Exhibit 10.80 REVOLVING CREDIT AGREEMENT dated as of June 13, 2008 among EXACTECH, INC., as Borrower THE LENDERS FROM TIME TO TIME PARTY HERETO and SUNTRUST BANK as Administrative Agent -------------------------------------------------------------------------------- TABLE OF CONTENTS Page ARTICLE I DEFINITIONS; CONSTRUCTION 1 Section 1.1. Definitions 1 Section 1.2. Classifications of Loans and Borrowings 16 Section 1.3. Accounting Terms and Determination 17 Section 1.4. Terms Generally 17 ARTICLE II AMOUNT AND TERMS OF THE COMMITMENTS 17 Section 2.1. General Description of Facilities 17 Section 2.2. Revolving Loans 17 Section 2.3. Procedure for Revolving Borrowings 18 Section 2.4. Swingline Commitment 18 Section 2.5. Procedure for Swingline Borrowing; Etc 18 Section 2.6. Competitive Bid Borrowings 19 Section 2.7. Term Loan Commitments 19 Section 2.8. Funding of Borrowings 20 Section 2.9. Interest Elections 20 Section 2.10. Optional Reduction and Termination of Commitments 20 Section 2.11. Repayment of Loans 21 Section 2.12. Evidence of Indebtedness 21 Section 2.13. Optional Prepayments 21 Section 2.14. Interest on Loans 22 Section 2.15. Fees 22 Section 2.16. Computation of Interest and Fees 23 Section 2.17. Inability to Determine Interest Rates 23 Section 2.18. Illegality 23 Section 2.19. Increased Costs 23 Section 2.20. Funding Indemnity 24 Section 2.21. Taxes 25 Section 2.22. Payments Generally; Pro Rata Treatment; Sharing of Set-offs 26 Section 2.23. Mitigation of Obligations; Replacement of Lenders 27 ARTICLE III CONDITIONS PRECEDENT TO LOANS 28 Section 3.1. Conditions To Effectiveness 28 Section 3.2. Each Credit Event 29 Section 3.3. Delivery of Documents 29 ARTICLE IV REPRESENTATIONS AND WARRANTIES 30 Section 4.1. Existence; Power 30 Section 4.2. Organizational Power; Authorization 30 Section 4.3. Governmental Approvals; No Conflicts 30 Section 4.4. Financial Statements 30 Section 4.5. Litigation and Environmental Matters 31 Section 4.6. Compliance with Laws and Agreements 31 Section 4.7. Investment Company Act, Etc 31 Section 4.8. Taxes 31 Section 4.9. Margin Regulations 32 Section 4.10. ERISA 32 Section 4.11. Ownership of Property 32 Section 4.12. Disclosure 32 Section 4.13. Labor Relations 33 Section 4.14. Subsidiaries 33 i -------------------------------------------------------------------------------- Section 4.15. Insolvency. After giving effect to the execution and delivery of the Loan Documents, the making of the Loans under this Agreement, neither the Borrower nor its Subsidiaries will be “insolvent,” within the meaning of such term as defined in § 101 of Title 11 of the United States Code, as amended from time to time, or be unable to pay its debts generally as such debts become due, or have an unreasonably small capital to engage in any business or transaction, whether current or contemplated. 33 Section 4.16. [INTENTIONALLY DELETED] 33 Section 4.17. OFAC. No Loan Party (i) is a person whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in any dealings or transactions prohibited by Section 2 of such executive order, or is otherwise associated with any such person in any manner violative of Section 2, or (iii) is a person on the list of Specially Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any other U.S. Department of Treasury’s Office of Foreign Assets Control regulation or executive order. 33 Section 4.18. Patriot Act. Each Loan Party is in compliance, in all material respects, with (i) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (ii) the Uniting And Strengthening America By Providing Appropriate Tools Required To Intercept And Obstruct Terrorism (USA Patriot Act of 2001). No part of the proceeds of the Loans will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended. 33 ARTICLE V AFFIRMATIVE COVENANTS 34 Section 5.1. Financial Statements and Other Information 34 Section 5.2. Notices of Material Events 35 Section 5.3. Existence; Conduct of Business 35 Section 5.4. Compliance with Laws, Etc 36 Section 5.5. Payment of Obligations 36 Section 5.6. Books and Records 36 Section 5.7. Visitation, Inspection, Etc 36 Section 5.8. Maintenance of Properties; Insurance 36 Section 5.9. Use of Proceeds 36 Section 5.10. Interest Rate Protection 37 Section 5.11. Additional Subsidiaries 37 Section 5.12. Further Assurances. The Borrower will, and will cause each of its Subsidiaries to, execute any and all further documents, financing statements, agreements and instruments, and take all further action (including filing Uniform Commercial Code and other financing statements, and preparing all documentation relating to filings under the Assignment of Claims Act) that may be required under applicable law, or that the Required Lenders or the Administrative Agent may reasonably request, in order to effectuate the transactions contemplated by the Loan Documents and in order to grant, preserve, protect and perfect the validity and first priority of the security interests created or intended to be created by the Security Documents; provided, however, that notwithstanding anything else to the contrary in the Loan Documents, none of the Loan Parties shall be required to make filings under the Assignment of Claims Act for the assignment of Government Contracts to the Administrative Agent unless (a) such Government Contract constitutes a Material Contract and (b) the Administrative Agent shall have requested, in its reasonable discretion, that a filing under the Assignment of Claims Act be made with respect to such Government Contract. The Borrower will cause any subsequently acquired or organized Subsidiary (except a Foreign Subsidiary) to become a Loan Party