender shall (a) be entitled to receive any greater amount pursuant to any provision of this Agreement, including without limitation Subsection 4.10, 4.11, 4.12 or 11.5, than the designating Lender would have been entitled to receive in respect of the extensions of credit made by such Conduit Lender if such designating Lender had not designated such Conduit Lender hereunder, (b) be deemed to have any Commitment or (c) be designated if such designation would otherwise increase the costs of any Facility to any Borrower.

 

Confidential Healthcare Information”:  as defined in Subsection 7.6(c).

 

Confidential Information Memorandum”:  that certain Confidential Information Memorandum dated April 4, 2011, and furnished to the Lenders.

 

Consolidated Fixed Charge Coverage Ratio”:  (a) as of the last day of the Most Recent Four Quarter Period, the ratio of (a) (i) EBITDA for such period minus (ii) the unfinanced portion of all Capital Expenditures (excluding any Capital Expenditure made in an amount equal to all or part of the proceeds, applied within twelve months of receipt thereof, of (x) any casualty insurance, condemnation or eminent domain or (y) any sale of assets (other than Inventory)) of the Parent Borrower and its consolidated Restricted Subsidiaries during such period, to (b) the sum, without duplication, of (i) Debt Service Charges payable in cash by the Parent Borrower and its consolidated Restricted Subsidiaries during such period plus (ii) federal, state and foreign income taxes paid in cash by the Parent Borrower and its consolidated Restricted Subsidiaries (net of refunds received) for the period of four (4) full Fiscal Quarters ending on such date plus (iii) cash paid by the Parent Borrower during the relevant period pursuant to clause (h) of Subsection 8.3.

 

Consolidated Interest Expense”:  for any period, an amount equal to (a) interest expense (accrued and paid or payable in cash for such period, and in any event excluding any amortization or write-off of financing costs) on Indebtedness of the Parent Borrower and its consolidated Restricted Subsidiaries for such period minus (b) interest income (accrued and received or receivable in cash for such period) of the Parent Borrower and its consolidated Restricted Subsidiaries for such period, in each case determined on a consolidated basis in accordance with GAAP; provided that for purposes of calculating the Consolidated Fixed Charge Coverage Ratio for any period or portion of a period of four (4) Fiscal Quarters ending on or prior to the first anniversary of the Closing Date, Consolidated Interest Expense shall be calculated by reference to the actual amount of Consolidated Interest Expense as disclosed in the financial statements delivered pursuant to Subsection 7.1(a) or 7.1(b) and/or compliance certificates delivered pursuant to Subsection 7.2(b) for the period from the Closing Date to the last day of the relevant Fiscal Quarter at the end of the applicable test period divided by the number of days from the Closing Date to the last day of such Fiscal Quarter and multiplied by 365 and, provided, further, that for purposes of calculating the Consolidated Fixed Charge Coverage Ratio for any period prior to delivery of financial statements pursuant to Subsection

 

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7.1(b) for the first Fiscal Quarter following the Closing Date, Consolidated Interest Expenses shall be as determined by the Parent Borrower in good faith and certified to the Administrative Agent in a form reasonably acceptable to the Administrative Agent.

 

Consolidated Net Income”:  for any period, net income of the Parent Borrower and its consolidated Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.

 

Consolidated Total Assets”:  as of any date of determination, the total assets of the Parent Borrower and its Restricted Subsidiaries as at the last day of the Most Recent Four Quarter Period, determined on a consolidated basis in accordance with GAAP (and, in the case of any determination relating to any incurrence of Indebtedness, any Investment or any acquisition pursuant to Subsection 8.4, on a Pro Forma Basis, including any property or assets being acquired in connection therewith).

 

Continuing Directors”:  the directors of Holdings on the Closing Date, after giving effect to the Transactions and the other transactions contemplated thereby, and each other director if, in each case, such other director’s nomination for election to the Board of Directors of Holdings is recommended by at least a majority of the then Continuing Directors or the election of such other director is approved by one or more Permitted Holders.

 

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

 

Core Concentration Account”:  as defined in Subsection 4.16(f).

 

Credit Agreement Refinancing Indebtedness”:  any secured Indebtedness incurred or otherwise obtained by the Borrowers under and in accordance with the terms of this Agreement in the form of revolving commitments or term loans in exchange for, or to extend, renew, replace or refinance, in whole or part, existing ABL Term Loans, outstanding Revolving Credit Loans or Commitments hereunder (including any successive Credit Agreement Refinancing Indebtedness obtained pursuant to a prior Refinancing Amendment) (“Refinanced Debt”); provided that:

 

(a)           such Refinanced Debt shall be repaid and the commitments with respect thereto terminated and all accrued interest, fees and premiums (if any) in connection therewith shall be paid, on the date such Credit Agreement Refinancing Indebtedness is issued, incurred or obtained; provided that to the extent that such Refinanced Debt consists, in whole or in part, of Commitments or Other Revolving Credit Commitments (or Revolving Credit Loans, Other Revolving Credit Loans or Swingline Loans incurred pursuant to any Commitments or Other Revolving Credit Commitments), such Commitments or Other Revolving Credit Commitments, as applicable, shall be terminated, the proceeds of such Credit Agreement Refinancing Indebtedness shall be applied to the prepayment of outstanding ABL Term Loans, outstanding Revolving Credit Loans, or reduction of Commitments in respect of the Revolving Credit Facility being so refinanced on a pro rata basis within each Tranche being refinanced and all

 

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accrued fees in connection therewith shall be paid, on the date such Credit Agreement Refinancing Indebtedness is issued, incurred or obtained; and

 

(b)           such Indebtedness (including, if such Indebtedness includes any Other Revolving Credit Commitments, the unused portion of such Other Revolving Credit Commitments) shall:

 

(i)            be governed by the terms of this Agreement (as amended by any Refinancing Amendment) and the Security Documents and no other loan agreement, note purchase agreement or other similar agreement and the Lenders with respect to such Indebtedness shall execute an assumption agreement, reasonably satisfactory to the Administrative Agent, pursuant to which such Lenders agree to be bound by the terms of this Agreement as Lenders; provided that the terms and conditions of such Indebtedness (as amended by such Refinancing Amendment but excluding pricing and optional prepayment or redemption terms) shall be substantially similar to, or (taken as a whole) not more favorable to the investors providing such Indebtedness than the terms and conditions of the applicable Refinanced Debt as reasonably determined by the Parent Borrower in good faith (except with respect to any terms (including covenants) and conditions contained in such Indebtedness that are applicable only after the then Termination Date); provided, further, that the terms and conditions applicable to such Indebtedness may provide for any additional or different financial or other covenants or other provisions that are agreed between the Parent Borrower and the applicable Lenders and applicable only during periods after the Termination Date that is in effect on the date such Credit Agreement Refinancing Indebtedness is incurred or obtained,

 

(ii)           be in an original aggregate principal amount not greater than the aggregate principal amount of the Refinanced Debt except by any amount equal to unpaid accrued interest and premium (including applicable prepayment penalties) thereon plus underwriting discounts, original issue discount, commissions, fees and other costs and expenses incurred in connection therewith (and, in the case of Refinanced Debt consisting, in whole or in part, of unused Commitments or Other Revolving Credit Commitments, the amount thereof),

 

(iii)          not mature or have scheduled amortization or payments of principal sooner or greater than the same under such Refinanced Debt and not be subject to mandatory redemption, repurchase, prepayment or sinking fund obligation (except customary prepayments with respect to lender exposure or outstandings exceeding commitments or the borrowing base and customary asset sale or change of control provisions), in each case prior to the Termination Date,

 

(iv)          only be secured by assets consisting of Collateral on a pari passu basis (but without regard to the control of remedies) with the Obligations and not be secured by any property or assets of Holdings, the Borrowers or any Restricted Subsidiary other than the Collateral; provided that such Obligations (including the Credit Agreement Refinancing Indebtedness) shall be secured by the Security Documents and the Lenders with respect to such Credit Agreement Refinancing Indebtedness shall have authorized the Collateral Agent to act as their Agent to take any action with respect to any applicable

 

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Collateral or Security Documents which may be necessary to perfect and maintain perfected the security interest in and liens upon the Collateral granted pursuant to the Security Documents,

 

(v)           rank pari passu in right of payment and of security with the Obligations hereunder (including being entitled to the benefits of the same place in the waterfall as the Refinanced Debt) and at any time that a Default or an Event of Default exists, all prepayments of Other ABL Term Loans and Other Revolving Credit Loans (other than in respect of the FILO Tranche) shall be made on a pro rata basis,

 

(vi)          be part of, and count against, the Borrowing Base on the same basis as the Refinanced Debt, and

 

(vii)         not refinance the commitments in respect of the FILO Tranche unless (1) the Loans comprising the FILO Tranche are the only Loans outstanding and (2) the Commitments for the Revolving Credit Facility (excluding the FILO Tranche) have been terminated.

 

Cure Amount”:  as defined in Subsection 9.3(a).

 

Customary Permitted Liens”:  (a) Liens for taxes, assessments and similar charges that are not yet delinquent or the nonpayment of which in the aggregate would not reasonably be expected to have a Material Adverse Effect, or which are being contested in good faith by appropriate proceedings and adequate reserves with respect thereto are maintained on the books of the Parent Borrower or its Restricted Subsidiaries, as the case may be, in conformity with GAAP;

 

(b)           Liens with respect to outstanding motor vehicle fines, liens of landlords or of mortgagees of landlords arising by statute and liens of suppliers, mechanics, carriers, materialmen, warehousemen or workmen and other liens imposed by law created in the ordinary course of business for amounts not overdue for a period of more than 60 days or that are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained to the extent required by GAAP;

 

(c)           deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance or other types of social security benefits or other insurance related obligations (including pledges or deposits securing liability to insurance carriers under insurance or self-insurance arrangements);

 

(d)           encumbrances arising by reason of zoning restrictions, easements, licenses, reservations, covenants, rights-of-way, utility easements, building restrictions and other similar encumbrances on the use of real property not materially detracting from the value of such real property or not materially interfering with the ordinary conduct of the business conducted and proposed to be conducted at such real property;

 

(e)           encumbrances arising under leases or subleases of real property that do not, in the aggregate over all such encumbrances, materially detract from the value of such real

 

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property or interfere with the ordinary conduct of the business conducted and proposed to be conducted at such real property;

 

(f)            financing statements with respect to a lessor’s rights in and to personal property leased to such Person in the ordinary course of such Person’s business;

 

(g)           Liens, pledges or deposits securing the performance of (x) bids, contracts (other than for borrowed money), obligations for utilities, leases and statutory or regulatory obligations, or (y) performance, bid, surety, appeal, judgment, replevin and similar bonds, other surety arrangements, and other similar obligations, all in, or relating to liabilities or obligations incurred in, the ordinary course of business;

 

(h)           Liens arising by reason of any judgment, decree or order of any court or other Governmental Authority, unless the judgment, decree or order it secures has not, within thirty (30) days after entry of such judgment, been discharged or execution stayed pending appeal, or has not been discharged within thirty (30) days after the expiration of any such stay;

 

(i)            Liens existing on assets or properties at the time of the acquisition thereof by the Parent Borrower or any of its Restricted Subsidiaries which do not materially interfere with the use, occupancy, operation and maintenance of structures existing on the property subject thereto or extend to or cover any assets or properties of the Parent Borrower or such Restricted Subsidiary other than the assets or property being acquired; and

 

(j)            Liens on goods in favor of customs and revenue authorities arising as a matter of law to secure customs duties in connection with the importation of such goods.

 

DDA”: any Loan Party DDA and/or any Related Corporation DDA, as the context requires.

 

Debt Financing”:  the debt financing transactions contemplated under (a) the Loan Documents, (b) the Term Loan Documents and (c) the Senior Notes Debt Documents, in each case including any Interest Rate Protection Agreements related thereto.

 

Debt Obligations”: means, with respect to any Indebtedness, any principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, other monetary obligations of any nature and all other amounts payable thereunder or in respect thereof.

 

Debt Service Charges”:  for any period, the sum of (a) Consolidated Interest Expense plus (b) scheduled principal payments required to be made (after giving effect to any prepayments paid in cash that reduce the amount of such required payments) on account of Indebtedness of the Parent Borrower and its consolidated Restricted Subsidiaries of the type permitted by Subsections 8.13(a), 8.13(c) and (to the extent relating to any renewal, extension, refinancing or refunding of the foregoing) 8.13(i)(ii) hereof, including the full amount of any non-recourse Indebtedness (excluding the obligations hereunder, payments to reimburse any drawings under any commercial letters of credit, and any payments on Indebtedness required to be made on the final maturity date thereof, but including any obligations in respect of Financing

 

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Leases) for such period, plus (c) scheduled mandatory payments on account of Disqualified Capital Stock of the Parent Borrower and its consolidated Restricted Subsidiaries (whether in the nature of dividends, redemption, repurchase or otherwise) required to be made during such period, in each case determined on a consolidated basis in accordance with GAAP.

 

Default”:  any of the events specified in Subsection 9.1, whether or not any requirement for the giving of notice (other than, in the case of Subsection 9.1(e), a Default Notice), the lapse of time, or both, or any other condition specified in Subsection 9.1, has been satisfied.

 

Default Notice”:  as defined in Subsection 9.1(e).

 

Defaulting Lender”:  any Lender whose acts or failure to act, whether directly or indirectly, cause it to meet any part of the definition of Lender Default.

 

Deposit Account”:  any deposit account (as such term is defined in Article 9 of the UCC).

 

Designated Cash Management Agreements”:  Bank Products Agreements that are (i) secured by Liens on ABL Priority Collateral that are pari passu in priority with the Liens on such Collateral securing the amounts due under this Agreement, pursuant to (A) the Security Documents (but only to the extent any such Bank Products Agreement secured under a Security Document has also been designated as a Designated Cash Management Agreement in accordance with clause (ii) hereof), or (B) the ABL/Term Loan Intercreditor Agreement or (C) another intercreditor agreement in form and substance reasonably satisfactory to the Parent Borrower and the Administrative Agent and (ii) designated as a “Designated Cash Management Agreement” as contemplated by Subsection 11.22.

 

Designated Hedging Agreements”:  Interest Rate Protection Agreements, Hedging Agreements or other Permitted Hedging Arrangements that are (i) secured by Liens on ABL Priority Collateral that are pari passu in priority with the Liens on such Collateral securing the amounts due under this Agreement, pursuant to (A) the Security Documents, or (B) the ABL/Term Loan Intercreditor Agreement or (C) another intercreditor agreement in form and substance reasonably satisfactory to the Parent Borrower and the Administrative Agent and (ii) designated as a “Designated Hedging Agreement” to the Administrative Agent as contemplated by Subsection 11.22.

 

Designated Hedging Reserves”:  such reserves as the Administrative Agent determines in its Permitted Discretion to reflect (and in no event to exceed) the then aggregate outstanding mark-to-market (“MTM”) exposure of all Loan Parties to the relevant Hedging Parties under all Designated Hedging Agreements as provided by the applicable Hedging Party from time to time in accordance with the succeeding requirements.  Such exposure shall be the sum of the positive aggregate MTM values to each Hedging Party of all Designated Hedging Agreements with such Hedging Party outstanding at the time of the relevant calculation.  The aggregate MTM value to a Hedging Party of all Designated Hedging Agreements with such Hedging Party shall be calculated by such Hedging Party (i) on a net basis by taking into account the netting provision contained in the ISDA Master Agreement (or other similar agreement with

 

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netting provisions substantially similar to an ISDA Master Agreement) with such Hedging Party and (ii) if applicable, by taking into account any master netting agreement or arrangement in place among such Hedging Party, any Subsidiary or Affiliate thereof that is also party to a Designated Hedging Agreement and the relevant Loan Party, in which case the positive aggregate MTM value of all relevant Designated Hedging Agreements to such Hedging Party and such Subsidiaries or Affiliates who are parties to such master netting agreements shall be calculated in respect of all of the relevant Designated Hedging Agreements on a net basis across all such Designated Hedging Agreements, provided that the Parent Borrower (i) certifies to the Administrative Agent that such master netting agreement shall apply to all such Designated Hedging Agreements in all cases including upon the occurrence of an event of default by the relevant Loan Party in respect of any such Designated Hedging Agreement and (ii) upon request, provides to the Administrative Agent a copy of the master netting agreement.  The Hedging Party, in calculating the positive aggregate MTM value to such Hedging Party, shall take into account the value of collateral posted to such Hedging Party in respect of such Designated Hedging Agreements, such that the value of such collateral shall reduce the MTM value of such Designated Hedging Agreements that is out-of-the-money to the relevant Loan Party by an amount equal to (x) the amount of cash collateral or (y) the value of non-cash collateral with such value as determined by the relevant Hedging Party or the relevant valuation agent in accordance with the relevant credit support annex or other collateral agreement (for the avoidance of doubt, taking into account any haircut provision applicable to such non-cash collateral), provided that the Parent Borrower shall provide any supporting documentation for such value as may be reasonably requested by the Administrative Agent.  For the avoidance of doubt, if the MTM value of all Designated Hedging Agreements with a Hedging Party is a negative amount to such Hedging Party (i.e., if all such Designated Hedging Agreements with such Hedging Party are in-the-money to the relevant Loan Party on a net basis), such MTM value shall be treated as zero in calculating the amount of the Designated Hedging Reserves.  The MTM value of a Designated Hedging Agreement for this purpose shall be calculated and provided to the Administrative Agent, the relevant Loan Party and the Parent Borrower together with the supporting calculations therefor (i) on or prior to the date on which the applicable Interest Rate Protection Agreement, Hedging Agreement or other Permitted Hedging Arrangement is designated as a Designated Hedging Agreement and (ii) thereafter promptly (but in any case not later than three (3) Business Days) following (x) the last calendar day of each calendar month and (y) such other date on which a request was made by the Administrative Agent, the relevant Loan Party or the Parent Borrower, as applicable, for such MTM value.  Upon receipt of such MTM value of a Designated Hedging Agreement from the relevant Hedging Party, the Parent Borrower may, within three (3) Business Days of such receipt, notify the Administrative Agent that the Parent Borrower does not agree with such MTM value provided by such Hedging Party and seek a Dealer Polling (as defined below) with respect to the relevant Designated Hedging Agreement as set forth below.  In the event the Parent Borrower does not provide such notice to the Administrative Agent, the Administrative Agent shall use such MTM value in calculating the relevant portion of the Designated Hedging Reserves.  Prior to any Hedging Party providing the MTM value of an Interest Rate Protection Agreement, Hedging Agreement or other Permitted Hedging Arrangement, the applicable Interest Rate Protection Agreement, Hedging Agreement or other Permitted Hedging Arrangement will not be designated as a Designated Hedging Agreement for the purposes of this Agreement, until such time as an MTM value is provided by such Hedging Party or an alternative value is provided by

 

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the Parent Borrower pursuant to a Dealer Polling. The Parent Borrower may commence a Dealer Polling (i) at any time if a Hedging Party fails to provide an MTM value or (ii) within three (3) Business Days of the receipt by the Administrative Agent of an MTM value provided by a Hedging Party.  In the case of the immediately preceding sub-clause (ii), until Dealer Polling results in an alternative MTM value, the MTM value provided by the Hedging Party shall be used for purposes of calculating the Designated Hedging Reserves.  If a Hedging Party provides an MTM value in respect of the relevant Designated Hedging Agreement subsequent to the determination of an MTM value in accordance with a Dealer Polling, such MTM value so provided by the Hedging Party shall be used in calculating the relevant portion of the Designated Hedging Reserves provided that the Parent Borrower may disagree with such new MTM value and commence a new Dealer Polling in accordance with these provisions.  A “Dealer Polling” for purposes hereof is a procedure by which the Parent Borrower seeks mid-market quotations (which may be firm or indicative) from at least two (and not more than three) recognized dealers in Hedging Agreements of the same or similar type of the MTM value of a Designated Hedging Agreement.  In seeking such quotations, the Parent Borrower shall (x) instruct each such dealer to calculate its mid-market valuation in a manner consistent with the manner in which such dealer would calculate such valuation for products of its own that are of the same or substantially similar type as the relevant Designated Hedging Agreement and (y) provide each such dealer with the transaction details and other information necessary for such dealer to provide such mid-market quotation.  The Parent Borrower shall provide a copy of all written communications with each such dealer and all information provided pursuant to clause (y) of the preceding sentence to the dealers participating in the Dealer Polling to the Administrative Agent and the relevant Hedging Party.  Upon notification and delivery by the Parent Borrower to the Administrative Agent of (A) the details and results of any such mid-market quotations from such other dealers attributable to the Designated Hedging Agreement for which such additional dealer mid-market quotations have been obtained, and (B) a certificate showing the amount determined by calculating either (i) the arithmetic average of the valuation provided by the relevant Hedging Party and the valuations provided by each of such other dealers in the event the Parent Borrower did not agree with the valuation provided by such Hedging Party or (ii) the arithmetic average of the valuations provided by each of such other dealers in the event the relevant Hedging Party has not provided its valuation (in either case, including reasonable details of such calculation), the Administrative Agent shall adjust the Designated Hedging Reserves attributable to the Designated Hedging Agreement for which such additional dealer mid-market quotations have been obtained to equal the amount provided by the Parent Borrower in preceding clause (B).  In the event that (x) the Parent Borrower commenced the Dealer Polling but no third party dealer has provided any quotation within seven (7) Business Days from the date on which the Parent Borrower notified the Administrative Agent of the commencement of the Dealer Polling, or (y) the Parent Borrower has failed to commence the Dealer Polling in a situation described above, then the MTM value of the relevant Designated Hedging Agreement for purposes of the determination of the relevant portion of the Designated Hedging Reserves shall be determined by the Administrative Agent based on the previous MTM value provided by the relevant Hedging Party.

 

Designated Noncash Consideration”:  the Fair Market Value of noncash consideration received by the Parent Borrower or one of its Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Noncash Consideration pursuant to a

 

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certificate signed by a Responsible Officer of the Parent Borrower, setting forth the basis of such valuation.

 

Designation Date”:  as defined in Subsection 2.8(e).

 

Dilution”: as of any date of determination, as to Accounts that are Other Eligible Accounts if applicable, a percentage, based upon the experience of the immediately prior twelve (12) consecutive months, that is the result of dividing the U.S. Dollar amount of (a) bad debt write-downs, discounts, contract allowances, credits, volume or other rebates, returns or chargebacks with respect to such Accounts during such period, by (b) billings with respect to such Other Eligible Accounts in each case without duplication of any exclusion from the definition of “Other Eligible Accounts” during such twelve (12) month period.

 

Dilution Reserve”: as of any date of determination, as to Accounts that are Other Eligible Accounts, an amount equal to the product of (a) the amount (if positive), expressed as a percentage, by which Dilution of such Accounts exceeds 5.00% and (b) the aggregate Accounts that are Other Eligible Accounts.

 

Disinterested Director”:  as defined in Subsection 8.11.

 

Disposition”:  as defined in the definition of the term “Asset Sale” in this Subsection 1.1.

 

Disqualified Capital Stock”:  with respect to any Person, any Capital Stock (other than Management Stock) that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable or exercisable), or upon the happening of any event (other than following the occurrence of a Change of Control or other similar event described under such terms as a “change of control” or an Asset Sale), (a) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise, (b) is convertible or exchangeable for Indebtedness or Disqualified Capital Stock or (c) is redeemable at the option of the holder thereof (other than following the occurrence of a Change of Control or other similar event described under such terms as a “change of control” or an Asset Sale), in whole or in part, in each case on or prior to the Termination Date, provided that Capital Stock issued to any employee benefit plan, or by any such plan to any employees of the Parent Borrower or any Subsidiary, shall not constitute Disqualified Capital Stock solely because it may be required to be repurchased or otherwise acquired or retired in order to satisfy applicable statutory or regulatory obligations.

 

Disqualified Lender”:  (i) any competitor of the Parent Borrower and its Restricted Subsidiaries that is in the same or a similar line of business as the Parent Borrower and its Restricted Subsidiaries or any affiliate of such competitor designated in writing by the Borrower Representative or CD&R to the Administrative Agent from time to time and (ii) any Persons designated in writing by the Borrower Representative or CD&R to the Administrative Agent prior to February 13, 2011.

 

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

 

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Domestic Subsidiary”:  any Subsidiary of the Parent Borrower which is not a Foreign Subsidiary.

 

Dominion Event”:  a period (a) commencing on the date on which either (x) a Specified Default has occurred and has been continuing or (y) the Specified Availability, expressed as a percentage, has been less than the greater of (i) 12.5% of Availability at such time and (ii) the Excess Availability Floor, in the case of each of (x) and (y), for a period of five (5) consecutive Business Days; provided that the Administrative Agent has notified the Borrower Representative thereof and (b) ending on the first date thereafter on which both (x) no Specified Default has existed or been continuing at any time and (y) the Specified Availability, expressed as a percentage, shall have been not less than the greater of (i) 12.5% of Availability and (ii) the Excess Availability Floor at any time, in each case for twenty-one (21) consecutive calendar days; provided that a Dominion Event may not be cured as contemplated by this sentence more than three (3) times in any four (4) Fiscal Quarter period.

 

EBITDA”:  for any period, the sum of (a) Consolidated Net Income for such period adjusted (i) to exclude the following items (without duplication) of income or expense to the extent that such items are included in the calculation of Consolidated Net Income:  (A) Consolidated Interest Expense, (B) any non-cash expenses and charges, (C) total income tax expense, (D) depreciation expense, (E) the expense associated with amortization of intangible and other assets (including amortization or other expense recognition of any costs associated with asset write-ups in accordance with Financial Accounting Standards No. 141(R) and gains or losses associated with FASB Interpretation No. 45), (F) non-cash provisions for reserves for discontinued operations, (G) any extraordinary, unusual or non-recurring gains or losses or charges or credits, including but not limited to any expenses relating to the Transactions and any non-recurring or extraordinary items paid or accrued during such period relating to deferred compensation owed to any Management Investor that was cancelled, waived or exchanged in connection with the grant to such Management Investor of the right to receive or acquire shares of Capital Stock of Holdings or any Parent Entity, (H) any gain or loss associated with the sale or write-down of assets not in the ordinary course of business, (I) any income or loss accounted for by the equity method of accounting (except in the case of income to the extent of the amount of cash dividends or cash distributions actually paid to the Parent Borrower or any of its Restricted Subsidiaries by the entity accounted for by the equity method of accounting), (J) the amount of any non-cash loss or gain attributable to non-controlling interests, (K) the cumulative effect of a change in accounting principles, (L) any unrealized foreign currency transaction gains or losses in respect of Indebtedness of any Person denominated in a currency other than the functional currency of such Person, (M) any unrealized foreign currency translation or transaction gains or losses in respect of Indebtedness or other obligations of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any Restricted Subsidiary, and (N) fees paid to CD&R or any of its Affiliates for the rendering of management consulting or financial advisory services for compensation and (ii) by reducing EBITDA (as otherwise determined above) by the amount of all dividends paid by the Parent Borrower during the relevant period pursuant to any of clauses (a) and (b) of Subsection 8.3 (in each case, unless and to the extent (x) the amount paid with such dividends by Holdings or any Parent Entity would not, if the respective expense or other item had been incurred directly by the Parent Borrower, have reduced EBITDA determined in accordance with the foregoing provisions of this definition or (y) such dividend is paid by the Parent Borrower in respect of an expense or other item that has resulted in, or will

 

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result in, a reduction of EBITDA, as calculated pursuant to clause (a) above) plus (b) the amount of net cost savings projected by the Parent Borrower in good faith to be realized as the result of actions taken or to be taken on or prior to the date that is 12 months after the Closing Date, or 12 months after the consummation of any operational change, respectively, and prior to or during such period (calculated on a Pro Forma Basis as though such cost savings had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions, provided that such cost savings are reasonably identifiable and factually supportable and in an aggregate amount not to exceed $30,000,000 in any period of four (4) Fiscal Quarters, plus (c) only with respect to determining compliance with Subsection 8.1 hereof, any Specified Equity Contribution.

 

Eligible Accounts”:  all AMR Service Eligible Accounts, all EmCare General Eligible Accounts and all Other Eligible Accounts, or each one of them as the context may require.

 

Eligible Inventory”:  all Inventory of the Loan Parties relating to the AMR Business, except for any Inventory:

 

(a)           that is damaged or unfit for use in the AMR Business or unfit for re-sale or return for credit;

 

(b)           that is not of a type used by any Loan Party in the AMR Business in the ordinary course as is being conducted by each such party;

 

(c)           that is not subject to a valid and perfected first priority Lien in favor of the Collateral Agent, as applicable, pursuant to a Security Document (as and to the extent provided therein (it being agreed that in no event shall any Excluded Assets be deemed to be Eligible Inventory hereunder));

 

(d)           that is not owned by any Loan Party;

 

(e)           that does not comply in all material respects with each of the representations and warranties respecting Eligible Inventory made in the Loan Documents;

 

(f)            that consists of Materials of Environmental Concern that can be transported and used in the rendition of services or sold in connection with the AMR Business only with licenses that are not readily available;

 

(g)           that is covered by a negotiable document of title, unless such document has been delivered to the Administrative Agent; or

 

(h)           that is located outside the United States of America.

 

Notwithstanding the foregoing, the Administrative Agent may, from time to time, in the exercise of its Permitted Discretion, on not less than ten (10) Business Days’ prior notice to the Parent Borrower, change the criteria for Eligible Inventory as reflected on the Borrowing Base Certificate based on either:  (i) an event, condition or other circumstance arising after the Closing Date, or (ii) an event, condition or other circumstance existing on the Closing Date to the

 

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extent the Administrative Agent had no knowledge thereof on or prior to the Closing Date, in either case under clause (i) or (ii), which adversely affects, or would reasonably be expected to adversely affect, Eligible Inventory in any material respect as determined by the Administrative Agent in the exercise of its Permitted Discretion.  Any such change in criteria shall have a reasonable relationship to the event, condition or other circumstance that is the basis for such change.  Upon delivery of the notice of such change pursuant to the foregoing sentence, the Administrative Agent shall be available to discuss the proposed change, and the applicable Borrower may take such action as may be required so that the event, condition or circumstance that is the basis for such change no longer exists, in a manner and to the extent reasonably satisfactory to the Administrative Agent in the exercise of its Permitted Discretion.  Any Inventory of the Loan Parties that is not Eligible Inventory shall nevertheless be part of the Collateral as and to the extent provided in the Security Documents.

 

EmCare Business”: (a) the provision of outsourced facility-based physician services to healthcare facilities in the United States in respect of emergency department, anesthesiology, hospitalist/inpatient, radiology and teleradiology staffing and other businesses of a similar type or reasonably related thereto and any business related thereto and (b) the provision of billing and collection, recruiting, risk management and other management services to third parties (other than Related Corporations) in the United States and other businesses of a similar type or reasonably related thereto and any business related thereto.

 

EmCare General Accounts”:  all Accounts relating to paragraph (a) of the EmCare Business.

 

EmCare General Adjusted Eligible Accounts”: an amount equal to:

 

(a)           the product of (i) the aggregate amount of EmCare General Eligible Accounts multiplied by (ii) the most recent EmCare Projected Collection Rate for 0-180 Days; minus

 

(b)           the sum of (i) any unreconciled differences plus (ii) an amount equal to the product of (x) unapplied cash relating to EmCare General Accounts that has not been applied to, or posted to, any EmCare General Account multiplied by (y) the Cash Eligible Account Rate applicable to EmCare General Eligible Accounts,

 

provided that the amount of Self-Pay Accounts that are included as EmCare General Adjusted Eligible Accounts, when aggregated with the amount of Self-Pay Accounts that are included as AMR Service Eligible Accounts, does not at any time exceed ten percent (10%) of the Borrowing Base (calculated for this purpose excluding the amount of any Self-Pay Accounts that would otherwise be included in the calculation thereof).

 

EmCare General Eligible Accounts”:  those EmCare General Accounts created by a Loan Party or a Related Corporation in the ordinary course of their business, which Accounts comply in all material respects with each of the representations and warranties respecting Eligible Accounts made in the Loan Documents, and that are not excluded as ineligible by virtue of one or more of the excluding criteria set forth below.  EmCare General Eligible Accounts shall not include the following:

 

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(a)           [Reserved];

 

(b)           if applicable, an amount equal to the amount of any reductions made to the gross amount invoiced or to be invoiced to Account Debtors reflecting contractual allowances provided to Account Debtors in respect of Accounts that would otherwise be EmCare General Eligible Accounts;

 

(c)           Accounts that have not been billed by the date that is 30 days after the earlier of (i) the Service Date or (ii) the date as of which such Account is first included in the Borrowing Base Certificate or otherwise reported to the Administrative Agent as Collateral;

 

(d)           billed Accounts that Account Debtors have failed to pay within one hundred and eighty (180) days after the original Service Date;

 

(e)           (i) Accounts that have been written off, or (ii) Accounts that the Administrative Agent, in its Permitted Discretion, believes to be doubtful by reason of the Account Debtor’s financial condition, upon notice thereof to the Borrower Representative;

 

(f)            Accounts with respect to which the Account Debtor is (i) an Affiliate of any Loan Party or Related Corporation or (ii) an employee or agent of any Loan Party or Related Corporation or any Affiliate of such Loan Party or Related Corporation, in each case, other than Accounts arising from the provision of medical care delivered in the ordinary course of business;  provided that Accounts of a portfolio company of any of the CD&R Investors or their respective Affiliates or an employee or agent thereof shall not be excluded by virtue of this clause (f);

 

(g)           Accounts that are not payable in Dollars;

 

(h)           Accounts with respect to which the Account Debtor is insolvent, is subject to a proceeding related thereto, has gone out of business, or as to which a Related Corporation or a Loan Party has received notice of an imminent proceeding related to such Account Debtor being or alleged to be insolvent or which proceeding is reasonably likely to result in a material impairment of the financial condition of such Account Debtor;

 

(i)            Accounts with respect to which the applicable Related Corporation’s or Loan Party’s right to receive payment is deferred or otherwise is not absolute or is contingent upon the fulfillment of any condition whatsoever (other than the preparation and delivery of an invoice), provided that any such Accounts shall be included as EmCare General Eligible Accounts once the related services have been rendered or all conditions have been met and such Accounts are otherwise not excluded under clauses (a) to (s) of this definition;

 

(j)            Accounts with respect to which the Account Debtor is a Person other than a Governmental Authority unless:  (i) the Account Debtor (A) is a natural person with a billing address in the United States, (B) maintains its Chief Executive Office in the United States, or (C) is organized under the laws of the United States or any state, territory or subdivision thereof; (ii) the Account Debtor is a Third Party Payor (excluding for this purpose Government Accounts), or (iii) (A) the Account is supported by an irrevocable letter of credit satisfactory to the Administrative Agent, in its Permitted Discretion (as to form, substance, and issuer or domestic confirming bank), that has been delivered to the Administrative Agent and is directly drawable

 

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by the Administrative Agent, or (B) the Account is covered by credit insurance in form, substance, and amount, and by an insurer, satisfactory to the Administrative Agent, in its Permitted Discretion;

 

(k)           Accounts with respect to which the Account Debtor is the government of any country or sovereign state other than the United States, or of any state, municipality or other political subdivision thereof, or of any department, agency, public corporation, or other instrumentality thereof, unless (i) the Account is supported by an irrevocable letter of credit satisfactory to the Administrative Agent, in its Permitted Discretion (as to form, substance, and issuer or domestic confirming bank) that has been delivered to the Administrative Agent and is directly drawable by the Administrative Agent, or (ii) the Account is covered by credit insurance in form, substance, and amount, and by an insurer, satisfactory to the Administrative Agent, in its Permitted Discretion;

 

(l)            Accounts with respect to which the Account Debtor is the federal government of the United States or any department, agency or instrumentality of the United States (exclusive, however, of (i) Accounts with respect to which the applicable Loan Party has complied, to the reasonable satisfaction of the Administrative Agent, with the Assignment of Claims Act of 1940 (31 USC Section 3727) and (ii) Government Accounts, to the extent that these would otherwise be EmCare General Eligible Accounts);

 

(m)          (i) Accounts with respect to which the Account Debtor is a creditor of any Related Corporation or Loan Party, and such Account Debtor has or has asserted a right of setoff, or has disputed its obligation to pay all or any portion of the Account, to the extent of such claim, right of setoff, or dispute, (ii) Accounts which are subject to a rebate that has been earned but not taken or a chargeback, to the extent of such rebate or chargeback, (iii) Accounts that comprise service charges or finance charges, or (iv) Accounts with respect to which the applicable Related Corporation or a Loan Party is not able to bring suit or otherwise enforce its remedies against the Account Debtor through judicial process;

 

(n)           Accounts that are not owned by a Related Corporation or a Loan Party;

 

(o)           Accounts which have been redated or extended (provided that this shall not apply to any Accounts that have been re-categorized from one payor type to another payor type in the ordinary course of business);

 

(p)           (i) with respect to EmCare General Eligible Accounts that are created by a Related Corporation, Accounts that are subject to any Lien in favor of another Person (provided that (x) in no event shall any Excluded Assets be deemed to be EmCare General Eligible Accounts hereunder and (y) this exclusion shall not apply in respect of Liens permitted, mutatis mutandis, pursuant to Subsections 8.14(a), 8.14(c), 8.14(e) (to the extent that the Liens on such Accounts are at least as subordinated to the Liens thereon securing the Obligations as the Liens securing the Term Loan Facility Obligations under the ABL/Term Loan Intercreditor Agreement), 8.14(h), 8.14(q) or 8.14(s)) and (ii) with respect to EmCare General Eligible Accounts that are created by a Loan Party, Accounts that are not subject to a valid and perfected first priority Lien in favor of the Collateral Agent, as applicable, pursuant to a Security

 

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Document (as and to the extent provided therein (provided that in no event shall any Excluded Assets be deemed to be EmCare General Eligible Accounts hereunder));

 

(q)           Accounts that exceed the amount such Related Corporation or Loan Party is entitled to receive under any capitation arrangement, fee schedule, discount formula, cost-based reimbursement or other adjustment or limitation to such Loan Party’s usual charges (to the extent of such excess);

 

(r)            Accounts with respect to which the services giving rise to such Account have not yet been performed; or

 

(s)           Accounts that were acquired or originated by a Person acquired in a Permitted Acquisition consisting either of (x) receivables of a type substantially different from those in the Borrowing Base at such time, or (y) receivables of a type substantially similar to those in the Borrowing Base at such time, provided that in the case of clause (y) only, such Accounts with an aggregate net book value in an amount not exceeding 10% of the aggregate Borrowing Base at the time of such Permitted Acquisition shall not be excluded, provided, further, that this clause (u) shall cease to exclude any Accounts of the type listed under clause (x) or (y) above at the time the Parent Borrower delivers to the Administrative Agent a field exam in form and substance reasonably satisfactory to the Administrative Agent prepared by a third party field examiner reasonably satisfactory to the Administrative Agent with respect to such acquired Accounts, or such field exam requirement is waived by the Administrative Agent.

 

Notwithstanding the foregoing, the Administrative Agent may, from time to time, in the exercise of its Permitted Discretion, on not less than ten (10) Business Days’ prior notice to the Parent Borrower, change the criteria for EmCare General Eligible Accounts as reflected on the Borrowing Base Certificate based on either:  (i) an event, condition or other circumstance arising after the Closing Date, or (ii) an event, condition or other circumstance existing on the Closing Date to the extent the Administrative Agent had no knowledge thereof on or prior to the Closing Date, in either case under clause (i) or (ii), which adversely affects, or would reasonably be expected to adversely affect, EmCare General Eligible Accounts in any material respect as determined by the Administrative Agent in the exercise of its Permitted Discretion.  Any such change in criteria shall have a reasonable relationship to the event, condition or other circumstance that is the basis for such change.  Upon delivery of the notice of such change pursuant to the foregoing sentence, the Administrative Agent shall be available to discuss the proposed change, and the applicable Borrower may take such action as may be required so that the event, condition or circumstance that is the basis for such change no longer exists, in a manner and to the extent reasonably satisfactory to the Administrative Agent in the exercise of its Permitted Discretion.  Any Accounts of the Loan Parties that are not EmCare General Eligible Accounts shall nevertheless be part of the Collateral as and to the extent provided in the Security Documents.

 

EmCare Hospital Accounts”:  all Accounts that are subsidies payable in respect of EmCare Business services provided to healthcare facilities and reported in the Parent Borrower’s accounts receivables financial reporting systems under the category “Hospital” (or any successor category in the current accounts receivables financial reporting systems of the Parent Borrower or any successor accounts receivables financial reporting system).

 

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EmCare Other Accounts”:  all Accounts relating to paragraph (b) of the definition of EmCare Business.

 

EmCare Projected Collection Analysis”: the Parent Borrower’s analysis of write-offs and projected collectability of EmCare General Accounts by payor type consistent with the past practice of the Parent Borrower or otherwise in a form and level of detail reasonably acceptable to the Administrative Agent.

