CONSENT, WAIVER AND AMENDMENT NO. 3 TO CREDIT AGREEMENT

Exhibit 10.1

CONSENT, WAIVER AND AMENDMENT NO. 3 TO CREDIT AGREEMENT

          This CONSENT, WAIVER AND AMENDMENT NO. 3 TO CREDIT AGREEMENT (this “Amendment”) is dated as of September 29, 2006, and is by and among GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, individually as sole Lender and as Agent for the Lenders (“Agent”), ODYSSEY HEALTHCARE OPERATING A, LP, a Delaware limited partnership (“OpCoA”), ODYSSEY HEALTHCARE OPERATING B, LP, a Delaware limited partnership (“OpCoB”), HOSPICE OF THE PALM COAST, INC., a Florida not for profit corporation (“Palm Coast”; OpCoA, OpCoB and Palm Coast being referred to together as the “Borrowers” and each individually as a “Borrower”), and the other Credit Parties signatory hereto.

W I T N E S S E T H:

          WHEREAS, pursuant to that certain Credit Agreement dated as of May 14, 2004, by and among Agent, the Lenders from time to time party thereto (“Lenders”), Borrowers and the other Credit Parties signatory from time to time thereto (as amended or otherwise modified from time to time, the “Credit Agreement”; capitalized terms used herein and not otherwise defined herein shall have the meaning ascribed to such terms in the Credit Agreement), Agent and Lenders agreed, subject to the terms and provisions thereof, to provide certain loans and other financial accommodations to Borrowers;

          WHEREAS, Borrowers have advised Agent and Lenders that OpCoB has formed two new wholly-owned subsidiaries, Odyssey HealthCare Detroit, LLC, a Delaware limited liability company (“Odyssey Detroit”), that will acquire Real Estate located at 26231 Franklin Road, Southfield, Michigan (the “Detroit Real Estate”), and Odyssey HealthCare Fort Worth, LLC, a Delaware limited liability company (“Odyssey Fort Worth”, and together with Odyssey Detroit, the “New Subsidiaries”), that acquire Real Estate described as Lot 6, Block 2, River Park Addition located in Fort Worth, Texas (the “Fort Worth Real Estate”);

          WHEREAS, pursuant to Section 5.9 of the Credit Agreement, if any Credit Party proposes to acquire a fee ownership interest in Real Estate, such Credit Party is required to provide to Agent a mortgage or deed of trust granting Agent a first priority Lien on such Real Estate together with certain other related documentation; and

          WHEREAS, Borrowers desire that Agent and Lenders (i) consent to the formation of the New Subsidiaries, (ii) waive the requirements set forth in Section 5.9 of the Credit Agreement in connection with the purchase of the Detroit Real Estate and the Fort Worth Real Estate and (iii) amend the Credit Agreement in certain respects;

          NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

          1. Consent. Subject to the satisfaction of the conditions set forth in Section 4 below, and in reliance on the representations and warranties set forth in Section 6 below, Agent and Lenders hereby consent to the formation of the New Subsidiaries; provided, that, Credit Parties hereby agree that upon Agent’s request at any time after the

 

earlier of the occurrence of an Event of Default (whether or not such Event of Default is subsequently cured or waived) or such time that the outstanding principal amount of the aggregate Revolving Loan and Swing Line Loans exceeds $5,000,000, Credit Parties shall cause the New Subsidiaries to execute a Guaranty, in form and substance reasonably satisfactory to Agent and shall cause a first priority perfected Lien (subject to Permitted Encumbrances) to be granted in favor of Agent in all the assets and Stock of the New Subsidiaries, and Credit Parties and the New Subsidiaries shall execute such documents and taken such actions as may be reasonably required by Agent in connection therewith. The foregoing consent is a limited consent, which shall not be deemed to constitute a consent or waiver of any other term, provision or condition of the Credit Agreement or to prejudice any right or remedy that Agent or Lenders may now have or may have in the future under or in connection with any of the Loan Documents.

          2. Waiver. Subject to the satisfaction of the conditions set forth in Section 4 below, and in reliance on the representations and warranties set forth in Section 6 below, Agent and the undersigned Lenders hereby waive Credit Parties’ compliance with the requirements set forth in Section 5.9 of the Credit Agreement in connection with Odyssey Detroit’s acquisition of a fee ownership interest in the Detroit Real Estate and in connection with Odyssey Fort Worth’s acquisition of a fee ownership interest in the Fort Worth Real Estate; provided, that, Credit Parties hereby agree that upon Agent’s request at any time after the earlier of the occurrence of an Event of Default (whether or not such Event of Default is subsequently cured or waived) or such time that the outstanding principal amount of the aggregate Revolving Loan and Swing Line Loans exceeds $5,000,000, Credit Parties shall provide to Agent a mortgage or deed of trust (in the form provided by Agent) granting Agent a first priority Lien on the Detroit Real Estate and the Fort Worth Real Estate, together with (as soon as reasonably practicable) environmental audits, mortgage title insurance commitment, real property survey, local counsel opinion(s), and, if required by Agent, supplemental casualty insurance and flood insurance, and such other documents, instruments or agreements reasonably requested by Agent, in each case, in form and substance reasonably satisfactory to Agent. The foregoing waiver is a limited waiver, which shall be effective only with respect to the specific facts set forth above. Such limited waiver shall not be deemed to constitute a consent or waiver of any other term, provision or condition of the Credit Agreement or to prejudice any right or remedy that Agent or Lenders may now have or may have in the future under or in connection with any of the Loan Documents.

          3. Amendments to Credit Agreement. Subject to the satisfaction of the conditions set forth in Section 4 below, and in reliance on the representations and warranties set forth in Section 6 below, the Credit Agreement is amended as follows:

          (a) Clause (b) of Section 6.2 of Credit Agreement shall be amended and restated in its entirety as follows:

     (b) each Credit Party may make and maintain investments in any other Credit Party; provided, that, the aggregate amount of investments made by a Credit Party (other than Odyssey Fort Worth and Odyssey Detroit) in Odyssey Fort Worth and Odyssey Detroit shall not exceed $8,000,000 in the aggregate;

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