by executing the Security Agreement and each applicable Security Document in favor of the Administrative Agent. In addition, from time to time, the Borrower will, at its cost and expense, promptly secure the Obligations by pledging or creating, or causing to be pledged or created, perfected security interests with respect to such of its assets and properties as the Administrative Agent or the Required Lenders shall designate (it being understood that it is the intent of the parties that the Obligations shall be secured by substantially all the assets of the Borrower and its Subsidiaries (including properties acquired subsequent to the Closing Date)). Such security interests and Liens will be created under the Security Documents and other security agreements, and other instruments and documents in form and substance reasonably satisfactory to the Administrative Agent, and the Borrower shall deliver or cause to be delivered to the Lenders all such instruments and documents (including legal opinions, title ii -------------------------------------------------------------------------------- insurance policies and lien searches) as the Administrative Agent shall reasonably request to evidence compliance with this Section 5.12. The Borrower agrees to provide such evidence as the Administrative Agent shall reasonably request as to the perfection and priority status of each such security interest and Lien. 37 Section 5.13. Primary Operating Account. The Borrower will, and will cause each Loan Party to, maintain its primary operating deposit accounts with the Administrative Agent. 38 Section 5.14. Security Documents. The Security Agreement, upon execution and delivery thereof by the parties thereto, will create in favor of the Administrative Agent, for the ratable benefit of the Lenders, a legal, valid and enforceable security interest in the Collateral (as defined in the Security Agreement) and the proceeds thereof, in which a security interest may be perfected under the Florida Uniform Commercial Code as in effect at the relevant time by filing of financing statements or obtaining control or possession, and the Lien created under the Security Agreement is (or will be, upon the filing of appropriate financing statements, the execution of appropriate control agreements and delivery of certificated securities and instruments to the Administrative Agent) a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Collateral), in each case prior and superior in right to any other person, other than with respect to Liens permitted by Section 7.2. Notwithstanding anything stated herein to the contrary, absent mutual agreement between the Borrower, the Administrative Agent and the Required Lenders (to the extent applicable), in no event shall Borrower or any Subsidiary be required to grant a mortgage with respect to any real property owned by Borrower or any Subsidiary. 38 ARTICLE VI FINANCIAL COVENANTS 38 Section 6.1. Leverage Ratio 38 Section 6.2. Fixed Charge Coverage Ratio 39 ARTICLE VII NEGATIVE COVENANTS 39 Section 7.1. Indebtedness 39 Section 7.2. Negative Pledge 40 Section 7.3. Fundamental Changes 41 Section 7.4. Investments, Loans, Etc 41 Section 7.5. Restricted Payments 42 Section 7.6. Sale of Assets 42 Section 7.7. Transactions with Affiliates 42 Section 7.8. Restrictive Agreements 43 Section 7.9. Sale and Leaseback Transactions 43 Section 7.10. Hedging Agreements 43 Section 7.11. Amendment to Material Documents 43 Section 7.12. Accounting Changes 43 ARTICLE VIII EVENTS OF DEFAULT 43 Section 8.1. Events of Default 43 ARTICLE IX THE ADMINISTRATIVE AGENT 46 Section 9.1. Appointment of Administrative Agent 46 Section 9.2. Nature of Duties of Administrative Agent 46 Section 9.3. Lack of Reliance on the Administrative Agent 47 Section 9.4. Certain Rights of the Administrative Agent 47 Section 9.5. Reliance by Administrative Agent 47 Section 9.6. The Administrative Agent in its Individual Capacity 47 Section 9.7. Successor Administrative Agent 48 Section 9.8. Authorization to Execute other Loan Documents; Collateral 48 Section 9.9. Benefits of Article 9. None of the provisions of this Article 9 shall inure to the benefit of the Borrower or of any Person other than Administrative Agent and each of the Lenders and their respective successors and permitted assigns. Accordingly, neither the Borrower nor any Person other than Administrative Agent and the Lenders (and their respective successors and permitted assigns) shall be entitled to rely upon, or to raise as a defense, the failure of the Administrative Agent or any Lenders to comply with the provisions of this Article 9. 49 iii -------------------------------------------------------------------------------- ARTICLE X MISCELLANEOUS 49 Section 10.1. Notices 49 Section 10.2. Waiver; Amendments 51 Section 10.3. Expenses; Indemnification 52 Section 10.4. Successors and Assigns 53 Section 10.5. Governing Law; Jurisdiction; Consent to Service of Process 55 Section 10.6. WAIVER OF JURY TRIAL 55 Section 10.7. Right of Setoff 56 Section 10.8. Counterparts; Integration 56 Section 10.9. Survival 56 Section 10.10. Severability 57 Section 10.11. Confidentiality 57 Section 10.12. Interest Rate Limitation 57 Section 10.13. Patriot Act. The Administrative Agent and each Lender hereby notifies the Loan Parties that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender or the Administrative Agent, as applicable, to identify such Loan Party in accordance with the Patriot Act. Each Loan Party shall, and shall cause each of its Subsidiaries to, provide to the extent commercially reasonable, such information and take such other actions as are reasonably