 

EmCare Projected Collection Rate for 0-180 Days”: as of any date of determination, based on the most recent EmCare Projected Collection Analysis, a projected collection percentage calculated as follows: the percentage produced by dividing (A) the following amount: (i) the amount produced by multiplying (x) the projected “cash per visit” amount which the Parent Borrower expects to collect for each EmCare General Account billed during the six (6) consecutive month period ending on the date that is one (1) month prior to the date of determination by (y) the number of visits represented by the total number of billed EmCare General Accounts during such period, minus (ii) the aggregate amount of any payments actually received for EmCare General Accounts billed during such period, by (B) the total amount of billed EmCare General Eligible Accounts that are unpaid on the date of determination and have been outstanding for less than 180 days from the original Service Date, or a projected collection percentage calculated in another manner reasonably satisfactory to the Administrative Agent.

 

EmCare Projected Collection Rate for 180-360 Days”: as of any date of determination, based on the most recent EmCare Projected Collection Analysis, a projected collection percentage calculated as follows: the percentage produced by dividing (A) the following amount: (i) the amount produced by multiplying (x) the projected “cash per visit” amount which the Parent Borrower expects to collect for each EmCare General Account billed during the six (6) consecutive month period ending on the date that is seven (7) months prior to the date of determination by (y) the number of visits represented by the total number of billed EmCare General Accounts during such period, minus (ii) the aggregate amount of any payments actually received for EmCare General Accounts billed during such period, by (B) the total amount of billed EmCare General Eligible Accounts that are unpaid on the date of determination and have been outstanding for more than 180 days and less than 360 days from the original Service Date, or a projected collection percentage calculated in another manner reasonably satisfactory to the Administrative Agent.

 

Environmental Costs”:  any and all costs or expenses (including attorney’s and consultant’s fees, investigation and laboratory fees, response costs, court costs and litigation expenses, fines, penalties, damages, settlement payments, judgments and awards), of whatever kind or nature, known or unknown, contingent or otherwise, arising out of, or in any way relating to, any actual or alleged violation of, noncompliance with or liability under any Environmental Laws.  Environmental Costs include any and all of the foregoing, without regard to whether they arise out of or are related to any past, pending or threatened proceeding of any kind.

 

Environmental Laws”:  any and all U.S. or foreign, federal, state, provincial, territorial, local or municipal laws, rules, orders, enforceable guidelines and orders-in-council, regulations, statutes, ordinances, codes, decrees, and such requirements of any Governmental

 

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Authority properly promulgated and having the force and effect of law or other Requirements of Law (including common law) regulating, relating to or imposing liability or standards of conduct concerning protection of human health (as it relates to exposure to Materials of Environmental Concern) or the environment, as have been, or now or at any relevant time hereafter are, in effect.

 

Environmental Permits”:  any and all permits, licenses, registrations, notifications, exemptions and any other authorization required under any Environmental Law.

 

Equity Contribution”:  as defined in the Recitals hereto.

 

Equity Financing”:  as defined in the Recitals hereto.

 

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

 

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

 

Event of Default”:  any of the events specified in Subsection 9.1, provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied.

 

Excess Availability”:  as of any date of determination, the excess, if any, of (a) Availability over (b) Aggregate Lender Exposure at such time.  For purposes of the definition of “Payment Condition”, the Excess Availability shall be calculated on a pro forma basis to include the borrowing or repayment of any Loans or issuance or cancellation of any Letters of Credit in connection with the proposed transaction.

 

Excess Availability Floor”:  at any time, (a) an amount equal to $40,000,000 or (b) if any Significant Asset Sale shall have then occurred, an amount equal to (i) the amount set forth in paragraph (a) minus (ii) an amount equal to the gross sale proceeds received in respect of such Significant Asset Sale, provided that such amount may not be reduced to an amount less than $35,000,000.

 

Exchange Act”:  the Securities Exchange Act of 1934, as amended from time to time.

 

Excluded Accounts Receivable”:  all Accounts for which the Parent Borrower is unable to provide supporting information and data necessary, as determined by the Administrative Agent in its reasonable discretion, to determine eligibility.

 

Excluded Assets”:  as defined in the Guarantee and Collateral Agreement.

 

Excluded Bank Accounts”:  (a) bank accounts the balance of which consists exclusively of and used exclusively for (i) withheld income taxes and federal, state or local employment taxes in such amounts as are required in the reasonable judgment of the Parent Borrower to be paid to the Internal Revenue Service or state or local government agencies within

 

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the following two months with respect to employees of any of the Loan Parties or any Related Corporation and (ii) amounts required to be paid over to an employee benefit plan pursuant to DOL Reg. Sec. 2510.3-102 on behalf of or for the benefit of employees of one or more Loan Parties or any Related Corporation, and (b) bank accounts constituting (and the balance of which consists solely of funds set aside to be used in connection with) taxes bank accounts and payroll bank accounts.

 

Excluded Contribution”:  (a) Net Proceeds, or the Fair Market Value of property or assets, received by the Parent Borrower of capital contributions to the Parent Borrower after the Closing Date or (b) Net Proceeds from the public or private issuance or sale (other than to a Restricted Subsidiary) of Capital Stock (other than Disqualified Capital Stock) by, or a capital contribution to, the Parent Borrower, in each case to the extent designated as an “Excluded Contribution” in a certificate of a Responsible Officer of the Parent Borrower delivered to the Administrative Agent; provided, however, that Net Proceeds received by the Parent Borrower in connection with any contributions of non-cash property or assets shall only be included so long as such non-cash property or assets were acquired by the Parent Entity of the Parent Borrower in an arms-length transaction within six (6) months prior to such contribution.

 

Excluded Subsidiary”:  at any date of determination, any Subsidiary of the Parent Borrower designated as such in writing by the Borrower Representative to the Administrative Agent that:

 

(a)           is an Immaterial Subsidiary;

 

(b)           is prohibited by Requirement of Law or Contractual Obligations existing on the Closing Date (or, in the case of any newly acquired Subsidiary, in existence at the time of acquisition but not entered into in contemplation thereof) from Guaranteeing,  or granting Liens to secure, the Obligations or if Guaranteeing, or granting Liens to secure, the Obligations would require governmental (including regulatory) consent, approval, license or authorization unless such consent, approval, license or authorization has been received;

 

(c)           with respect to which the Parent Borrower and the Administrative Agent reasonably agree that the burden or cost or other consequences of providing a guarantee of the Obligations shall be excessive in view of the benefits to be obtained by the Lenders therefrom;

 

(d)           with respect to which the provision of such guarantee of the Obligations would result in material adverse tax consequences to the Parent Borrower or one of its Subsidiaries (as reasonably determined by the Parent Borrower and notified in writing to the Administrative Agent);

 

(e)           is a Subsidiary of a Foreign Subsidiary;

 

(f)            joint ventures or any non Wholly Owned Subsidiaries, but only to the extent that the Organizational Documents or other agreements with equity or debt holders of such joint ventures or non Wholly Owned Subsidiaries do not permit such entity to guarantee or grant Liens to secure the Obligations;

 

(g)           is an Unrestricted Subsidiary;

 

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(h)           is a Captive Insurance Subsidiary;

 

(i)            is a special purpose entity; or

 

(j)            EMS Executive Investco LLC, a Delaware limited liability company;

 

provided, however, that no Subsidiary of the Parent Borrower shall be an “Excluded Subsidiary” if such Subsidiary is not an “Excluded Subsidiary” (or comparable term) for purposes of the Term Loan Facility.  Subject to the proviso in the preceding sentence, any Subsidiary so designated as an Excluded Subsidiary that fails to meet the foregoing requirements as of the last day of the Most Recent Four Quarter Period shall continue to be deemed an Excluded Subsidiary hereunder until the date that is sixty (60) days following the date on which such annual or quarterly financial statements were required to be delivered pursuant to Subsection 7.1 with respect to such Most Recent Four Quarter Period.

 

Excluded Taxes”:  (a) any Taxes measured by or imposed upon the net income of any Agent or Lender or its applicable lending office, or any branch or affiliate thereof, and all franchise Taxes, branch Taxes, Taxes on doing business or Taxes measured by or imposed upon the overall capital or net worth of any such Agent or Lender or its applicable lending office, or any branch or affiliate thereof, in each case imposed:  (i) by the jurisdiction under the laws of which such Agent or Lender, applicable lending office, branch or affiliate is organized or is located, or in which its principal executive office is located, or any nation within which such jurisdiction is located or any political subdivision thereof; or (ii) by reason of any connection between the jurisdiction imposing such Tax and such Agent or Lender, applicable lending office, branch or affiliate other than a connection arising solely from such Agent or Lender having executed, delivered or performed its obligations under, or received payment under or enforced, this Agreement or any Notes, and (b) any Tax imposed by FATCA.

 

Exempt Sale and Leaseback Transaction”:  any Sale and Leaseback Transaction (a) in which the sale or transfer of property occurs within 90 days of the acquisition of such property by the Parent Borrower or any of its Restricted Subsidiaries or (b) that involves property with a book value of $20,000,000 or less, and is not part of a series of related Sale and Leaseback Transactions involving property with an aggregate value in excess of such amount and entered into with a single Person or group of Persons.

 

Existing Financing Leases”:  Financing Leases of the Parent Borrower and its Restricted Subsidiaries existing on the Closing Date or permitted to be incurred under the Merger Agreement and disclosed on Schedule 1.1(c).

 

Existing Letters of Credit”:  Letters of Credit issued prior to, and outstanding on, the Closing Date and disclosed on Schedule 1.1(d).

 

Extended ABL Term Loans”:  as defined in Subsection 2.8(a).

 

Extended Revolving Commitment”:  as defined in Subsection 2.8(a).

 

Extending ABL Term Lenders”:  as defined in Subsection 2.8(a).

 

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Extending Lenders”:  as defined in Subsection 2.8(a).

 

Extending Revolving Credit Lender”:  as defined in Subsection 2.8(a).

 

Extension”:  as defined in Subsection 2.8(a).

 

Extension of Credit”:  as to any Lender, the making of a Loan, or, in the case of Subsection 2.4(d), participation in a Loan by such Lender or the issuance of, or participation in, a Letter of Credit by such Lender.

 

Extension Offer”:  as defined in Subsection 2.8(a).

 

Facility”:  each of (a) the Commitments and the Extensions of Credit made thereunder and (b) any other committed facility hereunder and the Extensions of Credit made thereunder.

 

Fair Market Value”:  with respect to any asset or property, the fair market value of such asset or property as determined in good faith by the Board of Directors, whose determination shall be conclusive.

 

FATCA”:  Sections 1471 through 1474 of the Code as in effect on the Closing Date (and any amended or successor provisions that are substantially comparable), and any regulations or other administrative authority promulgated thereunder.

 

Federal District Court”: as defined in Subsection 11.13(a).

 

Federal Funds Effective Rate”:  for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System of the United States arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day for such transactions received by the Administrative Agent from three (3) federal funds brokers of recognized standing selected by it.

 

Fee Letter”:  the fee letter agreement, dated as of February 13, 2011 as amended by the letter agreement dated as of February 25, 2011, and as further amended by the letter agreement dated as of March 7, 2011, among Barclays Bank PLC, Deutsche Bank AG New York Branch, Deutsche Bank AG Cayman Islands Branch, Deutsche Bank Securities Inc., Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley Senior Funding, Inc., Royal Bank of Canada, UBS Loan Finance LLC, UBS Securities LLC, Citigroup Global Markets Inc., Natixis and Merger Sub, as amended, restated, modified or supplemented.

 

FILO Tranche”:  as defined in Subsection 2.6(b)(iii).

 

Financial Covenant Debt”:  with respect to any Person, without duplication, Indebtedness of the type specified in clauses (a) through (f) of the definition of “Indebtednessplus, without duplication, any Guarantee Obligations in respect thereof; provided, however, that Indebtedness of the type specified in clause (d) of the definition thereof shall only be included on the date Indebtedness of such Person is being determined to the extent such Indebtedness

 

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identified in such clause constitutes a non-contingent reimbursement obligation owing at such time and clause (e) of the definition thereof shall not include payments required upon any early termination on the date Indebtedness of such Person is being determined if no such early termination has occurred.

 

Financing Lease”:  any lease of property, real or personal, the obligations of the lessee in respect of which are required in accordance with GAAP to be capitalized on a balance sheet of the lessee.  The Stated Maturity of any Indebtedness under a Financing Lease shall be the scheduled date under the terms thereof of the last payment of rent or any other amount due under such Financing Lease.

 

Financing Lease Obligations”:  obligations under any Financing Lease.

 

FIRREA”:  the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended from time to time.

 

First Lien Term Obligations”: (i) the Term Loan Facility Obligations and (ii) the Additional Obligations, the Permitted Debt Exchange Notes and refinancing Indebtedness in respect of the Indebtedness described in this clause (ii) (other than any such Additional Obligations, Permitted Debt Exchange Notes and refinancing Indebtedness that are unsecured or secured by a Lien ranking junior to the Lien securing the Term Loan Facility Obligations) secured by a first priority interest in the Term Loan Priority Collateral and a second priority interest in the ABL Priority Collateral, collectively.

 

first priority”:  with respect to any Lien purported to be created in any Collateral pursuant to any Security Document, that such Lien is the most senior Lien to which such Collateral is subject (subject to Customary Permitted Liens, Retained Rights and Liens permitted under Subsection 8.14(h)).

 

Fiscal Period”:  each fiscal month of the Parent Borrower and its Restricted Subsidiaries as described on Schedule 1.1(e).

 

Fiscal Quarter”:  for any Fiscal Year, (i) the fiscal period commencing on January 1 of such Fiscal Year and ending on March 31 of such Fiscal Year, (ii) the fiscal period commencing on April 1 of such Fiscal Year and ending on June 30 of such Fiscal Year, (iii) the fiscal period commencing on July 1 of such Fiscal Year and ending on September 30 of such Fiscal Year and (iv) the fiscal period commencing on October 1 of such Fiscal Year and ending on December 31 of such Fiscal Year.

 

Fiscal Year”:  any period of twelve (12) consecutive months ending on December 31 of any calendar year.

 

Fixed GAAP Date”:  the Closing Date, provided that at any time after the Closing Date, the Parent Borrower may by written notice to the Administrative Agent elect to change the Fixed GAAP Date to be the date specified in such notice, and upon such notice, the Fixed GAAP Date shall be such date for all periods beginning on and after the date specified in such notice.

 

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Fixed GAAP Terms”: (a) the covenants contained in Subsections 8.1 and 8.13 and the defined terms “Capital Expenditures”, “Consolidated Fixed Charge Coverage Ratio”, “Consolidated Interest Expense”, “Consolidated Net Income”, “Consolidated Total Assets”, “Debt Service Charges”, “EBITDA”, “Financial Covenant Debt”, “Pro Forma Basis”, “Pro Forma Compliance” or “Total Leverage Ratio”, (b) in each case all defined terms in this Agreement related thereto to the extent used in or relating to any of the foregoing definitions, and all ratios and computations based on any of the foregoing definitions, and (c) any other term or provision of this Agreement or the Loan Documents that, at the Parent Borrower’s election, may be specified by the Parent Borrower by written notice to the Administrative Agent from time to time.

 

Foreign Pension Plan”:  a registered pension plan which is subject to applicable pension legislation other than ERISA or the Code, which a Restricted Subsidiary sponsors or maintains, or to which it makes or is obligated to make contributions.

 

Foreign Plan”:  each Foreign Pension Plan, deferred compensation or other retirement or superannuation plan, fund, program, agreement, commitment or arrangement whether oral or written, funded or unfunded, sponsored, established, maintained or contributed to, or required to be contributed to, or with respect to which any liability is borne, outside the United States of America, by the Parent Borrower or any of its Restricted Subsidiaries, other than any such plan, fund, program, agreement or arrangement sponsored by a Governmental Authority.

 

Foreign Subsidiary”:  any Subsidiary of the Parent Borrower which is organized and existing under the laws of any jurisdiction outside of the United States of America or that is a Foreign Subsidiary Holdco. Any subsidiary of the Parent Borrower which is organized and existing under the laws of Puerto Rico or any other territory of the United States of America shall be a Foreign Subsidiary.

 

Foreign Subsidiary Holdco”:  any Restricted Subsidiary of the Parent Borrower, so long as such Restricted Subsidiary has no material assets other than securities or Indebtedness of one or more Foreign Subsidiaries (or Subsidiaries thereof), and intellectual property relating to such Foreign Subsidiaries (or Subsidiaries thereof) and other assets (including cash, Cash Equivalents or Temporary Cash Investments) relating to an ownership interest in any such securities, Indebtedness, intellectual property or Subsidiaries; provided that no Subsidiary of the Parent Borrower shall be a “Foreign Subsidiary Holdco” if such Subsidiary is not a “Foreign Subsidiary Holdco” (or comparable term) for purposes of the Term Loan Facility.

 

GAAP”:  generally accepted accounting principles in the United States of America as in effect on the Fixed GAAP Date (for purposes of the Fixed GAAP Terms) and as in effect from time to time (for all other purposes of this Agreement), including those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession, and subject to the following sentence.  If at any time the SEC permits or requires U.S. domiciled companies subject to the reporting requirements of the Exchange Act to use IFRS in lieu of GAAP for financial reporting purposes, the Parent Borrower

 

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may elect by written notice to the Administrative Agent to so use IFRS in lieu of GAAP and, upon any such notice, references herein to GAAP shall thereafter be construed to mean (a) for periods beginning on and after the date specified in such notice, IFRS as in effect on the date specified in such notice (for purposes of the Fixed GAAP Terms) and as in effect from time to time (for all other purposes of this Agreement) and (b) for prior periods, GAAP as defined in the first sentence of this definition.  All ratios and computations based on GAAP contained in this Agreement shall be computed in conformity with GAAP.

 

General Intangibles”:  “general intangibles” (as such term is defined in Article 9 of the UCC), including payment intangibles, contract rights, rights to payment, rights arising under common law, statutes, or regulations, choses or things in action, goodwill, patents, trade names, trade secrets, trademarks, servicemarks, copyrights, blueprints, drawings, purchase orders, customer lists, monies due or recoverable from pension funds, route lists, rights to payment and other rights under any royalty or licensing agreements, infringement claims, computer programs, information contained on computer disks or tapes, software, literature, reports, catalogs, insurance premium rebates, tax refunds, and tax refund claims, and any and all supporting obligations in respect thereof, and any other personal property other than Accounts, Deposit Accounts, goods, Investment Property, and Negotiable Collateral.

 

Government Accounts”: Restricted Government Accounts and Unrestricted Government Accounts.

 

Government Accounts Receivable”:  any right to payment for goods sold or services rendered for Restricted Government Accounts.

 

Government Accounts Receivable Bank”:  any bank at which a Government Receivables Deposit Account is maintained.

 

Government Receivables Deposit Account”:  any Deposit Accounts containing or receiving Government Accounts Receivable deposited or transferred by Governmental Authorities.

 

Governmental Authority”:  the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supranational bodies such as the European Union or the European Central Bank).

 

Guarantee”:  any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person; provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.

 

Guarantee and Collateral Agreement”:  the Guarantee and Collateral Agreement delivered to the Collateral Agent as of the date hereof, substantially in the form of Exhibit B hereto, as the same may be amended, supplemented, waived or otherwise modified from time to time.

 

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Guarantee Obligation”:  as to any Person (the “guaranteeing person”), any obligation of (a) the guaranteeing person or (b) another Person (including any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other obligations (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including any such obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (A) for the purchase or payment of any such primary obligation or (B) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business.  The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by the Borrower Representative in good faith.

 

Guarantors”:  the collective reference to Holdings and each Subsidiary Guarantor; individually, a “Guarantor”.

 

Hedging Affiliate”:  as defined in the ABL/Term Loan Intercreditor Agreement.

 

Hedging Agreement”:  as defined in the ABL/Term Loan Intercreditor Agreement.

 

Hedging Arrangement”:  as defined in Subsection 8.10.

 

Hedging Party”:  any Hedging Affiliate party to an Interest Rate Protection Agreement, Hedging Agreement or other Permitted Hedging Arrangement.

 

HIPAA”:  has the meaning provided in Subsection 7.6(c).

 

Holdings”:  CDRT Acquisition Corporation, a Delaware corporation, and any successor in interest thereto.

 

IFRS”:  International Financial Reporting Standards and applicable accounting requirements set by the International Accounting Standards Board or any successor thereto (or the Financial Accounting Standards Board, the Accounting Principles Board of the American Institute of Certified Public Accountants, or any successor to either such Board, or the SEC, as the case may be), as in effect from time to time.

 

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Immaterial Subsidiary”:  any Subsidiary of the Parent Borrower designated as such in writing by the Borrower Representative to the Administrative Agent that (i) (x) contributed 2.50% or less of EBITDA for the Most Recent Four Quarter Period, and (y) had consolidated assets representing 2.50% or less of Consolidated Total Assets for the Most Recent Four Quarter Period; and (ii) together with all other Immaterial Subsidiaries designated pursuant to the preceding clause (i) (x) contributed 5.00% or less of EBITDA for the Most Recent Four Quarter Period, and (y) had consolidated assets representing 5.00% or less of Consolidated Total Assets for the Most Recent Four Quarter Period; provided, however, that no Subsidiary of the Parent Borrower shall be an “Immaterial Subsidiary” if such Subsidiary is not an “Immaterial Subsidiary” (or comparable term) for purposes of the Term Loan Facility.  Subject to the proviso in the preceding sentence, any Subsidiary so designated as an Immaterial Subsidiary that fails to meet the foregoing requirements as of the last day of the Most Recent Four Quarter Period shall continue to be deemed an “Immaterial Subsidiary” hereunder until the date that is sixty (60) days following the date on which such annual or quarterly financial statements were required to be delivered pursuant to Subsection 7.1(a) or 7.1(b) with respect to such Most Recent Four Quarter Period.

 

Incremental ABL Term Loans”:  as defined in Subsection 2.6(a).

 

Incremental Facility” and “Incremental Facilities”:  as defined in Subsection 2.6(a).

 

Incremental Facility Increase”:  as defined in Subsection 2.6(a).

 

Incremental Indebtedness”:  Indebtedness incurred by any Borrower pursuant to and in accordance with Subsection 2.6.

 

Incremental Revolving Commitment Effective Date”:  as defined in Subsection 2.6(d).

 

Incremental Revolving Commitments”:  as defined in Subsection 2.6(a).

 

Indebtedness”:  of any Person at any date, (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property (other than trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices), which purchase price is due more than one year after the date of placing such property in final service or taking final delivery and title thereto, (b) any other indebtedness of such Person which is evidenced by a note, bond, debenture or similar instrument, (c) all obligations of such Person under Financing Leases, (d) all obligations of such Person in respect of letters of credit, bankers’ acceptances or other similar instruments issued or created for the account of such Person, (e) for purposes of Subsection 9.1(e) only, all obligations of such Person in respect of interest rate protection agreements, interest rate futures, interest rate options, interest rate caps and any other interest rate hedge arrangements, (f) all indebtedness or obligations of the types referred to in the preceding clauses (a) through (e) to the extent secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof and (g) Guarantee Obligations of such Person in respect of any Indebtedness of the type described in the preceding clauses (a) through (f).

 

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Indebtedness to be Refinanced”:  the Indebtedness under that certain Credit Agreement, dated as of April 18, 2010, by and among AMR Holdco, Inc., EmCare Holdco, Inc., the Company, various lenders and Bank of America, N.A., as administrative agent (as amended, restated or otherwise modified through and including the Closing Date).

 

Individual Lender Exposure”:  of any Revolving Credit Lender, at any time, the sum of (a) the aggregate principal amount of all Revolving Credit Loans made by such Lender and then outstanding, (b) the sum of such Lender’s Commitment Percentage in each then outstanding Letter of Credit multiplied by the sum of the Stated Amount of the respective Letters of Credit and any Unpaid Drawings relating thereto and (c) such Lender’s Commitment Percentage of the Swingline Loans then outstanding.

 

Initial Agreement”:  as defined in Subsection 8.8(d).

 

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

 

Intellectual Property”:  as defined in Subsection 5.9.

 

Intercreditor Agreement Supplement”:  as defined in Subsection 10.8(a).

 

Interest Payment Date”:  (a) as to any ABR Loan, the last day of each March, June, September and December to occur while such Loan is outstanding, and the final maturity date of such Loan, (b) as to any Eurodollar Loan having an Interest Period of three months or less, the last day of such Interest Period, and (c) as to any Eurodollar Loan having an Interest Period longer than three months, (i) each day which is three months, or a whole multiple thereof, after the first day of such Interest Period and (ii) the last day of such Interest Period.

 

Interest Period”:  with respect to any Eurodollar Loan:

 

(a)           initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one, two, three or six (6) months (or, if required pursuant to Subsection 2.1(a), or agreed to by each affected Lender, nine (9) months, twelve (12) months or a shorter period) thereafter, as selected by the Borrower Representative in its notice of borrowing or notice of conversion, as the case may be, given with respect thereto; and

 

(b)           thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three or six (6) months (or if required pursuant to Subsection 2.1(a) or agreed to by each affected Lender, nine (9) months, twelve (12) months or a shorter period) thereafter, as selected by the Borrower Representative by irrevocable notice to the Administrative Agent not less than three Business Days prior to the last day of the then current Interest Period with respect thereto; provided that all of the foregoing provisions relating to Interest Periods are subject to the following:

 

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

 

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month in which event such Interest Period shall end on the immediately preceding Business Day;

 

(ii)           any Interest Period that would otherwise extend beyond the Termination Date shall (for all purposes other than Subsection 4.12) end on the Termination Date;

 

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

 

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

 

Interest Rate Protection Agreement”:  with respect to any Person, any interest rate protection agreement, future agreement, option agreement, swap agreement, cap agreement, collar agreement, hedge agreement or other similar agreement or arrangement (including derivative agreements or arrangements) as to which such Person is a party or a beneficiary.

 

Inventory”:  means inventory (as defined in Article 9 of the UCC).

 

Investment”:  in any Person by any other Person, any direct or indirect advance, loan or other extension of credit (other than to customers, dealers, licensees, franchisees, suppliers, directors, officers or employees of any Person in the ordinary course of business) or capital contribution (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others) to, or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by, such Person. For purposes of the definition of “Unrestricted Subsidiary” and Subsection 8.12 only (i) “Investment” shall include the portion (proportionate to the Parent Borrower’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of any Subsidiary of the Parent Borrower at the time that such Subsidiary is designated an Unrestricted Subsidiary, provided that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Parent Borrower shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to (x) the Parent Borrower’s “Investment” in such Subsidiary at the time of such redesignation less (y) the portion (proportionate to the Parent Borrower’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such redesignation and (ii) any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer. Guarantees shall not be deemed to be Investments.  The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced (at the Parent Borrower’s option) by any dividend, distribution, interest payment, return of capital, repayment or other amount or value received in respect of such Investment.

 

Investment Company Act”:  the Investment Company Act of 1940, as amended from time to time.

 

Investment Property”:  “investment property” (as such term is defined in Article 9 of the UCC) and any and all supporting obligations in respect thereof.

 

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ISP”:  the International Standby Practices (1998), International Chamber of Commerce Publication No. 590.

 

Issuing Lender”:  as the context may require, (a) Deutsche Bank AG New York Branch in its capacity as issuer of Letters of Credit issued by it; (b) Bank of America, N.A. in its capacity as issuer of the Existing Letters of Credit; (c) any other Lender that may become an Issuing Lender pursuant to Subsections 3.10 and 3.11 in its capacity as issuer of Letters of Credit issued by such Lender; or (d) collectively, all of the foregoing.

 

Junior Lien Intercreditor Agreement”:  the intercreditor agreement substantially in the form of Exhibit P to be entered into as required by the terms hereof, as amended, supplemented, waived or otherwise modified, from time to time.

 

L/C Disbursement”:  as defined in Subsection 3.5.

 

L/C Exposure”:  at any time the aggregate principal amount at such time of the L/C Obligations.  The L/C Exposure of any Revolving Credit Lender at any time shall equal its Commitment Percentage of the aggregate L/C Exposure at such time.

 

L/C Fee Payment Date”:  with respect to any Letter of Credit, the last day each of March, June, September and December to occur after the date of issuance thereof, to and including the first such day to occur on or after the date of expiry thereof; provided that if any L/C Fee Payment Date would otherwise occur on a day that is not a Business Day, such L/C Fee Payment Date shall be the immediately preceding Business Day.

 

L/C Fees”:  the fees and commissions specified in Subsection 3.3.

 

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

 

L/C Request”:  a letter of credit request in the form of Exhibit J attached hereto or, in such form as the applicable Issuing Lender may specify from time to time, requesting the Issuing Lender to issue a Letter of Credit.

 

Lead Arrangers”:  Deutsche Bank Securities Inc., Barclays Capital, Merrill Lynch, Pierce, Fenner & Smith Inc., Morgan Stanley Senior Funding, Inc., RBC Capital Markets and UBS Securities LLC, as Joint Lead Arrangers.

 

Lender Default”:  (a) the refusal (which may be given verbally or in writing and has not been retracted) or failure of any Lender (including any Agent in its capacity as Lender) to make available its portion of any incurrence of Loans or reimbursement obligations, which refusal or failure is not cured within one (1) Business Day after the date of such refusal or failure, (b) the failure of any Lender (including any Agent in its capacity as Lender) to pay over to the Administrative Agent, any Issuing Lender or any other Lender any other amount required to be paid by it hereunder within one (1) Business Day of the date when due, unless the subject of a good faith dispute, (c) a Lender (including any Agent in its capacity as Lender) has notified

 

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the Parent Borrower or the Administrative Agent that it does not intend to comply with its funding obligations hereunder, (d) a Lender (including any Agent in its capacity as Lender) has failed, within ten (10) Business Days after request by the Administrative Agent, to confirm that it will comply with its funding obligations hereunder or (e) an Agent or a Lender has admitted in writing that it is insolvent or such Agent or Lender becomes subject to a Lender-Related Distress Event.

 

Lender Joinder Agreement”:  as defined in Subsection 2.6(c)(i).

 

Lender-Related Distress Event”:  with respect to any Agent or Lender (each, a “Distressed Person”), a voluntary or involuntary case with respect to such Distressed Person under any debt relief law, or a custodian, conservator, receiver or similar official is appointed for such Distressed Person or any substantial part of such Distressed Person’s assets, or such Distressed Person makes a general assignment for the benefit of creditors or is otherwise adjudicated as, or determined by any Governmental Authority having regulatory authority over such Distressed Person to be, insolvent or bankrupt; provided that a Lender-Related Distress Event shall not be deemed to have occurred solely by virtue of the ownership or acquisition of any equity interests in any Agent or Lender or any person that directly or indirectly controls such Agent or Lender by a Governmental Authority or an instrumentality thereof.

 

Lenders”:  the several banks and other financial institutions from time to time parties to this Agreement together with, in each case, any affiliate of any such bank or financial institution through which such bank or financial institution elects, by notice to the Administrative Agent and the Borrower Representative to make any Revolving Credit Loans, Swingline Loans or Letters of Credit available to any Borrower, provided that for all purposes of voting or consenting with respect to (a) any amendment, supplementation or modification of any Loan Document, (b) any waiver of any of the requirements of any Loan Document or any Default or Event of Default and its consequences or (c) any other matter as to which a Lender may vote or consent pursuant to Subsection 11.1 hereof, the bank or financial institution making such election shall be deemed the “Lender” rather than such affiliate, which shall not be entitled to so vote or consent.

 

Letters of Credit” or “L/Cs”:  letters of credit (including Existing Letters of Credit) issued by any Issuing Lender to, or for the account of the Borrowers, pursuant to Section 3.

 

LIBOR Rate”:  with respect each day during each Interest Period pertaining to a Eurodollar Loan, the rate per annum determined by the Administrative Agent to be:

 

(a)           the arithmetic average (rounded upwards to the nearest 1/100th of 1.00% per annum) of the London Interbank Offered Rates for United States Dollar deposits for a duration equal to or comparable to the duration of such Interest Period which appear on the relevant Reuters Monitor Money Rates Service page (being currently the page designated as “LIBO”) at or about 11:00 A.M. (London time) two (2) London Business Days before the first day of such Interest Period; or

 

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(b)           if no such page is available, the arithmetic mean of the rates (rounded upwards to the nearest 1/100th of 1.00% per annum) as supplied to the Administrative Agent at its request quoted by the Reference Banks to leading banks in the London interbank market two London Business Days before the first day of such Interest Period for United States Dollar deposits of a duration equal to the duration of such Interest Period.

 

Lien”:  any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof).

 

Loan”:  a Revolving Credit Loan or a Swingline Loan, as the context shall require; collectively, the “Loans”.

 

Loan Documents”:  this Agreement, any Notes, the L/C Requests, the ABL/Term Loan Intercreditor Agreement, the Guarantee and Collateral Agreement, the Junior Lien Intercreditor Agreement (on and after the execution thereof), each Other Intercreditor Agreement (on and after the execution thereof) and any other Security Documents, each as amended, supplemented, waived or otherwise modified from time to time.

 

Loan Parties”:  Holdings, the Borrowers and the Subsidiary Guarantors; individually, a “Loan Party”.

 

Loan Party Concentration Account”: any concentration account maintained by any Loan Party (other than any such concentration account if such concentration account is (i) an Excluded Bank Account or (ii) all of the funds and other assets owned by a Loan Party held in such concentration account are excluded from the Collateral pursuant to any Security Document, including Excluded Assets) into which the funds in any Loan Party DDA and/or any funds in any Related Corporation DDA or Related Corporation Concentration Account are transferred on a periodic basis as provided for in Subsection 4.16(b), as set forth on Part 4 of Schedule 4.16 as updated from time to time in accordance with the provisions of this Agreement. All funds in any Loan Party Concentration Account shall be conclusively presumed to be Collateral and proceeds of Collateral and the Agents and the Lenders shall have no duty to inquire as to the source of the amounts on deposit in such Loan Party Concentration Account, subject to the Security Documents, the ABL/Term Loan Intercreditor Agreement or any other applicable intercreditor agreement.

 

Loan Party DDA”:  any checking or other demand deposit bank account maintained by any Loan Party (other than any such checking or other demand deposit account if such checking or other demand deposit account is (i) an Excluded Bank Account or (ii) all of the funds and other assets owned by a Loan Party held in such checking or other demand deposit account are excluded from the Collateral pursuant to any Security Document, including Excluded Assets) into which the proceeds of ABL Priority Collateral are deposited or are expected to be deposited, as set forth on Part 3 of Schedule 4.16 as updated from time to time in accordance with the provisions of this Agreement. All funds in any Loan Party DDA shall be conclusively presumed to be Collateral and proceeds of Collateral and the Agents and the Lenders shall have no duty to inquire as to the source of the amounts on deposit in such Loan

 

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Party DDA, subject to the Security Documents, the ABL/Term Loan Intercreditor Agreement or any other applicable intercreditor agreement.

 

Management Advances”:  (1) loans or advances made to directors, officers, employees or consultants of any Parent Entity, any Borrower or any Restricted Subsidiary or to Related Physicians (x) in respect of travel, entertainment or moving related expenses incurred in the ordinary course of business, (y) in respect of moving related expenses incurred in connection with any closing or consolidation of any facility, or (z) in the ordinary course of business and (in the case of this clause (z)) not exceeding $5,000,000 in the aggregate outstanding at any time, (2) promissory notes of Management Investors acquired in connection with the issuance of Management Stock to such Management Investors, (3) Management Guarantees, or (4) other Guarantees of borrowings by Management Investors in connection with the purchase of Management Stock, which Guarantees are permitted under Subsection 8.13.

 

Management Guarantees”:  guarantees (x) of up to an aggregate principal amount outstanding at any time of $20,000,000 of borrowings by Management Investors in connection with their purchase of Management Stock or (y) made on behalf of, or in respect of loans or advances made to, directors, officers or employees of any Parent Entity, the Parent Borrower or any Restricted Subsidiary or to any Related Physicians (1) in respect of travel, entertainment and moving related expenses incurred in the ordinary course of business, or (2) in the ordinary course of business and (in the case of this clause (2)) not exceeding $5,000,000 in the aggregate outstanding at any time.

 

Management Investors”:  the officers, directors, employees and other members of the management of any Parent Entity, the Parent Borrower or any of their respective Subsidiaries, or any Related Physicians, or family members or relatives of any of the foregoing (provided that, solely for purposes of the definition of “Permitted Holders”, such relatives shall include only those Persons who are or become Management Investors in connection with estate planning for or inheritance from other Management Investors, as determined in good faith by the Borrower, which determination shall be conclusive), or trusts, partnerships or limited liability companies for the benefit of any of the foregoing, or any of their heirs, executors, successors and legal representatives, who at any date beneficially own or have the right to acquire, directly or indirectly, Capital Stock of the Parent Borrower or any Parent Entity.

 

Management Stock”: Capital Stock of the Parent Borrower, Holdings or any Parent Entity (including any options, warrants or other rights in respect thereof) held by any of the Management Investors.

 

Management Subscription Agreements”:  one or more stock subscription, stock option, grant or other agreements which have been or may be entered into between Holdings or any Parent Entity and one or more Management Investors (or any of their heirs, successors, assigns, legal representatives or estates), with respect to the issuance to and/or acquisition, ownership and/or disposition by any of such parties of common stock of Holdings or any Parent Entity, or options, warrants, units or other rights in respect of common stock of Holdings or any Parent Entity, any agreements entered into from time to time by transferees of any such stock, options, warrants or other rights in connection with the sale, transfer or reissuance thereof, and

 

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any assumptions of any of the foregoing by third parties, as amended, supplemented, waived or otherwise modified from time to time.

 

Mandatory Revolving Credit Loan Borrowing”:  as defined in Subsection 2.4(c).

 

Material Adverse Effect”:  a material adverse effect on (a) the business, operations, property or condition (financial or otherwise) of Holdings and its Restricted Subsidiaries taken as a whole or (b) the validity or enforceability as to any Loan Party thereto of this Agreement or any of the other Loan Documents or the rights or remedies of the Agents and the Lenders under the Loan Documents or with respect to the Collateral comprising the Borrowing Base taken as a whole.

 

Material Subsidiaries”:  Restricted Subsidiaries of the Parent Borrower constituting, individually or in the aggregate (as if such Restricted Subsidiaries constituted a single Subsidiary), a “significant subsidiary” in accordance with Rule 1-02 under Regulation S-X.

 

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

 

Maximum Incremental Facilities Amount”:  at any date of determination, the sum of (i) $250,000,000 minus the aggregate principal amount of all Indebtedness incurred in reliance on clause (i) of this definition of “Maximum Incremental Facilities Amount” pursuant to Subsection 8.1(b)(i)(C) of the Term Loan Credit Agreement prior to such date plus (ii) an additional amount if, after giving effect to the incurrence of such additional amount, the Consolidated First-Lien Net Leverage Ratio (as defined in the Term Loan Credit Agreement) shall not exceed 4.00 to 1.00 (as set forth in an officer’s certificate of a Responsible Officer delivered to the Administrative Agent at the time of such incurrence, together with calculations demonstrating compliance with such ratio).

 

Medicaid”: collectively, the healthcare assistance program established by Title XIX of the Social Security Act (42 U.S.C. §§ 1396 et seq.) and any statutes succeeding thereto, and all law, rules, regulations, manuals, orders, guidelines or requirements (whether or not having the force of law) pertaining to such program, in each case as the same may be amended, supplemented or otherwise modified from time to time.

 

Medicaid Account”: an Account payable pursuant to an agreement entered into between a state agency or other entity administering Medicaid in such state and a Loan Party or a Related Corporation under which such Loan Party or Related Corporation agrees to provide services for Medicaid patients.

 

Medicare”: collectively, the health insurance program for the aged and disabled established by Title XVIII of the Social Security Act (42 U.S.C. §§ 1395 et seq.) and any statutes succeeding thereto, and all laws, rules, regulations, manuals, orders or guidelines (whether or not

 

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having the force of law) pertaining to such program, in each case as the same may be amended, supplemented or otherwise modified from time to time.

 

Medicare Account”: an Account payable pursuant to an agreement entered into between any entity administering Medicare in any state and a Loan Party or a Related Corporation under which such Loan Party or Related Corporation agrees to provide services for Medicare patients.

 

Merger”:  as defined in the Recitals hereto.

 

Merger Agreement”:  that certain Agreement and Plan of Merger (together with the Company Disclosure Schedule (as defined in the Merger Agreement) and Parent Disclosure Schedule (as defined in the Merger Agreement) delivered in connection therewith), dated as of February 13, 2011, among Holdings, Merger Sub and the Company, as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and in accordance with the terms of this Agreement.

 

Merger Documents”:  collectively, (i) the Merger Agreement and (ii) the Unitholders Agreement, dated as of February 13, 2011, among Holdings, Merger Sub, the Company, EMSLP, Onex Corporation, a corporation existing under the laws of Canada, and the limited partners of EMSLP party thereto.

 

Merger Sub”:  as defined in the Preamble hereto.

 

Minimum Equity Amount”:  as defined in the Recitals hereto.

