UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 9, 2011

 

MOLINA HEALTHCARE, INC.

(Exact name of registrant as specified in its charter)

Delaware		1-31719		13-4204626
(State of incorporation)		(Commission File Number)		(I.R.S. Employer Identification Number)

200 Oceangate, Suite 100, Long Beach, California 90802
(Address of principal executive offices)

Registrant’s telephone number, including area code: (562) 435-3666

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

     o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 1.01. Entry into a Material Definitive Agreement.

     On September 9, 2011, Molina Healthcare, Inc. (the “Company”) entered into a Credit Agreement (the “Credit Agreement”) for a $170 million revolving credit facility with various lenders and U.S. Bank National Association, as LC Issuer, Swing Line Lender, and Administrative Agent. The credit facility will be used for general corporate purposes.

     The credit facility has a term of five years and all amounts outstanding under the credit facility will be due and payable on September 9, 2016. Subject to obtaining commitments from existing or new lenders and satisfaction of other specified conditions, the Company may increase the credit facility to up to $195 million.

     Borrowings under the credit facility will bear interest based, at the Company’s election, on the base rate plus an applicable margin or the Eurodollar rate. The base rate is, for any day, a rate of interest per annum equal to the highest of (i) the prime rate of interest announced from time to time by U.S. Bank or its parent, (ii) the sum of the federal funds rate for such day plus 0.50% per annum and (iii) the Eurodollar rate (without giving effect to the applicable margin) for a one month interest period on such day (or if such day is not a business day, the immediately preceding business day) plus 1.00%. The Eurodollar rate is a reserve adjusted rate at which Eurodollar deposits are offered in the interbank Eurodollar market plus an applicable margin. In addition to interest payable on the principal amount of indebtedness outstanding from time to time under the Credit Agreement, the Company is required to pay a quarterly commitment fee of 0.25% to 0.50% (based upon the Company’s leverage ratio) of the unused amount of the lenders’ commitments under the Credit Agreement. The initial commitment fee shall be set at 0.35% until the Company’s delivery of its financials for the quarter ended September 30, 2011. The applicable margins range between 0.75% to 1.75% for base rate loans and 1.75% to 2.75% for Eurodollar loans, in each case, based upon the Company’s leverage ratio.

     The Company’s obligations under the Credit Agreement are secured by a lien on substantially all of the Company’s assets, with the exception of certain of its real estate assets, and by a pledge of the capital stock or membership interests of its operating subsidiaries and health plans (with the exception of the California health plan).

     The credit agreement includes usual and customary covenants for credit facilities of this type, including covenants limiting liens, mergers, asset sales, other fundamental changes, debt, acquisitions, dividends and other distributions, capital expenditures, and investments. The credit agreement also requires the Company to maintain a ratio of total consolidated debt to total consolidated EBITDA of not more than 2.75 to 1.00 as of the end of each fiscal quarter and a fixed charge coverage ratio of not less than 1.75 to 1.00.

     In the event of a default by the Company under the credit agreement, including cross-defaults relating to specified other debt of the Company in excess of $20 million, the lenders may terminate the commitments under the credit agreement and declare the amounts outstanding, including all accrued interest and unpaid fees, payable immediately. In addition, the lenders may enforce any and all rights and remedies created under the credit facility or applicable law.

     In addition to U.S. Bank National Association, the additional members of the syndicate include: Union Bank, N.A., City National Bank, BMO Harris Bank, N.A., East West Bank, BOKF NA dba Bank of Albuquerque, Santa Barbara Bank & Trust, Land Bank of Taiwan Los Angeles Branch, and Hua Nan Commercial Bank Ltd., Los Angeles Branch.

     The agents and certain lenders under the credit facility and their affiliates may have in the past provided, and each of the agents and lenders may in the future provide, lending, commercial banking, and other financial and advisory services to the Company in the ordinary course of their respective businesses. These parties have received, and may in the future receive, customary compensation from the Company for such services.

     A copy of the Credit Agreement is attached as Exhibit 10.1 and is incorporated herein by reference. The foregoing summary of the terms of the credit agreement does not purport to be complete and is qualified in its entirety by reference to the Credit Agreement.

Item 1.02. Termination of a Material Definitive Agreement.

     On September 9, 2011, in connection with the Company’s entering into the Credit Agreement discussed under Item 1.01, the Company terminated our existing credit agreement with Bank of America, dated March 9, 2005, as amended to date, which had provided the Company with a $150 million revolving credit facility.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

     The information in Item 1.01 with respect to the $170 million five-year revolving Credit Agreement is hereby incorporated by reference.

Item 9.01. Financial Statements and Exhibits.

     (d) Exhibits:

Exhibit
No.		Description
10.1		Credit Agreement, dated as of September 9, 2011, among Molina Healthcare, Inc., certain lenders and U.S. Bank National Association, as LC Issuer, Swing Line Lender and Administrative Agent.

SIGNATURE

          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EXHIBIT INDEX

Exhibit
No.		Description
10.1		Credit Agreement, dated as of September 9, 2011, among Molina Healthcare, Inc., certain lenders and U.S. Bank National Association, as LC Issuer, Swing Line Lender, and Administrative Agent.

Exhibit 10.1

CREDIT AGREEMENT

DATED AS OF SEPTEMBER 9, 2011

AMONG

MOLINA HEALTHCARE, INC.,

THE LENDERS,

U.S. BANK NATIONAL ASSOCIATION
AS ADMINISTRATIVE AGENT

AND

U.S. BANK NATIONAL ASSOCIATION
AS LEAD ARRANGER AND SOLE BOOK RUNNER

AND

CITY NATIONAL BANK AND
UNION BANK, N.A.
AS CO-SYNDICATION AGENTS

Table of Contents

		Page
ARTICLE I DEFINITIONS			1
1.1. Definitions			1
1.2. Pro Forma Calculations			27
ARTICLE II THE CREDITS			27
2.1. Commitment			27
2.2. Required Payments; Termination			27
2.3. Ratable Loans; Types of Advances			27
2.4. Swing Line Loans			28
2.5. Commitment Fee			29
2.6. Minimum Amount of Each Advance			29
2.7. Reductions in Aggregate Commitment; Optional Principal Payments			29
2.8. Method of Selecting Types and Interest Periods for New Advances			29
2.9. Conversion and Continuation of Outstanding Advances; Maximum Number of Interest Periods			30
2.10. Interest Rates			30
2.11. Rates Applicable After Event of Default			31
2.12. Method of Payment			31
2.13. Noteless Agreement; Evidence of Indebtedness			31
2.14. Telephonic Notices			32
2.15. Interest Payment Dates; Interest and Fee Basis			32
2.16. Notification of Advances, Interest Rates, Prepayments and Commitment Reductions			32
2.17. Lending Installations			33
2.18. Non-Receipt of Funds by the Administrative Agent			33
2.19. Facility LCs			33
2.20. Replacement of Lender			37
2.21. Limitation of Interest			37
2.22. Defaulting Lenders			38
2.23. Increase Option			40
ARTICLE III YIELD PROTECTION; TAXES			40
3.1. Yield Protection			40
3.2. Changes in Capital Adequacy Regulations			41
3.3. Availability of Types of Advances; Adequacy of Interest Rate			42
3.4. Funding Indemnification			42
3.5. Taxes			42
3.6. Selection of Lending Installation; Mitigation Obligations; Lender Statements; Survival of Indemnity			45

		Page
ARTICLE IV CONDITIONS PRECEDENT			45
4.1. Initial Credit Extension			45
4.2. Each Credit Extension			46
ARTICLE V REPRESENTATIONS AND WARRANTIES			46
5.1. Existence, Qualification and Power			46
5.2. Authorization; No Contravention			47
5.3. Governmental Authorization; Other Consents			47
5.4. Binding Effect			47
5.5. Financial Statements; No Material Adverse Effect			47
5.6. Litigation			48
5.7. No Default			48
5.8. Subsidiaries			48
5.9. Ownership of Personal Property; Liens			48
5.10. Intellectual Property; Licenses, Etc			48
5.11. Real Estate; Leases			49
5.12. Environmental Matters			49
5.13. Security Documents			50
5.14. Insurance			50
5.15. Taxes			50
5.16. ERISA Compliance			51
5.17. Margin Regulations; Investment Company Act			51
5.18. Disclosure			52
5.19. Compliance with Laws			52
5.20. Labor Matters			52
5.21. Licensing			53
5.22. Solvency			53
5.23. Borrower Identification			53
ARTICLE VI COVENANTS			54
6.1. Financial Statements			54
6.2. Certificates; Other Information			57
6.3. Notices			56
6.4. Payment of Obligations			58
6.5. Preservation of Existence			58
6.6. Maintenance of Properties			58
6.7. Maintenance of Insurance			58
6.8. Reinsurance Arrangements			59
6.9. Compliance with Laws			59
6.10. Books and Records			59
6.11. Inspection Rights			59
6.12. Use of Proceeds			59
6.13. Further Assurances with Respect to Non-Regulated Subsidiaries			59
6.14. Further Assurances with Respect to Regulated Subsidiaries			60
6.15. Further Assurances with Respect to other Collateral			61

		Page
6.16. Performance of Material Contracts			63
6.17. Maintenance of Licensing, Etc			63
6.18. [Intentionally Omitted].			63
6.19. Liens			63
6.20. Investments			65
6.21. Indebtedness			66
6.22. Fundamental Changes and Acquisitions			68
6.23. Dispositions			69
6.24. Restricted Payments			70
6.25. Amendment, Etc. of Indebtedness and Constitutive Documents and Payments in respect of Indebtedness			71
6.26. Change in Nature of Business			71
6.27. Transactions with Affiliates			71
6.28. Limitations on Restricted Actions			72
6.29. Margin Stock			72
6.30. Impairment of Security Interests			72
6.31. Ownership of Subsidiaries and Other Restrictions Relating to Subsidiaries			72
6.32. Fiscal Year			72
6.33. Partnerships, etc			72
6.34. Financial Covenants			73
6.35. Statutory Net Worth Ratio			73
ARTICLE VII DEFAULTS			73
7.1. Non-Payment			73
7.2. Specific Covenants			73
7.3. Other Defaults			73
7.4. Representations and Warranties			73
7.5. Cross-Default			73
7.6. Insolvency Proceedings, Etc			74
7.7. Inability to Pay Debts; Attachment			74
7.8. Judgments			74
7.9. ERISA			74
7.10. Invalidity of Loan Documents			75
7.11. Subsidiary Guaranty			75
7.12. Change of Control			75
7.13. Exclusion Event			75
ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES			75
8.1. Acceleration; Remedies			75
8.2. Application of Funds			76
8.3. Amendments			77
8.4. Preservation of Rights			77

		Page
ARTICLE IX GENERAL PROVISIONS			78
9.1. Survival of Representations			78
9.2. Governmental Regulation			78
9.3. Headings			78
9.4. Entire Agreement			78
9.5. Several Obligations; Benefits of this Agreement			78
9.6. Expenses; Indemnification			78
9.7. [Intentionally Omitted]			79
9.8. Accounting			79
9.9. Severability of Provisions			80
9.10. Nonliability of Lenders			80
9.11. Confidentiality			80
9.12. Nonreliance			81
9.13. Disclosure			81
9.14. USA PATRIOT ACT NOTIFICATION			81
ARTICLE X THE ADMINISTRATIVE AGENT			81
10.1. Appointment; Nature of Relationship			81
10.2. Powers			81
10.3. General Immunity			82
10.4. No Responsibility for Loans, Recitals, etc			82
10.5. Action on Instructions of Lenders			82
10.6. Employment of Administrative Agents and Counsel			82
10.7. Reliance on Documents; Counsel			82
10.8. Administrative Agent’s Reimbursement and Indemnification			83
10.9. Notice of Event of Default			83
10.10. Rights as a Lender			83
10.11. Lender Credit Decision, Legal Representation			83
10.12. Successor Administrative Agent			84
10.13. Administrative Agent and Arranger Fees			85
10.14. Delegation to Affiliates			85
10.15. Execution of Collateral Documents			85
10.16. Collateral Releases			85
10.17. Co-Syndication Agents, etc			85
10.18. No Advisory or Fiduciary Responsibility			85
10.19. Enforcement.			85
ARTICLE XI SETOFF; RATABLE PAYMENTS			86
11.1. Setoff			86
11.2. Ratable Payments			86
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS			86
12.1. Successors and Assigns			86
12.2. Participations			87
12.3. Assignments			88
12.4. Dissemination of Information			89
12.5. Tax Treatment			89

		Page
ARTICLE XIII NOTICES			90
13.1. Notices; Effectiveness; Electronic Communication			90
ARTICLE XIV COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION			91
14.1. Counterparts; Effectiveness			91
14.2. Electronic Execution of Assignments			91
ARTICLE XV CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL			91
15.1. Choice of Law			91
15.2. Consent to Jurisdiction			91
15.3. Waiver of Jury Trial			92

SCHEDULES

PRICING SCHEDULE

SCHEDULE I — Commitments

SCHEDULE 1 — Initial Guarantors

SCHEDULE 2.19 — Existing Facility LCs

SCHEDULE 5.3 — Third Party Consents

SCHEDULE 5.8 — Subsidiaries and Other Equity Investments

SCHEDULE 5.11 — Fee Properties; Leased Properties

SCHEDULE 5.14 — Insurance

SCHEDULE 5.20 — Labor Matters

SCHEDULE 5.23 — Borrower Identification

SCHEDULE 6.19 — Liens

SCHEDULE 6.20 — Investments

SCHEDULE 6.21 — Indebtedness

SCHEDULE 6.27 — Transactions with Affiliates

EXHIBITS

EXHIBIT A — Form of Compliance Certificate

EXHIBIT B — Form of Assignment and Assumption Agreement

EXHIBIT C — Form of Borrowing Notice

EXHIBIT D — Form of Note

EXHIBIT E — Form of Increasing Lender Supplement

EXHIBIT F — Form of Augmenting Lender Supplement

EXHIBIT G — List of Closing Documents

EXHIBIT H — Form of Joinder Agreement

EXHIBIT I — Form of Mortgage

EXHIBIT J — Form of Pledge Agreement

EXHIBIT K — Form of Security Agreement

EXHIBIT L — Form of Subsidiary Guaranty

EXHIBIT M-1 — Form of Legal Opinion of External Counsel

EXHIBIT M-2 — Form of Legal Opinion of In-House Counsel

CREDIT AGREEMENT

     This Credit Agreement (the “Agreement”), dated as of September 9, 2011, is among Molina Healthcare, Inc., the Lenders and U.S. Bank National Association, a national banking association, as LC Issuer, Swing Line Lender and as Administrative Agent. The parties hereto agree as follows:

ARTICLE I

DEFINITIONS

     1.1. Definitions. As used in this Agreement:

     “Account Control Agreement” means any Account Control Agreement in form and substance reasonably satisfactory to the Administrative Agent, as the same may be amended, restated, supplemented or otherwise modified from time to time in a manner reasonably satisfactory to the Administrative Agent.

     “Acquiring Party” means the Borrower, any other Loan Party or any wholly-owned Subsidiary of the Borrower whose stock is pledged pursuant to the Pledge Agreement who makes an Acquisition.

     “Acquisition”, by any Person, means the purchase or acquisition by such Person of any capital stock of another Person other than a Loan Party or all or any substantial portion of the Property (other than the capital stock) of another Person other than a Loan Party, whether involving a merger or consolidation with such other Person.

     “Act” shall have the meaning set forth in Section 9.14.

     “Actual Knowledge” means, as to any matter with respect to any Person, the actual knowledge of such matter by a Responsible Officer of such Person, it being understood in any event that “Actual Knowledge” shall be deemed to exist upon receipt of notice of such matter by a Responsible Officer.

     “Administrative Agent” means U.S. Bank in its capacity as contractual representative of the Lenders pursuant to Article X, and not in its individual capacity as a Lender, and any successor Administrative Agent appointed pursuant to Article X.

     “Advance” means a borrowing hereunder, (i) made by some or all of the Lenders on the same Borrowing Date, or (ii) converted or continued by the Lenders on the same date of conversion or continuation, consisting, in either case, of the aggregate amount of the several Loans of the same Type and, in the case of Eurodollar Loans, for the same Interest Period. The term “Advance” shall include Swing Line Loans unless otherwise expressly provided.

     “Affected Foreign Subsidiary” means any “controlled foreign corporation” within the meaning of Section 957 of the Code, to the extent a pledge of such Foreign Subsidiary’s Equity Interests would cause a Deemed Dividend Problem.

     “Affected Lender” shall have the meaning set forth in Section 2.20.

     “Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified; “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise, and “Controlling” and “Controlled” have meanings correlative thereto.

     “Aggregate Commitment” means the aggregate of the Commitments of all the Lenders, as reduced from time to time pursuant to the terms hereof. As of the date of this Agreement, the Aggregate Commitment is $170,000,000.

     “Aggregate Outstanding Credit Exposure” means, at any time, the aggregate of the Outstanding Credit Exposure of all the Lenders.

     “Agreement” means this Credit Agreement, as it may be amended or modified and in effect from time to time.

     “Alternate Base Rate” means, for any day, a rate of interest per annum equal to the highest of (i) the Prime Rate for such day, (ii) the sum of the Federal Funds Effective Rate for such day plus 0.50% per annum and (iii) the Eurodollar Rate (without giving effect to the Applicable Margin) for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1.00%, provided that, for the avoidance of doubt, the Eurodollar Rate for any day shall be based on the rate reported by the applicable financial information service at approximately 11:00 a.m. London time on such day.

     “Applicable Fee Rate” means, at any time, the percentage rate per annum at which Commitment Fees are accruing on the unused portion of the Aggregate Commitment at such time as set forth in the Pricing Schedule.

     “Applicable Margin” means, with respect to Advances of any Type at any time, the percentage rate per annum which is applicable at such time with respect to Advances of such Type as set forth in the Pricing Schedule.

     “Applicable Pledge Percentage” means 100% but 65% in the case of a pledge by the Borrower or any Domestic Subsidiary of its Equity Interests in an Affected Foreign Subsidiary.

     “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

     “Arco” means the real property with a street address of 200 & 300 Oceangate, Long Beach, California, 90802, and the office project, all fixtures and other improvements located at such location.

     “Arranger” means U.S. Bank, and its successors, in its capacity as Lead Arranger and Sole Book Runner.

     “Article” means an article of this Agreement unless another document is specifically referenced.

     “Attributable Indebtedness” means, on any date, in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP.

     “Audited Financial Statements” means the audited consolidated balance sheet of the Borrower and the Subsidiaries for the fiscal year ended December 31, 2010, and the related consolidated statements of income or operations, stockholders’ equity and cash flows for such fiscal year of the Borrower and the Subsidiaries, including the notes thereto.

     “Augmenting Lender” shall have the meaning set forth in Section 2.23.

     “Authorized Officer” means any of the Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer or General Counsel of a Loan Party, acting singly.

     “Available Aggregate Commitment” means, at any time, the Aggregate Commitment then in effect minus the Aggregate Outstanding Credit Exposure at such time.

     “Base Rate” means, for any day, a rate per annum equal to (i) the Alternate Base Rate for such day plus (ii) the Applicable Margin, in each case changing when and as the Alternate Base Rate changes.

     “Base Rate Advance” means an Advance which, except as otherwise provided in Section 2.11, bears interest at the Base Rate.

     “Base Rate Loan” means a Loan which, except as otherwise provided in Section 2.11, bears interest at the Base Rate.

     “Borrower” means Molina Healthcare, Inc., a Delaware corporation, and its successors and assigns.

     “Borrowing Date” means a date on which an Advance is made or a Facility LC is issued hereunder.

     “Borrowing Notice” shall have the meaning set forth in Section 2.8.

     “Business Day” means (i) with respect to any borrowing, payment or rate selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on which banks generally are open in New York City, New York, and London, England, for the conduct of substantially all of their commercial lending activities, interbank wire transfers can be made on the Fedwire system and dealings in Dollars are carried on in the London interbank market and (ii) for all other purposes, a day (other than a Saturday or Sunday) on which banks generally are open in New York City, New York, for the conduct of substantially all of their commercial lending activities and interbank wire transfers can be made on the Fedwire system.

     “Businesses” shall have the meaning set forth in Section 5.12.

     “Capital Expenditures” means, for any period for any Person, without duplication (a) all expenditures made directly or indirectly during such period for Capital Assets (whether paid in cash or other consideration or accrued as a liability and including, without limitation, all expenditures for maintenance and repairs which are required, in accordance with GAAP, to be capitalized on the books of such Person) and (b) solely to the extent not otherwise included in clause (a) of this definition, the aggregate principal amount of all Indebtedness (including, without limitation, obligations in respect of Capitalized Leases) assumed or incurred during such period to finance any such expenditures for Capital Assets. For purposes of this definition, (i) Permitted Acquisitions shall not be included in Capital Expenditures, and (ii) the purchase price of equipment that is purchased simultaneously with the trade-in of existing assets, equipment or other property or with insurance proceeds, condemnation awards or other settlements in respect of lost, destroyed, damaged or condemned assets, equipment or other property shall be included in Capital Expenditures only to the extent of the gross amount by which such purchase price exceeds the credit granted by the seller of such asset, equipment or other property for the asset, equipment or other property being traded in at such time or the amount of such insurance proceeds, as the case may be.

     “Capitalized Lease” means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee which in accordance with GAAP, is or should be accounted for, as a capital lease on the balance sheet of such Person.

     “Cash Equivalents” means:

     (a) securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) having maturities of not more than twelve (12) months from the date of acquisition;

     (b) marketable obligations issued by any State of the United States of America or any local government or other political subdivision thereof rated (at the time of acquisition of such security) at least “AA” by S&P or the equivalent thereof by Moody’s having maturities of not more than one year from the date of acquisition;

     (c) certificates of deposit maturing not more than twelve (12) months from the date of acquisition thereof issued by a commercial bank or trust company organized under the laws of the United States of America or a state thereof or that is a Lender or the parent company of a Lender, provided that (i) such deposits are denominated in Dollars, (ii) such bank or trust company has capital, surplus and undivided profits of not less than $100,000,000 and (iii) such bank or trust company has certificates of deposit or other debt obligations rated at least “A-1” (or its equivalent) by S&P or “P-1” (or its equivalent) by Moody’s;

     (d) commercial paper and variable or fixed rate notes issued by any Lender or by the parent company of any Lender and commercial paper and variable rate notes issued by, or guaranteed by, any industrial or financial company with a short-term commercial paper rating (at the time of acquisition of such security) of at least “A-1” or the equivalent thereof by S&P or at least “P-1” or the equivalent thereof by Moody’s, or guaranteed by any industrial company with a long-term unsecured debt rating (at the time of at least “Aa” or the equivalent thereof by Moody’s) and in each case maturing within one year after the date of acquisition; and

     (e) repurchase agreements with any Lender or any primary dealer maturing within one (1) year from the date of acquisition that are fully collateralized by investment instruments that would otherwise be Cash Equivalents; provided that the terms of such repurchase agreements comply with the guidelines set forth in the “Federal Financial Institutions Examinations Council Supervisory Policy — Repurchase Agreements of Depository Institutions With Securities Dealers and Others, as adopted by the Comptroller of the Currency in October 31, 1985”.

     “Cash Management Obligations” of a Person means any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), with respect to any and all Cash Management Services.

     “Cash Management Services” means any banking services that are provided to the Borrower or any Subsidiary by the Administrative Agent or any of its Affiliates (other than pursuant to this Agreement), including without limitation: (a) credit cards, (b) credit card processing services, (c) debit cards, (d) purchase cards, (e) stored value cards, (f) automated clearing house or wire transfer services, or (g) treasury management, including controlled disbursement, consolidated account, lockbox, overdraft, return items, sweep and interstate depository network services.

     “Change of Control” means, with respect to any Person, an event or series of events by which:

     (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 promulgated under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 30% or more of the equity securities of such Person entitled to vote for members of the board of directors or equivalent governing body of such Person on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right); provided, however, that notwithstanding any of the foregoing, transfers of Equity Interests among members of the Molina Family and/or trusts beneficially owned by any member of the Molina Family shall not be considered a Change of Control hereunder; or

     (b) during any period of twelve (12) consecutive months, a majority of the members of the board of directors or other equivalent governing body of such Person ceases to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body (excluding, in the case of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any Person or group other than a solicitation for the election of one or more directors by or on behalf of the board of directors).

     “CMS” means the Centers for Medicare and Medicaid Services and any successor thereof.

     “Co-Syndication Agent” means each of City National Bank and Union Bank, N.A. in their respective capacities as co-syndication agents for the credit facility evidenced by this Agreement.

     “Code” means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time.

     “Collateral” means all the “Collateral” referred to in the Collateral Documents.

     “Collateral Documents” means, collectively, the Security Agreement, the Pledge Agreement, each Account Control Agreement, each Mortgage, each Intellectual Property Security Agreement and any other security agreements, pledge agreements or similar instruments delivered to the Administrative Agent from time to time pursuant to Sections 6.13, 6.14 and 6.15.

     “Collateral Shortfall Amount” shall have the meaning set forth in Section 8.1.

     “Commitment” means, for each Lender, the obligation of such Lender to make Revolving Loans to, and participate in Facility LCs issued upon the application of, the Borrower in an aggregate amount

not exceeding the amount set forth on Schedule I, as it may be modified as a result of any assignment that has become effective pursuant to Section 12.3(b) or as otherwise modified from time to time pursuant to the terms hereof.

     “Company Action Level” means the Company Action Level risk-based capital threshold, as defined by the HMO Model Act or comparable act applicable to a Regulated Subsidiary.

     “Compliance Certificate” means a certificate substantially in the form of Exhibit A attached hereto.

     “Consolidated EBITDA” means Consolidated Net Income plus, to the extent deducted from revenues in determining Consolidated Net Income and without duplication, (i) Consolidated Interest Expense, (ii) expense for taxes paid in cash or accrued, (iii) depreciation expense, (iv) amortization expense, (v) extraordinary or non-recurring, non-cash expenses, charges or losses incurred other than in the ordinary course of business and (vi) non-cash charges related to stock based compensation expenses pursuant to the financial reporting guidance of the Financial Accounting Standards Board concerning stock-based compensation as in effect from time to time, minus, to the extent included in Consolidated Net Income, extraordinary or non-recurring, non-cash income or gains realized other than in the ordinary course of business.

     “Consolidated Funded Indebtedness” means, for the Borrower and the Subsidiaries determined on a consolidated basis in accordance with GAAP, as of any date of determination, the sum of (a) the outstanding principal amount of all obligations, whether current or long-term, for borrowed money (including Obligations hereunder) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments, (b) all purchase money Indebtedness (other than customary reservations of title under agreements with suppliers entered into in the ordinary course of business), (c) all direct obligations arising under letters of credit (including standby and commercial), bankers’ acceptances, including, without limitation, all unreimbursed drafts drawn thereunder, bank guaranties, surety bonds and similar instruments (less the amount of any cash collateral securing any such letters of credit and banker’s acceptances), (d) the outstanding principal amount of all obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business), (e) Attributable Indebtedness in respect of Capitalized Leases, (f) the attributed principal amount of Securitization Transactions, (g) all preferred stock or comparable Equity Interests providing for mandatory redemption, sinking fund or other like payments at any time prior to the Facility Termination Date, (h) without duplication, all Guarantees with respect to outstanding Indebtedness of the types specified in clauses (a) through (g) above, which shall include any Guarantee in connection with the purchase of Arco, and (i) all Indebtedness of the types referred to in clauses (a) through (h) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or joint venturer, unless such Indebtedness is expressly made non-recourse to such Person; provided, however, that Contingent Obligations arising as a result of surety bond requirements in connection with any MMIS Contract to which the Borrower or a Subsidiary is a party shall not be included in Consolidated Funded Indebtedness. To the extent that the rights and remedies of the obligee of any Consolidated Funded Indebtedness are limited to certain property or are otherwise non-recourse to the Borrower or any Subsidiary the amount of such Consolidated Funded Indebtedness shall be limited to the value of such Person’s interest in such property (valued at the higher of book value or market value as of such date of determination).

     “Consolidated Interest Expense” means, with reference to any period, the interest expense of the Borrower and its Subsidiaries calculated on a consolidated basis for such period.

     “Consolidated Net Income” means, for any period, the Net Income of the Borrower and the Subsidiaries on a consolidated basis for such period.

     “Consolidated Rent Expense” means, with reference to any period, the rent expense of the Borrower and its Subsidiaries calculated on a consolidated basis for such period, in accordance with GAAP.

     “Contingent Obligation” of a Person means any agreement, undertaking or arrangement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person, or otherwise assures any creditor of such other Person against loss, including, without limitation, any comfort letter, operating agreement, take-or-pay contract or the obligations of any such Person as general partner of a partnership with respect to the liabilities of the partnership.

     “Contract Provider” means any Person or any employee, agent or subcontractor of such Person who provides professional health care services under or pursuant to any contract with the Borrower or any of the Subsidiaries.

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

     “Conversion/Continuation Notice” shall have the meaning set forth in Section 2.9.

     “Convertible Debt” means Indebtedness that is convertible into common stock of the Borrower, cash or any combination thereof.

     “Credit Extension” means the making of an Advance or the issuance of a Facility LC hereunder.

     “Daily Eurodollar Base Rate” means, with respect to a Swing Line Loan, the applicable British Bankers’ Association Interest Settlement Rate for deposits in Dollars in the London interbank market for one month appearing on the applicable Reuters Screen LIBOR01 as of 11:00 a.m. (London time) on a Business Day, provided that, if the applicable Reuters Screen is not available to the Administrative Agent for any reason, the applicable Daily Eurodollar Base Rate for one month shall instead be the applicable British Bankers’ Association Interest Settlement Rate for deposits in Dollars for one month as reported by any other generally recognized financial information service selected by the Administrative Agent as of 11:00 a.m. (London time) on a Business Day, provided that, if no such British Bankers’ Association Interest Settlement Rate is available to the Administrative Agent, the applicable Daily Eurodollar Base Rate for one month shall instead be the rate determined by the Administrative Agent to be the rate at which U.S. Bank or one of its Affiliate banks offers to place deposits in Dollars with first-class banks in the interbank market at approximately 11:00 a.m. (London time) on a Business Day in the approximate amount of U.S. Bank’s relevant Swing Line Loan and having a maturity equal to one month. For purposes of determining any interest rate hereunder or under any other Loan Document which is based on the Daily Eurodollar Base Rate, such interest rate shall change as and when the Daily Eurodollar Base Rate shall change.

     “Daily Eurodollar Loan” means a Swing Line Loan which, except as otherwise provided in Section 2.11, bears interest at the Daily Eurodollar Rate.

     “Daily Eurodollar Rate” means, with respect to a Swing Line Loan, the sum of (a) the quotient of (i) the Daily Eurodollar Base Rate, divided by (ii) one minus the Reserve Requirement (expressed as a decimal) applicable to such Interest Period, plus (b) the Applicable Margin.

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

     “Deemed Dividend Problem” means, with respect to any Foreign Subsidiary, any portion of such Foreign Subsidiary’s accumulated and undistributed earnings and profits being deemed to be repatriated to the Borrower or the applicable parent Domestic Subsidiary for U.S. federal income tax purposes and the effect of such repatriation causing adverse tax consequences to the Borrower or such parent Domestic Subsidiary, in each case as determined by the Borrower in its commercially reasonable judgment acting in good faith and in consultation with its legal and tax advisors.

     “Default” means an event which but for the lapse of time or the giving of notice, or both, would constitute an Event of Default.

     “Default Rate” means an interest rate equal to (a) in the case of each Eurodollar Advance, the rate of interest for the remainder of the applicable Interest Period equal to the rate otherwise applicable to Eurodollar Advances for such Interest Period plus 2.00% per annum, (ii) in the case of each Base Rate Advance, the rate of interest equal to the Base Rate in effect from time to time plus 2.00% per annum and (iii) in the case of Facility LCs, the LC Fee plus 2.00% per annum.

     “Defaulting Lender” means any Lender, as determined by the Administrative Agent, that has (a) failed to fund any portion of its Loans or participations in Facility LCs or Swing Line Loans within two Business Days of the date such portion is required in the determination of the Administrative Agent to be funded by it hereunder, (b) notified the Borrower, the Administrative Agent, the LC Issuer, the Swing Line Lender or any Lender in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to that effect, (c) failed, within one Business Day after request by the Administrative Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund prospective Loans and participations in then outstanding Facility LCs and Swing Line Loans, (d) otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute, or (e) (i) become or is insolvent or has a parent company that has become or is insolvent or (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or custodian, appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment; provided, that a Lender shall not become a Defaulting Lender solely as the result of (x) the acquisition or maintenance of an ownership interest in such Lender or a Person controlling such Lender or (y) the exercise of control over a Lender or a Person controlling such Lender, in each case, by a Governmental Authority. Any determination by the Administrative Agent that a Lender is a Defaulting Lender will be conclusive and binding absent manifest error, and such Lender will be deemed to be a Defaulting Lender upon notification of such determination by the Administrative Agent to the Borrower, the LC Issuer, the Swing Line Lender and the Lenders.

     “Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith, but other than pursuant to any casualty or condemnation event.

     “Dollar” and “$” means the lawful currency of the United States of America.

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

     “Eligible Assignee” means (i) a Lender; (ii) an Approved Fund; (iii) a commercial bank organized under the laws of the United States, or any state thereof, and having total assets in excess of $3,000,000,000, calculated in accordance with the accounting principles prescribed by the regulatory authority applicable to such bank in its jurisdiction of organization; (iv) a commercial bank organized under the laws of any other country that is a member of the OECD, or a political subdivision of any such country, and having total assets in excess of $3,000,000,000, calculated in accordance with the accounting principles prescribed by the regulatory authority applicable to such bank in its jurisdiction of organization, so long as such bank is acting through a branch or agency located in the country in which it is organized or another country that is described in this clause (iv); or (v) the central bank of any country that is a member of the OECD; provided, however, that neither the Borrower nor an Affiliate of the Borrower shall qualify as an Eligible Assignee.

     “Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

     “Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any rule or regulation issued thereunder.

     “ERISA Affiliate” means any trade or business (whether or not incorporated) which together with the Borrower would be deemed to be a “single employer” within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

     “ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or

notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, or the treatment of a Plan amendment as a termination, under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

     “Eurodollar Advance” means an Advance which, except as otherwise provided in Section 2.11, bears interest at the applicable Eurodollar Rate.

     “Eurodollar Base Rate” means, with respect to a Eurodollar Advance for the relevant Interest Period, the applicable British Bankers’ Association Interest Settlement Rate for deposits in Dollars in the London interbank market appearing on the Reuters Screen LIBOR01 Page as of 11:00 a.m. (London time) on the Quotation Date for such Interest Period, and having a maturity equal to such Interest Period, provided that, if the applicable Reuters Screen is not available to the Administrative Agent for any reason, the applicable Eurodollar Base Rate for the relevant Interest Period shall instead be the applicable British Bankers’ Association Interest Settlement Rate for deposits in Dollars as reported by any other generally recognized financial information service selected by the Administrative Agent as of 11:00 a.m. (London time) on the Quotation Date for such Interest Period, and having a maturity equal to such Interest Period, provided that, if no such British Bankers’ Association Interest Settlement Rate is available to the Administrative Agent, the applicable Eurodollar Base Rate for the relevant Interest Period shall instead be the rate determined by the Administrative Agent to be the rate at which U.S. Bank or one of its Affiliate banks offers to place deposits in Dollars with first-class banks in the interbank market at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period, in the approximate amount of U.S. Bank’s relevant Eurodollar Loan and having a maturity equal to such Interest Period.