requested by the Administrative Agent or any Lender in order to assist the Administrative Agent and the Lenders in maintaining compliance with the Patriot Act 57 Schedules Schedule I - Applicable Margin and Applicable Percentage Schedule 4.5 - Intentionally Deleted Schedule 4.14 - Subsidiaries Schedule 7.1 - Outstanding Indebtedness Schedule 7.2 - Existing Liens Schedule 7.4 - Existing Investments Schedule I-F - To the Subsidiary Guaranty Agreement Schedule I-G - To the Indemnity, Subrogation and Contribution Agreement Schedule I-G- - To Supplement No. to the Indemnity, Subrogation and Contribution Agreement Annex I-F - To the Subsidiary Guaranty Agreement Annex I-G - To the Indemnity, Subrogation and Contribution Agreement Exhibits Exhibit A - Revolving Credit Note Exhibit B - Intentionally Deleted Exhibit C - Intentionally Deleted Exhibit D - Swingline Note Exhibit E - Form of Assignment and Acceptance Exhibit F - Form of Subsidiary Guaranty Agreement Exhibit G - Form of Indemnity, Subrogation and Contribution Agreement Exhibit H - Form of Security Agreement Exhibit 2.3 - Notice of Revolving Borrowing Exhibit 2.5 - Notice of Swingline Borrowing Exhibit 2.6-A - Intentionally Deleted Exhibit 2.6-B - Intentionally Deleted Exhibit 2.6-C - Intentionally Deleted iv -------------------------------------------------------------------------------- Exhibit 2.9 - Intentionally Deleted Exhibit 3.1(b)(iv) - Form of Secretary’s Certificate of Exactech, Inc. Exhibit 3.1(b)(vii) - Form of Officer’s Certificate Exhibit 3.1(b)(viii) - Form of Opinion Letter Exhibit 5.1(c) - Form of Compliance Certificate v -------------------------------------------------------------------------------- REVOLVING CREDIT AGREEMENT THIS REVOLVING CREDIT AGREEMENT (this “Agreement”) is made and entered into as of June 13, 2008, by and among EXACTECH, INC., a Florida corporation (the “Borrower”), the several banks and other financial institutions from time to time party hereto (the “Lenders”), and SUNTRUST BANK, in its capacity as administrative agent for the Lenders (the “Administrative Agent”), as a Lender and as swingline lender (the “Swingline Lender”). W I T N E S S E T H: WHEREAS, the Borrower has requested that the Lenders establish a $40,000,000 revolving credit facility; WHEREAS, subject to the terms and conditions of this Agreement, the Lenders severally, to the extent of their respective Commitments, are willing to establish the requested revolving credit facility for Borrower. NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Borrower, the Lenders and the Administrative Agent agree as follows: ARTICLE I DEFINITIONS; CONSTRUCTION Section 1.1. Definitions. In addition to the other terms defined herein, the following terms used herein shall have the meanings herein specified (to be equally applicable to both the singular and plural forms of the terms defined): “Administrative Agent” shall have the meaning assigned to such term in the opening paragraph hereof. “Administrative Questionnaire” shall mean, with respect to each Lender, an administrative questionnaire in the form prepared by the Administrative Agent and submitted to the Administrative Agent duly completed by such Lender. “Affiliate” shall mean, as to any Person, any other Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Person. “Aggregate Revolving Commitment Amount” shall mean the aggregate principal amount of the Aggregate Revolving Commitments from time to time. On the Closing Date, the Aggregate Revolving Commitment Amount equals $40,000,000. “Aggregate Revolving Commitments” shall mean collectively, all Revolving Commitments of all Lenders at any time outstanding. “Applicable Lending Office” shall mean, for each Lender and for each Type of Loan, the “Lending Office” of such Lender (or an Affiliate of such Lender) designated for such Type of Loan in the Administrative Questionnaire submitted by such Lender or such other office of such Lender (or an Affiliate of such Lender) as such Lender may from time to time specify to the Administrative Agent and the Borrower as the office by which its Loans of such Type are to be made and maintained. -------------------------------------------------------------------------------- “Applicable Margin” shall mean, as of any date, with respect to interest on all Loans outstanding on any date, as the case may be, a percentage per annum determined by reference to the applicable Leverage Ratio in effect from time to time as set forth on Schedule 1; provided that a change in the Applicable Margin resulting from a change in the Leverage Ratio shall be effective on the second Business Day after which the Borrower is required to deliver the financial statements required by Section 5.1(a) or (b) and the compliance certificate required by Section 5.1(c); provided further, that if at any time the Borrower shall have failed to deliver such financial statements and such certificate, the Applicable Margin shall be at Level I until such time as such financial statements and certificate are delivered, at which time the Applicable Margin shall be determined as provided above; and provided, further, that in the event that any financial statement delivered pursuant to Section 5.1(a) or (b) or any Compliance Certificate delivered pursuant to Section 5.1(c) is shown to be inaccurate (regardless of whether this Agreement or the Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any period (an “Applicable Margin Period”) than the Applicable Margin applied for such Applicable Margin Period, and only in such case, then the Borrower shall immediately (i) deliver to the Administrative Agent a corrected Compliance