 

Minimum Extension Condition”:  as defined in Subsection 2.8(b).

 

Minority Business”:  means any business unit of the Company that represents less than 50% of the EBITDA of the Company and its Restricted Subsidiaries as of the last day of the Most Recent Four Quarter Period.

 

Minority Business Assets”:  the assets of the Company and its Subsidiaries, including Capital Stock of Subsidiaries that relate to or form part of a Minority Business.

 

Minority Business Disposition”:  (i) any sale or other disposition of Capital Stock of any Minority Business Subsidiary (whether by issuance or sale of Capital Stock, merger, or otherwise) to one or more Persons (other than the Company or a Restricted Subsidiary) in any transaction or series of related transactions following the consummation of which such Minority Business Subsidiary is no longer a Restricted Subsidiary of the Company (excluding any Minority Business Offering) or (ii) any sale or other disposition of any assets of any Minority Business Subsidiary, including all or substantially all of the assets of any Minority Business Subsidiary, to one or more Persons (other than the Company or a Restricted Subsidiary) in any transaction or series of related transactions; provided that at the time of any such Minority Business Disposition (x) the Payment Condition is satisfied and (y) no Specified Default exists or would arise therefrom.

 

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Minority Business Offering”:  a public offering of Capital Stock of any Minority Business Subsidiary for cash pursuant to a registration statement filed with the SEC; provided that at the time of any such Minority Business Offering (x) the Payment Condition is satisfied and (y) no Specified Default exists or would arise therefrom.

 

Minority Business Subsidiary”:  any of the Company’s Subsidiaries and successors in interest thereto to the extent any of such Subsidiaries form part of the relevant Minority Business.

 

Moody’s”:  as defined in the definition of “Cash Equivalents” in this Subsection 1.1.

 

Mortgaged Fee Properties”:  the collective reference to each real property owned in fee by the Loan Parties required to be mortgaged as Collateral pursuant to the requirements of Subsection 7.9, including the land and all buildings, improvements, structures and fixtures now or subsequently located thereon and owned by any such Loan Party.

 

Mortgages”:  each of the mortgages and deeds of trust or similar security instruments executed and delivered by any Loan Party to the Collateral Agent, substantially in the form of Exhibit C, as the same may be amended, supplemented, waived or otherwise modified from time to time.

 

Most Recent Four Quarter Period”:  the four (4) Fiscal Quarter period of the Parent Borrower ending on the last day of the most recently completed Fiscal Year or Fiscal Quarter for which financial statements of the Parent Borrower have been (or have been required to be) delivered under Subsection 7.1(a) or 7.1(b).

 

MTM”:  as defined in the definition of “Designated Hedging Reserves”.

 

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

 

Municipal Contract Lien”:  any Lien incurred in connection with any of the Parent Borrower’s or its Subsidiaries’ contracts with Governmental Authorities, including municipalities, providing for emergency 911 ambulance services.

 

Negotiable Collateral”:  letters of credit, letter of credit rights, instruments, promissory notes, drafts, documents, and chattel paper (including electronic chattel paper and tangible chattel paper), and any and all supporting obligations in respect thereof.

 

Net Proceeds”:  with respect to any new public or private issuance or sale of any securities, any capital contribution (whether of property or assets, including cash) or any incurrence of Indebtedness, an amount equal to the gross proceeds in cash and Cash Equivalents (or with respect to capital contributions of non-cash property or assets, the Fair Market Value) of such issuance, sale or contribution net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, discounts or commissions and brokerage, consultant and other fees actually incurred in connection with such issuance, sale or contribution and net of taxes paid or reasonably estimated to be payable as a result thereof.

 

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New York Courts”: as defined in Subsection 11.13(a).

 

New York Supreme Court”: as defined in Subsection 11.13(a).

 

Non-Defaulting Lender”:  any Lender other than a Defaulting Lender.

 

Non-Excluded Taxes”:  all Taxes other than Excluded Taxes.

 

Non-Extending Lender”:  any Lender that does not accept an Extension Offer.

 

Non-Loan Party”:  each Subsidiary of the Parent Borrower that is not a Loan Party.

 

Notes”:  the collective reference to the Revolving Credit Notes and the Swingline Note.

 

Obligations”:  obligations of the Parent Borrower and the other Loan Parties from time to time arising under or in respect of the due and punctual payment of (i) the principal of and premium, if any, and interest (including interest accruing during (or would accrue but for) the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (ii) each payment required to be made by Borrowers and the other Loan Parties under this Agreement in respect of any Letter of Credit, when and as due, including payments in respect of Reimbursement Obligations and interest thereon and (iii) all other monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), of the Parent Borrower and the other Loan Parties under this Agreement and the other Loan Documents.

 

Obligor”:  any purchaser of goods or services or other Person obligated to make payment to the Parent Borrower or any of its Restricted Subsidiaries (other than any Restricted Subsidiary that is not a Loan Party) in respect of a purchase of such goods or services.

 

Optional Payments”: as defined in Subsection 8.6(e).

 

Organizational Documents”:  with respect to any Person, (a) the articles of incorporation, certificate of incorporation or certificate of formation (or the equivalent organizational documents) of such Person, (b) the bylaws or operating agreement (or the equivalent governing documents) of such Person and (c) any document (other than policy or procedural manuals or other similar documents) setting forth the manner of election or duties of the directors or managing members of such Person (if any) and the designation, amount or relative rights, limitations and preferences of any class or series of such Person’s Capital Stock.

 

Other ABL Term Commitments”:  one or more Tranches of term loan commitments hereunder that result from a Refinancing Amendment.

 

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Other ABL Term Loans”:  one or more Tranches of term loans hereunder that result from a Refinancing Amendment.

 

Other Eligible Accounts”:  (i) those AMR Other Accounts created by a Loan Party in the ordinary course of business, (ii) those EmCare Hospital Accounts created by a Related Corporation or a Loan Party in the ordinary course of their business, and (iii) those EmCare Other Accounts created by a Loan Party in the ordinary course of business, which Accounts in each case comply in all material respects with each of the representations and warranties respecting Eligible Accounts made in the Loan Documents, and that are not excluded as ineligible by virtue of one or more of the excluding criteria set forth below.  Other Eligible Accounts shall not include the following:

 

(a)           Excluded Accounts Receivable;

 

(b)           if applicable, an amount equal to the amount of any reductions made to the gross amount invoiced or to be invoiced to Account Debtors reflecting contractual allowances provided to Account Debtors in respect of Accounts that would otherwise be Other Eligible Accounts;

 

(c)           (i) Accounts (excluding any Accounts subject to clause (c)(ii) below) that have not been billed by the date that is 30 days after the earlier of (x) the Service Date or (y) the dates as of which such Account is first included in the Borrowing Base Certificate or otherwise reported to the Administrative Agent as Collateral or (ii) if the Accounts are subject to a contractually agreed billing date, Accounts that are not billed on the contractually agreed billing date (provided that in any event Accounts that are billed on a date later than 90 days after the date on which the Service Period, to which such Accounts relate, commenced shall be excluded under this clause (c)(ii));

 

(d)           billed Accounts (i) that are unpaid more than ninety (90) days after the original billing date or, in respect of Accounts relating to the provision of air ambulance services only, the Service Date, for such Accounts or (ii) that are unpaid more than sixty (60) days after the original due date for such Accounts;

 

(e)           the amount of any credit balances which are outstanding (i) more than ninety (90) days after the original billing date or, in respect of Accounts relating to the provision of air ambulance services only, the Service Date, of the Accounts to which such credit balances relate or (ii) more than 60 days after the original due date of the Accounts to which such credit balances relate;

 

(f)            Accounts owed by an Account Debtor (or its Affiliates) where 50% or more of the total amount of all Accounts owed by that Account Debtor (or its Affiliates) are deemed ineligible under clause (d) above;

 

(g)           (i) Accounts that have been written off, or (ii) Accounts that the Administrative Agent, in its Permitted Discretion, believes to be doubtful by reason of the Account Debtor’s financial condition, upon notice thereof to the Borrower Representative;

 

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(h)           (i) an amount equal to the amount of any unreconciled differences relating to Other Eligible Accounts that has not been applied to or posted to any AMR Other Account or EmCare Hospital Account plus (ii) an amount equal to the product of (x) unapplied cash relating to EmCare Other Accounts multiplied by (y) the Cash Eligible Account Rate applicable to Other Eligible Accounts that are EmCare Other Accounts;

 

(i)            Accounts with respect to which the Account Debtor is (i) an Affiliate of any Loan Party or an Affiliate of a Related Corporation or (ii) an employee or agent of any Loan Party or a Related Corporation or any Affiliate of such Loan Party or such Related Corporation, in each case, other than Accounts arising from the provision of medical care, including ambulance services, delivered in the ordinary course of business; provided that Accounts of a portfolio company of any of the CD&R Investors or their respective Affiliates or an employee or agent thereof shall not be excluded by virtue of this clause (i);

 

(j)            Accounts that are not payable in Dollars;

 

(k)           Accounts with respect to which the Account Debtor is insolvent, is subject to a proceeding related thereto, has gone out of business, or as to which a Loan Party or a Related Corporation has received notice of an imminent proceeding related to such Account Debtor being or alleged to be insolvent or which proceeding is reasonably likely to result in a material impairment of the financial condition of such Account Debtor;

 

(l)            Accounts with respect to which the applicable Loan Party’s or Related Corporation’s right to receive payment is deferred or otherwise is not absolute or is contingent upon the fulfillment of any condition whatsoever (other than the preparation and delivery of an invoice), provided that any such Accounts shall be included as Other Eligible Accounts once the related services have been rendered or all conditions have been met and such Accounts are otherwise not excluded under clauses (a) to (v) of this definition;

 

(m)          Accounts with respect to which the Account Debtor is a Person other than a Governmental Authority unless:  (i) the Account Debtor (A) is a natural person with a billing address in the United States, (B) maintains its Chief Executive Office in the United States, or (C) is organized under the laws of the United States or any state, territory or subdivision thereof; (ii) the Account Debtor is a Third Party Payor (excluding for this purpose Government Accounts), or (iii) (A) the Account is supported by an irrevocable letter of credit satisfactory to the Administrative Agent, in its Permitted Discretion (as to form, substance, and issuer or domestic confirming bank), that has been delivered to the Administrative Agent and is directly drawable by the Administrative Agent, or (B) the Account is covered by credit insurance in form, substance, and amount, and by an insurer, satisfactory to the Administrative Agent, in its Permitted Discretion;

 

(n)           Accounts with respect to which the Account Debtor is the government of any country or sovereign state other than the United States, or of any state, municipality or other political subdivision thereof, or of any department, agency, public corporation, or other instrumentality thereof, unless (i) the Account is supported by an irrevocable letter of credit satisfactory to the Administrative Agent, in its Permitted Discretion (as to form, substance, and issuer or domestic confirming bank) that has been delivered to the Administrative Agent and is

 

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directly drawable by the Administrative Agent, or (ii) the Account is covered by credit insurance in form, substance, and amount, and by an insurer, satisfactory to the Administrative Agent, in its Permitted Discretion;

 

(o)           Accounts with respect to which the Account Debtor is the federal government of the United States or any department, agency or instrumentality of the United States (exclusive, however, of (i) Accounts with respect to which the applicable Loan Party or Related Corporation has complied, to the reasonable satisfaction of the Administrative Agent, with the Assignment of Claims Act of 1940 (31 USC Section 3727) and (ii) Government Accounts, to the extent that these would otherwise be Other Eligible Accounts);

 

(p)           (i) Accounts with respect to which the Account Debtor is a creditor of any Loan Party or any Related Corporation, and such Account Debtor has or has asserted a right of setoff, or has disputed its obligation to pay all or any portion of the Account, to the extent of such claim, right of setoff, or dispute, (ii) Accounts which are subject to a rebate that has been earned but not taken or a chargeback, to the extent of such rebate or chargeback, (iii) Accounts that comprise service charges or finance charges, or (iv) Accounts with respect to which the applicable Loan Party or Related Corporation is not able to bring suit or otherwise enforce its remedies against the Account Debtor through judicial process;

 

(q)           Accounts that are not owned by (i) a Loan Party or (ii) a Related Corporation (excluding for this purpose AMR Other Accounts);

 

(r)            Accounts which have been redated or extended (provided that this shall not apply to any Accounts that have been re-categorized from one payor type to another payor type in the ordinary course of business);

 

(s)           (i) with respect to Other Eligible Accounts that are created by a Loan Party, Accounts that are not subject to a valid and perfected first priority Lien in favor of the Collateral Agent, as applicable, pursuant to a Security Document (as and to the extent provided therein (provided that in no event shall any Excluded Assets be deemed to be Other Eligible Accounts hereunder)) and (ii) with respect to Other Eligible Accounts that are created by a Related Corporation, Accounts that are subject to any Lien in favor of another Person (provided that (x) in no event shall any Excluded Assets be deemed to be Other Eligible Accounts hereunder and (y) this exclusion shall not apply in respect of Liens permitted, mutatis mutandis, pursuant to Subsections 8.14(a), 8.14(c), 8.14(e) (to the extent that the Liens on such Accounts are at least as subordinated to the Liens thereon securing the Obligations as the Liens securing the Term Loan Facility Obligations under the ABL/Term Loan Intercreditor Agreement), 8.14(h), 8.14(q) or 8.14(s));

 

(t)            Accounts that exceed the amount such Loan Party or Related Corporation is entitled to receive under any capitation arrangement, fee schedule, discount formula, cost-based reimbursement or other adjustment or limitation to such Loan Party’s or such Related Corporation’s usual charges (to the extent of such excess);

 

(u)           Accounts with respect to which the services giving rise to such Account have not yet been performed; or

 

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(v)           Accounts that were acquired or originated by a Person acquired in a Permitted Acquisition consisting either of (x) receivables of a type substantially different from those in the Borrowing Base at such time, or (y) receivables of a type substantially similar to those in the Borrowing Base at such time, provided that in the case of clause (y) only, such Accounts with an aggregate net book value in an amount not exceeding 10% of the aggregate Borrowing Base at the time of such Permitted Acquisition shall not be excluded, provided, further, that this clause (u) shall cease to exclude any Accounts of the type listed under clause (x) or (y) above at the time the Parent Borrower delivers to the Administrative Agent a field exam in form and substance reasonably satisfactory to the Administrative Agent prepared by a third party field examiner reasonably satisfactory to the Administrative Agent with respect to such acquired Accounts, or such field exam requirement is waived by the Administrative Agent.

 

Notwithstanding the foregoing, the Administrative Agent may, from time to time, in the exercise of its Permitted Discretion, on not less than ten (10) Business Days’ prior notice to the Parent Borrower, change the criteria for Other Eligible Accounts as reflected on the Borrowing Base Certificate based on either:  (i) an event, condition or other circumstance arising after the Closing Date, or (ii) an event, condition or other circumstance existing on the Closing Date to the extent the Administrative Agent had no knowledge thereof on or prior to the Closing Date, in either case under clause (i) or (ii), which adversely affects, or would reasonably be expected to adversely affect, Other Eligible Accounts in any material respect as determined by the Administrative Agent in the exercise of its Permitted Discretion.  Any such change in criteria shall have a reasonable relationship to the event, condition or other circumstance that is the basis for such change.  Upon delivery of the notice of such change pursuant to the foregoing sentence, the Administrative Agent shall be available to discuss the proposed change, and the applicable Borrower may take such action as may be required so that the event, condition or circumstance that is the basis for such change no longer exists, in a manner and to the extent reasonably satisfactory to the Administrative Agent in the exercise of its Permitted Discretion.  Any Accounts of the Loan Parties that are not Other Eligible Accounts shall nevertheless be part of the Collateral as and to the extent provided in the Security Documents.

 

Other Intercreditor Agreement”:  an intercreditor agreement in form and substance reasonably satisfactory to the Parent Borrower and the Collateral Agent.

 

Other Representatives”:  each of Deutsche Bank Securities Inc., Barclays Capital, the investment banking division of Barclays Bank PLC, Merrill Lynch, Pierce, Fenner & Smith Inc., Morgan Stanley Senior Funding, Inc., RBC Capital Markets, and UBS Securities LLC, in their collective capacity as Joint Lead Arrangers, and Barclays Capital, Merrill Lynch, Pierce, Fenner & Smith Inc., Morgan Stanley Senior Funding, Inc., RBC Capital Markets, UBS Securities LLC, Citigroup Global Markets Inc. and Natixis in their collective capacity as Joint Bookmanagers.

 

Other Revolving Credit Commitments”:  one or more Tranches of revolving credit commitments hereunder or extended Commitments in respect of the Revolving Credit Facility that result from a Refinancing Amendment.

 

Other Revolving Credit Loans”:  the Revolving Credit Loans made pursuant to any Other Revolving Credit Commitment.

 

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Parent Borrower”:  as defined in the Preamble hereto.

 

Parent Entity”:  any of CDRT Parent, Holdings, any Other Parent, and any other Person that is a Subsidiary of Holdings or any Other Parent and of which the Parent Borrower is a Subsidiary.  As used herein, “Other Parent” means a Person of which the Parent Borrower becomes a Subsidiary after the Closing Date, provided that either (x) immediately after the Parent Borrower first becomes a Subsidiary of such Person, more than 50.0% of the Voting Stock of such Person shall be held by one or more Persons that held more than 50.0% of the Voting Stock of a Parent Entity of the Parent Borrower immediately prior to the Parent Borrower first becoming such Subsidiary or (y) such Person shall be deemed not to be an Other Parent for the purpose of determining whether a Change of Control shall have occurred by reason of the Parent Borrower first becoming a Subsidiary of such Person.

 

Parent Entity Expenses”:  (i) costs (including all professional fees and expenses) incurred by any Parent Entity in connection with maintaining its existence or in connection with its reporting obligations under, or in connection with compliance with, applicable laws or applicable rules of any governmental, regulatory or self-regulatory body or stock exchange, this Agreement or any other agreement or instrument relating to Indebtedness of the Parent Borrower or any Restricted Subsidiary, including in respect of any reports filed with respect to the Securities Act, the Exchange Act or the respective rules and regulations promulgated thereunder, (ii) expenses incurred by any Parent Entity in connection with the acquisition, development, maintenance, ownership, prosecution, protection and defense of its intellectual property and associated rights (including but not limited to trademarks, service marks, trade names, trade dress, patents, copyrights and similar rights, including registrations and registration or renewal applications in respect thereof; inventions, processes, designs, formulae, trade secrets, know-how, confidential information, computer software, data and documentation, and any other intellectual property rights; and licenses of any of the foregoing) to the extent such intellectual property and associated rights relate to the business or businesses of the Parent Borrower or any Subsidiary thereof, (iii) indemnification obligations of any Parent Entity owing to directors, officers, employees or other Persons under its charter or by-laws or pursuant to written agreements with or for the benefit of any such Person (including the CD&R Indemnification Agreement), or obligations in respect of director and officer insurance (including premiums therefor), (iv) other administrative and operational expenses of any Parent Entity incurred in the ordinary course of business, and (v) fees and expenses incurred by any Parent Entity in connection with any offering of Capital Stock or Indebtedness, (w) which offering is not completed, or (x) where the net proceeds of such offering are intended to be received by or contributed or loaned to the Parent Borrower or a Restricted Subsidiary, or (y) in a prorated amount of such expenses in proportion to the amount of such net proceeds intended to be so received, contributed or loaned, or (z) otherwise on an interim basis prior to completion of such offering so long as any Parent Entity shall cause the amount of such expenses to be repaid to the Parent Borrower or the relevant Restricted Subsidiary out of the proceeds of such offering promptly if completed.

 

Participant”:  as defined in Subsection 11.6(c)(i).

 

Participant Register”:  as defined in Subsection 11.6(b)(v).

 

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Patient Receivables”:  with respect to any Restricted Subsidiary, the patient accounts receivable of such Restricted Subsidiary existing or hereafter created, any and all rights to receive payments due on such accounts receivable from any Governmental Authority payor under or in respect of such accounts receivable (including, without limitation, Medicare, Medicaid, CHAMPVA and TRICARE), and all proceeds of or in any way derived, whether directly or indirectly, from any of the foregoing (including, without limitation, all interest, finance charges and other amounts payable by any Governmental Authority obligor, directly or indirectly, in respect thereof).

 

Payment Condition”:  at any time of determination with respect to any Specified Transaction, that the following conditions are all satisfied:  (x) (1) 30-Day Excess Availability (divided by Availability as of such time of determination and expressed as a percentage) and (2) the Specified Availability on the date of such Specified Transaction (divided by Availability as of such time of determination and expressed as a percentage), in each case exceed the applicable Availability Percentage (as defined below) and (y) unless the Fixed Charge Condition (as defined below) is satisfied (to the extent applicable), the Parent Borrower shall be in Pro Forma Compliance with a minimum Consolidated Fixed Charge Coverage Ratio of at least 1.00:1.00.  “Availability Percentage”: (a) in respect of any dividend payment pursuant to Subsection 8.3(i), 17.5%; (b) in respect of (A) any investment or acquisition permitted pursuant to clause (u) or (w) of the definition of “Permitted Investments”, (B) clause (c) of the definition of “Permitted Acquisition,” or (C) Subsection 8.13(f)(ii), 12.5%; (c) in respect of any payment, repurchase or redemption pursuant to Subsection 8.6(a), 15%; (d) in respect of a Minority Business Disposition or Minority Business Offering, 20%; and (e) in respect of (A) any merger, consolidation or amalgamation pursuant to Subsection 8.2(a) or 8.2(b) or (B) any Asset Sale that would otherwise have to comply with Subsection 8.5, 12.5%.  “Fixed Charge Condition” shall mean 30-Day Excess Availability (divided by Availability as of such time of determination and expressed as a percentage) exceeds:  (a) in respect of (A) any acquisition permitted pursuant to clause (c) of the definition of “Permitted Acquisition”, (B) clause (w) of the definition of “Permitted Investments” or (C) Subsection 8.13(f)(ii), 17.5%; (b) in respect of any investment permitted pursuant to clause (u) of the definition of “Permitted Investments”, 20%; (c) in respect of any payment, repurchase or redemption pursuant to Subsection 8.6(a), 17.5%; and (d) in respect of (A) any merger, consolidation or amalgamation pursuant to Subsection 8.2(a) or (b) or (B) any Asset Sale that would otherwise have to comply with Subsection 8.5, 20%.

 

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

 

Permitted Acquisitions”:  any acquisition in a transaction that satisfies each of the following requirements:

 

(a)           the business of the acquired company shall be substantially similar to, or ancillary, complementary or related to the line of business of the Parent Borrower and its Restricted Subsidiaries on the Closing Date, or the assets so acquired shall be used or useful in or otherwise relate to, any such business;

 

(b)           the acquired company and its Subsidiaries will become (i) Guarantors and pledge their Collateral to the Administrative Agent to the extent required by Subsection 7.9(b)

 

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and Subsection 7.9(c) or (ii) Related Corporations on a basis consistent with past practices on or prior to the Closing Date or made in the ordinary course of business, including the entry into applicable Related Corporation Contracts in connection therewith; and

 

(c)           either:

 

(i)            the Payment Condition in respect of Permitted Acquisitions is satisfied, or

 

(ii)           to the extent such Payment Condition is not satisfied, the Acquisition Consideration consists solely of any combination of (x) Capital Stock of any Parent Entity or Holdings; and/or (y) amounts not to exceed the Available Excluded Contribution Amount Basket; and/or (z) additional cash and other property (excluding cash and other property covered in subclauses (x) and (y) of this clause (c)(ii)) and Indebtedness (whether incurred or assumed), provided that the aggregate amount of such cash consideration paid pursuant to this clause (c)(ii)(z) and all other cash consideration paid for Permitted Acquisitions consummated during any Fiscal Year in reliance on this clause (c)(ii)(z) is less than or equal to $20,000,000 (during the first Fiscal Year) and $10,000,000 (during each subsequent Fiscal Year), provided, further, that amounts unused in any Fiscal Year may be carried forward and used to make Permitted Acquisitions in succeeding Fiscal Years, and provided, further, that the Acquisition Consideration paid or payable pursuant to this clause (c)(ii)(z) during any one Fiscal Year shall not exceed $30,000,000 in the aggregate.

 

Permitted Affiliated Assignee”:  CD&R, any investment fund managed or controlled by CD&R and any special purpose vehicle established by CD&R or by one or more of such investment funds.

 

Permitted Cure Securities”:  common equity securities of Holdings or any Parent Entity or other equity securities of Holdings or any Parent Entity that do not constitute Disqualified Capital Stock.

 

Permitted Debt Exchange”:  as defined in Subsection 2.7(a) of the Term Loan Credit Agreement.

 

Permitted Debt Exchange Notes”:  as defined in Subsection 2.7(a) of the Term Loan Credit Agreement.

 

Permitted Discretion”:  the commercially reasonable judgment of the Administrative Agent exercised in good faith in accordance with customary business practices for comparable asset-based lending transactions, as to any factor which the Administrative Agent reasonably determines:  (a) will or reasonably could be expected to adversely affect in any material respect the value of any Eligible Inventory or Eligible Accounts, the enforceability or priority of the applicable Agent’s Liens thereon or the amount which any Agent, the Lenders or any Issuing Lender would be likely to receive (after giving consideration to delays in payment and costs of enforcement) in the liquidation of such Eligible Inventory or Eligible Accounts or (b) is evidence that any collateral report or financial information delivered to the Administrative Agent by any Person on behalf of the applicable Borrower is incomplete, inaccurate or misleading in any material respect.  In exercising such judgment, the Administrative Agent may

 

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consider, without duplication, such factors already included in or tested by the definition of Eligible Inventory or Eligible Accounts, as well as any of the following:  (i) changes after the Closing Date in any material respect in demand for, pricing of, or product mix of Inventory; (ii) changes after the Closing Date in any material respect in any concentration of risk with respect to Accounts; and (iii) any other factors arising after the Closing Date that change in any material respect the credit risk of lending to the Borrowers on the security of the Eligible Inventory or Eligible Accounts.

 

Permitted Hedging Arrangements”:  as defined in Subsection 8.10.

 

Permitted Holders”:  any of the following: (i) any of the CD&R Investors; (ii) any of the Management Investors, CD&R and their respective Affiliates; (iii) any investment fund or vehicle managed, sponsored or advised by CD&R or any Affiliate thereof, and any Affiliate of or successor to any such investment fund or vehicle; (iv) any limited or general partners of, or other investors in, any CD&R Investor or any Affiliate thereof, or any such investment fund or vehicle; (v) any “group” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act as in effect on the Closing Date) of which any of the Persons specified in clauses (i), (ii), (iii) or (iv) above is a member (provided that (without giving effect to the existence of such “group” or any other “group”) one or more of such Persons collectively have beneficial ownership, directly or indirectly, of more than 50.0% of the total voting power of the Voting Stock of the Parent Entity held by such “group”), and any other Person that is a member of such “group”; and (vi) any Person acting in the capacity of an underwriter (solely to the extent that and for so long as such Person is acting in such capacity) in connection with a public or private offering of Capital Stock of any Parent Entity or the Parent Borrower.  In addition, any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act as in effect on the Closing Date) whose status as a “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act as in effect on the Closing Date) constitutes or results in a Change of Control in respect of which the Parent Borrower makes all payments of Loans and other amounts required by Subsection 8.6(b), together with its Affiliates, shall thereafter constitute Permitted Holders.

 

Permitted Indebtedness”:  as defined in Subsection 8.13.

 

Permitted Investments”:  (a) Investments in accounts, payment intangibles and chattel paper (each as defined in the UCC), notes receivable, extensions of trade credit and similar items arising or acquired in the ordinary course of business consistent with the past practice of the Parent Borrower and its Restricted Subsidiaries;

 

(b)           Investments in cash, Cash Equivalents and Temporary Cash Investments;

 

(c)           Investments existing or made pursuant to legally binding written commitments in existence on the Closing Date and set forth on Schedule 1.1(f);

 

(d)           (i) Investments by any Loan Party in any other Loan Party (other than Holdings) or in any Captive Insurance Subsidiary; provided, however, that if any such Investment is in the form of intercompany Indebtedness, such Indebtedness shall not be secured

 

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by any Lien and (ii) Investments in Holdings in amounts and for purposes for which dividends are permitted under Subsection 8.3;

 

(e)           Investments received in settlement amounts due to the Parent Borrower or any Restricted Subsidiary of the Parent Borrower effected in the ordinary course of business;

 

(f)            Investments by any Non-Loan Parties in any other Non-Loan Party;

 

(g)           Investments by Loan Parties in any Non-Loan Parties; provided, however, that (i) the aggregate outstanding amount at any time of all intercompany Investments made pursuant to this clause (g) in any Fiscal Year shall not exceed $20,000,000 during such Fiscal Year; provided, further, that amounts unused in any Fiscal Year may be carried forward and used to make Investments in succeeding Fiscal Years in an amount not to exceed $30,000,000 in the aggregate in any one Fiscal Year and (ii) in lieu of the Investments permitted by this clause (g), any Restricted Payment from Loan Parties to Non-Loan Parties may be made in amounts not exceeding the available limit as determined pursuant to this clause (g) (with a corresponding reduction in such limit as a result thereof);

 

(h)           Investments by any Non-Loan Party in any Loan Party (other than Holdings); provided, however, that if any such Investment is in the form of intercompany Indebtedness, such Indebtedness shall not be secured by any Lien;

 

(i)            Investments by any Loan Party in any Non-Loan Party to the extent substantially concurrent with, and in any event within three (3) Business Days of, such Investment, a corresponding cash Investment or Restricted Payment is made from such Non-Loan Party, directly or indirectly, to a Loan Party;

 

(j)            any Investment constituting or acquired in connection with a Permitted Acquisition, including any Investment in the form of a capital contribution or intercompany Indebtedness among Holdings, the Parent Borrower and their respective Subsidiaries for the purpose of consummating a Permitted Acquisition;

 

(k)           Investments made in connection with the Transactions;

 

(l)            loans and advances (and guarantees of loans and advances by third parties) made to officers, directors or employees of any Parent Entity or Holdings, the Parent Borrower or any of its Restricted Subsidiaries, or Related Physicians and Guarantee Obligations of the Parent Borrower or any of its Restricted Subsidiaries in respect of obligations of officers, directors or employees of any Parent Entity, Holdings, the Parent Borrower or any of its Restricted Subsidiaries, or Related Physicians, in each case (i) in the ordinary course of business (other than in connection with the Management Subscription Agreement or the Stock Transfer and Option Agreements), (ii) existing on the Closing Date and described on Schedule 1.1(f), (iii) made after the Closing Date for relocation expenses in the ordinary course of business, (iv) made for other purposes in an aggregate principal amount not to exceed $5,000,000 at any time or (v) relating to indemnification or reimbursement of any officers, directors or employees in respect of liabilities relating to their serving in any such capacity, in each case other than any loans or advances to any director or executive officer (or equivalent thereof) that would be in violation of Section 402 of the United States Sarbanes-Oxley Act of 2002; provided, however, that with

 

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respect to any employee of any Parent Entity, no such loans or advances shall be permitted unless the activities of such employee relate primarily to the Parent Borrower and its Restricted Subsidiaries;

 

(m)          loans and advances (and guarantees of loans and advances by third parties) made to Management Investors in connection with the purchase by such Management Investors of Capital Stock of Holdings or any Parent Entity (so long as Holdings or such Parent Entity, as applicable, applies an amount equal to the Net Proceeds of such purchases to, directly or indirectly, make capital contributions to, or purchase Capital Stock of, the Parent Borrower or applies such proceeds to pay Holdings or Parent Entity Expenses) of up to $20,000,000 outstanding at any one time and promissory notes of Management Investors acquired in connection with the issuance of Management Stock to such Management Investors;

 

(n)           (i) Investments of the Parent Borrower and its Restricted Subsidiaries under Interest Rate Protection Agreements, Hedging Agreements or other Permitted Hedging Arrangements and (ii) any Investment by any Captive Insurance Subsidiary in connection with its provision of insurance to the Parent Borrower or its Subsidiaries which Investment is made in the ordinary course of business of such Captive Insurance Subsidiary, or by reason of applicable law, rule, regulation or order, or is required or approved by any regulatory authority having jurisdiction over such Captive Insurance Subsidiary;

 

(o)           Investments in the nature of pledges or deposits (x) with respect to leases or utilities provided to third parties in the ordinary course of business or (y) otherwise described in the definition of “Customary Permitted Liens” or made in connection with Liens permitted under Subsection 8.14;

 

(p)           Investments representing non-cash consideration received by the Parent Borrower or any of its Restricted Subsidiaries in connection with any Disposition, provided that any such non-cash consideration received by the Parent Borrower or any other Loan Party is pledged to the Collateral Agent for the benefit of the Secured Parties pursuant to the Security Documents as and to the extent provided for therein;

 

(q)           Investments by the Parent Borrower or any of its Restricted Subsidiaries in a Person in connection with a joint venture or similar arrangement; provided that (i) the aggregate amount of such Investments outstanding pursuant to this clause (q) do not exceed $30,000,000 at any time and (ii) the Parent Borrower or such Restricted Subsidiary complies with the provisions of Subsection 7.9(b) and (c) hereof, if applicable, with respect to such ownership interest;

 

(r)            Investments in industrial development or revenue bonds or similar obligations secured by assets leased to and operated by the Parent Borrower or any of its Restricted Subsidiaries that were issued in connection with the financing of such assets, so long as the Parent Borrower or any such Restricted Subsidiary may obtain title to such assets at any time by optionally canceling such bonds or obligations, paying a nominal fee and terminating such financing transaction;

 

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(s)           Investments representing evidences of Indebtedness, securities or other property received from another Person by the Parent Borrower or any of its Restricted Subsidiaries in connection with any bankruptcy proceeding or other reorganization of such other Person or as a result of foreclosure, perfection or enforcement of any Lien or exchange for evidences of Indebtedness, securities or other property of such other Person held by the Parent Borrower or any of its Restricted Subsidiaries; provided that any such securities or other property received by the Parent Borrower or any other Loan Party is pledged to the Collateral Agent for the benefit of the Secured Parties pursuant to the Security Documents as and to the extent required thereby;

 

(t)            any Investment to the extent not exceeding the Available Excluded Contribution Amount Basket;

 

(u)           other Investments; provided that at the time such Investments are made the Payment Condition is satisfied;

 

(v)           Investments by the Parent Borrower and its Restricted Subsidiaries in an aggregate amount outstanding at any time not to exceed $20,000,000;

 

(w)          loans and advances to and other Investments in Related Corporations (a) made on a basis consistent with past practices on or prior to the Closing Date or made in the ordinary course of business, pursuant to or in connection with Related Corporation Contracts, including obtaining letters of credit on behalf of Related Corporations or (b) in connection with the acquisition of, or Investment in, any Person that becomes a Related Corporation (promptly following such acquisition or Investment), in any such case by the Related Corporation in which such loans, advances or other Investments were made in or to on a basis consistent with past practices on or prior to the Closing Date or made in the ordinary course of business, including the entry into applicable Related Corporation Contracts in connection therewith, in the case of this clause (b) subject to (A) meeting the Payment Condition and (B) that no Specified Default or other Event of Default known to the Borrowers has occurred and is continuing or would result therefrom; and

 

(x)            any Investment to the extent made using Capital Stock of the Parent Borrower (other than Disqualified Capital Stock), or Capital Stock of any Parent Entity, as consideration.

 

For purposes of determining compliance with Subsection 8.12, (i) in the event that any Investment meets the criteria of more than one of the types of Investments described in clauses (a) through (x) above, the Parent Borrower, in its sole discretion, shall classify such item of Investment and may include the amount and type of such Investment in one or more of such clauses (including in part under one such clause and in part under another such clause) and (ii) the amount of any Investment made or outstanding at any time under clause (g), (l), (m), (q), (v) and (w) shall be the original cost of such Investment, reduced (at the Parent Borrower’s option) by any dividend, distribution, interest payment, return of capital, repayment or other amount or value received in respect of such Investment.

 

Permitted Liens”:  as defined in Subsection 8.14.

 

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

 

Plan”:  at a particular time, any employee benefit plan which is covered by ERISA and in respect of which the Parent Borrower or a Commonly Controlled Entity is an “employer” as defined in Section 3(5) of ERISA.

 

Platform”: Intralinks, Syndtrak Online or any other similar electronic distribution systems.

 

Preferred Stock”:  as applied to the Capital Stock of any corporation, Capital Stock of any class or classes (however designated) that by its terms is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such corporation, over shares of Capital Stock of any other class of such corporation.

 

Pro Forma Basis” or “Pro Forma Compliance”:  with respect to any determination for any period, that such determination shall be made giving pro forma effect to any event that by the terms of the Loan Documents requires compliance on a “Pro Forma Basis” or “Pro Forma Compliance” (and, if relevant, to each Material Acquisition and each Material Disposition of any Person, business or asset), together with all transactions relating thereto, in each case consummated during such period or thereafter and on or prior to the date of determination (including any incurrence, assumption, refinancing or repayment of Indebtedness), as if such acquisition, investment, sale (or other disposition), other event and related transactions had been consummated on the first day of such period, in each case based on historical results accounted for in accordance with GAAP, and taking into account adjustments consistent with the definition of EBITDA, including the amount of net cost savings projected by the Parent Borrower in good faith to be realized as the result of actions taken or to be taken on or prior to the date that is twelve (12) months after the closing date of such transaction and prior to or during such period (calculated on a Pro Forma Basis as though such cost savings had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions, provided that such costs savings are reasonably identifiable and factually supportable and in an aggregate amount not to exceed $30,000,000 in any period of four (4) Fiscal Quarters.  For purposes of the foregoing, “Material Acquisition” means any acquisition of property or series of related acquisitions of property that (x) constitutes assets comprising all or substantially all of an operating unit of a business or constitutes all or substantially all of the common stock of a Person and (y) involves the payment of consideration by the Parent Borrower or any of its Subsidiaries in excess of $5,000,000; and “Material Disposition” means any Disposition of property or series of related Dispositions of property that (x) constitutes assets comprising all or substantially all of an operating unit of a business or constitutes all or substantially all of the common stock of a Person and (y) yields gross proceeds to the Parent Borrower or any of its Subsidiaries in excess of $5,000,000.

 

Projections”:  those financial projections included in the confidential information memoranda and related material prepared in connection with the syndication of the Facility and

 

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provided to the Lenders on or about April, 2011, covering the Fiscal Years ending in 2011 through 2015, inclusive.

 

Purchase Money Obligations”:  any Indebtedness incurred to finance or refinance the acquisition, leasing, construction or improvement of property (real or personal) or assets, and whether acquired through the direct acquisition of such property or assets or the acquisition of the Capital Stock of any Person owning such property or assets, or otherwise.

 

Recovery Event”:  any settlement of or payment in respect of any property or casualty insurance claim or any condemnation proceeding relating to any asset of the Parent Borrower or any of its Restricted Subsidiaries.

 

Reference Banks”:  Deutsche Bank AG New York Branch, Barclays Bank PLC, Citibank, N.A., and Bank of America, N.A., or such additional or other banks as may be appointed by the Administrative Agent and reasonably acceptable to the Parent Borrower, provided that at any time the maximum number of Reference Banks does not exceed six (6).

 

refinance”:  refinance, refund, replace, renew, repay, modify, restate, defer, substitute, supplement, reissue, resell or extend (including pursuant to any defeasance or discharge mechanism); and the terms “refinances,” “refinanced” and “refinancing” as used for any purpose in this Agreement shall have a correlative meaning.

 

Refinanced Debt”:  as defined in the definition of “Credit Agreement Refinancing Indebtedness”.

 

Refinancing Agreement”:  as defined in Subsection 8.8(d).

 

Refinancing Amendment”:  an amendment to this Agreement in form and substance reasonably satisfactory to the Administrative Agent and the institutions providing such Credit Agreement Refinancing Indebtedness executed by each of (a) the Parent Borrower, (b) the Administrative Agent and (c) each financial institution that agrees to provide any portion of the Credit Agreement Refinancing Indebtedness being incurred pursuant thereto, in accordance with Subsection 2.7.

 

Refinancing of Existing Debt”:  the repayment, repurchase, prepayment or defeasance in full of Indebtedness to be Refinanced of the Company or any of its Subsidiaries, together with the payment of all fees and other amounts owing thereon, the permanent cancellation of all commitments thereunder and the rolling, termination, back-stopping, cash-collateralization of or other provision for, in a manner reasonably acceptable to the Administrative Agent, all reimbursement obligations in respect of letters of credit issued pursuant thereto.

 

Register”:  as defined in Subsection 11.6(b)(iv).

 

Regulation S-X”:  Regulation S-X promulgated by the United States Securities and Exchange Commission, as in effect on the Closing Date.

 

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

 

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

 

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

 

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

 

Reimbursement Obligations”:  the obligation of the applicable Borrower to reimburse the applicable Issuing Lender pursuant to Subsection 3.5(a) for amounts drawn under the applicable Letters of Credit.