     “Eurodollar Loan” means a Loan which, except as otherwise provided in Section 2.11, bears interest at the applicable Eurodollar Rate.

     “Eurodollar Rate” means, with respect to a Eurodollar Advance for the relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base Rate applicable to such Interest Period, divided by (b) one minus the Reserve Requirement (expressed as a decimal) applicable to such Interest Period, plus (ii) the Applicable Margin.

     “Event of Default” shall have the meaning set forth in Article VII.

     “Evergreen Letter of Credit” shall have the meaning set forth in Section 2.19(d).

     “Excluded Subsidiary” means any Subsidiary of the Borrower which has assets of less than 1.00% of the total assets of the Borrower and the Subsidiaries as of the last day of the most recent fiscal year-ended of the Borrower for which the Borrower has delivered the Required Financial Information or has revenues of less than 1.00% of the total revenues of the Borrower and the Subsidiaries for the most recent fiscal year-ended of the Borrower for which the Borrower has delivered the Required Financial Information; provided, however, the aggregate amount of assets for all Excluded Subsidiaries under this definition shall not exceed 3.00% of the total assets of the Borrower and the Subsidiaries as of the last day of the most recent fiscal year-ended of the Borrower for which the Borrower has delivered the Required Financial Information and the aggregate amount of revenues for all Excluded Subsidiaries under this definition shall not exceed 3.00% of the total revenues of the Borrower and the Subsidiaries for the most

recent fiscal year-ended of the Borrower for which the Borrower has delivered the Required Financial Information.

     “Excluded Taxes” means, in the case of each Lender or applicable Lending Installation, the LC Issuer and the Administrative Agent, (a) taxes imposed on or measured by its overall net income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Lender, the LC Issuer or the Administrative Agent is incorporated or organized or the jurisdiction in which the Administrative Agent’s, the LC Issuer’s or such Lender’s principal executive office or such Lender’s applicable Lending Installation is located, (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which the Borrower is located, (c) in the case of a Non-U.S. Lender, any withholding tax that is imposed on amounts payable to such Non-U.S. Lender at the time such Non-U.S. Lender becomes a party hereto (or designates a new Lending Installation) except to the extent that such Non-U.S. Lender was entitled, at the time of assignment (or designation of a new Lending Installation), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 3.5 and (d) any U.S. federal withholding taxes imposed by FATCA.

     “Exclusion Event” means the exclusion of the Borrower or any of the Subsidiaries from participation in any Medical Reimbursement Program.

     “Exhibit” refers to an exhibit to this Agreement, unless another document is specifically referenced.

     “Existing Convertible Indebtedness” means the $200,000,000 in aggregate original principal amount of the Borrower’s 3.75% Convertible Senior Notes due 2014 issued on October 11, 2007.

     “Existing Credit Agreement” means that certain Amended and Restated Credit Agreement dated as of March 9, 2005 among the Borrower, certain lenders party thereto and Bank of America, N.A. as administrative agent, as amended.

     “Existing Facility LC” shall have the meaning set forth in Section 2.19(a).

     “Facility LC” shall have the meaning set forth in Section 2.19(a).

     “Facility LC Application” shall have the meaning set forth in Section 2.19(c).

     “Facility LC Collateral Account” shall have the meaning set forth in Section 2.19(k).

     “Facility Termination Date” means September 9, 2016, or any earlier date on which the Aggregate Commitment is reduced to zero or otherwise terminated pursuant to the terms hereof.

     “FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), and any current or future regulations or official interpretations thereof.

     “Federal Funds Effective Rate” means, for any day, an interest rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published for such day (or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 10:00 a.m. (New York time) on such day on such transactions received by the

Administrative Agent from three (3) Federal funds brokers of recognized standing selected by the Administrative Agent in its sole discretion.

     “Fee Letter” shall have the meaning set forth in Section 10.13.

     “Fixed Charge Coverage Ratio” means, for any period, the ratio of (a) the total for such period of (i) the sum of Consolidated EBITDA and Consolidated Rent Expense minus (ii) the sum of income taxes paid in cash by the Borrower and the Subsidiaries, all non-financed Capital Expenditures (excluding any portion of Capital Expenditures required in connection with any MMIS Contract to which the Borrower or its Subsidiaries are a party that are reimbursable from a Governmental Authority and any Capital Expenditures, to the extent not in excess of $80,000,000, made in connection with the purchase of Arco) and cash dividends paid by the Borrower to (b) the sum for such period of Consolidated Rent Expense, interest payable on all Indebtedness for borrowed money (including interest payments on all Indebtedness incurred in connection with the purchase of Arco, but excluding non-cash interest charges on Convertible Debt determined in accordance with Accounting Standards Codification Subtopic 470-20 until the maturity date of such Convertible Debt), and scheduled principal payments on all Indebtedness for borrowed money (but excluding the repayment in full of any Indebtedness for borrowed money at the scheduled maturity thereof).

     “Foreign Subsidiary” means any Subsidiary organized under the laws of a jurisdiction not located in the United States of America.

     “Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

     “GAAP” means generally accepted accounting principles as in effect from time to time in the United States, applied in a manner consistent with that used in preparing the financial statements referred to in Section 5.4.

     “Governmental Authority” means 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 supra-national bodies such as the European Union or the European Central Bank).

     “Governmental Reimbursement Program Cost” means with respect to and payable by the Borrower and the Subsidiaries, the sum of:

     (a) all amounts (including punitive and other similar amounts) agreed to be paid or payable (i) in settlement of claims made pursuant to any litigation, suit, arbitration, investigation or other legal or administrative proceeding relating to a dispute or (ii) as a result of a final, non-appealable judgment, award or similar order, in each case, relating to participation in Medical Reimbursement Programs;

     (b) all final, non-appealable fines, penalties, forfeitures or other amounts rendered pursuant to criminal indictments or other criminal proceedings relating to participation in Medical Reimbursement Programs; and

     (c) the amount of final, non-appealable recovery, damages, awards, penalties, forfeitures or similar amounts rendered in any litigation, suit, arbitration, investigation or other

legal or administrative proceeding of any kind relating to participation in Medical Reimbursement Programs.

     “Grantor” means each Guarantor who executes the Collateral Documents and each other Guarantor that joins the Collateral Documents as a Grantor pursuant to the terms of Section 6.13, together with their permitted successors and assigns.

     “Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien); provided that 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 related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

     “Guarantor” means each Non-Regulated Domestic Subsidiary that is not an Excluded Subsidiary and that is a party to the Subsidiary Guaranty, either on the date hereof or pursuant to the terms of Section 6.13, and its successors and assigns; provided, no Subsidiary that holds title to the Specified Real Estate, nor any entity in which the Borrower and/or any Subsidiary holds a minority interest shall be deemed a Guarantor. The Guarantors on the date hereof are identified as such in Schedule 1 hereto.

     “Hazardous Materials” means all explosive or radioactive substances or wastes and 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 or wastes of any nature regulated pursuant to any Environmental Law.

     “Health Care Business” means (a) the provision, administration or arrangement of health care services or related ancillary services or products, directly or through an HMO, a provider, a regulated health care service contractor or any other business which in the ordinary course of business provides, administers or arranges for such services or products, including, without limitation, the provision of services under Medicare, Medicaid or SCHIP, or any other health care program operated by or financed in whole or in part by any Governmental Authority, (b) the provision, administration or arrangement of health and related insurance, (c) the provision or management of health care ancillary services, including, without limitation, state fiscal agent services, claims services, medical management, disease management, or medical information services, (d) the provision, administration or arrangement of health or personal care services through a hospital, outpatient, urgent care, clinic, home health or hospice environment, (e) the leasing of excess office space or other facilities, (f) any other related business in which the Borrower

or the Subsidiaries are engaged on the date hereof, and (g) any other business activity which is related, ancillary, or incidental to any of the foregoing.

     “Health Care Business Regulations” means all laws, regulations, directives and administrative orders applicable under United States federal or state law or the law of the District of Columbia to any Regulated Subsidiary and any regulations, orders and directives promulgated or issued pursuant to any of the foregoing (including, without limitation, Medicaid Regulations, Medicare Regulations, Titles XVIII and XIX of the Social Security Act (which include, but are not limited to, 42 U.S.C. §§ 1320a-7, 1320a-7a, 1320a-7b, 1395nn), the federal TRICARE statute (10 U.S.C. § 1071 et seq.), the Federal False Claims Act (31 U.S.C. §§ 3759-33) and any guidance relevant to overpayments, the criminal false claims statute (which includes, but is not limited to, 18 U.S.C. §§ 287 and 1001), federal statutes governing the privacy and security of individually identifiable health information, and, with respect to each of the above, any ordinance, rule, regulation, order, or interpretative guidance issued by United States Governmental Authorities, Subchapter XI of Chapter 6A of Title 42 of the United States Code Annotated (and any regulations, orders and directives promulgated or issued pursuant thereto, including pursuant to Part 417 of Chapter IV of 42 Code of Federal Regulations)). Health Care Business Regulations shall also mean, with respect to any applicable state, the state laws pertaining to substantially similar subject matter, as well as any state laws pertaining to the practice of the applicable health care professionals.

     “Health Care Business Regulator” means any Person charged with the administration, oversight or enforcement of a Health Care Business Regulation, whether primarily, secondarily or jointly.

     “HHS” means the United States Department of Health and Human Services and any successor thereof.

     “Highest Lawful Rate” means, on any day, the maximum non-usurious rate of interest permitted for that day by applicable federal or state law stated as a rate per annum.

     “HMO” means any health maintenance organization or similar managed care organization, or any health service plan under applicable Law, any Person doing business as a health maintenance organization or similar managed care organization, or a health care service plan under applicable Law, or any Person required to qualify or be licensed as a health maintenance organization or similar managed care organization under applicable United States federal or state Law or a health care service plan under applicable Law (including, without limitation, in each case, Health Care Business Regulations).

     “HMO Model Act” means the Health Maintenance Organization Model Act adopted by the National Association of Insurance Commissioners, as amended, supplemented or otherwise modified from time to time.

     “Improvements” means, with respect to any Mortgaged Property, all buildings, structures and other improvements now or hereafter existing, erected or placed on or under the Mortgaged Property or any portion thereof, and all fixtures of every kind and nature whatsoever now or hereafter owned and used or procured for use in connection with the Mortgaged Property.

     “Increasing Lender” shall have the meaning set forth in Section 2.23.

     “Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

     (a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

     (b) all direct or Contingent Obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, including, without limitation, all unreimbursed drafts drawn thereunder, bank guaranties, surety bonds and similar instruments (less the amount of any cash collateral securing any such letters of credit, bankers’ acceptances or surety bonds);

     (c) net obligations of such Person under any Swap Contract;

     (d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business);

     (e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

     (f) Capitalized Leases;

     (g) all obligations to repurchase any Equity Interests issued by such Person at any time prior to the Facility Termination Date which repurchase obligations are related to the issuance thereof, including, without limitation, obligations commonly known as residual equity appreciation potential shares;

     (h) all Indebtedness in respect of any of the foregoing of another Person secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise to be secured by) any Lien on the property, including, without limitation, accounts and contract rights owned by such Person, even though such Person has not assumed or become liable for such Indebtedness; and

     (i) all Guarantees of such Person in respect of any of the foregoing.

     For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any Capitalized Lease as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date. To the extent that the rights and remedies of the obligee of any Indebtedness are limited to certain property and are otherwise non-recourse to such Person, the amount of such Indebtedness shall be limited to the value of such Person’s interest in such property (valued at the higher of book value and market value as of such date of determination). For the avoidance of doubt, Contingent Obligations arising as a result of surety bond requirements in connection with any MMIS Contract to which the Borrower or a Subsidiary is a party shall not constitute Indebtedness.

     “Intellectual Property Security Agreement” means each Intellectual Property Security Agreement executed by the Borrower and each Grantor, substantially in the form of Exhibit D to the Security Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time in a manner reasonably satisfactory to the Administrative Agent.

     “Intercompany Note” means the promissory notes issued as contemplated by Section 6.20(e), substantially in the form of Exhibit A to the Pledge Agreement.

     “Interest Period” means, with respect to a Eurodollar Advance, a period of one (1), two (2), three (3) or six (6) months, or, if acceptable to all Lenders, nine (9) or twelve (12) months, commencing on a Business Day selected by the Borrower pursuant to this Agreement. Such Interest Period shall end on the day which corresponds numerically to such date one (1), two (2), three (3), six (6), nine (9) or twelve (12) months thereafter, provided, however, that if there is no such numerically corresponding day in such next, second, third, sixth, ninth or twelfth succeeding month, such Interest Period shall end on the last Business Day of such next, second, third, sixth, ninth or twelfth succeeding month. If an Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next succeeding Business Day, provided, however, that if said next succeeding Business Day falls in a new calendar month, such Interest Period shall end on the immediately preceding Business Day.

     “Internal Control Event” means a material weakness in, or fraud that involves management or other employees who have a significant role in, the Borrower’s internal controls over financial reporting, in each case as described in the Securities Laws.

     “Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person (other than equity swaps, warrants or options on the capital stock of the Borrower entered into in connection with any Permitted Convertible Indebtedness), whether by means of (a) the purchase or other acquisition of capital stock or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor guarantees Indebtedness of such Person or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

     “Investment Policy” means the investment policy of the Borrower as approved by the Board of Directors of the Borrower and as disclosed to the Administrative Agent prior to the date hereof, as amended, restated, supplemented or otherwise modified from time to time, in each case with the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed).

     “IP Rights” shall have the meaning set forth in Section 5.10.

     “Joinder Agreement” means a joinder agreement executed and delivered in accordance with the provisions of Section 6.13, substantially in the form of Exhibit H hereto.

     “Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

     “LC Fee” shall have the meaning set forth in Section 2.19(e).

     “LC Issuer” means U.S. Bank (or any subsidiary or affiliate of U.S. Bank designated by U.S. Bank) in its capacity as issuer of Facility LCs hereunder, or any successor issuer of Facility LCs hereunder.

     “LC Obligations” means, at any time, the sum, without duplication, of (i) the aggregate undrawn stated amount under all Facility LCs outstanding at such time plus (ii) the aggregate unpaid amount at such time of all Reimbursement Obligations.

     “LC Payment Date” shall have the meaning set forth in Section 2.19(f).

     “Lenders” means the lending institutions listed on the signature pages of this Agreement and their respective successors and assigns. Unless otherwise specified, the term “Lenders” includes U.S. Bank in its capacity as Swing Line Lender.

     “Lending Installation” means, with respect to a Lender or the Administrative Agent, the office, branch, subsidiary or affiliate of such Lender or the Administrative Agent listed on the signature pages hereof (in the case of the Administrative Agent) or on its Administrative Questionnaire (in the case of a Lender) or otherwise selected by such Lender or the Administrative Agent pursuant to Section 2.17.

     “Letter of Credit” of a Person means a letter of credit or similar instrument which is issued upon the application of such Person or upon which such Person is an account party or for which such Person is in any way liable.

     “Lien” means any mortgage, pledge, hypothecation, assignment, restricted deposit arrangement, encumbrance, lien (statutory or other), charge, or security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

     “Loan” means a Revolving Loan or a Swing Line Loan.

     “Loan Documents” means this Agreement, the Facility LC Applications, the Collateral Documents, the Subsidiary Guaranty, the Fee Letter and any note or notes executed by the Borrower in connection with this Agreement and payable to a Lender.

     “Loan Party” or “Loan Parties” means, individually or collectively, the Borrower and the Guarantors.

     “Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect on, the operations, business, properties, liabilities (actual or contingent) or condition (financial or otherwise) of the Borrower and Subsidiaries taken as a whole; (b) a material impairment of the ability of any Loan Party to perform its obligations under any Loan Document to which it is a party; (c) a material adverse change in, or a material adverse effect on, the Lien of any Collateral Document, or (d) a material adverse change in, or material adverse effect on, the material rights, powers, or remedies of the Administrative Agent or any Lender under any Loan Document.

     “Material Contract” shall have the meaning set forth in Section 601(b)(10) of Regulation S-K.

     “Medicaid” means that means-tested entitlement program under Title XIX, P.L. 89-87 of the Social Security Act, which provides federal grants to states for medical assistance based on specific eligibility criteria, as set forth in Section 1396, et seq. of Title 42 of the United States Code, as amended.

     “Medicaid Regulations” means, collectively, (a) all federal statutes (whether set forth in Title XIX of the Social Security Act or elsewhere) affecting the medical assistance program established by Title XIX of the Social Security Act and any statutes succeeding thereto, (b) all applicable provisions of all federal rules, regulations, manuals and orders of all Governmental Authorities promulgated pursuant to or in connection with the statutes described in clause (a) above and all federal administrative, reimbursement and other guidelines of all Governmental Authorities having the force of law promulgated pursuant to or in connection with the statutes described in clause (a) above, (c) all state or other political subdivision statutes and regulations for medical assistance enacted in connection with the statutes and provisions described in clauses (a) and (b) above, and (d) all applicable provisions of all rules, regulations, manuals and orders of all Governmental Authorities promulgated pursuant to or in connection with the statutes described in clause (c) above and all state administrative, reimbursement and other guidelines of all Governmental Authorities having the force of law promulgated pursuant to or in connection with the statutes described in clause (b) above, in each case as may be amended, supplemented or otherwise modified from time to time.

     “Medical Reimbursement Programs” means a collective reference to the Medicare, Medicaid and SCHIP programs and any other health care program operated by or financed in whole or in part by any Governmental Authority.

     “Medicare” means that government-sponsored entitlement program under Title XVIII, P.L. 89-87, of the Social Security Act, which provides for a health insurance system for eligible elderly and disabled individuals, as set forth at Section 1395, et seq. of Title 42 of the United States Code, as amended.

     “Medicare Regulations” means, collectively, all federal statutes (whether set forth in Title XVIII of the Social Security Act or elsewhere) affecting the health insurance program for the aged and disabled established by Title XVIII of the Social Security Act and any statutes succeeding thereto, together with all applicable provisions of all rules, regulations, manuals and orders and administrative, reimbursement and other guidelines having the force of law of all Governmental Authorities (including, without limitation, CMS, the OIG, HHS, or any person succeeding to the functions of the foregoing) promulgated pursuant to or in connection with any of the foregoing having the force of law, as each may be amended, supplemented or otherwise modified from time to time.

     “MMIS Contract” means each Medicaid Management Information System contract or fiscal administrator contract to which the Borrower or its Subsidiaries are a party.

     “Modify” and “Modification” are defined in Section 2.19(a).

     “Molina Family” means Mary R. Molina, Joseph M. Molina, Mary Martha Bernadett, M.D., John C. Molina, Janet M. Watt and Josephine M. Molina-Battiste, and the spouses, natural and legal issue and other descendants and the stepchildren (including the natural and legal issue of the stepchildren) of any of the above-named persons.

     “Molina Healthcare of California” means Molina Healthcare of California, a California corporation.

     “Molina Healthcare of New Mexico” means Molina Healthcare of New Mexico, Inc., a New Mexico corporation.

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

     “Mortgage” means any mortgage, deed of trust, assignment of leases and rents, leasehold mortgage or other security document granting a security interest to the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, on the Mortgaged Property, substantially in the form of Exhibit I hereto or in such form as is suitable for filing in the applicable jurisdiction, as the same may be amended, restated, supplemented or otherwise modified from time to time in a manner reasonably satisfactory to the Administrative Agent.

     “Mortgaged Property” means (a) all the Real Property Assets identified on Schedule 5.11 that are identified as Mortgaged Property and (b) all other Real Property Assets with respect to which a Mortgage is granted pursuant to Section 6.15.

     “Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five (5) plan years, has made or been obligated to make contributions.

     “Net Income” means for any period, net income of any Person (excluding extraordinary gains and extraordinary non-cash losses but including extraordinary cash losses) for that period.

     “New Mexico Data Center” means the real property located at 5610 Turing Drive South East, Albuquerque, New Mexico, 87106, and the building, all fixtures and other improvements located at such location.

     “Non-Regulated Domestic Subsidiary” means each Domestic Subsidiary that is a Non-Regulated Subsidiary.

     “Non-Regulated Subsidiary” means each of the Subsidiaries that are not Regulated Subsidiaries identified on Schedule 5.8 hereto, and any other future, direct and indirect Subsidiary of the Borrower that is not a Regulated Subsidiary.

     “Non-Renewal Notice Date” shall have the meaning set forth in Section 2.19(d).

     “Non-U.S. Lender” shall have the meaning set forth in Section 3.5(d).

     “Note” shall have the meaning set forth in Section 2.13.

     “Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans, all LC Obligations, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations of the Borrower to the Lenders or to any Lender, the Administrative Agent, the LC Issuer or any indemnified party arising under the Loan Documents.

     “OIG” means the Office of Inspector General of HHS and any successor thereof.

     “One Golden Shore” means the Borrower’s corporate headquarters building located at One Golden Shore Drive, Long Beach, California 90802.

     “One Golden Shore JV” shall have the meaning set forth in Section 6.20(k).

     “Operating Lease” of a Person means any lease of Property (other than a Capitalized Lease) by such Person as lessee which has an original term (including any required renewals and any renewals effective at the option of the lessor) of one year or more.

     “Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws; (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

     “Other Taxes” shall have the meaning set forth in Section 3.5(b).

     “Outstanding Credit Exposure” means, as to any Lender at any time, the sum of (i) the aggregate principal amount of its Revolving Loans outstanding at such time, plus (ii) an amount equal to its Pro Rata Share of the aggregate principal amount of Swing Line Loans outstanding at such time, plus (iii) an amount equal to its Pro Rata Share of the LC Obligations at such time.

     “Participant Register” shall have the meaning set forth in Section 12.2(c).

     “Participants” shall have the meaning set forth in Section 12.2(a).

     “Payment Date” means the last Business Day of each calendar quarter.

     “PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.

     “Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five (5) plan years.

     “Permitted Acquisition” means any Acquisition (or series of related Acquisitions) by any Acquiring Party (any such Acquisition (or series of related Acquisitions) a “Subject Acquisition”); provided that:

     (a) in the case of an Acquisition of the capital stock of another Person, the Person to be acquired will be a direct or indirect wholly-owned Subsidiary of the Borrower after giving effect to such Acquisition and the Person to be acquired is in the Health Care Business;

     (b) the Property acquired (or the Property of the Person acquired) in such Subject Acquisition shall be used or useful in the Health Care Business of the Borrower or its Subsidiaries;

     (c) all Property to be acquired in connection with such Subject Acquisition shall be located in the United States of America;

     (d) in the case of an Acquisition of the capital stock of another Person, the board of directors (or other comparable governing body) of such other Person shall have duly approved such Acquisition;

     (e) no Default shall exist immediately after giving effect to such Subject Acquisition on a Pro Forma Basis;

     (f) the Subject Acquisition shall not involve an interest in a partnership or have a requirement that the Borrower or any other Loan Party be a general partner;

     (g) the Acquiring Party shall, and shall cause the party that is the subject of the Subject Acquisition to, execute and deliver such Joinder and Pledge Agreements, Security Agreements and Intercompany Notes and take such other actions as may be necessary for compliance with the provisions of Sections 6.13, 6.14 and 6.15;

     (h) the Borrower shall be in compliance with the financial covenants hereunder after giving effect to the Subject Acquisition on a Pro Forma Basis;

     provided, however, that the Subject Acquisition shall not result in interests in such Person or the property of such Person being directly or indirectly held by or transferred into Molina Healthcare of California or any of its Subsidiaries so long as the stock of Molina Healthcare of California has not been pledged pursuant to terms of this Agreement, except that Molina Healthcare of California and its Subsidiaries located in California shall be permitted to make one or more Subject Acquisitions in accordance with the provisions set forth in this definition but solely within the State of California, where the consideration therefor is payable (x) solely in the form of common stock of the Borrower or (y) in the form of cash and non-cash consideration, but only if the Total Debt to EBITDA Ratio is less than 1.00 to 1.00 immediately after giving effect to such Subject Acquisition on a Pro Forma Basis.

     “Permitted Convertible Indebtedness” means Indebtedness of the Borrower in the form of unsecured convertible notes issued in accordance with Section 6.21(i) and Section 6.24(e).

     “Permitted Lien” shall have the meaning set forth in Section 6.19.

     “Permitted Senior Indebtedness” means senior unsecured Indebtedness of the Borrower issued in accordance with Section 6.21(i).

     “Person” means any natural person, corporation, firm, joint venture, partnership, limited liability company, association, enterprise, trust or other entity or organization, or any government or political subdivision or any agency, department or instrumentality thereof.

     “Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by the Borrower.

     “Pledge Agreement” means the Pledge Agreement duly executed by the Borrower and any Subsidiary party thereto, which Pledge Agreement shall be substantially in the form of Exhibit J hereto, as the same may be amended, restated, supplemented or otherwise modified from time to time in a manner reasonably satisfactory to the Administrative Agent.

     “Pricing Schedule” means the Schedule attached hereto identified as such.

     “Prime Rate” means a rate per annum equal to the prime rate of interest announced from time to time by U.S. Bank or its parent (which is not necessarily the lowest rate charged to any customer), changing when and as said prime rate changes.

     “Pro Forma Basis” means, for purposes of determining the applicable pricing level under the definition of “Applicable Margin”, and determining compliance with any financial covenant or test hereunder and determining whether the conditions precedent to a Permitted Acquisition have been met, that the subject transaction shall be deemed to have occurred as of the first day of the period of four (4) consecutive fiscal quarters ending as of the end of the most recent fiscal quarter for which annual or quarterly financial statements shall have been delivered in accordance with the provisions hereof (the “Pro Forma Reference Period”). Further, for purposes of making calculations on a “Pro Forma Basis” hereunder, (a) any funds to be used by any Person in consummating a Permitted Acquisition will be assumed to have been used for that purpose as of the first day of the Pro Forma Reference Period, (b) EBITDA for the Pro Forma Reference Period associated with the assets acquired or to be acquired in any Permitted Acquisition will be included in the calculation of Consolidated EBITDA, (c) Consolidated Interest Expense shall be calculated to give effect to such Permitted Acquisition, (d) any Indebtedness to be incurred by any Person in connection with the consummation of any Permitted Acquisition will be assumed to have been incurred on the first day of the Pro Forma Reference Period, (e) the gross interest expenses, determined in accordance with GAAP, with respect to such Indebtedness assumed to have been incurred on the first day of the Pro Forma Reference Period that bears interest at a floating rate shall be calculated at the current rate under the agreement governing such Indebtedness (including this Agreement if the Indebtedness is incurred hereunder), (f) any funds to be received by any Person in consummating a Disposition will be assumed to have been used for that purposes as of the first day of the Pro Forma Reference Period, (g) EBITDA for the Pro Forma Reference Period associated with the assets disposed of or to be disposed of in any Disposition will be reflected in the calculation of Consolidated EBITDA, (h) Consolidated Interest Expense shall be calculated to give effect to such Disposition, and (i) any gross interest expense, determined in accordance with GAAP, incurred during the Pro Forma Reference Period that was or is to be refinanced with proceeds of Indebtedness assumed to have been incurred as of the first day of the Pro Forma Reference Period will be excluded from the calculation for which a Pro Forma Basis is being given.

     “Property” of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person.

     “Pro Rata Share” means, with respect to a Lender, a portion equal to a fraction the numerator of which is such Lender’s Commitment and the denominator of which is the Aggregate Commitment, provided, however, if all of the Commitments are terminated pursuant to the terms of this Agreement, then “Pro Rata Share” means the percentage obtained by dividing (a) such Lender’s Outstanding Credit Exposure at such time by (b) the Aggregate Outstanding Credit Exposure at such time; and provided, further, that when a Defaulting Lender shall exist, “Pro Rata Share” shall mean the percentage of the Aggregate Commitment (disregarding any Defaulting Lender’s Commitment) represented by such Lender’s Commitment. If the Commitments have terminated or expired, the Pro Rata Shares shall be determined based upon the Commitments most recently in effect, giving effect to any assignments.

     “Purchasers” shall have the meaning set forth in Section 12.3(a).

     “Quotation Date” means, in relation to any Interest Period for which an interest rate is to be determined, two (2) Business Days before the first day of that period.

     “Real Property Assets” means all interest of the Borrower or any Subsidiary in any real property, including all facilities and properties owned, leased or operated by the Borrower or any Subsidiary.

     “Register” shall have the meaning set forth in Section 12.3(d).

     “Registered Public Accounting Firm” has the meaning specified in the Securities Laws and shall be independent of the Borrower as prescribed in the Securities Laws.

     “Regulated Subsidiary” means each of the Subsidiaries identified as an HMO or a Subsidiary regulated by a state health, insurance or human services agency in the United States identified on Schedule 5.8 hereto, and any other future HMO or direct and indirect Subsidiary of the Borrower regulated by a state health, insurance or human services agency in the United States.

     “Regulation D” means Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor thereto or other regulation or official interpretation of said Board of Governors relating to reserve requirements applicable to member banks of the Federal Reserve System.

     “Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by banks for the purpose of purchasing or carrying margin stocks applicable to member banks of the Federal Reserve System.

     “Reimbursement Obligations” means, at any time, the aggregate of all obligations of the Borrower then outstanding under Section 2.19 to reimburse the LC Issuer for amounts paid by the LC Issuer in respect of any one or more drawings under Facility LCs.

     “Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the thirty (30) day notice period has been waived.

     “Reports” shall have the meaning set forth in Section 9.6.

     “Required Advances” means advances required by Health Care Business Regulators to be made by the Borrower or any of the Subsidiaries to a Contract Provider; provided that the Borrower shall have provided reasonably satisfactory evidence of any such requirement to the Administrative Agent.

     “Required Financial Information” means with respect to each fiscal year-end or quarter-end of the Borrower, (a) the financial statements required to be delivered pursuant to Section 6.1(a) or (b) for such fiscal year-end or quarter-end, as applicable, and (b) the certificate of the Responsible Officer of the Borrower required by Section 6.2(b) to be delivered with the financial statements described in clause (a) above

     “Required Lenders” means Lenders in the aggregate having greater than 50% of the Aggregate Commitment or, if the Aggregate Commitment has been terminated, Lenders in the aggregate holding greater than 50% of the Aggregate Outstanding Credit Exposure.

     “Reserve Requirement” means, with respect to an Interest Period, the maximum aggregate reserve requirement (including all basic, supplemental, marginal and other reserves) which is imposed under Regulation D on Eurodollar liabilities.

     “Responsible Officer” means the chief executive officer, president, chief financial officer or treasurer of a Loan Party. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

     “Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such capital stock or other Equity Interest or on account of any return of capital to the Borrower’s stockholders, partners or other members (or the equivalent Persons thereof).

     “Revolving Loan” means, with respect to a Lender, such Lender’s loan made pursuant to its commitment to lend set forth in Section 2.1 (or any conversion or continuation thereof).

     “S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business.

     “SAP” means, with respect to each Regulated Subsidiary, the statutory accounting principles and procedures prescribed or permitted by applicable Health Care Business Regulations for such Regulated Subsidiary, as in effect from time to time and as applied on a consistent basis.

     “Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002, as amended, supplemented or otherwise modified from time to time.

     “Schedule” refers to a specific schedule to this Agreement, unless another document is specifically referenced.

     “SCHIP” means that government-sponsored entitlement program under Title XXI of the Balanced Budget Act of 1997 known as the State Children’s Health Insurance Program, as amended, restated, supplemented or otherwise modified from time to time.

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

     “Section” means a numbered section of this Agreement, unless another document is specifically referenced.

     “Secured Obligations” means, collectively, (i) the Obligations and (ii) all Cash Management Obligations and Swap Contract Obligations owing to one or more Lenders or their Affiliates.

     “Secured Parties” means, collectively, the Administrative Agent, the LC Issuer and each Lender.

     “Securities Laws” means the Securities Act of 1933, the Securities Exchange Act of 1934, Sarbanes-Oxley and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the SEC or the Public Company Accounting Oversight Board, as each of the foregoing may be amended and in effect on any applicable date hereunder.

     “Securitization Transaction” means any financing transaction or series of financing transactions, including factoring transactions, that have been or may be entered into by the Borrower or any of its Subsidiaries pursuant to which such Person may sell, convey or otherwise transfer to (i) a Subsidiary or Affiliate of such Person, or (ii) any other Person, or may grant a security interest in, any accounts receivable, notes receivable, rights to future lease payments or residuals or other similar rights to payment (the “Securitization Receivables”) (whether such Securitization Receivables are then existing or arising in the future) of the Borrower or such Subsidiary, as applicable, and any assets related thereto, including, without limitation, all security interests in merchandise or services financed thereby, the proceeds of such

Securitization Receivables, and other assets that are customarily sold or in respect of which security interests are customarily granted in connection with securitization or factoring transactions involving such assets.

     “Security Agreement” means the Security Agreement duly executed by the Borrower and each Grantor, substantially in the form of Exhibit K hereto, as the same may be amended, restated, supplemented or otherwise modified from time to time in a manner reasonably satisfactory to the Administrative Agent.

     “Significant Subsidiary” means any Subsidiary of the Borrower which had (a) revenues (directly and together with its Subsidiaries, but excluding intercompany revenues) for the most recent fiscal year of the Borrower for which the Borrower has delivered the Required Financial Information that were at least 5.00% of the Borrower’s consolidated revenues for such fiscal year or (b) total assets (directly and together with its Subsidiaries) as of the last day of the most recent fiscal year of the Borrower for which the Borrower has delivered the Required Financial Information that were at least 5.00% of the Borrower’s consolidated total assets as of such date.

     “Specified Real Estate” means, collectively, Arco, One Golden Shore and New Mexico Data Center.

     “Stark Law” means Section 1877 of the Social Security Act as set forth at Section 1395nn of Title 42 of the United States Code, as amended, and any successor statute thereto, as interpreted by the rules and regulations issued thereunder, in each case as in effect from time to time.

     “Stated Rate” shall have the meaning set forth in Section 2.21.

     “Statutory Net Worth” means, with respect to each Regulated Subsidiary, at any time, the difference between (a) total admitted assets and (b) total liabilities, in each case as calculated according to SAP in the applicable jurisdiction.

     “Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity which is organized under the Laws of a political subdivision of the United States of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary,” the “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

     “Subsidiary Guaranty” means the Subsidiary Guaranty Agreement duly executed by each Guarantor, substantially in the form of Exhibit L hereto, as the same may be amended, restated, supplemented or otherwise modified from time to time in a manner reasonably satisfactory to the Administrative Agent.

     “Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options (other than equity swaps, warrants or options on the capital stock of the Borrower entered into in connection with any Permitted Convertible Indebtedness), or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap

transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement (other than equity swaps or options on the capital stock of the Borrower entered into in connection with any Permitted Convertible Indebtedness).

     “Swap Contract Obligations” of a Loan Party means any and all obligations of such Loan Party, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (i) any and all Swap Contracts required or permitted under this Agreement that are entered into by and between the Borrower and any Lender or any Affiliate of a Lender, and (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any Swap Contracts required or permitted under this Agreement that are entered into by and between the Borrower and any Lender or any Affiliate of a Lender.

