Exhibit 10.1

 

 

CREDIT AGREEMENT

dated as of

June 30, 2017

among

AAC HOLDINGS, INC.,

as Borrower,

THE LENDERS PARTY HERETO

and

CREDIT SUISSE AG,

as Administrative Agent and Collateral Agent

 

 

CREDIT SUISSE SECURITIES (USA) LLC,

BMO CAPITAL MARKETS CORP.

and

WHITNEY BANK (D/B/A HANCOCK BANK),

as Joint Bookrunners and Joint Lead Arrangers

 

 

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TABLE OF CONTENTS

 

ARTICLE I Definitions      1     SECTION 1.01      Defined Terms      1    
SECTION 1.02      Terms Generally      34     SECTION 1.03      Pro Forma
Calculations      35     SECTION 1.04      Classification of Loans and
Borrowings      35     SECTION 1.05      Designation as Senior Debt      35  
ARTICLE II The Credits      35     SECTION 2.01      Commitments      35    
SECTION 2.02      Loans      36     SECTION 2.03      Borrowing Procedure     
38     SECTION 2.04      Evidence of Debt; Repayment of Loans      38    
SECTION 2.05      Fees      39     SECTION 2.06      Interest on Loans      40  
  SECTION 2.07      Default Interest      40     SECTION 2.08      Alternate
Rate of Interest      41     SECTION 2.09      Termination and Reduction of
Commitments      41     SECTION 2.10      Conversion and Continuation of
Borrowings      42     SECTION 2.11      Repayment of Term Borrowings      43  
  SECTION 2.12      Voluntary Prepayments      45     SECTION 2.13     
Mandatory Prepayments      47     SECTION 2.14      Reserve Requirements; Change
in Circumstances      49     SECTION 2.15      Change in Legality      50    
SECTION 2.16      Breakage      51     SECTION 2.17      Pro Rata Treatment     
51     SECTION 2.18      Sharing of Setoffs      51     SECTION 2.19     
Payments      52     SECTION 2.20      Taxes      53     SECTION 2.21     
Assignment of Commitments under Certain Circumstances; Duty to Mitigate      55
    SECTION 2.22      Letters of Credit      57     SECTION 2.23     
Incremental Loans      62     SECTION 2.24      Defaulting Lenders      65    
SECTION 2.25      Amend and Extend Transactions      67   ARTICLE III
Representations and Warranties      69     SECTION 3.01      Organization;
Powers      69     SECTION 3.02      Authorization; No Default      69    
SECTION 3.03      Enforceability      69     SECTION 3.04      Approvals and
Consents      70     SECTION 3.05      Financial Statements      70  

 

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  SECTION 3.06      No Material Adverse Effect      71     SECTION 3.07     
Title to Properties; Possession Under Leases      71     SECTION 3.08     
Subsidiaries      71     SECTION 3.09      Litigation; Compliance with Laws     
72     SECTION 3.10      Agreements      72     SECTION 3.11      Federal
Reserve Regulations      72     SECTION 3.12      Investment Company Act      73
    SECTION 3.13      Use of Proceeds      73     SECTION 3.14      Tax Returns
     73     SECTION 3.15      No Material Misstatements      73     SECTION 3.16
     Employee Benefit Plans      74     SECTION 3.17      Environmental Matters
     74     SECTION 3.18      Insurance      74     SECTION 3.19      Security
Documents      75     SECTION 3.20      Location of Real Property and Leased
Premises      76     SECTION 3.21      Labor Matters      76     SECTION 3.22
     Solvency      76     SECTION 3.23      Senior Indebtedness      76    
SECTION 3.24      Sanctioned Persons      76     SECTION 3.25      USA PATRIOT
Act      77     SECTION 3.26      Foreign Corrupt Practices Act      77    
SECTION 3.27      Intellectual Property      77     SECTION 3.28      Healthcare
Matters      78   ARTICLE IV Conditions of Lending      80     SECTION 4.01     
All Credit Events      80     SECTION 4.02      First Credit Event      81  
ARTICLE V Affirmative Covenants      83     SECTION 5.01      Existence;
Compliance with Laws; Businesses and Properties      83     SECTION 5.02     
Insurance      84     SECTION 5.03      Obligations and Taxes      85    
SECTION 5.04      Financial Statements, Reports, etc.      85     SECTION 5.05
     Litigation and Other Notices      87     SECTION 5.06      Information
Regarding Collateral      88     SECTION 5.07      Maintaining Records; Access
to Properties and Inspections; Maintenance of Ratings      88     SECTION 5.08
     Use of Proceeds      89     SECTION 5.09      Employee Benefits      89    
SECTION 5.10      Compliance with Environmental Laws      89     SECTION 5.11
     Preparation of Environmental Reports      90     SECTION 5.12      Further
Assurances      90     SECTION 5.13      Intellectual Property      91    
SECTION 5.14      Compliance with Real Estate Obligations      92  

 

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  SECTION 5.15      Lender Calls      92     SECTION 5.16      Healthcare Laws
     92     SECTION 5.17      Post-Closing Obligations      94   ARTICLE VI
Negative Covenants      94     SECTION 6.01      Indebtedness      94    
SECTION 6.02      Liens      96     SECTION 6.03      Sale and Leaseback
Transactions      98     SECTION 6.04      Investments, Loans and Advances     
99     SECTION 6.05      Mergers, Consolidations, Sales of Assets and
Acquisitions      100     SECTION 6.06      Restricted Payments; Restrictive
Agreements      101     SECTION 6.07      Transactions with Affiliates      102
    SECTION 6.08      Business of Borrower and Subsidiaries      102     SECTION
6.09      Other Indebtedness and Agreements      102     SECTION 6.10     
Maximum Senior Secured Leverage Ratio      103     SECTION 6.11      Fiscal Year
     103     SECTION 6.12      Sanctions      103     SECTION 6.13     
Anti-Corruption, Anti-Bribery, Anti-Terrorism and Anti-Money Laundering Laws   
  103     SECTION 6.14      Use of Proceeds      104     SECTION 6.15     
Healthcare Authorizations      104   ARTICLE VII Events of Default      104    
SECTION 7.01      Events of Default      104     SECTION 7.02      Right to Cure
     107   ARTICLE VIII The Administrative Agent and the Collateral Agent; Etc.
     108   ARTICLE IX Miscellaneous      111     SECTION 9.01      Notices;
Electronic Communications      111     SECTION 9.02      Survival of Agreement
     113     SECTION 9.03      Binding Effect      114     SECTION 9.04     
Successors and Assigns      114     SECTION 9.05      Expenses; Indemnity     
119     SECTION 9.06      Right of Setoff      121     SECTION 9.07     
Applicable Law      121     SECTION 9.08      Waivers; Amendment      122    
SECTION 9.09      Interest Rate Limitation      123     SECTION 9.10      Entire
Agreement      123     SECTION 9.11      WAIVER OF JURY TRIAL      123    
SECTION 9.12      Severability      124     SECTION 9.13      Counterparts     
124     SECTION 9.14      Headings      124     SECTION 9.15      Jurisdiction;
Consent to Service of Process      124  

 

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  SECTION 9.16      Confidentiality      125     SECTION 9.17      Lender Action
     125     SECTION 9.18      USA PATRIOT Act Notice      126     SECTION 9.19
     Withholding Taxes      126     SECTION 9.20      No Fiduciary Duty      126
    SECTION 9.21      Acknowledgment and Consent to Bail-In of EEA Financial
Institutions      127     SECTION 9.22      Cashless Settlement      127  

 

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SCHEDULES

 

Schedule 1.01(a)    -      Subsidiary Guarantors

Schedule 1.01(b)

   -      Mortgaged Property

Schedule 2.01

   -      Lenders and Commitments

Schedule 3.08

   -      Subsidiaries

Schedule 3.18

   -      Insurance

Schedule 3.20(a)

   -      Owned Real Property

Schedule 3.20(b)

   -      Leased Real Property

Schedule 3.27

   -      Intellectual Property

Schedule 5.17

   -      Post-Closing Deliverables

Schedule 6.01

   -      Existing Indebtedness

Schedule 6.02

   -      Existing Liens

Schedule 6.03

   -      Sale and Leaseback Transactions

Schedule 6.07

   -      Affiliate Transactions

EXHIBITS

 

Exhibit A    -    Form of Administrative Questionnaire Exhibit B    -      Form
of Assignment and Acceptance Exhibit C    -      Form of Borrowing Request
Exhibit D    -      Form of Guarantee and Collateral Agreement Exhibit E    -  
   Form of Mortgage Exhibit F    -      Form of Affiliate Subordination
Agreement Exhibit G    -      Form of Compliance Certificate Exhibit H    -     
Form of Landlord Personal Property Collateral Access Agreement

 

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CREDIT AGREEMENT dated as of June 30, 2017 (as may be amended, restated,
supplemented or otherwise modified from time to time, this “Agreement”) among
AAC HOLDINGS, INC., a Nevada corporation (the “Borrower”), the Lenders (such
term and each other capitalized term used but not defined in this preamble
having the meaning given to it in Article I) party hereto and CREDIT SUISSE AG
(“Credit Suisse”), as administrative agent for the Lenders (in such capacity,
including any successor thereto, the “Administrative Agent”) and as collateral
agent for the Secured Parties (in such capacity, including any successor
thereto, the “Collateral Agent”).

The Borrower has requested the applicable Lenders to extend credit in the form
of (a) Term Loans on the Closing Date, in an aggregate principal amount not in
excess of $210,000,000 and (b) Revolving Loans on and at any time and from time
to time after the Closing Date until the earlier of the Revolving Credit
Maturity Date and the termination of the Revolving Credit Commitment of such
applicable Lenders in accordance with the terms hereof, in an aggregate
principal amount at any time outstanding not in excess of $40,000,000. The
Borrower has requested the Issuing Bank to issue Letters of Credit, in an
aggregate face amount at any time outstanding not in excess of $7,000,000,
solely to support payment obligations incurred in the ordinary course of
business by the Borrower and its Subsidiaries. The proceeds of the Term Loans
are to be used solely (i) to refinance all amounts due or outstanding under, and
to terminate, the Existing Indebtedness, (ii) to pay the Transaction Costs and
(iii) for other general corporate purposes. The proceeds of the Revolving Loans
will be used (x) on the Closing Date, solely (i) to pay the Deerfield Consent
Fee, (ii) to pay the Transaction Costs and (iii) for other general corporate
purposes and (y) after the Closing Date, solely for general corporate purposes
of the Borrower and its Subsidiaries as set forth herein.

The Lenders are willing to extend such credit to the Borrower, and the Issuing
Bank is willing to issue Letters of Credit for the account of the Borrower, in
each case on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto hereby agree as follows:

ARTICLE I

Definitions

SECTION 1.01 Defined Terms. As used in this Agreement, the following terms shall
have the meanings specified below:

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

“Acquired Entity” shall have the meaning assigned to such term in Section
6.04(f).

“Adjusted LIBO Rate” shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, an interest rate per annum equal to the greater of (a)(i)
in the case of Term Loans, 1.00%, and (ii) in the case of Revolving Loans,
0.00%, and (b) the product of (i) the LIBO Rate in effect for such Interest
Period and (ii) Statutory Reserves.

 

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“Administrative Agent” shall have the meaning assigned to such term in the
preamble.

“Administrative Agent Fees” shall have the meaning assigned to such term in
Section 2.05(b).

“Administrative Questionnaire” shall mean an Administrative Questionnaire in the
form of Exhibit A, or such other form as may be supplied from time to time by
the Administrative Agent.

“Affiliate” shall mean, when used with respect to a specified 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;
provided that, for purposes of the definition of “Eligible Assignee” and
Section 6.07, the term “Affiliate” shall also include (i) any Person that
directly or indirectly owns 10% or more of any class of Equity Interests of the
Person specified and (ii) any Controlled Physician Affiliate.

“Affiliate Subordination Agreement” shall mean an Affiliate Subordination
Agreement in the form of Exhibit F pursuant to which intercompany obligations
and advances owed by any Loan Party are subordinated to the Obligations.

“Agents” shall have the meaning assigned to such term in Article VIII.

“Aggregate Revolving Credit Exposure” shall mean the aggregate amount of the
Lenders’ Revolving Credit Exposures.

“Agreement” shall have the meaning assigned to such term in the preamble.

“Agreement Value” shall mean, for each Hedging Agreement, on any date of
determination, the maximum aggregate amount (giving effect to any netting
agreements) that the Borrower or any Subsidiary would be required to pay if such
Hedging Agreement were terminated on such date.

“All-In Yield” shall mean, with respect to any Indebtedness, the amount (as
reasonably determined by the Administrative Agent) equal to the sum of (a) the
margin above the Adjusted LIBO Rate applicable to such Indebtedness (which shall
be increased by the amount by which any “LIBOR floor” applicable to such
Indebtedness on the date of the calculation exceeds the Adjusted LIBO Rate on
such date), plus (b) the quotient obtained by dividing (i) the amount of any
upfront fees on such Indebtedness by (ii) the lesser of (x) the Weighted Average
Life to Maturity and (y) four; provided that “All-In Yield” shall not include
structuring fees, underwriting fees, commitment fees, arranger fees and any fees
not paid to all providers of such Indebtedness pro rata.

“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1.00%, and (c) the Adjusted
LIBO Rate applicable for an Interest Period of one month commencing on such day
(or if such day is not a Business Day, the immediately preceding Business Day)
plus 1.00%; provided that, solely for purposes of determining the

 

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Adjusted LIBO Rate for purposes of the foregoing, the Adjusted LIBO Rate for any
day shall be based on the rate set forth on such day at approximately 11:00 a.m.
(London time) by reference to the ICE Benchmark Administration Interest
Settlement Rates for deposits in Dollars (as set forth by any service selected
by the Administrative Agent that has been nominated by the ICE Benchmark
Administration Limited (or any Person who takes over the administration of such
rate) as an authorized vendor for the purpose of displaying such rates) (“ICE
LIBOR”) as published by Reuters (or such other commercially available source
providing quotations of ICE LIBOR as may be designated by the Administrative
Agent from time to time). If the Administrative Agent shall have determined
(which determination shall be conclusive absent manifest error) that it is
unable to ascertain the Federal Funds Effective Rate or the Adjusted LIBO Rate,
as the case may be, for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms of the respective definitions thereof, the Alternate Base Rate shall be
determined without regard to clause (b) or (c), as applicable, of the preceding
sentence until the circumstances giving rise to such inability no longer exist.
Any change in the Alternate Base Rate due to a change in the Prime Rate, the
Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective as of
the opening of business on the effective day of such change in the Prime Rate,
the Federal Funds Effective Rate or the Adjusted LIBO Rate, as the case may be.

“Applicable Margin” shall mean, for any day, (a) (x) with respect to any
Eurodollar Revolving Loan, 6.00% per annum and (y) with respect to any ABR
Revolving Loan, 5.00% per annum, and (b) (x) with respect to any Eurodollar Term
Loan, 6.75% per annum and (y) with respect to any ABR Term Loan, 5.75% per
annum.

“Arrangers” shall mean Credit Suisse Securities (USA) LLC, BMO Capital Markets
Corp. and Whitney Bank (d/b/a Hancock Bank), in their capacities as joint
bookrunners and joint lead arrangers for the Credit Facilities. Except as
expressly set forth in Article VIII and Section 9.05(b), the capacity of the
Arrangers is titular in nature and the Arrangers shall have no special rights or
obligations over those of a Lender by reason thereof.

“Asset Sale” shall mean the sale, transfer or other disposition (by way of
merger, casualty, condemnation or otherwise) by the Borrower or any of the
Subsidiaries to any Person other than the Borrower or any Subsidiary Guarantor
of (a) any Equity Interests of any of the Subsidiaries (other than directors’
qualifying shares) or (b) any other assets of the Borrower or any of the
Subsidiaries (other than (i) inventory, damaged, obsolete or worn out assets,
scrap and Permitted Investments, in each case disposed of in the ordinary course
of business, (ii) any lease or sub-lease of any real property or personal
property, in each case in the ordinary course of business, (iii) any license or
sublicense of intellectual property of the Borrower or any Subsidiary, in each
case in the ordinary course of business, (iv) any sale, transfer or other
disposition constituting the abandonment of intellectual property rights that,
in the reasonable good faith determination of the Borrower, are not material to
the conduct of the business of the Borrower and the Subsidiaries, in each case
in the ordinary course of business, (v) any sale, transfer or other disposition
consisting of the granting of Liens permitted by Section 6.02 and (vi) any sale,
transfer or other disposition or series of related sales, transfers or other
dispositions having a value not in excess of $3,000,000 per fiscal year).

 

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“Assignment and Acceptance” shall mean an assignment and acceptance entered into
by a Lender and an Eligible Assignee, and accepted by the Administrative Agent,
in the form of Exhibit B or such other form as shall be approved by the
Administrative Agent.

“Attributable Indebtedness” shall mean, when used with respect to any Sale and
Leaseback Transaction permitted by Section 6.03, as at the time of
determination, the present value (discounted at a rate equivalent to Borrower’s
then-current weighted average cost of funds for borrowed money as at the time of
determination, compounded on a semi-annual basis) of the total obligations of
the lessee for rental payments during the remaining term of the lease included
in any such Sale and Leaseback Transaction.

“Auction Procedures” shall mean the auction procedures with respect to Dutch
Auctions reasonably satisfactory to the Borrower and the Administrative Agent.

“Available Amount” shall mean, at any time (the “Reference Date”), an amount
equal to (a) the sum, without duplication, of (1) an amount (which amount shall
not be less than zero) equal to (x) the cumulative amount of Excess Cash Flow
for all fiscal years of the Borrower completed after the Closing Date
(commencing with the fiscal year ending on December 31, 2017) and prior to the
Reference Date minus (y) the portion of such Excess Cash Flow that has been (or
will be) after the Closing Date and on or prior to the Reference Date applied to
the prepayment or repayment of Loans in accordance with Section 2.13, plus
(2) the amount of any capital contributions (whether in cash or Permitted
Investments) received by the Borrower or proceeds of equity issuances by the
Borrower or any direct or indirect parent of the Borrower and directly or
indirectly contributed in cash or Permitted Investments as common equity to the
Borrower, in each case to the extent permitted hereunder (other than in
connection with Cure Amounts) after the Closing Date and on or prior to the
Reference Date plus (3) an amount equal to any repayments, interest, returns,
profits, distributions, income and similar amounts actually theretofore received
in cash or Permitted Investments in respect of any investment made pursuant to
Section 6.04(i)(ii) after the Closing Date and on or prior to the Reference
Date, plus (4) an amount equal to any Declined Proceeds retained by the Borrower
after the Closing Date and on or prior to the Reference Date (and not, for the
avoidance of doubt, applied for any other purpose, including as permitted by
Section 2.12(b)), minus (b) the sum, without duplication, of (i) the aggregate
amount of investments, loans and advances made pursuant to Section 6.04(i)(ii)
after the Closing Date and on or prior to the Reference Date, (ii) the aggregate
amount of Restricted Payments made pursuant to Section 6.06(a)(ii) after the
Closing Date and on or prior to the Reference Date and (iii) the aggregate
amount of distributions, payments, commitments, redemptions, repurchases,
retirements, acquisitions or set aside made pursuant to Section 6.09(b)(iv)
after the Closing Date and on or prior to the Reference Date.

“Available Liquidity” shall mean, at any time, the sum of (a) (i) the aggregate
amount of all Revolving Credit Commitments outstanding at such time, minus
(ii) the aggregate amount of L/C Disbursements at such time, minus (iii) the
aggregate amount of all Revolving Loans outstanding at such time, plus (b) the
aggregate amount of unrestricted cash and Permitted Investments of the Borrower
and its Subsidiaries at such time.

 

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“Bail-In Action” shall mean the exercise of any Write-Down and Conversion Powers
by the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

“Bail-In Legislation” shall mean, with respect to any EEA Member Country
implementing Article 55 of Directive 2014/59/EU of the European Parliament and
of the Council of the European Union, the implementing law for such EEA Member
Country from time to time which is described in the EU Bail-In Legislation
Schedule.

“Board” shall mean the Board of Governors of the Federal Reserve System of the
United States of America.

“Borrower” shall have the meaning assigned to such term in the preamble.

“Borrower Materials” shall have the meaning assigned to such term in
Section 9.01.

“Borrowing” shall mean Loans of the same Class and Type made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect.

“Borrowing Request” shall mean a request by the Borrower in accordance with the
terms of Section 2.03 and substantially in the form of Exhibit C, or such other
form as shall be approved by the Administrative Agent.

“Breakage Event” shall have the meaning assigned to such term in Section 2.16.

“Business Day” shall mean any day other than a Saturday, Sunday or day on which
banks in New York City are authorized or required by law to close; provided,
however, that when used in connection with a Eurodollar Loan or an ABR Loan
based on the Adjusted LIBO Rate, the term “Business Day” shall also exclude any
day on which banks are not open for dealings in Dollar deposits in the London
interbank market.

“Capital Expenditures” shall mean, for any period, the additions to property,
plant and equipment and other capital expenditures of the Borrower and its
consolidated Subsidiaries that are (or should be) set forth in a consolidated
statement of cash flows of the Borrower for such period prepared in accordance
with GAAP, but excluding in each case (i) any such expenditure made to restore,
replace or rebuild property to the condition of such property immediately prior
to any damage, loss, destruction or condemnation of such property, to the extent
such expenditure is made with insurance proceeds, condemnation awards or damage
recovery proceeds relating to any such damage, loss, destruction or condemnation
and (ii) any such expenditure that constitutes a Permitted Acquisition.

“Capital Lease Obligations” of any Person shall mean the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.

 

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“Cash Collateralize” shall mean to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the Issuing Bank or Lenders, as
collateral for L/C Exposure, cash or deposit account balances or, if the
Administrative Agent and the Issuing Bank shall agree in their sole discretion,
other credit support, in each case pursuant to documentation in form and
substance satisfactory to the Administrative Agent and the Issuing Bank. “Cash
Collateral” shall have a meaning correlative to the foregoing and shall include
the proceeds of such cash collateral and other credit support.

“Cash Management Services” shall have the meaning assigned to such term in the
Guarantee and Collateral Agreement.

A “Change in Control” shall mean any event or series of events by which:

(a) a “person” or “group” (as such terms are used in Section 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 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, whether such right is exercisable immediately or only after the
passage of time (such right, an “option right”)), directly or indirectly, of
thirty-five percent (35%) or more of the Equity Interests of the Borrower
entitled to vote for members of the board of directors or equivalent governing
body of the Borrower 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); or

(b) during any period of twenty-four (24) consecutive months, a majority of the
members of the board of directors or other equivalent governing body of the
Borrower cease 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.

“Change in Law” shall mean (a) the adoption of any law, rule or regulation after
the date of this Agreement, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after
the date of this Agreement or (c) compliance by any Lender or the Issuing Bank
(or, for purposes of Section 2.14, by any lending office of such Lender or by
such Lender’s or the Issuing Bank’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement; provided
that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, rules, guidelines or
directives thereunder or issued in connection therewith and (y) all requests,
rules, guidelines or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities, in
each case pursuant to Basel III, shall in each case be deemed to be a “Change in
Law”, regardless of the date enacted, adopted or issued.

 

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“Charges” shall have the meaning assigned to such term in Section 9.09.

“Class,” when used in reference to any Loan or Borrowing, shall refer to whether
such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Term
Loans or Other Term Loans and, when used in reference to any Commitment, refers
to whether such Commitment is a Revolving Credit Commitment, Incremental
Revolving Credit Commitment, Term Loan Commitment or Incremental Term Loan
Commitment in respect of any Other Term Loan.

“Closing Date” shall mean the date on which the conditions set forth in
Section 4.02 shall have been satisfied or waived, which date is June 30, 2017.

“Closing Fee” shall have the meaning assigned to such term in Section 2.05(d).

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time.

“Collateral” shall mean all the “Collateral” as defined in any Security Document
and shall also include the Mortgaged Properties.

“Collateral Agent” shall have the meaning assigned to such term in the preamble.