 

Related Billing Entity”:  any Person whose only substantial activity is invoicing and collecting payments for professional medical services on behalf of a Related Professional Corporation or a Subsidiary of the Parent Borrower.

 

Related Corporation”:  (i) a Related Professional Corporation or (ii) a Related Billing Entity.

 

Related Corporation Concentration Account”:  any concentration account (other than any Excluded Bank Account) maintained by any Related Corporation into which the proceeds of EmCare General Accounts, EmCare Hospital Accounts or EmCare Other Accounts are transferred after initial collection in a Related Corporation DDA, which Related Corporation Concentration Accounts as of the Closing Date are set forth in all material respects on Part 2 of Schedule 4.16.

 

Related Corporation Contracts”:  management, practice support, consulting and similar agreements, entered into on a basis consistent with past practices on or prior to the Closing Date or entered into in the ordinary course of business, with Related Corporations.

 

Related Corporation DDAs”: any checking or other demand deposit bank account (other than any Excluded Bank Account) maintained by any Related Corporation into which the proceeds of EmCare General Accounts, EmCare Hospital Accounts or EmCare Other Accounts are deposited or are expected to be deposited, which Related Corporation DDAs as of the Closing Date are set forth in all material respects on Part 1 of Schedule 4.16.

 

Related Parties”:  with respect to any Person, such Person’s affiliates and the partners, officers, directors, trustees, employees, employees, shareholders, members, attorneys and other advisors, agents and controlling persons of such person and of such person’s affiliates and “Related Party” shall mean any of them.

 

Related Physicians”:  physicians or independent contractors that own, are employed by, or are under contract with, a Related Professional Corporation or a Subsidiary of the Parent Borrower.

 

Related Professional Corporation”:  any Person that is owned by one or more physicians and/or independent contractor physicians, in each case to whom a Subsidiary of the Parent Borrower or another Related Professional Corporation provides management services pursuant to a management services, practice support or similar agreement.

 

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Related Taxes”:  (x) any taxes, charges or assessments, including but not limited to sales, use, transfer, rental, ad valorem, value-added, stamp, property, consumption, franchise, license, capital, net worth, gross receipts, excise, occupancy, intangibles or similar taxes, charges or assessments (other than federal, state or local taxes measured by income and federal, state or local withholding imposed by any government or other taxing authority on payments made by Parent Entity other than to another Parent Entity), required to be paid by any Parent Entity by virtue of its being incorporated or having Capital Stock outstanding (but not by virtue of owning stock or other equity interests of any corporation or other entity other than the Parent Borrower, any of its Subsidiaries or any Parent Entity), or being a holding company parent of the Parent Borrower, any of its Subsidiaries or any Parent Entity or receiving dividends from or other distributions in respect of the Capital Stock of the Parent Borrower, any of its Subsidiaries or any Parent Entity or having guaranteed any obligations of the Parent Borrower or any Subsidiary thereof, or having made any payment in respect of any of the items for which the Parent Borrower or any of its Subsidiaries is permitted to make payments to any Parent Entity pursuant to Subsection 8.3, or acquiring, developing, maintaining, owning, prosecuting, protecting or defending its intellectual property and associated rights (including but not limited to receiving or paying royalties for the use thereof) relating to the business or businesses of the Parent Borrower or any Subsidiary thereof, or (y) any taxes attributable to any taxable period (or portion thereof) ending on or prior to the Closing Date, or to the consummation of any of the Transactions, or to any Parent Entity’s receipt of (or entitlement to) any payment in connection with the Transactions, including any payment received after the Closing Date pursuant to any agreement relating to the Transactions, or (z) any other federal, state, foreign, provincial or local taxes measured by income for which any Parent Entity is liable up to an amount not to exceed, with respect to federal taxes, the amount of any such taxes that the Parent Borrower and its Subsidiaries would have been required to pay on a separate company basis, or on a consolidated basis as if the Parent Borrower had filed a consolidated return on behalf of an affiliated group (as defined in Section 1504 of the Code) of which it were the common parent, or with respect to state and local taxes, the amount of any such taxes that the Parent Borrower and its Subsidiaries would have been required to pay on a separate company basis, or on a consolidated, combined, unitary or affiliated basis as if the Parent Borrower had filed a consolidated, combined, unitary or affiliated return on behalf of an affiliated group (as defined in the applicable state or local tax laws for filing such return) consisting only of the Parent Borrower and its Subsidiaries. Taxes include all interest, penalties and additions relating thereto.

 

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

 

Reportable Event”:  any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty (30) day notice period is waived under Section 21, 22, 23, 24, 25, 27 or 28 of PBGC Regulation Section 4043 or any successor regulation thereto.

 

Required Lenders”:  Lenders the sum of whose outstanding Commitments (or after the termination thereof, outstanding Individual Lender Exposures) represent a majority of aggregate Commitments (or after the termination thereof, the sum of the Individual Lender Exposures) at such time; provided that the Commitments (or Individual Lender Exposures) held or deemed held by Defaulting Lenders shall be excluded for purposes of making a determination of Required Lenders.

 

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Requirement of Law”:  as to any Person, the Organizational Documents of such Person, and any law, statute, ordinance, code, decree, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its material property or to which such Person or any of its material property is subject, including laws, ordinances and regulations pertaining to zoning, occupancy and subdivision of real properties; provided that the foregoing shall not apply to any non-binding recommendation of any Governmental Authority.

 

Responsible Officer”:  as to any Person, any of the following officers of such Person:  (a) the chief executive officer or the president of such Person and, with respect to financial matters, the chief financial officer, the treasurer or the controller of such Person, (b) any vice president of such Person or, with respect to financial matters, any assistant treasurer or assistant controller of such Person, in each case who has been designated in writing to the Administrative Agent or the Collateral Agent as a Responsible Officer by such chief executive officer or president of such Person or, with respect to financial matters, by such chief financial officer of such Person, (c) with respect to Subsection 7.7 and without limiting the foregoing, the general counsel of such Person and (d) with respect to ERISA matters, the senior vice president -human resources (or substantial equivalent) of such Person.

 

Restricted Bank Account”: any Loan Party DDA, Related Corporation DDA, Related Corporation Concentration Account or Loan Party Concentration Account set forth on Part 5 of Schedule 4.16 as of the Closing Date, as updated from time to time in accordance with the provisions of this Agreement.

 

Restricted Government Accounts”: collectively, any and all Accounts which are (a) Medicare Accounts, (b) Medicaid Accounts, (c) TRICARE Accounts and (d) CHAMPVA Accounts, in each case, pursuant to Medicare, Medicaid, TRICARE, CHAMPVA or any other similar or replacement laws, rules or regulations of a Governmental Authority as amended or re-enacted from time to time and (e) Accounts arising from services provided under agreements with the U.S. Department of Health and Human Services but only to the extent such Accounts are subject to Medicare, Medicaid, TRICARE, CHAMPVA or any other similar or replacement laws, rules or regulations of a Governmental Authority as amended or re-enacted from time to time.

 

Restricted Indebtedness”:  as defined in Subsection 8.6(a).

 

Restricted Payment”:  any dividend or any other payment whether direct or indirect (other than dividends payable solely in common stock of the Parent Borrower or options, warrants or other rights to purchase common stock of the Parent Borrower) on, or any payment on account of, or any setting apart of assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of the Parent Borrower (other than any acquisition of Capital Stock deemed to occur upon the exercise of options if such Capital Stock represents a portion of the exercise price thereof) or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, or any other distribution (other than (x) distributions payable solely in common stock of the Parent Borrower or (y) options, warrants or other rights to purchase common stock

 

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of the Parent Borrower) in respect thereof, either directly or indirectly, whether in cash or property or in obligations of the Parent Borrower.

 

Restricted Subsidiary”:  any Subsidiary of the Parent Borrower other than an Unrestricted Subsidiary.

 

Retained Rights”: with respect to any Patient Receivable owing from any Governmental Authority, the rights of any payee granted by applicable law and regulation over such Patient Receivable, which in the absence of a court order in the manner expressly contemplated by applicable state and federal law are subject to restrictions on assignment, pledging or are otherwise encumbered by applicable law or regulation, including, without limitation, and as applicable, restrictions on the collection thereof and discretion over the transfer thereof, to any party and restrictions on any such party’s ability to enforce the claim giving rise to such Patient Receivable against such Governmental Authority.

 

Revolving Credit Facility”:  the revolving credit facility available to the Borrowers hereunder.

 

Revolving Credit Lender”:  any Lender having a Commitment hereunder and/or a Revolving Credit Loan outstanding hereunder.

 

Revolving Credit Loan”:  a Loan made pursuant to Subsection 2.1(a).

 

Revolving Credit Note”:  as defined in Subsection 2.1(d).

 

Revolving Exposure”:  at any time the aggregate principal amount at such time of all outstanding Revolving Credit Loans.  The Revolving Exposure of any Revolving Credit Lender at any time shall equal its Commitment Percentage of the aggregate Revolving Exposure at such time.

 

S&P”:  as defined in the definition of the term “Cash Equivalents” in this Subsection 1.1.

 

Sale and Leaseback Transaction”:  any arrangement with any Person providing for the leasing by the Parent Borrower or any of its Restricted Subsidiaries of real or personal property which has been or is to be sold or transferred by the Parent Borrower or any such Restricted Subsidiary to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of the Parent Borrower or such Restricted Subsidiary.

 

SEC”:  the Securities and Exchange Commission.

 

Secured Parties”:  the “Secured Parties” as defined in the Guarantee and Collateral Agreement.

 

Securities Act”:  the Securities Act of 1933, as amended from time to time.

 

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Security Documents”:  the collective reference to each Mortgage related to any Mortgaged Fee Property, the Guarantee and Collateral Agreement and all other similar security documents hereafter delivered to the Collateral Agent granting or perfecting a Lien on any asset or assets of any Person to secure the obligations and liabilities of the Loan Parties hereunder and/or under any of the other Loan Documents or to secure any guarantee of any such obligations and liabilities, including any security documents executed and delivered or caused to be delivered to the Collateral Agent pursuant to Subsection 7.9(a), 7.9(b) or 7.9(c), in each case, as amended, supplemented, waived or otherwise modified from time to time.

 

Self-Pay Account”: any Account owed directly from a natural person for services provided or rendered to such natural person.

 

Senior Notes”:  8.125% Senior Notes due 2019 of the Parent Borrower issued on the date hereof, as the same may be exchanged for substantially similar senior notes that have been registered under the Securities Act, and as the same or such substantially similar notes may be amended, supplemented, waived or otherwise modified from time to time.

 

Senior Notes Debt Documents”:  the Senior Notes Indenture and all other instruments, agreements and other documents evidencing or governing the Senior Notes or providing for any guarantee, obligation, security or other right in respect thereof.

 

Senior Notes Indenture”:  the Indenture dated as of the date hereof, under which the Senior Notes are issued, as the same may be amended, supplemented, waived or otherwise modified from time to time.

 

Senior Notes Offering”:  as defined in the Recitals hereto.

 

Service Date”: with respect to services rendered to any patient, the date on which such services are rendered.

 

Service Period”: with respect to any EmCare Other Business services rendered, each monthly or quarterly service period in respect of such services.

 

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

 

Settlement Service”:  as defined in Subsection 11.6(b).

 

Significant Asset Sale”:  with respect to the Borrowers and the Restricted Subsidiaries, any Disposition (including a Minority Business Disposition of a Minority Business Offering), outside of the ordinary course of business in one transaction or a series of related transactions, of any real or personal, tangible or intangible, property (including Capital Stock) with a Fair Market Value in excess of $5,000,000.

 

Single Employer Plan”:  any Plan which is covered by Title IV or Section 302 of ERISA or Section 412 of the Code, but which is not a Multiemployer Plan.

 

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Solvent” and “Solvency”:  with respect to the Parent Borrower and its Restricted Subsidiaries on the Closing Date on a consolidated basis means (i) the Fair Value and Present Fair Salable Value of the assets of the Parent Borrower and its Restricted Subsidiaries taken as a whole exceed their Stated Liabilities and Identified Contingent Liabilities; (ii) the Parent Borrower and its Restricted Subsidiaries taken as a whole do not have Unreasonably Small Capital; and (iii) the Parent Borrower and its Restricted Subsidiaries taken as a whole will be able to pay their Stated Liabilities and Identified Contingent Liabilities as they mature (all capitalized terms used in this definition other than “Parent Borrower” and “Restricted Subsidiary” shall have the meaning assigned to such terms in the form of solvency certificate attached hereto as Exhibit I).

 

Specified Availability”:  as of any date of determination, without duplication of amounts calculated thereunder, the sum of the Excess Availability plus Specified Unrestricted Cash (but excluding therefrom the cash proceeds of any Specified Equity Contribution) as at such date.

 

Specified Default”:  (a) the occurrence and continuance of an Event of Default under Subsection 9.1(b) as a result of a material breach of any representation or warranty set forth in Subsection 5.21 or Subsection 5.22, (b) the occurrence and continuance of an Event of Default under Subsection 9.1(c) as a result of the failure of any Loan Party to comply with the terms of Subsection 4.16 or a failure to comply with the delivery obligations with respect to Borrowing Base Certificates set forth in Subsection 7.2(f) or (c) the occurrence and continuance of an Event of Default under Subsection 9.1(a) or Subsection 9.1(f).

 

Specified Equity Contribution”:  any cash equity contribution made to Holdings or any Parent Entity in exchange for Permitted Cure Securities; provided that (a)(i) such cash equity contribution to Holdings or any Parent Entity and (ii) the contribution of any proceeds therefrom to, and the receipt thereof by, the Parent Borrower occur (x) after the Closing Date and (y) (A) on or prior to the date that is ten (10) Business Days after the date on which financial statements are required to be delivered for a Fiscal Quarter (or Fiscal Year) pursuant to Subsection 7.1(a) or 7.1(b) or (B) on the date on which a Borrowing Base Certificate is delivered (provided that the right to make a cash equity contribution for Permitted Cure Securities under this clause (a)(i)(y)(B) shall be limited to no more than once in each Fiscal Period) in accordance with Subsection 7.2(f); (b) the Parent Borrower identifies such equity contribution as a “Specified Equity Contribution” in a certificate of a Responsible Officer of the Parent Borrower delivered to the Administrative Agent; (c) in each four (4) Fiscal Quarter period, there shall exist a period of at least two (2) Fiscal Quarters in respect of which no Specified Equity Contribution shall have been made; (d) no more than four (4) Specified Equity Contributions may be made during the term of this Agreement; and (e) the amount of any Specified Equity Contribution included in the calculation of EBITDA hereunder shall be limited to the amount required to effect or continue compliance with Subsection 8.1 hereof, whether or not a Compliance Period is in effect, and such amount shall be added to EBITDA solely when calculating EBITDA for purposes of determining compliance with Subsection 8.1.

 

Specified Representations”:  the representations set forth in the last sentence of Subsection 5.2 and Subsections 5.3(a), 5.4 (other than the second sentence thereof), 5.5(c), 5.11, 5.13, 5.14 and 5.23.

 

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Specified Transaction”:  (a) any dividend payment pursuant to Subsection 8.3(i), (b) any acquisition permitted pursuant to clause (c) of the definition of “Permitted Acquisition”, (c) any investment permitted pursuant to clause (u) of the definition of “Permitted Investment” and (d) any payment, repurchase or redemption pursuant to Subsection 8.6(a) and (e) any Minority Business Disposition or any Minority Business Offering.

 

Specified Unrestricted Cash”: as of any date of determination, an amount equal to all Unrestricted Cash of the Parent Borrower and the Loan Parties that (in the case of cash) is deposited in (i) Loan Party DDAs, (ii) Loan Party Concentration Accounts, or (iii) other deposit accounts in the United States, in each case with respect to which a control agreement is in place between the applicable Loan Party, the applicable depositary institution and the Administrative Agent or the Collateral Agent (or over which any such Agent has “control” whether or not pursuant to a control agreement) or that (in the case of Cash Equivalents) (a) are not in a securities account in respect of which the applicable Loan Party has entered into a “control agreement” with the applicable broker or securities intermediary for purposes of perfecting a security interest in favor of a third party and (b) are subject to the laws of any state, commonwealth, province or territory of the United States of America, provided that if, as of such date, the Excess Availability is less than the lesser of (x) 10% of the lesser of (1) the Commitments hereunder and (2) the Borrowing Base and (y) $35,000,000, the amount of Specified Unrestricted Cash shall equal zero and provided, further, that for purposes of calculating Specified Unrestricted Cash, (i) the term “Cash Equivalents” shall be deemed not to include any money, and (ii) the term “Unrestricted Cash” shall be deemed not to include any Temporary Cash Investments.

 

Sponsor”:  CD&R.

 

Sponsor Management Agreement”:  the letter agreement, dated as of the date hereof, among CDRT Parent, Holdings, the Company and CD&R, for CD&R to provide management, consulting and advisory services, as the same may be amended, supplemented, waived or otherwise modified from time to time so long as such amendment, supplement, waiver or modification is not, when taken as a whole, materially disadvantageous to the Lenders compared to the Sponsor Management Agreement in effect on the date hereof, as determined by the Parent Borrower in good faith.

 

Standby Letter of Credit”:  as defined in Subsection 3.1(b).

 

Stated Amount”:  at any time, as to any Letter of Credit, the maximum amount available to be drawn thereunder (regardless of whether any conditions for drawing could then be met).

 

Stated Maturity”:  with respect to any Indebtedness, the date specified in such Indebtedness as the fixed date on which the payment of principal of such Indebtedness is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase or repayment of such Indebtedness at the option of the holder thereof upon the happening of any contingency).

 

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Statutory Reserves”:  for any day as applied to a Eurodollar Loan, the average maximum rate at which reserves (including any marginal, supplemental or emergency reserves) are required to be maintained during such Interest Period under Regulation D by member banks of the United States Federal Reserve System in New York City with deposits exceeding one billion Dollars against “Eurocurrency liabilities” (as such term is used in Regulation D).  Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities and to be subject to such reserve requirements without benefit of or credit for proration, exceptions or offsets which may be available from time to time to any Lender under Regulation D.

 

Stock Transfer and Option Agreement”: each Stock Transfer and Option Agreement entered into by EmCare Inc. with a Related Professional Corporation.

 

Subsidiary”:  as to any Person, a corporation, partnership, limited liability company or other entity (a) of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the Board of Directors or other managers of such corporation, partnership, limited liability company or other entity are at the time owned by such Person, or (b) the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person and, in the case of this clause (b), which is treated as a consolidated subsidiary for accounting purposes. The term “Subsidiary” shall not include any Related Corporation, provided that, for the avoidance of doubt, nothing in this sentence shall limit or otherwise affect the treatment of Related Corporations (including with respect to consolidation) for financial reporting purposes under and in accordance with GAAP. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Parent Borrower.

 

Subsidiary Borrower Joinder”:  a joinder in substantially the form of Exhibit N hereto, to be executed by each Subsidiary Borrower designated as such after the Closing Date.

 

Subsidiary Borrowers”:  each Domestic Subsidiary that is a Wholly Owned Subsidiary and a Restricted Subsidiary that becomes a Borrower after five (5) days’ written notice to the Administrative Agent pursuant to a Subsidiary Borrower Joinder, together with their respective successors and assigns.

 

Subsidiary Guarantor”:  each Domestic Subsidiary that is a Wholly Owned Subsidiary (other than any Borrower or Excluded Subsidiary) of the Parent Borrower which executes and delivers a Subsidiary Guaranty pursuant to Subsection 7.9 or otherwise, in each case, unless and until such time as the respective Subsidiary Guarantor (a) ceases to constitute a Domestic Subsidiary of the Parent Borrower in accordance with the terms and provisions hereof, (b) is designated an Unrestricted Subsidiary pursuant to the terms of this Agreement or (c) is released from all of its obligations under the Subsidiary Guaranty in accordance with terms and provisions thereof.

 

Subsidiary Guaranty”:  the guaranty of the Obligations of the Borrowers under the Loan Documents provided pursuant to the Guarantee and Collateral Agreement.

 

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Successor Borrower”:  as defined in Subsection 8.2(a).

 

Supermajority Lenders”:  Lenders the sum of whose outstanding Commitments (or after the termination thereof, outstanding Individual Lender Exposures) representing more than 66 2/3% of the sum of the aggregate amount of the total Commitments less the Commitments of all Defaulting Lenders (or after the termination thereof, the sum of the Individual Lender Exposures of Non-Defaulting Lenders) at such time.

 

Swingline Commitment”:  the Swingline Lender’s obligation to make Swingline Loans pursuant to Subsection 2.4.

 

Swingline Exposure”:  at any time the aggregate principal amount at such time of all outstanding Swingline Loans.  The Swingline Exposure of any Revolving Credit Lender at any time shall equal its Commitment Percentage of the aggregate Swingline Exposure at such time.

 

Swingline Lender”:  as defined in the Preamble hereto.

 

Swingline Loan Participation Certificate”:  a certificate in substantially the form of Exhibit F hereto.

 

Swingline Loans”:  as defined in Subsection 2.4(a).

 

Swingline Note”:  as defined in Subsection 2.4(b).

 

Target Amount”:  an amount, when aggregated with all other amounts remaining on deposit in all DDAs and Related Corporation Concentration Accounts (excluding any Loan Party DDAs that are Blocked Accounts, Restricted Bank Accounts and Business Development Amounts) at any time, not exceeding $4,000,000.

 

Tax Sharing Agreement”:  the Tax Sharing Agreement among CDRT Parent and the Parent Borrower to be entered into on or prior to the Closing Date, as the same may be amended, supplemented, waived or otherwise modified from time to time.

 

Taxes”:  any and all present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority.

 

Temporary Cash Investments”:  any of the following: (i) any investment in (x) direct obligations of the United States of America, a member state of the European Union or any country in whose currency funds are being held pending their application in the making of an investment or capital expenditure by the Parent Borrower or a Restricted Subsidiary in that country or with such funds, or any agency or instrumentality of any thereof or obligations Guaranteed by the United States of America or a member state of the European Union or any country in whose currency funds are being held pending their application in the making of an investment or capital expenditure by the Parent Borrower or a Restricted Subsidiary in that country or with such funds, or any agency or instrumentality of any of the foregoing, or obligations guaranteed by any of the foregoing or (y) direct obligations of any foreign country

 

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recognized by the United States of America rated at least “A” by S&P or “A-1” by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization), (ii) overnight bank deposits, and investments in time deposit accounts, certificates of deposit, bankers’ acceptances and money market deposits (or, with respect to foreign banks, similar instruments) maturing not more than one year after the date of acquisition thereof issued by (x) any bank or other institutional lender under this Agreement or the Term Loan Facility or any affiliate thereof or (y) a bank or trust company that is organized under the laws of the United States of America, any state thereof or any foreign country recognized by the United States of America having capital and surplus aggregating in excess of $250,000,000 (or the foreign currency equivalent thereof) and whose long term debt is rated at least “A” by S&P or “A-1” by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization) at the time such Investment is made, (iii) repurchase obligations with a term of not more than thirty (30) days for underlying securities or instruments of the types described in clause (i) or (ii) above entered into with a bank meeting the qualifications described in clause (ii) above, (iv) Investments in commercial paper, maturing not more than 270 days after the date of acquisition, issued by a Person (other than that of the Parent Borrower or any of its Subsidiaries), with a rating at the time as of which any Investment therein is made of “P-2” (or higher) according to Moody’s or “A-2” (or higher) according to S&P (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization), (v) Investments in securities maturing not more than one year after the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least “A” by S&P or “A” by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization), (vi) Preferred Stock (other than of the Parent Borrower or any of its Subsidiaries) having a rating of “A” or higher by S&P or “A2” or higher by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization), (vii) investment funds investing 95.0% of their assets in securities of the type described in clauses (i) through (vi) above (which funds may also hold reasonable amounts of cash pending investment and/or distribution), (viii) any money market deposit accounts issued or offered by a domestic commercial bank or a commercial bank organized and located in a country recognized by the United States of America, in each case, having capital and surplus in excess of $250,000,000 (or the foreign currency equivalent thereof), or investments in money market funds subject to the risk limiting conditions of Rule 2a-7 (or any successor rule) of the SEC under the Investment Company Act of 1940, as amended, and (ix) similar investments approved by the Board of Directors in the ordinary course of business.

 

Term Loan Agent”:  Deutsche Bank AG New York Branch, in its capacity as administrative agent and collateral agent under the Term Loan Documents, or any successor administrative agent or collateral agent under the Term Loan Documents.

 

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Term Loan Credit Agreement”:  the Credit Agreement, dated as of the date hereof, among the Parent Borrower, the lenders party thereto from time to time and Deutsche Bank AG New York Branch, as administrative agent and collateral agent thereunder, as such agreement may be amended, supplemented, waived or otherwise modified from time to time or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (whether in whole or in part, whether with the original administrative agent and lenders or other agents and lenders or otherwise, and whether provided under the original Term Loan Credit Agreement or other credit agreements or otherwise, unless such agreement or instrument expressly provides that it is not intended to be and is not a Term Loan Credit Agreement hereunder).  Any reference to the Term Loan Credit Agreement hereunder shall be deemed a reference to any Term Loan Credit Agreement then in existence.

 

Term Loan Documents”:  the “Loan Documents” as defined in the Term Loan Credit Agreement, as the same may be amended, supplemented, waived or otherwise modified from time to time or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (other than any agreement, document or instrument that expressly provides that it is not intended to be and is not a Term Loan Document).

 

Term Loan Facility”:  the collective reference to the Term Loan Credit Agreement, any Term Loan Documents, any notes and letters of credit issued pursuant thereto and any guarantee and collateral agreement, patent and trademark security agreement, mortgages, letter of credit applications and other guarantees, pledge agreements, security agreements and collateral documents, and other instruments and documents, executed and delivered pursuant to or in connection with any of the foregoing, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time, or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (whether in whole or in part, whether with the original agent and lenders or other agents and lenders or otherwise, and whether provided under the original Term Loan Credit Agreement or one or more other credit agreements, indentures (including the Senior Notes Indenture) or financing agreements or otherwise, unless such agreement, instrument or document expressly provides that it is not intended to be and is not a Term Loan Facility).  Without limiting the generality of the foregoing, the term “Term Loan Facility” shall include any agreement (i) changing the maturity of any Indebtedness incurred thereunder or contemplated thereby, (ii) adding Subsidiaries of the Parent Borrower as additional borrowers or guarantors thereunder, (iii) increasing the amount of Indebtedness incurred thereunder or available to be borrowed thereunder or (iv) otherwise altering the terms and conditions thereof.

 

Term Loan Facility Obligations”:  obligations of the Parent Borrower and the other Loan Parties from time to time arising under or in respect of the due and punctual payment of (i) the principal of and premium, if any, and interest (including interest accruing during (or would accrue but for) the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Term Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise and (ii) all other monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), of

 

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the Borrower and the other Loan Parties under the Term Loan Credit Agreement and the other Term Loan Documents.

 

Term Loan Priority Collateral”:  as defined in the ABL/Term Loan Intercreditor Agreement whether or not the same remains in full force and effect.

 

Term Loans”:  the loans borrowed under the Term Loan Facility.

 

Termination Date”:  the date which is the five (5) year anniversary of the Closing Date.

 

Third Party Payor”: any governmental entity, insurance company, health maintenance organization, professional provider organization or similar entity or any other Person (other than a natural person) that is obligated to make payments on any Account.

 

Total Leverage Ratio”:  as of any date of determination, the ratio (calculated on a Pro Forma Basis) of (a) Financial Covenant Debt of the Parent Borrower and its Restricted Subsidiaries determined on a consolidated basis in accordance with GAAP minus the amount of cash, Cash Equivalents, and Temporary Cash Investments held by the Parent Borrower and its Restricted Subsidiaries (whether or not such cash is held in a deposit account over which the Administrative Agent has “control”) as at such date to (b) EBITDA of the Parent Borrower and its Restricted Subsidiaries for the four (4) Fiscal Quarters ended on or most recently prior to such date for which financial statements have been delivered pursuant to Subsection 7.1.

 

Tranche”:  each Tranche of Loans available hereunder, with there being two tranches on the Closing Date; namely, Revolving Credit Loans and Swingline Loans.

 

Transaction Documents”:  collectively, (i) the Merger Documents, (ii) the CD&R Indemnification Agreement, (iii) the Sponsor Management Agreement, (iv) the Registration Rights Agreement, to be dated as of the Closing Date, among CDRT Parent, each of the stockholders of CDRT Parent whose name appears on the signature pages thereof and any person who becomes a party thereto pursuant to Subsection 9(d) thereof, and (v) any agreement primarily providing for indemnification and/or contribution for the benefit of any Permitted Holder in respect of liabilities resulting from, arising out of or in connection with, based upon or relating to (a) any management consulting, financial advisory, financing, underwriting or placement services or other investment banking activities to, for or in respect of any Parent Entity or any of its Subsidiaries, (b) any offering of securities or other financing activity or arrangement of or by any Parent Entity or any of its Subsidiaries or (c) any action or failure to act of or by any Parent Entity or any of its Subsidiaries (or any of their respective predecessors), in each case as the same may be amended, supplemented, waived or otherwise modified from time to time in accordance with the terms thereof and of this Agreement.

 

Transactions”:  collectively, any or all of the following:  (i) the consummation of the Equity Contribution, (ii) the exchange of LP exchangeable units of Emergency Medical Services L.P., a Delaware limited partnership, for Capital Stock of Emergency Medical Services Corporation, a Delaware corporation, (iii) the entry into the Merger Documents and the consummation of the Merger, (iv) the conversion of Emergency Medical Services L.P. into a Delaware corporation, (v) the consummation of the Refinancing of Existing Debt, (vi) the entry

 

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into the Term Loan Facility, and the execution, delivery and performance by each Loan Party of the Term Loan Documents to which it is a party, the incurrence of Term Loans on the Closing Date and the use of proceeds thereof, (vii) the entry into the Senior Notes Indenture, and the execution, delivery and performance by each party thereto of the Senior Notes Debt Documents to which it is a party, the consummation of the Senior Notes Offering and issuance of the Senior Notes on the Closing Date and the use of proceeds thereof, (viii) the entry into this Agreement and the execution, delivery and performance by each Loan Party of the Loan Documents to which it is a party and incurrence of Indebtedness hereunder by one or more of Holdings, the Parent Borrower and its Restricted Subsidiaries and (ix) all other transactions relating to any of the foregoing (including payment of fees and expenses related to any of the foregoing).

 

Transferee”:  any Participant or Assignee.

 

Treaty”:  the Treaty establishing the European Economic Community, being the Treaty of Rome of March 25, 1957 as amended by the Single European Act 1986 and the Maastricht Treaty (which was signed on February 7, 1992 and came into force on November 1, 1993) and as may, from time to time, be further amended, supplemented or otherwise modified.

 

TRICARE”: collectively, a program of medical benefits covering former and active members of the uniformed services and certain of their dependents, financed and administered by the United States Departments of Defense, Health and Human Services and Transportation, which program was formerly know as the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS), and all laws, rules, regulations, manuals, orders and administrative, reimbursement and other guidelines of all Governmental Authorities promulgated in connection with such program (whether or not having the force of law), in each case as the same may be amended, supplemented or otherwise modified from time to time.

 

TRICARE Account”: an Account payable pursuant to TRICARE.

 

Type”:  the type of Loan determined based on the currency in which the same is denominated, and the interest option applicable thereto, with there being multiple Types of Loans hereunder, namely ABR Loans and Eurodollar Loans.

 

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

 

Underfunding”:  the excess of the present value of all accrued benefits under a Plan (based on those assumptions used to fund such Plan), determined as of the most recent annual valuation date, over the value of the assets of such Plan allocable to such accrued benefits.

 

Uniform Customs”:  the Uniform Customs and Practice for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600, as the same may be amended from time to time.

 

United States Person”:  any United States person within the meaning of Section 7701(a)(30) of the Code.

 

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Unpaid Drawing”:  drawings on Letters of Credit that have not been reimbursed by the applicable Borrower.

 

Unrestricted Cash”:  as at any date of determination, the aggregate amount of cash, Cash Equivalents and Temporary Cash Investments included in the cash accounts that would be listed on the consolidated balance sheet of the Parent Borrower and its Restricted Subsidiaries prepared in accordance with GAAP as at such date to the extent such cash is not classified as “restricted” for financial statement purposes.

 

Unrestricted Government Accounts”: collectively, any and all Accounts (other than Restricted Government Accounts) which (a) represent any government subsidies payable by a Governmental Authority, (b) are Accounts arising from services provided under agreements with the U.S. Department of Health and Human Services, including any pilot program, or (c) any other Account payable by a Governmental Authority approved by the Administrative Agent in its reasonable discretion.

 

Unrestricted Subsidiary”:  (i) any Subsidiary of the Parent Borrower designated at any time by the Board of Directors of the Parent Borrower as an Unrestricted Subsidiary hereunder by written notice to the Administrative Agent and (ii) any Subsidiary of an Unrestricted Subsidiary, provided that the Board of Directors of the Parent Borrower shall only be permitted to designate a subsidiary as an Unrestricted Subsidiary so long as:

 

(a)           immediately before and after such designation, no Event of Default under Subsection 9.1(a) or 9.1(f) shall have occurred and be continuing;

 

(b)           (i)            such designation was made at or prior to the Closing Date; or

 

(ii)           the Subsidiary to be so designated has Consolidated Total Assets of $1,000 or less at the time of designation; or

 

(iii)          if such Subsidiary has Consolidated Total Assets greater than $1,000 at the time of designation, then immediately after giving effect to such designation, the Parent Borrower and its Restricted Subsidiaries shall be in compliance, on a Pro Forma Basis, with the covenant set forth in Subsection 8.1, whether or not a Compliance Period is in effect, as demonstrated to the reasonable satisfaction of the Administrative Agent;

 

(c)           no Subsidiary shall be designated as an Unrestricted Subsidiary if such Subsidiary owns (directly or indirectly) any Capital Stock or Indebtedness of, or holds any Liens on any property of, any Borrower or any Restricted Subsidiary that is not a Subsidiary of the Subsidiary to be so designated; and

 

(d)           no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for the purpose of the Term Loan Documents, the Senior Notes Debt Documents or any other Indebtedness of the Parent Borrower or its Restricted Subsidiaries.

 

The designation of any Subsidiary as an Unrestricted Subsidiary shall constitute an Investment by the Parent Borrower therein (and must comply as such with the limitations on

 

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Investments under Subsection 8.12) at the date of designation in an amount equal to the net book value of the Parent Borrower’s Investment therein.

 

The Parent Borrower shall only be permitted to designate an Unrestricted Subsidiary as a Restricted Subsidiary so long as:

 

(a)           immediately before and after such designation, no Event of Default under Subsection 9.1(a) or 9.1(f) shall have occurred and be continuing; and

 

(b)           immediately after giving effect to such designation, the Parent Borrower and its Restricted Subsidiaries shall be in compliance, on a Pro Forma Basis, with the covenant set forth in Subsection 8.1, whether or not a Compliance Period is in effect, as demonstrated to the reasonable satisfaction of the Administrative Agent.

 

The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Subsidiary existing at such time and, in each case, shall be subject to the terms of Subsection 7.9 and Section 8.

 

Unsecured Ratio Indebtedness”: unsecured Indebtedness of any Loan Party evidenced by any notes, other debt securities or other indebtedness; provided that immediately before and after giving effect to each issuance of such Unsecured Ratio Indebtedness, the Total Leverage Ratio is less than or equal to 6.75 to 1:00.

 

Unutilized Commitment”:  with respect to any Lender at any time, an amount equal to the remainder of (x) such Lender’s Commitment as in effect at such time less (y) such Lender’s Individual Lender Exposure at such time (excluding any Swingline Exposure of such Lender).

 

U.S. Tax Compliance Certificate”:  as defined in Subsection 4.11(b)(ii)(2).

 

Vehicles”:  as defined in the Guarantee and Collateral Agreement.

 

Voting Stock”:  as to any entity, all classes of Capital Stock of such entity then outstanding and normally entitled to vote in the election of directors to the Board of Directors or all interests in such entity with the ability to control the management or actions of such entity.

 

Wholly Owned Subsidiary”:  as to any Person, any Subsidiary of such Person of which such Person owns, directly or indirectly through one or more Wholly Owned Subsidiaries, all of the Capital Stock of such Subsidiary other than directors qualifying shares or shares held by nominees.

 

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

 

(a)         As used herein and in any Notes and any other Loan Document, and any certificate or other document made or delivered pursuant hereto or thereto, accounting terms

 

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relating to the Parent Borrower and its Restricted Subsidiaries not defined in Subsection 1.1 and accounting terms partly defined in Subsection 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP.

 

(b)        The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Subsection, Schedule and Exhibit references are to this Agreement unless otherwise specified.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.

 

(c)         Financial ratios and other financial calculations pursuant to this Agreement, including calculations pursuant to Subsection 8.1 shall, following any transaction described in the definition of “Pro Forma Basis,” be calculated on a Pro Forma Basis until the completion of four (4) full Fiscal Quarters following such transaction (and shall also be subject to clause (d) below to the extent applicable).

 

(d)        For purposes of determining any financial ratio or making any financial calculation for any Fiscal Quarter (or portion thereof) ending prior to the Closing Date (other than the calculation of Consolidated Interest Expense, as and to the extent set forth in the definition thereof), the components of such financial ratio or financial calculation shall be determined on a pro forma basis to give effect to the Merger as if it had occurred at the beginning of such four quarter period; and each Person that is a Restricted Subsidiary upon giving effect to the Transaction shall be deemed to be a Restricted Subsidiary for purposes of the components of such financial ratio or financial calculation as of the beginning of such four quarter period.

 

(e)         For purposes of this Agreement for periods ending on or prior to the Closing Date, references to the consolidated financial statements of the Parent Borrower shall be to the consolidated financial statements of the Company (with Subsidiaries of the Company being deemed Subsidiaries of the Parent Borrower), as the context may require.

 

(f)         Any financial ratios required to be maintained pursuant to this Agreement (or required to be satisfied in order for a specific action to be permitted under this Agreement) shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

 

(g)        Any references in this Agreement to “cash and/or Cash Equivalents”, “cash, Cash Equivalents and/or Temporary Cash Investments” or any similar combination of the foregoing shall be construed as not double counting cash or any other applicable amount which would otherwise be duplicated therein.

 

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

 

(i)          The Borrowing Base shall be calculated without duplication, including without duplication of any reserves, items that are otherwise addressed or excluded through

 

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eligibility criteria or items that are factored into the calculation of collection rates or collection percentages.

 

SECTION 2

 

Amount and Terms of Commitments

 

2.1           Commitments.  (a) Subject to and upon the terms and conditions set forth herein, each Lender severally agrees to make, at any time and from time to time on or after the Closing Date and prior to the Termination Date, a Revolving Credit Loan or Revolving Credit Loans to the Borrowers (on a joint and several basis as between the Borrowers), which Revolving Credit Loans:

 

(i)            shall be denominated in Dollars;

 

(ii)           shall, at the option of the Borrowers, be incurred and maintained as, and/or converted into, ABR Loans or Eurodollar Loans, provided that (A) except as otherwise specifically provided in Subsections 4.9 and 4.10, all Revolving Credit Loans comprising the same Borrowing shall at all times be of the same Type, and (B) unless the Administrative Agent either otherwise agrees in its reasonable discretion, prior to the 15th Business Day following the Closing Date (at which time this clause (B) shall no longer be applicable), Revolving Credit Loans may only be incurred and maintained as, and/or converted into, ABR Loans; provided that Revolving Credit Loans incurred on the Closing Date may be incurred as Eurodollar Loans having an Interest Period of two weeks;

 

(iii)          may be repaid and reborrowed in accordance with the provisions hereof;

 

(iv)          shall not be made (and shall not be required to be made) by any Lender to the extent the incurrence thereof (after giving effect to the use of the proceeds thereof on the date of the incurrence thereof to repay any amounts theretofore outstanding pursuant to this Agreement) would cause the Individual Lender Exposure of such Lender to exceed the amount of its Commitment at such time;

 

(v)           shall not be made (and shall not be required to be made) by any Lender to the extent the incurrence thereof (after giving effect to the use of the proceeds thereof on the date of the incurrence thereof to repay any amounts theretofore outstanding pursuant to this Agreement) would cause the Aggregate Lender Exposure to exceed the lesser of (A) the total Commitments as then in effect and (B) the Borrowing Base at such time (based on the Borrowing Base Certificate last delivered); and

 

(vi)          made on the Closing Date, shall not exceed an aggregate principal amount of $10,000,000.