Certificate for such Applicable Margin Period, (ii) determine the Applicable Margin for such Applicable Margin Period based upon the corrected Compliance Certificate, and (iii) immediately pay to the Administrative Agent the accrued additional interest owing as a result of such increased Applicable Margin for such Applicable Margin Period, which payment shall be promptly applied by the Administrative Agent in accordance with Section 2.22. In the event that any financial statement delivered pursuant to Section 5.1(a) or (b) or any Compliance Certificate delivered pursuant to Section 5.1(c) is shown to be inaccurate, and such inaccuracy, if corrected, would have led to the application of a lower Applicable Margin for any Applicable Margin Period than the Applicable Margin applied for such Applicable Margin Period, then (i) the Borrower shall immediately deliver to the Administrative Agent a correct Compliance Certificate for such Applicable Margin Period, (ii) the Applicable Margin shall be as if the lower applicable percentage were applicable for such Applicable Margin Period, and (iii) Borrower shall receive a credit towards any future interest payments in an amount equal to the excess interest paid by Borrower as a result of the application of such lower Applicable Margin. The provisions of this definition are in addition to rights of the Administrative Agent and Lenders with respect to Section 2.14(c) and Article 8 and other of their respective rights under this Agreement. Notwithstanding the foregoing, the Applicable Margin from the Closing Date until the first financial statement and Compliance Certificate are required to be delivered shall be at Level IV. “Applicable Percentage” shall mean, with respect to the facility fee as of any date, the percentage per annum determined by reference to the applicable Leverage Ratio in effect on such date as set forth on Schedule I attached hereto; provided, that a change in the Applicable Percentage resulting from a change in the Leverage Ratio shall be effective on the second Business Day after which the Borrower is required to deliver the financial statements required by Section 5.1(a) or (b) and the compliance certificate required by Section 5.1(c); provided, further, that if at any time the Borrower shall have failed to deliver such financial statements and such certificate, the Applicable Percentage shall be at Level I until such time as such financial statements and certificate are delivered, at which time the Applicable Percentage shall be determined as provided above. Notwithstanding the foregoing, the Applicable Percentage for the facility fee from the Closing Date until the first financial statement and Compliance Certificate are required to be delivered shall be at Level IV. 2 -------------------------------------------------------------------------------- “Assignment and Acceptance” shall mean an assignment and acceptance entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 10.4(b)) and accepted by the Administrative Agent, in the form of Exhibit E attached hereto or any other form approved by the Administrative Agent. “Availability Period” shall mean the period from the Closing Date to the Commitment Termination Date. “Base Rate” shall mean the higher of (i) the per annum rate which the Administrative Agent publicly announces from time to time to be its prime lending rate, as in effect from time to time, and (ii) the Federal Funds Rate, as in effect from time to time, plus one-half of one percent (0.50%). The Administrative Agent’s prime lending rate is a reference rate and does not necessarily represent the lowest or best rate charged to customers. The Administrative Agent may make commercial loans or other loans at rates of interest at, above or below the Administrative Agent’s prime lending rate. Each change in the Administrative Agent’s prime lending rate shall be effective from and including the date such change is publicly announced as being effective. “Borrower” shall have the meaning in the introductory paragraph hereof. “Borrowing” shall mean a borrowing consisting of (i) Loans of the same Class and Type, made on the same date, or (ii) a Swingline Loan. “Borrowing Availability” means, at any time, the amount by which the Aggregate Revolving Commitment Amount exceeds the sum of the outstanding Revolving Loans and Swingline Loans. “Business Day” shall mean (i) any day other than a Saturday, Sunday or other day on which commercial banks in Gainesville, Florida are authorized or required by law to close and (ii) if such day relates to a Borrowing of, a payment or prepayment of principal or interest on an Index Rate Loan or a Index Rate Loan or a notice with respect to any of the foregoing, any day on which dealings in Dollars are carried on in the London interbank market. “Capital Expenditures” shall mean for any period, without duplication, (i) the additions to property, plant and equipment and other capital expenditures of the Borrower and its Subsidiaries that are (or would be) set forth on a consolidated statement of cash flows of the Borrower for such period prepared in accordance with GAAP and (ii) Capital Lease Obligations required to be paid by the Borrower and its Subsidiaries during such period. For purposes of this definition, Capital Expenditures: (a) shall not include any expenditure by Borrower or its Subsidiaries which is reimbursed in cash by a third party (other than a Loan Party or any Subsidiary of a Loan Party) during the same period in which such expenditure was made, so long as Consolidated Net Income for such period does not include the amount of the reimbursement from the third party; (b) shall only include the amount spent by Borrower and/or its Subsidiaries in excess of insurance proceeds received by Borrower and/or its Subsidiaries on the purchase of replacement equipment, so long as such insurance proceeds were not included in Consolidated Net Income; and (c) shall include expenditures for equipment purchased substantially contemporaneously with the trade-in or sale of similar equipment only to the extent such purchase price exceeds the credit granted by the seller of such equipment for the equipment being traded in at such time or the proceeds of such sale, as the case may be, and provided such sale proceeds were not included in Consolidated Net Income. 