     “Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

     “Swing Line Borrowing Notice” shall have the meaning set forth in Section 2.4(b).

     “Swing Line Lender” means U.S. Bank or such other Lender which may succeed to its rights and obligations as Swing Line Lender pursuant to the terms of this Agreement.

     “Swing Line Loan” means a Loan made available to the Borrower by the Swing Line Lender pursuant to Section 2.4.

     “Swing Line Sublimit” means the maximum principal amount of Swing Line Loans the Swing Line Lender may have outstanding to the Borrower at any one time, which, as of this date, is $10,000,000.

     “Taxes” means any and all present or future taxes, duties, levies, imposts, deductions, fees, assessments, charges or withholdings, and any and all liabilities with respect to the foregoing, but excluding Excluded Taxes and Other Taxes.

     “Threshold Amount” means $20,000,000 or more in the aggregate (or the equivalent thereof in any currency other than Dollars).

     “Title Insurance Company” shall have the meaning set forth in Section 6.15(b)(ii).

     “Total Debt to EBITDA Ratio” means, as of any date of calculation, the ratio of (i) Consolidated Funded Indebtedness outstanding on such date to (ii) Consolidated EBITDA for the Borrower’s then most-recently ended four fiscal quarters.

     “Transferee” shall have the meaning set forth in Section 12.4.

     “Type” means, with respect to any Advance, its nature as a Base Rate Advance or a Eurodollar Advance and with respect to any Loan, its nature as a Base Rate Loan or a Eurodollar Loan.

     “UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York or any other state the laws of which are required to be applied in connection with the issue of perfection of security interests.

     “Unfunded Pension Liability” means the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Sections 412 and 430 of the Code for the applicable plan year.

     “United States” and “U.S.” mean the United States of America.

     “U.S. Bank” means U.S. Bank National Association, a national banking association, in its individual capacity, and its successors.

     The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.

     1.2. Pro Forma Calculations. Notwithstanding anything to the contrary contained herein, financial ratios and tests (including the Total Debt to EBITDA Ratio and the Fixed Charge Coverage Ratio) pursuant to this Agreement shall be calculated in the manner prescribed by the definition of “Pro Forma Basis”.

ARTICLE II

THE CREDITS

     2.1. Commitment. From and including the date of this Agreement and prior to the Facility Termination Date, each Lender severally agrees, on the terms and conditions set forth in this Agreement, to make Loans to the Borrower in Dollars and participate in Facility LCs issued upon the request of the Borrower, provided that, after giving effect to the making of each such Loan and the issuance of each such Facility LC, the amount of such Lender’s Outstanding Credit Exposure shall not exceed its Commitment. Subject to the terms of this Agreement, the Borrower may borrow, repay and reborrow at any time prior to the Facility Termination Date. The Commitments to extend credit hereunder shall expire on the Facility Termination Date. The LC Issuer will issue Facility LCs hereunder on the terms and conditions set forth in Section 2.19.

     2.2. Required Payments; Termination. If at any time the amount of the Aggregate Outstanding Credit Exposure exceeds the Aggregate Commitment, the Borrower shall immediately prepay Loans in an aggregate amount sufficient to eliminate such excess. The Aggregate Outstanding Credit Exposure and all other unpaid Obligations shall be paid in full by the Borrower on the Facility Termination Date.

     2.3. Ratable Loans; Types of Advances. Each Advance hereunder (other than any Swing Line Loan) shall consist of Revolving Loans made from the several Lenders ratably according to their Pro Rata Shares. The Advances may be Base Rate Advances or Eurodollar Advances, or a combination thereof,

selected by the Borrower in accordance with Sections 2.8 and 2.9, or Swing Line Loans selected by the Borrower in accordance with Section 2.4.

     2.4. Swing Line Loans.

          (a) Amount of Swing Line Loans. Upon the satisfaction of the conditions precedent set forth in Section 4.2 and, if such Swing Line Loan is to be made on the date of the initial Advance hereunder, the satisfaction of the conditions precedent set forth in Section 4.1 as well, from and including the date of this Agreement and prior to the Facility Termination Date, the Swing Line Lender may, at its option, on the terms and conditions set forth in this Agreement, make Swing Line Loans in Dollars to the Borrower from time to time in an aggregate principal amount not to exceed the Swing Line Sublimit, provided that the Aggregate Outstanding Credit Exposure shall not at any time exceed the Aggregate Commitment, and provided further that at no time shall the sum of (i) the Swing Line Lender’s Pro Rata Share of the Swing Line Loans, plus (ii) the outstanding Revolving Loans made by the Swing Line Lender pursuant to Section 2.1, plus (iii) the Swing Line Lender’s Pro Rata Share of the LC Obligations, exceed the Swing Line Lender’s Commitment at such time. Subject to the terms of this Agreement (including, without limitation the discretion of the Swing Line Lender), the Borrower may borrow, repay and reborrow Swing Line Loans at any time prior to the Facility Termination Date.

          (b) Borrowing Notice. The Borrower shall deliver to the Administrative Agent and the Swing Line Lender irrevocable notice (a “Swing Line Borrowing Notice”) not later than 12:00 noon (California time) on the Borrowing Date of each Swing Line Loan, specifying (i) the applicable Borrowing Date (which date shall be a Business Day), and (ii) the aggregate amount of the requested Swing Line Loan which shall be an amount not less than $100,000.

          (c) Making of Swing Line Loans; Participations. Not later than 2:00 p.m. (California time) on the applicable Borrowing Date, the Swing Line Lender shall make available the Swing Line Loan, in funds immediately available, to the Administrative Agent at its address specified pursuant to Article XIII. The Administrative Agent will promptly make the funds so received from the Swing Line Lender available to the Borrower on the Borrowing Date at the Administrative Agent’s aforesaid address. Each time that a Swing Line Loan is made by the Swing Line Lender pursuant to this Section 2.4(c), the Swing Line Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably sold to each Lender and each Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the Swing Line Lender a participation in such Swing Line Loan in proportion to its Pro Rata Share.

          (d) Repayment of Swing Line Loans. Each Swing Line Loan shall be paid in full by the Borrower on the date selected by the Administrative Agent. In addition, the Swing Line Lender may at any time in its sole discretion with respect to any outstanding Swing Line Loan, require each Lender to fund the participation acquired by such Lender pursuant to Section 2.4(c) or require each Lender (including the Swing Line Lender) to make a Revolving Loan in the amount of such Lender’s Pro Rata Share of such Swing Line Loan (including, without limitation, any interest accrued and unpaid thereon), for the purpose of repaying such Swing Line Loan. Not later than 12:00 noon (California time) on the date of any notice received pursuant to this Section 2.4(d), each Lender shall make available its required Revolving Loan, in funds immediately available to the Administrative Agent at its address specified pursuant to Article XIII. Revolving Loans made pursuant to this Section 2.4(d) shall initially be Base Rate Loans and thereafter may be continued as Base Rate Loans or converted into Eurodollar Loans in the manner provided in Section 2.9 and subject to the other conditions and limitations set forth in this Article II. Unless a Lender shall have notified the Swing Line Lender, prior to the Swing Line Lender’s making any Swing Line Loan, that any applicable condition precedent set forth in Sections 4.1 or 4.2 had not then been satisfied, such Lender’s obligation to make Revolving Loans pursuant to this Section 2.4(d) to repay

Swing Line Loans or to fund the participation acquired pursuant to Section 2.4(c) shall be unconditional, continuing, irrevocable and absolute and shall not be affected by any circumstances, including, without limitation, (a) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against the Borrower, the Administrative Agent, the Swing Line Lender or any other Person, (b) the occurrence or continuance of a Default or Event of Default, (c) any adverse change in the condition (financial or otherwise) of the Borrower, or (d) any other circumstances, happening or event whatsoever. In the event that any Lender fails to make payment to the Administrative Agent of any amount due under this Section 2.4(d), interest shall accrue thereon at the Federal Funds Effective Rate for each day during the period commencing on the date of demand and ending on the date such amount is received and the Administrative Agent shall be entitled to receive, retain and apply against such obligation the principal and interest otherwise payable to such Lender hereunder until the Administrative Agent receives such payment from such Lender or such obligation is otherwise fully satisfied. On the Facility Termination Date, the Borrower shall repay in full the outstanding principal balance of the Swing Line Loans.

     2.5. Commitment Fee. The Borrower agrees to pay to the Administrative Agent for the account of each Lender according to its Pro Rata Share a commitment fee at a per annum rate equal to the Applicable Fee Rate on the average daily Available Aggregate Commitment from the date hereof to and including the Facility Termination Date (the “Commitment Fee”), payable in arrears on a quarterly basis on each Payment Date hereafter and on the Facility Termination Date. Swing Line Loans shall not count as usage of the Aggregate Commitment for the purpose of calculating the commitment fee due hereunder with respect to any Lender other than the Swing Line Lender, except to the extent another Lender’s participation in such Swing Line Loans has been funded by such Lender.

     2.6. Minimum Amount of Each Advance. Each Eurodollar Advance shall be in the minimum amount of $5,000,000 and incremental amounts in integral multiples of $500,000, and each Base Rate Advance (other than an Advance to repay Swing Line Loans) shall be in the minimum amount of $500,000 and incremental amounts in integral multiples of $100,000, provided, however, that any Base Rate Advance may be in the amount of the Available Aggregate Commitment.

     2.7. Reductions in Aggregate Commitment; Optional Principal Payments. The Borrower may permanently reduce the Aggregate Commitment in whole, or in part ratably among the Lenders in an aggregate amount of $1,000,000 or any higher integral multiples of $500,000 in excess thereof, upon at least five (5) Business Days’ written notice to the Administrative Agent, which notice shall specify the amount of any such reduction, provided, however, that the amount of the Aggregate Commitment may not be reduced below the Aggregate Outstanding Credit Exposure. All accrued Commitment Fees shall be payable on the effective date of any termination of the obligations of the Lenders to make Credit Extensions hereunder. The Borrower may from time to time pay, without penalty or premium, all outstanding Base Rate Advances (other than Swing Line Loans), or, in a minimum aggregate amount of $1,000,000 or any higher integral multiple of $500,000 in excess thereof, any portion of the outstanding Base Rate Advances (other than Swing Line Loans) upon one (1) Business Day’s prior written notice to the Administrative Agent. The Borrower may at any time pay, without penalty or premium, all outstanding Swing Line Loans, or any portion of the outstanding Swing Line Loans, with notice to the Administrative Agent and the Swing Line Lender by 11:00 a.m. (California time) on the date of repayment. The Borrower may from time to time pay, subject to the payment of any funding indemnification amounts required by Section 3.4 but without penalty or premium, all outstanding Eurodollar Advances, or, in a minimum aggregate amount of $1,000,000 or any higher integral multiple of $500,000 in excess thereof, any portion of the outstanding Eurodollar Advances upon three (3) Business Days’ prior written notice to the Administrative Agent.

     2.8. Method of Selecting Types and Interest Periods for New Advances. The Borrower shall select the Type of Advance and, in the case of each Eurodollar Advance, the Interest Period applicable

thereto from time to time. The Borrower shall give the Administrative Agent irrevocable notice in the form of Exhibit C (a “Borrowing Notice”) not later than 10:00 a.m. (California time) on the Borrowing Date of each Base Rate Advance (other than a Swing Line Loan) and three (3) Business Days before the Borrowing Date for each Eurodollar Advance, specifying:

(i)

the Borrowing Date, which shall be a Business Day, of such Advance,

(ii)

the aggregate amount of such Advance,

(iii)

the Type of Advance selected, and

(iv)

in the case of each Eurodollar Advance, the Interest Period applicable thereto.

Not later than 12:00 noon (California time) on each Borrowing Date, each Lender shall make available its Loan or Loans in funds immediately available to the Administrative Agent at its address specified pursuant to Article XIII. The Administrative Agent will make the funds so received from the Lenders available to the Borrower at the Administrative Agent’s aforesaid address.

     2.9. Conversion and Continuation of Outstanding Advances; Maximum Number of Interest Periods. Base Rate Advances (other than Swing Line Loans) shall continue as Base Rate Advances unless and until such Base Rate Advances are converted into Eurodollar Advances pursuant to this Section 2.9 or are repaid in accordance with Section 2.7. Each Eurodollar Advance shall continue as a Eurodollar Advance until the end of the then applicable Interest Period therefor, at which time such Eurodollar Advance shall be automatically converted into a Base Rate Advance unless (x) such Eurodollar Advance is or was repaid in accordance with Section 2.7 or (y) the Borrower shall have given the Administrative Agent a Conversion/Continuation Notice (as defined below) requesting that, at the end of such Interest Period, such Eurodollar Advance continue as a Eurodollar Advance for the same or another Interest Period. Subject to the terms of Section 2.6, the Borrower may elect from time to time to convert all or any part of a Base Rate Advance (other than a Swing Line Loan) into a Eurodollar Advance. The Borrower shall give the Administrative Agent irrevocable notice (a “Conversion/Continuation Notice”) of each conversion of a Base Rate Advance into a Eurodollar Advance, conversion of a Eurodollar Advance to a Base Rate Advance, or continuation of a Eurodollar Advance not later than 10:00 a.m. (California time) at least three (3) Business Days prior to the date of the requested conversion or continuation, specifying:

(i)

the requested date, which shall be a Business Day, of such conversion or continuation,

(ii)

the Type of the Advance which is to be converted or continued, and

(iii)

the amount of such Advance which is to be converted into or continued as a Eurodollar Advance and the duration of the Interest Period applicable thereto.

After giving effect to all Advances, all conversions of Advances from one Type to another and all continuations of Advances of the same type, there shall be no more than ten (10) Interest Periods in effect hereunder.

     2.10. Interest Rates. Each Base Rate Advance (other than a Swing Line Loan) shall bear interest on the outstanding principal amount thereof, for each day from and including the date such Advance is made or is automatically converted from a Eurodollar Advance into a Base Rate Advance pursuant to Section 2.9, to but excluding the date it becomes due or is converted into a Eurodollar Advance pursuant to Section 2.9 hereof, at a rate per annum equal to the Base Rate for such day. Each

Swing Line Loan shall bear interest on the outstanding principal amount thereof, for each day from and including the day such Swing Line Loan is made to but excluding the date it is paid, at a rate per annum equal to the Daily Eurodollar Rate or the Base Rate for such day. Changes in the rate of interest on that portion of any Advance maintained as a Base Rate Advance will take effect simultaneously with each change in the Alternate Base Rate. Each Eurodollar Advance shall bear interest on the outstanding principal amount thereof from and including the first day of the Interest Period applicable thereto to (but not including) the last day of such Interest Period at the interest rate determined by the Administrative Agent as applicable to such Eurodollar Advance based upon the Borrower’s selections under Sections 2.8 and 2.9 and the Pricing Schedule. No Interest Period may end after the Facility Termination Date.

     2.11. Rates Applicable After Event of Default. Notwithstanding anything to the contrary contained in Section 2.8, 2.9 or 2.10, during the continuance of a Default or Event of Default the Required Lenders may, at their option, by notice to the Borrower (which notice may be revoked at the option of the Required Lenders notwithstanding any provision of Section 8.2 requiring unanimous consent of the Lenders to changes in interest rates), declare that no Advance may be made as, converted into or continued as a Eurodollar Advance. If any amount (i) of principal of any Loan is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Law and (ii) other than principal of any Loan payable by the Borrower under any Loan Document that is not paid when due (without regard to any applicable grace period), such amount shall bear interest at the Default Rate applicable to Base Rate Advances to the fullest extent permitted by applicable Law. Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

     2.12. Method of Payment. All payments of the Obligations hereunder shall be made, without setoff, deduction, or counterclaim, in immediately available funds in Dollars to the Administrative Agent at the Administrative Agent’s address specified pursuant to Article XIII, or at any other Lending Installation of the Administrative Agent specified in writing by the Administrative Agent to the Borrower, by 12:00 noon (California time) on the date when due and shall (except (i) with respect to repayments of Swing Line Loans, (ii) in the case of Reimbursement Obligations for which the LC Issuer has not been fully indemnified by the Lenders, or (iii) as otherwise specifically required hereunder) be applied ratably by the Administrative Agent among the Lenders. Each payment delivered to the Administrative Agent for the account of any Lender shall be delivered promptly by the Administrative Agent to such Lender in the same type of funds that the Administrative Agent received at its address specified pursuant to Article XIII or at any Lending Installation specified in a notice received by the Administrative Agent from such Lender. The Administrative Agent is hereby authorized to charge the account of the Borrower maintained with U.S. Bank for each payment of principal, interest, Reimbursement Obligations and fees as such amounts become due hereunder. Each reference to the Administrative Agent in this Section 2.12 shall also be deemed to refer, and shall apply equally, to the LC Issuer, in the case of payments required to be made by the Borrower to the LC Issuer pursuant to Section 2.19(g).

     2.13. Noteless Agreement; Evidence of Indebtedness.

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

          (b) The Administrative Agent shall also maintain accounts in which it will record (i) the amount of each Loan made hereunder, the Type thereof and the Interest Period with respect thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the

Borrower to each Lender hereunder, (iii) the original stated amount of each Facility LC and the amount of LC Obligations outstanding at any time, and (iv) the amount of any sum received by the Administrative Agent hereunder from the Borrower and each Lender’s share thereof.

          (c) The entries maintained in the accounts maintained pursuant to paragraphs (a) and (b) above shall be prima facie evidence of the existence and amounts of the Obligations therein recorded; provided, however, that the failure of the Administrative Agent or any Lender to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Obligations in accordance with their terms.

          (d) Any Lender may request that its Loans be evidenced by a promissory note or, in the case of the Swing Line Lender, promissory notes representing its Revolving Loans and Swing Line Loans, respectively, substantially in the form of Exhibit D, with appropriate changes for notes evidencing Swing Line Loans (each a “Note”). In such event, the Borrower shall prepare, execute and deliver to such Lender such Note or Notes payable to the order of such Lender in a form supplied by the Administrative Agent. The Loans evidenced by such Note and interest thereon shall at all times (prior to any assignment pursuant to Section 12.3) be represented by one or more Notes payable to the order of the payee named therein, except to the extent that any such Lender subsequently returns any such Note for cancellation and requests that such Loans once again be evidenced as described in clause (b) above.

     2.14. Telephonic Notices. The Borrower hereby authorizes the Lenders and the Administrative Agent to extend, convert or continue Advances, effect selections of Types of Advances and to transfer funds based on telephonic notices made by any person or persons the Administrative Agent or any Lender in good faith believes to be acting on behalf of the Borrower, it being understood that the foregoing authorization is specifically intended to allow Borrowing Notices and Conversion/Continuation Notices to be given telephonically. The Borrower agrees to deliver promptly to the Administrative Agent a written confirmation (which may include e-mail) of each telephonic notice authenticated by an Authorized Officer of the Borrower. If the written confirmation differs in any material respect from the action taken by the Administrative Agent and the Lenders, the records of the Administrative Agent and the Lenders shall govern absent manifest error. The parties agree to prepare appropriate documentation to correct any such error within 10 days after discovery by any party to this Agreement.

     2.15. Interest Payment Dates; Interest and Fee Basis. Interest accrued on each Base Rate Advance and each Swing Line Loan shall be payable on each Payment Date, commencing with the first such Payment Date to occur after the date hereof and at maturity. Interest accrued on each Eurodollar Advance shall be payable on the last day of its applicable Interest Period, on any date on which the Eurodollar Advance is prepaid, whether by acceleration or otherwise, and at maturity. Interest accrued on each Eurodollar Advance having an Interest Period longer than three (3) months shall also be payable on the last day of each three-month interval during such Interest Period. Interest on all Advances and fees shall be calculated for actual days elapsed on the basis of a 360-day year, except that Interest at the Prime Rate shall be calculated for actual days elapsed on the basis of a 365/366-day year. Interest shall be payable for the day an Advance is made but not for the day of any payment on the amount paid if payment is received prior to 12:00 noon (California time) at the place of payment. If any payment of principal of or interest on an Advance shall become due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day.

     2.16. Notification of Advances, Interest Rates, Prepayments and Commitment Reductions. Promptly after receipt thereof, the Administrative Agent will notify each Lender of the contents of each Aggregate Commitment reduction notice, Borrowing Notice, Swing Line Borrowing Notice, Conversion/Continuation Notice, and repayment notice received by it hereunder. Promptly after notice from the LC Issuer, the Administrative Agent will notify each Lender of the contents of each request for

issuance of a Facility LC hereunder. The Administrative Agent will notify each Lender of the interest rate applicable to each Eurodollar Advance promptly upon determination of such interest rate and will give each Lender prompt notice of each change in the Alternate Base Rate.

     2.17. Lending Installations. Each Lender may book its Advances and its participation in any LC Obligations and the LC Issuer may book the Facility LCs at any Lending Installation selected by such Lender or the LC Issuer, as the case may be, and may change its Lending Installation from time to time. All terms of this Agreement shall apply to any such Lending Installation and the Loans, Facility LCs, participations in LC Obligations and any Notes issued hereunder shall be deemed held by each Lender or the LC Issuer, as the case may be, for the benefit of any such Lending Installation. Each Lender and the LC Issuer may, by written notice to the Administrative Agent and the Borrower in accordance with Article XIII, designate replacement or additional Lending Installations through which Loans will be made by it or Facility LCs will be issued by it and for whose account Loan payments or payments with respect to Facility LCs are to be made.

     2.18. Non-Receipt of Funds by the Administrative Agent. Unless the Borrower or a Lender, as the case may be, notifies the Administrative Agent prior to the date on which it is scheduled to make payment to the Administrative Agent of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal, interest or fees to the Administrative Agent for the account of the Lenders, that it does not intend to make such payment, the Administrative Agent may assume that such payment has been made. The Administrative Agent may, but shall not be obligated to, make the amount of such payment available to the intended recipient in reliance upon such assumption. If such Lender or the Borrower, as the case may be, has not in fact made such payment to the Administrative Agent, the recipient of such payment shall, on demand by the Administrative Agent, repay to the Administrative Agent the amount so made available together with interest thereon in respect of each day during the period commencing on the date such amount was so made available by the Administrative Agent until the date the Administrative Agent recovers such amount at a rate per annum equal to (x) in the case of payment by a Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (y) in the case of payment by the Borrower, the interest rate applicable to the relevant Loan.

     2.19. Facility LCs.

          (a) Issuance. The LC Issuer hereby agrees, on the terms and conditions set forth in this Agreement, to issue standby and commercial Letters of Credit denominated in Dollars (each, a “Facility LC”) and to renew, extend, increase, decrease or otherwise modify each Facility LC (“Modify,” and each such action a “Modification”), from time to time from and including the date of this Agreement and prior to the Facility Termination Date upon the request of the Borrower; provided that immediately after each such Facility LC is issued or Modified, (i) the aggregate amount of the outstanding LC Obligations shall not exceed $40,000,000 and (ii) the Aggregate Outstanding Credit Exposure shall not exceed the Aggregate Commitment. No Facility LC shall have an expiry date later than the earlier to occur of (x) the fifth Business Day prior to the Facility Termination Date and (y) one year after its issuance; provided, however, that the expiry date of a Facility LC may be up to one year later than the fifth Business Day prior to the Facility Termination Date if the Borrower has posted on or before the fifth Business Day prior to the Facility Termination Date cash collateral in the Facility LC Collateral Account on terms satisfactory to the Administrative Agent in an amount equal to 105% of the LC Obligations with respect to such Facility LC. Schedule 2.19 sets forth a list of existing letters of credit outstanding as of the date hereof (the “Existing Facility LCs”) issued by U.S. Bank National Association for the account of the Borrower or a Subsidiary thereof. On and after the date hereof, the Existing Facility LCs shall constitute Facility LCs deemed to have been issued under this Agreement.

          (b) Participations. Upon the issuance or Modification by the LC Issuer of a Facility LC in accordance with this Section 2.19, the LC Issuer shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably sold to each Lender, and each Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the LC Issuer, a participation in such Facility LC (and each Modification thereof) and the related LC Obligations in proportion to its Pro Rata Share.

          (c) Notice. Subject to Section 2.19(a), the Borrower shall give the Administrative Agent notice prior to 10:00 a.m. (California time) at least three (3) Business Days prior to the proposed date of issuance or Modification of each Facility LC, specifying the beneficiary, the proposed date of issuance (or Modification) and the expiry date of such Facility LC, and describing the proposed terms of such Facility LC and the nature of the transactions proposed to be supported thereby. Upon receipt of such notice, the Administrative Agent shall promptly notify the LC Issuer and each Lender, of the contents thereof and of the amount of such Lender’s participation in such proposed Facility LC. The issuance or Modification by the LC Issuer of any Facility LC shall, in addition to the conditions precedent set forth in Article IV, be subject to the conditions precedent that such Facility LC shall be satisfactory to the LC Issuer and that the Borrower shall have executed and delivered such application agreement and/or such other instruments and agreements relating to such Facility LC as the LC Issuer shall have reasonably requested (each, a “Facility LC Application”). The LC Issuer shall have no independent duty to ascertain whether the conditions set forth in Article IV have been satisfied; provided, however, that the LC Issuer shall not issue a Facility LC if, on or before the proposed date of issuance, the LC Issuer shall have received notice from the Administrative Agent or the Required Lenders that any such condition has not been satisfied or waived. In the event of any conflict between the terms of this Agreement and the terms of any Facility LC Application, the terms of this Agreement shall control.

          (d) Evergreen Letters of Credit. If the Borrower so requests in any Facility LC Application, the LC Issuer agrees to issue a Facility LC that has automatic renewal provisions (each, an “Evergreen Letter of Credit”); provided that (i) any such Evergreen Letter of Credit must permit the LC Issuer to prevent any such renewal at least once in each twelve-month period (commencing with the date of issuance of such Facility LC) by giving prior notice to the beneficiary thereof not later than one (1) Business Day (the “Non-Renewal Notice Date”) in each such twelve-month period to be agreed upon at the time such Facility LC is issued and (ii) no such Evergreen Letter of Credit shall have an expiry date later than the earlier to occur of (x) the fifth Business Day prior to the Facility Termination Date and (y) one year after its issuance; provided, however, that the expiry date of an Evergreen Letter of Credit may be up to one year later than the fifth Business Day prior to the Facility Termination Date if the Borrower has posted on or before the fifth Business Day prior to the Facility Termination Date cash collateral in the Facility LC Collateral Account on terms satisfactory to the Administrative Agent in an amount equal to 105% of the LC Obligations with respect to such Evergreen Letter of Credit. Unless otherwise directed by the LC Issuer, the Borrower shall not be required to make a specific request to the LC Issuer for any such renewal.

          (e) LC Fees. The Borrower shall pay to the Administrative Agent, for the account of the Lenders ratably in accordance with their respective Pro Rata Shares, (i) with respect to each Facility LC which is a standby Letter of Credit, a letter of credit fee at a per annum rate equal to the Applicable Margin for Eurodollar Loans in effect from time to time on the average daily undrawn stated amount under such Facility LC, and (ii) with respect to each Facility LC which is a commercial Letter of Credit, a letter of credit fee at a per annum rate equal to one-half (1/2) of the Applicable Margin for Eurodollar Loans in effect from time to time on the average daily undrawn stated amount under such Facility LC, in each case, such fee to be payable in arrears on each Payment Date (the “LC Fee”). The Borrower shall also pay to the LC Issuer for its own account (x) a fronting fee in the amount set forth in the Fee Letter and (y) on demand, all amendment, drawing and other fees regularly charged by the LC Issuer to its letter

of credit customers and all out-of-pocket expenses incurred by the LC Issuer in connection with the issuance, Modification, administration or payment of any Facility LC.

          (f) Administration; Reimbursement by Lenders. Upon receipt from the beneficiary of any Facility LC of any demand for payment under such Facility LC, the LC Issuer shall notify the Administrative Agent and the Administrative Agent shall promptly notify the Borrower and each other Lender as to the amount to be paid by the LC Issuer as a result of such demand and the proposed payment date (the “LC Payment Date”). The responsibility of the LC Issuer to the Borrower and each Lender shall be only to determine that the documents (including each demand for payment) delivered under each Facility LC in connection with such presentment shall be in conformity in all material respects with such Facility LC. The LC Issuer shall endeavor to exercise the same care in the issuance and administration of the Facility LCs as it does with respect to letters of credit in which no participations are granted, it being understood that in the absence of any gross negligence or willful misconduct by the LC Issuer, each Lender shall be unconditionally and irrevocably liable without regard to the occurrence of any Event of Default or any condition precedent whatsoever, to reimburse the LC Issuer on demand for (i) such Lender’s Pro Rata Share of the amount of each payment made by the LC Issuer under each Facility LC to the extent such amount is not reimbursed by the Borrower pursuant to Section 2.19(g) below and there are not funds available in the Facility LC Collateral Account to cover the same, plus (ii) interest on the foregoing amount to be reimbursed by such Lender, for each day from the date of the LC Issuer’s demand for such reimbursement (or, if such demand is made after 11:00 a.m. (California time) on such date, from the next succeeding Business Day) to the date on which such Lender pays the amount to be reimbursed by it, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

          (g) Reimbursement by Borrower. The Borrower shall be irrevocably and unconditionally obligated to reimburse the LC Issuer on or before the applicable LC Payment Date for any amounts to be paid by the LC Issuer upon any drawing under any Facility LC, without presentment, demand, protest or other formalities of any kind; provided that neither the Borrower nor any Lender shall hereby be precluded from asserting any claim for direct (but not consequential) damages suffered by the Borrower or such Lender to the extent, but only to the extent, caused by (i) the willful misconduct or gross negligence of the LC Issuer in determining whether a request presented under any Facility LC issued by it complied with the terms of such Facility LC or (ii) the LC Issuer’s failure to pay under any Facility LC issued by it after the presentation to it of a request strictly complying with the terms and conditions of such Facility LC. All such amounts paid by the LC Issuer and remaining unpaid by the Borrower shall bear interest, payable on demand, for each day until paid at a rate per annum equal to (x) the rate applicable to Base Rate Advances for such day if such day falls on or before the applicable LC Payment Date and (y) the sum of 2.00% plus the rate applicable to Base Rate Advances for such day if such day falls after such LC Payment Date. The LC Issuer will pay to each Lender ratably in accordance with its Pro Rata Share all amounts received by it from the Borrower for application in payment, in whole or in part, of the Reimbursement Obligation in respect of any Facility LC issued by the LC Issuer, but only to the extent such Lender has made payment to the LC Issuer in respect of such Facility LC pursuant to Section 2.19(f). Subject to the terms and conditions of this Agreement (including without limitation the submission of a Borrowing Notice in compliance with Section 2.8 and the satisfaction of the applicable conditions precedent set forth in Article IV), the Borrower may request an Advance hereunder for the purpose of satisfying any Reimbursement Obligation.

          (h) Obligations Absolute. The Borrower’s obligations under this Section 2.19 shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which the Borrower may have or have had against the LC Issuer, any Lender or any beneficiary of a Facility LC. The Borrower further agrees with the LC Issuer and the Lenders that the LC Issuer and the Lenders shall not be responsible for, and the Borrower’s

Reimbursement Obligation in respect of any Facility LC shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even if such documents should in fact prove to be in any or all respects invalid, fraudulent or forged, or any dispute between or among the Borrower, any of its Affiliates, the beneficiary of any Facility LC or any financing institution or other party to whom any Facility LC may be transferred or any claims or defenses whatsoever of the Borrower or of any of its Affiliates against the beneficiary of any Facility LC or any such transferee. The LC Issuer shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Facility LC. The Borrower agrees that any action taken or omitted by the LC Issuer or any Lender under or in connection with each Facility LC and the related drafts and documents, if done without gross negligence or willful misconduct, shall be binding upon the Borrower and shall not put the LC Issuer or any Lender under any liability to the Borrower. Nothing in this Section 2.19(h) is intended to limit the right of the Borrower to make a claim against the LC Issuer for damages as contemplated by the proviso to the first sentence of Section 2.19(g).

          (i) Actions of LC Issuer. The LC Issuer shall be entitled to rely, and shall be fully protected in relying, upon any Facility LC, draft, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, facsimile, telex, teletype or electronic mail message, statement, order or other document believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by the LC Issuer. The LC Issuer shall be fully justified in failing or refusing to take any action under this Agreement unless it shall first have received such advice or concurrence of the Required Lenders as it reasonably deems appropriate or it shall first be indemnified to its reasonable satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Notwithstanding any other provision of this Section 2.19, the LC Issuer shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement in accordance with a request of the Required Lenders, and such request and any action taken or failure to act pursuant thereto shall be binding upon the Lenders and any future holders of a participation in any Facility LC.

          (j) [Intentionally Omitted].

          (k) Lenders’ Indemnification. Each Lender shall, ratably in accordance with its Pro Rata Share, indemnify the LC Issuer, its affiliates and their respective directors, officers, agents and employees (to the extent not reimbursed by the Borrower) against any cost, expense (including reasonable counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from such indemnitees’ gross negligence or willful misconduct or the LC Issuer’s failure to pay under any Facility LC after the presentation to it of a request strictly complying with the terms and conditions of the Facility LC) that such indemnitees may suffer or incur in connection with this Section 2.19 or any action taken or omitted by such indemnitees hereunder.

          (l) Facility LC Collateral Account. The Borrower agrees that it will, upon the request of the Administrative Agent or the Required Lenders and until the final expiration date of any Facility LC and thereafter as long as any amount is payable to the LC Issuer or the Lenders in respect of any Facility LC, maintain a special collateral account pursuant to arrangements satisfactory to the Administrative Agent (the “Facility LC Collateral Account”), in the name of such Borrower but under the sole dominion and control of the Administrative Agent, for the benefit of the Lenders and in which such Borrower shall have no interest other than as set forth in Section 8.1. The Borrower hereby pledges, assigns and grants to the Administrative Agent, on behalf of and for the ratable benefit of the Lenders and the LC Issuer, a security interest in all of the Borrower’s right, title and interest in and to all funds which may from time to time be on deposit in the Facility LC Collateral Account to secure the prompt and complete payment and performance of the Obligations. The Administrative Agent will invest any funds

on deposit from time to time in the Facility LC Collateral Account in certificates of deposit of U.S. Bank having a maturity not exceeding thirty (30) days. Nothing in this Section 2.19(l) shall either obligate the Administrative Agent to require the Borrower to deposit any funds in the Facility LC Collateral Account or limit the right of the Administrative Agent to release any funds held in the Facility LC Collateral Account in each case other than as required by Section 8.1.

          (m) Rights as a Lender. In its capacity as a Lender, the LC Issuer shall have the same rights and obligations as any other Lender.