 

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(b)        Notwithstanding anything to the contrary in Subsection 2.1(a) or elsewhere in this Agreement, the Administrative Agent shall have the right to establish Availability Reserves in such amounts, and with respect to such matters, as the Administrative Agent in its Permitted Discretion shall deem necessary or appropriate, against the Borrowing Base including reserves with respect to (i) sums that the Borrowers are or will be required to pay (such as taxes (including payroll and sales taxes), assessments, insurance premiums, or, in the case of leased assets, rents or other amounts payable under such leases) and have not yet paid and (ii) amounts owing by the Borrowers or, without duplication, their respective Restricted Subsidiaries to any Person to the extent secured by a Lien on, or trust over, any of the ABL Priority Collateral, which Lien or trust, in the Permitted Discretion of the Administrative Agent is capable of ranking senior in priority to or pari passu with one or more of the Liens in the ABL Priority Collateral granted in the Security Documents (such as Liens or trusts in favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad valorem, excise, sales, or other taxes where given priority under applicable law) in and to such item of the ABL Priority Collateral; provided that (x) with respect to any Availability Reserve (other than any Designated Hedging Reserves or Cash Management Reserves), the Administrative Agent shall have provided the applicable Borrower reasonable advance notice of any such establishment and (y) (i) the imposition of any Designated Hedging Reserve or Cash Management Reserve shall be immediately effective upon the Administrative Agent notifying the Borrower Representative in writing of the imposition of any such Designated Hedging Reserve or Cash Management Reserve in accordance with Subsection 11.22 and (ii) any adjustment in any Designated Hedging Reserve or Cash Management Reserve contemplated by the respective definitions thereof shall be immediately effective upon the notification to the Administrative Agent of the details and results of (x), in the case of any Designated Hedging Reserve, the applicable mid-market quotations as provided in the penultimate sentence of the definition of “Designated Hedging Reserve” and (y) in the case of any Cash Management Reserve, the new applicable anticipated monetary obligations as provided in the final sentence of the definition of “Cash Management Reserve”; and provided, further, that the Administrative Agent may only establish an Availability Reserve after the date hereof based on an event, condition or other circumstance arising after the Closing Date or based on facts not known to the Administrative Agent as of the Closing Date.  The amount of any Availability Reserve shall have a reasonable relationship to the event, condition or other matter that is the basis for the Availability Reserve.  Upon delivery of such notice, the Administrative Agent shall be available to discuss any proposed Availability Reserve, and the Borrowers may take such action as may be required so that the event, condition or matter that is the basis for such Availability Reserve or increase no longer exists, in a manner and to the extent reasonably satisfactory to the Administrative Agent in the exercise of its Permitted Discretion.  In no event shall such notice and opportunity limit the right of the Administrative Agent to establish such Availability Reserve, unless the Administrative Agent shall have determined in its Permitted Discretion that the event, condition or other matter that is the basis for such new Availability Reserve no longer exists or has otherwise been adequately addressed by the applicable Borrower.  In the event that the event, condition or other matter giving rise to the establishment of any Availability Reserve shall cease to exist (unless there is a reasonable prospect that such event, condition or other matter will occur again within a reasonable period of time thereafter), the Availability Reserve established pursuant to such event, condition or other matter, shall be discontinued.

 

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Notwithstanding anything herein to the contrary, Availability Reserves shall not duplicate (i) eligibility criteria contained in the definition of “Eligible Accounts” or “Eligible Inventory” and vice versa, (ii) reserves or criteria deducted in computing the value of Eligible Inventory (based on cost and quantity) and vice versa, or (iii) collection rate or collection percentages contained in the definition of “AMR Accounts Historical Collection Analysis”, “EmCare Projected Collection Analysis”, “EmCare Projected Collection Rate for 0-180 Days”, “EmCare Projected Collection Rate for 180-360 Days”, “AMR Self-Pay Accounts Collection Rate” and vice versa (it being understood that, notwithstanding paragraph (iii), the Administrative Agent shall not be restricted in its ability to establish a reserve in its Permitted Discretion related to collection rates or collection percentages used in determining eligibility).

 

(c)         In the event the Borrowers are unable to comply with (i) the borrowing base limitations set forth in Subsection 2.1(a) or (ii) the conditions precedent to the making of Revolving Credit Loans or the issuance of Letters of Credit set forth in Section 6, the Lenders authorize the Administrative Agent, for the account of the Lenders, to make Revolving Credit Loans to the Borrowers, which may only be made as ABR Loans (each, an “Agent Advance”) for a period commencing on the date the Administrative Agent first receives a notice of Borrowing requesting an Agent Advance until the earliest of (i) the 30th Business Day after such date, (ii) the date the respective Borrowers or Borrower are again able to comply with the Borrowing Base limitations and the conditions precedent to the making of Revolving Credit Loans and issuance of Letters of Credit, or obtains an amendment or waiver with respect thereto and (iii) the date the Required Lenders instruct the Administrative Agent to cease making Agent Advances (in each case, the “Agent Advance Period”).  The Administrative Agent shall not make any Agent Advance to the extent that at such time the amount of such Agent Advance (A) when added to the aggregate outstanding amount of all other Agent Advances made to the Borrowers at such time, would exceed 5.0% of the Borrowing Base at such time (based on the Borrowing Base Certificate last delivered) or (B) when added to the Aggregate Lender Exposure as then in effect (immediately prior to the incurrence of such Agent Advance), would exceed the total Commitments at such time.  It is understood and agreed that, subject to the requirements set forth above, Agent Advances may be made by the Administrative Agent in its discretion to the extent the Administrative Agent deems such Agent Advances necessary or desirable (x) to preserve and protect the applicable Collateral, or any portion thereof, (y) to enhance the likelihood of, or maximize the amount of, repayment of the Loans and other obligations of the Loan Parties hereunder and under the other Loan Documents or (z) to pay any other amount chargeable to or required to be paid by the Borrowers pursuant to the terms of this Agreement, including payments of reimbursable expenses and other sums payable under the Loan Documents, and that the Borrowers shall have no right to require that any Agent Advances be made.

 

(d)        Each Borrower agrees that, upon the request to the Administrative Agent by any Revolving Credit Lender made on or prior to the Closing Date or in connection with any assignment pursuant to Subsection 11.6(b), in order to evidence such Lender’s Revolving Credit Loans, such Borrower will execute and deliver to such Lender a promissory note substantially in the form of Exhibit A-1 hereto (each, as amended, supplemented, replaced or otherwise modified from time to time, a “Revolving Credit Note”), with appropriate insertions as to payee, date and principal amount, payable to such Lender and in a principal amount equal to the aggregate unpaid principal amount of all Revolving Credit Loans made by such

 

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Revolving Credit Lender to such Borrower.  Each Revolving Credit Note shall (i) be dated the Closing Date, (ii) be stated to mature on the Termination Date and (iii) provide for the payment of interest in accordance with Subsection 4.1.

 

2.2           Procedure for Revolving Credit Borrowing.  Each of the Borrowers may borrow under the Commitments during the Commitment Period on any Business Day, provided that the Borrower Representative shall give the Administrative Agent irrevocable (in the case of any notice except notice with respect to the initial Extension of Credit hereunder, which shall be irrevocable after the funding) notice (which notice must be received by the Administrative Agent prior to (a) 1:00 P.M., New York City time, at least three Business Days prior to the requested Borrowing Date, if all or any part of the requested Revolving Credit Loans are to be initially Eurodollar Loans or (b) 10:00 A.M., New York City time, on the requested Borrowing Date, for ABR Loans) specifying (i) the identity of a Borrower, (ii) the amount to be borrowed, (iii) the requested Borrowing Date, (iv) whether the borrowing is to be of Eurodollar Loans, ABR Loans or a combination thereof and (v) if the borrowing is to be entirely or partly of Eurodollar Loans, the respective amounts of each such Type of Loan and the respective lengths of the initial Interest Periods therefor.  Each borrowing shall be in an amount equal to (x) in the case of ABR Loans, except any ABR Loan to be used solely to pay a like amount of outstanding Reimbursement Obligations or Swingline Loans, in multiples of $1,000,000 (or, if the Commitments then available (as calculated in accordance with Subsection 2.1(a)) are less than $1,000,000, such lesser amount) and (y) in the case of Eurodollar Loans, $1,000,000, or a whole multiple of $500,000 in excess thereof.  Upon receipt of any such notice from the Borrower Representative the Administrative Agent shall promptly notify each applicable Revolving Credit Lender thereof.  Subject to the satisfaction of the conditions precedent specified in Subsection 6.2 (or in the case of the initial Extension of Credit on the Closing Date, Subsection 6.1), each applicable Revolving Credit Lender will make the amount of its pro rata share of each borrowing of Revolving Credit Loans available to the Administrative Agent for the account of the Borrower identified in such notice at the office of the Administrative Agent specified in Subsection 11.2 prior to 12:00 P.M. (or 9:00 A.M., in the case of the initial borrowing hereunder), New York City time, or at such other office of the Administrative Agent or at such other time as to which the Administrative Agent shall notify such Borrower reasonably in advance of the Borrowing Date with respect thereto, on the Borrowing Date requested by such Borrower and in funds immediately available to the Administrative Agent.

 

2.3           Termination or Reduction of Commitments.  The Parent Borrower (on behalf of itself and each other applicable Borrower) shall have the right, upon not less than three Business Days’ notice to the Administrative Agent (who will promptly notify the Lenders), to terminate the Commitments, or, from time to time, to reduce the amount of the Commitments; provided that no such termination or reduction shall be permitted if, after giving effect thereto and to any prepayments of the Revolving Credit Loans and Swingline Loans made on the effective date thereof, the aggregate principal amount of the Revolving Credit Loans and Swingline Loans then outstanding, when added to the sum of the then outstanding L/C Obligations, would exceed the Commitments then in effect and provided, further, that any such notice of termination delivered by the Parent Borrower may state that such notice is conditioned upon the occurrence or non-occurrence of any event specified therein (including the effectiveness of other credit facilities), in which case such notice may be revoked by the Parent Borrower (by written notice to the Administrative Agent on or prior to the specified effective

 

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date) if such condition is not satisfied.  Any such reduction shall be in an amount equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof and shall reduce permanently the applicable Commitments then in effect.

 

2.4           Swingline Commitments.  (a) Subject to the terms and conditions hereof, the Swingline Lender agrees to make Swingline loans (individually, a “Swingline Loan”; collectively, the “Swingline Loans”) to any of the Borrowers from time to time during the Commitment Period in an aggregate principal amount at any one time outstanding not to exceed $25,000,000; provided that at no time may the sum of the then outstanding Swingline Loans, Revolving Credit Loans and L/C Obligations exceed the lesser of (1) the Commitments then in effect and (2) the Borrowing Base then in effect (based on the most recent Borrowing Base Certificate).  Swingline Loans shall be made in minimum amounts of $1,000,000 and integral multiples of $500,000 above such amount.  Amounts borrowed by any Borrower under this Subsection 2.4 may be repaid and, through but excluding the Termination Date, reborrowed.  All Swingline Loans made to any Borrower shall be made in Dollars as ABR Loans, and shall not be entitled to be converted into Eurodollar Loans.  The Borrower Representative (on behalf of itself or any other Borrower as the case may be), shall give the Swingline Lender irrevocable notice (which notice must be received by the Swingline Lender prior to 12:00 P.M., New York City time, on the requested Borrowing Date) specifying (1) the identity of a Borrower, (2) the amount of the requested Swingline Loan and (3) that the Borrowing is to be of ABR Loans.  The proceeds of the Swingline Loans will be made available by the Swingline Lender to the Borrower identified in such notice at an office of the Swingline Lender by crediting the account of such Borrower at such office with such proceeds in Dollars.

 

(b)        Each of the Borrowers agrees that, upon the request to the Administrative Agent by the Swingline Lender made on or prior to the Closing Date or in connection with any assignment pursuant to Subsection 11.6(b), in order to evidence the Swingline Loans such Borrower will execute and deliver to the Swingline Lender a promissory note substantially in the form of Exhibit A-2 hereto, with appropriate insertions (as the same may be amended, supplemented, replaced or otherwise modified from time to time, the “Swingline Note”), payable to the Swingline Lender and representing the obligation of such Borrower to pay the amount of the Swingline Commitment or, if less, the unpaid principal amount of the Swingline Loans made to such Borrower, with interest thereon as prescribed in Subsection 4.1.  The Swingline Note shall (i) be dated the Closing Date, (ii) be stated to mature on the Termination Date and (iii) provide for the payment of interest in accordance with Subsection 4.1.

 

(c)         The Swingline Lender, at any time in its sole and absolute discretion may, and, at any time as there shall be a Swingline Loan outstanding for more than seven (7) Business Days, the Swingline Lender shall, on behalf of the Borrower to which the Swingline Loan has been made (which hereby irrevocably directs and authorizes such Swingline Lender to act on its behalf), request (provided that such request shall be deemed to have been automatically made upon the occurrence of an Event of Default under Subsection 9.1(f)) each Lender, including the Swingline Lender, to make a Revolving Credit Loan as an ABR Loan in an amount equal to such Lender’s Commitment Percentage of the principal amount of all Swingline Loans made in Dollars (each, a “Mandatory Revolving Credit Loan Borrowing”) in an amount equal to such Lender’s Commitment Percentage of the principal amount of all of the Swingline Loans (collectively, the “Refunded Swingline Loans”) outstanding on the date such

 

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notice is given; provided that the provisions of this Subsection 2.4 shall not affect the obligations of any Borrower to prepay Swingline Loans in accordance with the provisions of Subsection 4.4(c).  Unless the Commitments shall have expired or terminated (in which event the procedures of clause (d) of this Subsection 2.4 shall apply), each Lender hereby agrees to make the proceeds of its Revolving Credit Loan (including any Eurodollar Loan) available to the Administrative Agent for the account of the Swingline Lender at the office of the Administrative Agent prior to 11:00 A.M., New York City time, in funds immediately available on the Business Day next succeeding the date such notice is given notwithstanding (i) that the amount of the Mandatory Revolving Credit Loan Borrowing may not comply with the minimum amount for Revolving Credit Loans otherwise required hereunder, (ii) whether any conditions specified in Section 6 are then satisfied, (iii) whether a Default or an Event of Default then exists, (iv) the date of such Mandatory Revolving Credit Loan Borrowing and (v) the amount of the Commitment of such, or any other, Lender at such time.  The proceeds of such Revolving Credit Loans (including without limitation, any Eurodollar Loan) shall be immediately applied to repay the Refunded Swingline Loans.

 

(d)        If the Commitments shall expire or terminate at any time while Swingline Loans are outstanding, each Lender shall, at the option of the Swingline Lender, exercised reasonably, either (i) notwithstanding the expiration or termination of the Commitments, make a Loan as an ABR Loan (which Revolving Credit Loan shall be deemed a “Revolving Credit Loan” for all purposes of this Agreement and the other Loan Documents) or (ii) purchase an undivided participating interest in such Swingline Loans, in either case in an amount equal to such Lender’s Commitment Percentage determined on the date of, and immediately prior to, expiration or termination of the Commitments of the aggregate principal amount of such Swingline Loans; provided that in the event that any Mandatory Revolving Credit Loan Borrowing cannot for any reason be made on the date otherwise required above (including as a result of the commencement of a proceeding under any domestic or foreign bankruptcy, reorganization, dissolution, insolvency, receivership, administration or liquidation or similar law with respect to any Borrower), then each Lender hereby agrees that it shall forthwith purchase (as of the date the Mandatory Revolving Credit Loan Borrowing would otherwise have occurred, but adjusted for any payments received from such Borrower on or after such date and prior to such purchase) from the Swingline Lender such participations in such outstanding Swingline Loans as shall be necessary to cause such Lenders to share in such Swingline Loans ratably based upon their respective Commitment Percentages, provided, further, that (x) all interest payable on the Swingline Loans shall be for the account of the Swingline Lender until the date as of which the respective participation is required to be purchased and, to the extent attributable to the purchased participation, shall be payable to the participant from and after such date and (y) at the time any purchase of participations pursuant to this sentence is actually made, the purchasing Lender shall be required to pay the Swingline Lender interest on the principal amount of the participation purchased for each day from and including the day upon which the Mandatory Revolving Credit Loan Borrowing would otherwise have occurred to but excluding the date of payment for such participation, at the rate otherwise applicable to Revolving Credit Loans made as ABR Loans.  Each Lender will make the proceeds of any Revolving Credit Loan made pursuant to the immediately preceding sentence available to the Administrative Agent for the account of the Swingline Lender at the office of the Administrative Agent prior to 11:00 A.M., New York City time, in Dollars in funds immediately available on the Business Day next succeeding the date on which the

 

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Commitments expire or terminate.  The proceeds of such Revolving Credit Loans shall be immediately applied to repay the Swingline Loans outstanding on the date of termination or expiration of the Commitments.  In the event that the Lenders purchase undivided participating interests pursuant to the first sentence of this clause (d), each Lender shall immediately transfer to the Swingline Lender, in Dollars in immediately available funds, the amount of its participation and upon receipt thereof the Swingline Lender will deliver to such Lender a Swingline Loan Participation Certificate dated the date of receipt of such funds and in such amount.

 

(e)         Whenever, at any time after the Swingline Lender has received from any Lender such Lender’s participating interest in a Swingline Loan, the Swingline Lender receives any payment on account thereof (whether directly from a Borrower or otherwise, including proceeds of Collateral applied thereto by the Swingline Lender), or any payment of interest on account thereof, the Swingline Lender will, if such payment is received prior to 11:00 A.M., New York City time, on a Business Day, distribute to such Lender its pro rata share thereof prior to the end of such Business Day and otherwise, the Swingline Lender will distribute such payment on the next succeeding Business Day (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 in the event that such payment received by the Swingline Lender is required to be returned, such Lender will return to the Swingline Lender any portion thereof previously distributed by the Swingline Lender to it.

 

(f)         Each Lender’s obligation to make the Revolving Credit Loans and to purchase participating interests with respect to Swingline Loans in accordance with Subsections 2.4(c) and 2.4(d) shall be absolute and unconditional and shall not be affected by any circumstance, including without limitation (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any of the Borrowers may have against the Swingline Lender, any of the Borrowers or any other Person for any reason whatsoever; (ii) the occurrence or continuance of a Default or an Event of Default; (iii) any adverse change in condition (financial or otherwise) of any of the Borrowers; (iv) any breach of this Agreement or any other Loan Document by any of the Borrowers, any other Loan Party or any other Lender; (v) any inability of any of the Borrowers to satisfy the conditions precedent to borrowing set forth in this Agreement on the date upon which such Revolving Credit Loan is to be made or participating interest is to be purchased or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

 

2.5           Repayment of Loans.  (a) Each Borrower hereby unconditionally promises to pay to the Administrative Agent in Dollars for the account of:  (i) each Lender the then unpaid principal amount of each Revolving Credit Loan of such Lender made to such Borrower, on the Termination Date (or such earlier date on which the Revolving Credit Loans become due and payable pursuant to Section 9); and (ii) the Swingline Lender, the then unpaid principal amount of the Swingline Loans made to such Borrower, on the Termination Date (or such earlier date on which the Swingline Loans become due and payable pursuant to Section 9).  Each Borrower hereby further agrees to pay interest (which payments shall be in Dollars) on the unpaid principal amount of such Loans from time to time outstanding from the date hereof until payment in full thereof at the rates per annum, and on the dates, set forth in Subsection 4.1.

 

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

 

(c)         The Administrative Agent shall maintain the Register pursuant to Subsection 11.6(b), and a subaccount therein for each Lender, in which shall be recorded (i) the amount of each Loan made hereunder, the Type thereof, the Borrowers to which such Loan is made, each Interest Period, if any, applicable thereto and whether such Loans are Revolving Credit Loans or Swingline Loans, (ii) the amount of any principal or interest due and payable or to become due and payable from each of the Borrowers to each applicable Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder from each of the Borrowers and each applicable Lender’s share thereof.

 

(d)        The entries made in the Register and the accounts of each Lender maintained pursuant to Subsection 2.5(c) shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of each of the Borrowers therein recorded; provided, however, that the failure of any Lender or the Administrative Agent to maintain the Register or any such account, or any error therein, shall not in any manner affect the obligation of any Borrower to repay (with applicable interest) the Loans made to such Borrower by such Lender in accordance with the terms of this Agreement.

 

2.6           Incremental Facility.  (a) So long as no Specified Default exists or would arise therefrom, the Borrowers shall have the right, at any time and from time to time after the Closing Date, to request (i) an increase of the aggregate amount of the then outstanding Commitments (the “Incremental Revolving Commitments”) or (ii) one or more term loans (the “Incremental ABL Term Loans” and together with the Incremental Revolving Commitments, collectively, the “Incremental Facilities” and each, an “Incremental Facility”).  Notwithstanding anything to contrary herein, the principal amount of any Incremental ABL Term Loans or Incremental Revolving Commitments shall not exceed the Available Incremental Amount at such time.  The Parent Borrower may seek to obtain Incremental Revolving Commitments or Incremental ABL Term Loans from existing Lenders or other Persons, as applicable (each an “Incremental Facility Increase,” and each Person extending, or Lender extending, Incremental Revolving Commitments or Incremental ABL Term Loans, an “Additional Lender”), provided, however, that (i) no Lender shall be obligated to provide an Incremental Facility Increase as a result of any such request by the Borrowers, and (ii) any Additional Lender which is not an existing Lender shall be subject to the approval of, the Administrative Agent, the Swingline Lender, each Issuing Lender and the Borrowers (each such approval not to be unreasonably withheld).  Each Incremental Facility Increase shall be in a minimum aggregate amount of at least $15,000,000 and in integral multiples of $5,000,000 in excess thereof.  Any Incremental Facility Increase may be denominated in Dollars.

 

(b)        (i) Any Incremental ABL Term Loans (A) may not be guaranteed by any Subsidiaries of the Parent Borrower other than the Guarantors and shall rank pari passu (or, at the option of the Parent Borrower, junior) in right of (x) priority with respect to the Collateral and (y) payment with respect to the Obligations in respect of the Commitments and any existing

 

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Incremental ABL Term Loans, (B) shall be part of, and count against, the Borrowing Base, (C) shall not have a final maturity that is earlier than the Termination Date, (D) shall not amortize at a rate greater than 1.0% per annum, (E) for purposes of prepayments, shall be treated no more favorably than the Loans, (F) may not be secured by any Collateral or other assets of any Loan Party that do not also secure the Loans and (G) shall otherwise be on terms as are reasonably satisfactory to the Administrative Agent.

 

(ii)           Any Incremental Revolving Commitments (A) shall be guaranteed by the Guarantors and shall rank pari passu in right of (x) priority with respect to the Collateral and (y) payment with respect to the Obligations in respect of the Commitments in effect prior to the Incremental Revolving Commitment Effective Date and (B) shall be on terms and pursuant to the documentation applicable to the existing Commitments; provided that the Applicable Margin relating to the Incremental Revolving Commitments may exceed the Applicable Margin relating to the Commitments in effect prior to the Incremental Revolving Commitment Effective Date so long as the Applicable Margins relating to all Revolving Credit Loans shall be adjusted to be equal to the Applicable Margin payable to the Lenders providing such Incremental Revolving Commitments.

 

(iii)          The Incremental Facilities may be in the form of a separate “first-in, last-out” tranche (the “FILO Tranche”) with a separate borrowing base against the ABL Priority Collateral and interest rate margins in each case to be agreed upon (which, for the avoidance of doubt, shall not require any adjustment to the Applicable Margin of other Loans pursuant to clause (ii) above) among the Parent Borrower, the Administrative Agent and the Lenders providing the FILO Tranche so long as (1) any loans under the FILO Tranche may not be guaranteed by any Subsidiaries of the Parent Borrower other than the Guarantors and shall rank pari passu (or, at the option of the Parent Borrower, junior) in right of priority with respect to the Collateral; (2) if the FILO Tranche availability exceeds $0, any Extension of Credit under the Revolving Credit Facility thereafter requested shall be made under the FILO Tranche until the FILO Tranche availability no longer exceeds $0; (3) as between (x) the Revolving Credit Facility (other than the FILO Tranche), the Incremental ABL Term Loans (unless otherwise agreed in writing between the Administrative Agent and any Additional ABL Agent) and the Designated Hedging Agreements and Designated Cash Management Agreements and (y) the FILO Tranche, all proceeds from the liquidation or other realization of the Collateral (including ABL Priority Collateral) shall be applied, first to obligations owing under, or with respect to, the Revolving Credit Facility (other than the FILO Tranche), the Incremental ABL Term Loans (unless otherwise agreed in writing between the Administrative

 

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Agent and any Additional ABL Agent) and such Designated Hedging Agreements and Designated Cash Management Agreements and second to the FILO Tranche; (4) no Borrower may prepay Revolving Credit Loans under the FILO Tranche or terminate or reduce the commitments in respect thereof at any time that other Loans and/or Reimbursement Obligations (unless cash collateralized or otherwise provided for in a manner reasonably satisfactory to the Administrative Agent) or Incremental ABL Term Loans (unless otherwise agreed in writing between the Administrative Agent and any Additional ABL Agent) are outstanding; (5) the Required Lenders (calculated as including Lenders under the Incremental Facilities and the FILO Tranche) shall, subject to the terms of the ABL/Term Loan Intercreditor Agreement, control exercise of remedies in respect of the Collateral and (6) no changes affecting the priority status of the Revolving Credit Facility (other than the FILO Tranche) or the Incremental ABL Term Loans (unless otherwise agreed in writing between the Administrative Agent and any Additional ABL Agent) vis-à-vis the FILO Tranche may be made without the consent of the Required Lenders under the Revolving Credit Facility, other than such changes which affect only the FILO Tranche, or only the Incremental ABL Term Loans, as the case may be.

 

(c)         No Incremental Facility Increase shall become effective unless and until each of the following conditions have been satisfied:

 

(i)            The Borrowers, the Administrative Agent, and any Additional Lender shall have executed and delivered a joinder to the Loan Documents (“Lender Joinder Agreement”) in substantially the form of Exhibit L hereto;

 

(ii)           The Borrowers shall have paid such fees and other compensation to the Additional Lenders and to the Administrative Agent as the applicable Borrowers, the Administrative Agent and such Additional Lenders shall agree;

 

(iii)          The applicable Borrowers shall deliver to the Administrative Agent and the Lenders an opinion or opinions, in form and substance reasonably satisfactory to the Administrative Agent from counsel to the applicable Borrowers reasonably satisfactory to the Administrative Agent and dated such date;

 

(iv)          A Revolving Credit Note (to the extent requested) will be issued at the applicable Borrowers’ expense, to each such Additional Lender, to be in conformity with requirements of Subsection 2.1(d) (with appropriate modification) to the extent necessary to reflect the new Commitment of each Additional Lender;

 

(v)           The Parent Borrower shall deliver a certificate certifying that (A) the representations and warranties made by the Parent Borrower and its Restricted Subsidiaries contained herein and in the other Loan Documents are true and correct in all material respects on and as of the Incremental Facility Closing Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and (B) no Specified Default has occurred and is continuing; and

 

(vi)          The applicable Borrowers and Additional Lenders shall have delivered such other instruments, documents and agreements as the Administrative Agent may reasonably have requested in order to effectuate the documentation of the foregoing.

 

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(d)        (i) In the case of any Incremental Facility Increase constituting Incremental Revolving Commitments, the Administrative Agent shall promptly notify each Lender as to the effectiveness of such Incremental Facility Increase (with each date of such effectiveness being referred to herein as an “Incremental Revolving Commitment Effective Date”), and at such time (i) the Commitments under, and for all purposes of, this Agreement shall be increased by the aggregate amount of such Incremental Revolving Commitments, (ii) Schedule A shall be deemed modified, without further action, to reflect the revised Commitments and Commitment Percentages of the Lenders and (iii) this Agreement shall be deemed amended, without further action, to the extent necessary to reflect any such Incremental Revolving Commitments.

 

(ii)           In the case of any Incremental Facility Increase, the Administrative Agent, the Additional Lenders and the Borrowers agree to enter into any amendment required to incorporate the addition of the Incremental Revolving Commitments and the Incremental ABL Term Loans, the pricing of the Incremental Revolving Commitments and the Incremental ABL Term Loans, the maturity date of the Incremental Revolving Commitments and the Incremental ABL Term Loans and such other amendments as may be necessary or appropriate in the reasonable opinion of the Administrative Agent and the Borrowers in connection therewith.  The Lenders hereby irrevocably authorize the Administrative Agent to enter into such amendments.

 

(e)         In connection with the Incremental Facility Increases hereunder, the Lenders and the Borrowers agree that, notwithstanding anything to the contrary in this Agreement, (i) the applicable Borrowers shall, in coordination with the Administrative Agent, (x) repay applicable outstanding Revolving Credit Loans of certain Lenders, and obtain applicable Revolving Credit Loans from certain other Lenders (including the Additional Lenders), or (y) take such other actions as reasonably may be required by the Administrative Agent to the extent necessary so that the Lenders effectively participate in each of the outstanding Revolving Credit Loans, as applicable, pro rata on the basis of their Commitment Percentages (determined after giving effect to any increase in the Commitments pursuant to this Subsection 2.6), and (ii) the applicable Borrowers shall pay to the Lenders any costs of the type referred to in Subsection 4.12 in connection with any repayment and/or Revolving Credit Loans required pursuant to the preceding clause (i).  Without limiting the obligations of the Borrowers provided for in this Subsection 2.6, the Administrative Agent and the Lenders agree that they will use commercially reasonable efforts to attempt to minimize the costs of the type referred to in Subsection 4.12 which the Borrowers would otherwise incur in connection with the implementation of an increase in the Commitments.

 

2.7           Refinancing Amendments.  (a) So long as no Specified Default exists or would arise therefrom, at any time after the Closing Date, the Borrowers may obtain, from any Lender, any Additional Lender or any other Person, Credit Agreement Refinancing Indebtedness in respect of the Facility (which for purposes of this clause (a) will be deemed to include any then outstanding (w) Other ABL Term Loans, (x) Incremental ABL Term Loans, (y) Other Revolving Credit Loans and (z) Loans provided against the Incremental Revolving Commitments, but will exclude the commitments in respect of the FILO Tranche unless (1) the Loans comprising the FILO Tranche are the only Loans outstanding and (2) the Commitments

 

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for the Revolving Credit Facility (excluding the FILO Tranche) have been terminated) in the form of (i) one or more Other ABL Term Loans or Other ABL Term Commitments, (ii) one or more Other Revolving Credit Loans or Other Revolving Credit Commitments, or (iii) in the case of the FILO Tranche, a new “first-in, last-out” tranche, as the case may be, in each case pursuant to a Refinancing Amendment.  Each Tranche of Credit Agreement Refinancing Indebtedness incurred under this Subsection 2.7 shall be in an aggregate principal amount that is (x) not less than $15,000,000 in the case of Other ABL Term Loans or Other Revolving Credit Loans and (y) an integral multiple of $5,000,000 in excess thereof.

 

(b)        The effectiveness of any Refinancing Amendment shall be subject to the satisfaction on the date thereof of each of the conditions set forth in Subsection 6.2(a) and 6.2(b) and, to the extent reasonably requested by the Administrative Agent, receipt by the Administrative Agent of legal opinions, board resolutions, officers’ certificates and/or reaffirmation agreements consistent with those delivered on the Closing Date under Subsection 6.1 (other than changes to such legal opinions resulting from a change in law, change in fact or change to counsel’s form of opinion).  Any Refinancing Amendment may provide for the issuance of Letters of Credit for the account of the Parent Borrower, or the provision to the Parent Borrower of Swingline Loans, pursuant to any Other Revolving Credit Commitments established thereby, in each case on terms substantially equivalent to the terms applicable to Letters of Credit and Swingline Loans under the Commitments.

 

(c)         The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Refinancing Amendment.  Each of the parties hereto hereby agrees that, upon the effectiveness of any Refinancing Amendment, this Agreement shall be deemed amended to the extent (but only to the extent) necessary to reflect the existence and terms of the Credit Agreement Refinancing Indebtedness incurred pursuant thereto (including any amendments necessary to treat the Loans and Commitments subject thereto as Other ABL Term Loans, Other Revolving Credit Loans, Other Revolving Credit Commitments and/or Other ABL Term Commitments).  The Lenders hereby irrevocably authorize the Administrative Agent to enter into any Refinancing Amendment to effect such amendments to this Agreement and the other Loan Documents and such technical amendments as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the Borrower Representative, to effect the provisions of this Subsection 2.7.  In addition, if so provided in the relevant Refinancing Amendment and with the consent of each Issuing Lender, participations in Letters of Credit expiring on or after the Termination Date shall be reallocated from Lenders holding Commitments to Lenders holding extended revolving commitments in accordance with the terms of such Refinancing Amendment; provided, however, that such participation interests shall, upon receipt thereof by the relevant Lenders holding Commitments, be deemed to be participation interests in respect of such Commitments and the terms of such participation interests (including, without limitation, the commission applicable thereto) shall be adjusted accordingly.

 

2.8           Extension of Commitments.  (a) Notwithstanding anything to the contrary in this Agreement, pursuant to one or more offers (each, an “Extension Offer”) made from time to time by the Borrowers to all Revolving Credit Lenders of Commitments, with a like maturity date, or all lenders with ABL Term Loans, with a like maturity date, in each case on a pro rata basis (based on the aggregate outstanding principal amount of the applicable Commitments or

 

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ABL Term Loans, as applicable) and on the same terms to each such Lender, the Borrowers are hereby permitted to consummate from time to time transactions with individual Lenders that accept the terms contained in such Extension Offers to extend the maturity date of each such Lender’s Commitments or ABL Term Loans, as applicable, and otherwise modify the terms of such Revolving Commitments or ABL Term Loans pursuant to the terms of the relevant Extension Offer (including, without limitation, by increasing the interest rate or fees payable in respect of such Commitments (and related outstandings) or ABL Term Loans) (each, an “Extension”, and each group of Commitments or ABL Term Loans, as applicable, as so extended, as well as the original Commitments or ABL Term Loans (not so extended), as applicable, being a “tranche”; any Extended Revolving Commitments shall constitute a separate tranche of Commitments from the tranche of Commitments from which they were converted and any Extended ABL Term Loans shall constitute a separate tranche of ABL Term Loans from the tranche of ABL Term Loans from which they were converted), so long as the following terms are satisfied:  (i) no Specified Default shall have occurred and be continuing at the time the offering document in respect of an Extension Offer is delivered to the Lenders, (ii) except as to interest rates, fees and final maturity (which shall be determined by the Borrowers and set forth in the relevant Extension Offer), (x) the Commitment of any Revolving Credit Lender that agrees to an extension with respect to such Commitment (an “Extending Revolving Credit Lender”) extended pursuant to an Extension (an “Extended Revolving Commitment”), and the related outstandings, shall be a Commitment (or related outstandings, as the case may be) with the same terms as the original Commitments (and related outstandings) and (y) the ABL Term Loans of any Lender that agrees to an extension with respect to such ABL Term Loans (an “Extending ABL Term Lender” and together with any Extending Revolving Credit Lender, if any, collectively, “Extending Lenders”) pursuant to an Extension (“Extended ABL Term Loans”) shall have the same terms as the original ABL Term Loans; provided that (x) subject to the provisions of Section 3 and Subsection 2.4 to the extent dealing with Letters of Credit and Swingline Loans which mature or expire after a maturity date when there exist Extended Revolving Commitments with a longer maturity date, all Letters of Credit and Swingline Loans shall be participated in on a pro rata basis by all Lenders with Commitments in accordance with their Commitment Percentage of the Commitments and all borrowings under Commitments and repayments thereunder shall be made on a pro rata basis (except for (A) payments of interest and fees at different rates on Extended Revolving Commitments (and related outstandings) and (B) repayments required upon the maturity date of the non-extending Commitments) and (y) at no time shall there be Commitments hereunder (including Extended Revolving Commitments and any original Commitments) which have more than two different maturity dates, unless otherwise agreed by the Administrative Agent and the Borrowers (including agreements as to additional administrative fees to be paid by the Borrowers), and (iii) any applicable Minimum Extension Condition shall be satisfied unless waived by the Borrowers.

 

(b)        With respect to all Extensions consummated by the Borrowers pursuant to this Subsection 2.8, (i) such Extensions shall not constitute optional or mandatory payments or prepayments for purposes of Subsection 4.4 and (ii) no Extension Offer is required to be in any minimum amount or any minimum increment, provided that the Borrowers may at their election specify as a condition (a “Minimum Extension Condition”) to consummating any such Extension that a minimum amount (to be determined and specified in the relevant Extension Offer in the Borrowers’ sole discretion and which may be waived by the Borrowers) of Commitments or ABL Term Loans, as applicable, of any or all applicable tranches be extended.

 

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The Administrative Agent and the Lenders hereby consent to the transactions contemplated by this Subsection 2.8 (including, for the avoidance of doubt, payment of any interest, fees or premium in respect of any Extended Revolving Commitments or Extended ABL Term Loans, as applicable, on such terms as may be set forth in the relevant Extension Offer) and hereby waive the requirements of any provision of this Agreement (including, without limitation, Subsections 4.4 and 4.8) or any other Loan Document that may otherwise prohibit any such Extension or any other transaction contemplated by this Subsection 2.8.

 

(c)         No consent of any Lender or the Administrative Agent shall be required to effectuate any Extension, other than (A) the consent of each Lender agreeing to such Extension with respect to its Commitments or ABL Term Loans (or a portion thereof) and (B) with respect to any Extension of the Commitments, the consent of each Issuing Lender and the Swingline Lender, which consent shall not be unreasonably withheld or delayed.  All Extended Revolving Commitments and Extended ABL Term Loans and all obligations in respect thereof shall be Obligations under this Agreement and the other Loan Documents that are secured by the Collateral on a pari passu basis with all other applicable Obligations under this Agreement and the other Loan Documents.  The Lenders hereby irrevocably authorize the Administrative Agent to enter into amendments to this Agreement and the other Loan Documents with the Borrowers as may be necessary in order to establish new tranches or sub-tranches in respect of Commitments or ABL Term Loans so extended, permit the repayment of non-extending Loans on the Termination Date and such technical amendments as may be necessary or appropriate in the reasonable opinion of the Administrative Agent and the Borrowers in connection therewith, in each case on terms consistent with this Subsection 2.8.  Without limiting the foregoing, in connection with any Extensions the respective Loan Parties shall (at their expense) amend (and the Administrative Agent is hereby directed to amend) any Mortgage that has a maturity date prior to the then latest maturity date so that such maturity date is extended to the then latest maturity date (or such later date as may be advised by local counsel to the Administrative Agent).

 

(d)        In connection with any Extension, the Borrowers shall provide the Administrative Agent at least five (5) Business Days’ (or such shorter period as may be agreed by the Agent) prior written notice thereof, and shall agree to such procedures (including, without limitation, regarding timing, rounding and other adjustments and to ensure reasonable administrative management of the credit facilities hereunder after such Extension), if any, as may be established by, or acceptable to, the Administrative Agent, in each case acting reasonably to accomplish the purposes of this Subsection 2.8.

 

(e)         Following any Extension, with the consent of the Parent Borrower, any Non-Extending Lender may elect to have all or a portion of its existing Commitments or ABL Term Loans deemed to be an Extended Revolving Commitment or Extended ABL Term Loan, as applicable under the applicable extended tranche on any date (each date a “Designation Date”) prior to the maturity date or termination date, as applicable, of such extended tranche; provided that (i) such Lender shall have provided written notice to the Parent Borrower and the Administrative Agent at least ten (10) Business Days prior to such Designation Date (or such shorter period as the Administrative Agent may agree in its reasonable discretion) and (ii) no more than three (3) Designation Dates may occur in any one-year period without the written consent of the Administrative Agent.  Following a Designation Date, the existing Commitments

 

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or ABL Term Loans, as applicable, held by such Lender so elected to be extended will be deemed to be an Extended Revolving Commitment or Extended ABL Term Loan, as applicable, and any existing Commitments or ABL Term Loans, as applicable, held by such Lender not elected to be extended, if any, shall continue to be existing Commitments or ABL Term Loans, as applicable.

 

SECTION 3

 

Letters of Credit

 

3.1           L/C Commitment.  (a) Subject to the terms and conditions hereof, each Issuing Lender, in reliance on the agreements of the other Revolving Credit Lenders set forth in Subsection 3.4(a), agrees to continue under this Agreement for the account of the Parent Borrower the Existing Letters of Credit issued by it and to issue letters of credit (the letters of credit issued on and after the Closing Date pursuant to this Section 3, together with the Existing Letters of Credit, collectively, the “Letters of Credit”) for the account of the applicable Borrower or (if required by the applicable Issuing Lender, so long as a Borrower is a co-applicant and jointly and severally liable thereunder) any Subsidiary or any Related Corporation on any Business Day during the Commitment Period but in no event later than the fifth (5th) day prior to the Termination Date in such form as may be approved from time to time by the Issuing Lender; provided that no Letter of Credit shall be issued if, after giving effect to such issuance, (i) the aggregate Extensions of Credit to the Borrowers would exceed the applicable limitations set forth in Subsection 2.1, (ii) the L/C Obligations in respect of Letters of Credit would exceed $150,000,000 or (iii) the Aggregate Outstanding Credit of all the Revolving Credit Lenders would exceed the Commitments of all the Revolving Credit Lenders then in effect.