3 -------------------------------------------------------------------------------- “Capital Lease Obligations” of any Person shall mean all obligations of such Person to pay rent or other amounts under any lease (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP. “Cash Management Swingline Loans” shall have the meaning assigned to such term in Section 2.4(b). “Change in Control” shall mean the occurrence of one or more of the following events: (a) any sale, lease, exchange or other transfer (in a single transaction or a series of related transactions) of all or substantially all of the assets of the Borrower to any Person or “group” (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder in effect on the date hereof), (b) the acquisition of ownership, directly or indirectly, beneficially or of record by any Person or “group” (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof) of 50% or more of the outstanding shares of the voting stock of the Borrower; or (c) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by Persons who were neither (i) nominated by the current board of directors or (ii) appointed by directors so nominated. “Change in Law” shall mean (i) the adoption of any applicable law, rule or regulation after the date of this Agreement, (ii) any change in any applicable law, rule or regulation, or any change in the interpretation or application thereof, by any Governmental Authority after the date of this Agreement, or (iii) compliance by any Lender (or its Applicable Lending Office) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement. “Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline Loans and when used in reference to any Commitment, refers to whether such Commitment is a Revolving Commitment, or a Swingline Commitment. “Closing Date” shall mean the date on which the conditions precedent set forth in Section 3.1 and Section 3.2 have been satisfied or waived in accordance with Section 10.2. “Code” shall mean the Internal Revenue Code of 1986, as amended and in effect from time to time. “Collateral” shall mean all property and assets of the Loan Parties, now owned or hereafter acquired, upon which a Lien is purported to be created by any Security Document. “Commitment” shall mean a Revolving Commitment or a Swingline Commitment or any combination thereof (as the context shall permit or require). “Commitment Termination Date” shall mean the earliest of (i) June 13, 2013, (ii) the date on which the Revolving Commitments are terminated pursuant to Section 2.10 and (iii) the date on which all amounts outstanding under this Agreement have been declared or have automatically become due and payable (whether by acceleration or otherwise). 4 -------------------------------------------------------------------------------- “Consolidated EBITDA” shall mean, for the Borrower and its Subsidiaries for any period, an amount equal to the sum of (a) Consolidated Net Income for such period plus (b) to the extent deducted in determining Consolidated Net Income for such period, (i) Consolidated Interest Expense, (ii) Federal, state, local and foreign income taxes payable by the Borrower and its Subsidiaries, (iii) depreciation and amortization expense, (iv) all other non-cash charges, (v) other non-recurring or extraordinary charges or expenses made in conformance with GAAP, and (vii) any expenses deducted in calculating Consolidated Net Income for such period and reimbursed during such period by third parties (other than the Borrower or any of its Subsidiaries), in each case such deductions shall be for such period determined on a consolidated basis in accordance with GAAP. Consolidated EBITDA shall include the pro forma Consolidated EBITDA of any Person or business acquired for the applicable period preceding such acquisition, not to exceed four fiscal quarters, so long as the calculation thereof is done in a manner reasonably calculated to comply with GAAP and such calculation is detailed in the supporting calculations to each applicable Compliance Certificate as detailed and measured to the Administrative Agent’s reasonable satisfaction. “Consolidated Fixed Charges” shall mean, for the Borrower and its Subsidiaries for any period, the sum (without duplication) of (a) Consolidated Interest Expense for such period, (b) scheduled principal payments made on Consolidated Total Debt during such period, and (c) any Permitted Dividend Payments paid during such period. “Consolidated Funded Debt” shall mean and include (without duplication) (a) all Funded Debt of the Borrower on a consolidated basis, (b) all Funded Debt of other Persons, which has been guaranteed by the Borrower, which is supported by a letter of credit issued for the account of any one or more of the Borrower, or as to which and to the extent that any of the Borrower or its assets have otherwise become liable for payment thereof, (c) all Indebtedness for money borrowed by the Borrower pursuant to lines of credit or