     2.20. Replacement of Lender. If the Borrower is required pursuant to Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any Lender’s obligation to make or continue, or to convert Base Rate Advances into Eurodollar Advances shall be suspended pursuant to Section 3.3 or if any Lender defaults in its obligation to make a Loan, reimburse the LC Issuer pursuant to Section 2.19(e) or the Swing Line Lender pursuant to Section 2.4(d) or declines to approve an amendment or waiver requiring the consent of “all of the Lenders” or “each Lender directly affected thereby” that is approved by the Required Lenders or otherwise becomes a Defaulting Lender (any Lender so affected an “Affected Lender”), the Borrower may elect, if such amounts continue to be charged or such suspension is still effective, to replace such Affected Lender as a Lender party to this Agreement, provided that, concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Borrower and the Administrative Agent shall agree, as of such date, to purchase for cash the Advances and other Obligations due to the Affected Lender pursuant to an assignment substantially in the form of Exhibit B and to become a Lender for all purposes under this Agreement and to assume all obligations of the Affected Lender to be terminated as of such date and to comply with the requirements of Section 12.3 applicable to assignments, and (ii) the Borrower shall pay to such Affected Lender in same day funds on the day of such replacement all interest, fees and other amounts then accrued but unpaid to such Affected Lender by the Borrower hereunder to and including the date of termination, including without limitation payments due to such Affected Lender under Sections 3.1, 3.2, 3.4 and 3.5.

     2.21. Limitation of Interest. The Borrower, the Administrative Agent and the Lenders intend to strictly comply with all applicable laws, including applicable usury laws. Accordingly, the provisions of this Section 2.21 shall govern and control over every other provision of this Agreement or any other Loan Document which conflicts or is inconsistent with this Section 2.21, even if such provision declares that it controls. As used in this Section 2.21, the term “interest” includes the aggregate of all charges, fees, benefits or other compensation which constitute interest under applicable law, provided that, to the maximum extent permitted by applicable law, (a) any non-principal payment shall be characterized as an expense or as compensation for something other than the use, forbearance or detention of money and not as interest, and (b) all interest at any time contracted for, reserved, charged or received shall be amortized, prorated, allocated and spread, in equal parts during the full term of the Obligations. In no event shall the Borrower or any other Person be obligated to pay, or any Lender have any right or privilege to reserve, receive or retain, (a) any interest in excess of the maximum amount of nonusurious interest permitted under the applicable laws (if any) of the United States or of any applicable state, or (b) total interest in excess of the amount which such Lender could lawfully have contracted for, reserved, received, retained or charged had the interest been calculated for the full term of the Obligations at the Highest Lawful Rate. On each day, if any, that the interest rate (the “Stated Rate”) called for under this Agreement or any other Loan Document exceeds the Highest Lawful Rate, the rate at which interest shall accrue shall automatically be fixed by operation of this sentence at the Highest Lawful Rate for that day, and shall remain fixed at the Highest Lawful Rate for each day thereafter until the total amount of interest accrued equals the total amount of interest which would have accrued if there were no such ceiling rate as is imposed by this sentence. Thereafter, interest shall accrue at the Stated Rate unless and until the Stated Rate again exceeds the Highest Lawful Rate when the provisions of the immediately preceding sentence shall again automatically operate to limit the interest accrual rate. The daily interest rates to be used in

calculating interest at the Highest Lawful Rate shall be determined by dividing the applicable Highest Lawful Rate per annum by the number of days in the calendar year for which such calculation is being made. None of the terms and provisions contained in this Agreement or in any other Loan Document which directly or indirectly relate to interest shall ever be construed without reference to this Section 2.21, or be construed to create a contract to pay for the use, forbearance or detention of money at an interest rate in excess of the Highest Lawful Rate. If the term of any Obligation is shortened by reason of acceleration of maturity as a result of any Event of Default or by any other cause, or by reason of any required or permitted prepayment, and if for that (or any other) reason any Lender at any time, including but not limited to, the stated maturity, is owed or receives (and/or has received) interest in excess of interest calculated at the Highest Lawful Rate, then and in any such event all of any such excess interest shall be canceled automatically as of the date of such acceleration, prepayment or other event which produces the excess, and, if such excess interest has been paid to such Lender, it shall be credited pro tanto against the then-outstanding principal balance of the Borrower’s obligations to such Lender, effective as of the date or dates when the event occurs which causes it to be excess interest, until such excess is exhausted or all of such principal has been fully paid and satisfied, whichever occurs first, and any remaining balance of such excess shall be promptly refunded to its payor.

     2.22. Defaulting Lenders. Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

          (a) fees shall cease to accrue on the unfunded portion of the Commitment of such Defaulting Lender pursuant to Section 2.5;

          (b) the Commitment and Outstanding Credit Exposure of such Defaulting Lender shall not be included in determining whether all Lenders or the Required Lenders have taken or may take any action hereunder;

          (c) if any Swing Line Loans shall be outstanding or any LC Obligations shall exist at the time a Lender becomes a Defaulting Lender then:

	(i)		all or any part of the unfunded participations in and commitments with respect to such Swing Line Loans or Facility LCs shall be reallocated among the non-Defaulting Lenders in accordance with their respective Pro Rata Shares but only to the extent (x) the sum of all non-Defaulting Lenders’ Outstanding Credit Exposure plus such Defaulting Lenders’ Loans and participations in and commitments with respect to Loans and Facility LCs does not exceed the total of all non-Defaulting Lender’s Commitments and (y) the conditions set forth in Article IV are satisfied at such time; provided, that the LC Fees payable to the Lenders shall be determined taking into account such reallocation.
	(ii)		if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall within one Business Day following notice by the Administrative Agent (x) first, prepay the outstanding Swing Line Loans that were not reallocated and (y) second, cash collateralize such Defaulting Lender’s Pro Rata Share of the LC Obligations in accordance with the procedures set forth in Section 8.1 for so long as such Facility LC Exposure is outstanding;
	(iii)		if the Borrower cash collateralizes any portion of such Defaulting Lender’s Facility LC Exposure pursuant to clause (ii) above, the Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.19(e) with respect to such Defaulting

Lender’s Facility LC Exposure during the period such Defaulting Lender’s Facility LC Exposure is cash collateralized; and

(iv)

if any Defaulting Lender’s Facility LC Exposure is not cash collateralized pursuant to clause (ii) above, then, without prejudice to any rights or remedies of the LC Issuer or any Lender hereunder, all letter of credit fees payable under Section 2.19(e) with respect to such Defaulting Lender’s Facility LC Exposure shall be payable to the LC Issuer until such Facility LC Exposure is cash collateralized;

          (d) so long as any Lender is a Defaulting Lender, the LC Issuer shall not be required to issue or Modify any Facility LC, unless it is satisfied that the related exposure will be 100% covered by cash collateral provided by the Borrower in accordance with Section 2.22(c); and

          (e) 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 Section 11.2 but excluding Section 2.20) shall, in lieu of being distributed to such Defaulting Lender, be retained by the Administrative Agent in a segregated 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, to the payment of any amounts owing by such Defaulting Lender to the LC Issuer or Swing Line Lender hereunder, (iii) third, to the funding of any Revolving Loan or the funding or cash collateralization of any participating interest in any Swing Line Loan or Facility LC 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 Borrower, held in such account as cash collateral for future funding obligations of the Defaulting Lender under this Agreement, (v) fifth, to the payment of any amounts owing to the Borrower or the Lenders as a result of any judgment of a court of competent jurisdiction obtained by the 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, if so determined by the Administrative Agent, distributed to the Lenders other than the Defaulting Lender until the ratio of the Outstanding Credit Exposure of such Lenders to the Aggregate Outstanding Exposure equals such ratio immediately prior to the Defaulting Lender’s failure to fund any portion of any Loans or participations in Facility LCs or Swing Line Loans and (vii) seventh, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided, that if such payment is a prepayment of the principal amount of any Loans or Reimbursement Obligations in respect of draws under Facility LCs with respect to which the LC Issuer has funded its participation obligations, such payment shall be applied solely to prepay the Loans of, and Reimbursement Obligations owed to, all Lenders that are not Defaulting Lenders pro rata prior to being applied to the prepayment of any Loans, or Reimbursement Obligations owed to, any Defaulting Lender.

In the event that the Administrative Agent, the Borrower, the LC Issuer and the Swing Line Lender each agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swing Line Exposure and Facility LC Exposure 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 the Revolving Loans in accordance with its Pro Rata Share. For purposes of this Section 2.22, (x) “Swing Line Exposure” shall mean, with respect to any Defaulting Lender at any time, such Defaulting Lender’s Pro Rata Share of the aggregate principal amount of all Swing Line Loans outstanding at such time and (y) “Facility LC Exposure” shall mean, with respect to any Defaulting Lender at any time, such Defaulting Lender’s Pro Rata Share of the LC Obligations at such time.

Nothing contained in the foregoing shall be deemed to constitute a waiver by the Borrower of any of its rights or remedies (whether in equity or law) against any Lender which fails to fund any of its Loans hereunder at the time or in the amount required to be funded under the terms of this Agreement.

     2.23. Increase Option. So long as no Default or Event of Default has occurred and is continuing, the Borrower may from time to time elect to increase the Commitments, in each case in minimum increments of $5,000,000 or such lower amount as the Borrower and the Administrative Agent agree upon, so long as, after giving effect thereto, the aggregate amount of such increases does not exceed $25,000,000. The Borrower may arrange for any such increase to be provided by one or more Lenders (each Lender so agreeing to an increase in its Commitment, an “Increasing Lender”), or by one or more new banks, financial institutions or other entities (each such new bank, financial institution or other entity, an “Augmenting Lender”), to increase their existing Commitments, or extend Commitments, as the case may be; provided that (i) each Augmenting Lender shall be subject to the reasonable approval of the Borrower and the Administrative Agent and (ii) (x) in the case of an Increasing Lender, the Borrower and such Increasing Lender execute an agreement substantially in the form of Exhibit E hereto, and (y) in the case of an Augmenting Lender, the Borrower and such Augmenting Lender execute an agreement substantially in the form of Exhibit F hereto. No consent of any Lender (other than the Lenders participating in the increase) shall be required for any increase in Commitments pursuant to this Section 2.23. Increases and new Commitments created pursuant to this Section 2.23 shall become effective on the date agreed by the Borrower, the Administrative Agent and the relevant Increasing Lenders or Augmenting Lenders, and the Administrative Agent shall notify each Lender thereof. Notwithstanding the foregoing, no increase in the Commitments (or in the Commitment of any Lender) shall become effective under this paragraph unless, (i) on the proposed date of the effectiveness of such increase, (A) the conditions set forth in paragraphs (i) and (ii) of Section 4.2 shall be satisfied or waived by the Required Lenders and the Administrative Agent shall have received a certificate to that effect dated such date and executed by an Authorized Officer of the Borrower and (B) the Borrower shall be in compliance (on a Pro Forma Basis) with the covenants contained in Section 6.26 and (ii) the Administrative Agent shall have received documents reasonably requested by it and consistent with those delivered on the date hereof as to the corporate power and authority of the Borrower to borrow hereunder after giving effect to such increase. On the effective date of any increase in the Commitments, (i) each relevant Increasing Lender and Augmenting Lender shall make available to the Administrative Agent such amounts in immediately available funds as the Administrative Agent shall determine, for the benefit of the other Lenders, as being required in order to cause, after giving effect to such increase and the use of such amounts to make payments to such other Lenders, each Lender’s portion of the outstanding Revolving Loans of all the Lenders to equal its Pro Rata Share of such outstanding Revolving Loans, and (ii) the Borrower shall be deemed to have repaid and reborrowed all outstanding Revolving Loans as of the date of any increase in the Commitments (with such reborrowing to consist of the Types of Revolving Loans, with related Interest Periods if applicable, specified in a notice delivered by the Borrower, in accordance with the requirements of Section 2.3). The deemed payments made pursuant to clause (ii) of the immediately preceding sentence shall be accompanied by payment of all accrued interest on the amount prepaid and, in respect of each Eurodollar Loan, shall be subject to indemnification by the Borrower pursuant to the provisions of Section 3.4 if the deemed payment occurs other than on the last day of the related Interest Periods.

ARTICLE III

YIELD PROTECTION; TAXES

     3.1. Yield Protection. If, on or after the date of this Agreement, any law or any governmental or quasi-governmental rule, regulation, policy, guideline or directive (whether or not having the force of law) is adopted, or any change is made in the interpretation, promulgation, implementation or

administration thereof by any governmental or quasi-governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, including, notwithstanding the foregoing, all requests, rules, guidelines or directives in connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act regardless of the date enacted, adopted or issued, or compliance by any Lender or applicable Lending Installation or the LC Issuer with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency:

          (a) subjects any Lender or any applicable Lending Installation, the LC Issuer or the Administrative Agent to any taxes, duties, levies, imposts, deductions, assessments, fees, charges or withholdings, and any and all liabilities with respect to the foregoing (other than (A) Taxes, (B) Other Taxes or (C) Excluded Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto, or

          (b) imposes or increases or deems applicable any reserve, assessment, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender or any applicable Lending Installation or the LC Issuer (other than reserves and assessments taken into account in determining the interest rate applicable to Eurodollar Advances) and Daily Eurodollar Loans, or

          (c) imposes any other condition the result of which is to increase the cost to any Lender or any applicable Lending Installation or the LC Issuer of making, funding or maintaining its Eurodollar Loans or Daily Eurodollar Loans, or of issuing or participating in Facility LCs, or reduces any amount receivable by any Lender or any applicable Lending Installation or the LC Issuer in connection with its Eurodollar Loans, or Daily Eurodollar Loans, Facility LCs or participations therein, or requires any Lender or any applicable Lending Installation or the LC Issuer to make any payment calculated by reference to the amount of Eurodollar Loans, or Daily Eurodollar Loans, Facility LCs or participations therein held or interest or LC Fees received by it, by an amount deemed material by such Lender or the LC Issuer as the case may be,

and the result of any of the foregoing is to increase the cost to such Lender or applicable Lending Installation, the LC Issuer or the Administrative Agent, as the case may be, of making or maintaining its Loans or Commitment or of issuing or participating in Facility LCs or to reduce the return received by such Lender or applicable Lending Installation, the LC Issuer or the Administrative Agent, as the case may be, in connection with such Loans or Commitment, Facility LCs or participations therein, then, within 15 days after demand by such Lender, the LC Issuer or the Administrative Agent, as the case may be, the Borrower shall pay such Lender, the LC Issuer or the Administrative Agent, as the case may be, such additional amount or amounts as will compensate such Lender, the LC Issuer or the Administrative Agent, as the case may be, for such increased cost or reduction in amount received.

     3.2. Changes in Capital Adequacy Regulations. If a Lender or the LC Issuer determines the amount of capital required or expected to be maintained by such Lender or the LC Issuer, any Lending Installation of such Lender or the LC Issuer, or any corporation or holding company controlling such Lender or the LC Issuer is increased as a result of a Change (as hereinafter defined), then, within 15 days of demand by such Lender or the LC Issuer, the Borrower shall pay such Lender or the LC Issuer the amount necessary to compensate for any shortfall in the rate of return on the portion of such increased capital which such Lender or the LC Issuer determines is attributable to this Agreement, its Outstanding Credit Exposure or its Commitment to make Loans and issue or participate in Facility LCs, as the case may be, hereunder (after taking into account such Lender’s or the LC Issuer’s policies as to capital adequacy). “Change” means (i) any change after the date of this Agreement in the Risk-Based Capital Guidelines (as hereinafter defined) or (ii) any adoption of or change in any other law, governmental or quasi-governmental rule, regulation, policy, guideline, interpretation, or directive (whether or not having

the force of law) or in the interpretation, promulgation, implementation or administration thereof after the date of this Agreement which affects the amount of capital required or expected to be maintained by any Lender or the LC Issuer or any Lending Installation or any corporation controlling any Lender or the LC Issuer. Notwithstanding the foregoing, for purposes of this Agreement, all requests, rules, guidelines or directives in connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act shall be deemed to be a Change regardless of the date enacted, adopted or issued. All requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Regulations and Supervisory Practices (or any successor or similar authority) or the United States financial regulatory authorities shall be deemed to be a Change regardless of the date adopted, issued, promulgated or implemented. “Risk-Based Capital Guidelines” means (i) the risk-based capital guidelines in effect in the United States on the date of this Agreement, including transition rules, and (ii) the corresponding capital regulations promulgated by regulatory authorities outside the United States including transition rules, and any amendments to such regulations adopted prior to the date of this Agreement.

     3.3. Availability of Types of Advances; Adequacy of Interest Rate. If the Administrative Agent or the Required Lenders determine that deposits of a type and maturity appropriate to match fund Eurodollar Advances or Daily Eurodollar Loans are not available to such Lenders in the relevant market or the Administrative Agent, in consultation with the Lenders, determines that the interest rate applicable to Eurodollar Advances or Daily Eurodollar Loans is not ascertainable or does not adequately and fairly reflect the cost of making or maintaining Eurodollar Advances or Daily Eurodollar Loans, then the Administrative Agent shall suspend the availability of Eurodollar Advances or Daily Eurodollar Loans and require any affected Eurodollar Advances or Daily Eurodollar Loans to be repaid or converted to Base Rate Advances, subject to the payment of any funding indemnification amounts required by Section 3.4.

     3.4. Funding Indemnification. If (a) any payment of a Eurodollar Advance occurs on a date which is not the last day of the applicable Interest Period, whether because of acceleration, prepayment or otherwise, (b) a Eurodollar Advance is not made on the date specified by the Borrower for any reason other than default by the Lenders, (c) a Eurodollar Loan is converted other than on the last day of the Interest Period applicable thereto, (d) the Borrower fails to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto or (e) any Eurodollar Loan is assigned other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.20, the Borrower will indemnify each Lender for such Lender’s costs, expenses and Interest Differential (as determined by such Lender) incurred as a result of such prepayment. The term “Interest Differential” shall mean that sum equal to the greater of zero or the financial loss incurred by the Lender resulting from prepayment, calculated as the difference between the amount of interest such Lender would have earned (from the investments in money markets as of the Borrowing Date of such Advance) had prepayment not occurred and the interest such Lender will actually earn (from like investments in money markets as of the date of prepayment) as a result of the redeployment of funds from the prepayment. Because of the short-term nature of this facility, Borrower agrees that Interest Differential shall not be discounted to its present value.

     3.5. Taxes.

          (a) All payments by the Borrower to or for the account of any Lender, the LC Issuer or the Administrative Agent hereunder or under any Note or Facility LC Application shall be made free and clear of and without deduction for any and all Taxes except as required by law. If the Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Lender, the LC Issuer or the Administrative Agent, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under

this Section 3.5) such Lender, the LC Issuer or the Administrative Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the full amount deducted to the relevant authority in accordance with applicable law and (iv) the Borrower shall furnish to the Administrative Agent the original copy of a receipt, or other evidence of such payment reasonably acceptable to the Administrative Agent, evidencing payment thereof as soon as practicable after such payment is made.

          (b) In addition, the Borrower hereby agrees to pay any present or future stamp or documentary taxes and any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or under any Note or Facility LC Application or from the execution or delivery of, or otherwise with respect to, this Agreement or any Note or Facility LC Application (“Other Taxes”).

          (c) The Borrower hereby agrees to indemnify the Administrative Agent, the LC Issuer and each Lender for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed on amounts payable under this Section 3.5) paid by the Administrative Agent, the LC Issuer or such Lender as a result of its Commitment, any Loans made by it hereunder, or otherwise in connection with its participation in this Agreement and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. Payments due under this indemnification shall be made within thirty (30) days of the date the Administrative Agent, the LC Issuer or such Lender makes demand therefor pursuant to Section 3.6.

          (d) Each Lender that is not incorporated under the laws of the United States of America or a state thereof (each a “Non-U.S. Lender”) agrees that it will, prior to the date on which such Non-U.S. Lender becomes a Lender under this Agreement, deliver to each of the Borrower and Administrative Agent either (i) two (2) duly completed copies of United States Internal Revenue Service Form W-8BEN or W-8ECI, certifying in either case that such Lender is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes, or (ii) in the case of a Non-U.S. Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (A) a certificate to the effect that such Non-U.S. Lender is not (I) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (II) a “ten (10) percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (III) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (B) duly completed copies of Internal Revenue Service Form W-8BEN. Each Non-U.S. Lender further undertakes to deliver to each of the Borrower and the Administrative Agent (x) renewals or additional copies of such form (or any successor form) on or before the date that such form expires or becomes obsolete, and (y) after the occurrence of any event requiring a change in the most recent forms so delivered by it, such additional forms or amendments thereto as may be reasonably requested by the Borrower or the Administrative Agent. All forms or amendments described in the preceding sentence shall provide evidence that such Lender is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes, unless an event (including without limitation any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such form or amendment with respect to it and such Lender advises the Borrower and the Administrative Agent that it is not capable of receiving payments without any deduction or withholding of United States federal income tax.

          (e) For any period during which a Non-U.S. Lender has failed to provide the Borrower with an appropriate form pursuant to clause (d) above (unless such failure is due to a change in treaty, law or regulation, or any change in the interpretation or administration thereof by any governmental authority, occurring subsequent to the date on which a form originally was required to be provided), such Non-U.S. Lender shall not be entitled to indemnification or additional amounts under this

Section 3.5 with respect to Taxes imposed by the United States; provided that, should a Non-U.S. Lender which is otherwise exempt from or subject to a reduced rate of withholding tax become subject to Taxes because of its failure to deliver a form required under clause (d) above, the Borrower shall take such steps as such Non-U.S. Lender shall reasonably request to assist such Non-U.S. Lender to recover such Taxes.

          (f) Any Lender that is entitled to an exemption from or reduction of withholding tax with respect to payments under this Agreement or any Note pursuant to the law of any relevant jurisdiction or any treaty shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate.

          (g) If the U.S. Internal Revenue Service or any other governmental authority of the United States or any other country or any political subdivision thereof asserts a claim that the Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Lender (because the appropriate form was not delivered or properly completed, because such Lender failed to notify the Administrative Agent of a change in circumstances which rendered its exemption from withholding ineffective, or for any other reason), such Lender shall indemnify the Administrative Agent fully for all amounts paid, directly or indirectly, by the Administrative Agent as tax, withholding therefor, or otherwise, including penalties and interest, and including taxes imposed by any jurisdiction on amounts payable to the Administrative Agent under this subsection, together with all costs and expenses related thereto (including attorneys fees and time charges of attorneys for the Administrative Agent, which attorneys may be employees of the Administrative Agent). The obligations of the Lenders under this Section 3.5(g) shall survive the payment of the Obligations and termination of this Agreement.

          (h) If a payment made to a Lender hereunder, or under any Note or Facility LC Application 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 (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent, at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and 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. Solely for purposes of this Section 3.5(h), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

          (i) If the Administrative Agent, LC Issuer or any Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 3.5, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 3.5) with respect to the Taxes or Other Taxes giving rise to such refund, net of all out-of-pocket expenses of the Administrative Agent, LC Issuer or Lender, as the case may be, and without interest (other than interest paid by the relevant governmental authority with respect to such refund); provided that such Borrower, upon the request of the Administrative Agent, LC Issuer or Lender, as the case may be, agrees to repay the amount paid over to such Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent, LC Issuer or Lender in the event the Administrative Agent, LC Issuer or Lender is required to repay such refund to such Governmental Authority. This Section 3.5(i) shall not be construed to require Administrative Agent, LC Issuer or

Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person.

     3.6. Selection of Lending Installation; Mitigation Obligations; Lender Statements; Survival of Indemnity. To the extent reasonably possible, each Lender shall designate an alternate Lending Installation to reduce any liability of the Borrower to such Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of Eurodollar Advances or Daily Eurodollar Loans under Section 3.3, so long as such designation is not, in the judgment of such Lender, materially disadvantageous to such Lender. Each Lender shall deliver a written statement of such Lender to the Borrower (with a copy to the Administrative Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth in reasonable detail the calculations upon which such Lender determined such amount and shall be final, conclusive and binding on the Borrower in the absence of manifest error. Determination of amounts payable under such Sections in connection with a Eurodollar Loan or Daily Eurodollar Loan shall be calculated as though each Lender funded its Eurodollar Loan and the Swing Line Lender funded its Daily Eurodollar Loans through the purchase of a deposit of the type and maturity corresponding to the deposit used as a reference in determining the Eurodollar Rate or Daily Eurodollar Rate applicable to such Loan, whether in fact that is the case or not. Unless otherwise provided herein, the amount specified in the written statement of any Lender shall be payable on demand after receipt by the Borrower of such written statement. The obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the Obligations and termination of this Agreement.

ARTICLE IV

CONDITIONS PRECEDENT

     4.1. Initial Credit Extension. The Lenders shall not be required to make the initial Credit Extension hereunder unless each of the following conditions is satisfied:

          (a) The Administrative Agent shall have received executed counterparts of each of this Agreement and the Subsidiary Guaranty.

          (b) The Administrative Agent shall have received a certificate, signed by the chief accounting officer or the treasurer of the Borrower, stating that on the date of the initial Credit Extension (1) no Default or Event of Default has occurred and is continuing and (2) the representations and warranties contained in Article V are (x) with respect to any representations or warranties that contain a materiality qualifier, true and correct in all respects and (y) with respect to any representations or warranties that do not contain a materiality qualifier, true and correct in all material respects as of such date, except, in each case, to the extent any such representation or warranty is stated to relate solely to an earlier date, in which case such representation or warranty shall have been true and correct (or true and correct in all material respects, as applicable) on and as of such earlier date.

          (c) The Administrative Agent shall have received written legal opinions of each of (i) Orrick, Herrington & Sutcliffe LLP, counsel to the Borrower and the other Loan Parties, and (ii) in-house counsel to the Borrower and the other Loan Parties, in each case addressed to the Lenders and in the forms attached hereto as Exhibits M-1 and M-2, respectively.

          (d) The Administrative Agent shall have received any Notes requested by a Lender pursuant to Section 2.13 payable to the order of each such requesting Lender.

          (e) The Administrative Agent shall have received the Organization Documents and good standing certificates of the Borrower and each initial Guarantor and each of the other closing documents listed on Exhibit G.

          (f) If the initial Credit Extension will be the issuance of a Facility LC, the Administrative Agent shall have received a properly completed Facility LC Application.

          (g) The Administrative Agent shall have received evidence satisfactory to it that the Existing Credit Agreement currently in effect for the Borrower shall have been terminated and cancelled and all indebtedness thereunder shall have been fully repaid (except to the extent being so repaid with the initial Loans) and any and all liens thereunder shall have been terminated and released.

          (h) The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the date hereof, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder.

     4.2. Each Credit Extension. The Lenders shall not (except as otherwise set forth in Section 2.4(d) with respect to Revolving Loans for the purpose of repaying Swing Line Loans) be required to make any borrowing of Loans hereunder or issue a Facility LC hereunder unless on the applicable Borrowing Date:

          (a) There exists no Default or Event of Default, nor would a Default or Event of Default result from such Credit Extension.

          (b) The representations and warranties contained in Article V are (x) with respect to any representations or warranties that contain a materiality qualifier, true and correct in all respects and (y) with respect to any representations or warranties that do not contain a materiality qualifier, true and correct in all material respects as of such Borrowing Date, except, in each case, to the extent any such representation or warranty is stated to relate solely to an earlier date, in which case such representation or warranty shall have been true and correct (or true and correct in all material respects, as applicable) on and as of such earlier date.

     Each Borrowing Notice or Swing Line Borrowing Notice, as the case may be, or request for issuance of a Facility LC with respect to each such Credit Extension shall constitute a representation and warranty by the Borrower that the conditions contained in Sections 4.2(a) and (b) have been satisfied.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

     The Borrower represents and warrants to the Administrative Agent and the Lenders that:

     5.1. Existence, Qualification and Power. The Borrower and each of the Subsidiaries (a) is duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite corporate power and authority to (i) own its assets and carry on its business as presently conducted, and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, including, without limitation, to conduct its business or to own a Health Care Business in the state of its organization, and (c) is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of its properties or the conduct of its business requires such qualification or license, except, in each case referred to in

clauses (b)(i) or (c) to the extent failure to do so could not reasonably be expected to have a Material Adverse Effect.

     5.2. Authorization; No Contravention. The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is party, have been duly authorized by all necessary corporate or other organizational action. The execution, delivery and performance by each Loan Party of each Loan Document to which it is a party, and the consummation of the transactions contemplated hereby with respect to each Loan Party and any of their respective Subsidiaries, do not and will not: (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with in any material respect or result in any material breach or contravention of, or (except for the Liens created under the Loan Documents) the creation of any Lien under, (i) any material Contractual Obligation to which such Person is a party or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any Law applicable to any Loan Party, including, without limitation, state and Federal Laws relating to health care organizations and health care providers except for such violations as could not reasonably be expected to have a Material Adverse Effect.

     5.3. Governmental Authorization; Other Consents. Except as specifically disclosed on Schedule 5.3, no material approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with (a) the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document (other than those that have been obtained), (b) the validity or enforceability of any Loan Documents against the Loan Parties (except such filings as are necessary in connection with the perfection of the Liens created by such Loan Documents), or (c) the consummation of the transactions contemplated hereby (other than those that have been obtained by the Borrower and the Subsidiaries).

     5.4. Binding Effect. This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto. This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, except as enforceability may be limited by Debtor Relief Laws and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

     5.5. Financial Statements; No Material Adverse Effect.

          (a) The Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, (ii) fairly present in all material respects the financial condition of the Borrower and the Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP (or as applicable, with respect to Regulated Subsidiaries, SAP) consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, and (iii) properly reflect, in accordance with GAAP or as applicable, with respect to Regulated Subsidiaries, SAP, all material indebtedness and other material liabilities, direct or contingent, of the Borrower and the Subsidiaries as of the date thereof, including material liabilities for taxes, material commitments and Indebtedness.

          (b) Since the date of the Audited Financial Statements, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.

          (c) The financial statements delivered to the Administrative Agent and each Lender pursuant to Sections 6.1(a) and (b) (i) will be prepared in accordance with GAAP (or, as applicable, with

respect to Regulated Subsidiaries, SAP), except as otherwise noted therein, and (ii) will fairly present in all material respects the financial condition of the Borrower and the Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP (or, as applicable, with respect to Regulated Subsidiaries, SAP).

     5.6. Litigation. There are no actions, suits, proceedings, claims or disputes pending or, to the Actual Knowledge of the Borrower, threatened, at law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower or any of the Subsidiaries or against any of their respective properties or revenues or injunctions, writs, temporary restraining orders or other orders of any nature issued by any court or Governmental Authority that (a) purport to affect, pertain to or enjoin or restrain the execution, delivery or performance of this Agreement or any other Loan Document, or any of the transactions contemplated hereby, or (b) either individually or in the aggregate, in the case of any such suit, proceeding, claim or dispute which is reasonably likely to be adversely determined, either individually or in the aggregate, if determined adversely, could reasonably be expected to have a Material Adverse Effect.

     5.7. No Default. (a) Neither the Borrower nor any of its Subsidiaries is in default under or with respect to any Contractual Obligation and (b) to the knowledge of the Borrower, no other party is in default, and no default has been asserted, under or with respect to any Contractual Obligation, in the case of both (a) and (b), that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Default could reasonably be expected to result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.

     5.8. Subsidiaries. As of the date hereof, the Borrower has no Subsidiaries other than those specifically disclosed in Part (a) of Schedule 5.8 (which disclosure shall include the jurisdiction of organization, classes of capital stock (including options, warrants, rights of subscription, conversion and exchangeability and other similar rights, ownership and ownership percentages thereof) and whether such Subsidiaries are capitalized or licensed as an HMO or another type of Regulated Subsidiary) and has no equity investments in any other corporation or entity other than those specifically disclosed in Part (b) of Schedule 5.8 or on Schedule 6.20. The outstanding shares of capital stock shown have been validly issued, fully-paid and are non-assessable and owned free and clear of Liens. The outstanding shares of capital stock shown are not subject to buy-sell, voting trust or other stockholders agreement.

     5.9. Ownership of Personal Property; Liens. Each of the Borrower and each Subsidiary has good title to all of their respective material personal properties and assets (except for those properties and assets disposed of not in violation of this Agreement and the other Loan Documents and except for encumbrances and title defects that could not reasonably be expected to have a Material Adverse Effect). The property and assets of the Borrower and the Subsidiaries are subject to no Liens, other than Permitted Liens. Each of the Borrower and each of the Subsidiaries has obtained all material licenses, permits, franchises or other certifications, consents, approvals and authorizations, governmental or private, necessary to the ownership of its property and assets and the conduct of its business.

     5.10. Intellectual Property; Licenses, Etc. The Borrower and the Subsidiaries own, or possess the right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent rights and other intellectual property rights (collectively, “IP Rights”) that are reasonably necessary for the operation of its businesses as currently conducted. To the Actual Knowledge of the Borrower the use of such IP Rights by the Borrower and its Subsidiaries does not infringe on the rights of any Person, except for such infringements that, in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

     5.11. Real Estate; Leases.

          (a) Schedule 5.11 sets forth an accurate description, as of the date hereof, of the location, by state and street address, of all Real Property Assets owned by the Borrower and the Subsidiaries under the heading “Fee Properties” and all Real Property Assets leased by the Borrower and the Subsidiaries under the heading “Leased Properties”, together with, in the case of owned Real Property Assets, a statement as to whether each such Real Property Asset is the subject of a contract of sale (and, if so, a statement as to the status of such sale), and, in the case of the each Real Property Asset, the identity of the lessor and lessee, the term of the lease and the annual rental payments.

          (b) The Borrower and each of the Subsidiaries has (i) good and marketable fee title to all of its owned Real Property Assets and (ii) good and valid title to the leasehold estates in all of the leased Real Property Assets, in each case free and clear of all Liens, except Permitted Liens.

     5.12. Environmental Matters. Except as would not reasonably be expected to have a Material Adverse Effect, to the knowledge of the Borrower:

          (a) Each of the Real Property Assets and all operations with respect to Real Property Assets are in compliance with all applicable Environmental Laws, and there is no violation of any Environmental Law with respect to the Real Property Assets or the businesses operated by the Borrower and the Subsidiaries (the “Businesses”), and there are no conditions relating to the Businesses or the Real Property Assets that could be reasonably likely to give rise to liability under any applicable Environmental Laws.

          (b) None of the Real Property Assets contains, or to the Actual Knowledge of the Borrower, has previously contained, any Hazardous Materials at, on or under the Real Property Assets in amounts or concentrations that constitute or constituted a violation of, or could give rise to liability under, Environmental Laws.

          (c) Neither the Borrower nor any of the Subsidiaries has received any written or verbal notice of, or inquiry from any Governmental Authority regarding, any violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of the Real Property Assets or the Businesses, nor does the Borrower have Actual Knowledge that any such notice is being threatened.

          (d) Hazardous Materials have not been transported or disposed of from the Real Property Assets, or generated, treated, stored or disposed of at, on or under any of the Real Property Assets or any other location, in each case by or on behalf of the Borrower or any of the Subsidiaries in violation of, or in a manner that would be reasonably likely to give rise to liability under, any applicable Environmental Law.

          (e) There are no consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements outstanding under any Environmental Law with respect to the Borrower or any of the Subsidiaries, the Real Property Assets or the Businesses.

          (f) There has been no release or threat of release of Hazardous Materials at or from the Real Property Assets, or arising from or related to the operations (including, without limitation, disposal) of the Borrower or any of the Subsidiaries in connection with the Real Property Assets or otherwise in connection with the Businesses, in violation of, or in amounts or in a manner that could reasonably be likely to give rise to liability under, Environmental Laws.