 

(b)        Each Letter of Credit shall be denominated in Dollars and shall be either (i) a standby letter of credit issued to support obligations of the Parent Borrower or any of its Restricted Subsidiaries, or any Related Corporation, contingent or otherwise, which finance or otherwise arise in connection with the working capital and business needs of the Parent Borrower, its Restricted Subsidiaries or any Related Corporation, and for general corporate purposes, of the Parent Borrower, any of its Restricted Subsidiaries or any Related Corporation (a “Standby Letter of Credit”), or (ii) a commercial letter of credit in respect of the purchase of goods or services by the Parent Borrower, any of its Restricted Subsidiaries or any Related Corporation (a “Commercial L/C”), and unless otherwise agreed by the applicable Issuing Lender and, in the case of clause (B) below, the Administrative Agent, expire no later than the earlier of (A) one year after its date of issuance and (B) the fifth (5th) Business Day prior to the Termination Date; provided that, notwithstanding any extension of the Termination Date pursuant to Subsection 2.8, unless otherwise agreed, no Issuing Lender shall be obligated to issue a Letter of Credit that expires beyond the non-extended Termination Date.

 

(c)         Notwithstanding anything to the contrary in Subsection 3.1(b), if the Borrower Representative so requests in any L/C Request, the applicable Issuing Lender may, in its sole and absolute discretion, agree to issue a Letter of Credit that has automatic renewal provisions (each, an “Auto-Renewal L/C”); provided that any such Auto-Renewal L/C must permit the applicable Issuing Lender 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

 

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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.  Unless otherwise directed by the applicable Issuing Lender, the applicable Borrower shall not be required to make a specific request to such Issuing Lender for any such renewal.  Once an Auto-Renewal L/C has been issued, the Lenders shall be deemed to have authorized (but may not require) the applicable Issuing Lender to permit the renewal of such Letter of Credit at any time to an extended expiry date not later than the earlier of (i) one year from the date of such renewal and (ii) the fifth (5th) Business Day prior to the Termination Date; provided that such Issuing Lender shall not permit any such renewal if (x) such Issuing Lender 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 (by reason of the provisions of Subsection 3.2(c) or otherwise), or (y) it has received notice on or before the day that is two Business Days before the date which has been agreed upon pursuant to the proviso of the first sentence of this clause (c), (1) from the Administrative Agent that any Lender directly affected thereby has elected not to permit such renewal or (2) from the Administrative Agent, any Lender or Borrower that one or more of the applicable conditions specified in Section 6 are not then satisfied, or that the issuance of such Letter of Credit would violate Subsection 3.1.

 

(d)        Each Letter of Credit issued by an Issuing Lender shall be deemed to constitute a utilization of the Commitments, and shall be participated in (as more fully described in the following Subsection 3.4) by the Lenders in accordance with their respective Commitment Percentages.  All Letters of Credit issued hereunder shall be denominated in Dollars and shall be issued for the account of the applicable Borrower or (if required by the applicable Issuing Lender, so long as a Borrower is a co-applicant and jointly and severally liable thereunder) any Subsidiary or any Related Corporation.

 

(e)         Unless otherwise agreed by the applicable Issuing Lender and the Parent Borrower, each Letter of Credit shall be governed by, and shall be construed in accordance with, the laws of the State of New York, and to the extent not prohibited by such laws, the ISP shall apply to each standby Letter of Credit and the Uniform Customs shall apply to each commercial Letter of Credit.  The ISP shall not in any event apply to this Agreement.  All Letters of Credit shall be issued on a sight basis only.

 

3.2           Procedure for Issuance of Letters of Credit.  (a) The Borrower Representative may, from time to time during the Commitment Period but in no event later than the 30th day prior to the Termination Date, request that an Issuing Lender issue a Letter of Credit by delivering to such Issuing Lender and the Administrative Agent at its address for notices specified herein, an L/C Request therefor in the form of Exhibit J hereto (completed to the reasonable satisfaction of such Issuing Lender), and such other certificates, documents and other papers and information as such Issuing Lender may reasonably request.  Upon receipt of any L/C Request, such Issuing Lender will process such L/C Request and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall promptly issue the Letter of Credit requested thereby (but in no event shall an Issuing Lender be required, unless otherwise agreed to by such Issuing Lender, to issue any Letter of Credit earlier than five (5) Business Days after its receipt of the L/C Request therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise

 

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may be agreed by such Issuing Lender and the Borrower Representative.  The applicable Issuing Lender shall furnish a copy of such Letter of Credit to the Borrower Representative promptly following the issuance thereof.  No Issuing Lender shall amend, cancel or waive presentation of any Letter of Credit, or replace any lost, mutilated or destroyed Letter of Credit, without the prior written consent of the Borrower Representative.  Upon the issuance of any Letter of Credit or amendment, renewal, extension or modification to a Letter of Credit, the applicable Issuing Lender shall promptly notify the Administrative Agent, who shall promptly notify each Lender, thereof, which notice shall be accompanied by a copy of such Letter of Credit or amendment, renewal, extension or modification to a Letter of Credit and the amount of such Lender’s respective participation in such Letter of Credit pursuant to Subsection 3.4.  If the applicable Issuing Lender is not the same person as the Administrative Agent, on the first Business Day of each calendar month, such Issuing Lender shall provide to the Administrative Agent a report listing all outstanding Letters of Credit and the amounts and beneficiaries thereof and the Administrative Agent shall promptly provide such report to each Lender.

 

(b)        The making of each request for a Letter of Credit by the Borrower Representative shall be deemed to be a representation and warranty by the Borrower Representative that such Letter of Credit may be issued in accordance with, and will not violate the requirements of, Subsection 3.1.  Unless the respective Issuing Lender has received notice from the Required Lenders before it issues a Letter of Credit that one or more of the applicable conditions specified in Section 6 are not then satisfied, or that the issuance of such Letter of Credit would violate Subsection 3.1, then such Issuing Lender may issue the requested Letter of Credit for the account of the applicable Borrower, Subsidiary or Related Corporation in accordance with such Issuing Lender’s usual and customary practices.

 

(c)         No Issuing Lender shall be under any obligation to issue any Letter of Credit if

 

(i)            any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such Issuing Lender from issuing such Letter of Credit, or any Requirement of Law applicable to such Issuing Lender or any request or directive (whether or not having the force of law) from any banking regulatory authority with jurisdiction over such Issuing Lender shall prohibit the issuance of letters of credit generally; or

 

(ii)           the issuance of such Letter of Credit would violate one or more existing (as of the date hereof) policies of such Issuing Lender consistently applied by such Issuing Lender to borrowers generally.

 

3.3           Fees, Commissions and Other Charges.  (a) Each Borrower agrees to pay to the Administrative Agent a letter of credit commission with respect to each Letter of Credit issued by such Issuing Lender on its behalf, computed for the period from and including the date of issuance of such Letter of Credit through to the expiration date of such Letter of Credit, computed at a rate per annum equal to the Applicable Margin then in effect for Eurodollar Loans calculated based upon the actual number of days elapsed over a 360-day year, of the aggregate amount available to be drawn under such Letter of Credit, payable quarterly in arrears on each L/C Fee Payment Date with respect to such Letter of Credit and on the Termination Date or such

 

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earlier date as the Commitments shall terminate as provided herein.  Such commission shall be payable to the Administrative Agent for the account of the applicable Revolving Credit Lenders to be shared ratably among them in accordance with their respective Commitment Percentages.  Each Borrower shall pay to the relevant Issuing Lender with respect to each Letter of Credit a fee equal to 1/8 of 1.0% per annum of the aggregate amount available to be drawn under such Letter of Credit or such other amounts as may be agreed by such Borrower and such Issuing Lender, payable quarterly in arrears on each L/C Fee Payment Date with respect to such Letter of Credit and on the Termination Date or such other date as the Commitments shall terminate calculated based upon the actual number of days elapsed over a 360-day year.  Such commissions and fees shall be nonrefundable.  Such fees and commissions shall be payable in Dollars.

 

(b)        In addition to the foregoing commissions and fees, each Borrower agrees to pay amounts necessary to reimburse the applicable Issuing Lender for such normal and customary costs and expenses as are incurred or charged by such Issuing Lender in issuing, effecting payment under, amending or otherwise administering any Letter of Credit issued by such Issuing Lender within ten (10) days after demand therefor.

 

(c)         The Administrative Agent shall, promptly following any receipt thereof, distribute to the applicable Issuing Lender and the applicable Lenders all commissions and fees received by the Administrative Agent for their respective accounts pursuant to this Subsection 3.3.

 

3.4           L/C Participations.  (a) By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the applicable Issuing Lender or the Lenders, each Issuing Lender hereby irrevocably grants to each Lender, and each Lender hereby acquires from such Issuing Lender, a participation in such Letter of Credit equal to such Lender’s Commitment Percentage of the aggregate amount available to be drawn under such Letter of Credit.  Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, or expiration, termination or cash collateralization of any Letter of Credit and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.  All calculations of the Lenders’ Commitment Percentages shall be made from time to time by the Administrative Agent, which calculations shall be conclusive absent manifest error.

 

(b)        If the Borrowers fail to reimburse the applicable Issuing Lender on the due date as provided in Subsection 3.5, such Issuing Lender shall notify the Administrative Agent and the Administrative Agent shall notify each Lender of the applicable L/C Disbursement, the payment then due from the Borrowers in respect thereof and such Lender’s Commitment Percentage thereof.  Each Lender shall pay by wire transfer of immediately available funds to the Administrative Agent not later than 2:00 P.M., New York City time, on such date (or, if such Lender shall have received such notice later than 12:00 P.M., New York City time, on any day, not later than 11:00 A.M., New York City time, on the next succeeding Business Day), an amount equal to such Lender’s Commitment Percentage of the unreimbursed L/C Disbursement in the same manner as provided in Subsection 2.2 with respect to Loans made by such Lender,

 

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and the Administrative Agent will promptly pay to the applicable Issuing Lender the amounts so received by it from the Lenders.  The Administrative Agent will promptly pay to the applicable Issuing Lender any amounts received by it from the Borrowers pursuant to the above clause (a) prior to the time that any Lender makes any payment pursuant to the preceding sentence and any such amounts received by the Administrative Agent from the Borrowers thereafter will be promptly remitted by the Administrative Agent to the Lender that shall have made such payments and to such Issuing Lender, as appropriate.

 

(c)         If any Lender shall not have made its Commitment Percentage of such L/C Disbursement available to the Administrative Agent as provided above, each of such Lender and each Borrower severally agrees to pay interest on such amount, for each day from and including the date such amount is required to be paid in accordance with the foregoing to but excluding the date such amount is paid, to the Administrative Agent for the account of the applicable Issuing Lender at (i) in the case of Borrower, the rate per annum set forth in Subsection 3.5(b) and (ii) in the case of such Lender, at a rate determined by the Administrative Agent in accordance with banking industry rules or practices on interbank compensation.

 

3.5           Reimbursement Obligation of the Borrowers.  (a) Each Issuing Lender shall promptly notify the Borrower Representative of any presentation of a draft under any Letter of Credit. Each Borrower hereby agrees to reimburse each Issuing Lender, upon receipt by the Borrower Representative of notice from the applicable Issuing Lender of the date and amount of a draft presented under any Letter of Credit issued on its behalf and paid by such Issuing Lender (an “L/C Disbursement”), for the amount of such draft so paid and any taxes, fees, charges or other costs or expenses reasonably incurred by such Issuing Lender in connection with such payment.  Each such payment shall be made to the applicable Issuing Lender, at its address for notices specified herein, in Dollars in immediately available funds, no later than 3:00 P.M., New York City time, on the date which is one (1) Business Day (or, if the Facility is fully drawn on such date and the applicable Borrower does not have sufficient cash on hand to make such payment, two (2) Business Days) after the date on which the Borrower Representative receives such notice, if received prior to 11:00 A.M., New York City Time, on a Business Day and otherwise, no later than 3:00 P.M., New York City time, on the next succeeding Business Day; provided that the Borrowers may, subject to the conditions to borrowing set forth herein, request in accordance with Subsection 2.2 that such payment be financed with ABR Loans or Swingline Loans in an equivalent amount and, to the extent so financed, the Borrowers’ obligation to make such payment shall be discharged and replaced by the resulting ABR Loans or Swingline Loans.

 

(b)        Interest shall be payable on any and all amounts remaining unpaid by the Borrowers under this Subsection 3.5(b) from the date the draft presented under the affected Letter of Credit is paid to the date on which the applicable Borrower is required to pay such amounts pursuant to clause (a) above at the rate which would then be payable on any outstanding ABR Loans that are Revolving Credit Loans and (ii) thereafter until payment in full at the rate which would be payable on any outstanding ABR Loans that are Revolving Credit Loans which were then overdue.

 

3.6           Obligations Absolute.  The Reimbursement Obligations of Borrowers as provided in Subsection 3.5 shall be absolute, unconditional and irrevocable, and shall be paid and performed strictly in accordance with the terms of this Agreement under any and all

 

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circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein; (ii) any draft or other document presented under a Letter of Credit being proved to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (iii) payment by any Issuing Lender under a Letter of Credit against presentation of a draft or other document that fails to comply with the terms of such Letter of Credit; (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section 3, constitute a legal or equitable discharge of, or provide a right of setoff against, the obligations of Borrower hereunder; (v) the fact that a Default shall have occurred and be continuing; or (vi) any material adverse change in the business, property, results of operations, prospects or condition, financial or otherwise, of the Parent Borrower and its Restricted Subsidiaries.  None of the Agents, the Lenders, the Issuing Lenders or any of their affiliates shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Lenders; provided that the foregoing shall not be construed to excuse any Issuing Lender from liability to the Borrowers to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrowers to the extent permitted by applicable Requirements of Law) suffered by the Borrowers that are caused by such Issuing Lender’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof.  The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the applicable Issuing Lender (as finally determined by a court of competent jurisdiction), such Issuing Lender shall be deemed to have exercised care in each such determination.  In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the applicable Issuing Lender may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

 

3.7           L/C Disbursements.  The applicable Issuing Lender shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit.  Such Issuing Lender shall promptly give written notice to the Administrative Agent and the Borrower Representative of such demand for payment and whether such Issuing Lender has made or will make an L/C Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve Borrower of its Reimbursement Obligation to such Issuing Lender and the Lenders with respect to any such L/C Disbursement (other than with respect to the timing of such Reimbursement Obligation set forth in Subsection 3.5).

 

3.8           L/C Request.  In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any L/C Request or other

 

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application or agreement submitted by any Borrower, any Subsidiary or any Related Corporation to, or entered into by any Borrower, any Subsidiary or any Related Corporation with, any Issuing Lender relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

 

3.9           Cash Collateralization.  If the maturity of the Loans has been accelerated, the Borrowers shall then deposit on terms and in accounts satisfactory to the Administrative Agent, in the name of the Collateral Agent and for the benefit of the Revolving Credit Lenders, an amount in cash equal to the L/C Obligations as of such date plus any accrued and unpaid interest thereon.  Funds so deposited shall be applied by the Administrative Agent to reimburse the applicable Issuing Lender for L/C Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be applied to satisfy other Obligations of the Borrowers under this Agreement.

 

3.10         Additional Issuing Lenders.  The Borrower Representative may, at any time and from time to time with the consent of the Administrative Agent (which consent shall not be unreasonably withheld) and such Lender, designate one or more additional Lenders to act as an issuing lender under the terms of this Agreement.  Any Lender designated as an issuing lender pursuant to this Subsection 3.10 shall be deemed to be an “Issuing Lender” (in addition to being a Lender) in respect of Letters of Credit issued or to be issued by such Lender, and, with respect to such Letters of Credit, such term shall thereafter apply to the other Issuing Lender or Issuing Lenders and such Lender.  The Administrative Agent shall notify the Lenders of any such additional Issuing Lender.  If at any time there is more than one Issuing Lender hereunder, the Borrower Representative may, in its discretion, select which Issuing Lender is to issue any particular Letter of Credit.

 

3.11         Resignation or Removal of the Issuing Lender.  Any Issuing Lender may resign as Issuing Lender hereunder at any time upon at least thirty (30) days’ prior notice to the Lenders, the Administrative Agent and the Borrower Representative.  Any Issuing Lender may be replaced at any time by written agreement among the Borrower Representative, each Agent, the replaced Issuing Lender and the successor Issuing Lender.  The Administrative Agent shall notify the Lenders of any such resignation or replacement of an Issuing Lender.  At the time any such resignation of an Issuing Lender shall become effective, the Borrowers shall pay all unpaid fees accrued for the account of the retiring Issuing Lender pursuant to Subsection 3.3.  From and after the effective date of any such resignation or replacement, (i) the successor Issuing Lender shall have all the rights and obligations of an Issuing Lender under this Agreement with respect to Letters of Credit to be issued by it thereafter and (ii) references herein to the term “Issuing Lender” shall be deemed to refer to such successor or to any previous Issuing Lender, or to such successor and all previous Issuing Lenders, as the context shall require.  After the resignation or replacement of an Issuing Lender, the retiring or replaced Issuing Lender shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Lender under this Agreement with respect to Letters of Credit issued by it prior to such resignation or replacement, but shall not be required to issue additional Letters of Credit.

 

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SECTION 4

 

General Provisions Applicable to Loans and Letters of Credit

 

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

 

(b)        Each ABR Loan denominated in Dollars shall bear interest for each day that it is outstanding at a rate per annum equal to the Alternate Base Rate in effect for such day plus the Applicable Margin in effect for such day.

 

(c)         If all or a portion of (i) the principal amount of any Loan, (ii) any interest payable thereon or (iii) any commitment fee, letter of credit commission, letter of credit fee or other amount payable hereunder shall not be paid when due (whether at the Stated Maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum which is (x) in the case of overdue principal, the rate that would otherwise be applicable thereto pursuant to the relevant foregoing provisions of this Subsection 4.1 plus 2.00%, (y) in the case of overdue interest, the rate that would be otherwise applicable to principal of the related Loan pursuant to the relevant foregoing provisions of this Subsection 4.1 (other than clause (x) above) plus 2.00% and (z) in the case of, fees, commissions or other amounts, the rate described in clause (b) of this Subsection 4.1 for ABR Loans that are Revolving Credit Loans accruing interest at the Alternate Base Rate plus 2.00%, in each case from the date of such nonpayment until such amount is paid in full (as well after as before any judgment relating thereto).

 

(d)        Interest shall be payable in arrears on each Interest Payment Date, provided that interest accruing pursuant to clause (c) of this Subsection 4.1 shall be payable from time to time on demand.

 

(e)         It is the intention of the parties hereto to comply strictly with applicable usury laws; accordingly, it is stipulated and agreed that the aggregate of all amounts which constitute interest under applicable usury laws, whether contracted for, charged, taken, reserved, or received, in connection with the indebtedness evidenced by this Agreement or any Notes, or any other document relating or referring hereto or thereto, now or hereafter existing, shall never exceed under any circumstance whatsoever the maximum amount of interest allowed by applicable usury laws.

 

4.2           Conversion and Continuation Options.  (a) Subject to its obligations pursuant to Subsection 4.12(c), the applicable Borrowers may elect from time to time to convert outstanding Revolving Credit Loans from Eurodollar Loans to ABR Loans by the Borrower Representative giving the Administrative Agent irrevocable notice of such election prior to 1:00 P.M., New York City time two Business Days prior to such election.  The Borrowers may elect from time to time to convert outstanding Revolving Credit Loans from ABR Loans to Eurodollar Loans by the Borrower Representative giving the Administrative Agent irrevocable notice of such election prior to 1:00 P.M., New York City time at least two (2) Business Days’ prior to such election.  Any such notice of conversion to Eurodollar Loans shall specify the length of the

 

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initial Interest Period or Interest Periods therefor.  Upon receipt of any such notice the Administrative Agent shall promptly notify each affected Lender thereof.  All or any part of outstanding Eurodollar Loans or ABR Loans may be converted as provided herein, provided that (i) (unless the Required Lenders otherwise consent) no Loan may be converted into a Eurodollar Loan when any Default or Event of Default has occurred and is continuing and, in the case of any Default (other than any Default under Subsection 9.1(f)), the Administrative Agent has given notice to the Parent Borrower that no such conversions may be made and (ii) no Loan may be converted into a Eurodollar Loan after the date that is one month prior to the Termination Date.

 

(b)        Any Eurodollar Loan may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Borrower Representative giving notice to the Administrative Agent of the length of the next Interest Period to be applicable to such Loan, determined in accordance with the applicable provisions of the term “Interest Period” set forth in Subsection 1.1, provided that no Eurodollar Loan may be continued as such (i) (unless the Required Lenders otherwise consent) when any Default or Event of Default has occurred and is continuing and, in the case of any Default (other than any Default under Subsection 9.1(f)), the Administrative Agent has given notice to the Borrower Representative that no such continuations may be made or (ii) after the date that is one month prior to either the Termination Date, and provided, further, that if the Borrower Representative shall fail to give any required notice as described above in this clause (b) or if such continuation is not permitted pursuant to the preceding proviso such Eurodollar Loans shall be automatically converted to ABR Loans on the last day of such then expiring Interest Period.  Upon receipt of any such notice of continuation pursuant to this Subsection 4.2(b), the Administrative Agent shall promptly notify each affected Lender thereof.

 

4.3           Minimum Amounts; Maximum Sets.  All borrowings, conversions and continuations of Loans hereunder and all selections of Interest Periods hereunder shall be in such amounts and be made pursuant to such elections so that, after giving effect thereto, the aggregate principal amount of the Eurodollar Loans comprising each Set shall be equal to $1,000,000 or a whole multiple of $500,000 in excess thereof and so that there shall not be more than 15 Sets at any one time outstanding.

 

4.4           Optional and Mandatory Prepayments.  (a) Each of the Borrowers may at any time and from time to time prepay the Loans made to it and the Reimbursement Obligations in respect of Letters of Credit issued for its account, in whole or in part, subject to Subsection 4.12, without premium or penalty, upon notice by the Borrower Representative to the Administrative Agent prior to 1:00 P.M., New York City time at least three (3) Business Days prior to the date of prepayment (in the case of Eurodollar Loans), prior to 12:00 P.M., New York City time at least one Business Day prior to the date of prepayment (in the case of ABR Loans other than Swingline Loans) or same-day notice by the Borrower Representative to the Administrative Agent (in the case of (x) Swingline Loans and (y) Reimbursement Obligations outstanding in Dollars).  Such notice shall be irrevocable except as provided in Subsection 4.4(g).  Such notice shall specify, in the case of any prepayment of Loans, the identity of the prepaying Borrower, the date and amount of prepayment and whether the prepayment is (i) of Revolving Credit Loans or Swingline Loans, or a combination thereof, and (ii) of Eurodollar Loans or ABR Loans, or a combination thereof, and, in each case if a combination thereof, the principal amount allocable to each and, in the case of any prepayment of Reimbursement

 

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Obligations, the date and amount of prepayment, the identity of the applicable Letter of Credit or Letters of Credit and the amount allocable to each of such Reimbursement Obligations.  Upon the receipt of any such notice the Administrative Agent shall promptly notify each affected Lender thereof.  If any such notice is given, the amount specified in such notice shall (subject to Subsection 4.4(g)) be due and payable on the date specified therein, together with (if a Eurodollar Loan is prepaid other than at the end of the Interest Period applicable thereto) any amounts payable pursuant to Subsection 4.12, the Revolving Credit Loans and the Reimbursement Obligations pursuant to this Section shall (unless the Parent Borrower otherwise directs) be applied, first, to payment of the Swingline Loans then outstanding, second, to payment of the Revolving Credit Loans then outstanding, third, to payment of any Reimbursement Obligations then outstanding and, last, to cash collateralize any outstanding L/C Obligation on terms reasonably satisfactory to the Administrative Agent.  Partial prepayments pursuant to this Subsection 4.4(a) shall be in multiples of $1,000,000, as applicable, provided that, notwithstanding the foregoing, any Loan may be prepaid in its entirety.

 

(b)        On any day (other than during an Agent Advance Period) on which the Aggregate Lender Exposure or the unpaid balance of Extensions of Credit to, or for the account of, the Borrowers exceeds the Borrowing Base (based on the Borrowing Base Certificate last delivered) or the total Commitments at such time, the Borrowers shall prepay on such day the principal of outstanding Revolving Credit Loans in an amount equal to such excess.  If, after giving effect to the prepayment of all outstanding Revolving Credit Loans, the aggregate amount of the L/C Obligations exceeds the Borrowing Base at such time (based on the Borrowing Base Certificate last delivered), the Borrowers shall pay to the Administrative Agent on such day an amount of cash and/or Cash Equivalents equal to the amount of such excess (up to a maximum amount equal to such L/C Obligations at such time), such cash and/or Cash Equivalents to be held as security for all obligations of the Borrowers to the Issuing Lenders and the Revolving Credit Lenders hereunder in a cash collateral account to be established by, and under the sole dominion and control of, the Administrative Agent.

 

(c)         The Borrowers shall prepay all Swingline Loans then outstanding simultaneously with each borrowing by them of Revolving Credit Loans.

 

(d)        Prepayments pursuant to Subsection 4.4(b) shall be applied, first, to prepay Swingline Loans then outstanding, second, to prepay Revolving Credit Loans then outstanding, third, to pay any Reimbursement Obligations then outstanding and, last, to cash collateralize all L/C Obligations on terms reasonably satisfactory to the Administrative Agent.

 

(e)         For avoidance of doubt, the Commitments shall not be correspondingly reduced by the amount of any prepayments of Revolving Credit Loans, payments of Reimbursement Obligations and cash collateralizations of L/C Obligations, in each case, made under Subsections 4.4(b).

 

(f)         Notwithstanding the foregoing provisions of this Subsection 4.4, if at any time any prepayment of the Loans pursuant to Subsection 4.4(a) or 4.4(b) would result, after giving effect to the procedures set forth in this Agreement, in any Borrower incurring breakage costs under Subsection 4.12 as a result of Eurodollar Loans being prepaid other than on the last day of an Interest Period with respect thereto, then, the relevant Borrower may, so long as no

 

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Default or Event of Default shall have occurred and be continuing, in its sole discretion, initially (i) deposit a portion (up to 100.0%) of the amounts that otherwise would have been paid in respect of such Eurodollar Loans with the Administrative Agent (which deposit must be equal in amount to the amount of such Eurodollar Loans not immediately prepaid), to be held as security for the obligations of such Borrowers to make such prepayment pursuant to a cash collateral agreement to be entered into on terms reasonably satisfactory to the Administrative Agent with such cash collateral to be directly applied upon the first occurrence thereafter of the last day of an Interest Period with respect to such Eurodollar Loans (or such earlier date or dates as shall be requested by such Borrower) or (ii) make a prepayment of the Revolving Credit Loans in accordance with Subsection 4.4(a) with an amount equal to a portion (up to 100.0%) of the amounts that otherwise would have been paid in respect of such Eurodollar Loans (which prepayment, together with any deposits pursuant to clause (i) above, must be equal in amount to the amount of such Eurodollar Loans not immediately prepaid); provided that, notwithstanding anything in this Agreement to the contrary, none of the Borrowers may request any Extension of Credit under the Commitments that would reduce Excess Availability to an amount that is less than the amount of such prepayment until the related portion of such Eurodollar Loans have been prepaid upon the first occurrence thereafter of the last day of an Interest Period with respect to such Eurodollar Loans; provided that, in the case of either clause (i) or (ii) above, such unpaid Eurodollar Loans shall continue to bear interest in accordance with Subsection 4.1 until such unpaid Eurodollar Loans or the related portion of such Eurodollar Loans, as the case may be, have or has been prepaid.

 

(g)        If a notice of prepayment in connection with a repayment of all outstanding Loans is given in connection with a conditional notice of termination of Commitments as contemplated by Subsection 2.3, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Subsection 2.3.

 

(h)        Notwithstanding anything to the contrary herein, this Subsection 4.4 may be amended (and the Lenders hereby irrevocably authorize the Administrative Agent to enter into any such amendments) to the extent necessary to reflect differing amounts payable, and priorities of payments, to Lenders participating in any new classes or tranches of loans added pursuant to Subsections 2.6, 2.7 and 2.8, as applicable.

 

4.5           Commitment Fees; Administrative Agent’s Fee; Other Fees.  (a) Each Borrower agrees to pay to the Administrative Agent, for the account of each Lender, a commitment fee for the period from and including the first day of the Commitment Period to the Termination Date, computed at the Applicable Commitment Fee Rate on the average daily amount of the Unutilized Commitment of such Revolving Credit Lender during the period for which payment is made, payable quarterly in arrears on the last day of each March, June, September and December and on the Termination Date or such earlier date as the Commitments shall terminate as provided herein, commencing on the first such date to occur after the date hereof.

 

(b)        Each Borrower agrees to pay to the Administrative Agent the fees set forth in the fourth paragraph under the heading “Senior Secured Facilities Fees” of the Fee Letter (without duplication of fees paid to the Term Loan Agent pursuant to such section of the Fee Letter).

 

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4.6           Computation of Interest and Fees.  (a) Interest (other than interest based on the Base Rate) shall be calculated on the basis of a 360-day year for the actual days elapsed; and commitment fees and interest based on the Base Rate shall be calculated on the basis of a 365-day year (or 366-day year, as the case may be) for the actual days elapsed.  The Administrative Agent shall as soon as practicable notify the Parent Borrower and the affected Lenders of each determination of an Adjusted LIBOR Rate.  Any change in the interest rate on a Loan resulting from a change in the Alternate Base Rate or the Statutory Reserves shall become effective as of the opening of business on the day on which such change becomes effective.  The Administrative Agent shall as soon as practicable notify the Parent Borrower and the affected Lenders of the effective date and the amount of each such change in interest rate.

 

(b)        Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on each of the Borrowers and the Lenders in the absence of manifest error.  The Administrative Agent shall, at the request of the Borrower Representative or any Lender, deliver to the Borrower Representative or such Lender a statement showing in reasonable detail the calculations used by the Administrative Agent in determining any interest rate pursuant to Subsection 4.1, excluding any LIBOR Rate which is based upon the Reuters Monitor Money Rates Service page and any ABR Loan which is based upon the Alternate Base Rate.

 

4.7           Inability to Determine Interest Rate.  If prior to the first day of any Interest Period, the Administrative Agent shall have determined (which determination shall be conclusive and binding upon each of the Borrowers) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Adjusted LIBOR Rate with respect to any Eurodollar Loan for such Interest Period (the “Affected Eurodollar Rate”), the Administrative Agent shall give telecopy or telephonic notice thereof to the Parent Borrower and the Lenders as soon as practicable thereafter.  If such notice is given (a) any Eurodollar Loans the rate of interest applicable to which is based on the Affected Eurodollar Rate requested to be made on the first day of such Interest Period shall be made as ABR Loans and (b) any Loans that were to have been converted on the first day of such Interest Period to or continued as Eurodollar Loans the rate of interest applicable to which is based upon the Affected Eurodollar Rate shall be converted to or continued as ABR Loans.  Until such notice has been withdrawn by the Administrative Agent, no further Eurodollar Loans the rate of interest applicable to which is based upon the Affected Eurodollar Rate shall be made or continued as such, nor shall any of the Borrowers have the right to convert ABR Loans to Eurodollar Loans the rate of interest applicable to which is based upon the Affected Eurodollar Rate.

 

4.8           Pro Rata Treatment and Payments.  (a) Except as expressly otherwise provided herein, each borrowing of Revolving Credit Loans (other than Swingline Loans) by any of the applicable Borrowers from the Lenders hereunder shall be made, each payment by any of the Borrowers on account of any commitment fee in respect of the Commitments hereunder shall be allocated by the Administrative Agent and any reduction of the Commitments of the Lenders, as applicable, shall be allocated by the Administrative Agent in each case pro rata according to the Commitment Percentage of the Lenders.  Except as expressly otherwise provided herein, each payment (including each prepayment (but excluding payments made pursuant to Subsection 2.6, 2.7, 2.8, 4.5(b), 4.9, 4.10, 4.11, 4.12, 4.13(d), 4.15(c), 8.6(b)(ii) (to the extent declined by a Lender or the Administrative Agent) or 11.1(g))) by any of the applicable Borrowers on account

 

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of principal of and interest on any Revolving Credit Loans shall be allocated by the Administrative Agent pro rata according to the respective outstanding principal amounts of such Revolving Credit Loans then held by the relevant Revolving Credit Lenders, and each payment on account of principal of and interest on any loans made pursuant to any Tranche established after the date of this Agreement shall be allocated pro rata (or as may otherwise be provided for in the applicable amendment to this Agreement relating to such Tranche) among the Lenders with Incremental Revolving Commitments in respect thereof or with participations in such Tranche (in each case subject to any limitations on non-pro rata payments otherwise provided for in Subsection 2.6(b)(i)(E) or 2.6(b)(ii)). All payments (including prepayments) to be made by any of the Borrowers hereunder, whether on account of principal, interest, fees, Reimbursement Obligations or otherwise, shall be made without set-off or counterclaim and shall be made on or prior to the time expressly required hereunder or under such other Loan Document for such payment (or, if no such time is expressly required, prior to 2:00 P.M., New York City time), on the due date thereof to the Administrative Agent for the account of the Lenders holding the relevant Loans, the Lenders, the Administrative Agent, or the Other Representatives, as the case may be, at the Administrative Agent’s office specified in Subsection 11.2, in Dollars, and in immediately available funds.  Payments received by the Administrative Agent after such time shall be deemed to have been received on the next Business Day.  The Administrative Agent shall distribute such payments to such Lenders or Other Representatives, as the case may be, if any such payment is received prior to 2:00 P.M., New York City time, on a Business Day, in like funds as received prior to the end of such Business Day and otherwise the Administrative Agent shall distribute such payment to such Lenders or Other Representatives, as the case may be, on the next succeeding Business Day.  If any payment hereunder (other than payments on the Eurodollar Loans) becomes due and payable on a day other than a Business Day, the maturity of such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension.  If any payment on a Eurodollar Loan becomes due and payable on a day other than a Business Day, the maturity of such payment shall be extended to the next succeeding Business Day (and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension) unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day.  This Subsection 4.8(a) may be amended in accordance with Subsection 11.1(d) to the extent necessary to reflect differing amounts payable, and priorities of payments, to Lenders participating in any new classes or tranches of loans added pursuant to Subsections 2.6, 2.7 and 2.8, as applicable.

 

(b)        Unless the Administrative Agent shall have been notified in writing by any Lender prior to a borrowing that such Lender will not make the amount that would constitute its share of such borrowing available to the Administrative Agent, the Administrative Agent may assume that such Lender is making such amount available to the Administrative Agent, and the Administrative Agent may, in reliance upon such assumption, make available to the applicable Borrowers in respect of such borrowing a corresponding amount.  If such amount is not made available to the Administrative Agent by the required time on the Borrowing Date therefor, such Lender shall pay to the Administrative Agent on demand, such amount with interest thereon at a rate equal to the daily average Federal Funds Effective Rate for the period until such Lender makes such amount immediately available to the Administrative Agent.  A certificate of the Administrative Agent submitted to any Lender with respect to any amounts

 

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owing under this Subsection 4.8(b) shall be conclusive in the absence of manifest error.  If such Lender’s share of such borrowing is not made available to the Administrative Agent by such Lender within three Business Days of such Borrowing Date, (x) the Administrative Agent shall notify the Parent Borrower of the failure of such Lender to make such amount available to the Administrative Agent and the Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum applicable to ABR Loans hereunder on demand from such Borrower and (y) then such Borrower may, without waiving or limiting any rights or remedies it may have against such Lender hereunder or under applicable law or otherwise, borrow a like amount on an unsecured basis from any commercial bank for a period ending on the date upon which such Lender does in fact make such borrowing available, provided that at the time such borrowing is made and at all times while such amount is outstanding such Borrower would be permitted to borrow such amount pursuant to Subsection 2.1.

 

4.9           Illegality.  Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof occurring after the Closing Date shall make it unlawful for any Lender to make or maintain any Eurodollar Loans as contemplated by this Agreement (“Affected Loans”), (a) such Lender shall promptly give written notice of such circumstances to the Borrower Representative and the Administrative Agent (which notice shall be withdrawn whenever such circumstances no longer exist), (b) the commitment of such Lender hereunder to make Affected Loans, continue Affected Loans as such and convert an ABR Loan to an Affected Loan shall forthwith be cancelled and, until such time as it shall no longer be unlawful for such Lender to make or maintain such Affected Loans, such Lender shall then have a commitment only to make an ABR Loan (or a Swingline Loan) when an Affected Loan is requested and (c) such Lender’s Loans then outstanding as Affected Loans, if any, shall be converted automatically to ABR Loans on the respective last days of the then current Interest Periods with respect to such Affected Loans or within such earlier period as required by law.  If any such conversion or prepayment of an Affected Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, the applicable Borrower shall pay to such Lender such amounts, if any, as may be required pursuant to Subsection 4.12.

 

4.10         Requirements of Law.  (a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof applicable to any Lender or any Issuing Lender, or compliance by any Lender or any Issuing Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority, in each case made subsequent to the Closing Date (or, if later, the date on which such Lender becomes a Lender or such Issuing Lender becomes an Issuing Lender):

 

(i)            shall subject such Lender or such Issuing Lender to any Tax of any kind whatsoever with respect to any Letter of Credit, any L/C Request or any Eurodollar Loans made or maintained by it or its obligation to make or maintain Eurodollar Loans, or change the basis of taxation of payments to such Lender in respect thereof, in each case, except for Non-Excluded Taxes, Taxes imposed by FATCA and Taxes measured by or imposed upon net income, or franchise Taxes, or Taxes measured by or imposed upon overall capital or net worth, or branch Taxes (in the case of such capital, net worth or

 

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branch Taxes, imposed in lieu of such net income Tax), of such Lender, such Issuing Lender or its applicable lending office, branch, or any affiliate thereof;

 

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

 

(iii)          shall impose on such Lender or such Issuing Lender any other condition (excluding any Tax of any kind whatsoever);

 

and the result of any of the foregoing is to increase the cost to such Lender or such Issuing Lender, by an amount which such Lender or such Issuing Lender deems to be material, of making, converting into, continuing or maintaining Eurodollar Loans, or issuing or participating in Letters of Credit or to reduce any amount receivable hereunder in respect thereof, then, in any such case, upon notice to the Parent Borrower from such Lender, through the Administrative Agent in accordance herewith, the applicable Borrower shall promptly pay such Lender or such Issuing Lender, upon its demand, any additional amounts necessary to compensate such Lender for such increased cost or reduced amount receivable with respect to such Eurodollar Loans, or Letters of Credit, provided that, in any such case, such Borrower may elect to convert the Eurodollar Loans made by such Lender hereunder to ABR Loans by giving the Administrative Agent at least one Business Day’s notice of such election, in which case such Borrower shall promptly pay to such Lender, upon demand, without duplication, amounts theretofore required to be paid to such Lender pursuant to this Subsection 4.10(a) and such amounts, if any, as may be required pursuant to Subsection 4.12.  If any Lender becomes entitled to claim any additional amounts pursuant to this Subsection 4.10(a), it shall provide prompt notice thereof to the Parent Borrower, through the Administrative Agent, certifying (x) that one of the events described in this clause (a) has occurred and describing in reasonable detail the nature of such event, (y) as to the increased cost or reduced amount resulting from such event and (z) as to the additional amount demanded by such Lender and a reasonably detailed explanation of the calculation thereof.  Such a certificate as to any additional amounts payable pursuant to this Subsection 4.10(a) submitted by such Lender, through the Administrative Agent, to the Parent Borrower shall be conclusive in the absence of manifest error.  This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

 

(b)        If any Lender or any Issuing Lender shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Lender or such Issuing Lender or any corporation controlling such Lender or such Issuing Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority, in each case, made subsequent to the Closing Date, does or shall have the effect of reducing the rate of return on such Lender’s or such corporation’s capital as a consequence of such Lender’s or such Issuing Lender’s obligations hereunder or under or in respect of any Letter of Credit to a level below that which such Lender or such corporation could have achieved but for such change or compliance (taking into consideration such Lender’s or such Issuing Lender’s or such corporation’s policies with respect to capital adequacy) by an amount

 

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deemed by such Lender or such Issuing Lender to be material, then from time to time, within ten Business Days after submission by such Lender to the Parent Borrower (through the Administrative Agent) of a written request therefor certifying (x) that one of the events described in this clause (b) has occurred and describing in reasonable detail the nature of such event, (y) as to the reduction of the rate of return on capital resulting from such event and (z) as to the additional amount or amounts demanded by such Lender or such Issuing Lender or corporation and a reasonably detailed explanation of the calculation thereof, the applicable Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or corporation for such reduction.  Such a certificate as to any additional amounts payable pursuant to this Subsection 4.10(b) submitted by such Lender, through the Administrative Agent, to the Parent Borrower shall be conclusive in the absence of manifest error.  This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

 

(c)           Notwithstanding anything herein to the contrary, the Dodd Frank Wall Street Reform and Consumer Protection Act, and all requests, rules, regulations, guidelines and directives promulgated thereunder or issued in connection therewith shall be deemed to have been enacted, adopted or issued, as applicable, subsequent to the Closing Date for all purposes herein.