“Commitment” shall mean, with respect to any Lender, such Lender’s Revolving
Credit Commitment, Incremental Revolving Credit Commitment, Term Loan Commitment
or Incremental Term Loan Commitment or commitment to make any Extended Revolving
Loans or Extended Term Loans, as the case may be.

“Commitment Fee” shall have the meaning assigned to such term in
Section 2.05(a).

“Communications” shall have the meaning assigned to such term in Section 9.01.

“Compliance Certificate” shall mean a certificate of a Financial Officer
substantially in the form of Exhibit G.

“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for
such period plus (a) without duplication and to the extent deducted in
determining such Consolidated Net Income, the sum of (i) Consolidated Interest
Expense for such period, (ii) consolidated income tax expense for such period
(including any franchise taxes imposed in lieu of income taxes and any income
taxes), (iii) all amounts attributable to depreciation and amortization for such
period, (iv) any non-cash charges, expenses or losses (including, but not
limited to, impairment of goodwill or other intangible assets and exchange rate
losses) of the Borrower or any of its Subsidiaries for such period (excluding
any such charges, expenses or losses incurred that constitutes an accrual of or
a reserve for cash charges for any future period), (v) any extraordinary,
unusual, or non-recurring cash charges or expenses for such period (including
without limitation, severance, retention bonuses or other similar one time
compensation payments made to employees of the Borrower or any of its
Subsidiaries or made in connection

 

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with a Permitted Acquisition), (vi) deferred compensation, stock-option or
employee benefits-based and other equity-based compensation expenses for such
period, (vii) fees, costs and expenses in connection with the Transactions for
such period, (viii) fees, costs and expenses in connection with any investment
(including any Permitted Acquisition), asset disposition (including any Asset
Sale), issuance of Equity Interests or issuance, modification or refinancing of
any Indebtedness for such period, in each case to the extent permitted under
this Agreement and whether or not such transaction shall have been consummated,
(ix) any losses or expenses to the extent reimbursable by third parties in
connection with any Permitted Acquisition for such period, as reasonably
determined in good faith by the Borrower, provided, however, that if the
Administrative Agent, acting reasonably, determines in such period or the
immediately succeeding period that any such losses or expenses, or any portion
thereof (which, in each case, were included in Consolidated EBITDA for such
period or such immediately preceding period pursuant to this clause (ix)), are
no longer reimbursable or are not reasonably likely to be reimbursed, then such
losses or expenses, or any portion thereof, shall be subtracted from
Consolidated Net Income in calculating Consolidated EBITDA in for such period,
(x) unrealized losses in respect of Obligations under Hedging Agreements for
such period, (xi) any losses or expenses from discontinued operations or
incurred in connection with the disposal of discontinued operations in
accordance with GAAP for such period (or if not in accordance with GAAP as
otherwise reasonably acceptable to the Administrative Agent), (xii) non-cash
charges or amounts recorded in connection with purchase accounting under FASB
Accounting Standards Codification Topic 805 (ASC 805), Business Combinations
(including any applicable to future Permitted Acquisitions) for such period,
(xiii) non-cash purchase accounting adjustments relating to the writedown of
deferred revenue (whether billed or unbilled) that are the result of accounting
for any acquisition for such period, (xiv) the cumulative effect of a change in
accounting principles to the extent permitted by Section 1.02(b) for such
period, (xv) any expenses in connection with any litigation or claim involving
the Borrower or its Subsidiaries for such period, (xvi) debt discount and debt
issuance costs, fees, charges and commissions, in each case incurred in
connection with Indebtedness permitted to be incurred under Section 6.01
(whether or not such Indebtedness has been incurred) for such period, (xvii) any
losses or expenses incurred by the Borrower or its Subsidiaries in connection
with establishing new or materially expanding existing Healthcare Facilities for
a period of 6 months prior to the new establishment or material expansion of
such Healthcare Facilities and continuing for 12 months after the new
establishment or completed material expansion of such Healthcare Facilities, as
reasonably determined in good faith by the Borrower, for such period, not to
exceed an amount equal to 25% (or, for any period including or occurring after
the fiscal quarter ending December 31, 2017, 20%) of Consolidated EBITDA for the
period of four consecutive fiscal quarters most recently ended prior to the
determination date (without giving effect to any adjustments pursuant to this
clause (xvii)), provided that for any period including or occurring after the
fiscal quarter ending March 31, 2018, the aggregate amount of add backs made
pursuant to this clause (xvii) and the succeeding clause (xviii) shall not
exceed an amount equal to 25% of Consolidated EBITDA for the period of four
consecutive fiscal quarters most recently ended prior to the determination date
(without giving effect to any adjustments pursuant to this clause (xvii) and the
succeeding clause (xviii)), and (xviii) the amount of net cost savings,
operating expense reductions, other operating improvements and acquisition
synergies projected by the Borrower in good faith to be realized during such
period (calculated on a pro forma basis as though such items had been realized
on the first day of such period) as a result of actions taken or to be taken

 

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in connection with any acquisition, disposition or restructuring by the Borrower
or any Subsidiary, net of the amount of actual benefits realized during such
period that are otherwise included in the calculation of Consolidated EBITDA
from such actions, provided that (A) a duly completed certificate signed by a
Financial Officer of the Borrower shall be delivered to the Administrative Agent
together with the Compliance Certificate required to be delivered pursuant to
Section 5.04(c), certifying that (x) such cost savings, operating expense
reductions and synergies are reasonably expected and factually supportable as
determined in good faith by the Borrower, and (y) such actions are to be taken
within 12 months after the consummation of the acquisition, disposition or
restructuring, which is expected to result in such cost savings, expense
reductions or synergies, (B) no cost savings, operating expense reductions and
synergies shall be added pursuant to this clause (xviii) to the extent
duplicative of any losses, expenses or charges otherwise added to Consolidated
EBITDA, whether through a pro forma adjustment or otherwise, for such period,
(C) projected amounts (and not yet realized) may no longer be added in
calculating Consolidated EBITDA pursuant to this clause (xviii) to the extent
occurring more than four full fiscal quarters after the specified action taken
in order to realize such projected cost savings, operating expense reductions
and synergies, (D) the aggregate amount of add backs made pursuant to this
clause (xviii) shall not exceed an amount equal to 20% (or, for any period
including or occurring after the fiscal quarter ending December 31, 2017, 10%)
of Consolidated EBITDA for the period of four consecutive fiscal quarters most
recently ended prior to the determination date (without giving effect to any
adjustments pursuant to this clause (xviii)) and (E) for any period including or
occurring after the fiscal quarter ending March 31, 2018, the aggregate amount
of add backs made pursuant to the foregoing clause (xvii) and this clause
(xviii) shall not exceed an amount equal to 25% of Consolidated EBITDA for the
period of four consecutive fiscal quarters most recently ended prior to the
determination date (without giving effect to any adjustments pursuant to the
foregoing clause (xvii) and this clause (xviii)), and minus (b) without
duplication (i) to the extent included in determining such Consolidated Net
Income, any extraordinary, unusual, or non-recurring cash gains and all non-cash
items of income for such period, all determined on a consolidated basis in
accordance with GAAP, (ii) unrealized gains in respect of Obligations under
Hedging Agreements for such period and (iii) any gain from discontinued
operations or any gain incurred in connection with the disposal of discontinued
operations in accordance with GAAP for such period (or if not in accordance with
GAAP as otherwise reasonably acceptable to the Administrative Agent); provided
that, in each case, for any period (A) the Consolidated EBITDA of any Acquired
Entity acquired by the Borrower or any Subsidiary pursuant to a Permitted
Acquisition during such period shall be included on a pro forma basis for such
period (assuming the consummation of such acquisition and the incurrence or
assumption of any Indebtedness in connection therewith occurred as of the first
day of such period) and (B) the Consolidated EBITDA of any Person or line of
business sold or otherwise disposed of by the Borrower or any Subsidiary during
such period shall be excluded for such period (assuming the consummation of such
sale or other disposition and the repayment of any Indebtedness in connection
therewith occurred as of the first day of such period).

“Consolidated Interest Expense” shall mean, for any period, the sum of (a) the
interest expense (including imputed interest expense in respect of Capital Lease
Obligations and Synthetic Lease Obligations) of the Borrower and the
Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP (including, for the avoidance of doubt, (i) any amounts of premium or
penalty payable in connection with the payment of make-whole amounts

 

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or other prepayment premiums payable in connection with any Indebtedness of the
Borrower or any of its Subsidiaries, and (ii) all commissions, discounts and
other fees and charges owed in respect of interest rates to the extent such net
costs are allocable to such period in accordance with GAAP), plus (b) any
interest accrued during such period in respect of Indebtedness of the Borrower
or any Subsidiary that is required to be capitalized rather than included in
consolidated interest expense for such period in accordance with GAAP. For
purposes of the foregoing, interest expense shall be determined after giving
effect to any net payments made or received by the Borrower or any Subsidiary
with respect to interest rate Hedging Agreements.

“Consolidated Net Income” shall mean, for any period, the net income or loss of
the Borrower and the Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded (a) the
income of any Subsidiary to the extent that the declaration or payment of
dividends or similar distributions by the Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, statute, rule or governmental regulation
applicable to such Subsidiary except that (x) the Borrower’s equity in any net
loss of any such Subsidiary for such period shall be included in determining
Consolidated Net Income and (y) the net income of any Controlled Physician
Affiliate shall be included in the determination of Consolidated Net Income for
any period to the extent that any Loan Party has received cash payments under
the management agreement with such Controlled Physician Affiliate during such
period, (b) the income or loss of any Person accrued prior to the date it
becomes a Subsidiary or is merged into or consolidated with the Borrower or any
Subsidiary or the date that such Person’s assets are acquired by the Borrower or
any Subsidiary, (c) the income of any Person in which any other Person (other
than the Borrower or a Wholly-Owned Subsidiary or any director holding
qualifying shares in accordance with applicable law) has a joint interest,
except to the extent of the amount of dividends or other distributions actually
paid to the Borrower or a Wholly-Owned Subsidiary by such Person during such
period, and (d) any gains attributable to sales of assets out of the ordinary
course of business.

“Contractual Obligation” shall mean, 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 assets
or properties is bound.

“Control” shall mean 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 ownership of Voting Equity Interests, by contract or otherwise
(including any member of the senior management group of any such Person), and
the terms “Controlling” and “Controlled” shall have meanings correlative
thereto.

“Controlled Physician Affiliate” shall mean any Person comprised of or
constituting a physician group or healthcare practice in the business of
providing health care services through employed or contracted health care
professionals (a) as to which the Borrower or any Wholly-Owned Subsidiary has
the option to require a transfer of all of the Voting Equity Interests of such
group or practice to itself or a nominee, (b) with which the Borrower or any
Wholly-Owned Subsidiary has a long-term business agreement to provide management
services to such group or practice and (c) the Voting Equity Interests of which
cannot, pursuant to applicable Laws, or should not, in the reasonable good faith
determination of the Borrower, be owned by the Borrower or any Wholly-Owned
Subsidiary.

 

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“Credit Event” shall have the meaning assigned to such term in Section 4.01.

“Credit Facilities” shall mean the revolving credit, letter of credit and term
loan facilities provided for by this Agreement.

“Credit Suisse” shall have the meaning assigned to such term in the preamble.

“Cure Amount” shall have the meaning assigned to such term in Section 7.02(a).

“Cure Right” shall have the meaning assigned to such term in Section 7.02(a).

“Current Assets” shall mean, at any time, the consolidated current assets (other
than cash and Permitted Investments) of the Borrower and the Subsidiaries
determined in accordance with GAAP.

“Current Liabilities” shall mean, at any time, the consolidated current
liabilities of the Borrower and the Subsidiaries at such time determined in
accordance with GAAP, but excluding, without duplication, (a) the current
portion of any long-term Indebtedness and (b) outstanding Revolving Loans.

“Debtor Relief Laws” shall mean the Bankruptcy Code of the United States of
America, 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.

“Declined Proceeds” shall have the meaning assigned to such term in Section
2.13(f).

“Deerfield Consent Fee” shall mean that certain “Consent Fee” under and as
defined in that certain letter agreement dated as of May 30, 2017 by and among
Borrower, Deerfield Private Design Fund III, L.P., Deerfield Partners, L.P. and
Deerfield International Master Fund, L.P., a copy of which has been delivered to
the Administrative Agent.

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

“Defaulting Lender” shall mean, subject to Section 2.24(b), any Lender that
(a) has failed to (i) fund all or any portion of its Loans within two Business
Days of the date such Loans were required to be funded hereunder unless such
Lender notifies the Administrative Agent and the Borrower in writing that such
failure is the result of such Lender’s determination that one or more conditions
precedent to funding (each of which conditions precedent, together with any
applicable default, shall be specifically identified in such writing) has not
been satisfied, or (ii) pay to the Administrative Agent, the Issuing Bank or any
other Lender any other amount required to be paid by it hereunder (including in
respect of its participation in Letters of Credit) within two Business Days of
the date when due, (b) has notified the Borrower, the Administrative Agent or
the Issuing Bank in writing that it does not intend to comply with its

 

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funding obligations hereunder, or has made a public statement to that effect
(unless such writing or public statement relates to such Lenders’ obligation to
fund a Loan hereunder and states that such position is based on such Lender’s
determination that a condition precedent to funding (which condition precedent,
together with any applicable default, shall be specifically identified in such
writing or public statement) cannot be satisfied), (c) has failed, within three
Business Days after written request by the Administrative Agent or the Borrower,
to confirm in writing to the Administrative Agent and the Borrower that it will
comply with its prospective funding obligations hereunder (provided that such
Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon
receipt of such written confirmation by the Administrative Agent and the
Borrower), (d) has become the subject of a Bail-In Action or (e) has, or has a
direct or indirect parent company that has, (i) become the subject of a
proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver,
custodian, conservator, trustee, administrator, assignee for the benefit of
creditors or similar Person charged with reorganization or liquidation of its
business or assets, including the Federal Deposit Insurance Corporation or any
other state or Federal regulatory authority acting in such a capacity; provided
that a Lender shall not be a Defaulting Lender solely by virtue of the ownership
or acquisition of any equity interest in that Lender or any direct or indirect
parent company thereof by a Governmental Authority so long as such ownership
interest does not result in or provide such Lender with immunity from the
jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Lender (or such
Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts
or agreements made with such Lender. Any determination by the Administrative
Agent that a Lender is a Defaulting Lender under clauses (a) through (e) above
shall be conclusive and binding absent manifest error, and such Lender shall be
deemed to be a Defaulting Lender (subject to Section 2.24(b)) upon delivery of
written notice of such determination to the Borrower, the Issuing Bank and each
Lender.

“Designated Jurisdiction” shall mean any country or territory to the extent that
such country or territory is the subject of any Sanctions.

“Discount” shall have the meaning assigned to such term in Section 2.23(b).

“Disqualified Institution” shall mean (a) any Person identified by name in
writing to the Arrangers by the Borrower prior to the Closing Date, (b) any
competitor of the Borrower and its Subsidiaries identified by name in writing to
the Administrative Agent and the Lenders from time to time after the Closing
Date by the Borrower and (c) any clearly and reasonably identifiable Affiliate
of any Person referred to in clauses (i) or (ii) above solely on the basis of
such Affiliate’s name; provided that a Disqualified Institution shall not
include any bona fide fixed income investor, debt fund, investment vehicle or
lending entity that is primarily engaged in, or that advises investors, funds,
investment vehicles or other lending entities that are engaged in, making,
purchasing, holding or otherwise investing in commercial loans, bonds or similar
extensions of credit or securities in the ordinary course and with respect to
which a Disqualified Institution does not, directly or indirectly, possess the
power to direct or cause the direction of the investment policies of such
entity; provided, further, that no Disqualified Institution may become a Lender
or otherwise participate in the Credit Facilities without consent of the
Borrower; provided, further, that any Disqualified Institution identified from
time to time after the Closing Date shall not apply retroactively to disqualify
any party that has previously acquired an assignment or participation interest
in the Credit Facilities; provided, further, that the parties hereto hereby
understand and agree that the Administrative Agent shall not be responsible or
have any liability for, or have any duty to ascertain, inquire into, monitor or
enforce, compliance with the provisions hereof relating to any Disqualified
Institution.

 

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“Disqualified Stock” shall mean any Equity Interest that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, (a) matures (excluding any
maturity as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof (other than solely for Equity
Interests which are common equity interests or otherwise not Disqualified
Stock), in whole or in part, or requires the payment of any cash dividend or any
other scheduled payment constituting a return of capital, in each case at any
time on or prior to the ninety-first day after the later of the Term Loan
Maturity Date and the Incremental Term Loan Maturity Date as in effect at the
time such Equity Interest is issued, or (b) is convertible into or exchangeable
(unless at the sole option of the issuer thereof) for (i) debt securities or
(ii) any Equity Interest referred to in clause (a) above, in each case at any
time prior to the first anniversary of the later of the Term Loan Maturity Date
and the Incremental Term Loan Maturity Date as in effect at the time such Equity
Interest is issued.

“Dollars” or “$” shall mean lawful money of the United States of America.

“Dutch Auction” shall mean an auction conducted by the Borrower or any
Subsidiary in order to purchase Term Loans as contemplated by Section 9.04(l),
as applicable, in accordance with the Auction Procedures.

“EEA Financial Institution” shall mean (a) any credit institution or investment
firm established in any EEA Member Country which is subject to the supervision
of an EEA Resolution Authority, (b) any entity established in an EEA Member
Country which is a parent of an institution described in clause (a) of this
definition or (c) any financial institution established in an EEA Member Country
which is a subsidiary of an institution described in clause (a) or (b) of this
definition and is subject to consolidated supervision with its parent;

“EEA Member Country” shall mean any of the member states of the European Union,
Iceland, Liechtenstein, Norway and the United Kingdom.

“EEA Resolution Authority” shall mean any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

“ECF Percentage” shall mean, with respect to the prepayment required by
Section 2.13(c) with respect to any fiscal year, if the Senior Secured Leverage
Ratio as of the end of such fiscal year was (a) greater than 3.25:1.00, 75%,
(b) equal to or less than 3.25:1.00 but greater than 2.75:1.00, 50% and
(c) equal to or less than 2.75:1.00, 25%.

“Eligible Assignee” shall mean (a) a Lender, (b) an Affiliate of a Lender, (c) a
Related Fund of a Lender and (d) any other Person (other than a natural person)
approved by (x) the Administrative Agent and, in the case of any assignment of
Revolving Credit Commitments or Revolving Loans, the Issuing Bank and (y) except
with respect to assignments when an Event of Default has occurred and is
continuing or during the primary syndication of the Commitments

 

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and Loans to Persons identified to the Borrower prior to the Closing Date or to
a Revolving Credit Lender and its Affiliates, the Borrower (each such approval
not to be unreasonably withheld, conditioned or delayed); provided that the
Borrower shall be deemed to have consented to any proposed Eligible Assignee
unless it shall object thereto by written notice to the Administrative Agent
within five Business Days after having received written notice thereof;
provided, further, that notwithstanding the foregoing, “Eligible Assignee” shall
not include (i) the Borrower or any of the Borrower’s Affiliates (it being
understood and agreed that assignments to the Borrower or a Subsidiary may be
made pursuant to Section 9.04(l)), (ii) any Defaulting Lender or (iii) any
Disqualified Institution.

“Engagement Letter” shall mean the Amended and Restated Engagement Letter dated
as of June 7, 2017 among the Borrower, Credit Suisse Securities (USA) LLC, BMO
Capital Markets Corp. and Whitney Bank (d/b/a Hancock Bank), as amended,
restated, supplemented or otherwise modified from time to time.

“Environmental Laws” shall mean all applicable Federal, state, local and foreign
laws (including common law), treaties, regulations, rules, ordinances, codes,
decrees, judgments, directives and orders (including consent orders), in each
case, relating to (a) protection of the environment or natural resources,
(b) the presence, Release of, or exposure to Hazardous Materials, or (c) the
generation, manufacture, processing, distribution, use, treatment, storage,
transport, recycling or handling of, or the arrangement for such activities with
respect to, or the exposure to, Hazardous Materials.

“Environmental Liability” shall mean all liabilities, obligations, damages,
losses, claims, actions, suits, judgments, orders, fines, penalties, fees,
expenses and costs (including administrative oversight costs, natural resource
damages and remediation costs), whether contingent or otherwise, arising out of
or relating to (a) compliance or non-compliance with any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the Release of any Hazardous Materials or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.

“Equity Interests” shall mean shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity interests in any Person, and any option, warrant or other
right entitling the holder thereof to purchase or otherwise acquire any such
equity interest.

“Equity Issuance” shall mean any issuance or sale by the Borrower or any of its
subsidiaries of any Equity Interests of the Borrower or any such subsidiary, as
applicable, except in each case for (a) any issuance or sale to the Borrower or
any Subsidiary, (b) any issuance of directors’ qualifying shares, (c) sales or
issuances of common stock of the Borrower to management or employees of the
Borrower or any Subsidiary under any employee stock option or stock purchase
plan or employee benefit plan in existence from time to time and (d) Permitted
Acquisitions and establishing new or materially expanding existing Healthcare
Facilities, in each case within 270 days after such issuance or sale by the
Borrower or any of its subsidiaries of any Equity Interests of the Borrower or
any such subsidiary.

 

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“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the
same may be amended from time to time, the regulations promulgated thereunder
and any successor statute.

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under
Section 414(b), 414(c), 414(m) or 414(o) of the Code.

“ERISA Event” shall mean (a) the occurrence of any “reportable event” as defined
in Section 4043 of ERISA or the regulations issued thereunder, with respect to a
Plan (other than an event for which the 30-day notice period is waived), (b) the
failure by any Plan to meet the minimum funding standard of Sections 412 and 430
of the Code or Section 302 and 303 of ERISA, in each case, whether or not
waived, (c) the filing pursuant to Section 412(c) of the Code or Section 302(c)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan, (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan or the withdrawal or partial withdrawal of the Borrower
or any of its ERISA Affiliates from any Multiemployer Plan, (e) a determination
that any Plan is, or is expected to be, in “at risk” status (as defined in
Section 430 of the Code or Section 303 of ERISA), (f) the receipt by the
Borrower or any of its ERISA Affiliates from the PBGC or a plan administrator of
any notice relating to the intention to terminate any Plan or Plans or to
appoint a trustee to administer any Plan under Sections 4041 and 4042 of ERISA,
respectively, (g) a determination that any Multiemployer Plan is, or is expected
to be, in “critical” or “endangered” status under Section 432 of the Code or
Section 305 of ERISA, (h) the adoption of any amendment to a Plan that would
require the provision of security pursuant to Section 436(f) of the Code,
(i) the receipt by the Borrower or any of its ERISA Affiliates of any notice, or
the receipt by any Multiemployer Plan from the Borrower or any of its ERISA
Affiliates of any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent,
within the meaning of Section 4245 of ERISA, respectively, (j) the occurrence of
a “prohibited transaction” with respect to which the Borrower or any of the
Subsidiaries is a “disqualified person” (within the meaning of Section 4975 of
the Code), (k) the disqualification by the Internal Revenue Service of any Plan
under Section 401(a) of the Code or the determination by the Internal Revenue
Service that any trust forming part of any Plan fails to qualify for exemption
from taxation under Section 501(a) of the Code, (l) the imposition of a Lien
pursuant to Section 430(k) of the Code or pursuant to Section 303(k) of ERISA or
a violation of Section 436 of the Code with respect to any Plan or (m) any other
event or condition with respect to a Plan or Multiemployer Plan that could
result in liability of the Borrower or any Subsidiary.

“EU Bail-In Legislation Schedule” shall mean the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect
from time to time.

“Eurodollar,” when used in reference to any Loan or Borrowing, shall refer to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.

“Events of Default” shall have the meaning assigned to such term in Section
7.01.