     5.13. Security Documents.

          (a) The Security Agreement is effective to create in favor of the Administrative Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral identified therein owned by the Loan Parties who are a party thereto, and, when financing statements in appropriate form are filed in the appropriate offices for the locations specified in the schedules to the Security Agreement, the Security Agreement shall constitute a fully perfected first priority Lien on, and security interest in, all right, title and interest of the grantors thereunder in such Collateral that may be perfected by filing, recording or registering a financing statement under the UCC as in effect, in each case prior and superior in right to any other Lien on any Collateral other than Permitted Liens.

          (b) The Pledge Agreement is effective to create in favor of the Administrative Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral identified therein, and, when such Collateral is delivered to the Administrative Agent, the Pledge Agreement shall constitute a fully perfected first priority Lien on, and security interest in, all right, title and interest of the pledgors thereunder in such Collateral, in each case subject to no other Lien other than Permitted Liens.

          (c) The Security Agreement, together with the Intellectual Property Security Agreement when duly recorded in the United States Patent and Trademark Office, will constitute a fully perfected Lien on, and security interest in, all right, title and interest of the grantors thereunder in all Trademarks and Trademark Licenses (each as defined in the Security Agreement) owned by such grantors and in which a security interest may be perfected by filing, recording or registration of a Notice in the United States Patent and Trademark Office, in each case prior and superior in right to any other Lien other than Permitted Liens.

          (d) Each Account Control Agreement when duly executed and delivered by the banks and securities intermediaries parties thereto will constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Deposit Accounts and Securities Accounts (described in such Account Control Agreement) prior and superior in right to any other Lien other than Permitted Liens.

          (e) Each Mortgage, when executed and delivered pursuant to Section 6.15 and filed in the real estate recording offices specified in such Mortgage, will be effective to create in favor of the Administrative Agent for the benefit of the Secured Parties a legal, valid and enforceable Lien on, and security interest in, all the right, title and interest of the Loan Parties in and to the Mortgaged Properties thereunder. When any Mortgage is filed in the real estate recording offices specified in such Mortgage, such Mortgage shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in and to the Mortgaged Property and proceeds thereof, in each case subject to no other Lien other than Permitted Liens.

     5.14. Insurance. The properties of the Borrower and the Subsidiaries are insured, with financially sound and reputable insurance companies not Affiliates of the Borrower or through self-insurance as is in accordance with normal industry practice for comparable companies engaged in similar businesses, and in such amounts, with such deductibles and covering such risks as are consistent with the insurance maintained by comparable companies engaged in similar businesses and owning similar properties in localities where the Borrower or the applicable Subsidiary operates. As of the date hereof, the present insurance coverage of the Borrower and each of the Subsidiaries is described as to name of insured, carrier, policy number, expiration date, type and amount on Schedule 5.14.

     5.15. Taxes. The Borrower and each of the Subsidiaries have filed all Federal, material state and other material tax returns and reports required to be filed, and have paid all Federal, material state and

other material taxes, assessments, fees and other governmental charges shown thereon to be due (including interest and penalties) and all other Federal, state and other taxes, assessments, fees and other governmental charges owing by it, except (i) which are not yet due and payable or (ii) that are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP (or as applicable, with respect to Regulated Subsidiaries, SAP) or (iii) where the failure to file such tax returns and reports could not reasonably be expected to have a Material Adverse Effect. To the knowledge of the Borrower, there is no pending investigation or proposed tax assessment against the Borrower or any of the Subsidiaries that would, if made, have a Material Adverse Effect.

     5.16. ERISA Compliance.

          (a) Each Plan is in compliance with the applicable provisions of ERISA, the Code and other Federal or state Laws, except for any failure to so comply that could not reasonably be expected to have a Material Adverse Effect. Each Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination or opinion letter from the IRS or an application for such a letter is currently being processed by the IRS with respect thereto and, to the knowledge of the Borrower, nothing has occurred which would prevent, or cause the loss of, such qualification. The Borrower and each ERISA Affiliate have made all required contributions to each Pension Plan subject to Section 412 of the Code on or before the required due dates, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Pension Plan.

          (b) There are no pending or, to the Actual Knowledge of the Borrower, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.

          (c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Borrower nor any ERISA Affiliate has engaged in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA.

     5.17. Margin Regulations; Investment Company Act.

          (a) The Borrower is not engaged, and will not engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U), or extending credit for the purpose of purchasing or carrying margin stock, and no proceeds of any Loans or drawings under any Letter of Credit will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying margin stock.

          (b) None of the Borrower, any Person Controlling the Borrower, or any Subsidiary is or is required to be registered as an “investment company” under the Investment Company Act of 1940. Neither the making of the Loans, nor the issuance of the Letters of Credit or the application of the proceeds or repayment thereof by the Borrower, nor the consummation of other transactions contemplated hereunder, will violate any provision of any such Act or any rule, regulation or order of the SEC.

     5.18. Disclosure. The Borrower has made available to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which it or any of the Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No written report, financial statement, certificate or other written information furnished by or on behalf of any Loan Party or any of their respective Subsidiaries to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement and the other Loan Documents or delivered hereunder or thereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading as of the time when made or delivered; provided that, with respect to projected financial and projected operational information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed by it to be reasonable at the time.

     5.19. Compliance with Laws. Each of the Borrower and its Subsidiaries is in compliance with the requirements of all Laws (including, without limitation, Health Care Business Regulations applicable to it and its Properties) and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. Without limiting the generality of the foregoing, with respect to the Borrower and each of the Subsidiaries:

          (a) (i) neither the Borrower nor any of the Subsidiaries nor any individual employed by the Borrower or any of the Subsidiaries is reasonably expected to have criminal culpability or to be excluded from participation in any Medical Reimbursement Program for corporate or individual actions or failures to act where such culpability or exclusion has resulted or could reasonably be expected to result in an Exclusion Event; and (ii) there is no officer continuing to be employed by the Borrower or any of the Subsidiaries who may reasonably be expected to have individual culpability for matters under investigation by the OIG or other Governmental Authority relating to the Businesses unless such officer has been, within a reasonable period of time after discovery of such actual or potential culpability, either suspended or removed from positions of responsibility related to those activities under challenge by the OIG or other Governmental Authority;

          (b) current billing policies, arrangements, protocols and instructions comply with requirements of Medical Reimbursement Programs and are administered by properly trained personnel, except where any such failure to comply would not reasonably be expected to result in an Exclusion Event; and

          (c) current medical director compensation arrangements comply with state and federal anti-kick back, fraud and abuse, false claims act, and Stark Law requirements, except where any failure to comply would not reasonably be expected to result in an Exclusion Event.

     5.20. Labor Matters. Except as would not reasonably be expected to have a Material Adverse Effect:

          (a) There are no strikes or lockouts against the Borrower or any Subsidiary pending or, to the Actual Knowledge of the Borrower, threatened;

          (b) The hours worked by and payments made to employees of the Borrower and the Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable federal,

state, local or foreign Law dealing with such matters in any case where a Material Adverse Effect could reasonably be expected to occur as a result of the violation thereof;

          (c) All payments due from the Borrower or any of the Subsidiaries, or for which any claim may be made against the Borrower or any Subsidiary, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of the Borrower or such Subsidiary; and

          (d) Neither the Borrower nor any of the Subsidiaries is a party to a collective bargaining agreement.

     Set forth on Schedule 5.20 is a summary of all labor matters pending or, to the Actual Knowledge of the Borrower, threatened by or against the Borrower or any of the Subsidiaries as of the date hereof, and none of such labor matters, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

     5.21. Licensing. Except to the extent it could not reasonably be expected to result in a Material Adverse Effect, the Borrower and each of the Subsidiaries and, to the Actual Knowledge of the Borrower, each Contract Provider, has, to the extent applicable (a) obtained (or been duly assigned) all required authorizations, consents, approvals, certificates of authority, certificates of need or determinations of need as required by the relevant state Governmental Authority for the acquisition, construction, expansion of, investment in or operation of its businesses as currently operated, (b) obtained and maintains all required licenses, (c) to the extent prudent and customary in the industry in which it is engaged, obtained and maintains accreditation from all generally recognized accrediting agencies, and (d) entered into and maintains its status as a Medicare supplier and as a Medicaid supplier. To the Actual Knowledge of the Borrower, each Contract Provider is duly licensed by each state, state agency, commission or other Governmental Authority having jurisdiction over the provisions of such services by such Contract Provider in the locations where the Borrower or any of the Subsidiaries conduct business, to the extent such licensing is required to enable such Contract Provider to provide the professional services provided by such Contract Provider and otherwise as is necessary to enable the Borrower and the Subsidiaries to operate as currently operated and as contemplated to be operated. To the Actual Knowledge of the Borrower, all such required licenses are in full force and effect on the date hereof and have not been revoked or suspended or otherwise limited.

     5.22. Solvency. On the date hereof and immediately after giving effect to the initial Credit Extension, (a) the fair value of the assets of (i) the Borrower and (ii) the Borrower and its Subsidiaries on a consolidated basis will exceed the debts and liabilities, subordinated, contingent or otherwise, of (i) the Borrower and (ii) the Borrower and its Subsidiaries on a consolidated basis, respectively, (b) the present fair saleable value of the property of (i) the Borrower and (ii) the Borrower and its Subsidiaries on a consolidated basis will be greater than the amount that will be required to pay the probable liability of the debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and mature, of (i) the Borrower and (ii) the Borrower and its Subsidiaries on a consolidated basis, and (c)(i) the Borrower and (ii) the Borrower and its Subsidiaries on a consolidated basis will not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted following the date hereof.

     5.23. Borrower Identification. The true and correct legal name, jurisdiction of formation, address and U.S. taxpayer identification number of the Borrower is set forth on Schedule 5.23.

ARTICLE VI

COVENANTS

     So long as any Lender shall have any Commitment hereunder, any Loan or other matured and non-Contingent Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, the Borrower shall:

     6.1. Financial Statements. Deliver to the Administrative Agent (for further distribution to each Lender), in form and detail satisfactory to the Administrative Agent and the Required Lenders:

          (a) as soon as available, but in any event within (i) the period required by the SEC (plus five (5) days) (commencing with the fiscal year ended December 31, 2011), consolidated balance sheets of the Borrower and the Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations, stockholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, audited and accompanied by (x) a report and opinion of Ernst & Young LLP or another Registered Public Accounting Firm of nationally recognized standing reasonably acceptable to the Required Lenders, which report and opinion shall be prepared in accordance with generally accepted auditing standards and applicable Securities Laws and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit and (y) an attestation report of such Registered Public Accounting Firm with respect to the Borrower’s internal controls pursuant to Section 404 of Sarbanes-Oxley expressing a conclusion to which the Required Lenders do not reasonably object, and (ii) the period required by the applicable Governmental Authority (plus five (5) days) (commencing with the fiscal year ended December 31, 2011), with respect to each Regulated Subsidiary, as applicable, annual financial statements of such Regulated Subsidiary prepared in accordance with SAP; and

          (b) as soon as available, but in any event within (i) the period required by the SEC (plus five (5) days) (commencing with fiscal quarter ended September 30, 2011), consolidated balance sheets of the Borrower and the Subsidiaries as at the end of each of the first three (3) fiscal quarters of each fiscal year of the Borrower and the Subsidiaries, and the related consolidated statements of income or operations, stockholders’ equity and cash flows for such fiscal quarter and for the portion of the Borrower’s or the Subsidiaries’ fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail and certified by a Responsible Officer of the Borrower as fairly presenting the consolidated financial condition, results of operations, stockholders’ equity and cash flows of the Borrower and the Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes, and (ii) the period required by the applicable Governmental Authority (plus five (5) days) (commencing with the fiscal quarter ended September 30, 2011), with respect to each Regulated Subsidiary, as applicable, quarterly financial statements of such Regulated Subsidiary prepared in accordance with SAP.

     As to any information contained in materials furnished pursuant to Section 6.2(d), the Borrower shall not be separately required to furnish such information under subsection (a) or (b) above, but the foregoing shall not be in derogation of the obligation of the Borrower to furnish the information and materials described in subsections (a) and (b) above at the times specified therein.

     6.2. Certificates; Other Information. Deliver to the Administrative Agent (for further distribution to each Lender), in form and detail satisfactory to the Administrative Agent and the Required Lenders:

          (a) concurrently with the delivery of the financial statements referred to in Section 6.1(a), to the extent available on commercially reasonable terms, a certificate of its independent certified public accountants certifying such financial statements and stating that in making the examination necessary therefor no knowledge was obtained of any Default under the financial covenants set forth herein or, if any such Default shall exist, stating the nature and status of such Default and setting forth the details of such Default and the action that the Borrower has taken or proposes to take with respect thereto;

          (b) concurrently with the delivery of the financial statements referred to in Sections 6.1(a) and (b) (commencing with the delivery of the financial statements for the fiscal quarter ended September 30, 2011), a duly completed Compliance Certificate signed by a Responsible Officer of the Borrower. In connection with the delivery by the Borrower of each Compliance Certificate pursuant to this Section 6.2(b), the Borrower shall deliver to the Administrative Agent supplements to Schedules to the Security Agreement and the Pledge Agreement to the extent that there are any changes to such Schedules consistent with the terms of the Loan Documents, together with a statement of the Responsible Officer executing the Compliance Certificate, certifying that, as of the date thereof, after giving effect to the supplements to such Schedules and such report delivered therewith, the representations and warranties in the Loan Documents relating to any such supplemented Schedules and the Collateral are true and correct in all material respects;

          (c) promptly after receipt thereof, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of the Borrower or any of the Subsidiaries by independent accountants in connection with the accounts or books of the Borrower or any of the Subsidiaries, or any audit of any of them;

          (d) promptly after the same are available, (i) copies of management discussion and analysis in relationship to the financial statements delivered pursuant to Sections 6.1(a)(i) and 6.1(b), (ii) copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of the Borrower in their capacities as stockholders, and copies of all annual, regular, periodic and special reports and registration statements which the Borrower may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise required to be delivered to the Administrative Agent pursuant hereto, and (iii) upon the request of the Administrative Agent, all reports and written information to and from the United States Environmental Protection Agency, or any state or local agency responsible for environmental matters, the United States Occupational Health and Safety Administration, or any state or local agency responsible for health and safety matters, or any successor or other agencies or authorities concerning environmental, health or safety matters;

          (e) no later than the date hereof for fiscal year 2010, and as soon as available, but in any event no later than ninety (90) days following the end of each fiscal year of the Borrower thereafter, an annual strategic plan and budget of the Borrower and the Subsidiaries containing, among other things, summary pro forma financial information for the next fiscal year with respect to each calendar month and fiscal quarter;

          (f) promptly, and in any event within five (5) Business Days after receipt thereof by any Loan Party or any Subsidiary thereof, copies of each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or possible investigation or other inquiry by such agency regarding financial or other operational results of any Loan Party or any Subsidiary thereof; and

          (g) as soon as reasonably practicable after the Borrower’s receipt of a request thereof, promptly, such additional information regarding the business, financial or corporate affairs of the

Borrower or any Subsidiary, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may from time to time reasonably request.

     Documents required to be delivered pursuant to Sections 6.1(a) or (b) or Section 6.2(d) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the website address listed in Section 13.1(a)(i); or (ii) on which such documents are posted on the Borrower’s behalf on the Internet or an intranet website, if any, to which each Lender, the LC Issuer and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent, the LC Issuer or any Lender that requests the Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent, the LC Issuer or such Lender and (ii) the Borrower shall notify the Administrative Agent, the LC Issuer and each Lender (by telecopier or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. Notwithstanding anything contained herein, in every instance the Borrower shall be required to provide paper copies of the Compliance Certificates required by Section 6.2(b) to the Administrative Agent. The Administrative Agent shall have no obligation to request the delivery or to maintain copies (except for such Compliance Certificates) of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

     The Borrower hereby acknowledges that (a) the Administrative Agent, the Lead Arranger and/or the Book Runner will make available to the Lenders and the LC Issuer materials and/or information provided by or on behalf of such Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on DebtX or another similar electronic system (the “Platform”) and (b) certain of the Lenders (each a “Public Lender”) may have personnel who do not wish to receive material non-public information with respect to any Borrower or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities. The Borrower hereby agrees that, so long as the Borrower is the issuer of any outstanding debt or equity securities that are registered or issued pursuant to a private offering or is actively contemplating issuing any such securities, (i) any Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (ii) by marking Borrower Materials “PUBLIC”, the Borrower shall be deemed to have authorized the Administrative Agent, the Lead Arranger, the Book Runner, the LC Issuer and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Borrower or its securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute confidential information, they shall be treated as set forth in Section 9.11); (iii) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor,” and (iv) the Administrative Agent, the Lead Arranger and Book Runner shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.”

     6.3. Notices. Promptly notify the Administrative Agent and each Lender:

          (a) of the occurrence of any Default;

          (b) of, to the Actual Knowledge of the Borrower, (i) any material breach or non-performance of, or any material default under, a Material Contract of the Borrower or any Subsidiary, (ii) any dispute, action, litigation, investigation or proceeding between the Borrower or any Subsidiary and any Governmental Authority that either, individually, or in the aggregate could reasonably be expected to have a Material Adverse Effect, (iii) the commencement of, or any material development in, any action, litigation, investigation or proceeding affecting the Borrower or any Subsidiary, including pursuant to any applicable Environmental Laws that (A) purports to affect, pertain, enjoin or restrain the performance of this Agreement or the Loan Documents or any transactions contemplated hereby or (B) either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, (iv) the institution of any material action, litigation, investigation or proceeding against the Borrower or any Subsidiary (or, to the Actual Knowledge of the Borrower, any Contract Provider) to suspend, revoke or terminate (or that may result in termination of) its status as a Medicaid supplier or its status as a Medicare supplier, or any such investigation or proceeding that may result in an Exclusion Event, (v) a copy of any notice of intent to exclude the Borrower or any of the Subsidiaries from participation in any Medical Reimbursement Program, any notice of proposal to exclude the Borrower or any of the Subsidiaries from participation in any Medical Reimbursement Program issued by the OIG, or any other Exclusion Event, (vi) a copy of any notice of loss of participation under any reimbursement program or loss of applicable health care license or certificate of authority of any Regulated Subsidiary that could be reasonably expected to result in a material adverse change in, or a material adverse effect on, the operations, business, properties, liabilities (actual or contingent) or condition (financial or otherwise) of such Regulated Subsidiary, and all other material deficiency notices, material compliance orders or material reports issued by any Health Care Business Regulator or other Governmental Authority pursuant to a provider agreement that, if not promptly complied with or cured, could reasonably be expected to result in the suspension or forfeiture of any license or certification necessary for such Regulated Subsidiary to carry on its business as then conducted or the termination of any insurance or reimbursement program available to any Regulated Subsidiary, or (vii) any correspondence received by the Borrower and any Subsidiary from a Health Care Business Regulator or other Governmental Authority asserting that the Borrower or any Subsidiary is not in compliance with Health Care Business Regulations or other applicable Laws, or to the Actual Knowledge of the Borrower, threatening action against the Borrower or any Subsidiary under the Health Care Business Regulations or other applicable Laws, which in either case could reasonably be expected to result in a material adverse change in, or a material adverse effect on, the operations, business, properties, liabilities (actual or contingent) or condition (financial or otherwise) of such Regulated Subsidiary;

          (c) of the occurrence of any ERISA Event;

          (d) of any material change in accounting policies or financial reporting practices by the Borrower or any Subsidiary;

          (e) within the period for delivery of the quarterly financial statements provided in Section 6.1(b), of any written notification of Investments during such fiscal quarter by the Borrower or any Subsidiary in any Regulated Subsidiary that, individually or in the aggregate in any fiscal year of the Borrower, exceed the greater of $10,000,000 or 10% of the Company Action Level or the relevant state’s risk-based capital threshold, as applicable, (in each case as determined in accordance with SAP (if applicable) at the immediately preceding fiscal-year-end determination thereof) of such Regulated Subsidiary; provided that, to the extent such Investments, individually or in the aggregate, materially deviate from the strategic plan and budget delivered pursuant to Section 6.2(e), written notification of such Investments shall be provided not later than fifteen (15) days following the end of the calendar month during which such Investments are made; and

          (f) of the occurrence of any Internal Control Event.

     Each notice pursuant to this Section 6.3 shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto. Each notice pursuant to Section 6.3(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.

     6.4. Payment of Obligations. Pay and discharge, and cause each of the Subsidiaries to pay and discharge, as the same shall become due and payable, all its material obligations and liabilities, including (a) all tax liabilities, fees, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being diligently contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained, (b) all Indebtedness, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness; provided that no violation of this clause (b) shall constitute an Event of Default unless such violation is also an Event of Default under Section 7.5, and (c) all lawful claims that, if unpaid, would by law become a Lien upon its property, except where the failure to pay and discharge any such claim could not reasonably be expected to have a Material Adverse Effect.

     6.5. Preservation of Existence. (a) Preserve, renew and maintain, and cause each of the Subsidiaries to preserve, renew and maintain, in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its incorporation or organization, except in a transaction permitted by Sections 6.22 or 6.23; (b) take all reasonable action, and cause each of the Subsidiaries to take all reasonable action, to maintain all rights (charter or statutory), privileges, permits, licenses, approvals and franchises in each case which are necessary in the normal conduct of its business, except in a transaction permitted by Sections 6.22 and 6.23 and except to the extent that such failure to do so could not reasonably be expected to result in a material adverse change in, or a material adverse effect on, the operations, business, properties, liabilities (actual or contingent) or condition (financial or otherwise) of the Borrower or any Subsidiary, as applicable; and (c) preserve or renew, and cause each of the Subsidiaries to preserve and renew, all of its registered patents, trademarks, trade names and service marks, except, in each case, where failure to do so could not reasonably be expected to have a Material Adverse Effect.

     6.6. Maintenance of Properties. Maintain, preserve and protect, and cause each of its Subsidiaries to maintain, preserve and protect, all of its material properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted, to the extent and in the manner customary for Persons engaged in similar businesses, except where failure to do so could not reasonably be expected to have a Material Adverse Effect.

     6.7. Maintenance of Insurance. Maintain, and cause each of the Subsidiaries to maintain, with financially sound and reputable insurance companies not Affiliates of the Borrower or through self-insurance as is in accordance with normal industry practice for comparable companies engaged in similar businesses, insurance (including worker’s compensation insurance, liability insurance and casualty insurance), covering such risks and liabilities and with deductibles or other self-insurance retentions as are in accordance with normal industry practice for similarly situated companies. The Administrative Agent shall be named as loss payee and/or additional insured with respect to any such insurance providing coverage in respect of any Collateral, and each provider of any such insurance shall agree, by endorsement upon the policy or policies issued by it or by independent instruments furnished to the Administrative Agent, that it will give the Administrative Agent thirty (30) days prior written notice before any such policy or policies shall be canceled. The Borrower shall notify the Administrative Agent in writing, promptly after its awareness thereof, if (i) any such policy or policies shall be materially

altered in a manner adverse to the Administrative Agent and/or the Lenders or (ii) the amount of coverage thereunder shall be reduced.

     6.8. Reinsurance Arrangements. As soon as available, and in any event within 120 days after the end of each fiscal year of the Borrower, deliver a schedule signed by a Responsible Officer of the Borrower setting forth in reasonable detail the reinsurance arrangements maintained by each of the Regulated Subsidiaries of the Borrower as of the end of such fiscal year (with any changes subsequent to the end of such fiscal year described therein).

     6.9. Compliance with Laws. Comply, and cause each of the Subsidiaries to comply, in all respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

     6.10. Books and Records. (a) Maintain, and cause each of the Subsidiaries to maintain, proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of the Borrower or such Subsidiary, as the case may be (and with respect to each Regulated Subsidiary, if applicable, in accordance with SAP); and (b) maintain, and cause each of the Subsidiaries to maintain, such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Borrower or such Subsidiary, as the case may be.

     6.11. Inspection Rights. Permit, and cause each of the Subsidiaries to permit, representatives and independent contractors of the Administrative Agent and each Co-Syndication Agent to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, subject, in each case to applicable Laws of Governmental Authorities regarding confidentiality of patient health information and other confidentiality restrictions of Governmental Authorities to which the Borrower and its Subsidiaries are bound, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at such reasonable times during normal business hours, upon reasonable advance notice to the Borrower; provided, however, such right may not be exercised more than two (2) times in any consecutive twelve-month period unless an Event of Default shall have occurred and be continuing; and provided further that notwithstanding anything to the contrary contained herein (including Section 9.6), when an Event of Default exists the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice. The Borrower agrees that the Administrative Agent and its representatives may conduct an annual audit of the Collateral, at the expense of the Borrower.

     6.12. Use of Proceeds. Use the proceeds of the Credit Extensions (a) to pay fees and expenses incurred in connection with the Loan Documents, (b) to provide for working capital, Capital Expenditures, share repurchases and other general corporate purposes for the Borrower and the Subsidiaries not in contravention of any applicable Law or any Loan Document, (c) for Permitted Acquisitions, and (d) to refinance the outstanding obligations under the Existing Credit Agreement.

     6.13. Further Assurances with Respect to Non-Regulated Subsidiaries. Promptly, and in any event within thirty (30) days, after a Person becomes a Non-Regulated Subsidiary (a) cause such Subsidiary if it is a Non-Regulated Domestic Subsidiary and not an Excluded Subsidiary to (i) become a Guarantor by executing and delivering to the Administrative Agent the Subsidiary Guaranty, or if the Subsidiary Guaranty has been executed and delivered by another Guarantor, a Joinder Agreement and

such other documents as the Administrative Agent shall deem appropriate for such purpose, (ii) perfect and maintain the validity, effectiveness and priority of security interests in all of its personal property, assets and all proceeds and accessions therefrom (subject to any exceptions in the definition of “Collateral” with respect thereto in the Collateral Documents) to secure the Secured Obligations as contemplated herein and in the Collateral Documents by executing and delivering the Security Agreement in the capacity of a Grantor, or if the Security Agreement has been executed and delivered by another Grantor, a Joinder Agreement in the capacity of a Grantor and such other documents as the Administrative Agent shall deem appropriate for such purpose, and (iii) become a party to or execute all applicable Collateral Documents, as determined by the Administrative Agent and such other documents as the Administrative Agent shall deem appropriate for such purpose, (b) cause such Subsidiary if it is not an Excluded Subsidiary to pledge and maintain a pledge of the Applicable Pledge Percentage of the capital stock of any Non-Regulated Subsidiary pursuant to the terms of the Collateral Documents, and (c) deliver, and cause such Person to deliver, to the Administrative Agent documents, to the extent deemed appropriate by the Administrative Agent, of the types referred to in Section 4.1(e), and if requested by the Administrative Agent, favorable opinions of counsel to the Borrower and such Non-Regulated Subsidiary (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to in Section 4.1), all in form, content and scope reasonably satisfactory to the Administrative Agent. Notwithstanding anything to the contrary herein, Account Control Agreements shall not be required until sixty (60) days after the date hereof, or such other date as may be agreed by the Administrative Agent in its reasonable discretion.

     6.14. Further Assurances with Respect to Regulated Subsidiaries.

          (a) In the event the Health Care Business Regulations in California change or the undertaking agreement which prohibits the pledge of the capital stock of Molina Healthcare of California or any of its Subsidiaries to secure a loan to the Borrower or any of its Subsidiaries is terminated or changed at a date in the future to permit the pledge of the capital stock of Molina Healthcare of California or any of its Subsidiaries, the Borrower shall be required to take, or cause to be taken, commercially reasonable efforts to pledge 100% of the capital stock of Molina Healthcare of California and its Subsidiaries.

          (b) The Borrower will notify the Administrative Agent at any time that any other Person becomes licensed as a Regulated Subsidiary, and will file, or will cause such Regulated Subsidiary to file, if such Regulated Subsidiary is not an Excluded Subsidiary, promptly thereafter (and in any event within thirty (30) days after the issuance of such license), a request with the applicable Governmental Authority for approval of, or provide notice of (as applicable), the pledge of its capital stock to the Administrative Agent for the benefit of the Lenders. Upon submission of any such filing to the applicable Governmental Authority, the Borrower and such Regulated Subsidiary shall use commercially reasonable efforts to obtain such approval and shall provide the Administrative Agent, for the benefit of the Lenders, with monthly reports documenting the status of each request for approval. Within thirty (30) days after the date of such approval with respect to such Regulated Subsidiary, (a) the Borrower will pledge and maintain a pledge of the Applicable Pledge Percentage of the capital stock of such Regulated Subsidiary pursuant to the terms of the Collateral Documents (subject to no Liens), and (b) the Borrower or such Regulated Subsidiary, as appropriate, (i) shall become a party to and execute all applicable Collateral Documents, as determined by the Administrative Agent and such other documents as the Administrative Agent shall deem appropriate for such purpose, (ii) shall deliver to the Administrative Agent, to the extent deemed appropriate by the Administrative Agent, documents of the type referred to in Sections 4.1(c) and (e) and (iii) shall pledge and maintain the pledge of the Applicable Pledge Percentage of the capital stock of such Regulated Subsidiary in accordance with the provisions of the Collateral Documents (subject to no Liens); provided, however with respect to a Permitted Acquisition by Molina Healthcare of California, the actions specified in this subsection (b) shall only be required to the extent permitted by applicable

Law. Notwithstanding the foregoing provisions, the Borrower shall not be required to take such action with respect to a Regulated Subsidiary, and shall be relieved from its obligations under this Section 6.14(b) with respect to the pledge of the capital stock of such Regulated Subsidiary, if in the Borrower’s good faith reasonable judgment such action would be likely to result in the incurrence of regulatory restrictions that could be reasonably expected to result in a material adverse change in, or a material adverse effect on, the operations, business, properties, liabilities (actual or contingent) or condition (financial or otherwise) of the Regulated Subsidiary.

     6.15. Further Assurances with Respect to other Collateral.

          (a) To the fullest extent permitted by applicable Law, execute, and cause each of the Subsidiaries (to the extent appropriate) to execute, any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements, fixture filings, mortgages, deeds of trust and other documents), which may be required under any applicable Law, or which the Administrative Agent or the Required Lenders may reasonably request, to comply with the terms of this Agreement and the other Loan Documents, including causing, to the fullest extent permitted by Law, (i) the Collateral to be subject to a first priority security interest in favor of the Administrative Agent (subject, in the case of non-possessory security interests, to the Liens permitted by Section 6.19) and (ii) the pledge of the Applicable Pledge Percentage of the capital stock of the Subsidiaries which capital stock is subject to a pledge pursuant to the Pledge Agreement, in each case to secure all the Obligations, all at the expense of the Borrower. The Borrower also agrees to provide to the Administrative Agent, from time to time upon request, evidence reasonably satisfactory to the Administrative Agent as to the validity, perfection and priority of the Liens created or intended to be created by the Loan Documents.

          (b) If any property or asset is acquired or leased by the Borrower or any Grantor after the date hereof, notify the Administrative Agent thereof (except, in the case of personal property, such notice shall not be required if the Administrative Agent has a valid first priority perfected security interest in such property and assets by virtue of any actions previously taken by or on behalf of the Administrative Agent), and cause, to the fullest extent permitted by Law, subject to the next succeeding sentence with respect to Real Property Assets acquired or leased after the date hereof, such property and assets to be subjected to a first priority security interest, which in the case of a Real Property Asset would be a first priority deed of trust, in favor of the Administrative Agent (subject, in the case of non-possessory security interests, to the Liens permitted by Section 6.19) and take, and cause each Grantor to take, to the fullest extent permitted by Law, such actions as shall be necessary or reasonably requested by the Administrative Agent or the Required Lenders to grant and perfect such Liens, including the actions described in subsection (a). The Borrower and any Grantor shall only be required to provide a valid first priority perfected security interest in a Real Property Asset acquired after the date hereof with a market value of $15,000,000 or greater or a Real Property Asset in the form of a lease entered into after the date hereof (i) with annual rent of $1,000,000 or greater, and (ii) wherein the granting of such lien does not cause a default by the Borrower or its Grantor under the lease; provided the Borrower makes a good faith effort to obtain permission from landlord to grant such lien; provided, further, in each case, the Specified Real Estate shall be excluded from the obligations set forth in this Section 6.15. With respect to any owned Real Property Assets other than the Specified Real Estate with a market value of $15,000,000 or greater, the Borrower shall provide, or cause to be provided, the following:

(i)

an as-built survey of the sites of the Mortgaged Property that are certified to the Administrative Agent and the Title Insurance Company (as defined below) in a manner satisfactory to them, dated as of a date reasonably acceptable to the Administrative Agent by an independent professional licensed land surveyor satisfactory to the Administrative Agent and the Title Insurance Company, which surveys on which they are based shall be

made in accordance with the Minimum Standard Detail Requirements for Land Title Surveys jointly established and adopted by the American Land Title Association and the American Congress on Surveying and Mapping in 1997 or 1999 and meeting the accuracy requirements as defined therein, and, without limiting the generality of the foregoing, there shall be surveyed and shown on such surveys the following: (A) a current “as-built” survey showing the location of any adjoining streets (including their widths and any pavement or other Improvements), easements (including the recorded information with respect to all recorded instruments), the mean high water base line or other legal boundary lines of any adjoining bodies of water, fences, zoning or restriction setback lines, rights-of-way, utility lines to the points of connection and any encroachments; (B) all means of ingress and egress, certifying the amount of acreage and square footage, the address of the Mortgaged Property, the legal description of the Mortgaged Property, and a location sketch of the Mortgaged Property; (C) the location of all Improvements as constructed on the Mortgaged Property, all of which shall be within the boundary lines of the Mortgaged Property and conform to all applicable zoning ordinances, set-back lines and restrictions; (D) the location of any Improvements on the Mortgaged Property with the dimensions in relations to the lot and building lines; (E) the measured distances from the Improvements to be set back and specified distances from street or property lines in the event that deed restrictions, recorded plats or zoning ordinances require same; (F) all courses and distances referred to in the legal description, and the names of all adjoining owners on all sides of the Mortgaged Property, to the extent available; and (G) the flood zone designation, if any, in which the Mortgaged Property is located. The legal description of the applicable Mortgaged Property shall be shown on the face of each survey or affixed thereto, and the same shall conform to the legal description contained in the title policy described below;

(ii)

a mortgagee’s title insurance policy (or policies) or marked up unconditional binder for such insurance. Each such policy shall (A) be in an amount satisfactory to the Administrative Agent, (B) be issued at ordinary rates, (C) insure that each Mortgage insured thereby creates a valid first Lien on, and security interest in, the Mortgaged Property free and clear of all Liens, except as reasonably acceptable to the Administrative Agent, (D) name the Administrative Agent for the benefit of the Lenders as the insured thereunder, (E) be in the form of ALTA Loan Policy — 1970 Form B (Amended 10/17/70 and 10/17/84) (or equivalent policies), if available, (F) contain such endorsements and affirmative coverage as the Administrative Agent may reasonably request in form and substance acceptable to the Administrative Agent, including, without limitation (to the extent applicable with respect to the relevant Mortgaged Property and available in the jurisdiction in which such Mortgaged Property is located), the following: variable rate endorsement; survey endorsement, but only as to such Real Property Assets for which a land survey is required pursuant to clause (i) above; comprehensive endorsement; zoning (ALTA 3.1 with parking added) endorsement, but only as to such Real Property Assets for which a land survey is required pursuant to clause (i) above; first loss, last dollar and tie-in endorsement; access coverage; separate tax parcel coverage; usury; doing business; subdivision; environmental protection lien; CLTA 119.2; contiguity coverage; and such other endorsements as the Administrative Agent shall reasonably require in order to provide insurance against specific risks identified by the Administrative Agent in connection with the Mortgaged Property (provided that all endorsements requested by the Administrative Agent shall be made based on the relative value of the Real Property Asset and the extent the requested endorsement is generally available at commercially reasonable rates) and (G) be issued by nationally recognized title companies (collectively, the “Title Insurance Company”) satisfactory to the Administrative Agent. The

Administrative Agent shall have received evidence satisfactory to it that all premiums in respect of each such policy, all charges for mortgage recording tax, and all related expenses, if any, have been paid;

	(iii)		a certificate identifying the flood zone of the property, and if requested by the Administrative Agent, and required by Law, a policy of flood insurance that (A) covers any parcel of the Mortgaged Property that is located in a flood zone, and (B) is written in an amount not less than the outstanding principal amount of the Indebtedness secured by each relevant Mortgage or the maximum limit of coverage made available with respect to the particular type of Mortgaged Property under the National Flood Insurance Act of 1968, whichever is less;
	(iv)		a copy of (A) all documents listed as exceptions to title in, the title policy or policies referred to in clause (ii) above and (B) all other material documents affecting the Mortgaged Property in the possession or under the control of the Borrower, including, for those Real Property Assets for which a land survey is required under clause (i) above, including all building, construction, environmental and other permits, licenses, franchises, approvals, consents, authorizations and other approvals required in connection with the construction, ownership, use, occupation or operation of the Mortgaged Property; and
	(v)		evidence reasonably acceptable to the Administrative Agent that the Real Property Assets comply with applicable zoning ordinances, if any.