 

4.11         Taxes.  (a) Except as provided below in this Subsection 4.11 or as required by law, all payments made by each of the Borrowers or the Agents under this Agreement and any Notes shall be made free and clear of, and without deduction or withholding for or on account of any Taxes; provided that if any Non-Excluded Taxes are required to be withheld from any amounts payable by any Borrower to any Agent or any Lender hereunder or under any Notes, the amounts so payable by such Borrower shall be increased to the extent necessary to yield to such Agent or such Lender (after payment of all Non-Excluded Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement; provided, however, that each of the Borrowers shall be entitled to deduct and withhold, and the Borrowers shall not be required to indemnify for any Non-Excluded Taxes, and any such amounts payable by any Borrower to or for the account of any Agent or Lender, shall not be increased (x) if such Agent or Lender fails to comply with the requirements of clauses (b), (c) or (d) of this Subsection 4.11 or with the requirements of Subsection 4.13, or (y) with respect to any Non-Excluded Taxes imposed in connection with the payment of any fees paid under this Agreement unless such Non-Excluded Taxes are imposed as a result of a Change in Law, or (z) with respect to any Non-Excluded Taxes imposed by the United States or any state or political subdivision thereof, unless such Non-Excluded Taxes are imposed as a result of a change in treaty, law or regulation that occurred after such Agent became an Agent hereunder or such Lender became a Lender hereunder (or, if such Agent or Lender is a non-U.S. intermediary or flow-through entity for U.S. federal income tax purposes, after the relevant beneficiary or member of such Agent or Lender became such a beneficiary or member, if later) (any such change, at such time, a “Change in Law”).  Whenever any Non-Excluded Taxes are payable by any Borrower, as promptly as possible thereafter such Borrower shall send to the Administrative Agent for its own account or for the account of the respective Lender or Agent, as the case may be, a certified copy of an original official receipt received by such Borrower showing payment thereof.  If any Borrower fails to pay any Non-Excluded Taxes when due to the appropriate Governmental Authority in accordance with applicable law or fails to remit to the Administrative Agent the required receipts

 

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or other required documentary evidence, such Borrower shall indemnify the Administrative Agent, the Lenders and the Agents for any incremental Taxes, interest or penalties that may become payable by the Administrative Agent or any Lender as a result of any such failure.  The agreements in this Subsection 4.11 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

 

(b)        Each Agent and each Lender that is not a United States Person shall:

 

(i)            (1) on or before the date of any payment by any of the Borrowers under this Agreement or any Notes to, or for the account of, such Agent or Lender, deliver to the Borrowers and the Administrative Agent (A) two duly completed copies of Internal Revenue Service Form W-8BEN (certifying that it is a resident of the applicable country within the meaning of the income tax treaty between the United States and that country) or Form W-8ECI, or successor applicable form, as the case may be, in each case certifying that it is entitled to receive all payments under this Agreement and any Notes without deduction or withholding of any United States federal income taxes, and (B) such other forms, documentation or certifications, as the case may be, certifying that it is entitled to an exemption from United States backup withholding tax with respect to payments under this Agreement and any Notes;

 

(2)           deliver to the Borrowers and the Administrative Agent two further copies of any such form or certification provided in Subsection 4.11(b)(i)(1) on or before the date that any such form or certification expires or becomes obsolete and after the occurrence of any event requiring a change in the most recent form or certificate previously delivered by it to the Borrowers;

 

(3)           obtain such extensions of time for filing and completing such forms or certifications as may reasonably be requested by any Borrower or the Administrative Agent; and

 

(4)           deliver, to the extent legally entitled to do so, upon reasonable request by the Parent Borrower, to the Parent Borrower and the Administrative Agent such other forms as may be reasonably required in order to establish the legal entitlement of such Lender to an exemption from withholding with respect to payments under this Agreement and any Notes, provided that in determining the reasonableness of a request under this clause (4) such Lender shall be entitled to consider the cost (to the extent unreimbursed by any Loan Party) which would be imposed on such Lender of complying with such request; or

 

(ii)           in the case of any such Lender that is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code and is claiming the so-called “portfolio interest exemption”,

 

(1)           represent to the Borrowers and the Administrative Agent that it is not (A) a bank within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrowers within the meaning of

 

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Section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code;

 

(2)           deliver to the Borrowers on or before the date of any payment by any of the Borrowers with a copy to the Administrative Agent, (A) two certificates substantially in the form of Exhibit D hereto (any such certificate a “U.S. Tax Compliance Certificate”) and (B) two accurate and complete original signed copies of Internal Revenue Service Form W-8BEN, or successor applicable form, certifying to such Lender’s legal entitlement at the date of such form to an exemption from U.S. withholding tax under the provisions of Section 871(h) or Section 881(c) of the Code with respect to payments to be made under this Agreement and any Notes and (C) such other forms, documentation or certifications, as the case may be certifying that it is entitled to an exemption from United States backup withholding tax with respect to payments under this Agreement and any Notes (and shall also deliver to the Borrowers and the Administrative Agent two further copies of such form or certificate on or before the date it expires or becomes obsolete and after the occurrence of any event requiring a change in the most recently provided form or certificate and, if necessary, obtain any extensions of time reasonably requested by any Borrower or the Administrative Agent for filing and completing such forms or certificates); and

 

(3)           deliver, to the extent legally entitled to do so, upon reasonable request by any Borrower, to the Borrowers and the Administrative Agent such other forms as may be reasonably required in order to establish the legal entitlement of such Lender to an exemption from withholding with respect to payments under this Agreement and any Notes, provided that in determining the reasonableness of a request under this clause (3) such Lender shall be entitled to consider the cost (to the extent unreimbursed by any of the Borrowers) which would be imposed on such Lender of complying with such request; or

 

(iii)          in the case of any such Agent or Lender that is a non-U.S. intermediary or flow-through entity for U.S. federal income tax purposes,

 

(1)           on or before the date of any payment by any of the Borrowers under this Agreement or any Notes to, or for the account of, such Agent or Lender, deliver to the Borrowers and the Administrative Agent two accurate and complete original signed copies of Internal Revenue Service Form W-8IMY and, if any beneficiary or member of such Lender is claiming the so-called “portfolio interest exemption”, (I) represent to the Borrowers and the Administrative Agent that such Lender is not (A) a bank within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrowers within the meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code, and (II) also deliver to the Borrowers and the Administrative Agent two U.S. Tax Compliance Certificates certifying to such Lender’s legal entitlement at the date of such certificate to an exemption from U.S. withholding tax under the provisions of Section 881(c) of

 

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the Code with respect to payments to be made under this Agreement and any Notes; and

 

(A)          with respect to each beneficiary or member of such Agent or Lender that is not claiming the so-called “portfolio interest exemption”, also deliver to the Borrowers and the Administrative Agent (I) two duly completed copies of Internal Revenue Service Form W-8BEN (certifying that such beneficiary or member is a resident of the applicable country within the meaning of the income tax treaty between the United States and that country), Form W-8ECI or Form W-9, or successor applicable form, as the case may be, in each case so that each such beneficiary or member is entitled to receive all payments under this Agreement and any Notes without deduction or withholding of any United States federal income taxes and (II) such other forms, documentation or certifications, as the case may be, certifying that each such beneficiary or member is entitled to an exemption from United States backup withholding tax with respect to all payments under this Agreement and any Notes; and

 

(B)           with respect to each beneficiary or member of such Lender that is claiming the so-called “portfolio interest exemption”, (I) represent to the Borrowers and the Administrative Agent that such beneficiary or member is not (1) a bank within the meaning of Section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of the Borrowers within the meaning of Section 881(c)(3)(B) of the Code, or (3) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code, and (II) also deliver to the Borrowers and the Administrative Agent two U.S. Tax Compliance Certificates from each beneficiary or member and two accurate and complete original signed copies of Internal Revenue Service Form W-8BEN, or successor applicable form, certifying to such beneficiary’s or member’s legal entitlement at the date of such certificate to an exemption from U.S. withholding tax under the provisions of Section 871(h) or Section 881(c) of the Code with respect to payments to be made under this Agreement and any Notes, and (III) also delivers to Borrowers and the Administrative Agent such other forms, documentation or certifications, as the case may be, certifying that it is entitled to an exemption from United States backup withholding tax with respect to payments under this Agreement and any Notes;

 

(2)           deliver to the Borrowers and the Administrative Agent two further copies of any such forms, certificates or certifications referred to above on or before the date any such form, certificate or certification expires or becomes obsolete, or any beneficiary or member changes, and after the occurrence of any event requiring a change in the most recently provided form, certificate or certification and obtain such extensions of time reasonably requested by any Borrower or the Administrative Agent for filing and completing such forms, certificates or certifications; and

 

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(3)           deliver, to the extent legally entitled to do so, upon reasonable request by any Borrower, to the Borrowers and the Administrative Agent such other forms as may be reasonably required in order to establish the legal entitlement of such Agent or Lender (or beneficiary or member) to an exemption from withholding with respect to payments under this Agreement and any Notes, provided that in determining the reasonableness of a request under this clause (iii) such Agent or Lender shall be entitled to consider the cost (to the extent unreimbursed by any of the Borrowers) which would be imposed on such Agent or Lender (or beneficiary or member) of complying with such request;

 

unless in any such case there has been a Change in Law which renders all such forms inapplicable or which would prevent such Agent or such Lender (or such beneficiary or member) from duly completing and delivering any such form with respect to it and such Agent or such Lender so advises the Parent Borrower and the Administrative Agent.

 

(c)         Each Lender and each Agent, in each case that is a United States Person, shall on or before the date of any payment by any Borrower under this Agreement or any Notes to such Lender or Agent, deliver to such Borrower and the Administrative Agent two duly completed copies of Internal Revenue Service Form W-9, or successor form, certifying that such Lender or Agent is a United States Person and that such Lender or Agent is entitled to complete exemption from United States backup withholding tax.

 

(d)        Notwithstanding the foregoing, on or before the date of any payment by any of the Borrowers under this Agreement or any Notes to the Administrative Agent, the Administrative Agent shall:

 

(i)            deliver to the Borrowers (A) two duly completed copies of Internal Revenue Service Form W-8ECI, or successor applicable form, with respect to any amounts payable to the Administrative Agent for its own account, (B) two duly completed copies of Internal Revenue Service Form W-8IMY, or successor applicable form, with respect to any amounts payable to the Administrative Agent for the account of others, certifying that it is a “U.S. branch” and that the payments it receives for the account of others are not effectively connected with the conduct of its trade or business in the United States and that it is using such form as evidence of its agreement with the Borrowers to be treated as a U.S. person with respect to such payments (and the Borrowers and the Administrative Agent agree to so treat the Administrative Agent as a U.S. person with respect to such payments as contemplated by U.S. Treasury Regulation § 1.1441-1(b)(2)(iv)) or (C) such other forms or certifications as may be sufficient under applicable law to establish that the Administrative Agent is entitled to receive any payment by any of the Borrowers under this Agreement or any Notes (whether for its own account or for the account of others) without deduction or withholding of any United States federal income taxes;

 

(ii)           deliver to the Borrowers two further copies of any such form or certification provided in Subsection 4.11(d)(i) on or before the date that any such form or certification expires or becomes obsolete and after the occurrence of any

 

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event requiring a change in the most recent form or certificate previously delivered by it to the Borrowers; and

 

(iii)          obtain such extensions of time for filing and completing such forms or certifications as may reasonably be requested by any Borrower or the Administrative Agent.

 

(e)         If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA, such Lender shall deliver to the Administrative Agent and the Borrowers, at the time or times prescribed by law and at such time or times reasonably requested by the Administrative Agent or the Borrowers, such documentation prescribed by applicable law and such additional documentation reasonably requested by the Administrative Agent or the Borrowers as may be necessary for the Administrative Agent and the Borrowers to comply with their respective obligations (including any applicable reporting requirements) under FATCA, to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.

 

4.12         Indemnity.  Each Borrower agrees to indemnify each Lender in respect of Extensions of Credit made, or requested to be made, to the Borrowers and to hold each such Lender harmless from any loss or expense which such Lender may sustain or incur (other than through such Lender’s gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final and nonappealable decision) as a consequence of (a) default by such Borrower in making a borrowing of, conversion into or continuation of Eurodollar Loans, after the Parent Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (b) default by such Borrower in making any prepayment or conversion of Eurodollar Loans after the Borrower Representative has given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a payment or prepayment of Eurodollar Loans or the conversion of Eurodollar Loans on a day which is not the last day of an Interest Period with respect thereto.  Such indemnification may include an amount equal to the excess, if any, of (i) the amount of interest which would have accrued on the amount so prepaid, or converted, or not so borrowed, converted or continued, for the period from the date of such prepayment or conversion or of such failure to borrow, convert or continue to the last day of the applicable Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Eurodollar Loans provided for herein (excluding, however, the Applicable Margin included therein, if any) over (ii) the amount of interest (as reasonably determined by such Lender) which would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank eurodollar market.  If any Lender becomes entitled to claim any amounts under the indemnity contained in this Subsection 4.12, it shall provide prompt notice thereof to the Parent Borrower, through the Administrative Agent, certifying (x) that one of the events described in clause (a), (b) or (c) has occurred and describing in reasonable detail the nature of such event, (y) as to the loss or expense sustained or incurred by such Lender as a consequence thereof and (z) as to the amount for which such Lender seeks indemnification hereunder and a reasonably detailed explanation of the calculation thereof.  Such a certificate as to any indemnification pursuant to

 

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this Subsection 4.12 submitted by such Lender, through the Administrative Agent, to the Parent Borrower shall be conclusive in the absence of manifest error.  The Parent Borrower shall pay (or cause the relevant Borrower to pay) such Lender the amount shown as due on any such certificate within five Business Days after receipt thereof.  This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

 

4.13         Certain Rules Relating to the Payment of Additional Amounts.  (a) Upon the request, and at the expense of the applicable Borrower, each Lender to which any of the Borrowers is required to pay any additional amount pursuant to Subsection 4.10 or 4.11, and any Participant in respect of whose participation such payment is required, shall reasonably afford such Borrower the opportunity to contest, and reasonably cooperate with such Borrower in contesting, the imposition of any Non-Excluded Tax giving rise to such payment; provided that (i) such Lender shall not be required to afford such Borrower the opportunity to so contest unless such Borrower shall have confirmed in writing to such Lender its obligation to pay such amounts pursuant to this Agreement and (ii) such Borrower shall reimburse such Lender for its reasonable attorneys’ and accountants’ fees and disbursements incurred in so cooperating with such Borrower in contesting the imposition of such Non-Excluded Tax; provided, however, that notwithstanding the foregoing no Lender shall be required to afford any Borrower the opportunity to contest, or cooperate with such Borrower in contesting, the imposition of any Non-Excluded Taxes, if such Lender in its sole discretion in good faith determines that to do so would have an adverse effect on it.

 

(b)        If a Lender changes its applicable lending office (other than (i) pursuant to clause (c) below or (ii) after an Event of Default under Subsection 9.1(a) or 9.1(f) has occurred and is continuing) and the effect of such change, as of the date of such change, would be to cause any of the Borrowers to become obligated to pay any additional amount under Subsection 4.10 or 4.11, such Borrower shall not be obligated to pay such additional amount.

 

(c)         If a condition or an event occurs which would, or would upon the passage of time or giving of notice, result in the payment of any additional amount to any Lender by any of the Borrowers pursuant to Subsection 4.10 or 4.11 or result in Affected Loans or commitments to make Affected Loans being automatically converted to ABR Loans or commitments to make ABR Loans, as the case may be, pursuant to Subsection 4.9, such Lender shall promptly notify the Parent Borrower and the Administrative Agent and shall take such steps as may reasonably be available to it to mitigate the effects of such condition or event (which shall include efforts to rebook the Loans held by such Lender at another lending office, or through another branch or an affiliate, of such Lender); provided that such Lender shall not be required to take any step that, in its reasonable judgment, would be materially disadvantageous to its business or operations or would require it to incur additional costs (unless the Parent Borrower agrees to reimburse such Lender for the reasonable incremental out-of-pocket costs thereof).

 

(d)        If any of the Borrowers shall become obligated to pay additional amounts pursuant to Subsection 4.10 or 4.11 and any affected Lender shall not have promptly taken steps necessary to avoid the need for payments under Subsection 4.10 or 4.11 or if Affected Loans or commitments to make Affected Loans are automatically converted to ABR Loans or

 

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commitments to make ABR Loans, as the case may be, under Subsection 4.9 and any affected Lender shall not have promptly taken steps necessary to avoid the need for such conversion under Subsection 4.9, the applicable Borrower shall have the right, for so long as such obligation remains, (i) with the assistance of the Administrative Agent to seek one or more substitute Lenders reasonably satisfactory to the Administrative Agent and such Borrower to purchase the affected Loan, in whole or in part, at an aggregate price no less than such Loan’s principal amount plus accrued interest, and assume the affected obligations under this Agreement, or (ii) so long as no Event of Default under Subsection 9.1(a) or 9.1(f) then exists or will exist immediately after giving effect to the respective prepayment, upon notice to the Administrative Agent to prepay the affected Loan, in whole or in part, subject to Subsection 4.12, without premium or penalty and terminate the Commitments in respect of the Revolving Credit Facility of such Lender.  In the case of the substitution of a Lender, then, the Parent Borrower, any other applicable Borrower, the Administrative Agent, the affected Lender, and any substitute Lender shall execute and deliver an appropriately completed Assignment and Acceptance pursuant to Subsection 11.6(b) to effect the assignment of rights to, and the assumption of obligations by, the substitute Lender; provided that any fees required to be paid by Subsection 11.6(b) in connection with such assignment shall be paid by the Parent Borrower or the substitute Lender.  In the case of a prepayment of an affected Loan, the amount specified in the notice shall be due and payable on the date specified therein, together with any accrued interest to such date on the amount prepaid.  In the case of each of the substitution of a Lender and of the prepayment of an affected Loan, the applicable Borrower shall first pay the affected Lender any additional amounts owing under Subsections 4.10 and 4.11 (as well as any commitment fees and other amounts then due and owing to such Lender, including any amounts under this Subsection 4.13) prior to such substitution or prepayment. In the case of the substitution of a Lender pursuant to this Subsection 4.13(d) or Subsection 4.15(c)(i), if the Lender being replaced does not execute and deliver to the Administrative Agent a duly completed Assignment and Acceptance and/or any other documentation necessary to reflect such replacement by the later of (a) the date on which the assignee Lender executes and delivers such Assignment and Acceptance and/or such other documentation and (b) the date as of which all obligations of the Borrowers owing to such replaced Lender relating to the Loans and participations so assigned shall be paid in full by the assignee Lender and/or the Parent Borrower to such Lender being replaced, then the Lender being replaced shall be deemed to have executed and delivered such Assignment and Acceptance and/or such other documentation as of such date and the applicable Borrower shall be entitled (but not obligated) to execute and deliver such Assignment and Acceptance and/or such other documentation on behalf of such Lender.

 

(e)         If any Agent or any Lender receives a refund directly attributable to Taxes for which any of the Borrowers has made additional payments pursuant to Subsection 4.10(a) or 4.11(a), such Agent or such Lender, as the case may be, shall promptly pay such refund (together with any interest with respect thereto received from the relevant taxing authority, but net of any reasonable cost incurred in connection therewith) to such Borrower; provided, however, that such Borrower agrees promptly to return such refund (together with any interest with respect thereto due to the relevant taxing authority) (free of all Non-Excluded Taxes) to such Agent or the applicable Lender, as the case may be, upon receipt of a notice that such refund is required to be repaid to the relevant taxing authority.

 

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(f)         The obligations of any Agent, Lender or Participant under this Subsection 4.13 shall survive the termination of this Agreement and the payment of the Loans and all amounts payable hereunder.

 

4.14         Controls on Prepayment if Aggregate Outstanding Credit Exceeds Aggregate Revolving Credit Loan Commitments.  (a) In addition to the provisions set forth in Subsection 4.4(b), the Parent Borrower will implement and maintain internal controls to monitor the borrowings and repayments of Loans by the Borrowers and the issuance of and drawings under Letters of Credit, with the objective of preventing any request for an Extension of Credit that would result in (i) the Aggregate Outstanding Credit with respect to all of the Revolving Credit Lenders (including the Swingline Lender) being in excess of the aggregate Commitments then in effect or (ii) any other circumstance under which an Extension of Credit would not be permitted pursuant to Subsection 2.1(a).

 

(b)        The Administrative Agent will calculate the Aggregate Outstanding Credit with respect to all of (A) the Revolving Credit Lenders and (B) the Lenders (in each case, including the Swingline Lender) from time to time, and in any event not less frequently than once during each calendar week.  In making such calculations, the Administrative Agent will rely on the information most recently received by it from the Swingline Lender in respect of outstanding Swingline Loans and from the Issuing Lenders in respect of outstanding L/C Obligations.

 

4.15         Defaulting Lenders.  Notwithstanding anything contained in this Agreement to the contrary, if any Revolving Credit Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Revolving Credit Lender is a Defaulting Lender:

 

(a)           no commitment fee shall accrue for the account of a Defaulting Lender so long as such Lender shall be a Defaulting Lender (except to the extent it is payable to the Issuing Lender pursuant to clause (d)(v) below);

 

(b)           in determining the Required Lenders or Supermajority Lenders, any Lender that at the time is a Defaulting Lender (and the Revolving Credit Loans and/or Commitment of such Defaulting Lender) shall be excluded and disregarded;

 

(c)           the Parent Borrower shall have the right, at its sole expense and effort (i) to seek one or more Persons reasonably satisfactory to the Administrative Agent and the Parent Borrower to each become a substitute Revolving Credit Lender and assume all or part of the Commitment of any Defaulting Lender and the Parent Borrower, the Administrative Agent and any such substitute Revolving Credit Lender shall execute and deliver, and such Defaulting Lender shall thereupon be deemed to have executed and delivered, an appropriately completed Assignment and Acceptance to effect such substitution or (ii) so long as no Event of Default under Subsection 9.1(a) or 9.1(f) then exists or will exist immediately after giving effect to the respective prepayment, upon notice to the Administrative Agent, to prepay the Loans and, at the Parent Borrower’s option, terminate the Commitments of such Defaulting Lender, in whole or in part, without premium or penalty;

 

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(d)                                 if any Swingline Exposure exists or any L/C Obligations exist at the time a Revolving Credit Lender becomes a Defaulting Lender then:

 

(i)                                     all or any part of such Swingline Exposure and L/C Obligations shall be re-allocated among the Non-Defaulting Lenders in accordance with their respective Commitment Percentages but only to the extent the sum of all Non-Defaulting Lenders’ Revolving Exposures plus such Defaulting Lender’s Swingline Exposure and L/C Obligations does not exceed the total of all Non-Defaulting Lenders’ Commitments;

 

(ii)                                  if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrowers shall within one Business Day following notice by the Administrative Agent (x) first, prepay such Defaulting Lender’s Swingline Exposure and (y) second, cash collateralize such Defaulting Lender’s L/C Obligations (after giving effect to any partial reallocation pursuant to clause (i) above) on terms reasonably satisfactory to the Administrative Agent for so long as such L/C Obligations are outstanding;

 

(iii)                               if any portion of such Defaulting Lender’s L/C Obligations is cash collateralized pursuant to clause (ii) above, the Borrowers shall not be required to pay the L/C Fee for participation with respect to such portion of such Defaulting Lender’s L/C Exposure so long as it is cash collateralized;

 

(iv)                              if any portion of such Defaulting Lender’s L/C Obligations is reallocated to the Non-Defaulting Lenders pursuant to clause (i) above, then the letter of credit commission with respect to such portion shall be allocated among the Non-Defaulting Lenders in accordance with their Commitment Percentages; or

 

(v)                                 if any portion of such Defaulting Lender’s L/C Obligations is neither cash collateralized nor reallocated pursuant to this Subsection 4.15(d), then, without prejudice to any rights or remedies of the Issuing Lender or any Revolving Credit Lender hereunder, the commitment fee that otherwise would have been payable to such Defaulting Lender (with respect to the portion of such Defaulting Lender’s Commitment that was utilized by such L/C Obligations) and the letter of credit commission payable with respect to such Defaulting Lender’s L/C Obligations shall be payable to the Issuing Lender until such L/C Obligations are cash collateralized and/or reallocated;

 

(e)                                  so long as any Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Lender shall not be required to issue, amend or increase any Letter of Credit, unless they are respectively satisfied that the related exposure will be 100% covered by the Commitments of the Non-Defaulting Lenders and/or cash collateralized on terms reasonably satisfactory to the Administrative Agent, and participations in any such newly issued or increased Letter of Credit or newly made Swingline Loan shall be allocated among Non-Defaulting Lenders in accordance

 

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with their respective Commitment Percentages (and Defaulting Lenders shall not participate therein); and

 

(f)                                    any amount payable to such Defaulting Lender hereunder (whether on account of principal, interest, fees or otherwise and including any amount that would otherwise be payable to such Defaulting Lender pursuant to Subsection 11.7) may, in lieu of being distributed to such Defaulting Lender, be retained by the Administrative Agent in a segregated non-interest bearing account and, subject to any applicable Requirements of Law, be applied at such time or times as may be determined by the Administrative Agent (i) first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder, (ii) second, pro rata, to the payment of any amounts owing by such Defaulting Lender to the Issuing Lender or Swingline Lender hereunder, (iii) third, to the funding of any Loan or the funding or cash collateralization of any participation in any Swingline Loan or Letter of Credit in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent, (iv) fourth, if so determined by the Administrative Agent and the Parent Borrower, held in such account as cash collateral for future funding obligations of the Defaulting Lender under this Agreement, (v) fifth, pro rata, to the payment of any amounts owing to the Borrowers or the Lenders as a result of any judgment of a court of competent jurisdiction obtained by a Borrower or any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement and (vi) sixth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if such payment is (x) a prepayment of the principal amount of any Loans or Reimbursement Obligations in respect of L/C Disbursements in respect of which a Defaulting Lender has funded its participation obligations and (y) made at a time when the conditions set forth in Subsection 6.2 are satisfied, such payment shall be applied solely to prepay the Loans of, and Reimbursement Obligations owed to, all Non-Defaulting Lenders pro rata prior to being applied to the prepayment of any Loans, or Reimbursement Obligations owed to, any Defaulting Lender.

 

(g)                                 In the event that the Administrative Agent, the Borrower Representative, each applicable Issuing Lender or the Swingline Lender, as the case may be, each agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and L/C Obligations of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment and on such date such Lender shall purchase at par such of the Loans of the other Lenders as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Commitment Percentage.  The rights and remedies against a Defaulting Lender under this Subsection 4.15 are in addition to other rights and remedies that the Borrowers, the Administrative Agent, the Issuing Lenders, the Swingline Lender and the Non-Defaulting Lenders may have against such Defaulting Lender.  The arrangements permitted or required by this Subsection 4.15 shall be permitted under this Agreement, notwithstanding any limitation on Liens or the pro rata sharing provisions or otherwise.

 

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4.16                           Cash Management.  (a) Annexed hereto as Schedule 4.16, Parts 1 to 6 respectively, as the same may be modified from time to time by notice to the Administrative Agent or in accordance with Subsection 4.16(i), is a schedule of all Related Corporation DDAs, Related Corporation Concentration Accounts, Loan Party DDAs, Loan Party Concentration Accounts and Restricted Bank Accounts that are maintained by the Related Corporations and the Loan Parties, as applicable, which schedule includes (except for the schedules relating to Related Corporation DDAs and Related Corporation Concentration Accounts), with respect to each depository (i) the name and address of such depository; (ii) the account number(s) (and account name(s) of such bank account(s)) maintained with such depository; and (iii) a contact person at such depository.

 

(b)                                 Except as otherwise agreed by the Administrative Agent, and subject to clauses (c) and (d) below, after the Closing Date the Parent Borrower shall, and shall cause each Loan Party to, as applicable:

 

(i)                                     at all times on and after the Closing Date, (x) instruct each depository institution for each Loan Party DDA (other than with respect to Loan Party DDAs subject to clause (y) below) to sweep the entire available balance at the end of each Business Day in such Loan Party DDA to one of the Loan Party Concentration Accounts no less frequently than on a daily basis, or (y) transfer the entire available balance at the end of each Business Day in all Loan Party DDAs not subject to instructions given in accordance with clause (x) above to one of the Loan Party Concentration Accounts no less frequently than on a daily basis, provided that all balances subject to transfers pursuant to this clause (y) shall count towards the Target Amount, provided, further, that for a period of 30 days following the Closing Date any available balances manually transferred in accordance with this clause (y) from the Loan Party DDAs listed in Part 6 of Schedule 4.16 to Loan Party Concentration Accounts shall not count towards the Target Amount (it being understood that after such time period such Loan Party DDAs shall either comply with clause (x) above or their available balances shall count towards the Target Amount in accordance with this clause (y)),

 

(ii)                                  procure, with respect to each Related Corporation DDA maintained from time to time by any Related Corporation with an available balance at the end of each Business Day, (x) on and after the Closing Date, in respect of Related Corporation DDAs with an available balance that prior to the Closing Date has customarily been transferred or swept on a daily basis and (y) within 30 days of the Closing Date, in respect of Related Corporation DDAs with an available balance that prior to the Closing Date has not customarily been transferred or swept on a daily basis, the transfer or sweep of such available balance to one of the Related Corporation Concentration Accounts or one of the Loan Party Concentration Accounts no less frequently than on a daily basis,

 

(iii)                               procure, with respect to each Related Corporation Concentration Account maintained from time to time by any Related Corporation with an available balance at the beginning of each Business Day (or, at the Parent Borrower’s election, at the end of each Business Day), (x) on and after the

 

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Closing Date, in respect of Related Corporation Concentration Accounts with an available balance that prior to the Closing Date has customarily been transferred on a daily basis and (y) within 30 days of the Closing Date, in respect of Related Corporation Concentration Accounts with an available balance that prior to the Closing Date has customarily not been transferred on a daily basis, the transfer of such available balance to one of the Loan Party Concentration Accounts no less frequently than on a daily basis (provided that the Parent Borrower shall use commercially reasonable efforts to implement sweep arrangements with the applicable depositary institution for each Related Corporation Concentration Account),

 

(iv)                              within ninety (90) days of the Closing Date (or such later day as the Administrative Agent may, in its sole discretion, agree to), enter, or cause the applicable Loan Party to enter, into a blocked account agreement (each, a “Blocked Account Agreement”), in form reasonably satisfactory to the Administrative Agent, with the Administrative Agent or the Collateral Agent and any depositary with which such Loan Party maintains a Loan Party Concentration Account (and, at the option of the Parent Borrower, a Loan Party DDA) (each such account, a “Blocked Account”), covering each such Loan Party Concentration Account (and, at the option of the Parent Borrower, one or more Loan Party DDAs) maintained with such depositary,

 

(v)                                 (A) instruct all Account Debtors of such Loan Party that remit payments of Accounts regularly by check pursuant to arrangements with such Loan Party to remit all such payments (other than (i) any Accounts (or any payment thereof) that are to be deposited in Excluded Bank Accounts or (ii) any Accounts (or any payment thereof) excluded from the Collateral pursuant to any Security Document, including Excluded Assets), to the applicable “P.O. Boxes” or “Lockbox Addresses” with respect to the applicable Loan Party DDA or, except in the case of checks which relate to any Restricted Government Accounts, any applicable Loan Party Concentration Account, which remittances shall be collected by the applicable depositary and deposited in the applicable Loan Party DDA or the applicable Loan Party Concentration Account or (B) cause any checks relating to any such Accounts to be deposited in the applicable Loan Party DDA or applicable Loan Party Concentration Account within two (2) Business Days after such check is received by such Loan Party, and

 

(vi)                              (A) procure that all Account Debtors of Related Corporations that remit payments of Accounts regularly by check pursuant to arrangements with such Related Corporation are instructed to remit all such payments to the applicable “P.O. Boxes” or “Lockbox Addresses” with respect to the applicable Related Corporation DDA, which remittances shall be collected by the applicable depositary and deposited in the applicable Related Corporation DDA or (B) procure that the checks relating to any such Accounts be deposited in the applicable Related Corporation DDA within two (2) Business Days after such check is received by such Related Corporation or Loan Party, as the case may be.

 

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(c)                                  Notwithstanding the provisions of clause (b) above, in relation to the DDAs and Related Corporation Concentration Accounts, it will not be a breach of the covenants contained in clause (b) above with respect to any DDA or Related Corporation Concentration Account if the amount that is not transferred from such DDA or Related Corporation Concentration Account to any Loan Party Concentration Account, when aggregated with the amounts not transferred from all other DDAs and Related Corporation Concentration Accounts to any Loan Party Concentration Account and all amounts counting towards the Target Amount pursuant to Subsection 4.16(b)(i)(y) above (but excluding for this purpose any amounts permitted to remain in any Restricted Bank Account and any amounts in any Loan Party DDAs that are Blocked Accounts), does not at any time exceed the sum of the Target Amount plus the Business Development Amount.

 

(d)                                 Notwithstanding the provisions of clause (b) above, with respect to any DDA or Concentration Account that has been designated as a Restricted Bank Account in accordance with Subsection 4.16(k), the provisions of clause (b) shall not apply to such Restricted Bank Account to the extent of any legal restriction or requirement (including under applicable law, statute, ordinance, code, decree, treaty, rule or regulation, pursuant to the determination or order of any court, tribunal, administrative agency or other Governmental Authority or to the extent otherwise requested or required by any Governmental Authority, each, for purposes of this Subsection 4.16 a “legal requirement”), or any contractual requirement applicable to such Person or its assets or to which such person or its assets are bound or subject, which either prohibits the transfer of any funds in such Restricted Bank Account or requires a minimum credit balance to be maintained in such Restricted Bank Account, for so long as such legal requirement or contractual requirement remains in effect, provided that the amount in such Restricted Bank Account which may not be transferred, or the minimum credit balance that must be maintained, in each case unless otherwise further notified, shall not exceed the applicable affected amount notified by the Parent Borrower to the Administrative Agent at the time of designation of such bank account as a Restricted Bank Account.

 

(e)                                  (i) The Parent Borrower shall not, and shall cause each Loan Party to not, cause any proceeds of any Accounts (other than Restricted Government Accounts) that are to be deposited into any Loan Party DDA or transferred to any Loan Party Concentration Account in accordance with clause (b) above to be otherwise redirected. (ii) The Parent Borrower shall not, and shall procure that each Related Corporation shall not, cause any proceeds of any Accounts (other than Restricted Government Accounts) that are to be deposited into any Related Corporation DDA or transferred to any Related Corporation Concentration Account in accordance with clause (b) above to be otherwise redirected.

 

(f)                                    Each Blocked Account Agreement shall require, after the occurrence and during the continuance of a Dominion Event, the ACH or wire transfer no less frequently than once per Business Day (unless the Commitments have been terminated and the monetary obligations then due and owing hereunder and under the other Loan Documents have been paid in full and all Letters of Credit have either been terminated or expired (unless cash collateralized or otherwise provided for in a manner reasonably satisfactory to the Administrative Agent)), of all available cash balances and cash receipts, including the then contents or then entire available ledger balance of each Blocked Account net of such minimum balance (not to exceed $1,000,000 per account or $3,000,000 in the aggregate), if any, required by the bank at which such Blocked

 

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Account is maintained to a bank account maintained by the Administrative Agent at Deutsche Bank AG New York Branch (or another bank of recognized standing reasonably selected by the Administrative Agent with the reasonable consent of the Parent Borrower) (the “Core Concentration Account”).  The Parent Borrower shall not, and shall cause each Loan Party to not, cause the proceeds of any Blocked Account to be otherwise redirected.

 

(g)                                 All collected amounts received in the Core Concentration Account shall be distributed and applied on a daily basis in the following order (in each case, to the extent the Administrative Agent has actual knowledge of the amounts owing or outstanding as described below and after giving effect to the application of any such amounts constituting proceeds from any Collateral otherwise required to be applied pursuant to the terms of the respective Security Document or any applicable intercreditor agreement):  (1) first, to the payment (on a ratable basis) of any outstanding expenses actually due and payable to the Administrative Agent or the Collateral Agent under any of the Loan Documents and to repay or prepay outstanding Revolving Credit Loans advanced by the Administrative Agent; (2) second, to the extent all amounts referred to in preceding clause (1) have been paid in full, to pay (on a ratable basis) all outstanding expenses actually due and payable to each Issuing Lender under any of the Loan Documents and to repay all outstanding Unpaid Drawings and all interest thereon; (3) third, to the extent all amounts referred to in preceding clauses (1) and (2) have been paid in full, to pay (on a ratable basis) all accrued and unpaid interest actually due and payable on the Revolving Credit Loans and all accrued and unpaid Fees actually due and payable to the Administrative Agent, the Issuing Lenders and the Lenders under any of the Loan Documents; (4) fourth, to the extent all amounts referred to in preceding clauses (1) through (3), inclusive, have been paid in full, to repay (on a ratable basis) the outstanding principal of Revolving Credit Loans (whether or not then due and payable); (5) fifth, to the extent all amounts referred to in preceding clauses (1) through (4), inclusive, have been paid in full, to pay (on a ratable basis) all outstanding obligations of the Borrowers then due and payable to the Administrative Agent, the Collateral Agent, and the Lenders under this Agreement; and (6) sixth, to the extent all amounts referred to in preceding clauses (1) through (5), inclusive, have been paid in full, to pay (on a ratable basis) all other outstanding obligations of the Borrowers then due and payable to the Administrative Agent, the Collateral Agent, and the Lenders under any of the Loan Documents.  This Subsection 4.16(g) may be amended (and the Lenders hereby irrevocably authorize the Administrative Agent to enter into such amendments) to the extent necessary to reflect differing amounts payable, and priorities of payments, to Lenders participating in any new classes or tranches of loans added pursuant to Subsections 2.6, 2.7 and 2.8, as applicable, in accordance with Subsection 11.1(d).

 

(h)                                 If, at any time after the occurrence and during the continuance of a Dominion Event as to which the Administrative Agent has notified the Borrower Representative, any cash, Cash Equivalents or Temporary Cash Investments owned by any Loan Party (other than (i) de minimis cash, Cash Equivalents and/or Temporary Cash Investments from time to time inadvertently misapplied by any Loan Party, (ii) cash, Cash Equivalents or Temporary Cash Investments deposited or to be deposited in an Excluded Bank Account or a Restricted Bank Account in accordance with this Subsection 4.16, (iii) cash, Cash Equivalents or Temporary Cash Investments that are (or are in any bank account that is) excluded from the Collateral pursuant to any Security Document, including Excluded Assets and (iv) cash, Cash Equivalents or Temporary Cash Investments in the Asset Sales Proceeds Account (as defined in the

 

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ABL/Term Loan Intercreditor Agreement, if any) are deposited to any bank account, or held or invested in any manner, otherwise than in a Blocked Account subject to a Blocked Account Agreement (or a Loan Party DDA which is swept daily to such Blocked Account), the Administrative Agent shall be entitled to require the applicable Loan Party to close such bank account and have all funds therein transferred to a Blocked Account, and to cause all future deposits that were previously made or required to be made to such bank account to be made to a Blocked Account.

 

(i)                                     (a) The Loan Parties and Related Corporations respectively may close DDAs or Concentration Accounts and/or open new DDAs or new Concentration Accounts, subject to, in the case of any new Loan Party Concentration Account, (i) the contemporaneous execution and delivery to the Administrative Agent of a Blocked Account Agreement consistent with the provisions of this Subsection 4.16 with respect to each such new Loan Party Concentration Account or (ii) other arrangements reasonably satisfactory to the Administrative Agent and (b) as part of the Compliance Certificate to be delivered concurrently with the delivery of financial statements and reports referred to in Subsections 7.1(a) and 7.1(b) the Parent Borrower will provide a list to the Administrative Agent of any new opened or acquired Loan Party DDAs or Loan Party Concentration Accounts during the preceding Fiscal Quarter.

 

(j)                                     In the event that a Loan Party or a Related Corporation acquires new demand deposit accounts or new concentration accounts in connection with an acquisition, the Parent Borrower will procure that such Loan Party shall within ninety (90) days of the date of such acquisition (or such longer period as may be agreed by the Administrative Agent) cause such new demand deposit accounts or new concentration accounts so acquired to comply with the applicable requirements of Subsection 4.16(b) (including, with respect to any new Loan Party Concentration Account, by entering into a Blocked Account Agreement) or shall enter into other arrangements consistent with the provisions of this Subsection 4.16 and otherwise reasonably satisfactory to the Administrative Agent with respect to any new Loan Party Concentration Account or Loan Party DDA that, in either case, is to become a Blocked Account.