 

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“Excess Cash Flow” shall mean, for any fiscal year of the Borrower, the
difference, if any, of (a) the sum, without duplication, of (i) Consolidated
EBITDA for such fiscal year and (ii) reductions to noncash working capital of
the Borrower and the Subsidiaries for such fiscal year (i.e., the decrease, if
any, in Current Assets minus Current Liabilities from the beginning to the end
of such fiscal year (excluding any changes in working capital due to the effects
of purchase accounting adjustments)) minus (b) the sum, without duplication, of
(i) the amount of any Taxes paid in cash by the Borrower and the Subsidiaries
with respect to such fiscal year (including any franchise taxes imposed in lieu
of income taxes), (ii) Consolidated Interest Expense for such fiscal year paid
in cash, (iii) the amount of any Capital Expenditures and investments (including
any Permitted Acquisition), to the extent permitted under this Agreement
(whether or not such Capital Expenditure, investment or acquisition shall have
been consummated) and that are made in cash during such fiscal year, except to
the extent financed with the proceeds of Indebtedness, equity issuances,
casualty proceeds, condemnation proceeds or other proceeds that would not be
included in Consolidated EBITDA, (iv) permanent repayments of Indebtedness
(other than mandatory prepayments of Loans under Section 2.13, but including any
voluntary prepayments of Term Loans under Section 2.12 to the extent they reduce
scheduled repayments of Term Loans under Section 2.11 in such period) made in
cash by the Borrower and the Subsidiaries during such fiscal year, but only to
the extent that the Indebtedness so prepaid by its terms cannot be reborrowed or
redrawn and such prepayments do not occur in connection with a refinancing of
all or any portion of such Indebtedness, (v) solely to extent representing a
cash item actually paid in cash during such fiscal year, the amounts added back
to Consolidated EBITDA during such fiscal year pursuant to clauses (v), (vi),
(vii), (viii), (xv), (xvi) and (xvii) of the definition of Consolidated EBITDA,
(vi) additions to noncash working capital for such fiscal year (i.e., the
increase, if any, in Current Assets minus Current Liabilities from the beginning
to the end of such fiscal year) and (viii) the aggregate amount of Restricted
Payments made in cash during such fiscal year in accordance with Section
6.06(a)(i)(x).

“Excluded Assets” shall have the meaning assigned to such term in the Guarantee
and Collateral Agreement.

“Excluded Taxes” shall mean, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) income Taxes imposed
on (or measured by) its net income (however denominated) or franchise Taxes
imposed in lieu of income Taxes, in each case by (i) the United States of
America or by the jurisdiction under the Laws of which such recipient is
organized or in which its principal office is located, (ii) any jurisdiction
with which such recipient has a present or former connection (other than
connections arising solely from such recipient having executed, delivered,
become a party to, performed its obligations under, received payments under,
received or perfected security interests under, engaged in any other transaction
pursuant to or enforced any Loan Document, or sold or assigned any interest in a
Loan Document) or (iii) in the case of any Lender, in which its applicable
lending office is located, (b) any branch profits Taxes imposed by the United
States of America or any similar Tax imposed by any other jurisdiction described
in clause (a) above, (c) in the case of a Foreign Lender (other than an assignee
pursuant to a request by the Borrower under Section 2.21(a)), any U.S. federal
withholding Tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party to this Agreement (or designates a new
lending

 

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office) or is attributable to such Foreign Lender’s failure to comply with
Section 2.20(e), except to the extent that such Foreign Lender (or its assignor,
if any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from the Borrower with respect to
such withholding Tax pursuant to Section 2.20(a), (d) any backup withholding tax
that is required by the Code to be withheld from amounts payable to it, and
(e) any Taxes imposed by FATCA.

“Existing Indebtedness” shall mean (i) the Credit Agreement dated as of March 9,
2015 (as amended, restated, supplemented or otherwise modified prior to the date
hereof) among the Borrower, the lenders party thereto and Bank of America, N.A.,
as administrative agent, collateral agent and issuing bank and (ii) the Facility
Agreement dated as of October 2, 2015 (as amended, restated, supplemented or
otherwise modified prior to the date hereof) among the Borrower, Deerfield
Private Design Fund III, L.P., Deerfield Partners, L.P. and Deerfield
International Master Fund, L.P.

“Extended Revolving Credit Commitment” shall mean any Class of Revolving Credit
Commitments the maturity of which shall have been extended pursuant to
Section 2.25.

“Extended Revolving Loans” shall mean any Revolving Loans made pursuant to the
Extended Revolving Credit Commitments.

“Extended Term Loans” shall mean any Class of Term Loans the maturity of which
shall have been extended pursuant to Section 2.25.

“Extension” shall have the meaning assigned to such term in Section 2.25(a).

“Extension Offer” shall have the meaning assigned to such term in
Section 2.25(a).

“FATCA” shall mean 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), any current or
future regulations or official interpretations thereof, any agreement entered
into thereto, or any law implementing an intergovernmental agreement or approach
thereto.

“FCPA” shall have the meaning assigned to such term in Section 3.26.

“Federal Funds Effective Rate” shall mean, for any day, the greater of
(a) weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, and (b) 0.00% per annum.

“Fees” shall mean the Commitment Fees, the Administrative Agent Fees, the L/C
Participation Fees, the Issuing Bank Fees and the Closing Fees.

“Financial Officer” of any Person shall mean the chief financial officer,
principal accounting officer, treasurer or controller of such Person.

 

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“Floating Investments Basket” shall mean, at any time, (a) $10,000,000 minus
(b) the aggregate amount of all investments, loans and advances made pursuant to
Section 6.04(a), (h) and/or (i) at or prior to such time in reliance on the
foregoing clause (a).

“Foreign Lender” shall mean any Lender that is organized under the laws of a
jurisdiction other than the United States of America, each State thereof or the
District of Columbia.

“Fronting Exposure” shall mean, at any time there is a Defaulting Lender, with
respect to the Issuing Bank, such Defaulting Lender’s Pro Rata Percentage of the
outstanding L/C Exposure with respect to Letters of Credit issued by such
Issuing Bank other than L/C Exposure as to which such Defaulting Lender’s
participation obligation has been reallocated to other Lenders or Cash
Collateralized in accordance with the terms hereof.

“GAAP” shall mean United States generally accepted accounting principles applied
on a basis consistent with the financial statements delivered pursuant to
Section 4.02(j).

“Government Official” shall mean (a) an executive, official, employee or agent
of a governmental department, agency or instrumentality, (b) a director,
officer, employee or agent of a wholly or partially government-owned or
government-controlled company or business, (c) a political party or official
thereof, or candidate for political office or (d) an executive, official,
employee or agent of a public international organization (e.g., the
International Monetary Fund or the World Bank).

“Governmental Authority” shall mean any Federal, state, local or foreign court
or governmental agency, authority, instrumentality or regulatory body.

“Granting Lender” shall have the meaning assigned to such term in Section
9.04(i).

“Guarantee” of or by any Person shall mean any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly, and including
any obligation of such Person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the purchase
of) any security for the payment of such Indebtedness or other obligation,
(b) to purchase or lease property, securities or services for the purpose of
assuring the owner of such Indebtedness or other obligation of the payment of
such Indebtedness or other obligation or (c) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation; provided, however, that the term “Guarantee” shall not include
endorsements for collection or deposit 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 Indebtedness or other obligation of the primary
obligor in respect of which such Guarantee is made (or, if less, the maximum
amount of such Indebtedness or other obligation for which such Person may be
liable, whether singly or jointly, pursuant to the terms of the instrument
evidencing such Guarantee) or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder).

 

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“Guarantee and Collateral Agreement” shall mean the Guarantee and Collateral
Agreement, substantially in the form of Exhibit D, among the Borrower, the
Subsidiaries party thereto and the Collateral Agent for the benefit of the
Secured Parties.

“Hazardous Materials” shall mean (a) any petroleum products or byproducts and
all other hydrocarbons, coal ash, radon gas, asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, chlorofluorocarbons and all other
ozone-depleting substances and (b) any chemical, material, substance or waste
that is prohibited, limited or regulated by or pursuant to any Environmental
Law.

“Healthcare Authorizations” shall mean any and all permits, licenses,
authorizations, certificates, certificates of need, and accreditations of
third-party accreditation agencies and Nongovernmental Payors (a) necessary to
enable the Borrower or any of its Subsidiaries to engage in the Healthcare
Service Business, participate in and receive payment under plans of
Nongovernmental Payors or otherwise continue to conduct its Healthcare Service
Business or (b) required under any law relating to Persons engaged in the
Healthcare Service Business.

“Healthcare Facility” shall mean any facility which provides inpatient or
outpatient abuse treatment services for individuals with drug or alcohol
addiction, any sober living facility and any facility which provides laboratory
services that is owned, leased or operated by the Borrower or its Subsidiaries,
and any ancillary business thereto.

“Healthcare Laws” shall mean, collectively, any and all current or future laws
with respect to any healthcare regulatory matters, any Healthcare
Authorizations, any Healthcare Facility and any Healthcare Service Business, and
any rule, regulation, directive, order or decision promulgated or issued
pursuant thereto, including without limitation: (a) any and all federal, state
and local fraud and abuse laws, including, without limitation, the federal
Anti-Kickback Statute (42 U.S.C. § 1320a 7(b)), the Stark Law (42 U.S.C. §
1395nn and §1395(q)), the civil False Claims Act (31 U.S.C. §§ 3729 et seq.),
Sections 1320a-7 and 1320a-7a of Title 42 of the United States Code, the
criminal False Claims Law (42 U.S.C. § 1320a-7b(a)), all criminal laws relating
to healthcare fraud and abuse, including but not limited to 18 U.S.C. Sections
286 and 287, the healthcare fraud criminal provisions under HIPAA, and the
regulations promulgated pursuant to such statutes; (b) the federal Food, Drug &
Cosmetic Act (21 U.S.C. §§ 301 et seq.) and the regulations promulgated
thereunder; (c) HIPAA; (d) the Patient Protection and Affordable Care Act (P.L.
111-148), as amended by the Health Care and Education Reconciliation Act (P.L.
111-152) and the regulations promulgated thereunder; (e) quality, safety and
accreditation standards and requirements of all applicable state laws or
regulatory bodies; (f) Requirements of Law relating to the licensure,
certification, qualification or authority to transact business relating to the
provision of and/or payment for healthcare services; (g) the Clinical Laboratory
Improvement Amendments of 1988 (42 U.S.C. § 263a) and the regulations
promulgated thereunder; (h) laws related to the billing, coding or submission of
claims or collection of accounts receivable or refund of overpayments;
(i) corporate practice of medicine laws and fee-splitting prohibitions;
(j) health planning or rate-setting laws, including laws regarding certificates
of need and certificates of exemption; (k) the HITECH Act; (l) MHPAEA; and
(m) any and all other applicable health care laws, regulations, manual
provisions, policies and administrative guidance, each of (a) through (m) as may
be amended from time to time.

 

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“Healthcare Service Business” shall mean a business, the majority of whose
revenues are derived from arranging to provide or administering, managing or
monitoring healthcare services, or any business or activity that is reasonably
similar thereto (including, for the avoidance of doubt, a business providing
inpatient or outpatient abuse treatment services for individuals with drug or
alcohol addiction) or a reasonable extension, development or expansion thereof
or ancillary thereto.

“Hedging Agreement” shall mean any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.

“HIPAA” shall have the meaning assigned to such term in Section 5.16(f).

“HITECH Act” shall have the meaning assigned to such term in Section 5.16(f).

“ICE LIBOR” shall have the meaning assigned to such term in the definition of
“Alternate Base Rate”.

“Incremental Loan Assumption Agreement” shall mean an Incremental Loan
Assumption Agreement among, and in form and substance reasonably satisfactory
to, the Borrower, the Administrative Agent and one or more Incremental Term
Lenders.

“Incremental Revolving Credit Amount” shall mean, at any time, (a) $15,000,000
minus (b) the aggregate amount of all Incremental Revolving Credit Commitments
established prior to such time pursuant to Section 2.23 in reliance on the
foregoing clause (a).

“Incremental Revolving Credit Borrowing” shall mean a Borrowing comprised of
Incremental Revolving Credit Loans.

“Incremental Revolving Credit Commitment” shall have the meaning assigned to
such term in Section 2.23(a).

“Incremental Revolving Credit Lender” shall mean a Lender with an Incremental
Revolving Credit Commitment or an outstanding Revolving Loan as a result of an
Incremental Revolving Credit Commitment.

“Incremental Revolving Credit Loans” shall mean Revolving Loans made by one or
more Lenders to the Borrower pursuant to their Incremental Revolving Credit
Commitments.

“Incremental Term Borrowing” shall mean a Borrowing comprised of Incremental
Term Loans.

“Incremental Term Lender” shall mean a Lender with an Incremental Term Loan
Commitment or an outstanding Incremental Term Loan.

 

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“Incremental Term Loan Amount” shall mean, at any time, the sum of
(a) (i) $25,000,000 minus (ii) the aggregate amount of all Incremental Term Loan
Commitments established prior to such time pursuant to Section 2.23 in reliance
on this clause (a), and (b) the maximum amount of Incremental Term Loans that
could be incurred at such time such that after giving effect to the incurrence
thereof and the use of proceeds thereof the Senior Secured Leverage Ratio would
be less than 3.90:1.00 as of the most recently completed period of four
consecutive fiscal quarters for which the financial statements and certificates
required by Section 5.04(a) or (b), as the case may be, have been or were
required to have been delivered (determined for any such period by reference to
a certificate of a Financial Officer, certifying as to the foregoing and
containing reasonably detailed calculations in support thereof, in form and
substance reasonably satisfactory to the Administrative Agent).

“Incremental Term Loan Commitment” shall mean the commitment of any Lender,
established pursuant to Section 2.23, to make Incremental Term Loans to the
Borrower.

“Incremental Term Loan Maturity Date” shall mean the final maturity date of any
Incremental Term Loan, as set forth in the applicable Incremental Loan
Assumption Agreement.

“Incremental Term Loan Repayment Dates” shall mean the dates scheduled for the
repayment of principal of any Incremental Term Loan, as set forth in the
applicable Incremental Loan Assumption Agreement.

“Incremental Term Loans” shall mean the term loans made by one or more
Incremental Term Lenders to the Borrower pursuant to Section 2.01(b).
Incremental Term Loans may be made in the form of additional Term Loans with
terms and provisions identical to those of the Term Loans made by the Lenders to
the Borrower pursuant to clause (i) of Section 2.01(a) or, to the extent
permitted by Section 2.23 and provided for in the relevant Incremental Loan
Assumption Agreement, Other Term Loans.

“Indebtedness” of any Person shall mean, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property or assets purchased by such Person, (e) all obligations of such Person
issued or assumed as the deferred purchase price of property or services
(excluding trade accounts payable and accrued obligations incurred in the
ordinary course of business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the obligations secured thereby have been assumed (but
limited to the lesser of the fair market value of such property and the
outstanding principal amount of such Indebtedness), (g) all Guarantees by such
Person of Indebtedness of others, (h) all Capital Lease Obligations of such
Person, (i) all Synthetic Lease Obligations of such Person, (j) net obligations
of such Person under any Hedging Agreements, valued at the Agreement Value
thereof, (k) all obligations of such Person to purchase, redeem, retire, defease
or otherwise make any payment in respect of any Equity Interests of such Person
or any other Person or any warrants, rights or options to acquire such Equity
Interests, valued, in the case of redeemable preferred interests, at the greater
of its

 

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voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, (l) all obligations of such Person as an account party in respect of
letters of credit and (m) all obligations of such Person in respect of bankers’
acceptances. The Indebtedness of any Person shall include the Indebtedness of
any partnership in which such Person is a general partner (but only to the
extent such general partner is obligated thereunder); provided that,
notwithstanding anything to the contrary in the foregoing definition,
Indebtedness shall exclude (1) ordinary course intercompany payables among the
Borrower and its Subsidiaries and (2) solely for the purposes of calculating any
Senior Secured Leverage Ratio or any Total Leverage Ratio under this Agreement,
any Attributable Indebtedness or any other lease obligation resulting from any
Sale and Leaseback Transaction permitted pursuant to Section 6.03.

“Indemnified Taxes” shall mean Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any Obligation of the
Borrower under any Loan Document.

“Indemnitee” shall have the meaning assigned to such term in Section 9.05(b).

“Information” shall have the meaning assigned to such term in Section 9.16.

“Intellectual Property” shall have the meaning assigned to such term in the
Guarantee and Collateral Agreement.

“Interest Payment Date” shall mean (a) with respect to any ABR Loan, the last
Business Day of each March, June, September and December, and (b) with respect
to any Eurodollar Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months’ duration, each day
that would have been an Interest Payment Date had successive Interest Periods of
three months’ duration been applicable to such Borrowing.

“Interest Period” shall mean, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 1, 2, 3 or 6 months (or 12 months if agreed
to by all Lenders) thereafter, as the Borrower may elect; provided, however,
that (a) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day,
(b) any Interest Period that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last Business Day of
the calendar month at the end of such Interest Period and (c) no Interest Period
for any Loan shall extend beyond the maturity date of such Loan. Interest shall
accrue from and including the first day of an Interest Period to but excluding
the last day of such Interest Period. For purposes hereof, the date of a
Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.

 

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“Interpolated Rate” shall mean the rate per annum which results from
interpolating on a linear basis between (a) the rate per annum appearing on
Reuters Screen LIBOR01 Page (or on any successor or substitute page of such
service) for the longest period (for which such rate per annum is available)
which is less than such Interest Period and (b) the rate per annum appearing on
Reuters Screen LIBOR01 Page (or on any successor or substitute page of such
service) for the shortest period (for which such rate per annum is available)
which exceeds such Interest Period, each as determined by the Administrative
Agent at approximately 11:00 a.m. (London time) on the date that is two Business
Days prior to the commencement of such Interest Period.

“Issuing Bank” shall mean, as the context may require, (a) Credit Suisse, acting
through any of its Affiliates or branches, in its capacity as an issuer of
Letters of Credit hereunder and (b) any other Lender that may become an Issuing
Bank pursuant to Section 2.22(i) or 2.22(k), with respect to Letters of Credit
issued by such Lender. The Issuing Bank may, in its discretion, arrange for one
or more Letters of Credit to be issued by Affiliates or branches of the Issuing
Bank, in which case the term “Issuing Bank” shall include any such Affiliate or
branch with respect to Letters of Credit issued by such Affiliate or branch.

“Issuing Bank Fees” shall have the meaning assigned to such term in
Section 2.05(c).

“Junior Capital” shall mean any common or preferred Equity Interests of the
Borrower that do not (a) provide for scheduled payments of dividends (or other
payments constituting a return on capital) in cash prior to the date that is 91
days after the later of the Term Loan Maturity Date and the Incremental Term
Loan Maturity Date as in effect at the time of the issuance of such Equity
Interests, or (b) become mandatorily redeemable (including at the option of the
holder thereof) pursuant to a sinking fund obligation or otherwise prior to the
date that is 91 days after the later of the Term Loan Maturity Date and the
Incremental Term Loan Maturity Date as in effect at the time of the issuance of
such Equity Interests.

“L/C Commitment” shall mean the commitment of the Issuing Bank to issue Letters
of Credit pursuant to Section 2.22.

“L/C Disbursement” shall mean a payment or disbursement made by the Issuing Bank
pursuant to a Letter of Credit.

“L/C Exposure” shall mean at any time the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time and (b) the aggregate
amount of all L/C Disbursements that have not yet been reimbursed by or on
behalf of the Borrower at such time. The L/C Exposure of any Revolving Credit
Lender at any time shall equal its Pro Rata Percentage of the aggregate L/C
Exposure at such time.

“L/C Participation Fee” shall have the meaning assigned to such term in
Section 2.05(c).

“Landlord Personal Property Collateral Access Agreement” shall mean a Landlord
Personal Property Collateral Access Agreement substantially in the form of
Exhibit H with such amendments or modifications as may be approved by the
Collateral Agent.

 

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“Law” shall mean any federal, state, local, national or supranational or foreign
law, statute, code, ordinance, rule, regulation, order, judgment, writ,
stipulation, award, injunction, decree or arbitration award or finding.

“Lenders” shall mean (a) the Persons listed on Schedule 2.01 (other than any
such Person that has ceased to be a party hereto pursuant to an Assignment and
Acceptance), (b) any Person (other than a natural person) that has become a
party hereto pursuant to an Assignment and Acceptance and (c) any Person (other
than a natural person) that has become a party hereto pursuant to an Incremental
Loan Assumption Agreement.

“Letter of Credit” shall mean any standby letter of credit issued pursuant to
Section 2.22.

“LIBO Rate” shall mean, with respect to any Eurodollar Borrowing for any
Interest Period, the rate per annum determined by the Administrative Agent at
approximately 11:00 a.m. (London time) on the date that is two Business Days
prior to the commencement of such Interest Period by reference to ICE LIBOR as
published by Reuters (or such other commercially available source providing
quotations of ICE LIBOR as may be designated by the Administrative Agent from
time to time) for a period equal to such Interest Period; provided that, to the
extent that an interest rate is not ascertainable pursuant to the foregoing
provisions of this definition, the “LIBO Rate” shall be the Interpolated Rate.

“Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, encumbrance, charge or security interest in or on such asset and
(b) the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or title retention agreement (or any financing lease having
substantially the same economic effect as any of the foregoing) relating to such
asset; provided that in no event shall any operating lease, any license of
intellectual property or any agreement to sell be deemed to constitute a Lien.

“Loan Documents” shall mean this Agreement, the Letters of Credit, Section 5 of
the Engagement Letter, the Security Documents, each Incremental Loan Assumption
Agreement, the promissory notes, if any, executed and delivered pursuant to
Section 2.04(e), any other document executed in connection with any of the
foregoing and together with all schedules, exhibits, annexes and other
attachments thereto.

“Loan Parties” shall mean the Borrower and the Subsidiary Guarantors.

“Loans” shall mean the Revolving Loans and the Term Loans.

“Margin Stock” shall have the meaning assigned to such term in Regulation U.

“Material Adverse Effect” shall mean (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent) or condition (financial or otherwise) of the Borrower and
its Subsidiaries taken as a whole; (b) a material impairment of the rights and
remedies of any Agent or any Lender under any Loan Document, or of the ability
of any Loan Party to perform its obligations under any Loan Document to which it
is a party; or (c) a material adverse change in, or a material adverse effect
upon, the legality, validity, binding effect or enforceability against any Loan
Party of any Loan Document to which it is a party.

 

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“Material Indebtedness” shall mean Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Hedging Agreements,
of any one or more of the Borrower or any Subsidiary in an aggregate principal
amount exceeding $15,000,000. For purposes of determining Material Indebtedness,
the “principal amount” of the obligations of the Borrower or any Subsidiary in
respect of any Hedging Agreement at any time shall be the Agreement Value of
such Hedging Agreement at such time.

“Material Subsidiary” shall mean any Subsidiary of the Borrower that, together
with its Subsidiaries, (a) generates more than 5% of Consolidated EBITDA on a
pro forma basis for the four (4) fiscal quarter period most recently ended or
(b) has total assets (including Equity Interests in other Subsidiaries and
excluding investments that are eliminated in consolidation) of equal to or
greater than 5% of the total assets of the Borrower and its Subsidiaries, on a
consolidated basis as of the end of the most recent four (4) fiscal quarters;
provided, however, that if at any time there are Subsidiaries which are not
classified as “Material Subsidiaries” but which collectively (i) generate more
than 10% of Consolidated EBITDA on a pro forma basis or (ii) have total assets
(including Equity Interests in other Subsidiaries and excluding investments that
are eliminated in consolidation) of equal to or greater than 10% of the total
assets of the Borrower and its Subsidiaries on a consolidated basis, then the
Borrower shall promptly designate one or more of such Subsidiaries as Material
Subsidiaries and cause any such Subsidiaries to comply with the provisions of
Section 5.12 such that, after such Subsidiaries become Subsidiary Guarantors
hereunder, the Subsidiaries that are not Subsidiary Guarantors shall
(A) generate less than 10% of Consolidated EBITDA and (B) have total assets of
less than 10% of the total assets of the Borrower and its Subsidiaries on a
consolidated basis.

“Maximum Rate” shall have the meaning assigned to such term in Section 9.09.

“Medicaid” shall mean that government-sponsored entitlement program under Title
XIX, P.L. 89-97 of the Social Security Act, which provides federal grants to
states for medical assistance based on specific eligibility criteria, as set
forth on Sections 1396, et seq. of Title 42 of the United States Code.