     6.16. Performance of Material Contracts. Do the following, and cause each of the Subsidiaries to do the following: (a) perform and observe all the terms and provisions of each Material Contract to be performed or observed by it; and (b) maintain each such Material Contract in full force and effect, except, in either case, where the failure to do so, either individually or in the aggregate, could not be reasonably likely to have a Material Adverse Effect.

     6.17. Maintenance of Licensing, Etc. Preserve and maintain, and cause each of the Regulated Subsidiaries to preserve and maintain, (a) the licensing and certification of each Regulated Subsidiary pursuant to the Health Care Business Regulations and other applicable Laws, (b) all certifications and authorizations necessary to ensure that the Regulated Subsidiaries are eligible for all reimbursements available under the Health Care Business Regulations and other applicable Laws to the extent applicable to the Regulated Subsidiaries owned by the Borrower or any of the Subsidiaries in their respective jurisdictions and (c) all licenses, permits, authorizations and qualifications required under the Health Care Business Regulations and other applicable Laws in connection with the ownership or operation of the Regulated Subsidiaries, in each case, to the extent that such licensing and certification, certifications and authorizations, or licenses, permits, authorizations and qualifications are material to the conduct of the business of the Borrower and its Subsidiaries taken as a whole.

     6.18. [Intentionally Omitted].

     6.19. Liens. Not create, incur, assume or suffer to exist, or permit any Subsidiary to create, incur, assume or suffer to exist, any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following (collectively, the “Permitted Liens”):

          (a) Liens pursuant to any Loan Document;

          (b) Liens existing on the date hereof and listed on Schedule 6.19 and any renewals or extensions thereof; provided that the property covered thereby is not increased and any renewal or extension of the obligations secured or benefited thereby is permitted by Section 6.21(b);

          (c) Liens for taxes, fees, assessments or other governmental charges not yet due or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

          (d) statutory Liens of landlords and carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens imposed by Law or pursuant to customary reservations or retentions of title arising in the ordinary course of business; provided that such Liens secure only amounts not yet due and payable or, if due and payable, are unfiled and no other action has been taken to enforce the same or are being contested in good faith and by appropriate proceedings for which adequate reserves determined in accordance with GAAP have been established;

          (e) pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security legislation, other than any Lien imposed by ERISA;

          (f) deposits to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety bonds (other than bonds related to judgments or litigation), performance bonds and other obligations of a like nature incurred in the ordinary course of business;

          (g) easements, rights-of-way, restrictions and other similar encumbrances affecting real property incurred in the ordinary course of business which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person;

          (h) Liens securing judgments for the payment of money not constituting an Event of Default under Section 7.8 or securing appeal or other surety bonds related to such judgments;

          (i) Liens securing Indebtedness permitted under Section 6.21(e); provided that (i) any such Lien attaches to such property concurrently with or within ninety (90) days of the acquisition thereof, (ii) such Lien does not at any time encumber any property other than the property financed by such Indebtedness, and (iii) the Indebtedness secured thereby does not exceed 100% of the cost or fair market value, whichever is lower, of the property being acquired on the date of acquisition;

          (j) any interest or title of a lessor under, and Liens arising from UCC financing statements relating to, leases permitted by this Agreement;

          (k) Liens created or deemed to exist by the establishment of trusts for the purpose of satisfying (i) Governmental Reimbursement Program Costs and (ii) other actions or claims pertaining to the same or related matters; provided that the Borrower in its reasonable discretion in each case shall have established adequate reserves for such claims or actions;

          (l) normal and customary rights of setoff upon deposits of cash in favor of banks or other depository institutions;

          (m) Liens of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection;

          (n) Liens of sellers of goods to the Borrower and any of its Subsidiaries arising under Article 2 of the UCC or similar provisions of applicable Law in the ordinary course of business, covering only the goods sold and securing only the unpaid purchase price for such goods and related expenses;

          (o) Liens securing Indebtedness permitted under Section 6.21(m); provided that the Borrower may not grant any Lien in support of its Guarantee of the Indebtedness associated with the Arco property; and

          (p) other Liens securing Indebtedness or other obligations not otherwise prohibited by this Agreement not in excess of $10,000,000.

     6.20. Investments. Not make or hold, or permit any of the Subsidiaries to make or hold, any Investments in any Person, except:

          (a) Investments made by the Loan Parties in compliance with the Borrower’s Investment Policy;

          (b) Investments made prior to the date hereof and set forth on Schedule 6.20;

          (c) advances or loans to directors, officers and employees in the ordinary course of business of the Borrower and the Subsidiaries as presently conducted in an aggregate principal amount not to exceed $1,000,000 in the aggregate at any one time outstanding; provided however that all such advances or loans must be in compliance with all applicable Laws, including Sarbanes-Oxley;

          (d) Investments in any Person which is a Loan Party prior to giving effect to such Investment;

          (e) Investments by the Borrower in and to any Loan Party in the form of contributions to capital or loans or advances; provided that (i) immediately before and after giving effect thereto, no Default exists or would result therefrom, (ii) each item of intercompany Indebtedness shall be unsecured and (iii) each item of intercompany Indebtedness shall be evidenced by an Intercompany Note which shall be pledged as security for the Obligations of the holder thereof under the Loan Documents and delivered to the Administrative Agent pursuant to the terms of the Collateral Documents;

          (f) so long as no Default or Event of Default shall have occurred and be continuing at the time of any such Investment (unless such Investment is required by applicable regulatory requirements), Investments in Regulated Subsidiaries;

          (g) so long as no Default or Event of Default shall have occurred and be continuing at the time of any such Investment, Investments consisting of equity holdings in Persons other than Subsidiaries in an aggregate amount not to exceed $10,000,000 at any time outstanding;

          (h) Investments that constitute Permitted Acquisitions;

          (i) (i) Required Advances and (ii) other advances to Contract Providers (and their Affiliates) in an amount not to exceed (A) with respect to any Contract Provider (and its Affiliates) individually, $2,000,000 in the aggregate at any time outstanding (excluding Required Advances) and (B) with respect to Contract Providers collectively, $10,000,000 in the aggregate at any time outstanding (excluding Required Advances);

          (j) Investments by the Borrower in Swap Contracts permitted under Section 6.21(d);

          (k) minority Investment by the Borrower in the joint venture holding title to One Golden Shore (the “One Golden Shore JV”), the value of which Investment shall be limited to the value of the Borrower’s interest in such property (valued at the higher of book value or market value as of such date of determination); and

          (l) Investments of a nature not addressed in any of the foregoing subsections in an amount not to exceed $5,000,000 in the aggregate at any time outstanding.

     6.21. Indebtedness. Not create, incur, assume or suffer to exist, or permit any Subsidiary to create, incur, assume or suffer to exist, any Indebtedness, except:

          (a) Indebtedness under the Loan Documents;

          (b) Indebtedness outstanding on the date hereof and listed on Schedule 6.21 and any refinancings, refundings, renewals or extensions thereof; provided that the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder;

          (c) Guarantees of any Guarantor in respect of Indebtedness otherwise permitted hereunder of the Borrower;

          (d) obligations (contingent or otherwise) of the Borrower or any Subsidiary existing or arising under any Swap Contract; provided that (i) such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person, or changes in the value of securities issued by such Person, and not for purposes of speculation or taking a “market view,” and (ii) such Swap Contract does not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party;

          (e) Indebtedness in respect of Capitalized Leases and purchase money obligations for fixed or capital assets within the limitations set forth in the proviso in Section 6.19(h); provided, however, that the aggregate amount of all such Indebtedness at any one time outstanding shall not exceed $50,000,000;

          (f) intercompany Indebtedness permitted under Section 6.20(d);

          (g) (i) Contingent Obligations with respect to surety bonds and similar instruments incurred in the ordinary course of business and (ii) endorsements for collection or deposit in the ordinary course of business;

          (h) Guarantees by the Borrower of (i) leases by the Subsidiaries of office and medical space entered into in the ordinary course of business, (ii) reserve obligations and similar obligations of the Subsidiaries under applicable Laws and (iii) the obligations of the Regulated Subsidiaries under insurance policies issued by the Subsidiaries in the ordinary course of business;

          (i) senior or subordinated unsecured Indebtedness (excluding Existing Convertible Indebtedness, but including, without limitation, Indebtedness consisting of Permitted Convertible Indebtedness incurred after the date hereof and any equity swaps, warrants or options on the capital stock of the Borrower in connection therewith) in an aggregate principal amount not to exceed $250,000,000,

provided that (i) no portion of the principal of such Indebtedness shall have a stated maturity date prior to the date that is 100 days after the Facility Termination Date, (ii) the Borrower will not, and will not permit any Subsidiary to, directly or indirectly, declare, pay, make or set aside any amount for payment in respect of such Indebtedness, except (A) regularly scheduled payments of interest in respect of such Indebtedness, (B) prepayment in common stock of all or any portion of the principal amount of any such Permitted Convertible Indebtedness or senior Indebtedness or prepayment in common stock of all or any portion of the amount of any conversion or repurchase obligations with respect to any such Permitted Convertible Indebtedness or senior Indebtedness, (C) prepayment in Equity Interests (other than common stock) or cash of all or any portion of the principal amount of any such Permitted Convertible Indebtedness or senior Indebtedness, provided that as of the date of such prepayment, after giving effect to such prepayment on a Pro Forma Basis, (1) no Default or Event of Default shall have occurred and be continuing and (2) if all or any portion of such prepayment is made in cash, the aggregate amount of remaining availability existing under the Aggregate Commitments and unrestricted cash on hand of the Borrower shall equal at least $50,000,000, (y) payment in Equity Interests (other than common stock) or cash of all or any portion of the amount of any conversion or repurchase obligations with respect to any such Permitted Convertible Indebtedness or senior Indebtedness, provided that as of the date of such payment, after giving effect to such payment, on a Pro Forma Basis, (1) no Default or Event of Default shall have occurred and be continuing and (2) if all or any portion of such payment is made in cash, the aggregate amount of remaining availability existing under the Aggregate Commitments and unrestricted cash on hand of the Borrower shall equal at least $50,000,000 and (z) payment of usual and customary fees, expenses and indemnity obligations with respect to such Indebtedness, provided, that in no event shall the amount of payments of any such indemnity obligations exceed $10,000,000 in the aggregate, (iii) covenants and default provisions relating to the Borrower or any of the Subsidiaries shall be no more restrictive than the covenants and default provisions contained in the Loan Documents, (iv) such Indebtedness shall have no provisions limiting amendments to, or consents, waivers or other modifications with respect to, any of the Loan Documents, (v) immediately before and after giving effect to the incurrence of such Indebtedness, no Default or Event of Default shall have occurred or be continuing, and (vi) the Borrower shall have delivered to the Administrative Agent a Compliance Certificate demonstrating that, upon giving effect on a Pro Forma Basis to the incurrence of such Indebtedness and to the concurrent retirement of any other Indebtedness of the Borrower or any Subsidiary and/or repurchase of Borrower’s Equity Interests (other than common stock) in accordance with Section 6.24(e), the Borrower would be in compliance with the financial covenants set forth in Section 6.34, in each case as of the most recent fiscal quarter end with respect to which the Administrative Agent has received the Required Financial Information;

          (j) Indebtedness arising or existing with respect to Governmental Reimbursement Program Costs;

          (k) additional unsecured Indebtedness of the Borrower, or any Subsidiary not covered in the foregoing subsections in an aggregate principal amount not to exceed $10,000,000 at any time outstanding; provided that (i) such Indebtedness is not senior in right of payment to the payment of the Indebtedness arising under this Agreement and the Loan Documents and (ii) the loan documentation with respect to such Indebtedness shall not contain covenants or default provisions relating to the Borrower or any Subsidiary that are more restrictive than the covenants and default provisions contained in the Loan Documents;

          (l) Existing Convertible Indebtedness and any refinancings, refundings, renewals or extensions thereof; provided that that the amount of such Existing Convertible Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized

thereunder; provided, further, that the Borrower will not, and will not permit any Subsidiary to, directly or indirectly, declare, pay, make or set aside any amount for payment in respect of such Existing Convertible Indebtedness, except the following: (i) regularly scheduled payments of interest in respect of such Indebtedness; (ii) prepayment in common stock of all or any portion of the principal amount of any such Existing Convertible Indebtedness or prepayment in common stock of all or any portion of the amount of any conversion or repurchase obligations with respect to any such Existing Convertible Indebtedness; (iii) prepayment in Equity Interests (other than common stock) or cash of all or any portion of the principal amount of any such Existing Convertible Indebtedness (provided that as of the date of such prepayment, after giving effect to such prepayment on a Pro Forma Basis, (A) no Default or Event of Default shall have occurred and be continuing and (B) if all or any portion of such prepayment is made in cash, the aggregate amount of remaining availability existing under the Aggregate Commitments and unrestricted cash on hand of the Borrower shall equal at least $50,000,000); (iv) payment in Equity Interests (other than common stock) or cash of all or any portion of the amount of any conversion or repurchase obligations with respect to any such Existing Convertible Indebtedness (provided that as of the date of such payment, after giving effect to such payment, on a Pro Forma Basis, (A) no Default or Event of Default shall have occurred and be continuing and (B) if all or any portion of such payment is made in cash, the aggregate amount of remaining availability existing under the Aggregate Commitments and unrestricted cash on hand of the Borrower shall equal at least $50,000,000); and (v) payment of usual and customary fees, expenses and indemnity obligations with respect to such Existing Convertible Indebtedness (provided, that in no event shall the amount of payments of any such indemnity obligations exceed $10,000,000 in the aggregate); and

          (m) Indebtedness incurred in connection with Real Property Assets, including the Specified Real Estate, in an aggregate principal amount not to exceed $95,000,000, of which no more than $25,000,000 may be a Guarantee by the Borrower of the Indebtedness associated with the Arco property.

     6.22. Fundamental Changes and Acquisitions.

          (a) Not merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of, or permit any of the Subsidiaries to merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of, (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except that, so long as no Default exists or would result therefrom:

(i)

a Loan Party may merge with the Borrower; provided that the Borrower shall be the continuing or surviving Person;

(ii)

a Loan Party (other than the Borrower) may be party to a transaction of merger or consolidation with another Loan Party;

(iii)

any Subsidiary which is not a Loan Party may be merged or consolidated with or into (A) any Loan Party provided that such Loan Party shall be the continuing or surviving corporation, or (B) any other Subsidiary which is not a Loan Party;

(iv)

a wholly-owned Subsidiary may dissolve, liquidate or wind-up its affairs at any time provided that such dissolution, liquidation or winding-up, as applicable, could not reasonably be expected to have a Material Adverse Effect;

(v)

a Subsidiary may be a party to a transaction of merger or consolidation with a Person other than the Borrower or any Subsidiary; provided that (A) the surviving entity shall be

a wholly-owned Subsidiary and shall execute and deliver such Joinder Agreement, Pledge Agreement, Security Agreement and Intercompany Notes, as applicable, and take such other actions as may be necessary for compliance with the provisions of Sections 6.13, 6.14 and 6.15, and (B) the transaction shall otherwise constitute a Permitted Acquisition;

(vi)

a Subsidiary may enter into a transaction of merger or consolidation in connection with a Disposition permitted under Section 6.23; and

(vii)

the Borrower may enter into the transaction contemplated in Section 6.20(k).

               (b) Not permit the Borrower or any Subsidiary to make any Acquisition, except:

(i)

Acquisitions of capital stock of another Person, so long as after giving effect to such Acquisition,

            (A) such Acquisition constitutes an Investment permitted by Section 6.20, if the Acquisition is not of a controlling interest in the subject Person such that after giving effect thereto the subject Person will not be a Subsidiary; and

            (B) such Acquisition constitutes a Permitted Acquisition, if the Acquisition is of a controlling interest in the subject Person such that after giving effect thereto the subject Person will be a Subsidiary;

(ii)

an Acquisition of all or any substantial portion of the Property (other than capital stock) of another Person, so long as such Acquisition otherwise constitutes a Permitted Acquisition; and

(iii)

the Acquisition of Arco by a Subsidiary of the Borrower.

     6.23. Dispositions. Not make any Disposition or permit any Subsidiary to make any Disposition, except:

           (a) Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;

           (b) Dispositions of inventory in the ordinary course of business;

           (c) Dispositions of equipment or real property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such Disposition are reasonably promptly applied to the purchase price of similar replacement property;

           (d) Dispositions of property to a Loan Party;

           (e) Dispositions of property from a Subsidiary that is not a Loan Party to another Subsidiary that is not a Loan Party;

           (f) Dispositions permitted by Sections 6.20 and 6.22;

           (g) non-exclusive licenses of IP Rights in the ordinary course of business and substantially consistent with past practice for terms not exceeding five (5) years;

          (h) any other Disposition if (i) the consideration paid in connection therewith shall be cash or Cash Equivalents (payment to be contemporaneous with consummation of transaction) and shall be in an amount not less than the fair market value of the Property disposed of, (ii) such transaction does not involve the sale or other disposition of a minority Equity Interest in any Subsidiary, (iii) such transaction does not involve a sale or other disposition of receivables other than receivables owned by or attributable to other property concurrently being disposed of in a transaction otherwise permitted under this Section 6.23 and (iv) the aggregate net book value of all of the assets sold or otherwise disposed of by the Borrower and its Subsidiaries in all such transactions in any fiscal year shall not exceed $50,000,000; and

          (i) Disposition of the One Golden Shore Property, provided that (i) as of the date of such Disposition, no Default or Event of Default shall have occurred and be continuing and (ii) such Disposition shall be for fair market value;

provided, however, that any Disposition pursuant to subsections (a) through (g) shall be for fair market value.

     6.24. Restricted Payments. Not make, or permit any Subsidiary to make, any Restricted Payment; provided that:

          (a) the Borrower and each Subsidiary may declare and make dividend payments and other distributions, including stock splits, payable solely in common stock and other common Equity Interests of such Person;

          (b) the Borrower may accept (directly or indirectly) shares of its capital stock or other assets in satisfaction of any Indebtedness owed to the Borrower by its officers or employees; provided, however, that such activities must be in compliance with all applicable Laws, including Sarbanes-Oxley;

          (c) the Borrower may finance the costs of Permitted Acquisitions, payable solely in common stock and other Equity Interests of the Borrower;

          (d) any Subsidiary may make Restricted Payments to the Borrower or any wholly-owned Subsidiary of the Borrower;

          (e) so long as no Default or Event of Default shall have occurred and be continuing, the Borrower may (i) issue any Permitted Convertible Indebtedness in accordance with Section 6.21(i) and enter into or issue any equity swaps, warrants or options on the capital stock of the Borrower in connection therewith, (ii) satisfy its conversion or required repurchase obligations related to any (A) Existing Convertible Indebtedness or (B) Permitted Convertible Indebtedness issued by the Borrower in accordance with Section 6.21(i), as the case may be, in Equity Interests or cash of the Borrower, (iii) exercise or settle any equity swaps, warrants or options on the capital stock of the Borrower entered into in connection with any (A) Existing Convertible Indebtedness or (B) Permitted Convertible Indebtedness, in each case in Equity Interests of the Borrower or in cash to the extent cash payments are permitted under Section 6.21(i) or Section 6.21(l), as applicable, and (iv) apply up to 30% of the gross proceeds of any Permitted Senior Indebtedness issued in accordance with Section 6.21(i) to repurchase outstanding Equity Interests in the Borrower; and

          (f) the Borrower may make any other Restricted Payments so long as, at the time of any such Restricted Payment:

(i)

No Default or Event of Default shall have occurred and be continuing; and

(ii)

The aggregate amount paid to make such Restricted Payment, together with the aggregate amount paid to make all other Restricted Payments pursuant to this Section 6.24(f) during the same fiscal year shall not exceed $100,000,000.

     6.25. Amendment, Etc. of Indebtedness and Constitutive Documents and Payments in respect of Indebtedness.

          (a) After the issuance thereof, not amend or modify (or permit the amendment or modification of (including any waivers of)), or permit any Subsidiary to amend or modify (or permit the amendment or modification of (including any waivers of)), the terms of any Indebtedness (other than the Obligations under this Agreement) in a manner adverse in any material respect to the interests of the Lenders (including, without limitation, specifically shortening any maturity or average life to maturity or requiring any payment sooner than previously scheduled or increasing the interest rate or fees applicable thereto).

          (b) Not amend, or permit any of the Subsidiaries to amend, its Organization Documents, unless, in each case, any such amendment is not adverse in any material respect to the Lenders.

          (c) Not make any payment, or permit any Subsidiary to make any payment, in contravention of the terms of any subordination with respect to any Indebtedness.

          (d) Except in connection with a refinancing or refunding permitted hereunder, not make any prepayment, redemption, defeasance or acquisition for value (including, without limitation, by way of depositing money or securities with the trustee with respect thereto before due for the purpose of paying when due), or refund, refinance or exchange, or permit any Subsidiary to make any prepayment, redemption, defeasance or acquisition for value (including, without limitation, by way of depositing money or securities with the trustee with respect thereto before due for the purpose of paying when due), or refund, refinance or exchange, of any Indebtedness (other than the Indebtedness under the Loan Documents and intercompany Indebtedness permitted hereunder) other than regularly scheduled payments of principal and interest on such Indebtedness.

     6.26. Change in Nature of Business. Not engage in, or permit any Subsidiary to engage in, any material line of business other than the Health Care Business.

     6.27. Transactions with Affiliates. Except for certain existing transactions specifically set forth on Schedule 6.27, not enter into or permit to exist, or permit any Subsidiary to enter into or permit to exist, any transaction or series of transactions with any Affiliate of the Borrower, whether or not in the ordinary course of business, other than (a) advances of working capital to any Loan Party, (b) transfers of cash and assets to any Loan Party, (c) intercompany transactions expressly permitted by Sections 6.20, 6.21, 6.22, 6.23 or 6.24, (d) normal compensation (including bonuses) and reimbursement of expenses of officers and directors to the extent consistent with Law, including Sarbanes-Oxley, (e) Investments permitted by Sections 6.20(b) or 6.20(c) and Restricted Payments permitted under Section 6.24(b), (f) cost sharing arrangements of the Borrower and the Subsidiaries in the ordinary course of business generally consistent with past practices, (g) de minimis transactions and (h) except as otherwise specifically limited in this Agreement, other transactions which are entered into in the ordinary course of such Person’s business on terms and conditions substantially as favorable to such Person as would be obtainable by it in a comparable arms-length transaction with a Person other than an officer, director or Affiliate.

     6.28. Limitations on Restricted Actions. Not enter into or create or otherwise cause to exist or become effective, or permit any Subsidiary to enter into or create or otherwise cause to exist or become effective, any agreement or arrangement that: (a) limits the ability (i) of any Subsidiary to make Restricted Payments to the Borrower or to otherwise transfer property to the Borrower, (ii) of any Subsidiary to Guarantee the Indebtedness of the Borrower or (iii) of the Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens on property of such Person; provided, however, that this clause (iii) shall not prohibit (A) any negative pledge incurred or provided in favor of any holder of Indebtedness permitted under Section 6.21(e) solely to the extent any such negative pledge relates to the property financed by or the subject of such Indebtedness or (B) any amendments to or modifications of any undertaking between Molina Healthcare of California and Governmental Authorities in California solely with respect to Molina Healthcare of California but only to the extent the amendments and modifications could not reasonably be expected to have a material adverse effect on Molina Healthcare of California; or (b) requires the grant of a Lien to secure an obligation of such Person if a Lien is granted to secure another obligation of such Person.

     6.29. Margin Stock. Not use the proceeds of any Credit Extension, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.

     6.30. Impairment of Security Interests. Not permit any Loan Party or any of their respective Subsidiaries to (a) take or omit to take any action which action or omission could reasonably be expected to or would materially impair the security interests in favor of the Administrative Agent with respect to the Collateral or (b) grant to any Person (other than the Administrative Agent pursuant to the Collateral Documents) any interest whatsoever in the Collateral, except for Permitted Liens.

     6.31. Ownership of Subsidiaries and Other Restrictions Relating to Subsidiaries.

          (a) Ownership of Subsidiaries. Notwithstanding any other provisions of this Agreement to the contrary, (i) not permit any Person (other than the Borrower or any wholly-owned Subsidiary; provided that Molina Healthcare of California, a Subsidiary of the Borrower, shall not have any such right, except to the extent permitted by the definition of Permitted Acquisition) to own any capital stock of any Subsidiary (except as a result of or in connection with a dissolution, merger, consolidation or disposition of a Subsidiary permitted under Section 6.22 or Section 6.23) or (ii) not permit any Subsidiary to issue any shares of preferred capital stock.

          (b) Other Restrictions. Except as set forth in the final proviso of the definition of Permitted Acquisition, not form or acquire any new Subsidiaries of Molina Healthcare of California.

For the avoidance of doubt, nothing in this Section 6.31 shall be construed to prohibit the One Golden Shore JV or the Acquisition of Arco by a Subsidiary of the Borrower.

     6.32. Fiscal Year. Not change its fiscal year, or permit any Subsidiary to change its fiscal year, unless such change is not adverse in any respect to the Lenders.

     6.33. Partnerships, etc. Not become, or permit any Subsidiary to become, a general partner or limited partner or joint venture.

     6.34. Financial Covenants.

          (a) Fixed Charge Coverage Ratio. Not permit the Fixed Charge Coverage Ratio as of the end of any fiscal quarter of the Borrower (calculated for each four consecutive fiscal quarter period) to be less than 1.75 to 1.00.

          (b) Total Debt to EBITDA Ratio. Not permit the Total Debt to EBITDA Ratio as of the end of any fiscal quarter of the Borrower (calculated for each four consecutive fiscal quarter period) to be greater than 2.75 to 1.0.

     6.35. Statutory Net Worth Ratio. As of the end of each fiscal quarter, not permit any Regulated Subsidiary, regardless of whether it is operating in a state that requires risk-based capital reporting, to maintain a ratio of Statutory Net Worth to the applicable Statutory Net Worth requirement at a level less than 1.10 to 1.00.

ARTICLE VII

DEFAULTS

     Any of the following shall constitute an Event of Default (“Event of Default”):

     7.1. Non-Payment. The Borrower or any other Loan Party fails to pay (i) when and as required to be paid herein, any amount of principal of any Loan or any Reimbursement Obligation, or (ii) within five (5) days after the same becomes due, any interest on any Loan or on any LC Obligation, any Commitment Fee, LC Fee, or any other fee or amount payable hereunder or under any other Loan Document.

     7.2. Specific Covenants.

          (a) The Borrower fails to perform or observe any term, covenant or agreement contained in any of Section 6.5(a) (with respect to the legal existence of the Borrower only), 6.12, 6.19, 6.20, 6.21, 6.22, 6.23, 6.24, 6.25, 6.26, 6.27, 6.28, 6.29, 6.30, 6.31, 6.32, 6.33 or 6.34; or

          (b) Any Loan Party fails to perform or observe any term, covenant or agreement contained in any of Sections 6.1, 6.2 or 6.3, which failure continues for five (5) days after the earlier of (i) the date upon which a Responsible Officer had Actual Knowledge of such failure or (ii) the date upon which written notice thereof is given to the Borrower by the Administrative Agent or any Lender; or

     7.3. Other Defaults. The Borrower or any Loan Party fails to perform or observe any other covenant or agreement (not specified in Sections 7.1 or 7.2 above) contained in any Loan Document on its part to be performed or observed and such failure continues for thirty (30) days after the earlier of (i) the date upon which a Responsible Officer had Actual Knowledge of such failure or (ii) the date upon which written notice thereof is given to the Borrower by the Administrative Agent or any Lender; provided, that the thirty-day cure period for any breach of the minimum Statutory Net Worth Ratio set forth in Section 6.35 shall commence upon the initial occurrence of such breach.

     7.4. Representations and Warranties. Any representation, warranty or certification made or deemed made by or on behalf of the Borrower or any other Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading in any material respect when made or deemed made.

     7.5. Cross-Default. (i) The Borrower or any Subsidiary (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) beyond

the applicable grace period with respect thereto, if any, in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness under Swap Contracts) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, or (B) fails to observe or perform (beyond the applicable grace period with respect thereto) any other agreement or condition relating to any such Indebtedness or Guarantee or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity, or such Guarantee to become payable or cash collateral in respect thereof to be demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which the Borrower or any Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as defined in such Swap Contract) under such Swap Contract as to which the Borrower or any Subsidiary is an Affected Party (as defined in such Swap Contract) and, in either event, the Swap Termination Value owed by the Borrower or such Subsidiary as a result thereof is greater than the Threshold Amount; or

     7.6. Insolvency Proceedings, Etc. The Borrower or any of its Significant Subsidiaries (i) institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors or (ii) applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for sixty (60) calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for sixty (60) calendar days, or an order for relief is entered in any such proceeding.

     7.7. Inability to Pay Debts; Attachment. (i) The Borrower or any of its Significant Subsidiaries becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within thirty (30) days after its issue or levy.

     7.8. Judgments. There is entered against the Borrower or any of its Significant Subsidiaries (i) a final judgment or order for the payment of money in an aggregate amount exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage), or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case, there is a period of thirty (30) consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect.

     7.9. ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of the Borrower or any Subsidiary under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to

its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of the Threshold Amount.

     7.10. Invalidity of Loan Documents. Any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Loan Party or any other Person contests in any manner the validity or enforceability of any Loan Document; or any Responsible Officer of a Loan Party purports to revoke, terminate or rescind any Loan Document, or in the case of any Lien granted pursuant to any Collateral Document (including any Lien granted after the date hereof in accordance with Section 6.13, 6.14 or 6.15) in favor of the Administrative Agent, such Lien ceases to have the priority purported to be granted under such Collateral Document (other than pursuant to the terms thereof or hereunder) or is declared by a court of competent jurisdiction to be null and void, invalid or unenforceable in any respect.

     7.11. Subsidiary Guaranty. The Subsidiary Guaranty given by any Guarantor (including any Person that becomes a Guarantor after the date hereof in accordance with Section 6.13) or any provision thereof shall cease to be in full force and effect, or any Responsible Officer of a Guarantor (including any Person that becomes a Guarantor after the date hereof in accordance with Section 6.13) or any Person acting by or on behalf of such Guarantor shall deny or disaffirm such Guarantor’s obligations under the Subsidiary Guaranty, or any Guarantor shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to the Subsidiary Guaranty.

     7.12. Change of Control. There occurs any Change of Control with respect to the Borrower.

     7.13. Exclusion Event. There shall occur an Exclusion Event that could be reasonably expected to result in a Material Adverse Effect.

ARTICLE VIII

ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

     8.1. Acceleration; Remedies. (a) If any Event of Default described in Section 7.6 or 7.7 occurs with respect to the Borrower, the obligations of the Lenders to make Loans hereunder and the obligation and power of the LC Issuer to issue Facility LCs shall automatically terminate and the Obligations shall immediately become due and payable without any election or action on the part of the Administrative Agent, the LC Issuer or any Lender and the Borrower will be and become thereby unconditionally obligated, without any further notice, act or demand, to pay to the Administrative Agent an amount in immediately available funds, which funds shall be held in the Facility LC Collateral Account, equal to the difference of (x) the amount of LC Obligations at such time, less (y) the amount on deposit in the Facility LC Collateral Account at such time which is free and clear of all rights and claims of third parties and has not been applied against the Obligations (such difference, the “Collateral Shortfall Amount”). If any other Event of Default occurs, the Required Lenders (or the Administrative Agent with the consent of the Required Lenders) may (a) terminate or suspend the obligations of the Lenders to make Loans hereunder and the obligation and power of the LC Issuer to issue Facility LCs, or declare the Obligations to be due and payable, or both, whereupon the Obligations shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which the Borrower hereby expressly waives, and (b) upon notice to the Borrower and in addition to the continuing right to demand payment of all amounts payable under this Agreement, make demand on the Borrower to pay, and the Borrower will, forthwith upon such demand and without any further notice or act, pay to the Administrative Agent the Collateral Shortfall Amount, which funds shall be deposited in the Facility LC Collateral Account.

          (b) If at any time while any Event of Default is continuing, the Administrative Agent determines that the Collateral Shortfall Amount at such time is greater than zero, the Administrative Agent may make demand on the Borrower to pay, and the Borrower will, forthwith upon such demand and without any further notice or act, pay to the Administrative Agent the Collateral Shortfall Amount, which funds shall be deposited in the Facility LC Collateral Account.

          (c) The Administrative Agent may at any time or from time to time after funds are deposited in the Facility LC Collateral Account, apply such funds to the payment of the Obligations and any other amounts as shall from time to time have become due and payable by the Borrower to the Lenders or the LC Issuer under the Loan Documents, as provided in Section 8.2.

          (d) At any time while any Event of Default is continuing, neither the Borrower nor any Person claiming on behalf of or through the Borrower shall have any right to withdraw any of the funds held in the Facility LC Collateral Account. After all of the Obligations have been indefeasibly paid in full and the Aggregate Commitment has been terminated, any funds remaining in the Facility LC Collateral Account shall be returned by the Administrative Agent to the Borrower or paid to whomever may be legally entitled thereto at such time.

          (e) If, within thirty (30) days after acceleration of the maturity of the Obligations or termination of the obligations of the Lenders to make Loans and the obligation and power of the LC Issuer to issue Facility LCs hereunder as a result of any Event of Default (other than any Event of Default as described in Section 7.6 or 7.7 with respect to the Borrower) and before any judgment or decree for the payment of the Obligations due shall have been obtained or entered, the Required Lenders (in their sole discretion) shall so direct, the Administrative Agent shall, by notice to the Borrower, rescind and annul such acceleration and/or termination.