 

(k)                                  In order for any DDA or Concentration Account to be designated as a Restricted Bank Account, the Parent Borrower shall notify the Administrative Agent in writing of the account number(s) (and account name(s)) of the applicable DDA or Concentration Account and any minimum credit balance that must be maintained or any restriction on the amount of funds that may be transferred out of the applicable DDA or Concentration Account, in each case pursuant to any contractual requirement with a customer or because of a legal requirement, including the reason for such minimum credit balance or restriction (it being understood that any such minimum credit balance required to be maintained or any restriction on the amount of funds that may be transferred out of the applicable Restricted Bank Account may be increased or updated from time to time by further notice to the Administrative Agent), and such DDA or Concentration Account (and such related information) shall be deemed added to Part 5 of Schedule 4.16, and such DDA or Concentration Account shall thereafter continue to be designated as a Restricted Bank Account, for so long as the relevant legal requirement or contractual requirement affecting such Restricted Bank Account remains in effect.

 

(l)                                     The Core Concentration Account shall at all times be under the sole dominion and control of the Administrative Agent.  The Parent Borrower, on behalf of each

 

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Loan Party, hereby acknowledges and agrees that, except to the extent otherwise provided in the Guarantee and Collateral Agreement or any applicable intercreditor agreement (x) such Loan Party has no right of withdrawal from the Core Concentration Account, (y) the funds on deposit in the Core Concentration Account shall at all times continue to be collateral security for all of the Obligations of the Loan Parties hereunder and under the other Loan Documents, and (z) the funds on deposit in the Core Concentration Account shall be applied as provided in this Agreement and the ABL/Term Loan Intercreditor Agreement (and any other applicable intercreditor agreement).  In the event that, notwithstanding the provisions of this Subsection 4.16, any Loan Party receives or otherwise has dominion and control of any proceeds or collections required to be transferred to the Core Concentration Account pursuant to Subsection 4.16(f), such proceeds and collections shall be held in trust by such Loan Party for the Administrative Agent, shall not be commingled with any of such Loan Party’s other funds or deposited in any bank account of such Loan Party (other than any bank account by which such Loan Party received or acquired dominion or control over such proceeds and collections or with any funds in such bank account) and shall promptly be deposited into the Core Concentration Account or dealt with in such other fashion as such Loan Party may be instructed by the Administrative Agent.

 

(m)                               So long as no Dominion Event has occurred and is continuing, the Loan Parties may direct, and shall have sole control over, the manner of disposition of funds in the Blocked Accounts.

 

(n)                                 Any amounts held or received in the Core Concentration Account (including all interest and other earnings with respect hereto, if any) at any time (x) when all of the monetary obligations due and owing hereunder and under the other Loan Documents have been satisfied or (y) all Dominion Events have been cured, shall (subject in the case of clause (x) to the provisions of the applicable intercreditor agreement), be remitted to the operating bank account of the applicable Borrower.

 

SECTION 5

 

Representations and Warranties

 

To induce the Administrative Agent and each Lender to make the Extensions of Credit requested to be made by it on the Closing Date and on each Borrowing Date thereafter, the Parent Borrower with respect to itself and its Restricted Subsidiaries, hereby represents and warrants, on the Closing Date, in each case after giving effect to the Transactions, and on every Borrowing Date thereafter to the Administrative Agent and each Lender that:

 

5.1                                 Financial Condition.  (a) (i) The audited consolidated balance sheets of the Company and its Subsidiaries as of December 31, 2010, December 31, 2009 and December 31, 2008 and the related consolidated statements of income, parent company equity and cash flows for the Fiscal Years ended December 31, 2010, December 31, 2009 and December 31, 2008, reported on by and accompanied by unqualified reports from Ernst & Young LLP, and (ii) the unaudited consolidated balance sheets of the Company and its Subsidiaries and the related consolidated statements of income, parent company equity and cash flows for the Fiscal Quarter ended March 31, 2011 present fairly, in all material respects, the consolidated financial condition

 

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as at such dates, and the consolidated statements of operations and consolidated cash flows for the respective Fiscal Years then ended, of the Company and its Subsidiaries.  All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP consistently applied throughout the periods covered thereby (except as approved by a Responsible Officer, and disclosed in any such schedules and notes).  Except as disclosed on Schedule 5.1, during the period from December 31, 2010 to and including the Closing Date, except as provided in or permitted under the Merger Agreement or in connection with the Transactions, there has been no sale, transfer or other disposition by the Company and its Subsidiaries of any material part of its business or property and no purchase or other acquisition by the Company and its Subsidiaries of any business or property (including any Capital Stock of any other Person) which in either case is material in relation to the consolidated financial condition of the Company and its Subsidiaries, taken as a whole, which is not reflected in the foregoing financial statements or in the notes thereto or has not otherwise been disclosed in writing to the Lenders on or prior to the Closing Date.

 

(b)                         As of the Closing Date, except as set forth in the financial statements referred to in Subsection 5.1(a), there are no liabilities of any Loan Party of any kind, whether accrued, contingent, absolute, determined, determinable or otherwise, which could reasonably be expected to result in a Material Adverse Effect.

 

(c)                          The pro forma balance sheet and statements of operations of the Company and its Subsidiaries, copies of which have heretofore been furnished to each Lender, are the balance sheet and statements of operations of the Company and its Subsidiaries as of March 31, 2011, adjusted to give effect (as if such events had occurred on such date for purposes of the balance sheet and on April 1, 2010, for purposes of the statement of operations), to the consummation of the Transactions, and the Extensions of Credit hereunder on the Closing Date.

 

(d)                         The Projections have been prepared by management of the Parent Borrower in good faith based upon assumptions believed by management to be reasonable at the time of preparation thereof (it being understood that such Projections, and the assumptions on which they were based, may or may not prove to be correct).

 

5.2                                 No Change; Solvent.  Since the Closing Date, except as and to the extent disclosed on Schedule 5.2, there has been no development or event relating to or affecting any Loan Party which has had or would be reasonably expected to have a Material Adverse Effect (after giving effect to (i) the consummation of the Transactions, (ii) the making of the Extensions of Credit to be made on the Closing Date and the application of the proceeds thereof as contemplated hereby, and (iii) the payment of actual or estimated fees, expenses, financing costs and tax payments related to the Transactions contemplated hereby).  Since December 31, 2010, except (x) as contemplated or permitted by the Merger Agreement on or prior to the Closing Date, (y) in connection with the Transactions or (z) as otherwise permitted under this Agreement and each other Loan Document, no dividends or other distributions have been declared, paid or made upon the Capital Stock of the Parent Borrower, nor has any of the Capital Stock of the Parent Borrower been redeemed, retired, purchased or otherwise acquired for value by the Parent Borrower or any of its Restricted Subsidiaries.  As of the Closing Date, after giving effect to the consummation of the transactions described in preceding clauses (i) through (iii) of the second

 

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preceding sentence, the Parent Borrower, together with its Restricted Subsidiaries on a consolidated basis, is Solvent.

 

5.3                                 Corporate Existence; Compliance with Law.  Each of the Loan Parties (a) except as set forth on Schedule 5.3, is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, (b) has the legal right to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, except to the extent that the failure to have such legal right would not be reasonably expected to have a Material Adverse Effect, (c) is duly qualified as a foreign corporation or limited liability company and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification, other than in such jurisdictions where the failure to be so qualified and in good standing would not be reasonably expected to have a Material Adverse Effect and (d) is in compliance with all Requirements of Law, except to the extent that the failure to comply therewith would not, in the aggregate, be reasonably expected to have a Material Adverse Effect.

 

5.4                                 Corporate Power; Authorization; Enforceable Obligations.  Each Loan Party has the corporate or other organizational power and authority, and the legal right, to make, deliver and perform the Loan Documents to which it is a party and, in the case of each of the Borrowers, to obtain Extensions of Credit hereunder, and each such Loan Party has taken all necessary corporate or other organizational action to authorize the execution, delivery and performance of the Loan Documents to which it is a party and, in the case of each of the Borrowers, to authorize the Extensions of Credit to it, if any, on the terms and conditions of this Agreement, any Notes and the L/C Requests.  No consent or authorization of, filing with, notice to or other similar act by or in respect of, any Governmental Authority or any other Person is required to be obtained or made by or on behalf of any Loan Party in connection with the execution, delivery, performance, validity or enforceability of the Loan Documents to which it is a party or, in the case of each of the Borrowers, with the Extensions of Credit to it, if any, hereunder, except for (a) consents, authorizations, notices and filings described in Schedule 5.4, all of which have been obtained or made prior to the Closing Date, (b) filings to perfect the Liens created by the Security Documents, (c) filings pursuant to the Assignment of Claims Act of 1940, as amended (31 U.S.C. § 3727 et seq.), in respect of Accounts of the Parent Borrower and its Restricted Subsidiaries the Obligor in respect of which is the United States of America or any department, agency or instrumentality thereof, (d) establishment of assignment of Restricted Government Accounts by or pursuant to the order of a court of competent jurisdiction and (e) consents, authorizations, notices and filings which the failure to obtain or make would not reasonably be expected to have a Material Adverse Effect.  This Agreement has been duly executed and delivered by the Parent Borrower and each of the Borrowers, and each other Loan Document to which any Loan Party is a party will be duly executed and delivered on behalf of such Loan Party.  This Agreement constitutes a legal, valid and binding obligation of each of the Borrowers and each other Loan Document to which any Loan Party is a party when executed and delivered will constitute a legal, valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its terms, in each case except as enforceability may be limited by applicable domestic or foreign bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

 

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5.5                                 No Legal Bar.  The execution, delivery and performance of the Loan Documents by any of the Loan Parties, the Extensions of Credit hereunder and the use of the proceeds thereof (a) will not violate any Requirement of Law or Contractual Obligation of such Loan Party in any respect that would reasonably be expected to have a Material Adverse Effect, (b) will not result in, or require the creation or imposition of any Lien (other than Liens securing the Obligations) on any of its properties or revenues pursuant to any such Requirement of Law or Contractual Obligation and (c) will not violate any provision of the Organizational Documents of such Loan Party or any of the Restricted Subsidiaries.

 

5.6                                 No Material Litigation.  No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Parent Borrower, threatened by or against the Parent Borrower or any of its Restricted Subsidiaries or against any of their respective properties or revenues, (a) except as described on Schedule 5.6, which is so pending or threatened at any time on or prior to the Closing Date and relates to any of the Loan Documents or any of the transactions contemplated hereby or thereby or (b) which would be reasonably expected to have a Material Adverse Effect.

 

5.7                                 No Default.  Neither the Parent Borrower nor any of its Restricted Subsidiaries is in default under or with respect to any of its Contractual Obligations in any respect which would be reasonably expected to have a Material Adverse Effect.  Since the Closing Date, no Default or Event of Default has occurred and is continuing.

 

5.8                                 Ownership of Property; Liens.  Each of the Parent Borrower and its Restricted Subsidiaries has good title in fee simple to, or a valid leasehold interest in, all its material real property, and good title to, or a valid leasehold interest in, all its other material property, except those for which the failure to have such good title or have such leasehold interest in would not be reasonably expected to have a Material Adverse Effect, and none of such real or other property is subject to any Lien, except for Permitted Liens.  Schedule 5.8 sets forth all Mortgaged Fee Properties as of the Closing Date.

 

5.9                                 Intellectual Property.  The Parent Borrower and each of its Restricted Subsidiaries owns, or has the legal right to use, all United States and foreign patents, patent applications, trademarks, trademark applications, trade names, copyrights, technology, know-how and processes necessary for each of them to conduct its business as currently conducted (the “Intellectual Property”) except for those the failure to own or have such legal right to use would not be reasonably expected to have a Material Adverse Effect.  Except as provided on Schedule 5.9, no claim has been asserted and is pending by any Person against the Parent Borrower or any of its Restricted Subsidiaries challenging or questioning the use of any such Intellectual Property or the validity or effectiveness of any such Intellectual Property, nor does the Parent Borrower know of any such claim, and, to the knowledge of the Parent Borrower, the use of such Intellectual Property by the Parent Borrower and its Restricted Subsidiaries does not infringe on the rights of any Person, except for such claims and infringements which in the aggregate, would not be reasonably expected to have a Material Adverse Effect.

 

5.10                           Taxes.  To the knowledge of the Parent Borrower, each of Holdings, the Parent Borrower and its Restricted Subsidiaries has filed or caused to be filed all material tax returns which are required to be filed by it and has paid (a) all Taxes shown to be due and payable on such returns and (b) all Taxes shown to be due and

 

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payable on any assessments of which it has received notice made against it or any of its property (including the Mortgaged Fee Properties) and all other Taxes imposed on it or any of its property by any Governmental Authority (other than in respect of any (i) Taxes with respect to which the failure to pay, in the aggregate, would not have a Material Adverse Effect or (ii) Taxes the amount or validity of which are currently being contested in good faith by appropriate proceedings diligently conducted and with respect to which reserves in conformity with GAAP have been provided on the books of Holdings, the Parent Borrower or its Restricted Subsidiaries, as the case may be); and no Tax Liens have been filed (except for Liens for Taxes not yet due and payable), and no claim is being asserted in writing, with respect to any such Taxes.

 

5.11                           Federal Regulations.  No part of the proceeds of any Extensions of Credit will be used for any purpose which violates the provisions of the Regulations of the Board, including without limitation, Regulation T, Regulation U or Regulation X of the Board.  If requested by any Lender or the Administrative Agent, the Parent Borrower will furnish to the Administrative Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U-1, referred to in said Regulation U.

 

5.12                           ERISA.  (a) During the five year period prior to each date as of which this representation is made, or deemed made, with respect to any Plan, none of the following events or conditions, either individually or in the aggregate, has resulted or is reasonably likely to result in a Material Adverse Effect:  (i) a Reportable Event; (ii) a failure to satisfy the minimum funding standard (within the meaning of Section 412 of the Code or Section 302 of ERISA); (iii) any noncompliance with the applicable provisions of ERISA or the Code; (iv) a termination of a Single Employer Plan (other than a standard termination pursuant to Section 4041(b) of ERISA); (v) a Lien on the property of the Parent Borrower or its Restricted Subsidiaries in favor of the PBGC or a Plan; (vi) a complete or partial withdrawal from any Multiemployer Plan by the Parent Borrower or any Commonly Controlled Entity; (vii) the Reorganization or Insolvency of any Multiemployer Plan; or (viii) any transactions that resulted or could reasonably be expected to result in any liability to the Parent Borrower or any Commonly Controlled Entity under Section 4069 of ERISA or Section 4212(c) of ERISA.

 

(b)                         With respect to any Foreign Plan, none of the following events or conditions exists and is continuing that, either individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect:  (i) substantial non-compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders; (ii) failure to be maintained, where required, in good standing with applicable regulatory authorities; (iii) any obligation of the Parent Borrower or its Restricted Subsidiaries in connection with the termination or partial termination of, or withdrawal from, any Foreign Plan; (iv) any Lien on the property of the Parent Borrower or its Restricted Subsidiaries in favor of a Governmental Authority as a result of any action or inaction regarding a Foreign Plan; (v) for each Foreign Plan which is a funded or insured plan, failure to be funded or insured on an ongoing basis to the extent required by applicable non-U.S. law (using actuarial methods and assumptions which are consistent with the valuations last filed with the applicable Governmental Authorities); (vi) any facts that, to the best knowledge of the Parent Borrower or any of its Restricted Subsidiaries, exist that would reasonably be expected to give rise to a dispute and any pending or threatened disputes that, to the best knowledge of the Parent

 

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Borrower or any of its Restricted Subsidiaries, would reasonably be expected to result in a material liability to the Parent Borrower or any of its Restricted Subsidiaries concerning the assets of any Foreign Plan (other than individual claims for the payment of benefits); and (vii) failure to make all contributions in a timely manner to the extent required by applicable non-U.S. law.

 

5.13                           Collateral.  Upon execution and delivery thereof by the parties thereto, the Guarantee and Collateral Agreement and the Mortgages (if any) will be effective to create (to the extent described therein) in favor of the Collateral Agent for the benefit of the Secured Parties, a legal, valid and enforceable security interest in or liens on the Collateral described therein, except as to enforcement, as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing (and with respect to Restricted Government Accounts, only after assignment thereof has been established by or pursuant to the order of a court of competent jurisdiction).  When (a) the actions specified in Schedule 3 to the Guarantee and Collateral Agreement have been duly taken, (b) all applicable Instruments, Chattel Paper and Documents (each as described therein) a security interest in which is perfected by possession have been delivered to, and/or are in the continued possession of, the Collateral Agent and (c) all Deposit Accounts and Pledged Stock (each as defined in the Guarantee and Collateral Agreement) a security interest in which is required to be or is perfected by “control” (as described in the Uniform Commercial Code as in effect in each applicable jurisdiction (in the case of Deposit Accounts) and the State of New York (in the case of Pledged Stock) from time to time) are under the “control” of the Collateral Agent or the Administrative Agent, as agent for the Collateral Agent and as directed by the Collateral Agent, and (d) the Mortgages (if any) have been duly recorded in the proper recorders’ offices or appropriate public records and the mortgage recording fees and taxes in respect thereof, if any, are paid and compliance is otherwise had with the formal requirements of state or local law applicable to the recording of real property mortgages generally, the security interests and liens granted pursuant thereto shall constitute (to the extent described therein, and with respect to the Mortgages, only as relates to the real property security interests and liens granted pursuant thereto), a perfected security interest in and lien on (to the extent intended to be created thereby and required to be perfected under the Loan Documents), all right, title and interest of each pledgor or mortgagor (as applicable) party thereto in the Collateral described therein (excluding Commercial Tort Claims, as defined in the Guarantee and Collateral Agreement, other than such Commercial Tort Claims set forth on Schedule 6 thereto (if any)) with respect to such pledgor or mortgagor (as applicable).  Notwithstanding any other provision of this Agreement, capitalized terms that are used in this Subsection 5.13 and not defined in this Agreement are so used as defined in the applicable Security Document.

 

5.14                           Investment Company Act; Other Regulations.  None of the Borrowers is an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act.  None of the Borrowers is subject to regulation under any Federal or State statute or regulation (other than Regulation X of the Board) which limits its ability to incur Indebtedness as contemplated hereby.

 

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5.15                           SubsidiariesSchedule 5.15 sets forth all the Subsidiaries of Holdings at the Closing Date (after giving effect to the Transactions), the jurisdiction of their organization and the direct or indirect ownership interest of Holdings therein.

 

5.16                           Purpose of Loans.  The proceeds of Revolving Credit Loans and Swingline Loans shall be used by the Borrowers (i) to effect, in part, the Refinancing of Existing Debt and the other Transactions, and to pay certain fees and expenses relating thereto and (ii) to finance the working capital, capital expenditures, business requirements and other general corporate purposes of the Parent Borrower and its Restricted Subsidiaries.

 

5.17                           Environmental Matters.  Other than as disclosed on Schedule 5.17 or exceptions to any of the following that would not, individually or in the aggregate, reasonably be expected to give rise to a Material Adverse Effect:

 

(a)                          The Parent Borrower and its Restricted Subsidiaries:  (i) are, and within the period of all applicable statutes of limitation have been, in compliance with all applicable Environmental Laws; (ii) hold all Environmental Permits (each of which is in full force and effect) required for any of their current operations or for any property owned, leased, or otherwise operated by any of them and reasonably expect to timely obtain without material expense all such Environmental Permits required for planned operations; (iii) are, and within the period of all applicable statutes of limitation have been, in compliance with all of their Environmental Permits; and (iv) believe they will be able to maintain compliance with Environmental Laws, including any reasonably foreseeable future requirements thereto.

 

(b)                         Materials of Environmental Concern have not been transported, disposed of, emitted, discharged, or otherwise released or threatened to be released, to or at any real property presently or formerly owned, leased or operated by the Parent Borrower or any of its Restricted Subsidiaries or at any other location, which would reasonably be expected to (i) give rise to liability or other Environmental Costs of the Parent Borrower or any of its Restricted Subsidiaries under any applicable Environmental Law, or (ii) interfere with the planned or continued operations of the Parent Borrower and its Restricted Subsidiaries, or (iii) impair the fair saleable value of any real property owned by the Parent Borrower or any of its Restricted Subsidiaries that is part of the Collateral.

 

(c)                          There is no judicial, administrative, or arbitral proceeding (including any notice of violation or alleged violation) under any Environmental Law to which the Parent Borrower or any of its Restricted Subsidiaries is, or to the knowledge of the Parent Borrower or any of its Restricted Subsidiaries is reasonably likely to be, named as a party that is pending or, to the knowledge of the Parent Borrower or any of its Restricted Subsidiaries, threatened.

 

(d)                         Neither the Parent Borrower nor any of its Restricted Subsidiaries has received any written request for information, or been notified that it is a potentially responsible party, under the federal Comprehensive Environmental Response, Compensation, and Liability Act or any similar Environmental Law, or received any other written request for information from any Governmental Authority with respect to any Materials of Environmental Concern.

 

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(e)                          Neither the Parent Borrower nor any of its Restricted Subsidiaries has entered into or agreed to any consent decree, order, or settlement or other agreement, nor is subject to any judgment, decree, or order or other agreement, in any judicial, administrative, arbitral, or other forum, relating to compliance with or liability under any Environmental Law.

 

5.18                           No Material Misstatements.  The written information (including the Confidential Information Memorandum), reports, financial statements, exhibits and schedules furnished by or on behalf of the Parent Borrower to the Administrative Agent, the Other Representatives and the Lenders on or prior to the Closing Date in connection with the negotiation of any Loan Document or included therein or delivered pursuant thereto, taken as a whole, did not contain as of the Closing Date any material misstatement of fact and did not omit to state as of the Closing Date any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading in their presentation of the Parent Borrower and its Restricted Subsidiaries taken as a whole.  It is understood that (a) no representation or warranty is made concerning the forecasts, estimates, pro forma information, projections and statements as to anticipated future performance or conditions, and the assumptions on which they were based or concerning any information of a general economic nature or general information about Parent Borrower’s and its Subsidiaries’ industry, contained in any such information, reports, financial statements, exhibits or schedules, except that, in the case of such forecasts, estimates, pro forma information, projections and statements, as of the date such forecasts, estimates, pro forma information, projections and statements were generated, (i) such forecasts, estimates, pro forma information, projections and statements were based on the good faith assumptions of the management of the Parent Borrower and (ii) such assumptions were believed by such management to be reasonable and (b) such forecasts, estimates, pro forma information and statements, and the assumptions on which they were based, may or may not prove to be correct.

 

5.19                           Labor Matters.  There are no strikes pending or, to the knowledge of the Parent Borrower, reasonably expected to be commenced against the Parent Borrower or any of its Restricted Subsidiaries which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.  The hours worked and payments made to employees of the Parent Borrower and each of its Restricted Subsidiaries have not been in violation of any applicable laws, rules or regulations, except where such violations would not reasonably be expected to have a Material Adverse Effect.

 

5.20                           InsuranceSchedule 5.20 sets forth a complete and correct listing of all insurance that is (a) maintained by the Loan Parties and (b) material to the business and operations of the Parent Borrower and its Restricted Subsidiaries taken as a whole as of the Closing Date, with the amounts insured (and any deductibles) set forth therein.

 

5.21                           Eligible Accounts.  As of the date of any Borrowing Base Certificate, the Accounts included in the calculation of Eligible Accounts on such Borrowing Base Certificate satisfy in all material respects the requirements of an “Eligible Account” hereunder.

 

5.22                           Eligible Inventory.  As of the date of any Borrowing Base Certificate, the Inventory included in the calculation of Eligible Inventory on such Borrowing Base Certificate satisfy in all material respects the requirements of an “Eligible Inventory” hereunder.

 

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5.23                           Anti-Terrorism.  As of the Closing Date, the Parent Borrower and its Restricted Subsidiaries are in compliance with the Uniting and Strengthening of America by Providing the Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, except as would not reasonably be expected to have a Material Adverse Effect.

 

SECTION 6

 

Conditions Precedent

 

6.1                                 Conditions to Initial Extension of Credit.  This Agreement, including the agreement of each Lender to make the initial Extension of Credit requested to be made by it, shall become effective on the date on which the following conditions precedent shall have been satisfied or waived:

 

(a)                                  Loan Documents.  The Administrative Agent shall have received (or, in the case of Holdings, shall receive substantially concurrently with the satisfaction of the other conditions precedent set forth in this Subsection 6.1) the following Loan Documents, executed and delivered as required below:

 

(i)                                     this Agreement, executed and delivered by a duly authorized officer of each Borrower;

 

(ii)                                  the Guarantee and Collateral Agreement, executed and delivered by a duly authorized officer of Holdings, each of the Borrowers and each wholly-owned Domestic Subsidiary (other than any Excluded Subsidiary) of the Parent Borrower and an Acknowledgement and Consent in the form attached to the Guarantee and Collateral Agreement, executed and delivered by each Issuer (as defined therein), if any, that is not a Loan Party; and

 

(iii)                               the ABL/Term Loan Intercreditor Agreement, acknowledged by a duly authorized officer of each Loan Party;

 

provided that, clause (ii) above notwithstanding, but without limiting the requirements set forth in Subsection 6.1(h), to the extent any collateral is not provided on the Closing Date and to the extent Holdings and its Subsidiaries have used commercially reasonable efforts to provide such collateral, the provisions of clause (ii) above shall be deemed to have been satisfied and the Loan Parties shall be required to provide such collateral in accordance with the provisions set forth in Subsection 7.12, if, and only if, each Loan Party shall have executed and delivered the Guarantee and Collateral Agreement and the Administrative Agent shall have a perfected security interest in all Collateral of the type for which perfection may be accomplished by filing a UCC financing statement or possession of Capital Stock of Domestic Subsidiaries.

 

(b)                                 Merger Agreement.  The Merger shall be consummated substantially concurrently with or prior to any funding pursuant to the Debt Financing pursuant to the provisions of the Merger Agreement, without giving effect to any amendment, waiver or other modification thereof or consent granted thereunder that (in any such case) is materially adverse to the interests of the Lenders that is not approved by the Lead

 

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Arrangers acting reasonably (it being agreed that any reduction in the purchase price payable in respect of the Merger as contemplated under the Merger Agreement shall not be deemed to be materially adverse to the Lenders so long as 75.0% of such reduction is applied to reduce the principal amount of Senior Notes (and, thereafter, the Term Loan Facility) and 25.0% of such reduction is applied to reduce the Equity Financing). It is expressly acknowledged that the Merger Agreement and the disclosure schedules and exhibits thereto in each case in the form submitted to the Lead Arrangers on February 13, 2011 are satisfactory.

 

(c)                                  Debt Financings.  (i) Substantially concurrently with the satisfaction of the other conditions precedent set forth in this Subsection 6.1, the Administrative Agent shall receive evidence, in form and substance reasonably satisfactory to it, that the Parent Borrower shall have received (unless reduced in accordance with Subsection 6.1(b)) (x) gross cash proceeds of not less than $1,440,000,000 (calculated before applicable fees and original issue discount) from the proceeds of Term Loans and (y) gross cash proceeds of not less than $950,000,000 (calculated before applicable fees and original issue discount) from the issuance of Senior Notes and (ii) on the Closing Date, the Administrative Agent shall receive, substantially concurrently with the satisfaction of the other conditions precedent set forth in this Subsection 6.1, complete and correct copies of (x) the Term Loan Credit Agreement and (y) the Senior Notes Indenture, certified as such by an appropriate officer of the Parent Borrower.

 

(d)                                 Outstanding Indebtedness and Preferred Equity.  After giving effect to the consummation of the Merger, Holdings and its Subsidiaries shall have no outstanding preferred equity or Indebtedness for borrowed money, in each case held by third parties, except for indebtedness incurred pursuant to the Debt Financing, any Assumed Indebtedness and any Existing Financing Leases.  Any Indebtedness to be Refinanced shall have been repaid, defeased or otherwise discharged substantially concurrently with or prior to the satisfaction of the other conditions precedent set forth in this Subsection 6.1 and the Administrative Agent shall have received payoff letters with respect to any Indebtedness to be Refinanced that is to be repaid, defeased or otherwise discharged on the Closing Date.

 

(e)                                  Financial Information. The Committed Lenders shall have received (i) audited financial statements of the Company and its Subsidiaries for the three Fiscal Years ended December 31, 2010, December 31, 2009 and December 31, 2008, in each case, certified by the Parent Borrower’s independent registered public accountants, (ii) unaudited consolidated financial statements for the Company and its Subsidiaries for each subsequent Fiscal Quarter after December 31, 2010 ended at least forty-five (45) days prior to the Closing Date and (iii) a pro forma consolidated balance sheet and related consolidated statements of income of the Company as of and for the 12-month period ending on the last day of the most recently completed four quarter fiscal period ended at least 45 days prior to the Closing Date, in each case adjusted to give effect to the Transactions, the other transactions related thereto and such other adjustments as shall be agreed between the Parent Borrower and the Lead Arrangers; provided that the filing of the required financial statements on Form 10-K and Form 10-Q by the Company on or

 

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prior to the Closing Date will satisfy the requirements set forth in clauses (i) and (ii) above.

 

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

 

(i)                                     executed legal opinion of Debevoise & Plimpton LLP, counsel to each of the Borrowers and the other Loan Parties, substantially in the form of Exhibit M-1;

 

(ii)                                  executed legal opinions of Richards, Layton & Finger, P.A., special Delaware counsel to certain of the Loan Parties, substantially in the form of Exhibit M-2;

 

(iii)                               executed legal opinion of Brownstein Hyatt Farber Schreck, LLP, special Nevada counsel to certain of the Loan Parties, substantially in the form of Exhibit M-3;

 

(iv)                              executed legal opinions of Greenberg Traurig LLP, special Connecticut, Massachusetts and Pennsylvania counsel to certain of the Loan Parties, substantially in the form of Exhibit M-4;

 

(v)                                 executed legal opinions of Holme Roberts & Owen LLP, special California and Colorado counsel to certain of the Loan Parties, substantially in the form of Exhibit M-5;

 

(vi)                              executed legal opinion of Stoel Rives LLP, special Oregon counsel to certain of the Loan Parties, substantially in the form of Exhibit M-6; and

 

(vii)                           executed legal opinion of Bryan Cave LLP, special Arizona and Missouri counsel to certain of the Loan Parties, substantially in the form of Exhibit M-7.

 

(g)                                 Officer’s Certificate.  The Administrative Agent shall have received a certificate from the Parent Borrower, dated the Closing Date, substantially in the form of Exhibit H hereto, with appropriate insertions and attachments.

 

(h)                                 Perfected Liens.  The Collateral Agent shall have obtained a valid security interest in the Collateral covered by the Guarantee and Collateral Agreement (to the extent and with the priority contemplated therein and in the ABL/Term Loan Intercreditor Agreement); and all documents, instruments, filings, recordations and searches reasonably necessary in connection with the perfection and, in the case of the filings with the United States Patent and Trademark Office and the United States Copyright Office, protection of such security interests shall have been executed and delivered or made, or, in the case of UCC filings, written authorization to make such UCC filings shall have been delivered to the Collateral Agent, and none of such Collateral shall be subject to any other pledges, security interests or mortgages except for Permitted Liens; provided that with respect to any such collateral the security interest in which may not be perfected by

 

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filing of a UCC financing statement or by possession of Capital Stock, if perfection of the Collateral Agent’s security interest in such collateral may not be accomplished on or before the Closing Date after the applicable Loan Party’s commercially reasonable efforts to do so, then delivery of documents and instruments for perfection of such security interest shall not constitute a condition precedent to the initial borrowings hereunder if the applicable Loan Party agrees to deliver or cause to be delivered such documents and instruments, and take or cause to be taken such other actions as may be reasonably necessary to perfect such security interests in accordance with Subsections 7.12 and 7.13 and otherwise pursuant to arrangements to be mutually agreed by the applicable Loan Party and the Administrative Agent acting reasonably, but in no event later than the 91st day after the Closing Date (unless otherwise agreed by the Administrative Agent in its sole discretion) (and, in the case of Vehicles and related documentation, no later than the 365th day after the Closing Date with respect to Vehicles registered in the States of Hawaii or Connecticut and no later than the 181st day after the Closing Date for all other Vehicles, unless otherwise agreed by the Term Loan Agent in its sole discretion).

 

(i)                                     Pledged Stock; Stock Powers.  The Term Loan Agent shall have received the certificates, if any, representing the Pledged Stock under (and as defined in) the Guarantee and Collateral Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof.

 

(j)                                     Fees and Expenses. (i)  The Committed Lenders, the Agents and the Lenders, respectively, shall have received all fees related to the Transactions payable to them to the extent due (which may be offset against the proceeds of the Facility); and

 

(ii)                                  The Parent Borrower agrees to pay to the Administrative Agent, for the ratable benefit of each Lender as of the Closing Date, an initial yield payment equal to 0.50% of the aggregate principal amount of the Commitments held by such Lender as of the Closing Date, with such payment to be earned by, and payable to, each such Lender on the Closing Date.

 

(k)                                  Secretary’s Certificate.  The Administrative Agent shall have received a certificate from the Parent Borrower, dated the Closing Date, substantially in the form of Exhibit G hereto, with appropriate insertions and attachments reasonably satisfactory in form and substance to the Administrative Agent, executed by a Responsible Officer and the Secretary or any Assistant Secretary or other authorized representative of the Parent Borrower.

 

(l)                                     Corporate Proceedings of the Loan Parties.  The Administrative Agent shall have received a copy of the resolutions or equivalent action, in form and substance reasonably satisfactory to the Administrative Agent, of the Board of Directors of each Loan Party authorizing, as applicable, (i) the execution, delivery and performance of this Agreement, any Notes and the other Loan Documents to which it is or will be a party as of the Closing Date, (ii) the Extensions of Credit to such Loan Party (if any) contemplated hereunder and (iii) the granting by it of the Liens to be created pursuant to the Security Documents to which it will be a party as of the Closing Date, certified by the Secretary, any Assistant Secretary or other authorized representative of such Loan Party

 

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as of the Closing Date, which certificate shall be in substantially the form of Exhibit G hereto and shall state that the resolutions or other action thereby certified have not been amended, modified (except as any later such resolution or other action may modify any earlier such resolution or other action), superseded or revoked in any respect and are in full force and effect as of the Closing Date.

 

(m)                               Incumbency Certificates of the Loan Parties.  The Administrative Agent shall have received a certificate of each Loan Party, dated as of the Closing Date, as to the incumbency and signature of the officers or other authorized signatories of such Loan Party executing any Loan Document with respect to such Loan Party on the Closing Date.

 

(n)                                 Governing Documents.  The Administrative Agent shall have received copies of the Organizational Documents of each Loan Party, in each case certified as of the Closing Date as true, correct and complete copies (as amended through the Closing Date) by the Secretary, an Assistant Secretary or other authorized representative of such Loan Party and a certificate of good standing of each Loan Party in the state of incorporation of such Loan Party, in so-called “long-form” if available.

 

(o)                                 No Material Adverse Effect.  Since (1) September 30, 2010 through February 13, 2011 except (I) as disclosed in the SEC Documents (as defined in the Merger Agreement) filed with, or furnished to, the Securities and Exchange Commission by the Company on or after January 1, 2010 and prior to the date hereof, or incorporated by reference into such document, and publicly available prior to the date hereof, other than any disclosures contained under the captions “Risk Factors” or “Forward Looking Statements” and any other disclosures contained therein that are predictive, cautionary or forward looking in nature, or (II) as set forth on the Company Disclosure Schedule (as defined in the Merger Agreement) (it being understood and agreed that the items in Section 4.08 of the Company Disclosure Schedule apply, and any other item in any other section of the Company Disclosure Schedule apply, if such item’s relevance to whether or not a Company Material Adverse Effect has occurred or would reasonably be expected to occur is reasonably apparent on its face), there shall not have been any change, effect, event, state of facts, development or occurrence that would, individually or in the aggregate, have had or reasonably be expected to have a Company Material Adverse Effect and (2) February 13, 2011 through the date hereof, there shall not have occurred any change, event, state of facts, development or occurrence that constitutes a Company Material Adverse Effect, and Holdings shall have received a certificate signed on behalf of the Company by the chief executive officer or chief financial officer thereof to such effect.  “Company Material Adverse Effect” means any change, effect, event, state of facts, development or occurrence that, individually or in the aggregate with all other changes, effects, state of facts, developments or occurrences is, or would be reasonably expected to be, materially adverse to the business, assets, condition (financial or otherwise) or results of operation of the Company and its Subsidiaries (as defined in the Merger Agreement) taken as a whole; provided that none of the following shall either alone or in combination constitute, or be taken into account in determining whether there has been, a Company Material Adverse Effect:  any change, effect, event, state of facts, development or occurrence that arises out of or results from (i) general economic, credit,

 

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capital or financial markets or political conditions in the United States or elsewhere in the world, including with respect to interest rates or currency exchange rates, (ii) any outbreak or escalation of hostilities, acts of war (whether or not declared), sabotage or terrorism, (iii) any hurricane, tornado, flood, volcano, earthquake or other natural or man-made disaster occurring after the date of this Agreement, (iv) any change in applicable Law or GAAP (each as defined in the Merger Agreement) (or authoritative interpretation or enforcement thereof), (v) general conditions in the industries in which the Company and its Subsidiaries primarily operate, (vi) any failure, in and of itself, by the Company to meet any analyst projections or any internal or published projections, forecasts, estimates or predictions of revenue, earnings or other financial or operating metrics before, on or after the date hereof (provided that the underlying factors contributing to such failure shall not be excluded), (vii) any change in the market price or trading volume of the Company’s Class A Common Stock (as defined in the Merger Agreement) or the credit rating of the Company (provided that the underlying factors contributing to such changes shall not be excluded), (viii) the announcement and pendency of the Merger Agreement and the transactions contemplated thereby, (ix) any action taken by the Company or its Subsidiaries required by the Merger Agreement or the Commitment Letter, or (x) the identity of, or any facts or circumstances relating to Holdings, Merger Sub or its Affiliates (as defined in the Merger Agreement), except in the case of clauses (i), (ii), (iii), (iv) or (v) above, to the extent that the Company and its Subsidiaries, taken as a whole, are materially disproportionately affected thereby as compared with other participants in the industries in which the Company and its Subsidiaries primarily operate (in which case the incremental materially disproportionate impact or impacts may be taken into account in determining whether there has been, or is reasonably expected to be, a Company Material Adverse Effect).

 

(p)                                 Solvency.  The Administrative Agent shall have received a certificate of the chief financial officer of the Parent Borrower certifying the Solvency, after giving effect to the Transactions, of the Parent Borrower and its Restricted Subsidiaries on a consolidated basis in substantially the form of Exhibit I hereto.

 

(q)                                 Excess Availability.  The Administrative Agent shall have received a Borrowing Base Certificate in the form contemplated by Subsection 7.2(f), or such other form as may be reasonably acceptable to the Administrative Agent, prepared as of the last day of the last month ended at least twenty-five (25) business days prior to the Closing Date, setting forth, after giving effect to the Borrowings hereunder on the Closing Date, Excess Availability. After giving effect to any borrowing on the Closing Date, the amount of Excess Availability, immediately after giving effect to the Transactions, shall equal or exceed $100,000,000.

 

(r)                                    Field Exam.  The Administrative Agent shall have received the results of a completed field examination with respect to the ABL Priority Collateral to be included in calculating the Borrowing Base and of the relevant accounting systems, policies and procedures of the Parent Borrower and its Restricted Subsidiaries, completed by a third party examiner (reasonably acceptable to the Administrative Agent), in scope reasonably satisfactory to the Administrative Agent.

 

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(s)                                  Equity Financing.  The Parent Borrower shall have received, or substantially concurrently with the funding pursuant to the Debt Financing shall receive, the Equity Contribution in an amount of not less than the Minimum Equity Amount.

 

(t)                                    PATRIOT Act.  The Administrative Agent and the Committed Lenders shall have received at least three (3) days prior to the Closing Date all documentation and other information about the Guarantors required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the PATRIOT Act that has been requested in writing at least ten (10) days prior to the Closing Date.

 

(u)                                 Merger Agreement Conditions; Specified Representations.  (i) The condition in Subsection 7.2(a) of the Merger Agreement (but only with respect to the representations that are material to the interests of the Lenders, and only to the extent that Merger Sub has the right to terminate its obligations under the Merger Agreement as a result of a breach of such representations in the Merger Agreement) shall have been satisfied, as certified by a Responsible Officer in an officer’s certificate substantially in the form of Exhibit H hereto and (ii) the Specified Representations shall, except to the extent they relate to a particular date, be true and correct in all material respects on and as of such date as if made on and as of such date.

 

(v)                                 Borrowing Notice or L/C Request.  With respect to the initial Extensions of Credit, the Administrative Agent shall have received a notice of such Borrowing as required by Subsection 2.2 or 2.4, as applicable (or such notice shall have been deemed given in accordance with Subsection 2.2 or 2.4, as applicable).  With respect to the issuance of any Letter of Credit, the applicable Issuing Lender shall have received a L/C Request, completed to its satisfaction, and such other certificates, documents and other papers and information as such Issuing Lender may reasonably request.

 

The making of the initial Extensions of Credit (including the rolling over of the Existing Letters of Credit) by the Lenders hereunder shall (except as explicitly set forth in the proviso to Subsection 6.1(a) and as set forth in Subsections 6.1(h) and 6.1(u)), conclusively be deemed to constitute an acknowledgement by