“Medicare” shall mean that government-sponsored insurance program under Title
XVIII, P.L. 89-97 of the Social Security Act, which provides for a health
insurance system for eligible elderly and disabled individuals, as set forth on
Sections 1395, et seq. of Title 42 of the United States Code.

“MHPAEA” shall have the meaning assigned to such term in Section 5.16(f).

“Minimum Collateral Amount” shall mean, at any time, with respect to Cash
Collateral consisting of cash or deposit account balances, an amount equal to
103% of the Fronting Exposure of the Issuing Bank with respect to Letters of
Credit issued and outstanding at such time.

“Moody’s” shall mean Moody’s Investors Service, Inc., or any successor thereto.

“Mortgaged Properties” shall mean, initially, the owned real properties of the
Loan Parties specified on Schedule 1.01(b), and shall include each other parcel
of real property and improvements thereto with respect to which a Mortgage is
granted pursuant to Section 5.12 or Section 5.17.

 

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“Mortgages” shall mean the mortgages, deeds of trust, assignments of leases and
rents, modifications and other security documents delivered pursuant to
clause (i) of Section 4.02(g), Section 5.12 or Section 5.17, each substantially
in the form of Exhibit E (with such changes as are reasonably consented to by
the Collateral Agent to account for local law matters) or in such other form as
is reasonably satisfactory to the Collateral Agent and the Borrower.

“Multiemployer Plan” shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any of its ERISA Affiliates
is contributing or has an obligation to contribute.

“Net Cash Proceeds” shall mean (a) with respect to any Asset Sale or any
Recovery Event, the cash proceeds (including cash proceeds subsequently received
(as and when received) in respect of noncash consideration initially received),
net of (i) selling expenses (including reasonable broker’s fees or commissions,
reasonable legal fees, transfer and similar taxes, reasonable real estate due
diligence fees or expenses, and the Borrower’s good faith estimate of income
taxes paid or payable in connection with such sale), (ii) amounts provided as a
reserve, in accordance with GAAP, against any retained liabilities associated
with such Asset Sale, including under any indemnification obligations or in
respect of any purchase price adjustments (provided that, to the extent and at
the time any such amounts are released from such reserve, such amounts shall
constitute Net Cash Proceeds) and (iii) the principal amount, premium or
penalty, if any, interest and other amounts on any Indebtedness for borrowed
money which is secured by the asset sold in such Asset Sale and which is
required to be repaid with such proceeds (other than any such Indebtedness
assumed by the purchaser of such asset other than repayments of revolving debt,
except to the extent that the commitments with respect thereto are
correspondingly decreased); provided, however, that, if (x) the Borrower shall
deliver a certificate of a Financial Officer to the Administrative Agent at the
time of receipt thereof setting forth the Borrower’s intent to reinvest such
proceeds in productive assets of a kind then used or usable in the business of
the Borrower and its Subsidiaries within 365 days of receipt of such proceeds
and (y) no Default or Event of Default shall have occurred and shall be
continuing at the time of delivery of such certificate or at the proposed time
of the application of such proceeds, such proceeds shall not constitute Net Cash
Proceeds except to the extent not so used at the end of such 365-day period, at
which time such proceeds shall be deemed to be Net Cash Proceeds; and (b) with
respect to any issuance or incurrence of Indebtedness or any Equity Issuance,
the cash proceeds thereof, net of all taxes and customary fees, underwriting
discounts, commissions, costs and other expenses incurred in connection
therewith.

“Non-Defaulting Lender” shall mean, at any time, each Lender that is not a
Defaulting Lender at such time.

“Nongovernmental Payors” shall mean third-party payors (other than government
reimbursement programs) that reimburse providers for healthcare goods and
services rendered in the Healthcare Service Business, such as private insurers
and managed care organizations.

 

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“Obligations” shall mean all obligations defined as “Obligations” in the
Guarantee and Collateral Agreement and the other Security Documents.

“Other Taxes” shall mean any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document, except any
Taxes imposed with respect to an assignment (other than an assignment made
pursuant to Section 2.21(a)).

“Other Term Loans” shall have the meaning assigned to such term in
Section 2.23(a).

“Participant Register” shall have the meaning assigned to such term in Section
9.04(f).

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor statute.

“Perfection Certificate” shall mean the Perfection Certificate delivered
pursuant to Section 4.02(f).

“Permitted Acquisition” shall have the meaning assigned to such term in
Section 6.04(f).

“Permitted Investments” shall mean:

(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of issuance thereof;

(b) investments in commercial paper maturing within 270 days from the date of
issuance thereof and having, at such date of acquisition, the highest credit
rating obtainable from S&P or from Moody’s, or in the case of the United States
Government, a rating of AA or higher;

(c) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within one year from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, the Administrative Agent or any domestic office of any commercial
bank organized under the laws of the United States of America or any State
thereof that has a combined capital and surplus and undivided profits of not
less than $1,000,000,000 and that issues (or the parent of which issues)
commercial paper rated at least “Prime-1” (or the then equivalent grade) by
Moody’s or “A-1” (or the then equivalent grade) by S&P;

(d) fully collateralized repurchase agreements with a term of not more than 30
days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria of clause (c) above; and

(e) investments in “money market funds” within the meaning of Rule 2a-7 of the
Investment Company Act of 1940, as amended, substantially all of whose assets
are invested in investments of the type described in clauses (a) through
(d) above.

 

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“Permitted Liens” shall have the meaning assigned to such term in Section 6.02.

“Person” shall mean any natural person, corporation, business trust, joint
venture, association, company, limited liability company, partnership,
Governmental Authority or other entity.

“Plan” shall mean any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 or
Section 430 of the Code or Section 302 or Section 303 of ERISA, and in respect
of which the Borrower or any ERISA Affiliate is (or, if such plan were
terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as
defined in Section 3(5) of ERISA.

“Platform” shall have the meaning assigned to such term in Section 9.01.

“Prime Rate” shall mean the rate of interest per annum determined from time to
time by Credit Suisse as its prime rate in effect at its principal office in
New York City and notified to the Borrower. The prime rate is a rate set by
Credit Suisse based upon various factors including Credit Suisse’s costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such rate.

“Pro Rata Percentage” of any Revolving Credit Lender at any time shall mean the
percentage of the Total Revolving Credit Commitment represented by such Lender’s
Revolving Credit Commitment. In the event the Revolving Credit Commitments shall
have expired or been terminated, the Pro Rata Percentages shall be determined on
the basis of the Revolving Credit Commitments most recently in effect, giving
effect to any subsequent assignments.

“Public Lender” shall have the meaning assigned to such term in Section 9.01.

“Recovery Event” shall mean any settlement of or payment in respect of any
property or casualty insurance claim or any taking under power of eminent domain
or by condemnation or similar proceeding of or relating to any property or asset
of the Borrower or any Subsidiary.

“Register” shall have the meaning assigned to such term in Section 9.04(d).

“Regulation T” shall mean Regulation T of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

“Regulation U” shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

“Regulation X” shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

“Related Fund” shall mean, with respect to any Lender that is a fund or
commingled investment vehicle that invests in bank loans, any other fund that
invests in bank loans and is managed or advised by the same investment advisor
as such Lender or by an Affiliate of such investment advisor.

 

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

“Release” shall mean any release, spill, emission, pumping, leaking, dumping,
emptying, escaping, injection, pouring, deposit, disposal, discharge, dispersal,
leaching or migration into or through the environment (including the abandonment
or discarding of barrels, containers, and other closed receptacles containing
any Hazardous Materials or pollutant or contaminant).

“Removal Effective Date” shall have the meaning assigned to such term in Article
VIII.

“Repayment Date” shall have the meaning given such term in Section 2.11(a)(i).

“Required Lenders” shall mean, at any time, Lenders having Loans, L/C Exposure
and unused Revolving Credit Commitments and Term Loan Commitments representing
more than 50% of the sum of all Loans outstanding, L/C Exposure and unused
Revolving Credit Commitments and Term Loan Commitments at such time; provided
that the Loans, L/C Exposure and unused Revolving Credit Commitments and Term
Loan Commitments of any Defaulting Lender shall be disregarded in the
determination of the Required Lenders at any time.

“Requirement of Law” shall mean, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its assets or property or to which such
Person or any of its assets or property is subject.

“Responsible Officer” of any Person shall mean any executive officer or
Financial Officer of such Person and any other officer or similar official
thereof responsible for the administration of the obligations of such Person in
respect of this Agreement.

“Restricted Indebtedness” shall mean Indebtedness of the Borrower or any
Subsidiary, the payment, prepayment, repurchase or defeasance of which is
restricted under Section 6.09(b).

“Restricted Payment” shall mean any dividend or other distribution (whether in
cash, securities or other property) with respect to any Equity Interests in 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 Equity Interests in the Borrower or any Subsidiary.

“Revolving Credit Borrowing” shall mean a Borrowing comprised of Revolving
Loans.

“Revolving Credit Commitment” shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans hereunder (and to acquire
participations in Letters of Credit as provided for herein) as set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
assumed its Revolving Credit Commitment, as applicable, as the same may be
(a) reduced from time to time pursuant to Section 2.09 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04. The original aggregate principal amount of the
Revolving Credit Commitments on the Closing Date is $40,000,000. Unless the
context shall otherwise require, the term “Revolving Loans” shall include any
Incremental Revolving Credit Loans.

 

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“Revolving Credit Exposure” shall mean, with respect to any Lender at any time,
the aggregate principal amount at such time of all outstanding Revolving Loans
of such Lender, plus the aggregate amount at such time of such Lender’s L/C
Exposure.

“Revolving Credit Lender” shall mean a Lender with a Revolving Credit Commitment
or an outstanding Revolving Loan.

“Revolving Credit Maturity Date” shall mean June 30, 2022.

“Revolving Loans” shall mean the revolving loans made by the Lenders to the
Borrower pursuant to clause (ii) of Section 2.01(a). Unless the context shall
otherwise require, the term “Revolving Loans” shall include any Incremental
Revolving Credit Loans.

“Sale and Leaseback Transaction” shall have the meaning assigned to such term in
Section 6.03.

“S&P” shall mean S&P Global Ratings, or any successor thereto.

“Sanctions” shall have the meaning assigned to such term in Section 3.24.

“SEC” shall mean the Securities and Exchange Commission.

“Secured Parties” shall have the meaning assigned to such term in the Guarantee
and Collateral Agreement.

“Security Documents” shall mean the Mortgages, the Guarantee and Collateral
Agreement and each of the other security agreements, mortgages and other
instruments and documents executed and delivered pursuant to any of the
foregoing or pursuant to Section 5.12 or Section 5.17.

“Senior Secured Debt” shall mean, at any time, Total Debt of the Borrower and
the Subsidiaries that is secured by a Lien on the property or assets of the
Borrower or the Subsidiaries.

“Senior Secured Leverage Ratio” shall mean, on any date of determination, the
ratio of Senior Secured Debt on such date to Consolidated EBITDA for the period
of four consecutive fiscal quarters most recently then ended for which the
financial statements and certificates required by Section 5.04(a) or (b), as the
case may be, have been or were required to have been delivered.

“Solvent” shall mean, with respect to any Person (a) the fair value and present
fair saleable value of the assets of such Person, at a fair valuation, will
exceed its total liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities), (b) such Person, on a consolidated basis, has the
ability to pay its debts and liabilities, (including contingent, subordinated,
unmatured and unliquidated liabilities) as they become absolute and matured or
due in the normal or usual course of business and (c) such Person, on a
consolidated basis, does not have an unreasonably small amount of capital with
which to conduct its business.

 

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“SPV” shall have the meaning assigned to such term in Section 9.04(i).

“Statutory Reserves” shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority, domestic or foreign,
to which the Administrative Agent or any Lender (including any branch, Affiliate
or other fronting office making or holding a Loan) is subject for Eurocurrency
Liabilities (as defined in Regulation D of the Board). Eurodollar Loans shall be
deemed to constitute Eurocurrency Liabilities (as defined in Regulation D of the
Board) and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to the Administrative Agent or any Lender under such Regulation D.
Statutory Reserves shall be adjusted automatically on and as of the effective
date of any change in any reserve percentage.

“Subordinated Debt” shall mean all unsecured Indebtedness of the Borrower and
its Subsidiaries that (a) is expressly subordinated to the prior payment in full
of the Obligations, (b) no part of the principal or interest of which is
required to be paid (whether by way of mandatory sinking fund, mandatory
redemption or mandatory prepayment or otherwise) earlier than six months after
the later of the Term Loan Maturity Date and the Incremental Term Loan Maturity
Date as in effect at the time of the issuance of such unsecured Indebtedness and
(c) that is evidenced by an indenture or other agreement reasonably satisfactory
to the Administrative Agent in respect of subordination and related matters.

“subsidiary” shall mean, with respect to any Person (herein referred to as the
“parent”), any corporation, partnership, limited liability company, association
or other business entity (a) of which securities or other ownership interests
representing more than 50% of the aggregate equity or more than 50% of the
aggregate Voting Equity Interests or more than 50% of the aggregate general
partnership interests are, at the time any determination is being made, owned,
Controlled or held, or (b) that is, at the time any determination is made,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.

“Subsidiary” shall mean any direct or indirect subsidiary of the Borrower
(including any Controlled Physician Affiliate).

“Subsidiary Guarantor” shall mean each Subsidiary listed on Schedule 1.01(a) and
each other Subsidiary that is or becomes a party to the Guarantee and Collateral
Agreement.

“Synthetic Lease” shall mean, as to any Person, any lease (including leases that
may be terminated by the lessee at any time) of any property (whether real,
personal or mixed) (a) that is accounted for as an operating lease under GAAP
and (b) in respect of which the lessee retains or obtains ownership of the
property so leased for U.S. federal income tax purposes, other than any such
lease under which such Person is the lessor.

 

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“Synthetic Lease Obligations” shall mean, as to any Person, an amount equal to
the capitalized amount of the remaining lease payments under any Synthetic Lease
that would appear on a balance sheet of such person in accordance with GAAP if
such obligations were accounted for as Capital Lease Obligations.

“Synthetic Purchase Agreement” shall mean any swap, derivative or other
agreement or combination of agreements pursuant to which the Borrower or any
Subsidiary is or may become obligated to make (a) any payment in connection with
a purchase by any third party from a Person other than the Borrower or any
Subsidiary of any Equity Interest or Restricted Indebtedness or (b) any payment
(other than on account of a permitted purchase by it of any Equity Interest or
Restricted Indebtedness) the amount of which is determined by reference to the
price or value at any time of any Equity Interest or Restricted Indebtedness;
provided that no phantom stock or other equity-based plan or arrangement
providing for payments only to current or former directors, officers or
employees of the Borrower or the Subsidiaries (or to their heirs, transferees or
estates) shall be deemed to be a Synthetic Purchase Agreement.

“Taxes” shall mean any and all present or future taxes, levies, imposts, duties,
deductions, charges, assessments or withholdings of any nature (including
interest, penalties, and additions thereto) that are imposed by any Governmental
Authority.

“Term Borrowing” shall mean a Borrowing comprised of Term Loans.

“Term Lender” shall mean a Lender with a Term Loan Commitment or an outstanding
Term Loan.

“Term Loan Commitment” shall mean, with respect to each Lender, the commitment
of such Lender to make Term Loans hereunder as set forth on Schedule 2.01, in
the Incremental Loan Assumption Agreement or in the Assignment and Acceptance
pursuant to which such Lender assumed its Term Loan Commitment, as applicable,
as the same may be (a) reduced from time to time pursuant to Section 2.09 and
(b) reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The original aggregate principal amount of the
Term Loan Commitment on the Closing Date is $210,000,000.

“Term Loan Maturity Date” shall mean June 30, 2023.

“Term Loan Repayment Dates” shall mean the Repayment Dates and the Incremental
Term Loan Repayment Dates.

“Term Loans” shall mean the term loans made by the Lenders to the Borrower
pursuant to clause (i) of Section 2.01(a). Unless the context shall otherwise
require, the term “Term Loans” shall include any Incremental Term Loans.

“Total Debt” shall mean, at any time, the total Indebtedness of the Borrower and
the Subsidiaries at such time (excluding Indebtedness of the type described in
clauses (j) and (l) of the definition of such term, except, in the case of
clause (l), to the extent of any unreimbursed drawings thereunder).

 

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“Total Leverage Ratio” shall mean, on any date of determination, the ratio of
Total Debt on such date to Consolidated EBITDA for the period of four
consecutive fiscal quarters most recently then ended for which the financial
statements and certificates required by Section 5.04(a) or (b), as the case may
be, have been or were required to have been delivered.

“Total Revolving Credit Commitment” shall mean, at any time, the aggregate
amount of the Revolving Credit Commitments, as in effect at such time. The
initial Total Revolving Credit Commitment is $40,000,000.

“Transaction Costs” shall mean fees and expenses payable in connection with
clauses (a) through (c) of the definition of the term “Transactions”.

“Transactions” shall mean, collectively, (a) the execution, delivery and
performance by the Loan Parties of the Loan Documents to which they are a party
and the making of the Borrowings hereunder, (b) the repayment of all amounts due
or outstanding under or in respect of, and the termination of, the Existing
Indebtedness and (c) the payment of the Transaction Costs.

“Treasury Rate” shall mean, as of the date of any repayment or repricing of the
Term Loans of the type described in Section 2.12(f), the yield to maturity as of
such date of the United States Treasury securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15 (519) that has become publicly available at least two Business Days prior
to such date (or, if such Statistical Release is no longer published, any
publicly available source of similar market data)) most nearly equal to the
period from such date to the first anniversary of the Closing Date; provided,
however, that if the period from such date to the first anniversary of the
Closing Date is less than one year, the weekly average yield on actually traded
United States Treasury securities adjusted to a constant maturity of one year
will be used.

“Type,” when used in respect of any Loan or Borrowing, shall refer to the Rate
by reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined. For purposes hereof, the term “Rate” shall mean the
Adjusted LIBO Rate and the Alternate Base Rate.

“Uniform Customs” shall have the meaning assigned to such term in Section 9.07.

“USA PATRIOT Act” shall mean The Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)), as amended
from time to time.

“Voting Equity Interests” of any Person shall mean any class or classes of
Equity Interests pursuant to which the holders thereof have the general voting
power under ordinary circumstances to elect at least a majority of the board of
directors of such Person.

“Weighted Average Life to Maturity” shall mean, when applied to any Indebtedness
at any date, the number of years obtained by dividing: (a) the sum of the
products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by (b) the then outstanding principal
amount of such Indebtedness.

 

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“Wholly-Owned Subsidiary” of any Person shall mean a subsidiary of such Person
of which securities (except for directors’ qualifying shares) or other ownership
interests representing 100% of the Equity Interests are, at the time any
determination is being made, owned, Controlled or held by such Person or one or
more wholly-owned subsidiaries of such Person or by such Person and one or more
wholly-owned Subsidiaries of such Person.

“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.

“Write-Down and Conversion Powers” shall mean, with respect to any EEA
Resolution Authority, the write-down and conversion powers of such EEA
Resolution Authority from time to time under the Bail-In Legislation for the
applicable EEA Member Country, which write-down and conversion powers are
described in the EU Bail-In Legislation Schedule.

“Yield Differential” shall have the meaning assigned to such term in
Section 2.23(b).

SECTION 1.02 Terms Generally.

The definitions in Section 1.01 shall apply equally to both the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
“include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.” The word “will” shall be construed to have the same
meaning and effect as the word “shall”; and the words “asset” and “property”
shall be construed as having the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights. All references herein to Articles, Sections,
Exhibits and Schedules shall be deemed references to Articles and Sections of,
and Exhibits and Schedules to, this Agreement unless the context shall otherwise
require. Except as otherwise expressly provided herein, (a) any reference in
this Agreement to any Loan Document shall mean such document as amended,
restated, supplemented or otherwise modified from time to time, in each case, in
accordance with the express terms of this Agreement, and (b) all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in
effect on the date hereof and consistent with financial statements delivered
pursuant to Section 3.05(a). If at any time any change in GAAP would affect the
computation of any financial ratio or any other covenant or requirements set
forth in any Loan Document, and either the Borrower or the Required Lenders
shall so request, the Administrative Agent, the Lenders and the Borrower shall
negotiate in good faith to amend such ratio, covenant 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, (i) such
ratio, covenant or requirement shall continue to be computed in accordance with
GAAP prior to such change therein and (ii) the Borrower shall provide the
Administrative Agent and the Lenders financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting forth
a reconciliation between calculations of such ratio or requirements made before
and after giving effect to such change in GAAP.

 

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SECTION 1.03 Pro Forma Calculations.

All pro forma calculations permitted or required to be made by the Borrower or
any Subsidiary pursuant to this Agreement shall include only those adjustments
that (a) are permitted or required by Regulation S-X under the Securities Act of
1933, as amended, (b) (i) have been certified by a Financial Officer of the
Borrower as having been prepared in good faith based upon assumptions that were
believed to be reasonable at the time such assumptions were made and (ii) are
based on reasonably detailed written assumptions reasonably acceptable to the
Administrative Agent, or (c) are required by the definition of “Consolidated
EBITDA.”

SECTION 1.04 Classification of Loans and Borrowings.

For purposes of this Agreement, Loans may be classified and referred to by Class
(e.g., a “Revolving Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class
and Type (e.g., a “Eurodollar Revolving Loan”). Borrowings also may be
classified and referred to by Class (e.g., a “Revolving Credit Borrowing”) or by
Type (e.g., a “Eurodollar Borrowing”) or by Class and Type (e.g., a “Eurodollar
Revolving Credit Borrowing”).

SECTION 1.05 Designation as Senior Debt.

The Loans and other Obligations are hereby designated as “Senior Debt” and
“Designated Senior Debt,” as applicable, for all purposes under the indenture or
other agreement governing any Subordinated Debt.

ARTICLE II

The Credits

SECTION 2.01 Commitments.

(a) Subject to the terms and conditions and relying upon the representations and
warranties herein set forth, each Lender agrees, severally and not jointly,
(i) to make a Term Loan to the Borrower on the Closing Date in an
aggregate principal amount not to exceed its Term Loan Commitment, and (ii) to
make Revolving Loans to the Borrower (x) on the Closing Date, in an aggregate
principal amount not to exceed $14,500,000 and (y) after the Closing Date, at
any time and from time to time until the earlier of the Revolving Credit
Maturity Date and the termination of the Revolving Credit Commitment of such
Lender in accordance with the terms hereof, in an aggregate principal amount at
any time outstanding that will not result in such Lender’s Revolving Credit
Exposure exceeding such Lender’s Revolving Credit Commitment. Within the limits
set forth in clause (ii) of the preceding sentence and subject to the terms,
conditions and limitations set forth herein, the Borrower may borrow, pay or
prepay and reborrow Revolving Loans. Amounts paid or prepaid in respect of Term
Loans may not be reborrowed.

 

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(b) Each Lender having an Incremental Term Loan Commitment, severally and not
jointly, hereby agrees, subject to the terms and conditions and relying upon the
representations and warranties set forth herein and in the applicable
Incremental Loan Assumption Agreement, to make Incremental Term Loans to the
Borrower, in an aggregate principal amount not to exceed its Incremental Term
Loan Commitment. Amounts paid or prepaid in respect of Incremental Term Loans
may not be reborrowed.

SECTION 2.02 Loans.

(a) Each Loan shall be made as part of a Borrowing consisting of Loans made by
the Lenders ratably in accordance with their applicable Commitments; provided,
however, that the failure of any Lender to make any Loan shall not in itself
relieve any other Lender of its obligation to lend hereunder (it being
understood, however, that no Lender shall be responsible for the failure of any
other Lender to make any Loan required to be made by such other Lender). Except
for Loans deemed made pursuant to Section 2.02(f), the Loans comprising any
Borrowing shall be in an aggregate principal amount that is (i) an integral
multiple of $500,000 and not less than $1,000,000 (except, with respect to any
Incremental Term Borrowing, to the extent otherwise provided in the related
Incremental Loan Assumption Agreement) or (ii) equal to the remaining available
balance of the applicable Commitments.