          (f) Upon the occurrence and during the continuation of any Event of Default, the Administrative Agent may, subject to the direction of the Required Lenders, exercise all rights and remedies under the Loan Documents and enforce all other rights and remedies under applicable law.

     8.2. Application of Funds. After the exercise of remedies provided for in Section 8.1 (or after the Obligations have automatically become immediately due and payable as set forth in the first sentence of Section 8.1(i)), any amounts received by the Administrative Agent on account of the Obligations shall be applied by the Administrative Agent in the following order:

          (a) First, to payment of fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent in its capacity as such;

          (b) Second, to payment of fees, indemnities and other amounts (other than principal, interest, LC Fees and Commitment Fees) payable to the Lenders and the LC Issuer (including fees, charges and disbursements of counsel to the respective Lenders and the LC Issuer as required by Section 9.6 and amounts payable under Article III);

          (c) Third, to payment of accrued and unpaid LC Fees, Commitment Fees and interest on the Loans and Reimbursement Obligations, ratably among the Lenders and the LC Issuer in proportion to the respective amounts described in this Section 8.2(c) payable to them;

          (d) Fourth, to payment of the unpaid principal of the Loans and Reimbursement Obligations, ratably among the Lenders in proportion to their Pro Rata Shares;

          (e) Fifth, to payment of all other Secured Obligations ratably among the Lenders;

          (f) Sixth, to the Administrative Agent for deposit to the Facility LC Collateral Account; and

          (g) Last, the balance, if any, to the Borrower or as otherwise required by Law.

     8.3. Amendments. Subject to the provisions of this Section 8.3, the Required Lenders (or the Administrative Agent with the consent in writing of the Required Lenders) and the Borrower may enter into agreements supplemental hereto for the purpose of adding or modifying any provisions to the Loan Documents or changing in any manner the rights of the Lenders or the Borrower hereunder or waiving any Event of Default hereunder; provided, however, that no such supplemental agreement shall:

          (a) without the consent of each Lender directly affected thereby, extend the final maturity of any Loan, or extend the expiry date of any Facility LC to a date after the Facility Termination Date or postpone any regularly scheduled payment of principal of any Loan or forgive all or any portion of the principal amount thereof or any Reimbursement Obligation related thereto, or reduce the rate or extend the time of payment of interest or fees thereon or Reimbursement Obligations related thereto or increase the amount of the Commitment of such Lender hereunder.

          (b) without the consent of all of the Lenders, reduce the percentage specified in the definition of Required Lenders.

          (c) without the consent of all of the Lenders, amend this Section 8.3.

          (d) without the consent of all of the Lenders, release all or substantially all of the Guarantors of the Obligations or, except as otherwise provided in Section 10.16, release all or substantially all of the Collateral.

No amendment of any provision of this Agreement relating to the Administrative Agent shall be effective without the written consent of the Administrative Agent, and no amendment of any provision relating to the LC Issuer shall be effective without the written consent of the LC Issuer. No amendment to any provision of this Agreement relating to the Swing Line Lender or any Swing Line Loans shall be affective without the written consent of the Swing Line Lender. The Administrative Agent may waive payment of the fee required under Section 12.3(c) without obtaining the consent of any other party to this Agreement. Notwithstanding anything to the contrary herein, the Administrative Agent may, with the consent of the Borrower only, amend, modify or supplement this Agreement or any of the other Loan Documents to cure any ambiguity, omission, mistake, defect or inconsistency of a technical or immaterial nature, as determined in good faith by the Administrative Agent

     8.4. Preservation of Rights. No delay or omission of the Lenders, the LC Issuer or the Administrative Agent to exercise any right under the Loan Documents shall impair such right or be construed to be a waiver of any Event of Default or an acquiescence therein, and the making of a Credit Extension notwithstanding the existence of an Event of Default or the inability of the Borrower to satisfy the conditions precedent to such Credit Extension shall not constitute any waiver or acquiescence. Any single or partial exercise of any such right shall not preclude other or further exercise thereof or the exercise of any other right, and no waiver, amendment or other variation of the terms, conditions or provisions of the Loan Documents whatsoever shall be valid unless in writing signed by the Lenders required pursuant to Section 8.2, and then only to the extent in such writing specifically set forth. All remedies contained in the Loan Documents or by law afforded shall be cumulative and all shall be

available to the Administrative Agent, the LC Issuer and the Lenders until the Obligations have been paid in full.

ARTICLE IX

GENERAL PROVISIONS

     9.1. Survival of Representations. All representations and warranties of the Borrower contained in this Agreement shall survive the making of the Credit Extensions herein contemplated.

     9.2. Governmental Regulation. Anything contained in this Agreement to the contrary notwithstanding, neither the LC Issuer nor any Lender shall be obligated to extend credit to the Borrower in violation of any limitation or prohibition provided by any applicable statute or regulation.

     9.3. Headings. Section headings in the Loan Documents are for convenience of reference only, and shall not govern the interpretation of any of the provisions of the Loan Documents.

     9.4. Entire Agreement. The Loan Documents embody the entire agreement and understanding among the Borrower, the Administrative Agent, the LC Issuer and the Lenders and supersede all prior agreements and understandings among the Borrower, the Administrative Agent, the LC Issuer and the Lenders relating to the subject matter thereof other than those contained in the Fee Letter which shall survive and remain in full force and effect during the term of this Agreement.

     9.5. Several Obligations; Benefits of this Agreement. The respective obligations of the Lenders hereunder are several and not joint and no Lender shall be the partner or agent of any other (except to the extent to which the Administrative Agent is authorized to act as such). The failure of any Lender to perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. This Agreement shall not be construed so as to confer any right or benefit upon any Person other than the parties to this Agreement and their respective successors and assigns, provided, however, that the parties hereto expressly agree that the Arranger shall enjoy the benefits of the provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set forth therein and shall have the right to enforce such provisions on its own behalf and in its own name to the same extent as if it were a party to this Agreement.

     9.6. Expenses; Indemnification.

          (a) The Borrower shall reimburse the Administrative Agent and the Arranger upon demand for all reasonable and documented costs and expenses paid or incurred by the Administrative Agent or the Arranger, including, without limitation, filing and recording costs and fees, costs of any environmental review, and consultants’ fees, travel expenses and reasonable fees, charges and disbursements of outside counsel to the Administrative Agent and the Arranger, in connection with the due diligence, preparation, administration, negotiation, execution, delivery, syndication, distribution (including, without limitation, via DebtX and any other internet service selected by the Administrative Agent), review, amendment, modification, and administration of the Loan Documents. The Borrower also agrees to reimburse the Administrative Agent, the Arranger, the LC Issuer and the Lenders for any reasonable and documented out-of-pocket costs and expenses, including, without limitation, filing and recording costs and fees, costs of any environmental review, and consultants’ fees, travel expenses and reasonable fees, charges and disbursements of outside counsel to the Administrative Agent, the Arranger, the LC Issuer and the Lenders, paid or incurred by the Administrative Agent, the Arranger, the LC Issuer or any Lender in connection with the collection and enforcement of the Loan Documents. Expenses being reimbursed by the Borrower under this Section include, without limitation, the cost and expense of

obtaining an appraisal of each parcel of real property or interest in real property described in the relevant Collateral Documents, which appraisal shall be in conformity with the applicable requirements of any law or any governmental rule, regulation, policy, guideline or directive (whether or not having the force of law), or any interpretation thereof, including, without limitation, the provisions of Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended, reformed or otherwise modified from time to time, and any rules promulgated to implement such provisions and costs and expenses incurred in connection with the Reports described in the following sentence. The Borrower acknowledges that from time to time U.S. Bank may prepare and may distribute to the Lenders (but shall have no obligation or duty to prepare or to distribute to the Lenders) certain audit reports (the “Reports”) pertaining to the Borrower’s assets for internal use by U.S. Bank from information furnished to it by or on behalf of the Borrower, after U.S. Bank has exercised its rights of inspection pursuant to this Agreement.

          (b) The Borrower hereby further agrees to indemnify and hold harmless the Administrative Agent, the Arranger, the LC Issuer, each Lender, their respective affiliates, and each of their directors, officers and employees, agents and advisors from and against all losses, claims, damages, penalties, judgments, liabilities and expenses (including, without limitation, all expenses of litigation or preparation therefor (including reasonable fees, charges and disbursements of outside counsel) whether or not the Administrative Agent, the Arranger, the LC Issuer, any Lender or any affiliate is a party thereto) which any of them may pay or incur arising out of or relating to (i) the execution or delivery of any Loan Document or any agreement or instrument contemplated thereby, the performance by the parties hereto of their respective obligations thereunder or the consummation of the transactions contemplated hereby, (ii) any Loan or Facility LC or the use of the proceeds therefrom (including any refusal by the LC Issuer to honor a demand for payment under a Facility LC if the documents presented in connection with such demand do not strictly comply with the terms of such Facility LC), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any environmental liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any of its Subsidiaries, and regardless of whether the Administrative Agent, the Arranger, the LC Issuer, any Lender, any affiliate or any of their respective directors, officers, employees, agents or advisors is a party thereto, including, without limitation, reasonable attorneys’ fees and settlement costs, except, in each case, to the extent that (i) they are determined in a final non-appealable judgment by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Person seeking indemnification or (ii) they result from a claim brought by any Loan Party against the party seeking indemnification for a material breach in bad faith of such Person’s express obligations under the Loan Documents pursuant to a claim made by the Borrower, if such Loan Party has obtained a final and non-appealable judgment in its favor on such claim as determined by a court of competent jurisdiction. The obligations of the Borrower under this Section 9.6 shall survive the termination of this Agreement.

     9.7. [Intentionally Omitted].

     9.8. Accounting. Except as provided to the contrary herein, all accounting terms used herein shall be interpreted and all accounting determinations hereunder shall be made in accordance with GAAP in a manner consistent with that used in preparing the financial statements referred to in Section 5.4; provided, however that, notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made without giving effect to (i) any election under Accounting Standards Codification Section 825-10-25 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any of its Subsidiaries at “fair value”, as defined therein, or (ii) any treatment of Indebtedness in respect of

Convertible Debt instruments under Financial Accounting Standards Codification Subtopic 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and the Borrower, the Administrative Agent or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders), provided that, until so amended, such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and the Borrower shall provide to the Administrative Agent and the Lenders reconciliation statements showing the difference in such calculation, together with the delivery of monthly, quarterly and annual financial statements required hereunder.

     9.9. Severability of Provisions. Any provision in any Loan Document that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of all Loan Documents are declared to be severable.

     9.10. Nonliability of Lenders. The relationship between the Borrower on the one hand and the Lenders, the LC Issuer and the Administrative Agent on the other hand shall be solely that of borrower and lender. Neither the Administrative Agent, the Arranger, the LC Issuer nor any Lender shall have any fiduciary responsibilities to the Borrower. Neither the Administrative Agent, the Arranger, the LC Issuer nor any Lender undertakes any responsibility to the Borrower to review or inform the Borrower of any matter in connection with any phase of the Borrower’s business or operations. The Borrower agrees that neither the Administrative Agent, the Arranger, the LC Issuer nor any Lender shall have liability to the Borrower (whether sounding in tort, contract or otherwise) for losses suffered by the Borrower in connection with, arising out of, or in any way related to, the transactions contemplated and the relationship established by the Loan Documents, or any act, omission or event occurring in connection therewith, unless it is determined in a final non-appealable judgment by a court of competent jurisdiction that such losses resulted from the gross negligence or willful misconduct of the party from which recovery is sought. Neither the Administrative Agent, the Arranger, the LC Issuer nor any Lender shall have any liability with respect to, and the Borrower hereby waives, releases and agrees not to sue for, any special, indirect, consequential or punitive damages suffered by the Borrower in connection with, arising out of, or in any way related to the Loan Documents or the transactions contemplated thereby. It is agreed that the Arranger shall, in its capacity as such, have no duties or responsibilities under the Agreement or any other Loan Document. Each Lender acknowledges that it has not relied and will not rely on the Arranger in deciding to enter into the Agreement or any other Loan Document or in taking or not taking any action.

     9.11. Confidentiality. The Administrative Agent and each Lender agrees to hold any confidential information which it may receive from the Borrower in connection with this Agreement in confidence, except for disclosure (i) to its Affiliates and to the Administrative Agent and any other Lender and their respective Affiliates, (ii) to legal counsel, accountants, and other professional advisors to the Administrative Agent or such Lender or to a Transferee, (iii) to regulatory officials, (iv) to any Person as requested pursuant to or as required by law, regulation, or legal process, (v) to any Person in connection with any legal proceeding to which it is a party, (vi) to its direct or indirect contractual counterparties in swap agreements or to legal counsel, accountants and other professional advisors to such counterparties, (vii) permitted by Section 12.4, and (viii) to rating agencies if requested or required by such agencies in connection with a rating relating to the Advances hereunder. Without limiting Section

9.4, the Borrower agrees that the terms of this Section 9.11 shall set forth the entire agreement between the Borrower and the Administrative Agent and each Lender with respect to any confidential information previously or hereafter received by the Administrative Agent or such Lender in connection with this Agreement, and this Section 9.11 shall supersede any and all prior confidentiality agreements entered into by the Administrative Agent or any Lender with respect to such confidential information.

     9.12. Nonreliance. Each Lender hereby represents that it is not relying on or looking to any margin stock (as defined in Regulation U) for the repayment of the Credit Extensions provided for herein.

     9.13. Disclosure. The Borrower and each Lender hereby acknowledge and agree that U.S. Bank and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with the Borrower and its Affiliates.

     9.14. USA PATRIOT ACT NOTIFICATION. The following notification is provided to Borrower pursuant to Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318:

Each Lender that is subject to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) hereby notifies the Borrower and each other Loan Party that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies such Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender to identify such Loan Party in accordance with the Act.

ARTICLE X

THE ADMINISTRATIVE AGENT

     10.1. Appointment; Nature of Relationship. U.S. Bank National Association is hereby appointed by each of the Lenders as its contractual representative (herein referred to as the “Administrative Agent”) hereunder and under each other Loan Document, and each of the Lenders irrevocably authorizes the Administrative Agent to act as the contractual representative of such Lender with the rights and duties expressly set forth herein and in the other Loan Documents. The Administrative Agent agrees to act as such contractual representative upon the express conditions contained in this Article X. Notwithstanding the use of the defined term “Administrative Agent,” it is expressly understood and agreed that the Administrative Agent shall not have any fiduciary responsibilities to any Lender by reason of this Agreement or any other Loan Document and that the Administrative Agent is merely acting as the contractual representative of the Lenders with only those duties as are expressly set forth in this Agreement and the other Loan Documents. In its capacity as the Lenders’ contractual representative, the Administrative Agent (i) does not hereby assume any fiduciary duties to any of the Lenders, (ii) is a “representative” of the Lenders within the meaning of the term “secured party” as defined in the New York Uniform Commercial Code and (iii) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Loan Documents. Each of the Lenders hereby agrees to assert no claim against the Administrative Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Lender hereby waives.

     10.2. Powers. The Administrative Agent shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Administrative Agent by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Administrative Agent shall have no implied duties to the Lenders, or any obligation to the Lenders to take any action thereunder except any action specifically provided by the Loan Documents to be taken by the Administrative Agent.

     10.3. General Immunity. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be liable to the Borrower, the Lenders or any Lender for any action taken or omitted to be taken by it or them hereunder or under any other Loan Document or in connection herewith or therewith except to the extent such action or inaction is determined in a final non-appealable judgment by a court of competent jurisdiction to have arisen from the gross negligence or willful misconduct of such Person.

     10.4. No Responsibility for Loans, Recitals, etc. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (a) any statement, warranty or representation made in connection with any Loan Document or any borrowing hereunder; (b) the performance or observance of any of the covenants or agreements of any obligor under any Loan Document, including, without limitation, any agreement by an obligor to furnish information directly to each Lender; (c) the satisfaction of any condition specified in Article IV, except receipt of items required to be delivered solely to the Administrative Agent; (d) the existence or possible existence of any Default or Event of Default; (e) the validity, enforceability, effectiveness, sufficiency or genuineness of any Loan Document or any other instrument or writing furnished in connection therewith; (f) the value, sufficiency, creation, perfection or priority of any Lien in any collateral security; or (g) the financial condition of the Borrower or any guarantor of any of the Obligations or of any of the Borrower’s or any such guarantor’s respective Subsidiaries.

     10.5. Action on Instructions of Lenders. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Loan Document in accordance with written instructions signed by the Required Lenders, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders. The Lenders hereby acknowledge that the Administrative Agent shall be under no duty to take any discretionary action permitted to be taken by it pursuant to the provisions of this Agreement or any other Loan Document unless it shall be requested in writing to do so by the Required Lenders. The Administrative Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Loan Document unless it shall first be indemnified to its satisfaction by the Lenders pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action.

     10.6. Employment of Administrative Agents and Counsel. The Administrative Agent may execute any of its duties as Administrative Agent hereunder and under any other Loan Document by or through employees, agents, and attorneys-in-fact and shall not be answerable to the Lenders, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. The Administrative Agent shall be entitled to advice of counsel concerning the contractual arrangement between the Administrative Agent and the Lenders and all matters pertaining to the Administrative Agent’s duties hereunder and under any other Loan Document.

     10.7. Reliance on Documents; Counsel. The Administrative Agent shall be entitled to rely upon any Note, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex, electronic mail message, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons, and, in respect to legal matters, upon the opinion of counsel selected by the Administrative Agent, which counsel may be employees of the Administrative Agent. For purposes of determining compliance with the conditions specified in Sections 4.1 and 4.2, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the applicable date specifying its objection thereto.

     10.8. Administrative Agent’s Reimbursement and Indemnification. The Lenders agree to reimburse and indemnify the Administrative Agent ratably in proportion to their respective Commitments (or, if the Commitments have been terminated, in proportion to their Commitments immediately prior to such termination) (i) for any amounts not reimbursed by the Borrower for which the Administrative Agent is entitled to reimbursement by the Borrower under the Loan Documents, (ii) for any other expenses incurred by the Administrative Agent on behalf of the Lenders, in connection with the preparation, execution, delivery, administration and enforcement of the Loan Documents (including, without limitation, for any expenses incurred by the Administrative Agent in connection with any dispute between the Administrative Agent and any Lender or between two or more of the Lenders) and (iii) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of the Loan Documents or any other document delivered in connection therewith or the transactions contemplated thereby (including, without limitation, for any such amounts incurred by or asserted against the Administrative Agent in connection with any dispute between the Administrative Agent and any Lender or between two or more of the Lenders), or the enforcement of any of the terms of the Loan Documents or of any such other documents, provided that (i) no Lender shall be liable for any of the foregoing to the extent any of the foregoing is found in a final non-appealable judgment by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Administrative Agent and (ii) any indemnification required pursuant to Section 3.5(g) shall, notwithstanding the provisions of this Section 10.8, be paid by the relevant Lender in accordance with the provisions thereof. The obligations of the Lenders under this Section 10.8 shall survive payment of the Obligations and termination of this Agreement.

     10.9. Notice of Event of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless the Administrative Agent has received written notice from a Lender or the Borrower referring to this Agreement describing such Default or Event of Default and stating that such notice is a “notice of default”. In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give prompt notice thereof to the Lenders; provided that, except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity.

     10.10. Rights as a Lender. In the event the Administrative Agent is a Lender, the Administrative Agent shall have the same rights and powers hereunder and under any other Loan Document with respect to its Commitment and its Loans as any Lender and may exercise the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders” shall, at any time when the Administrative Agent is a Lender, unless the context otherwise indicates, include the Administrative Agent in its individual capacity. The Administrative Agent and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Agreement or any other Loan Document, with the Borrower or any of its Subsidiaries in which the Borrower or such Subsidiary is not restricted hereby from engaging with any other Person.

     10.11. Lender Credit Decision, Legal Representation.

          (a) Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent, the Arranger or any other Lender and based on the financial statements prepared by the Borrower and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Loan Documents. Each

Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent, the Arranger or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents. Except for any notice, report, document or other information expressly required to be furnished to the Lenders by the Administrative Agent or Arranger hereunder, neither the Administrative Agent nor the Arranger shall have any duty or responsibility (either initially or on a continuing basis) to provide any Lender with any notice, report, document, credit information or other information concerning the affairs, financial condition or business of the Borrower or any of its Affiliates that may come into the possession of the Administrative Agent or Arranger (whether or not in their respective capacity as Administrative Agent or Arranger) or any of their Affiliates.

          (b) Each Lender further acknowledges that it has had the opportunity to be represented by legal counsel in connection with its execution of this Agreement and the other Loan Documents, that it has made its own evaluation of all applicable laws and regulations relating to the transactions contemplated hereby, and that the counsel to the Administrative Agent represents only the Administrative Agent and not the Lenders in connection with this Agreement and the transactions contemplated hereby.

     10.12. Successor Administrative Agent. The Administrative Agent may resign at any time by giving written notice thereof to the Lenders and the Borrower, such resignation to be effective upon the appointment of a successor Administrative Agent or, if no successor Administrative Agent has been appointed, forty-five (45) days after the retiring Administrative Agent gives notice of its intention to resign. Upon any such resignation, the Required Lenders shall have the right, with the consent of the Borrower (provided that no such consent shall be required if an Event of Default has occurred and is continuing), to appoint, on behalf of the Borrower and the Lenders, a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed by the Required Lenders (and, unless an Event of Default has occurred and is continuing, consented to by the Borrower) within thirty (30) days after the resigning Administrative Agent’s giving notice of its intention to resign, then the resigning Administrative Agent may appoint, on behalf of the Borrower and the Lenders, a successor Administrative Agent. Notwithstanding the previous sentence, the Administrative Agent may at any time without the consent of the Borrower or any Lender, appoint any of its Affiliates which is a commercial bank as a successor Administrative Agent hereunder. If the Administrative Agent has resigned and no successor Administrative Agent has been appointed, the Lenders may perform all the duties of the Administrative Agent hereunder and the Borrower shall make all payments in respect of the Obligations to the applicable Lender and for all other purposes shall deal directly with the Lenders. No successor Administrative Agent shall be deemed to be appointed hereunder until such successor Administrative Agent has accepted the appointment. Any such successor Administrative Agent shall be a commercial bank having capital and retained earnings of at least $100,000,000. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the resigning Administrative Agent. Upon the effectiveness of the resignation of the Administrative Agent, the resigning Administrative Agent shall be discharged from its duties and obligations hereunder and under the Loan Documents. After the effectiveness of the resignation of an Administrative Agent, the provisions of this Article X shall continue in effect for the benefit of such Administrative Agent in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent hereunder and under the other Loan Documents. In the event that there is a successor to the Administrative Agent by merger, or the Administrative Agent assigns its duties and obligations to an Affiliate pursuant to this Section 10.12, then the term “Prime Rate” as used in this Agreement shall mean the prime rate, base rate or other analogous rate of the new Administrative Agent.

     10.13. Administrative Agent and Arranger Fees. The Borrower agrees to pay to the Administrative Agent and the Arranger, for their respective accounts, the fees agreed to by the Borrower, the Administrative Agent and the Arranger pursuant to that certain letter agreement dated July 12, 2011 (the “Fee Letter”), or as otherwise agreed from time to time.

     10.14. Delegation to Affiliates. The Borrower and the Lenders agree that the Administrative Agent may delegate any of its duties under this Agreement to any of its Affiliates. Any such Affiliate (and such Affiliate’s directors, officers, agents and employees) which performs duties in connection with this Agreement shall be entitled to the same benefits of the indemnification, waiver and other protective provisions to which the Administrative Agent is entitled under Articles IX and X.

     10.15. Execution of Collateral Documents. The Lenders hereby empower and authorize the Administrative Agent to execute and deliver to the Borrower on their behalf the Collateral Document(s) and all related financing statements and any financing statements, agreements, documents or instruments as shall be necessary or appropriate to effect the purposes of the Collateral Document(s).

     10.16. Collateral Releases. The Lenders hereby empower and authorize the Administrative Agent to execute and deliver to the Borrower on their behalf any agreements, documents or instruments as shall be necessary or appropriate to effect any releases of Collateral which shall be permitted by the terms hereof or of any other Loan Document or which shall otherwise have been approved by the Required Lenders (or, if required by the terms of Section 8.2, all of the Lenders) in writing.

     10.17. Co-Syndication Agents, etc. Neither any of the Lenders identified in this Agreement as a “co-agent” nor the Co-Syndication Agents shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such. Without limiting the foregoing, none of such Lenders shall have or be deemed to have a fiduciary relationship with any Lender. Each Lender hereby makes the same acknowledgments with respect to such Lenders as it makes with respect to the Administrative Agent in Section 10.11.

     10.18. No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees that: (i) (A) the arranging and other services regarding this Agreement provided by the Lenders are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Lenders, on the other hand, (B) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) each of the Lenders is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person and (B) no Lender has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) each of the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and no Lender has any obligation to disclose any of such interests to the Borrower or its Affiliates. To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against each of the Lenders with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

     10.19. Enforcement. Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan

Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 8.1 for the benefit of all the Lenders and the LC Issuer; provided, however, that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) the LC Issuer or the Swing Line Lender from exercising the rights and remedies that inure to its benefit (solely in their respective capacities as LC Issuer or Swing Line Lender, as the case may be) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 11.1 (subject to the terms of Section 11.2), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law; and provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 8.1 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 11.2, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

ARTICLE XI

SETOFF; RATABLE PAYMENTS

     11.1. Setoff. The Borrower hereby grants each Lender a security interest in all deposits, credits and deposit accounts (including all account balances, whether provisional or final and whether or not collected or available) of the Borrower with such Lender or any Affiliate of such Lender (the “Deposits”). In addition to, and without limitation of, any rights of the Lenders under applicable law, if the Borrower becomes insolvent, however evidenced, or any Event of Default occurs, Borrower authorizes each Lender, after obtaining the prior written consent of the Administrative Agent, to offset and apply all such Deposits toward the payment of the Obligations owing to such Lender, whether or not the Obligations, or any part thereof, shall then be due and regardless of the existence or adequacy of any collateral, Guarantee or any other security, right or remedy available to such Lender or the Lenders.

     11.2. Ratable Payments. If any Lender, whether by setoff or otherwise, has payment made to it upon its Outstanding Credit Exposure (other than payments received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than that received by any other Lender, such Lender agrees, promptly upon demand, to purchase a portion of the Aggregate Outstanding Credit Exposure held by the other Lenders so that after such purchase each Lender will hold its Pro Rata Share of the Aggregate Outstanding Credit Exposure. If any Lender, whether in connection with setoff or amounts which might be subject to setoff or otherwise, receives collateral or other protection for its Obligations or such amounts which may be subject to setoff, such Lender agrees, promptly upon demand, to take such action necessary such that all Lenders share in the benefits of such collateral ratably in proportion to their respective Pro Rata Shares of the Aggregate Outstanding Credit Exposure. In case any such payment is disturbed by legal process, or otherwise, appropriate further adjustments shall be made.

ARTICLE XII

BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

     12.1. Successors and Assigns. The terms and provisions of the Loan Documents shall be binding upon and inure to the benefit of the Borrower and the Lenders and their respective successors and assigns permitted hereby, except that (i) the Borrower shall not have the right to assign its rights or

obligations under the Loan Documents without the prior written consent of each Lender, (ii) any assignment by any Lender must be made in compliance with Section 12.3, and (iii) any transfer by participation must be made in compliance with Section 12.2. Any attempted assignment or transfer by any party not made in compliance with this Section 12.1 shall be null and void, unless such attempted assignment or transfer is treated as a participation in accordance with the terms of this Agreement. The parties to this Agreement acknowledge that clause (ii) of this Section 12.1 relates only to absolute assignments and this Section 12.1 does not prohibit assignments creating security interests, including, without limitation, (x) any pledge or assignment by any Lender of all or any portion of its rights under this Agreement and any Note to a Federal Reserve Bank or (y) in the case of a Lender which is a Fund, any pledge or assignment of all or any portion of its rights under this Agreement and any Note to its trustee in support of its obligations to its trustee; provided, however, that no such pledge or assignment creating a security interest shall release the transferor Lender from its obligations hereunder unless and until the parties thereto have complied with the provisions of Section 12.3. The Administrative Agent may treat the Person which made any Loan or which holds any Note as the owner thereof for all purposes hereof unless and until such Person complies with Section 12.3; provided, however, that the Administrative Agent may in its discretion (but shall not be required to) follow instructions from the Person which made any Loan or which holds any Note to direct payments relating to such Loan or Note to another Person. Any assignee of the rights to any Loan or any Note agrees by acceptance of such assignment to be bound by all the terms and provisions of the Loan Documents. Any request, authority or consent of any Person, who at the time of making such request or giving such authority or consent is the owner of the rights to any Loan (whether or not a Note has been issued in evidence thereof), shall be conclusive and binding on any subsequent holder or assignee of the rights to such Loan.

     12.2. Participations.

          (a) Permitted Participants; Effect. Any Lender may at any time sell to one or more banks or other entities (“Participants”) participating interests in any Outstanding Credit Exposure owing to such Lender, any Note held by such Lender, any Commitment of such Lender or any other interest of such Lender under the Loan Documents. In the event of any such sale by a Lender of participating interests to a Participant, such Lender’s obligations under the Loan Documents shall remain unchanged, such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, such Lender shall remain the owner of its Outstanding Credit Exposure and the holder of any Note issued to it in evidence thereof for all purposes under the Loan Documents, all amounts payable by the Borrower under this Agreement shall be determined as if such Lender had not sold such participating interests, and the Borrower and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under the Loan Documents.

          (b) Voting Rights. Each Lender shall retain the sole right to approve, without the consent of any Participant, any amendment, modification or waiver of any provision of the Loan Documents provided that each such Lender may agree in its participation agreement with its Participant that such Lender will not vote to approve any amendment, modification or waiver with respect to any Outstanding Credit Exposure or Commitment in which such Participant has an interest which would require consent of all of the Lenders pursuant to the terms of Section 8.3 or of any other Loan Document.

          (c) Benefit of Certain Provisions. The Borrower agrees that each Participant shall be deemed to have the right of setoff provided in Section 11.1 in respect of its participating interest in amounts owing under the Loan Documents to the same extent as if the amount of its participating interest were owing directly to it as a Lender under the Loan Documents, provided that each Lender shall retain the right of setoff provided in Section 11.1 with respect to the amount of participating interests sold to each Participant. The Lenders agree to share with each Participant, and each Participant, by exercising the right of setoff provided in Section 11.1, agrees to share with each Lender, any amount received

pursuant to the exercise of its right of setoff, such amounts to be shared in accordance with Section 11.2 as if each Participant were a Lender. The Borrower further agrees that each Participant shall be entitled to the benefits of Sections 3.1, 3.2, 3.4, 3.5, 9.6 and 9.10 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 12.3, provided that (i) a Participant shall not be entitled to receive any greater payment under Section 3.1, 3.2 or 3.5 than the Lender who sold the participating interest to such Participant would have received had it retained such interest for its own account, unless the sale of such interest to such Participant is made with the prior written consent of the Borrower, and (ii) any Participant not incorporated under the laws of the United States of America or any state thereof agrees to comply with the provisions of Section 3.5 to the same extent as if it were a Lender (it being understood that the documentation required under Section 3.5 shall be delivered to the participating Lender). Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the obligations under this Agreement (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in the obligations under this Agreement) to any Person except to the extent that such disclosure is necessary to establish that such interest is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

     12.3. Assignments.

          (a) Permitted Assignments. Any Lender may at any time assign to one or more Eligible Assignees (“Purchasers”) all or any part of its rights and obligations under the Loan Documents. Such assignment shall be substantially in the form of Exhibit B or in such other form reasonably acceptable to the Administrative Agent as may be agreed to by the parties thereto. Each such assignment with respect to a Purchaser which is not a Lender or an Affiliate of a Lender or an Approved Fund shall either be in an amount equal to the entire applicable Commitment and Outstanding Credit Exposure of the assigning Lender or (unless each of the Borrower and the Administrative Agent otherwise consents) be in an aggregate amount not less than $5,000,000. The amount of the assignment shall be based on the Commitment or Outstanding Credit Exposure (if the Commitment has been terminated) subject to the assignment, determined as of the date of such assignment or as of the “Trade Date,” if the “Trade Date” is specified in the assignment.

          (b) Consents. The consent of the Borrower shall be required prior to an assignment becoming effective unless the Purchaser is a Lender, an Affiliate of a Lender or an Approved Fund, provided that the consent of the Borrower shall not be required if an Event of Default has occurred and is continuing; provided further that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five (5) Business Days after having received notice thereof. The consent of the Administrative Agent shall be required prior to an assignment becoming effective. The consent of the LC Issuer shall be required prior to an assignment of a Revolving Commitment becoming effective unless the Purchaser is a Lender with a Revolving Commitment. Any consent required under this Section 12.3(b) shall not be unreasonably withheld or delayed.

          (c) Effect; Effective Date. Upon (i) delivery to the Administrative Agent of an assignment, together with any consents required by Sections 12.3(a) and 12.3(b), and (ii) payment by the assigning Lender of a $3,500 fee to the Administrative Agent for processing such assignment (unless such

fee is waived by the Administrative Agent), such assignment shall become effective on the effective date specified in such assignment. The assignment shall contain a representation by the Purchaser to the effect that none of the consideration used to make the purchase of the Commitment and Outstanding Credit Exposure under the applicable assignment agreement constitutes “plan assets” as defined under ERISA and that the rights and interests of the Purchaser in and under the Loan Documents will not be “plan assets” under ERISA. On and after the effective date of such assignment, such Purchaser shall for all purposes be a Lender party to this Agreement and any other Loan Document executed by or on behalf of the Lenders and shall have all the rights and obligations of a Lender under the Loan Documents, to the same extent as if it were an original party thereto, and the transferor Lender shall be released with respect to the Commitment and Outstanding Credit Exposure assigned to such Purchaser without any further consent or action by the Borrower, the Lenders or the Administrative Agent. In the case of an assignment covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a Lender hereunder but shall continue to be entitled to the benefits of, and subject to, those provisions of this Agreement and the other Loan Documents which survive payment of the Obligations and termination of the applicable agreement. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 12.3 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 12.2. Upon the consummation of any assignment to a Purchaser pursuant to this Section 12.3(c), the transferor Lender, the Administrative Agent and the Borrower shall, if the transferor Lender or the Purchaser desires that its Loans be evidenced by Notes, make appropriate arrangements so that new Notes or, as appropriate, replacement Notes are issued to such transferor Lender and new Notes or, as appropriate, replacement Notes, are issued to such Purchaser, in each case in principal amounts reflecting their respective Commitments, as adjusted pursuant to such assignment.

          (d) Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices in the United States of America, a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans owing to, each Lender, and participations of each Lender in Facility LCs, pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower at any reasonable time and from time to time upon reasonable prior notice.

     12.4. Dissemination of Information. The Borrower authorizes each Lender to disclose to any Participant or Purchaser or any other Person acquiring an interest in the Loan Documents by operation of law (each a “Transferee”) and any prospective Transferee any and all information in such Lender’s possession concerning the creditworthiness of the Borrower and its Subsidiaries, including without limitation any information contained in any Reports; provided that each Transferee and prospective Transferee agrees to be bound by Section 9.11 of this Agreement.