revolving credit facilities (regardless of the term thereof), and (d) all Permitted Subordinated Debt (if any). “Consolidated Interest Expense” shall mean, for the Borrower and its Subsidiaries for any period determined on a consolidated basis in accordance with GAAP, the sum of (i) total cash interest expense, including without limitation the interest component of any payments in respect of Capital Leases Obligations capitalized or expensed during such period (whether or not actually paid during such period) plus (ii) the net amount payable (or minus the net amount receivable) under Hedging Agreements during such period (whether or not actually paid or received during such period). “Consolidated Net Income” shall mean, for the Borrower and its Subsidiaries, for any period, the net income (or loss) of the Borrower and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, but excluding therefrom (to the extent otherwise included therein) (i) any gains attributable to write-ups of assets and (ii) any equity interest of the Borrower or any Subsidiary of the Borrower in the unremitted earnings of any Person that is not a Subsidiary and (iv) any income (or loss) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with the Borrower or any Subsidiary on the date that such Person’s assets are acquired by the Borrower or any Subsidiary. 5 -------------------------------------------------------------------------------- “Consolidated Total Debt” shall mean, as of any date of determination, all Indebtedness of the Borrower and its Subsidiaries that would be reflected on a consolidated balance sheet of the Borrower prepared in accordance with GAAP as of such date. “Control” shall mean the power, directly or indirectly, to direct or cause the direction of the management and policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. The terms “Controlling”, “Controlled by”, and “under common Control with” have meanings correlative thereto. “Default” shall mean any condition or event that, with the giving of notice or the lapse of time or both, would constitute an Event of Default. “Default Interest” shall have the meaning set forth in Section 2.14(d). “Dollar(s)” and the sign “$” shall mean lawful money of the United States of America. “Environmental Laws” shall mean all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, or injunctions issued or promulgated by or with any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Material. “Environmental Liability” shall mean any liability, (including any liability for damages, costs of environmental investigation and remediation, costs of administrative oversight, fines, natural resource damages, penalties or indemnities), of the Borrower or any Subsidiary resulting from or based upon (a) any violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials in violation of any Environmental Law, (c) any exposure to any Hazardous Materials in violation of any Environmental Law, (d) the Release or threatened Release of any Hazardous Materials in violation of any Environmental Law, or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing. “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute. “ERISA Affiliate” shall mean any trade or business (whether or not incorporated), which, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for the purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code. “ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator appointed by the PBGC of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect 6 -------------------------------------------------------------------------------- to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA. “Event of Default” shall have the meaning provided in Article VIII. “Excluded Taxes” shall mean with respect to the Administrative Agent, any Lender, or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which any Lender is located and (c) in the case of a Foreign Lender, any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Foreign Lender’s failure to comply with Section 2.21(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.21(a). “Federal Funds Rate” shall mean, for any day, the rate per annum (rounded upwards, if necessary, to the next 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with member banks of the Federal Reserve System arranged by Federal funds brokers, as published by the Federal Reserve Bank of New York on the next succeeding Business Day or if such rate is not so published for any Business Day, the Federal Funds Rate for such day shall be the average rounded upwards, if necessary, to the next 1/100th of 1% of the quotations for such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by the Administrative Agent. “Fixed Charge Coverage Ratio” shall mean, as of any date, the ratio of (a) Consolidated EBITDA minus the actual amount paid by Borrower and its Subsidiaries in cash during such period on account of income tax expenses and minus the actual amount paid by Borrower and its Subsidiaries in cash during such period on account of Capital Expenditures, except to the extent that any such Capital Expenditure was paid for with the direct proceeds of any Indebtedness other than the Loans, all as determined on a consolidated basis in accordance with GAAP, to (b) Consolidated Fixed Charges for such period to the extent payable in cash during such period, in each case measured for the four consecutive fiscal quarters ending on or immediately prior to such date. “Foreign Lender” shall mean any Lender that is not a United States person under Section 7701(a)(3) of the Code. “Foreign Subsidiary” shall mean any Subsidiary that is organized under the laws of a jurisdiction other than one of the fifty states of the United States of America. “Funded Debt” shall mean and include all Indebtedness for money borrowed, Indebtedness evidenced or secured by purchase money Liens, Capital Lease Obligations, and conditional sales contracts and similar title retention debt instruments (regardless of when such Indebtedness matures). 