(b) Subject to Sections 2.02(f), 2.08 and 2.15, each Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
pursuant to Section 2.03. Each Lender may at its option make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; provided that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms of
this Agreement. Borrowings of more than one Type may be outstanding at the same
time; provided, however, that the Borrower shall not be entitled to request any
Borrowing that, if made, would result in more than ten Eurodollar Borrowings
outstanding hereunder at any time. For purposes of the foregoing, Borrowings
having different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Borrowings.

(c) Except with respect to Loans made pursuant to Section 2.02(f), each Lender
shall make each Loan to be made by it hereunder on the proposed date thereof by
wire transfer of immediately available funds to such account in New York City as
the Administrative Agent may designate not later than 2:00 p.m., New York City
time, and the Administrative Agent shall promptly credit the amounts so received
to an account designated by the Borrower in the applicable Borrowing Request or,
if a Borrowing shall not occur on such date because any condition precedent
herein specified shall not have been met, return the amounts so received to the
respective Lenders.

(d) Unless the Administrative Agent shall have received notice from a Lender
prior to the date of any Borrowing that such Lender will not make available to
the Administrative Agent such Lender’s portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
paragraph (c) above and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If the Administrative Agent shall have so made funds available then, to the
extent that

 

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such Lender shall not have made such portion available to the Administrative
Agent, such Lender and the Borrower severally agree to repay to the
Administrative Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower to but excluding the date such amount is repaid to the
Administrative Agent at (i) in the case of the Borrower, a rate per annum equal
to the interest rate applicable at the time to the Loans comprising such
Borrowing and (ii) in the case of such Lender, a rate determined by the
Administrative Agent to represent its cost of overnight or short-term funds
(which determination shall be conclusive absent manifest error). If such Lender
shall repay to the Administrative Agent such corresponding amount, such amount
shall constitute such Lender’s Loan as part of such Borrowing for purposes of
this Agreement.

(e) Notwithstanding any other provision of this Agreement, the Borrower shall
not be entitled to request any Revolving Credit Borrowing if the Interest Period
requested with respect thereto would end after the Revolving Credit Maturity
Date.

(f) If the Issuing Bank shall not have received from the Borrower the payment
required to be made by Section 2.22(e) within the time specified in such
Section, the Issuing Bank will promptly notify the Administrative Agent of the
L/C Disbursement and the Administrative Agent will promptly notify each
Revolving Credit Lender of such L/C Disbursement and its Pro Rata Percentage
thereof. Each Revolving Credit Lender shall pay by wire transfer of immediately
available funds to the Administrative Agent not later than 2:00 p.m., New York
City time, on such date (or, if such Revolving Credit Lender shall have received
such notice later than 12:00 (noon), New York City time, on any day, not later
than 10:00 a.m., New York City time, on the immediately following Business Day),
an amount equal to such Lender’s Pro Rata Percentage of such L/C Disbursement
(it being understood that (i) if the conditions precedent to borrowing set forth
in Sections 4.01(b) and 4.01(c) have been satisfied, such amount shall be deemed
to constitute an ABR Revolving Loan of such Lender and, to the extent of such
payment, the obligations of the Borrower in respect of such L/C Disbursement
shall be discharged and replaced with the resulting ABR Revolving Credit
Borrowing, and (ii) if such conditions precedent to borrowing have not been
satisfied, then any such amount paid by any Revolving Credit Lender shall not
constitute a Loan and shall not relieve the Borrower from its obligation to
reimburse such L/C Disbursement), and the Administrative Agent will promptly pay
to the Issuing Bank amounts so received by it from the Revolving Credit Lenders.
The Administrative Agent will promptly pay to the Issuing Bank any amounts
received by it from the Borrower pursuant to Section 2.22(e) prior to the time
that any Revolving Credit Lender makes any payment pursuant to this paragraph
(f); any such amounts received by the Administrative Agent thereafter will be
promptly remitted by the Administrative Agent to the Revolving Credit Lenders
that shall have made such payments and to the Issuing Bank, as their interests
may appear. If any Revolving Credit Lender shall not have made its Pro Rata
Percentage of such L/C Disbursement available to the Administrative Agent as
provided above, such Lender and the Borrower severally agree to pay interest on
such amount, for each day from and including the date such amount is required to
be paid in accordance with this paragraph to but excluding the date such amount
is paid, to the Administrative Agent for the account of the Issuing Bank at
(i) in the case of the Borrower, a rate per annum equal to the interest rate
applicable to Revolving Loans pursuant to Section 2.06(a), and (ii) in the case
of such Lender, for the first such day, the Federal Funds Effective Rate, and
for each day thereafter, the Alternate Base Rate.

 

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SECTION 2.03 Borrowing Procedure.

In order to request a Borrowing (other than a deemed Borrowing pursuant to
Section 2.02(f) as to which this Section 2.03 shall not apply), the Borrower
shall notify the Administrative Agent of such request by telephone (a) in the
case of a Eurodollar Borrowing, not later than 1:00 p.m., New York City time,
three Business Days before a proposed Borrowing (or, solely in the case of a
Eurodollar Borrowing on the Closing Date, one Business Day before such proposed
Borrowing), and (b) in the case of an ABR Borrowing, not later than 1:00 p.m.,
New York City time, on the day of a proposed Borrowing. Each such telephonic
Borrowing Request shall be irrevocable, and shall be confirmed promptly by hand
delivery, fax or other electronic transmission to the Administrative Agent of a
written Borrowing Request and shall specify the following information:
(i) whether the Borrowing then being requested is to be a Term Borrowing, an
Incremental Term Borrowing, a Revolving Credit Borrowing or an Incremental
Revolving Credit Borrowing, and whether such Borrowing is to be a Eurodollar
Borrowing or an ABR Borrowing; (ii) the date of such Borrowing (which shall be a
Business Day); (iii) the number and location of the account to which funds are
to be disbursed; (iv) the amount of such Borrowing; and (v) if such Borrowing is
to be a Eurodollar Borrowing, the Interest Period with respect thereto;
provided, however, that, notwithstanding any contrary specification in any
Borrowing Request, each requested Borrowing shall comply with the requirements
set forth in Section 2.02. If no election as to the Type of Borrowing is
specified in any such notice, then the requested Borrowing shall be an ABR
Borrowing. If no Interest Period with respect to any Eurodollar Borrowing is
specified in any such notice, then the Borrower shall be deemed to have selected
an Interest Period of one month’s duration. The Administrative Agent shall
promptly advise the applicable Lenders of any notice given pursuant to this
Section 2.03 (and the contents thereof), and of each Lender’s portion of the
requested Borrowing.

SECTION 2.04 Evidence of Debt; Repayment of Loans.

(a) The Borrower hereby unconditionally promises to pay to the Administrative
Agent for the account of each Lender (i) the principal amount of each Term Loan
of such Lender as provided in Section 2.11 and (ii) the then unpaid principal
amount of each Revolving Loan of such Lender on the Revolving Credit Maturity
Date.

(b) 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 under
this Agreement.

(c) The Administrative Agent shall maintain accounts in which it will record
(i) the amount of each Loan made hereunder, the Class and Type thereof and, if
applicable, the Interest Period applicable 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 and (iii) the amount of any sum received by
the Administrative Agent hereunder from the Borrower or any Subsidiary Guarantor
and each Lender’s share thereof.

 

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(d) The entries made in the accounts maintained pursuant to paragraphs (b)
and (c) above shall be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the failure of any Lender
or the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligations of the Borrower to repay the Loans in
accordance with their terms. In the event of any conflict between the accounts
of each Lender maintained pursuant to paragraph (b) and the accounts of the
Administrative Agent maintained pursuant to paragraph (c), the accounts
maintained by the Administrative Agent shall control absent manifest error.

(e) Any Lender may request that Loans made by it hereunder be evidenced by a
promissory note. In such event, the Borrower shall execute and deliver to such
Lender a promissory note payable to such Lender and its registered assigns and
in a form and substance reasonably acceptable to the Administrative Agent and
the Borrower. Notwithstanding any other provision of this Agreement, in the
event any Lender shall request and receive such a promissory note, the interests
represented by such note shall at all times (including after any assignment of
all or part of such interests pursuant to Section 9.04) be represented by one or
more promissory notes payable to the payee named therein or its registered
assigns.

SECTION 2.05 Fees.

(a) The Borrower agrees to pay to each Lender, through the Administrative Agent,
on the last Business Day of March, June, September and December in each year
(commencing on September 30, 2017) and on each date on which any Commitment of
such Lender shall expire or be terminated as provided herein, a commitment fee
(a “Commitment Fee”) equal to 0.50% per annum on the daily unused amount of the
Revolving Credit Commitment of such Lender during the preceding quarter (or
other period commencing with the date hereof or ending with the Revolving Credit
Maturity Date or the date on which the Revolving Credit Commitments of such
Lender shall expire or be terminated). All Commitment Fees shall be computed on
the basis of the actual number of days elapsed in a year of 360 days.

(b) The Borrower agrees to pay to the Administrative Agent, for its own account,
the administrative fees set forth in the Engagement Letter at the times and in
the amounts specified therein (the “Administrative Agent Fees”).

(c) The Borrower agrees to pay (i) to each Revolving Credit Lender, through the
Administrative Agent, on the last Business Day of March, June, September and
December of each year and on the date on which the Revolving Credit Commitment
of such Lender shall be terminated as provided herein, a fee (an “L/C
Participation Fee”) calculated on such Lender’s Pro Rata Percentage of the daily
aggregate L/C Exposure (excluding the portion thereof attributable to
unreimbursed L/C Disbursements) during the preceding quarter (or shorter period
commencing with the date hereof or ending with the Revolving Credit Maturity
Date or the date on which all Letters of Credit have been canceled or have
expired and the Revolving Credit Commitments of all Lenders shall have been
terminated) at a rate per annum equal to the Applicable Margin from time to time
used to determine the interest rate on Revolving Credit Borrowings comprised of
Eurodollar Loans pursuant to Section 2.06, and (ii) to the Issuing Bank with
respect to each Letter of Credit, a fronting fee equal to 0.125% of the
aggregate face amount of outstanding Letters of Credit (due and payable
quarterly in arrears on the last Business Day of each March, June, September and
December, commencing with the first such date to occur after the issuance of any
Letter of Credit and on the Revolving Credit Maturity Date) and customary
issuance and drawing fees specified from time to time by the Issuing Bank (the
“Issuing Bank Fees”). All L/C Participation Fees and Issuing Bank Fees shall be
computed on the basis of the actual number of days elapsed in a year of 360
days.

 

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(d) The Borrower agrees to pay to each Lender that is party to this Agreement on
the Closing Date, for its own account, as fee compensation for the funding of
such Lender’s Term Loans and for its Revolving Credit Commitment, a closing fee
(a “Closing Fee”) in an amount equal to (i) 2.50% of the stated principal amount
of such Lender’s Term Loans and (ii) 0.25% of the amount of its Revolving Credit
Commitment (which shall include the face amount of any issued and undrawn
Letters of Credit). Such Closing Fee will be structured as original issue
discount, with respect only to clause (ii) of the preceding sentence, and will,
in each case, be in all respects fully earned on the Closing Date and due and
payable at the time specified in the Engagement Letter and non-refundable and
non-creditable thereafter.

(e) All Fees shall be paid on the dates due, in immediately available funds, to
the Administrative Agent for distribution, if and as appropriate, among the
Lenders, except that the Issuing Bank Fees shall be paid directly to the Issuing
Bank. Once paid, none of the Fees shall be refundable under any circumstances
(except as expressly set forth in the Engagement Letter) absent manifest error
in the calculation of such Fees.

SECTION 2.06 Interest on Loans.

(a) Subject to the provisions of Section 2.07, the Loans comprising each
ABR Borrowing shall bear interest (computed on the basis of the actual number of
days elapsed over a year of 365 or 366 days, as the case may be) at a rate per
annum equal to the Alternate Base Rate plus the Applicable Margin.

(b) Subject to the provisions of Section 2.07, the Loans comprising each
Eurodollar Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Margin.

(c) Interest on each Loan shall be payable on the Interest Payment Dates
applicable to such Loan except as otherwise provided in this Agreement. The
applicable Alternate Base Rate or Adjusted LIBO Rate for each Interest Period or
day within an Interest Period, as the case may be, shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.

SECTION 2.07 Default Interest.

If (i) the Borrower shall default in the payment of any principal of or interest
on any Loan or any other amount due hereunder or under any other Loan Document,
by acceleration or otherwise, (ii) if any Event of Default under
Section 7.01(b), 7.01(c), 7.01(g) or 7.01(h) has occurred and is continuing, or
(iii) if any Event of Default under Section 7.01(a), 7.01(d), 7.01(e), 7.01(f),
7.01(i), 7.01(j), 7.01(k), 7.01(l), 7.01(m), 7.01(n), 7.01(o) or 7.01(p) has
occurred and is continuing and the Required Lenders so vote, then, in the case
of clause (i) above, until such defaulted amount shall have been paid in full
or, in the case of clause (ii) above, from the date such Event of Default and
for so long as such Event of Default is

 

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continuing or, in the case of clause (iii) above, from the date such vote has
been exercised by the Required Lenders and for so long as such Event of Default
is continuing, to the extent permitted by law, all amounts outstanding under
this Agreement and the other Loan Documents shall bear interest (after as well
as before judgment), payable on demand, (a) in the case of principal, at the
rate otherwise applicable to such Loan pursuant to Section 2.06 plus 2.00% per
annum and (b) in all other cases, at a rate per annum (computed on the basis of
the actual number of days elapsed over a year of 365 or 366 days, as the case
may be, when determined by reference to the Prime Rate and over a year of 360
days at all other times) equal to the rate that would be applicable to an ABR
Loan plus 2.00% per annum.

SECTION 2.08 Alternate Rate of Interest.

In the event, and on each occasion, that on the day two Business Days prior to
the commencement of any Interest Period for a Eurodollar Borrowing the
Administrative Agent shall have determined that Dollar deposits in the principal
amounts of the Loans comprising such Borrowing are not generally available in
the London interbank market, or that the rates at which such Dollar deposits are
being quoted will not adequately and fairly reflect the cost to the majority of
Lenders of making or maintaining Eurodollar Loans during such Interest Period,
or that reasonable means do not exist for ascertaining the Adjusted LIBO Rate,
the Administrative Agent shall, as soon as practicable thereafter, give written
or fax notice of such determination to the Borrower and the Lenders. In the
event of any such determination, until the Administrative Agent shall have
advised the Borrower and the Lenders that the circumstances giving rise to such
notice no longer exist, any request by the Borrower for a Eurodollar Borrowing
pursuant to Section 2.03 or 2.10 shall be deemed to be a request for an
ABR Borrowing. Each determination by the Administrative Agent under this
Section 2.08 shall be conclusive absent manifest error.

SECTION 2.09 Termination and Reduction of Commitments.

(a) The Term Loan Commitments (other than any Incremental Term Loan Commitments,
which shall terminate as provided in the related Incremental Loan Assumption
Agreement) shall automatically terminate upon the making of the Term Loans on
the Closing Date. The Revolving Credit Commitments shall automatically terminate
on the Revolving Credit Maturity Date. The L/C Commitment shall automatically
terminate on the earlier to occur of (i) the termination of the Revolving Credit
Commitments and (ii) the date five Business Days prior to the Revolving Credit
Maturity Date.

(b) Upon at least three Business Days’ prior irrevocable (subject to the
following provisos below) written, fax or email notice to the Administrative
Agent, the Borrower may at any time in whole permanently terminate, or from time
to time in part permanently reduce, the Term Loan Commitments or the Revolving
Credit Commitments; provided that if such notice is for the termination of all
of the then outstanding Term Loan Commitments or the Revolving Credit
Commitments, then the Borrower may revoke such notice and/or extend the
termination date by not more than five Business Days’ written notice; provided,
further, that a notice of voluntary termination or reduction hereunder may state
that such notice is conditional upon the consummation of a certain transaction,
the effectiveness of other credit facilities or the receipt of the proceeds from
the issuance of other Indebtedness, in which case such notice of termination or
reduction, as the case may be, may be revoked by the Borrower (by written notice
to the

 

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Administrative Agent on or prior to 1:00 p.m., New York City time, on the
specified date of termination or reduction) if such condition is not satisfied;
provided, however, that (i) each partial reduction of the Term Loan Commitments
or the Revolving Credit Commitments shall be in an integral multiple of
$1,000,000 and in a minimum amount of $5,000,000 (but only to the extent that
Term Loan Commitments and Revolving Credit Commitments greater than such amounts
are outstanding) and (ii) the Total Revolving Credit Commitment shall not be
reduced to an amount that is less than the Aggregate Revolving Credit Exposure
at the time.

(c) Each reduction in the Term Loan Commitments or the Revolving Credit
Commitments hereunder shall be made ratably among the applicable Lenders in
accordance with their respective applicable Commitments. The Borrower shall pay
to the Administrative Agent for the account of the applicable Lenders, on the
date of each termination or reduction, the Commitment Fees on the amount of the
Commitments so terminated or reduced accrued to but excluding the date of such
termination or reduction.

SECTION 2.10 Conversion and Continuation of Borrowings.

The Borrower shall have the right at any time upon prior irrevocable notice to
the Administrative Agent (a) not later than 1:00 p.m., New York City time, one
Business Day prior to conversion, to convert any Eurodollar Borrowing into an
ABR Borrowing, (b) not later than 1:00 p.m., New York City time, three Business
Days prior to conversion or continuation, to convert any ABR Borrowing into a
Eurodollar Borrowing or to continue any Eurodollar Borrowing as a Eurodollar
Borrowing for an additional Interest Period, and (c) not later than 1:00 p.m.,
New York City time, three Business Days prior to conversion, to convert the
Interest Period with respect to any Eurodollar Borrowing to another permissible
Interest Period, subject in each case to the following:

(i) each conversion or continuation shall be made pro rata among the Lenders in
accordance with the respective principal amounts of the Loans comprising the
converted or continued Borrowing;

(ii) if less than all the outstanding principal amount of any Borrowing shall be
converted or continued, then each resulting Borrowing shall satisfy the
limitations specified in Sections 2.02(a) and 2.02(b) regarding the principal
amount and maximum number of Borrowings of the relevant Type;

(iii) each conversion shall be effected by each Lender and the Administrative
Agent by recording for the account of such Lender the new Loan of such Lender
resulting from such conversion and reducing the Loan (or portion thereof) of
such Lender being converted by an equivalent principal amount; accrued interest
on any Eurodollar Loan (or portion thereof) being converted shall be paid by the
Borrower at the time of conversion;

(iv) if any Eurodollar Borrowing is converted at a time other than the end of
the Interest Period applicable thereto, the Borrower shall pay, upon demand, any
amounts due to the Lenders pursuant to Section 2.16;

(v) any portion of a Borrowing maturing or required to be repaid in less than
one month may not be converted into or continued as a Eurodollar Borrowing;

 

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(vi) any portion of a Eurodollar Borrowing that cannot be converted into or
continued as a Eurodollar Borrowing by reason of the immediately preceding
clause shall be automatically converted at the end of the Interest Period in
effect for such Borrowing into an ABR Borrowing;

(vii) no Interest Period may be selected for any Eurodollar Term Borrowing that
would end later than a Term Loan Repayment Date occurring on or after the first
day of such Interest Period if, after giving effect to such selection, the
aggregate outstanding amount of (A) the Eurodollar Term Borrowings comprised of
Term Loans with Interest Periods ending on or prior to such Term Loan Repayment
Date and (B) the ABR Term Borrowings comprised of Term Loans would not be at
least equal to the principal amount of Term Borrowings to be paid on such Term
Loan Repayment Date; and

(viii) upon notice to the Borrower from the Administrative Agent given at the
request of the Required Lenders after the occurrence and during the continuance
of a Default or Event of Default, no outstanding Loan may be converted into, or
continued as, a Eurodollar Loan.

Each notice pursuant to this Section 2.10 shall be irrevocable and shall refer
to this Agreement and specify (i) the identity and amount of the Borrowing that
the Borrower requests be converted or continued, (ii) whether such Borrowing is
to be converted to or continued as a Eurodollar Borrowing or an ABR Borrowing,
(iii) if such notice requests a conversion, the date of such conversion (which
shall be a Business Day) and (iv) if such Borrowing is to be converted to or
continued as a Eurodollar Borrowing, the Interest Period with respect thereto.
If no Interest Period is specified in any such notice with respect to any
conversion to or continuation as a Eurodollar Borrowing, the Borrower shall be
deemed to have selected an Interest Period of one month’s duration. The
Administrative Agent shall promptly advise the Lenders of any notice given
pursuant to this Section 2.10 and of each Lender’s portion of any converted or
continued Borrowing. If the Borrower shall not have given notice in accordance
with this Section 2.10 to continue any Borrowing into a subsequent Interest
Period (and shall not otherwise have given notice in accordance with this
Section 2.10 to convert such Borrowing), such Borrowing shall, at the end of the
Interest Period applicable thereto (unless repaid pursuant to the terms hereof),
automatically be converted into an ABR Borrowing.

SECTION 2.11 Repayment of Term Borrowings.

(a) (i) The Borrower shall pay to the Administrative Agent, for the account of
the Term Lenders, on the dates set forth below, or if any such date is not a
Business Day, on the next preceding Business Day (each such date being called a
“Repayment Date”), a principal amount of the Term Loans other than Other Term
Loans (as adjusted from time to time pursuant to Sections 2.11(b), 2.12, 2.13(f)
and 2.23(d)) equal to the amount set forth below for such date, together in each
case with accrued and unpaid interest on the principal amount to be paid to but
excluding the date of such payment:

 

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Repayment Date    Amount

September 30, 2017

   $1,312,500

December 31, 2017

   $1,312,500

March 31, 2018

   $1,312,500

June 30, 2018

   $1,312,500

September 30, 2018

   $1,312,500

December 31, 2018

   $1,312,500

March 31, 2019

   $1,312,500

June 30, 2019

   $1,312,500

September 30, 2019

   $2,625,000

December 31, 2019

   $2,625,000

March 31, 2020

   $2,625,000

June 30, 2020

   $2,625,000

September 30, 2020

   $2,625,000

December 31, 2020

   $2,625,000

March 31, 2021

   $2,625,000

June 30, 2021

   $2,625,000

September 30, 2021

   $2,625,000

December 31, 2021

   $2,625,000

March 31, 2022

   $2,625,000

June 30, 2022

   $2,625,000

September 30, 2022

   $2,625,000

December 31, 2022

   $2,625,000

March 31, 2023

   $2,625,000 Term Loan Maturity Date    The remaining aggregate outstanding
principal amount of all Term Loans other than Other Term Loans

 

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(ii) The Borrower shall pay to the Administrative Agent, for the account of the
Incremental Term Lenders, on each Incremental Term Loan Repayment Date, a
principal amount of the Other Term Loans (as adjusted from time to time pursuant
to Sections 2.11(b), 2.12 and 2.13(f)) equal to the amount set forth for such
date in the applicable Incremental Loan Assumption Agreement, together in each
case with accrued and unpaid interest on the principal amount to be paid to but
excluding the date of such payment.

(b) In the event and on each occasion that the Term Loan Commitments shall be
reduced or shall expire or terminate other than as a result of the making of a
Term Loan, the installments payable on each Repayment Date and Incremental Term
Loan Repayment Date, as the case may be, shall be reduced pro rata by an
aggregate amount equal to the amount of such reduction, expiration or
termination.

(c) To the extent not previously paid, all Term Loans shall be due and payable
on the Term Loan Maturity Date and the Incremental Term Loan Maturity Date, as
the case may be, together with accrued and unpaid interest on the principal
amount to be paid to but excluding the date of payment.

(d) All repayments pursuant to this Section 2.11 shall be subject to
Section 2.16, but shall otherwise be without premium or penalty.

SECTION 2.12 Voluntary Prepayments.

(a) The Borrower shall have the right at any time and from time to time to
prepay any Borrowing, in whole or in part, upon (i) at least three Business
Days’ prior written, fax or other electronically transmitted notice (or
telephone notice promptly confirmed by written, fax or other electronically
transmitted notice) before 1:00 p.m., New York City time, in the case of
Eurodollar Loans, to the Administrative Agent or (ii) at least one Business Day
prior written, fax or other electronically transmitted notice (or telephone
notice promptly confirmed by written, fax or other electronically transmitted
notice) before 1:00 p.m., New York City time, in the case of ABR Loans, to the
Administrative Agent; provided, however, that each partial prepayment shall be
in an amount that is an integral multiple of $500,000 and not less than
$1,000,000.