     12.5. Tax Treatment. If any interest in any Loan Document is transferred to any Transferee which is not incorporated under the laws of the United States or any state thereof, the transferor Lender shall cause such Transferee, concurrently with the effectiveness of such transfer, to comply with the provisions of Section 3.5(d), (f) and (h). For the avoidance of doubt, the Transferee’s right to indemnification and additional amounts shall be subject to the provisions of Section 3.5(e).

ARTICLE XIII

NOTICES

          13.1. Notices; Effectiveness; Electronic CommunicationNotices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile as follows:

(i)

if to the Borrower, to it at Molina Healthcare, Inc., 200 Oceangate, Suite 100, Long Beach, California 90802, Attention: John C. Molina, Executive Vice President and Chief Financial Officer, Facsimile: (562) 495-7770, Internet address for purposes of Section 6.2: http://phx.corporate-ir.net/phoenix.zhtml?c=137837&p=irol-irhome;

(ii)

if to the Administrative Agent, to it at 1420 Fifth Avenue, 9th Floor, Seattle, Washington 98101, Attention: Sarah Adams, Facsimile: (206) 587-7022;

(iii)

if to the LC Issuer, to it at 111 SW 5th Street, Suite 500, Portland, Oregon 97204, Attention: Nancy Tousignant, Facsimile: (503) 275-5132

(iv)

if to a Lender, to it at its address (or facsimile number) set forth in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices delivered through electronic communications to the extent provided in paragraph (b) below, shall be effective as provided in said paragraph (b).

          (b) Electronic Communications. Notices and other communications to the Lenders and the LC Issuer hereunder may be delivered or furnished by electronic communication (including e-mail and internet or intranet websites) pursuant to procedures approved by the Administrative Agent or as otherwise determined by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or the LC Issuer pursuant to Article II if such Lender or the LC Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrower may, in its respective discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it or as it otherwise determines, provided that such determination or approval may be limited to particular notices or communications.

     Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not given during the normal business hours of the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

          (c) Change of Address, Etc. Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto given in the manner set forth in this Section 13.1.

ARTICLE XIV

COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION

     14.1. Counterparts; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Except as provided in Article IV, this Agreement shall become effective when it shall have been executed by the Administrative Agent, and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.

     14.2. Electronic Execution of Assignments. The words “execution,” “signed,” “signature,” and words of like import in any assignment and assumption agreement shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, or any other state laws based on the Uniform Electronic Transactions Act.

ARTICLE XV

CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

     15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

     15.2. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE ADMINISTRATIVE AGENT, THE LC ISSUER OR ANY LENDER OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENT, THE LC ISSUER OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY

ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK, NEW YORK.

     15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT, THE LC ISSUER AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

[Signature Pages Follow]

     IN WITNESS WHEREOF, the Borrower, the Lenders, the LC Issuer and the Administrative Agent have executed this Agreement as of the date first above written.

PRICING SCHEDULE

Applicable		Level I				Level II				Level III				Level IV				Level v
Margin		Status				Status				Status				Status				Status
Eurodollar Rate			1.75	%			2.00	%			2.25	%			2.50	%			2.75	%
Base Rate			0.75	%			1.00	%			1.25	%			1.50	%			1.75	%

Applicable		Level I				Level II				Level III				Level IV				Level V
Fee Rate		Status				Status				Status				Status				Status
Commitment Fee			0.25	%			0.30	%			0.35	%			0.45	%			0.50	%

     For the purposes of this Schedule, the following terms have the following meanings, subject to the final paragraph of this Schedule:

     “Financials” means the annual or quarterly financial statements of the Borrower delivered pursuant to Section 6.1(a) or (b).

     “Level I Status” exists at any date if, as of the last day of the fiscal quarter of the Borrower referred to in the most recent Financials, the Total Debt to EBITDA Ratio is less than 1.00 to 1.00.

     “Level II Status” exists at any date if, as of the last day of the fiscal quarter of the Borrower referred to in the most recent Financials, (i) the Borrower has not qualified for Level I Status and (ii) the Total Debt to EBITDA Ratio is less than 1.50 to 1.00.

     “Level III Status” exists at any date if, as of the last day of the fiscal quarter of the Borrower referred to in the most recent Financials, (i) the Borrower has not qualified for Level I Status or Level II Status and (ii) the Total Debt to EBITDA Ratio is less than 2.00 to 1.00.

     “Level IV Status” exists at any date if, as of the last day of the fiscal quarter of the Borrower referred to in the most recent Financials, (i) the Borrower has not qualified for Level I Status, Level II Status or Level III Status and (ii) the Total Debt to EBITDA Ratio is less than 2.50 to 1.00.

     “Level V Status” exists at any date if the Borrower has not qualified for Level I Status, Level II Status, Level III Status or Level IV Status.

     “Status” means either Level I Status, Level II Status, Level III Status, Level IV Status or Level V Status.

     The Applicable Margin and Applicable Fee Rate shall be determined in accordance with the foregoing table based on the Borrower’s Status as reflected in the then most recent Financials. Adjustments, if any, to the Applicable Margin or Applicable Fee Rate shall be effective from and after the first day of the first fiscal month immediately following the date on which the delivery of such Financials is required until the first day of the first fiscal month immediately following the next such date on which delivery of such Financials of the Borrower and its Subsidiaries is so required. If the Borrower fails to deliver the Financials to the Administrative Agent at the time required pursuant to Section 6.1, then the Applicable Margin and Applicable Fee Rate shall be the highest Applicable Margin and Applicable Fee Rate set forth in the foregoing table until five (5) days after such Financials are so delivered.

     Notwithstanding the foregoing, Level III Status shall be deemed to be applicable until the Administrative Agent’s receipt of the applicable Financials for the Borrower’s first full fiscal quarter ending after the date hereof and adjustments to the Status then in effect shall thereafter be effected in accordance with the preceding paragraphs.

SCHEDULE I
Commitments

BANK:		COMMITMENT:			PERCENTAGE:
U.S. BANK NATIONAL ASSOCIATION		$	33,500,000		19.705882352941	%
UNION BANK, N.A.		$	30,000,000		17.647058823529	%
CITY NATIONAL BANK		$	30,000,000		17.647058823529	%
BMO HARRIS BANK, N.A.		$	20,000,000		11.764705882353	%
EAST WEST BANK		$	20,000,000		11.764705882353	%
BOKF, NA dba BANK OF ALBUQUERQUE		$	17,500,000		10.294117647059	%
SANTA BARBARA BANK & TRUST		$	10,000,000		5.882352941176	%
LAND BANK OF TAIWAN LOS ANGELES BRANCH		$	5,000,000		2.941176470588	%
HUA NAN COMMERCIAL BANK LTD., LOS ANGELES BRANCH		$	4,000,000		2.352941176471	%
TOTAL COMMITMENTS		$	170,000,000		100	%

SCHEDULE 1
Initial Guarantors

Molina Information Systems, LLC, dba Molina Medicaid Solutions (“MMS”)

SCHEDULE 2.19
Existing Facility LCs

L/C No.		Beneficiary		Amount
SLCPPDX05516		State of Idaho		$	300,000.00
SLCPPDX05517		State of Idaho		$	5,000,000.00
SLCPPDX05518		State of Maine		$	5,000,000.00

SCHEDULE 5.3
Third Party Consents

Leases

1.		MMS is required to obtain the consent of Normandy Northridge, LLC, landlord of the premises commonly known as 13221 Woodland Park Road, Herndon, Virginia, in the event of a change of control of MMS.
2.		MMS, as successor-in-interest to Unisys Corporation, is required to obtain the consent of III United Partnership, landlord of the first floor of the premises commonly known as III United Plaza, 8545 United Plaza Boulevard, Baton Rouge, Louisiana, in the event of a change of control of MMS.
3.		MMS, as successor-in-interest to Unisys Corporation, is required to obtain the consent of III United Partnership, landlord of the premises commonly known as III United Plaza, 8545 United Plaza Boulevard, Baton Rouge, Louisiana, in the event of a change of control of MMS.
4.		MMS, as successor-in-interest to Unisys Corporation, is required to obtain the consent of V United Limited Liability Company, landlord of first, second and third floors of the premises commonly known as V United Plaza, 8591 United Plaza Boulevard, Baton Rouge, Louisiana, in the event of a change of control of MMS.
5.		Molina Healthcare of Florida, Inc. (“MHF”) is required to obtain the consent of The Prudential Insurance Company of America, landlord of the premises commonly known as 8300 Northwest 33rd St., Miami, Florida, in the event of a change of control of MHF.
6.		MHF is required to obtain the consent of BSH Owner LLC, landlord of the premises commonly known as 3350 Buschwood Park Drive, Tampa, Florida, in the event of a change of control of MHF.
7.		Molina Healthcare of Michigan, Inc. (“MHMI”) is required to obtain the consent of Liberty Property Limited Partnership, landlord of the premises commonly known as 100 West Big Beaver, Suite 600, Troy, Michigan, in the event of a change of control of MHMI.
8.		Molina Healthcare of New Mexico is required to obtain the consent of Westlake Horizon Blvd, LLC, landlord of the premises commonly known as 8801 Horizon Blvd. NE, Albuquerque, New Mexico, in the event of a change of control of Molina Healthcare of New Mexico.
9.		Molina Healthcare of New Mexico is required to obtain the consent of Nydes Properties SMV Ltd. Co, landlord of the premises commonly known as 1714 St. Michaels Drive, Santa Fe, New Mexico, in the event of a change of control of Molina Healthcare of New Mexico.
10.		Molina Healthcare of Ohio, Inc. (“MHO”) is required to obtain the consent of Northwoods II, L.P., landlord of the premises commonly known as 8101 North High Street, Columbus, Ohio, in the event of a change of control of MHO.
11.		Molina Healthcare of Texas, Inc. (“MHT”) is required to obtain the consent of 10 Park Row Office Corporation, landlord of the premises commonly known as Park Ten Plaza and whose street address is 15115 Park Row, Houston, Texas, in the event of a change of control of MHT.

12.		MHT is required to obtain the consent of Equastone MacArthur, LLC, landlord of the premises commonly known as 5605 N. MacArthur Blvd., Irving, Texas, in the event of a change of control of MHT.
13.		MHT is required to obtain the consent of Century 410 Associates, L.P., landlord of the premises commonly known as the Century Building and whose street address is 84 NE Loop 410, San Antonio, Texas, in the event of a change of control of MHT.
14.		Molina Healthcare of Utah, Inc. (“MHU”) is required to obtain the consent of James Campbell Company LLC, as successor-in-interest to the Trustees under the Will and of the Estate of James Campbell, deceased, landlord of the premises commonly known as 7050 Union Park Center, Midvale, Utah, in the event of a change of control of MHU.
15.		Molina Healthcare of Washington, Inc. (“MHWA”) is required to obtain the consent of Principal Development Investors, LLC, landlord of the premises commonly known as 21540 — 30th Drive S.E., Bothell, Washington, in the event of a change of control of MHWA.
16.		MHWA is required to obtain the consent of Teachers Insurance & Annuity Association of America, landlord of the premises commonly known as 22125 17th Avenue SE, Ste. 117, Bothell, Washington, in the event of a change of control of MHWA.
17.		MHWA is required to obtain the consent of Compass Health, landlord of the premises commonly known as 3301 Broadway Ave., Suite 200, Everett, Washington, in the event of a change of control of MHWA.
18.		MHWA is required to obtain the consent of Metropolitan Investments, landlord of the premises commonly known as 5709 W. Sunset Highway Suite 200, Spokane, Washington, in the event of a change of control of MHWA.

Regulatory

19.		MHF may be required to file a notice with the HMO regulator in the State of Florida relating to the pledge by the Borrower of its capital stock in MHF. MHF intends to file all requisite notices with the HMO regulator in the State of Florida in connection with the pledge by the Borrower of its capital stock in MHF. In the event of any enforcement against the pledged shares of MHF, the Administrative Agent will be required to obtain the advance written consent of, and comply with any other applicable rules and regulations of, the HMO regulator in the State of Florida prior to acquiring title to or selling such pledged shares.
20.		MHMI may be required to file a notice with the HMO regulator in the State of Michigan relating to the pledge by the Borrower of its capital stock in MHMI. MHMI intends to file all requisite notices with the HMO regulator in the State of Michigan in connection with the pledge by the Borrower of its capital stock in MHMI. In the event of any enforcement against the pledged shares of MHMI, the Administrative Agent may be required to obtain the advance written consent of, and will need to comply with any other applicable rules and regulations of, the HMO regulator in the State of Michigan prior to acquiring title to or selling such pledged shares.
21.		Alliance for Community Health LLC, dba Molina Healthcare of Missouri (“MHMO”), will be required to file a notice with the HMO regulator in the State of Missouri relating to the pledge by the Borrower of its capital stock in MHMO. MHMO intends to file all requisite notices with the

		HMO regulator in the State of Missouri in connection with the pledge by the Borrower of its capital stock in MHMO. In the event of any enforcement against the pledged shares of MHMO, the Administrative Agent will be required to obtain the advance written consent of, and comply with any other applicable rules and regulations of, the HMO regulator in the State of Missouri prior to acquiring title to or selling such pledged shares.
22.		Molina Healthcare of New Mexico may be required to file a notice with the HMO regulator in the State of New Mexico relating to the pledge by the Borrower of its capital stock in Molina Healthcare of New Mexico. Molina Healthcare of New Mexico intends to file all requisite notices with the HMO regulator in the State of New Mexico in connection with the pledge by the Borrower of its capital stock in Molina Healthcare of New Mexico. In the event of any enforcement against the pledged shares of Molina Healthcare of New Mexico, the Administrative Agent may be required to obtain the advance written consent of, and will need to comply with any other applicable rules and regulations of, the HMO regulator in the State of New Mexico prior to acquiring title to or selling such pledged shares.
23.		MHO will be required to file a notice with the HMO regulator in the State of Ohio relating to the pledge by the Borrower of its capital stock in MHO. MHO intends to file all requisite notices with the HMO regulator in the State of Ohio in connection with the pledge by the Borrower of its capital stock in MHO. In the event of any enforcement against the pledged shares of MHO, the Administrative Agent will be required to obtain the advance written consent of, and comply with any other applicable rules and regulations of, the HMO regulator in the State of Ohio prior to acquiring title to or selling such pledged shares.
24.		MHT will be required to file a notice with the HMO regulator in the State of Texas relating to the pledge by the Borrower of its capital stock in MHT. MHT intends to file all requisite notices with the HMO regulator in the State of Texas in connection with the pledge by the Borrower of its capital stock in MHT. In the event of any enforcement against the pledged shares of MHT, the Administrative Agent will be required to obtain the advance written consent of, and comply with any other applicable rules and regulations of, the HMO regulator in the State of Texas prior to acquiring title to or selling such pledged shares.
25.		MHU will be required to file a notice with the HMO regulator in the State of Utah relating to the pledge by the Borrower of its capital stock in MHU. MHU intends to file all requisite notices with the HMO regulator in the State of Utah in connection with the pledge by the Borrower of its capital stock in MHU. In the event of any enforcement against the pledged shares of MHU, the Administrative Agent may be required to obtain the advance written consent of, and will need to comply with any other applicable rules and regulations of, the HMO regulator in the State of Utah prior to acquiring title to or selling such pledged shares.
26.		MHWA will be required to file a notice with the HMO regulator in the State of Washington relating to the pledge by the Borrower of its capital stock in MHWA. MHWA intends to file all requisite notices with the HMO regulator in the State of Washington in connection with the pledge by the Borrower of its capital stock in MHWA. In the event of any enforcement against the pledged shares of MHWA, the Administrative Agent will be required to obtain the advance written consent of, and comply with any other applicable rules and regulations of, the HMO regulator in the State of Washington prior to acquiring title to or selling such pledged shares.
27.		MHWI may be required to file a notice with the HMO regulator in the State of Wisconsin relating to the pledge by the Borrower of its capital stock in MHWI. MHWI intends to file all requisite notices with the HMO regulator in the State of Wisconsin in connection with the pledge by the

		Borrower of its capital stock in MHWI. In the event of any enforcement against the pledged shares of MHWI, the Administrative Agent will be required to obtain the advance written consent of, and comply with any other applicable rules and regulations of, the HMO regulator in the State of Wisconsin prior to acquiring title to or selling such pledged shares.
28.		Molina Healthcare Insurance Company (“MHIC”) may be required to file a notice with the insurance regulator in the state of Ohio relating to the pledge by the Borrower of its capital stock in MHIC. MHIC intends to file all requisite notices with the insurance regulator in the State of Ohio in connection with the pledge by the Borrower of its capital stock in MHIC. In the event of any enforcement against the pledged shares of MHIC, the Administrative Agent may be required to obtain the advance written consent of, and will need to comply with any other applicable rules and regulations of, the insurance regulator in the State of Ohio (and also certain regulators in the states in which MHIC holds licenses) prior to acquiring title to or selling such pledged shares.
29.		In the event of any enforcement against the pledged interests of MMS, the Administrative Agent may be required to obtain the advance written consent of, and will need to comply with any other applicable contract provisions and rules and regulations of, certain regulators in the states in which MMS conducts business prior to acquiring title to or selling such pledged interests.
30.		Any future pledge of shares by a Regulated Subsidiary that is not an Excluded Subsidiary may require such Subsidiary to file a notice with the HMO regulator in the state in which it operates. In the event of any enforcement against the pledged shares of a Regulated Subsidiary, the Administrative Agent will be required to comply with the applicable rules and regulations of the HMO regulator in the state in which the Regulated Subsidiary operates prior to acquiring title to or selling such pledged shares.

SCHEDULE 5.8
Subsidiaries and Other Equity Investments

(a) Subsidiaries

										Conducting
										HMO Business
										and/or
		Jurisdiction		Classes of				Capitalized		Providing
		of		Capital		Ownership		or Licensed		Managed Care
Subsidiary		Organization		Stock		Percentages		as an HMO		Services
Molina Healthcare of California+		California		Common Stock		100% owned by the Borrower		Yes		Yes
Molina Healthcare of California Partner Plan, Inc.		California		Common Stock		100% owned by the Borrower		Yes		Yes
Molina Healthcare of Michigan, Inc.		Michigan		Class A and Class B Common Stock		100% owned by the Borrower		Yes		Yes
Molina Healthcare of Washington, Inc.		Washington		Common Stock		100% owned by the Borrower		Yes		Yes
Molina Healthcare of Utah, Inc.		Utah		Common Stock		100% owned by the Borrower		Yes		Yes
Molina Healthcare of New Mexico, Inc.		New Mexico		Common Stock		100% owned by the Borrower		Yes		Yes
Molina Healthcare of Ohio, Inc.		Ohio		Common Stock		100% owned by Borrower		Yes		Yes
Molina Healthcare of Texas, Inc.*		Texas		Common Stock		100% owned by Borrower		Yes		Yes

										Conducting
										HMO Business
										and/or
		Jurisdiction		Classes of				Capitalized		Providing
		of		Capital		Ownership		or Licensed		Managed Care
Subsidiary		Organization		Stock		Percentages		as an HMO		Services
Alliance for Community Health, LLC, dba Molina Healthcare of Missouri		Missouri		Membership Units		100% owned by Borrower		Yes		Yes
Molina Healthcare of Missouri, Inc.		Missouri		Common Stock		100% owned by Borrower		No		No
Molina Healthcare of Georgia, Inc.		Georgia		Common Stock		100% owned by Borrower		No		No
Molina Healthcare Insurance Company		Ohio		Common Stock		100% owned by Borrower		No**		No**
Molina Healthcare of Wisconsin, Inc.		Wisconsin		Common Stock		100% owned by Borrower		Yes		Yes
Molina Healthcare of Florida, Inc.		Florida		Common Stock		100% owned by Borrower		Yes		Yes
Molina Healthcare of Arizona, Inc.		Arizona		Common Stock		100% owned by Borrower		No		No
Molina Healthcare of Virginia, Inc.		Virginia		Common Stock		100% owned by Borrower		No		No
Molina Healthcare of Mississippi, Inc.		Mississippi		Common Stock		100% owned by Borrower		No		No
Molina Healthcare of Illinois, Inc.		Illinois		Common Stock		100% owned by Borrower		Yes		No
Molina Information Systems, LLC		California		Membership Units		100% owned by Borrower		No		No

										Conducting
										HMO Business
										and/or
		Jurisdiction		Classes of				Capitalized		Providing
		of		Capital		Ownership		or Licensed		Managed Care
Subsidiary		Organization		Stock		Percentages		as an HMO		Services
Molina Healthcare Data Center, Inc.		New Mexico		Common Stock		100% owned by Borrower		No		No
Molina Pathways, LLC		Delaware		Membership Units		100% owned by Borrower		No		No
American Family Care, Inc.		California		Common Stock		100% owned by Borrower		No		No
Molina Center LLC		Delaware		Membership Units		100% owned by Borrower		No		No

     (b) Other Equity Investments

None.

SCHEDULE 5.11
Fee Properties; Leased Properties

Fee Properties

		Subject to contract		If so, status of
Location (street address & state)		for sale (Y/N)		such sale		Description
One Golden Shore Drive Long Beach, CA 90802 Owned by Molina Healthcare, Inc.		No		N/A		Office space
887 East Second Street Pomona, CA 91767 Owned by Molina Healthcare, Inc.		No		N/A		Medical Office
5610 Turing Drive SE Albuquerque, NM 87106		No, but contemplated to be transferred from Molina, Healthcare, Inc. to Molina Healthcare Data Center, Inc.		Contemplated transfer to be completed in September 2011		Data Center

Leased Properties

Location (street address &								Annual rental
state)		Lessor		Lessee		Term of Lease		payments		Description
445 E. Anaheim St Wilmington, CA 90748		Maycent Incorporated and Hong Ly		Molina Healthcare of California		12/15/2015		$99,216.00+ miscellaneous expenses		Medical office
1627 East Anaheim Street Long Beach, CA 90813		Palo Plesnik		Molina Healthcare of California		7/31/2013		$68,873.5 + miscellaneous expenses		Medical office
1974 Santa Fe Avenue Long Beach, CA 90810		The Mary R. Molina Living Trust		Molina Healthcare of California		3/31/2015		$61,061.76 + miscellaneous expenses (small portion of the space is sub-leased, income rent $7,560)		Medical office
540 East Artesia Blvd. Long Beach, CA 90805		Kenneth B. Heller, Trustee		Molina Healthcare of California		4/30/2016		$54,400 + miscellaneous expenses		Medical office
44216 North 10th Street West Lancaster CA 93534		The Abbey Company		Molina Healthcare of California		8/31/2018		$160,056 + miscellaneous expenses		Medical office

Location (street address &								Annual rental
state)		Lessor		Lessee		Term of Lease		payments		Description
2895 North Towne Avenue Pomona, CA 91767		GMC Investors, Ltd. A Limited Partnership		Molina Healthcare of California		12/31/2011		$97,685.76 + miscellaneous expenses		Medical office
887 East Second Street Pomona, CA 91767		Molina Healthcare, Inc.		Molina Healthcare of California		4/30/2013		$95,631.12 + miscellaneous expenses		Medical office
1650 South Euclid Avenue Ontario, Ca 91762		GMC Investors, Ltd. A Limited Partnership		Molina Healthcare of California		12/31/2016		$101,667.72 + miscellaneous expenses		Medical office
11748 Magnolia Avenue Riverside, CA 92503		Biltmore Riverside I, LLC an Arizona limited liability company		Molina Healthcare of California		11/30/2015		$58,500.00 + miscellaneous expenses		Medical office
17500 Foothill Blvd Fontana, CA 92324		Woodside Investments, a California General Partnership C/O:		Molina Healthcare of California		7/31/2013		$134,299.56+ miscellaneous expenses		Medical office
		Pacific West Management
2279A E Palmdale Blvd. Palmdale, CA 93550		The Abbey Company		Molina Healthcare of California		7/31/2012		$95,764.80 + miscellaneous expenses		Medical office
184 — 190 East Highland San Bernardino, CA 92404		F&C Corporation a Delaware Corporation		Molina Healthcare of California		5/31/2015		$91,023.96 + miscellaneous expenses		Medical office
24853 Alessandro Blvd, #D Moreno Valley, CA 92553		Bhullar Investments, LLC		Molina Healthcare of California		12/31/2015		$133,377.60 + miscellaneous expenses		Medical office
11965 Cactus Road, #J Adelanto, CA 92301		Arrowhead Properties IV, LLC		Molina Healthcare of California		1/14/2016		$51,515.40 + miscellaneous expenses		Medical office
7215 55th Street Sacramento, CA 95823		Mark Eden, a California Corporation		Molina Healthcare of California		1/14/2013		$88,372.80 + miscellaneous expenses		Medical office

Location (street address &								Annual rental
state)		Lessor		Lessee		Term of Lease		payments		Description
3234 Marysville Blvd Sacramento, CA 95815		Terry Prock		Molina Healthcare of California		9/14/2012		$129,600.00 + miscellaneous expenses		Medical office and warehouse space
4215 Norwood Ave, St 01 Sacramento, CA 95838		Norwood Properties, LLC		Molina Healthcare of California		9/30/2112		$74,156.00+ miscellaneous expenses		Medical office
7400 Sunrise Blvd Citrus Heights, CA 95610		Negus, LLC		Molina Healthcare of California		7/31/2014		$92,083.20 + miscellaneous expenses		Medical office
900 E. Washington, Ste 215 Colton, CA 92324		Milan Properties, LLC		Molina Healthcare of California		2/08/2013		$93,157.68+ miscellaneous expenses		Office space
9665 Chesapeake Drive Ste 305 San Diego, CA 92123		ARI — Chesapeake Park Plaza, c/o CBRE		Molina Healthcare of California		5/14/2014		$102,624.00 + miscellaneous expenses		Office Space
2277 Fair Oaks Boulevard Suites 195 Sacramento, CA 95825		Payton Development, LLC		Molina Healthcare of California		8/31/2013		$84,273.60+ miscellaneous expenses		Office Space
8300 NW 33 Street, #400 Miami, FL 33122		Prudential Real Estate Investors		Molina Healthcare of Florida		2/06/2016		$781,275.00 + miscellaneous expenses		Office Space
3350 Buschwood Park Drive, #245 Tampa Bay, FL33618		BSH Owner LLC		Molina Healthcare of Florida		1/31/2015		$62,574.00 + miscellaneous expenses		Office space
100 West Big Beaver Road, Suites 400,500 & 600 Troy, MI 49525		Liberty Property Limited Partnership		Molina Healthcare of Michigan		8/31/2014		$907,581.24 + miscellaneous expenses		Office Space
409 E. Jefferson Ave, Suites 400,500 & 600 Detroit, MI 48226		Four Zero One Associates, LLC		Molina Healthcare of Michigan		7/31/2011		$304,999.92 + miscellaneous expenses		Office Space

Location (street address &								Annual rental
state)		Lessor		Lessee		Term of Lease		payments		Description
1648-A East Elm Street Jefferson City, MO 65101		David A. Nunn and Janie D. Nunn, Trustees of the David A. Nunn Revocable Living Trust, Y/A/D April 18, 2009		Molina Healthcare of Missouri		7/31/2013		$15,000.00 + miscellaneous expenses		Office Space
12400 Olive St, #100 St. Louis, MO 63141		The Missner Group		Molina Healthcare of Missouri		9/30/2016		$467,302.56+		Office Space
8801 Horizon Blvd, #400 Albuquerque, NM 87113		WESTLAKE HORIZON BLVD, LLC		Molina Healthcare of New Mexico		7/31/2015		$671,003.76 + expenses		Office Space
8101 N High Street, Suite #100 Columbus, OH 43235		Triple Net Properties, LLC		Molina Healthcare of Ohio		12/31/2013		$689,739.84 + miscellaneous expenses		Office Space
15115 Park Ten Plaza Houston, TX 77084		Stream Realty Partner		Molina Healthcare of Texas		6/30/2015		$110,368.00 + miscellaneous expenses		Office Space
3104 Edloe St. Ste #350 Houston, TX 77027		Parkland EBI LP		Molina Healthcare of Texas		10/9/2011		$127,200.00 + miscellaneous expenses		Office Space
84 NE Loop 410, Ste #200 San Antonio, TX 78216		Century 410 Associates, L.P.		Molina Healthcare of Texas		9/30/2014		$538,555.56 + miscellaneous expenses		Office Space
699 McPherson Rd, #213 Laredo, TX 78041		Tri-G Land Development, Ltd		Molina Healthcare of Texas		12/31/2014		$136,500 + miscellaneous expenses		Office Space
5605 MacArthur, #400 Irving, TX 75038		Equatone MacArthur         , LLC		Molina Healthcare of Texas		5/31/2016		$186,036.00+ miscellaneous expenses		Office space

Location (street address &								Annual rental
state)		Lessor		Lessee		Term of Lease		payments		Description
7050 Union Park Center Suites 240,260 & 550 Midvale, UT 84047		The trustees under the will and of the estate of James Campbell deceased		Molina Healthcare of Utah		8/31/2013		$728,900.00 + miscellaneous expenses		Office Space
21540 30th Drive SE Suites 101,320 & 400 Bothell, WA 98021		Diamond Canyon Park, LLC		Molina Healthcare of Washington		9/30/2015		$1,438,700.28 + miscellaneous expenses		Office Space
5709 W. Sunset Highway, Suites 100 & 200 Spokane, WA 99224		Metropolitan Investments		Molina Healthcare of Washington		3/31/2013		$555,850.56 + miscellaneous expenses		Office Space
3322 Broadway, #200 Everett, WA 98201		Compass Health		Molina Healthcare of Washington		1/31/2015		$59,480.16 + miscellaneous expenses		Medical office
15 SW Everett Mall Way Everett, WA 98204		Everett Project, LLC		Molina Healthcare of Washington		7/31/2015		$92,625.00 + miscellaneous expenses		Medical office
22125 17th Ave S.E Ste #117 and 113 Bothell, WA 98021		Teachers Insurance & Annuity Association America		Molina Healthcare of Washington (#117) Molina Healthcare, Inc. (#113)		8/31/2013		$140,412.00 + miscellaneous expenses		Office and warehouse space
40 Chestnut Place #5312 Long Beach, CA 90802		Camden Harbor View		Molina Healthcare, Inc.		7/29/2011		$23,052.00 + expenses		Corporate apartment
13 BonitoAve Long Beach, CA 90802		Long Beach Investments		Molina Healthcare, Inc.		8/08/2011		13,800.00 + expenses		Corporate apartment
300 University Ave, #100 Sacramento, CA 95825		JPI XXXII, L.P		Molina Healthcare, Inc.		1/31/2017		$266,495.00 + miscellaneous expenses		Office space

Location (street address &								Annual rental
state)		Lessor		Lessee		Term of Lease		payments		Description
3680 Skypark Drive Torrance, CA 90505		Weis Properties, Inc		Molina Healthcare, Inc.		3/31/2013		$144,480.00 + expenses		Warehouse Book Buddies
1500 Hughes Way Floors 1, 2, 3, 4 Long Beach, CA 90810		Linwood Avenue Limited Partnership		Molina Healthcare, Inc.		12/31/2018		$3,458,547.12 + expenses		Office Space
555 12th, #670 WA DC, 20005		John Hancock		Molina Healthcare, Inc.		7/31/2016		$192,492.00 + miscellaneous expenses		Office Space
111 W Ocean Blvd Suite 1100 Long Beach, CA 90802		Brookfield Properties		Molina Healthcare, Inc.		1/31/2014		$95,103.96 + miscellaneous expenses		Office Space
200 Oceangate Floors 1,2,3,4,5,6,7,10 (partial floor),11 & 14 Long Beach, CA 90802		200 Oceangate, LLC		Molina Healthcare, Inc. (1,2,5, 10, 11, 14) and Molina Healthcare of California (3,4,6,7)		12/31/2018		$4,010,610.00 + miscellaneous expenses		Office Space
2282 Killearn Center Blvd, #D Tallahassee, FL 32309		Joseph W. Landers, JR		Molina Medicaid Solutions		11/31/2011		$47,740.00 + miscellaneous expenses		Office Space
9415 W. Golden Trout Boise, ID 83704		Mowbary Property Management		Molina Medicaid Solutions		12/31/14		$233,667.36 + miscellaneous expenses		Office Space
8545 United Plaza Blvd, suites 110 and 250 Baton Rouge, LA 70809		III United Partnership		Molina Medicaid Solutions		1/31/2015		$440,900.00 + miscellaneous expenses		Office Space
8591 United Plaza Blvd, (floors 1, 2 and 3) Baton Rouge, LA 70809		V United LLC		Molina Medicaid Solutions		1/31/2015		$760,070.00 + miscellaneous expenses		Office Space
189 Water St, 1st floor Augusta, ME 04330		189 LLC		Molina Medicaid Solutions		3/31/2015		$71,979.60 + miscellaneous expenses		Office Space

Location (street address &								Annual rental
state)		Lessor		Lessee		Term of Lease		payments		Description
45 Commerce Drive Augusta, ME 04430		Lawson’s Property Services		Molina Medicaid Solutions		3/31/2015		$172,825.32 + miscellaneous expenses		Office Space
E.State St and Ward Ave Hamilton, NJ		Desertvest LLC		Molina Medicaid Solutions		12/31/2011		$30,260.00 + miscellaneous expenses		Warehouse
3705 Quakerbridge Trenton, NJ 08619		Mitzen Farm Associates		Molina Medicaid Solutions		12/31/2011		$1,458,443.52 + miscellaneous expenses		Office Space
4050 Innslake Drive, #202 Glen Allen, VA 23060		HRLC, LLC		Molina Medicaid Solutions		2/29/2016		$307,608.00 + miscellaneous expenses		Office Space
13221 Woodland Park Road, #200 Herndon, VA 20171		Normandy Northridge, LLC		Molina Medicaid Solutions		12/31/2015		$411,950.04 + miscellaneous expenses		Office Space
477 Viking Drive, #310 Virginia Beach, 23452		Ranco Road Associates, L.C.		Molina Medicaid Solutions		9/30/2015		$92,322.00 + miscellaneous expenses		Office Space
1600 Pennsylvania Ave, Charleston, WV		West Virginia — American Water Company		Molina Medicaid Solutions		4/30/2016		$532,560.00 + miscellaneous expenses		Office Space
2400 South 102 Street West Alis, WI 53227		Selzer-Ornst Co		Molina Healthcare of Wisconsin		6/30/2021		$405, 045.00 + miscellaneous expenses		Office Space
790E. Foothill Blvd, #D Rialto, CA 92376		Rialto Management Group, LLC		Molina Healthcare of California		3/22/2016		$50,400.00 + miscellaneous expenses		Medical Office
5549 Van Buren Blvd., Riverside, CA 92503		The Cotta Family Trust dated March 10,2005		Molina Healthcare of California		4/30/2016		$90,000.00 + miscellaneous expenses		Medical Office
890 South Military Trail/Summit Boulevard, #20 West Palm Beach, FL 33415		West Palm Beach FLA., CPDC, LTD		Molina Healthcare of Florida		7/15/2016		$52,160.00 + miscellaneous expenses		Medical Office
500 Inland Center Drive, #404 San Bernardino, CA 92408		WM Inland Investors IV, LLC		Molina Healthcare of California		10/31/2011		$14,400.00 + miscellaneous expenses		Community Outreach/Information Center