7 -------------------------------------------------------------------------------- “GAAP” shall mean generally accepted accounting principles in the United States applied on a consistent basis and subject to the terms of Section 1.3. “Governmental Authority” shall mean the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government. “Guarantee” or “Guaranty” of or by any Person (the “guarantor”) shall mean any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly and including any obligation, direct or indirect, of the guarantor (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued in support of such Indebtedness or obligation; provided, that the term “Guarantee” shall not include endorsements for collection or deposits in the ordinary course of business. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which Guarantee is made or, if not so stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith. The term “Guarantee” used as a verb has a corresponding meaning. “Hazardous Materials” means all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes, and all other substances of wastes of any nature regulated pursuant to any Environmental Law. “Hedging Agreements” shall mean interest rate swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts, commodity agreements and other similar agreements or arrangements designed to protect against fluctuations in interest rates, currency values or commodity values and any transaction (including an agreement with respect thereto) now existing or hereafter entered into by any such Person that is a rate swap, basis swap, forward rate transaction, commodity swap, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collateral transaction, forward transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof, whether linked to one or more interest rates, foreign currencies, commodity prices, equity prices or other financial measures. 8 -------------------------------------------------------------------------------- “Hedging Obligations” of any Person shall mean any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired under (i) any and all Hedging Agreements, (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any Hedging Agreements and (iii) any and all renewals, extensions and modifications of any Hedging Agreements and any and all substitutions for any Hedging Agreements. “Indebtedness” of any Person shall mean, without duplication (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person in respect of the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of business; provided, that for purposes of Section 8.1(f), trade payables overdue by more than 120 days shall be included in this definition except to the extent that any of such trade payables are being disputed in good faith and by appropriate measures), (iv) all obligations of such Person under any conditional sale or other title retention agreement(s) relating to property acquired by such Person, (v) all Capital Lease Obligations of such Person, (vi) all obligations, contingent or otherwise, of such Person in respect of letters of credit, acceptances or similar extensions of credit, (vii) all Guarantees of such Person of the type of Indebtedness described in clauses (i) through (vi) above, (viii) all Indebtedness of a third party secured by any Lien on property owned by such Person, whether or not such Indebtedness has been assumed by such Person, (ix) Off-Balance Sheet Liabilities, and (x) all Hedging Obligations. The Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner or a joint venturer, except to the extent that the terms of such Indebtedness provide that such Person is not liable therefor. “Indemnified Taxes” shall mean Taxes other than Excluded Taxes. “Indemnity and Contribution Agreement” shall mean the Indemnity, Subrogation and Contribution Agreement, substantially in the form of Exhibit G, among the Borrower, the Subsidiary Loan Parties and the Administrative Agent. “Index Rate” shall mean the rate per annum equal to the London Interbank Offered Rate for deposits in U.S. dollars for a one (1) month period, which rate appears on the page of Bloomberg Financial Markets reporting service (or such similar service as determined by the Administrative Agent) that displays British Bankers’ Association interest settlement rates for deposits in U.S. Dollars, as of 11:00 A.M. (London, England time) two (2) Business Days prior to the Index Rate Determination Date; provided, that if no such offered rate appears on such page, the rate used for such period will be the per annum rate of interest determined by the Administrative Agent to be the rate at which U.S. dollar deposits for such period, are offered to the Administrative Agent in the London Inter-Bank Market as of 11:00 A.M. (London, England time), on the day which is two (2) Business Days prior to the Index Rate Determination Date. “Index Rate Borrowing” and “Index Rate Loan” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, bears interest at a rate determined by reference to the Index Rate. “Index Rate Determination Date” means the Closing Date and the first Business Day of each calendar month thereafter. “Lenders” shall have the meaning assigned to such term in the opening paragraph of this Agreement and shall include, where appropriate, the Swingline Lender. 