(b) Voluntary prepayments of outstanding Term Loans under this Agreement shall
be allocated pro rata between the Term Loans and applied in direct order to the
next eight scheduled installments of principal due in respect of the Term Loans
under Sections 2.11(a)(i) and 2.11(a)(ii), as the case may be, and thereafter
pro rata against the remaining scheduled installments of principal due in
respect of the Term Loans under Sections 2.11(a)(i) and 2.11(a)(ii), as the case
may be.

 

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(c) Voluntary prepayments of outstanding Revolving Loans under this Agreement
shall be applied, first, to prepay outstanding ABR Revolving Loans to the full
extent thereof, without a corresponding permanent reduction of the amount of the
Revolving Credit Commitments; second, if no ABR Revolving Loans are outstanding,
to prepay outstanding Eurodollar Revolving Loans to the full extent thereof,
without a corresponding permanent reduction of the amount of the Revolving
Credit Commitments; third, if no Revolving Loans are outstanding, to cash
collateralize the aggregate undrawn amount of all outstanding Letters of Credit
in accordance with Section 2.22(j), without a corresponding permanent reduction
of the amount of the Revolving Credit Commitments.

(d) Any amounts remaining after the application of voluntary prepayments
pursuant to Sections 2.12(b) and 2.12(c) shall be retained by the Borrower to be
used for any other purpose permitted under this Agreement.

(e) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid, shall be
irrevocable (subject to the following provisos below) and shall commit the
Borrower to prepay such Borrowing by the amount stated therein on the date
stated therein; provided that if such prepayment is for all of the then
outstanding Loans, then the Borrower may revoke such notice and/or extend the
prepayment date by not more than one Business Day; provided, further, that a
notice of voluntary prepayment may state that such notice is conditional upon
the effectiveness of other credit facilities or the receipt of the proceeds from
the issuance of other Indebtedness, in which case such notice of prepayment may
be revoked by the Borrower (by written notice to the Administrative Agent on or
prior to 1:00 p.m., New York City time, on the specified date of prepayment) if
such condition is not satisfied; provided, however, that the provisions of
Section 2.16 shall apply with respect to any such revocation or extension. All
prepayments under this Section 2.12 shall be subject to Section 2.12(f) and to
Section 2.16 but otherwise without premium or penalty. All prepayments under
this Section 2.12 (other than prepayments of ABR Revolving Loans that are not
made in connection with the termination or permanent reduction of the Revolving
Credit Commitments) shall be accompanied by accrued and unpaid interest on the
principal amount to be prepaid to but excluding the date of payment.

(f) In the event all or any portion of the Term Loans (w) are repaid through any
voluntary repayments, (x) are repriced (or effectively refinanced) through any
waiver, consent or amendment (in each case, in connection with any waiver,
consent or amendment to the Term Loans directed at, or the result of which would
be, the lowering of the effective interest cost or the weighted average yield of
the Term Loans or the incurrence of any debt financing having an effective
interest cost or weighted average yield that is less than the effective interest
cost or weighted average yield of the Term Loans, (y) are prepaid pursuant to
Section 2.13 (other than (i) as a result of the receipt of Net Cash Proceeds
from any Recovery Event to be applied pursuant to Section 2.13(b) or
(ii) Section 2.13(c)) or (z) become due and payable pursuant to Article VII, in
each case on or prior to the first anniversary of the Closing Date, such
repayments or repricings will be made with a prepayment premium in an amount
equal to the present value of the sum of (I) the Applicable Margin that would
have been payable for Applicable Margin applicable to Term Loans plus (II) the
greater of (1) the Applicable Margin “floor” (i.e. 1.00%) and (2) the Applicable
Margin (assuming an Interest Period of three months in effect on the date on
which the applicable notice of repayment or repricing is given), in each case
calculated as a rate per annum on the amount of the principal of such Term Loans
repaid or repriced from the date of such repayment or repricing until the first
anniversary of the Closing Date plus (III) the prepayment premium on the amount
of the principal of such Term Loans repaid or repriced that

 

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would have been payable on such Term Loans had such repayment or repricing been
made after the Closing Date but on or prior to the first anniversary of the
Closing Date (in each case, computed on the basis of actual days elapsed over a
year of 360 days and using a discount rate equal to the Treasury Rate as of such
repayment or repricing date plus 50 basis points). After the first anniversary
of the Closing Date but prior to the second anniversary of the Closing Date,
such repayments or repricings will be made with a prepayment premium in an
amount equal to (x) 102% of the principal amount repaid or repriced if such
repayment or repricing occurs after the first anniversary of the Closing Date,
but on or prior to the second anniversary of the Closing Date and (y) 101% of
the principal amount repaid or repriced if such repayment or repricing occurs
after the second anniversary of the Closing Date but on or prior to the third
anniversary of the Closing Date.

SECTION 2.13 Mandatory Prepayments.

(a) In the event of any termination of all the Revolving Credit Commitments, the
Borrower shall, on the date of such termination, repay or prepay all its
outstanding Revolving Credit Borrowings and replace, cash collateralize or cause
to be canceled (or make other arrangements reasonably satisfactory to the
Administrative Agent and the Issuing Bank with respect to) all outstanding
Letters of Credit. If, after giving effect to any partial reduction of the
Revolving Credit Commitments or at any other time, the Aggregate Revolving
Credit Exposure would exceed the Total Revolving Credit Commitment, then the
Borrower shall, on the date of such reduction or at such other time, repay or
prepay Revolving Credit Borrowings and after the Revolving Credit Borrowings
shall have been repaid or prepaid in full, replace, cash collateralize or cause
to be canceled (or make other arrangements reasonably satisfactory to the
Administrative Agent and the Issuing Bank with respect to) Letters of Credit in
an amount sufficient to eliminate such excess.

(b) Not later than the third Business Day following the receipt of Net Cash
Proceeds in respect of any Asset Sale (including any Sale and Leaseback
Transaction permitted pursuant to Section 6.03(a), but excluding any Sale and
Leaseback Transaction permitted pursuant to Section 6.03(b)) or any Recovery
Event, the Borrower shall apply 100% of the Net Cash Proceeds received with
respect thereto to prepay outstanding Loans and cash collateralize Letters of
Credit in accordance with Section 2.13(f).

(c) No later than the fifth Business Day after the date on which the financial
statements with respect to such fiscal year (commencing with the fiscal year
ending on December 31, 2017) are required to be delivered pursuant to
Section 5.04(a), the Borrower shall prepay outstanding Term Loans in accordance
with Section 2.13(f) in an aggregate principal amount equal to the ECF
Percentage of Excess Cash Flow for the fiscal year then ended; provided that any
prepayment of outstanding Term Loans pursuant to this Section 2.13(c) in respect
of any fiscal year shall only be required in the amount by which the Excess Cash
Flow for such fiscal year exceeds $3,000,000.

 

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(d) In the event that any Loan Party or any subsidiary of a Loan Party shall
receive Net Cash Proceeds from the issuance of Disqualified Stock or incurrence
of Indebtedness for money borrowed of any Loan Party or any subsidiary of a Loan
Party (other than any cash proceeds from the issuance of Indebtedness for money
borrowed permitted pursuant to Section 6.01), the Borrower shall, substantially
simultaneously with (and in any event not later than the third Business Day next
following) the receipt of such Net Cash Proceeds by such Loan Party or such
subsidiary, apply an amount equal to 100% of such Net Cash Proceeds to prepay
outstanding Loans and cash collateralize Letters of Credit in accordance with
Section 2.13(f).

(e) So long as the Senior Secured Leverage Ratio is greater than 3.00:1.00
(calculated on a pro forma basis as of the most recently completed period of
four consecutive fiscal quarters for which the financial statements and
certificates required by Section 5.04(a) or (b), as the case may be, have been
or were required to have been delivered), in the event and on each occasion that
an Equity Issuance occurs, the Borrower shall, substantially simultaneously with
(and in any event not later than the third Business Day next following) the
occurrence of such Equity Issuance, apply 100% (or such lesser percentage
required for the Senior Secured Leverage Ratio to be equal to or less than
3.00:1.00 (calculated on a pro forma basis as of the most recently completed
period of four consecutive fiscal quarters for which the financial statements
and certificates required by Section 5.04(a) or (b), as the case may be, have
been or were required to have been delivered)) of the Net Cash Proceeds
therefrom to prepay outstanding Term Loans in accordance with Section 2.13(f).

(f) Mandatory prepayments of outstanding Term Loans under this Agreement shall
be allocated pro rata between the Term Loans and applied in direct order to the
next eight scheduled installments of principal due in respect of the Term Loans
under Sections 2.11(a)(i) and 2.11(a)(ii), as the case may be, and thereafter
pro rata against the remaining scheduled installments of principal due in
respect of the Term Loans under Sections 2.11(a)(i) and 2.11(a)(ii), as the case
may be. Upon the prepayment in full of all outstanding Term Loans, mandatory
prepayments under this Agreement shall be applied, first, to prepay outstanding
ABR Revolving Loans to the full extent thereof, without a corresponding
permanent reduction of the amount of the Revolving Credit Commitments; second,
if no ABR Revolving Loans are outstanding, to prepay outstanding Eurodollar
Revolving Loans to the full extent thereof, without a corresponding permanent
reduction of the amount of the Revolving Credit Commitments; and third, if no
Revolving Loans are outstanding, to cash collateralize the aggregate undrawn
amount of all outstanding Letters of Credit in accordance with Section 2.22(j),
without a corresponding permanent reduction of the amount of the Revolving
Credit Commitments. Any Lender may elect, by notice to the Administrative Agent
at or prior to the time and in the manner specified by the Administrative Agent,
prior to any mandatory prepayment of the Term Loans required to be made by the
Borrower pursuant to Section 2.13(b), Section 2.13(c) or Section 2.13(e), to
decline all (but not a portion) of its pro rata share of such mandatory
prepayment (such declined amounts, the “Declined Proceeds”). Any Declined
Proceeds may be retained by the Borrower or applied at the Borrower’s discretion
as otherwise permitted by Section 2.12(b).

(g) The Borrower shall deliver to the Administrative Agent, at the time of each
prepayment required under this Section 2.13, (i) a certificate signed by a
Financial Officer of the Borrower setting forth in reasonable detail the
calculation of the amount of such prepayment and (ii) at least three Business
Days prior written notice of such prepayment. Each notice of prepayment shall
specify the prepayment date, the Type of each Loan being prepaid and the
principal amount of each Loan (or portion thereof) to be prepaid. All
prepayments of Borrowings under this Section 2.13 shall be subject to
Section 2.12(f), as applicable, and Section 2.16, but shall otherwise be without
premium or penalty, and shall be accompanied by accrued and unpaid interest on
the principal amount to be prepaid to but excluding the date of payment (other
than prepayments of ABR Revolving Loans that are not made in connection with the
termination or permanent reduction of the Revolving Credit Commitments).

 

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SECTION 2.14 Reserve Requirements; Change in Circumstances.

(a) Notwithstanding any other provision of this Agreement, if any Change in Law
shall: (i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of or
credit extended by any Lender or the Issuing Bank (except any such reserve
requirement which is reflected in the Adjusted LIBO Rate), (ii) subject any
Agent, Lender or the Issuing Bank to any Taxes (other than Indemnified Taxes,
Excluded Taxes and Other Taxes) on its Loans, loan principal, Letters of Credit,
Commitments or other obligations, or its deposits, reserves, other liabilities
or capital attributable thereto; or (iii) impose on such Lender or the Issuing
Bank or the London interbank market any other condition affecting this Agreement
or Eurodollar Loans made by such Lender or any Letter of Credit or participation
therein, and the result of any of the foregoing shall be to increase the cost to
such Lender or the Issuing Bank of making or maintaining any Eurodollar Loan or
increase the cost to any Lender or the Issuing Bank of issuing or maintaining
any Letter of Credit or purchasing or maintaining a participation therein or to
reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise) by an
amount deemed by such Lender or the Issuing Bank to be material, then the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, upon
demand such additional amount or amounts as will compensate such Lender or the
Issuing Bank, as the case may be, for such additional costs incurred or
reduction suffered.

(b) If any Lender or the Issuing Bank shall have determined that any Change in
Law regarding capital adequacy has or would have the effect of reducing the rate
of return on such Lender’s or the Issuing Bank’s capital or on the capital of
such Lender’s or the Issuing Bank’s holding company, if any, as a consequence of
this Agreement or the Loans made or participations in Letters of Credit
purchased by such Lender pursuant hereto or the Letters of Credit issued by the
Issuing Bank pursuant hereto to a level below that which such Lender or the
Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have
achieved but for such Change in Law (taking into consideration such Lender’s or
the Issuing Bank’s policies and the policies of such Lender’s or the Issuing
Bank’s holding company with respect to capital adequacy) by an amount deemed by
such Lender or the Issuing Bank to be material, then from time to time the
Borrower shall pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank
or such Lender’s or the Issuing Bank’s holding company for any such reduction
suffered.

(c) A certificate of a Lender or the Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Bank or its holding
company and the calculation thereof in reasonable detail, as applicable, as
specified in paragraph (a) or (b) above shall be delivered to the Borrower and
shall be conclusive absent manifest error. The Borrower shall pay such Lender or
the Issuing Bank the amount shown as due on any such certificate delivered by it
within 10 days after its receipt of the same.

 

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(d) Failure or delay on the part of any Lender or the Issuing Bank to demand
compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital shall not constitute a waiver of
such Lender’s or the Issuing Bank’s right to demand such compensation; provided
that the Borrower shall not be under any obligation to compensate any Lender or
the Issuing Bank under paragraph (a) or (b) above with respect to increased
costs or reductions with respect to any period prior to the date that is
120 days prior to such request if such Lender or the Issuing Bank knew or could
reasonably have been expected to know of the circumstances giving rise to such
increased costs or reductions and of the fact that such circumstances would
result in a claim for increased compensation by reason of such increased costs
or reductions; provided further that the foregoing limitation shall not apply to
any increased costs or reductions arising out of the retroactive application of
any Change in Law within such 120-day period. The protection of this
Section 2.14 shall be available to each Lender and the Issuing Bank regardless
of any possible contention of the invalidity or inapplicability of the Change in
Law that shall have occurred or been imposed.

SECTION 2.15 Change in Legality.

(a) Notwithstanding any other provision of this Agreement, if any Change in Law
shall make it unlawful for any Lender to make or maintain any Eurodollar Loan or
to give effect to its obligations as contemplated hereby with respect to any
Eurodollar Loan, then, by written notice to the Borrower and to the
Administrative Agent:

(i) such Lender may declare that Eurodollar Loans will not thereafter (for the
duration of such unlawfulness) be made by such Lender hereunder (or be continued
for additional Interest Periods) and ABR Loans will not thereafter (for such
duration) be converted into Eurodollar Loans, whereupon any request for a
Eurodollar Borrowing (or to convert an ABR Borrowing to a Eurodollar Borrowing
or to continue a Eurodollar Borrowing for an additional Interest Period) shall,
as to such Lender only, be deemed a request for an ABR Loan (or a request to
continue an ABR Loan as such for an additional Interest Period or to convert a
Eurodollar Loan into an ABR Loan, as the case may be), unless such declaration
shall be subsequently withdrawn; and

(ii) such Lender may require that all outstanding Eurodollar Loans made by it be
converted to ABR Loans, in which event all such Eurodollar Loans shall be
automatically converted to ABR Loans as of the effective date of such notice as
provided in paragraph (b) below.

In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.

(b) For purposes of this Section 2.15, a notice to the Borrower by any Lender
shall be effective as to each Eurodollar Loan made by such Lender, if lawful, on
the last day of the Interest Period then applicable to such Eurodollar Loan; in
all other cases such notice shall be effective on the date of receipt by the
Borrower.

 

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SECTION 2.16 Breakage.

The Borrower shall indemnify each Lender against any loss or expense that such
Lender may sustain or incur as a consequence of (a) any event, other than a
default by such Lender in the performance of its obligations hereunder, which
results in (i) such Lender receiving or being deemed to receive any amount on
account of the principal of any Eurodollar Loan prior to the end of the Interest
Period in effect therefor, (ii) the conversion of any Eurodollar Loan to an ABR
Loan, or the conversion of the Interest Period with respect to any Eurodollar
Loan, in each case other than on the last day of the Interest Period in effect
therefor, or (iii) any Eurodollar Loan to be made by such Lender (including any
Eurodollar Loan to be made pursuant to a conversion or continuation under
Section 2.10) not being made after notice of such Loan shall have been given by
the Borrower hereunder (any of the events referred to in this clause (a) being
called a “Breakage Event”) or (b) any default in the making of any payment or
prepayment required to be made hereunder. In the case of any Breakage Event,
such loss shall include an amount equal to the excess, as reasonably determined
by such Lender, of (i) its cost of obtaining funds for the Eurodollar Loan that
is the subject of such Breakage Event for the period from the date of such
Breakage Event to the last day of the Interest Period in effect (or that would
have been in effect) for such Loan over (ii) the amount of interest likely to be
realized by such Lender in redeploying the funds released or not utilized by
reason of such Breakage Event for such period. A certificate of any Lender
setting forth in reasonable detail the calculations of any amount or amounts
which such Lender is entitled to receive pursuant to this Section 2.16 shall be
delivered to the Borrower and shall be conclusive absent manifest error.

SECTION 2.17 Pro Rata Treatment.

Except as required under Section 2.15 and subject to the express provisions of
this Agreement which require, or permit, differing payments to be made to
Non-Defaulting Lenders as opposed to Defaulting Lenders, each Borrowing, each
payment or prepayment of principal of any Borrowing, each payment of interest on
the Loans, each payment of the Commitment Fees, each reduction of the Term Loan
Commitments or the Revolving Credit Commitments and each conversion of any
Borrowing to or continuation of any Borrowing as a Borrowing of any Type shall
be allocated pro rata among the applicable Lenders in accordance with their
respective applicable Commitments (or, if such Commitments shall have expired or
been terminated, in accordance with the respective principal amounts of their
outstanding Loans). Each Lender agrees that in computing such Lender’s portion
of any Borrowing to be made hereunder, the Administrative Agent may, in its
discretion, round each Lender’s percentage of such Borrowing to the next higher
or lower whole Dollar amount.

SECTION 2.18 Sharing of Setoffs.

Each Lender agrees that if it shall, through the exercise of a right of banker’s
lien, setoff or counterclaim against the Borrower or any other Loan Party, or
pursuant to a secured claim under Section 506 of Title 11 of the United States
Code or other security or interest arising from, or in lieu of, such secured
claim, received by such Lender under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means, obtain payment (voluntary
or involuntary) in respect of any Loan or Loans or L/C Disbursement as a result
of which the unpaid principal portion of its Loans and participations in L/C
Disbursements shall be

 

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proportionately less than the unpaid principal portion of the Loans and
participations in L/C Disbursements of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at face value, and shall
promptly pay to such other Lender the purchase price for, a participation in the
Loans and L/C Exposure of such other Lender, so that the aggregate unpaid
principal amount of the Loans and L/C Exposure and participations in Loans and
L/C Exposure held by each Lender shall be in the same proportion to the
aggregate unpaid principal amount of all Loans and L/C Exposure then outstanding
as the principal amount of its Loans and L/C Exposure prior to such exercise of
banker’s lien, setoff or counterclaim or other event was to the principal amount
of all Loans and L/C Exposure outstanding prior to such exercise of banker’s
lien, setoff or counterclaim or other event; provided, however, that (i) if any
such purchase or purchases or adjustments shall be made pursuant to this
Section 2.18 and the payment giving rise thereto shall thereafter be recovered,
such purchase or purchases or adjustments shall be rescinded to the extent of
such recovery and the purchase price or prices or adjustment restored without
interest, and (ii) the provisions of this Section 2.18 shall not be construed to
apply to any payment made by the Borrower pursuant to and in accordance with the
express terms of this Agreement (including the application of funds arising from
the existence of a Defaulting Lender) or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans to any assignee or participant, other than to the Borrower or any of its
Affiliates (other than pursuant to Section 9.04(l)), as to which the provisions
of this Section 2.18 shall apply. The Borrower expressly consents to the
foregoing arrangements and agrees that any Lender holding a participation in a
Loan or L/C Disbursement deemed to have been so purchased may exercise any and
all rights of banker’s lien, setoff or counterclaim with respect to any and all
moneys owing by the Borrower to such Lender by reason thereof as fully as if
such Lender had made a Loan directly to the Borrower in the amount of such
participation.

SECTION 2.19 Payments.

(a) The Borrower shall make each payment (including principal of or interest on
any Borrowing or any L/C Disbursement or any Fees or other amounts) hereunder
and under any other Loan Document not later than 1:00 p.m., New York City time,
on the date when due in immediately available Dollars, without setoff, defense
or counterclaim. All payments received by the Administrative Agent after 1:00
p.m., New York City time, shall be deemed received on the next succeeding
Business Day (in the Administrative Agent’s sole discretion) and any applicable
interest or fee shall continue to accrue. Each such payment (other than Issuing
Bank Fees, which shall be paid directly to the Issuing Bank) shall be made to
the Administrative Agent at its offices at Eleven Madison Avenue, New York, NY
10010. The Administrative Agent shall promptly distribute to each Lender any
payments received by the Administrative Agent on behalf of such Lender.

(b) Except as otherwise expressly provided herein, whenever any payment
(including principal of or interest on any Borrowing or any Fees or other
amounts) hereunder or under any other Loan Document shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of interest or Fees, if applicable.

 

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(c) Unless the Administrative Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Administrative Agent for
the account of the Lenders or the Issuing Bank hereunder that the Borrower will
not make such payment, the Administrative Agent may assume that the Borrower has
made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders or the Issuing Bank, as the case may
be, the amount due. In such event, if the Borrower does not in fact make such
payment, then each of the Lenders or the Issuing Bank, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender, and to pay interest thereon, for each day
from and including the date such amount is distributed to it to but excluding
the date of payment to the Administrative Agent, at a rate reasonably determined
by the Administrative Agent to represent its cost of overnight or short-term
funds (which determination shall be conclusive absent manifest error).

(d) If an Event of Default shall have occurred and be continuing and shall not
otherwise have been waived, and the maturity of the Obligations shall have been
accelerated pursuant to Section 7.01, all payments or proceeds received by the
Administrative Agent and the Collateral Agent hereunder in respect of any of the
Obligations shall be applied in accordance with the application of proceeds
described in Section 6.05 of the Guarantee and Collateral Agreement.

SECTION 2.20 Taxes.

(a) Any and all payments by or on account of any obligation of the Borrower or
any other Loan Party hereunder or under any other Loan Document shall be made
free and clear of and without withholding or deduction for any Taxes unless
required under applicable law; provided that, if the Borrower or any other Loan
Party shall be required under applicable law to withhold or deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required withholding or
deductions of Indemnified Taxes or Other Taxes (including withholding or
deductions applicable to additional sums payable under this Section 2.20) the
Administrative Agent, each Lender and the Issuing Bank (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions for Indemnified Taxes or Other Taxes been made, (ii) the Borrower or
such Loan Party shall make such deductions and (iii) the Borrower or such Loan
Party shall pay the full amount deducted to the relevant Governmental Authority
in accordance with applicable law.

(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

(c) The Borrower shall indemnify the Administrative Agent, each Lender and the
Issuing Bank, within 10 days after written demand therefor, for the full amount
of any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such
Lender or the Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any obligation of the Borrower or any other Loan
Party hereunder or under any other Loan Document (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section 2.20) and any penalties, interest and reasonable out-of-pocket expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes
or Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender or the Issuing Bank, or by the
Administrative Agent on behalf of itself, a Lender or the Issuing Bank, shall be
conclusive as to such amount absent manifest error.

 

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(d) As soon as practicable after any payment of Taxes by the Borrower or any
other Loan Party to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.

(e) Each Foreign Lender shall furnish to the Borrower and the Administrative
Agent, as applicable, two accurate and complete copies of (i) U.S. Internal
Revenue Service Form W-8BEN or W-8BEN-E (or successor form) certifying exemption
from or in reduction in the rate of U.S. federal withholding tax under an
applicable treaty to which the United States is a party, (ii) U.S. Internal
Revenue Service Form W-8ECI (or successor form) certifying that the income
receivable pursuant to the Loan Documents is effectively connected with the
conduct of a trade or business in the United States, (iii) U.S. Internal Revenue
Service Form W-8IMY (or successor form), together with required attachments,
certifying exemption from or reduction in the rate of U.S. federal withholding
tax, (iv) in the case of a Foreign Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of “portfolio interest,” U.S. Internal Revenue Service Form W-8BEN or
W-8BEN-E (or successor form) together with a statement that (A) such Foreign
Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a
“10 percent shareholder” of the Borrower within the meaning of
Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code and (B) the interest payments in
question are not effectively connected with a U.S. trade or business conducted
by such Foreign Lender or (v) forms other than those described in clauses
(i) through (iv) as may be prescribed by applicable Laws as a basis for claiming
exemption from or a reduction in U.S. federal withholding tax together with such
supplementary documentation as may be necessary to permit the Borrower or the
Administrative Agent to determine the withholding or deduction required to be
made. Such forms shall be delivered by each Foreign Lender on or before the date
it becomes a party to this Agreement. In addition, each Foreign Lender shall
deliver such forms promptly upon the obsolescence or invalidity of any form
previously delivered by such Foreign Lender. Each Foreign Lender shall promptly
notify the Borrower and the Administrative Agent at any time it determines that
it is no longer in a position to provide any previously delivered form (or any
other form of certification adopted by the U.S. taxing authorities for such
purpose). Notwithstanding any other provision of this paragraph, a Foreign
Lender shall not be required to deliver any form pursuant to this paragraph that
such Foreign Lender is not legally able to deliver.

 

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(f) Each Lender that is not a Foreign Lender shall furnish to the Borrower and
the Administrative Agent two accurate and complete copies of U.S. Internal
Revenue Service Form W-9 (or successor form) establishing that the Lender is not
subject to U.S. backup withholding tax.

(g) If the Administrative Agent or any Lender determines, in its sole
discretion, that it has received a refund or credit in lieu of a refund in
respect of any Taxes as to which it has been indemnified under this Section 2.20
or with respect to which any sum payable hereunder has been increased and paid
by the Borrower under this Section 2.20, it shall pay to the Borrower an amount
equal to such refund or credit in lieu of a refund (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower under this
Section 2.20 with respect to the Taxes giving rise to such refund or credit in
lieu of a refund), net of all out-of-pocket expenses incurred by the
Administrative Agent or such Lender, and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund); provided that the Borrower, upon the request of the Administrative
Agent or such Lender, agrees to promptly repay the amount paid over to the
Borrower to the Administrative Agent or such Lender in the event the
Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority. Notwithstanding anything to the contrary in this
paragraph (g), in no event will the Administrative Agent or such Lender be
required to pay any amount to the Borrower pursuant to this paragraph (g) the
payment which would place the Administrative Agent or such Lender in a less
favorable net after-Tax position than the Administrative Agent or such Lender
would have been in if the Tax subject to indemnification and giving rise to such
refund had not been deducted, withheld or otherwise imposed and the
indemnification payments or additional amounts with respect to such Tax had
never been paid. This paragraph shall not be construed to require the
Administrative Agent or any Lender to make available its tax returns (or any
other information which it deems confidential) to the Borrower or any other
Person.

(h) The Administrative Agent and each 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 the amount, if any, to deduct and
withhold from such payment. Solely for purposes of this clause (h), “FATCA”
shall include any amendments made to FATCA after the date of this Agreement.

(i) For purposes of this Section 2.20, the term “Lender” includes the Issuing
Bank.

SECTION 2.21 Assignment of Commitments under Certain Circumstances; Duty to
Mitigate.

(a) In the event (i) any Lender or the Issuing Bank delivers a certificate
requesting compensation pursuant to Section 2.14, (ii) any Lender or the Issuing
Bank delivers a notice described in Section 2.15, (iii) the Borrower is required
to pay any additional amount to any Lender or the Issuing Bank or any
Governmental Authority on account of any Lender or the Issuing Bank pursuant to
Section 2.20, (iv) any Lender refuses to consent to any amendment, waiver or
other modification of any Loan Document requested by the Borrower that requires
the consent of a greater percentage of the Lenders than the Required Lenders and
such amendment, waiver or other modification is consented to by the Required
Lenders or (v) any Lender is a Defaulting Lender, then, in each case, the
Borrower may, at its sole expense and effort (including

 

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with respect to the processing and recordation fee referred to in
Section 9.04(b)), upon notice to such Lender or the Issuing Bank, as the case
may be, and the Administrative Agent, require such Lender or the Issuing Bank to
transfer and assign, without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all of its interests, rights and
obligations under this Agreement (or, in the case of clause (iv) above, all of
its interests, rights and obligation with respect to the Class of Loans or
Commitments that is the subject of the related consent, amendment, waiver or
other modification) to an Eligible Assignee that shall assume such assigned
obligations and, with respect to clause (iv) above, shall consent to such
requested amendment, waiver or other modification of any Loan Documents (which
assignee may be another Lender, if a Lender accepts such assignment); provided
that (x) such assignment shall not conflict with any law, rule or regulation or
order of any court or other Governmental Authority having jurisdiction, (y) the
Borrower shall have received the prior written consent of the Administrative
Agent (and, if a Revolving Credit Commitment is being assigned, of the Issuing
Bank), which consents shall not unreasonably be withheld, conditioned or
delayed, and (z) the Borrower or such assignee shall have paid to the affected
Lender or the Issuing Bank in immediately available funds an amount equal to the
sum of the principal of and interest accrued to the date of such payment on the
outstanding Loans or L/C Disbursements of such Lender or the Issuing Bank,
respectively, plus all Fees and other amounts accrued for the account of or due
to such Lender or the Issuing Bank hereunder with respect thereto (including any
amounts under Sections 2.14 and 2.16); provided further that, if prior to any
such transfer and assignment the circumstances or event that resulted in such
Lender’s or the Issuing Bank’s claim for compensation under Section 2.14, notice
under Section 2.15 or the amounts paid pursuant to Section 2.20, as the case may
be, cease to cause such Lender or the Issuing Bank to suffer increased costs or
reductions in amounts received or receivable or reduction in return on capital,
or cease to have the consequences specified in Section 2.15, or cease to result
in amounts being payable under Section 2.20, as the case may be (including as a
result of any action taken by such Lender or the Issuing Bank pursuant to
paragraph (b) below), or if such Lender or the Issuing Bank shall waive its
right to claim further compensation under Section 2.14 in respect of such
circumstances or event or shall withdraw its notice under Section 2.15 or shall
waive its right to further payments under Section 2.20 in respect of such
circumstances or event or shall consent to the proposed amendment, waiver,
consent or other modification or shall cease to be a Defaulting Lender, as the
case may be, then such Lender or the Issuing Bank shall not thereafter be
required to make any such transfer and assignment hereunder. Each Lender and the
Issuing Bank hereby grants to the Administrative Agent an irrevocable power of
attorney (which power is coupled with an interest) to execute and deliver, on
behalf of such Lender or the Issuing Bank, as the case may be, as assignor, any
Assignment and Acceptance necessary to effectuate any assignment of such
Lender’s or the Issuing Bank’s interests hereunder in the circumstances
contemplated by this Section 2.21(a).

(b) If (i) any Lender or the Issuing Bank shall request compensation under
Section 2.14, (ii) any Lender or the Issuing Bank delivers a notice described in
Section 2.15 or (iii) the Borrower is required to pay any additional amount to
any Lender or the Issuing Bank or any Governmental Authority on account of any
Lender or the Issuing Bank, pursuant to Section 2.20, then such Lender or the
Issuing Bank shall use reasonable efforts (which shall not require such Lender
or the Issuing Bank to incur an unreimbursed loss or unreimbursed cost or
expense or otherwise take any action inconsistent with its internal policies or
legal or regulatory restrictions or suffer any disadvantage or burden deemed by
it to be significant) (x) to file any

 

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certificate or document reasonably requested in writing by the Borrower or
(y) to assign its rights and delegate and transfer its obligations hereunder to
another of its offices, branches or affiliates, if such filing or assignment
would reduce its claims for compensation under Section 2.14 or enable it to
withdraw its notice pursuant to Section 2.15 or would reduce amounts payable
pursuant to Section 2.20, as the case may be, in the future. The Borrower hereby
agrees to pay all reasonable documented out-of-pocket costs and expenses
incurred by any Lender or the Issuing Bank in connection with any such filing or
assignment, delegation and transfer.

SECTION 2.22 Letters of Credit.

(a) General. The Borrower may, at any time on or prior to the date that is
thirty days prior to the Revolving Credit Maturity Date, request the issuance of
a Letter of Credit for its own account or for the account of any of its
Wholly-Owned Subsidiaries (in which case the Borrower and such Wholly-Owned
Subsidiary shall be co-applicants with respect to such Letter of Credit), in a
form reasonably acceptable to the Administrative Agent and the Issuing Bank, at
any time and from time to time while the L/C Commitment remains in effect as set
forth in Section 2.09(a). This Section 2.22 shall not be construed to impose an
obligation upon the Issuing Bank to issue any Letter of Credit that is
inconsistent with the terms and conditions of this Agreement.

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. In
order to request the issuance of a Letter of Credit (or to amend, renew or
extend an existing Letter of Credit), the Borrower shall hand deliver, transmit
by electronic mail or fax to the Issuing Bank and the Administrative Agent
(reasonably in advance of the requested date of issuance, amendment, renewal or
extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, the date of
issuance, amendment, renewal or extension, the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) below), the amount of
such Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare such Letter of Credit. A
Letter of Credit shall be issued, amended, renewed or extended only if, and upon
issuance, amendment, renewal or extension of each Letter of Credit the Borrower
shall be deemed to represent and warrant that, after giving effect to such
issuance, amendment, renewal or extension (i) the L/C Exposure shall not exceed
$7,000,000 and (ii) the Aggregate Revolving Credit Exposure shall not exceed the
Total Revolving Credit Commitment.

(c) Expiration Date. Each Letter of Credit shall expire at the close of business
on the earlier of the date one year after the date of the issuance of such
Letter of Credit and the date that is five Business Days prior to the Revolving
Credit Maturity Date, unless such Letter of Credit expires by its terms on an
earlier date; provided, however, that a Letter of Credit may, upon the request
of the Borrower, include a provision whereby such Letter of Credit shall be
renewed automatically for additional consecutive periods of twelve months or
less (but not beyond the date that is five Business Days prior to the Revolving
Credit Maturity Date) unless the Issuing Bank notifies the beneficiary thereof
at least thirty days (or such longer period as may be specified in such Letter
of Credit) prior to the then-applicable expiration date that such Letter of
Credit will not be renewed.

 

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(d) Participations. By the issuance of a Letter of Credit and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Revolving Credit Lender, and each such Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Lender’s Pro Rata Percentage of the aggregate amount available to be
drawn under such Letter of Credit, effective upon the issuance of such Letter of
Credit. In consideration and in furtherance of the foregoing, each Revolving
Credit Lender hereby absolutely and unconditionally agrees to pay to the
Administrative Agent, for the account of the Issuing Bank, such Lender’s Pro
Rata Percentage of each L/C Disbursement made by the Issuing Bank and not
reimbursed by the Borrower (or, if applicable, another party pursuant to its
obligations under any other Loan Document) forthwith on the date due as provided
in Section 2.02(f). Each Revolving Credit Lender acknowledges and agrees that
its obligation to acquire participations pursuant to this paragraph in respect
of Letters of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including the occurrence and continuance of a
Default or an Event of Default, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.

(e) Reimbursement. If the Issuing Bank shall make any L/C Disbursement in
respect of a Letter of Credit, the Issuing Bank shall notify the Borrower that
payment of such draft will be made and the Borrower shall pay to the
Administrative Agent an amount equal to such L/C Disbursement not later than the
later of (i) if such notice shall have been received before 1:00 p.m., New York
City time, on any day, two hours after receipt of such notice and (ii) after
1:00 p.m., New York City time, on the day of receipt of such notice or, if the
Borrower shall have received such notice later than 1:00 p.m., New York City
time, on any day, not later than 1:00 p.m., New York City time, on the
immediately following Business Day (it being understood that if the Issuing Bank
shall not have received such amount from the Borrower within the time specified
above and (A) if the conditions precedent to borrowing set forth in
Sections 4.01(b) and 4.01(c) have been satisfied, such amount shall be deemed to
constitute an ABR Revolving Loan of each Revolving Credit Lender in accordance
with Section 2.02(f) and, to the extent of such payment, the obligations of the
Borrower in respect of such L/C Disbursement pursuant to this Section 2.22(e)
shall be discharged and replaced with the resulting ABR Revolving Credit
Borrowing, or (B) if such conditions precedent to borrowing have not been
satisfied, then any such amount paid by any Revolving Credit Lender shall not
constitute a Loan and shall not relieve the Borrower from its obligation to
reimburse such L/C Disbursement pursuant to this Section 2.22(e)).

(f) Obligations Absolute. The Borrower’s obligations to reimburse L/C
Disbursements as provided in paragraph (e) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
and irrespective of:

(i) any lack of validity or enforceability of any Letter of Credit or any Loan
Document, or any term or provision therein;

(ii) any amendment or waiver of or any consent to departure from all or any of
the provisions of any Letter of Credit or any Loan Document;

(iii) the existence of any claim, setoff, defense or other right that the
Borrower, any other party guaranteeing, or otherwise obligated with, the
Borrower, any Subsidiary or other Affiliate thereof or any other Person may at
any time have against the beneficiary under any Letter of Credit, the Issuing
Bank, the Administrative Agent or any Lender or any other Person, whether in
connection with this Agreement, any other Loan Document or any other related or
unrelated agreement or transaction;

 

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

(v) payment by the Issuing Bank under a Letter of Credit against presentation of
a draft or other document that does not comply with the terms of such Letter of
Credit; and

(vi) any other act or omission to act or delay of any kind of the Issuing Bank,
the Lenders, the Administrative Agent or any other Person or any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section 2.22, constitute a legal or
equitable discharge of the Borrower’s obligations hereunder.

Without limiting the generality of the foregoing, it is expressly understood and
agreed that the absolute and unconditional obligation of the Borrower hereunder
to reimburse L/C Disbursements will not be excused by the gross negligence or
willful misconduct of the Issuing Bank. However, the foregoing shall not be
construed to excuse the Issuing Bank from liability to the Borrower to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are determined by a court of
competent jurisdiction by final and non-appealable judgment to have resulted
primarily from the Issuing Bank’s gross negligence or willful misconduct in
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. It is further understood and agreed that
the Issuing Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary and, in making any payment under any Letter of
Credit (i) the Issuing Bank’s exclusive reliance on the documents presented to
it under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and (ii) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute gross negligence or willful misconduct of
the Issuing Bank.

(g) Disbursement Procedures. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall as promptly as possible
give telephonic notification, confirmed by fax, to the Administrative Agent and
the Borrower of such demand for payment and whether the Issuing Bank has made or
will make an L/C Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Revolving Credit Lenders with respect to any
such L/C Disbursement.

 

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(h) Interim Interest. If the Issuing Bank shall make any L/C Disbursement in
respect of a Letter of Credit, then, unless the Borrower shall reimburse such
L/C Disbursement in full before the date and time set forth in Section 2.22(e),
the unpaid amount thereof shall bear interest for the account of the Issuing
Bank, for each day from and including the date of such L/C Disbursement, to but
excluding the earlier of the date of payment by the Borrower or the date on
which interest shall commence to accrue thereon as provided in Section 2.02(f),
at the rate per annum that would apply to such amount if such amount were an ABR
Revolving Loan.

(i) Resignation or Removal of the Issuing Bank. The Issuing Bank may resign at
any time by giving 30 days’ prior written notice to the Administrative Agent,
the Lenders and the Borrower, and may be removed at any time by the Borrower by
notice to the Issuing Bank, the Administrative Agent and the Lenders. Upon the
acceptance of any appointment as the Issuing Bank hereunder by a Lender that
shall agree to serve as the successor Issuing Bank, such successor shall succeed
to and become vested with all the interests, rights and obligations of the
retiring Issuing Bank. At the time such removal or resignation shall become
effective, the Borrower shall pay all accrued and unpaid fees pursuant to
Section 2.05(c)(ii). The acceptance of any appointment as the Issuing Bank
hereunder by a successor Lender shall be evidenced by an agreement entered into
by such successor, in a form satisfactory to the Borrower and the Administrative
Agent, and, from and after the effective date of such agreement, (i) such
successor Lender shall have all the rights and obligations of the previous
Issuing Bank under this Agreement and the other Loan Documents and
(ii) references herein and in the other Loan Documents to the term “Issuing
Bank” shall be deemed to refer to such successor or to any previous Issuing
Bank, or to such successor and all previous Issuing Banks, as the context shall
require. After the resignation or removal of the Issuing Bank hereunder, the
retiring Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of the Issuing Bank under this Agreement and the
other Loan Documents with respect to Letters of Credit issued by it prior to
such resignation or removal, but shall not be required to issue additional
Letters of Credit.

(j) Cash Collateralization. If any Event of Default shall occur and be
continuing, the Borrower shall, on the Business Day it receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Credit Lenders holding participations in
outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all outstanding Letters of Credit) thereof and of the amount
to be deposited, deposit in an account with the Collateral Agent, for the
benefit of the Revolving Credit Lenders, an amount in cash equal to 103% of the
L/C Exposure as of such date; provided that the obligation to deposit such cash
will become effective immediately, and such deposit will become immediately
payable in immediately available funds, without demand or notice of any kind,
upon the occurrence of an Event of Default described in Section 7.01(g) or
7.01(h). Such deposit shall be held by the Collateral Agent as collateral for
the payment and performance of the Obligations. The Collateral Agent shall have
exclusive dominion and control, including the exclusive right of withdrawal,
over such account. Other than any interest earned on the investment of such
deposits in Permitted Investments, which investments shall be made at the

 

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option and sole discretion of the Collateral Agent, such deposits shall not bear
interest. Interest or profits, if any, on such investments shall accumulate in
such account. Moneys in such account shall (i) automatically be applied by the
Administrative Agent to reimburse the Issuing Bank for L/C Disbursements for
which it has not been reimbursed, (ii) be held for the satisfaction of the
reimbursement obligations of the Borrower for the L/C Exposure at such time and
(iii) if the maturity of the Loans has been accelerated (but subject to the
consent of Revolving Credit Lenders holding participations in outstanding
Letters of Credit representing greater than 50% of the aggregate undrawn amount
of all outstanding Letters of Credit), be applied to satisfy the Obligations. If
the Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent not
applied as aforesaid) shall be returned to the Borrower within three Business
Days after all Events of Default have been cured or waived.

(k) Additional Issuing Banks. The Borrower may, at any time and from time to
time with the consent of the Administrative Agent (which consent shall not be
unreasonably withheld, conditioned or delayed) and such Lender, designate one or
more additional Lenders to act as an issuing bank under the terms of this
Agreement, subject to reporting requirements reasonably satisfactory to the
Administrative Agent with respect to issuances, amendments, extensions and
terminations of Letters of Credit by such additional issuing bank. Any Lender
designated as an issuing bank pursuant to this paragraph (k) shall be deemed to
be an “Issuing Bank” (in addition to being a Lender) in respect of Letters of
Credit issued or to be issued by such Lender, and, with respect to such Letters
of Credit, such term shall thereafter apply to the other Issuing Bank and such
Lender.

(l) Defaulting Lenders. At any time that there shall exist a Defaulting Lender,
within one Business Day following the written request of the Administrative
Agent or the Issuing Bank (with a copy to the Administrative Agent) the Borrower
shall Cash Collateralize the Issuing Bank’s Fronting Exposure with respect to
such Defaulting Lender (determined after giving effect to Section 2.24(a)(iv)
and any Cash Collateral provided by such Defaulting Lender) in an amount not
less than the Minimum Collateral Amount.

(i) The Borrower, and to the extent provided by any Defaulting Lender, such
Defaulting Lender, hereby grants to the Administrative Agent, for the benefit of
the Issuing Banks, and agrees to maintain, a first priority security interest in
all such Cash Collateral as security for the Defaulting Lender’s obligation to
fund participations in respect of L/C Exposure, to be applied pursuant to clause
(ii) below. If at any time the Administrative Agent determines that Cash
Collateral is subject to any right or claim of any Person other than the
Administrative Agent and the Issuing Bank as herein provided, or that the total
amount of such Cash Collateral is less than the Minimum Collateral Amount, the
Borrower will, promptly upon demand by the Administrative Agent, pay or provide
to the Administrative Agent additional Cash Collateral in an amount sufficient
to eliminate such deficiency (after giving effect to any Cash Collateral
provided by the Defaulting Lender).

 

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(ii) Notwithstanding anything to the contrary contained in this Agreement, Cash
Collateral provided under this Section 2.22(l) or Section 2.24 in respect of
Letters of Credit shall be applied to the satisfaction of the Defaulting
Lender’s obligation to fund participations in respect of L/C Exposure
(including, as to Cash Collateral provided by a Defaulting Lender, any interest
accrued on such obligation) for which the Cash Collateral was so provided, prior
to any other application of such property as may otherwise be provided for
herein.

(iii) Cash Collateral (or the appropriate portion thereof) provided to reduce
the Issuing Bank’s Fronting Exposure shall no longer be required to be held as
Cash Collateral pursuant to this Section 2.22(l) following (i) the elimination
of the applicable Fronting Exposure (including by the termination of Defaulting
Lender status of the applicable Lender), or (ii) the determination by the
Administrative Agent and the Issuing Bank that there exists excess Cash
Collateral; provided that, subject to Section 2.24 the Person providing Cash
Collateral and the Issuing Bank may agree that Cash Collateral shall be held to
support future anticipated Fronting Exposure or other obligations; and provided
further that to the extent that such Cash Collateral was provided by the
Borrower or any Subsidiary Guarantor, such Cash Collateral shall remain subject
to the security interest granted pursuant to the Guarantee and Collateral
Agreement.

SECTION 2.23 Incremental Loans.

(a) The Borrower may, by written notice to the Administrative Agent from time to
time, request (i) prior to the Revolving Credit Maturity Date, an increase to
the existing Revolving Credit Commitments in an aggregate amount not to exceed
the Incremental Revolving Credit Amount from one or more Incremental Revolving
Credit Lenders, all of which must be Eligible Assignees (any such increase, the
“Incremental Revolving Credit Commitments”) and/or (ii) prior to the Term Loan
Maturity Date, the establishment of Incremental Term Loan Commitments in an
aggregate amount not to exceed the Incremental Term Loan Amount from one or more
Incremental Term Lenders, all of which must be Eligible Assignees. Such notice
shall set forth (A) the amount of Incremental Revolving Credit Commitments
and/or Incremental Term Loan Commitments being requested (which shall be in
minimum increments of $500,000 and a minimum amount of $1,000,000 or such lesser
amount equal to the remaining Incremental Revolving Credit Amount or Incremental
Term Loan Amount, as applicable), (B) the date on which such Incremental
Revolving Credit Commitments and/or Incremental Term Loan Commitments are
requested to become effective (which shall not be less than 10 Business Days nor
more than 60 days after the date of such notice) and (C) in the case of
Incremental Term Loan Commitments, whether such Incremental Term Loan
Commitments are commitments to make additional Term Loans having the same terms
as the initial Term Loans made on the Closing Date or commitments to make term
loans with terms different from the initial Term Loans made on the Closing Date
(the “Other Term Loans”).