9 -------------------------------------------------------------------------------- “Leverage Ratio” shall mean, as of any date of determination with respect to the Borrower, the ratio of (i) Consolidated Funded Debt as of such date to (ii) Consolidated EBITDA for the four consecutive fiscal quarters ending on or immediately prior to such date. “Lien” shall mean any mortgage, pledge, security interest, lien (statutory or otherwise), charge, encumbrance, hypothecation, assignment, deposit arrangement, or other arrangement having the practical effect of the foregoing or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having the same economic effect as any of the foregoing). “Loan Documents” shall mean, collectively, this Agreement, the Notes, all Notices of Borrowing, the Subsidiary Guaranty Agreement, the Indemnity and Contribution Agreement, the Security Agreement, and any and all other instruments, agreements, documents and writings executed in connection with any of the foregoing. “Loan Parties” shall mean the Borrower and the Subsidiary Loan Parties. “Loans” shall mean all Revolving Loans and Swingline Loans in the aggregate or any of them, as the context shall require. “Material Adverse Effect” shall mean, with respect to any event, act, condition or occurrence of whatever nature (including any adverse determination in any litigation, arbitration, or governmental investigation or proceeding), whether singularly or in conjunction with any other related event or events, act or acts, condition or conditions, occurrence or occurrences, a material adverse change in, or a material adverse effect on, (i) the business, results of operations, financial condition, assets, or liabilities of the Borrower and of the Borrower and its Subsidiaries taken as a whole, (ii) the ability of the Loan Parties to perform any of their respective obligations under the Loan Documents, (iii) the rights and remedies of the Administrative Agent, the Lenders and the Swingline Lender under any of the Loan Documents or (iv) the legality, validity or enforceability of any of the Loan Documents. “Material Indebtedness” shall mean Indebtedness (other than the Loans) plus any obligations in respect of one or more Hedging Agreements, of any one or more of the Borrower and the Subsidiaries in an aggregate principal amount exceeding One Million Dollars ($1,000,000.00) during any calendar quarter. For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Borrower or any Subsidiary in respect to any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Hedging Agreement were terminated at such time. “Moody’s” shall mean Moody’s Investors Service, Inc. “Multiemployer Plan” shall have the meaning set forth in Section 4001(a)(3) of ERISA. “Notes” shall mean, collectively, the Revolving Credit Notes and the Swingline Note. “Notices of Borrowing” shall mean, collectively, the Notices of Revolving Borrowing, and the Notices of Swingline Borrowing. 10 -------------------------------------------------------------------------------- “Notice of Revolving Borrowing” shall have the meaning as set forth in Section 2.3. “Notice of Swingline Borrowing” shall have the meaning as set forth in Section 2.5. “Obligations” shall mean all amounts owing by the Borrower to the Administrative Agent or any Lender (including the Swingline Lender) pursuant to or in connection with this Agreement or any other Loan Document, including without limitation, all principal, interest (including any interest accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or like proceeding relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), all reimbursement obligations, fees, expenses, indemnification and reimbursement payments, costs and expenses (including all fees and expenses of counsel to the Administrative Agent and any Lender (including the Swingline Lender) incurred pursuant to this Agreement or any other Loan Document), the due and punctual payment and performance of all obligations of Borrower in respect of overdrafts and related liabilities owed to the Administrative Agent and any Lender (including the Swingline Lender) arising from treasury, depositary and cash management services or in connection with any automated clearinghouse transfer of funds, whether direct or indirect, absolute or contingent, liquidated or unliquidated, now existing or hereafter arising hereunder or thereunder, and all Hedging Obligations owed to the Administrative Agent, any Lender or any of their Affiliates incurred in order to limit interest rate or fee fluctuation with respect to the Loans, and all obligations and liabilities incurred in connection with collecting and enforcing the foregoing, together with all renewals, extensions, modifications or refinancings thereof. “Off-Balance Sheet Liabilities” of any Person shall mean (i) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (ii) any liability of such Person under any sale and leaseback transactions which do not create a liability on the balance sheet of such Person, (iii) any liability of such Person under any so-called “synthetic” lease transaction or (iv) any obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheet of such Person. “Other Taxes” shall mean any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document. “Participant” shall have the meaning set forth in Section 10.4(c). “Payment Office” shall mean the office of the Administrative Agent located at 5080 Newberry Road, Gainesville, Florida 32607, or such other location as to which the Administrative Agent shall have given written notice to the
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