(b) The Borrower may seek Incremental Revolving Credit Commitments and/or
Incremental Term Loan Commitments from existing Lenders (each of which shall be
entitled to agree or decline to participate in its sole discretion) and, subject
to the Administrative Agent’s consent (not to be unreasonably withheld,
conditioned or delayed), additional banks, financial institutions and other
institutional lenders who will become Incremental Term Lenders in connection
therewith. The Borrower and each Incremental Revolving Credit Lender and/or Term
Lender shall execute and deliver to the Administrative Agent an Incremental Loan
Assumption Agreement and such other documentation as the Administrative Agent
shall

 

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reasonably specify to evidence the Incremental Revolving Credit Commitment
and/or Incremental Term Loan Commitment of such Person. The terms and provisions
of the Incremental Revolving Credit Commitments shall be identical to the
Revolving Credit Commitments (it being understood that in connection with the
establishment of any Incremental Revolving Credit Commitments in respect of
which the initial All-In Yield applicable to Incremental Revolving Credit Loans
under such Incremental Revolving Credit Commitments (calculated assuming such
Incremental Revolving Credit Commitments are fully drawn on the date so
established) exceeds (the amount of such excess being referred to herein as the
“Revolver Yield Differential”) the All-In Yield then in effect for Eurodollar
Revolving Loans, the Applicable Margin then in effect for all Revolving Loans
shall automatically be increased by the Revolver Yield Differential, effective
upon the effectiveness of such Incremental Revolving Credit Commitments pursuant
to the applicable Incremental Loan Assumption Agreement). The terms and
provisions of the Incremental Term Loans shall be identical to those of the Term
Loans made pursuant to clause (i) of Section 2.01(a), except as otherwise set
forth herein or in the Incremental Loan Assumption Agreement, and any such terms
not consistent with those of such Term Loans shall be reasonably satisfactory to
the Administrative Agent. Without the prior written consent of the Required
Lenders, (i) the final maturity date of any Other Term Loans shall be no earlier
than the Term Loan Maturity Date, (ii) the Weighted Average Life to Maturity of
the Other Term Loans shall be no shorter than the Weighted Average Life to
Maturity of the Term Loans made pursuant to clause (i) of Section 2.01(a) and
(iii) if the initial yield on such Other Term Loans (as determined by the
Administrative Agent to be equal to the sum of (x) the margin above the Adjusted
LIBO Rate on such Other Term Loans (increased by the amount that any “LIBOR
floor” applicable to such Other Term Loans on the date of the calculation
exceeds the Adjusted LIBO Rate on such date) and (y) if such Other Term Loans
are initially made at a discount or the Lenders making the same receive a fee
directly or indirectly from the Borrower or any Subsidiary for doing so (the
amount of such discount or fee, expressed as a percentage of the Other Term
Loans, being referred to herein as “Discount”), the amount of such Discount
divided by the lesser of (A) the Weighted Average Life to Maturity of such Other
Term Loans and (B) four) exceeds the sum of the Applicable Margin then in effect
for Eurodollar Term Loans plus one fourth of the Closing Fees paid pursuant to
Section 2.05(d) in respect of the Term Loans made pursuant to clause (i) of
Section 2.01(a) by more than 50 basis points (the amount of such excess above 50
basis points being referred to herein as the “Yield Differential”), then the
Applicable Margin then in effect for Term Loans shall automatically be increased
by the Yield Differential, effective upon the making of the Other Term Loans.
The Administrative Agent shall promptly notify each Lender as to the
effectiveness of each Incremental Loan Assumption Agreement. Each of the parties
hereto hereby agrees that, upon the effectiveness of any Incremental Loan
Assumption Agreement, this Agreement shall be deemed amended to the extent (but
only to the extent) necessary to reflect the existence and terms of the
Incremental Revolving Credit Commitment and/or Incremental Term Loan Commitment
and the Incremental Revolving Credit Loans and/or Incremental Term Loans, as
applicable, evidenced thereby, and the Administrative Agent and the Borrower may
revise this Agreement to evidence such amendments.

(c) Notwithstanding the foregoing, no Incremental Revolving Credit Commitment or
Incremental Term Loan Commitment shall become effective under this Section 2.23
unless (i) on the date of such effectiveness the conditions set forth in
paragraphs (b) and (c) of Section 4.01 shall be satisfied (provided that, if the
proceeds of Incremental Term Loans are to be used to

 

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finance a Permitted Acquisition, then, in lieu of the conditions set forth in
paragraphs (b) and (c) of Section 4.01, only (x) “specified representations”
pursuant to customary “SunGard” or “certain funds” conditionality (conformed as
necessary for such Permitted Acquisition) shall be required to be satisfied and
(y) at the time of and immediately after such effectiveness, no Event of Default
under Section 7.01(b), (c), (g) or (h) shall have occurred and be continuing)
and the Administrative Agent shall have received a certificate to that effect
dated such date and executed by a Financial Officer of the Borrower, (ii) the
Incremental Term Loans shall rank pari passu in right of payment and be equal
with respect to security under the Loan Documents and none of the obligors or
guarantors with respect thereto shall be a Person that is not a Loan Party,
(iii) all fees and expenses owing in respect of such Incremental Revolving
Credit Commitments and/or Incremental Term Loan Commitments to the
Administrative Agent and the Lenders shall have been paid and (iv) except as
otherwise specified in the applicable Incremental Loan Assumption Agreement, the
Administrative Agent shall have received (with sufficient copies for each
Incremental Term Lender) legal opinions, board resolutions and other closing
certificates reasonably requested by the Administrative Agent and consistent
with those delivered on the Closing Date under Section 4.02, including, without
limitation, amendments to the Mortgages, datedown endorsements to the title
policies, flood zone determinations and the other deliverables, pursuant to
Section 4.02(g).

(d) Each of the parties hereto hereby agrees that the Administrative Agent may,
in consultation with the Borrower, take any and all action as may be reasonably
necessary to ensure that (i) all Incremental Term Loans (other than Other Term
Loans), when originally made, are included in each Borrowing of outstanding Term
Loans on a pro rata basis and (ii) all Revolving Loans in respect of Incremental
Revolving Credit Commitments, when originally made, are included in each
Borrowing of outstanding Revolving Loans on a pro rata basis. With respect to
Incremental Term Loans, this may be accomplished by requiring each outstanding
Eurodollar Term Borrowing to be converted into an ABR Term Borrowing on the date
of each Incremental Term Loan, or by allocating a portion of each Incremental
Term Loan to each outstanding Eurodollar Term Borrowing on a pro rata basis. Any
conversion of Eurodollar Term Loans to ABR Term Loans reasonably required by the
Administrative Agent to effectuate the foregoing shall be subject to
Section 2.16. With respect to Incremental Revolving Credit Commitments, this may
be accomplished by, with the consent of the Borrower, causing the Revolving
Credit Lenders to assign portions of their outstanding Revolving Loans to
Incremental Revolving Credit Lenders. If any Incremental Term Loan is to be
allocated to an existing Interest Period for a Eurodollar Term Borrowing, then
the interest rate thereon for such Interest Period and the other economic
consequences thereof shall be as set forth in the applicable Incremental Loan
Assumption Agreement. In addition, to the extent any Incremental Term Loans are
not Other Term Loans, the scheduled amortization payments under
Section 2.11(a)(i) required to be made after the making of such Incremental Term
Loans shall be ratably increased by the aggregate principal amount of such
Incremental Term Loans and shall be further increased for all Lenders on a pro
rata basis to the extent necessary to avoid any reduction in the amortization
payments to which the Term Lenders were entitled before such recalculation.

 

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SECTION 2.24 Defaulting Lenders.

(a) Notwithstanding anything to the contrary contained in this Agreement, if any
Lender becomes a Defaulting Lender, then, until such time as such Lender is no
longer a Defaulting Lender, to the extent permitted by applicable law:

(i) Such Defaulting Lender’s right to approve or disapprove any amendment,
waiver or consent with respect to this Agreement shall be restricted as set
forth in the definition of Required Lenders.

(ii) Any payment of principal, interest, fees or other amounts received by the
Administrative Agent for the account of such Defaulting Lender (whether
voluntary or mandatory, at maturity, pursuant to Article VII or otherwise) or
received by the Administrative Agent from a Defaulting Lender pursuant to
Section 9.06 shall be applied at such time or times as may be determined by the
Administrative Agent as follows: first, to the payment of any amounts owing by
such Defaulting Lender to the Administrative Agent hereunder; second, to the
payment on a pro rata basis of any amounts owing by such Defaulting Lender to
the Issuing Bank hereunder; third, to Cash Collateralize the Issuing Bank’s
Fronting Exposure with respect to such Defaulting Lender in accordance with
Section 2.22(l); fourth, as the Borrower may request (so long as no Default or
Event of Default exists), to the funding of any Loan 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; fifth, if so determined by
the Administrative Agent and the Borrower, to be held in a deposit account and
released pro rata in order to (x) satisfy such Defaulting Lender’s potential
future funding obligations with respect to Loans under this Agreement and
(y) Cash Collateralize the Issuing Bank’s future Fronting Exposure with respect
to such Defaulting Lender with respect to future Letters of Credit issued under
this Agreement, in accordance with Section 2.22(l); sixth, to the payment of any
amounts owing to the Lenders or the Issuing Bank as a result of any judgment of
a court of competent jurisdiction obtained by any Lender or the Issuing Bank
against such Defaulting Lender as a result of such Defaulting Lender’s breach of
its obligations under this Agreement; seventh, so long as no Default or Event of
Default exists, to the payment of any amounts owing to the Borrower as a result
of any judgment of a court of competent jurisdiction obtained by the Borrower
against such Defaulting Lender as a result of such Defaulting Lender’s breach of
its obligations under this Agreement; and eighth, to such Defaulting Lender or
as otherwise directed by a court of competent jurisdiction; provided that if
(x) such payment is a payment of the principal amount of any Loans or L/C
Disbursements in respect of which such Defaulting Lender has not fully funded
its appropriate share, and (y) such Loans were made or the related Letters of
Credit were issued at a time when the conditions set forth in Section 4.01 were
satisfied or waived, such payment shall be applied solely to pay the Loans of,
and L/C Disbursements owed to, all Non-Defaulting Lenders on a pro rata basis
prior to being applied to the payment of any Loans of, or L/C Disbursements owed
to, such Defaulting Lender until such time as all Loans and funded and unfunded
participations in L/C Exposure are held by the Lenders pro rata in accordance
with the Commitments under the applicable Credit Facility without giving effect
to Section 2.24(a)(iv). Any payments, prepayments or other amounts paid or
payable to a Defaulting Lender that are applied (or held) to pay amounts owed by
a Defaulting Lender or to post Cash Collateral pursuant to this
Section 2.24(a)(ii) shall be deemed paid to and redirected by such Defaulting
Lender, and each Lender irrevocably consents hereto.

 

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(iii) (A) No Defaulting Lender shall be entitled to receive any Commitment Fee
for any period during which that Lender is a Defaulting Lender and the Borrower
shall not be required to pay any such fee that otherwise would have been
required to have been paid to that Defaulting Lender.

(B) Each Defaulting Lender shall be entitled to receive L/C Participation Fees
for any period during which that Lender is a Defaulting Lender only to the
extent allocable to its Pro Rata Percentage of the stated amount of Letters of
Credit for which it has provided Cash Collateral pursuant to Section 2.22(l).

(C) With respect to any L/C Participation Fee not required to be paid to any
Defaulting Lender pursuant to clause (B) above, the Borrower shall (x) pay to
each Non-Defaulting Lender that portion of any such fee otherwise payable to
such Defaulting Lender with respect to such Defaulting Lender’s participation in
L/C Exposure that has been reallocated to such Non-Defaulting Lender pursuant to
clause (iv) below, (y) pay to the Issuing Bank the amount of any such fee
otherwise payable to such Defaulting Lender to the extent allocable to such
Issuing Bank’s Fronting Exposure to such Defaulting Lender, and (z) not be
required to pay the remaining amount of any such fee.

(iv) All or any part of such Defaulting Lender’s participation in L/C Exposure
shall be reallocated among the Non-Defaulting Lenders in accordance with their
respective Pro Rata Percentages (calculated without regard to such Defaulting
Lender’s Commitment) but only to the extent that (x) the conditions set forth in
Section 4.01 are satisfied at the time of such reallocation (and, unless the
Borrower shall have otherwise notified the Administrative Agent at such time,
the Borrower shall be deemed to have represented and warranted that such
conditions are satisfied at such time), and (y) such reallocation does not cause
the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed
such Non-Defaulting Lender’s Revolving Credit Commitment. No reallocation
hereunder shall constitute a waiver or release of any claim of any party
hereunder against a Defaulting Lender arising from that Lender having become a
Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of
such Non-Defaulting Lender’s increased exposure following such reallocation.

(v) If the reallocation described in clause (iv) above cannot, or can only
partially, be effected, the Borrower shall, without prejudice to any right or
remedy available to it hereunder or under law, Cash Collateralize the Issuing
Bank’s Fronting Exposure in accordance with the procedures set forth in
Section 2.22(l).

(b) If the Borrower, the Administrative Agent and the Issuing Bank agree in
writing that a Lender is no longer a Defaulting Lender, the Administrative Agent
will so notify the parties hereto, whereupon as of the effective date specified
in such notice and subject to any conditions set forth therein (which may
include arrangements with respect to any Cash

 

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Collateral), that Lender will, to the extent applicable, purchase at par that
portion of outstanding Loans of the other Lenders or take such other actions as
the Administrative Agent may determine to be necessary to cause the Loans and
funded and unfunded participations in Letters of Credit to be held pro rata by
the Lenders in accordance with the Commitments under the applicable Credit
Facility (without giving effect to Section 2.24(a)(iv)), whereupon such Lender
will cease to be a Defaulting Lender; provided that no adjustments will be made
retroactively with respect to fees accrued or payments made by or on behalf of
the Borrower while that Lender was a Defaulting Lender; and provided, further,
that except to the extent otherwise expressly agreed by the affected parties, no
change hereunder from Defaulting Lender to Lender will constitute a waiver or
release of any claim of any party hereunder arising from that Lender’s having
been a Defaulting Lender.

(c) So long as any Lender is a Defaulting Lender the Issuing Bank shall not be
required to issue, extend, renew or increase any Letter of Credit unless it is
satisfied that it will have no Fronting Exposure after giving effect thereto.

SECTION 2.25 Amend and Extend Transactions.

(a) The Borrower may, by written notice to the Administrative Agent from time to
time, request an extension (each, an “Extension”) of the Revolving Credit
Maturity Date and/or the Term Loan Maturity Date of any Class of Loans and
Commitments to the extended maturity date specified in such notice. Such notice
shall (i) set forth the amount of the applicable Class of Revolving Credit
Commitments and/or Term Loans to be extended (which shall be in minimum
increments of $1,000,000 and a minimum amount of $5,000,000), (ii) set forth the
date on which such Extension is requested to become effective (which shall be
not less than ten (10) Business Days nor more than sixty (60) days after the
date of such Extension (or such longer or shorter periods as the Administrative
Agent shall agree)) and (iii) identify the relevant Class of Revolving Credit
Commitments and/or Term Loans to which such Extension relates. Each Lender of
the applicable Class shall be offered (an “Extension Offer”) an opportunity to
participate in such Extension on a pro rata basis and on the same terms and
conditions as each other Lender of such Class pursuant to procedures established
by, or reasonably acceptable to, the Administrative Agent. If the aggregate
principal amount of Revolving Credit Commitments or Term Loans (calculated on
the face amount thereof) in respect of which Lenders shall have accepted the
relevant Extension Offer shall exceed the maximum aggregate principal amount of
Revolving Credit Commitments or Term Loans, as applicable, requested to be
extended by the Borrower pursuant to such Extension Offer, then the Revolving
Credit Commitments or Term Loans, as applicable, of Lenders of the applicable
Class shall be extended ratably up to such maximum amount based on the
respective principal amounts (but not to exceed actual holdings of record) with
respect to which such Lenders have accented such Extension Offer.

(b) It shall be a condition precedent to the effectiveness of any Extension that
(i) no Default or Event of Default shall have occurred and be continuing
immediately prior to and immediately after giving effect to such Extension,
(ii) the representations and warranties set forth in Article III and in each
other Loan Document shall be true and correct in all material respects on and as
of the date of such Extension, unless otherwise agreed among the Borrower, the
Administrative Agent and each applicable extending Lender, (iii) the Issuing
Bank shall have consented to any Extension of the Revolving Credit Commitments,
to the extent that such Extension provides for the issuance of Letters of Credit
at any time during the extended period and (iv) the terms of such Extended
Revolving Credit Commitments and Extended Term Loans shall comply with
Section 2.25(c).

 

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(c) The terms of each Extension shall be determined by the Borrower and the
applicable extending Lender and set forth in an amendment to this Agreement
(which may, at the option of the Administrative Agent, be in the form of an
amendment and restatement of this Agreement) providing for Extended Term Loans
and/or Extended Revolving Credit Commitments pursuant to this Section 2.25;
provided that (i) the final maturity date of any Extended Revolving Credit
Commitment or Extended Term Loan shall be no earlier than the Revolving Credit
Maturity Date or the Term Loan Maturity Date, respectively, (ii) (A) there shall
be no scheduled amortization of the Extended Revolving Credit Commitments and
(B) the average life to maturity of the Extended Term Loans shall be no shorter
than the remaining average life to maturity of the existing Term Loans,
(iii) the Extended Revolving Loans and the Extended Term Loans will rank pari
passu (or junior) in right of payment and with respect to security with the
existing Revolving Loans and the Term Loans and the borrower and guarantors of
the Extended Revolving Credit Commitments or Extended Term Loans, as applicable,
shall be the same as the Borrower and Subsidiary Guarantors with respect to the
existing Revolving Loans or Term Loans, (iv) the interest rate margin, rate
floors, fees, original issue discounts and premiums applicable to any Extended
Revolving Credit Commitment (and the Extended Revolving Loans thereunder) and
Extended Term Loan shall be determined by the Borrower and the applicable
extending Lender and (v) to the extent the terms of the Extended Revolving
Credit Commitments or Extended Term Loans are inconsistent with the terms set
forth herein (except as set forth in clause (i) through (iv) above), such terms
shall be reasonably satisfactory to the Administrative Agent.

(d) In connection with any Extension, the Borrower, the Administrative Agent and
each applicable extending Lender shall execute and deliver to the Administrative
Agent an amendment to this Agreement (which may, at the option of the
Administrative Agent, be in the form of an amendment and restatement of this
Agreement) providing for Extended Term Loans and/or Extended Revolving Credit
Commitments pursuant to this Section 2.25 and such other documentation as the
Administrative Agent shall reasonably specify to evidence the Extension,
including, without limitation, amendments to the Mortgages, datedown
endorsements to the title policies, flood zone determinations and the other
deliverables, pursuant to Section 4.02(g). The Administrative Agent shall
promptly notify each Lender as to the effectiveness of each Extension. Any
amendment to this Agreement (which may, at the option of the Administrative
Agent, be in the form of an amendment and restatement of this Agreement)
providing for Extended Term Loans and/or Extended Revolving Credit Commitments
pursuant to this Section 2.25 may, without the consent of any other Lender,
effect such amendments to this Agreement and the other Loan Documents as may be
necessary or appropriate, in the reasonable opinion of the Administrative Agent
and the Borrower, to implement the terms of any such Extension Offer, including
any amendments necessary to establish Extended Revolving Credit Commitments or
Extended Term Loans as a new Class or tranche of Revolving Credit Commitments or
Term Loans, as applicable, and such other technical amendments as may be
necessary or appropriate in the reasonable opinion of the Administrative Agent
and the Borrower in connection with the establishment of such new Class or
tranche (including to preserve the pro rata treatment of the extended and
non-extended Classes or tranches and to provide for the reallocation of L/C
Exposure upon the expiration or termination of the commitments under any Class
or tranche), in each case on terms consistent with this Section 2.25).

 

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ARTICLE III

Representations and Warranties

The Borrower represents and warrants to the Administrative Agent, the Collateral
Agent, the Issuing Bank and each of the Lenders that:

SECTION 3.01 Organization; Powers.

The Borrower and each of its Material Subsidiaries (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (b) has all requisite power and authority to own its property and
assets and to carry on its business as now conducted and as proposed to be
conducted, except to the extent that the failure to possess such power and
authority could not reasonably be expected to result in, individually or in the
aggregate, a Material Adverse Effect, (c) is qualified to do business in, and is
in good standing in, every jurisdiction where such qualification is required,
except where the failure so to qualify or be in good standing could not
reasonably be expected to result in, individually or in the aggregate, a
Material Adverse Effect, and (d) has the power and authority to execute, deliver
and perform its obligations under each of the Loan Documents and each other
agreement or instrument contemplated thereby to which it is or will be a party
and, in the case of the Borrower, to borrow hereunder.

SECTION 3.02 Authorization; No Default.

The Transactions (a) have been duly authorized by all requisite corporate and,
if required, stockholder action and (b) will not (i) violate (A) any provision
of (x) any material law, statute, rule or regulation, or (y) the certificate or
articles of incorporation or other constitutive documents or by-laws of the
Borrower or any Subsidiary, (B) any material order of any Governmental Authority
or (C) any provision of any indenture, agreement or other instrument to which
the Borrower or any Subsidiary is a party or by which any of them or any of
their property is or may be bound (in each case which is material to the conduct
of their business), (ii) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both) a default under, or
give rise to any right to accelerate or to require the prepayment, repurchase or
redemption of any obligation under any such indenture, agreement or other
instrument, in the case of this clause (ii) as could reasonably be expected to
result in, individually or in the aggregate, a Material Adverse Effect or
(iii) result in the creation or imposition of any Lien upon or with respect to
any material property or assets now owned or hereafter acquired, created,
developed or invented by the Borrower or any Subsidiary (other than any Lien
created hereunder or under the Security Documents).

SECTION 3.03 Enforceability.

This Agreement has been duly executed and delivered by the Borrower and
constitutes, and each other Loan Document when executed and delivered by each
Loan Party party thereto will constitute, a legal, valid and binding obligation
of such Loan Party enforceable against such Loan Party in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting creditors’
rights generally and by general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).

 

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SECTION 3.04 Approvals and Consents.

No action, consent or approval of, registration or filing with or any other
action by any Governmental Authority or Person is or will be required in
connection with the Transactions, except for (a) the filing of Uniform
Commercial Code financing statements and filings with the United States Patent
and Trademark Office and the United States Copyright Office, (b) recordation of
the Mortgages and (c) such as have been made or obtained and are in full force
and effect.

SECTION 3.05 Financial Statements.

(a) The Borrower has heretofore furnished to the Lenders its consolidated
balance sheets and related statements of income, stockholder’s equity and cash
flows (i) as of and for the fiscal year ended December 31, 2014, audited by and
accompanied by the opinion of BDO USA, LLP; December 31, 2015, audited by and
accompanied by the opinion of BDO USA, LLP; and December 31, 2016, audited by
and accompanied by the opinion of BDO USA, LLP and (ii) as of and for the fiscal
quarter and the portion of the fiscal year ended March 31, 2017, certified by
its chief financial officer. Such financial statements present fairly in all
material respects the financial condition and results of operations and cash
flows of the Borrower and its consolidated Subsidiaries as of such dates and for
such periods. Such balance sheets and the notes thereto disclose all material
liabilities, direct or contingent, of the Borrower and its consolidated
Subsidiaries as of the dates thereof, in accordance with GAAP applied on a
consistent basis, in all material respects. Such financial statements were
prepared in accordance with GAAP applied on a consistent basis, in all material
respects, subject, in the case of unaudited financial statements, to year-end
audit adjustments and the absence of footnotes.

(b) The Borrower has heretofore delivered to the Lenders its unaudited pro forma
consolidated balance sheet and related pro forma statements of income,
stockholder’s equity and cash flows as of and for the twelve-month period ended
March 31, 2017, prepared after giving effect to the Transactions as if the
Transactions had occurred as of such date (in the case of such balance sheet) or
at the beginning of such period (in the case of such other financial
statements). Such pro forma financial statements have been prepared in good
faith by the Borrower based upon the assumptions used to prepare the pro forma
financial information delivered to the Arrangers and the Lenders (which
assumptions are reasonable on the date such pro forma financial statements are
made, on the date of delivery thereof and on the Closing Date), are based on the
best information available to the Borrower as of the date of delivery thereof,
accurately reflect in all material respects all adjustments required to be made
to give effect to the Transactions and present fairly in all material respects
on a pro forma basis the estimated consolidated financial position of the
Borrower and its consolidated Subsidiaries as of such date and for such period
as if the Transactions had occurred as of such date (in the case of such balance
sheet) or at the beginning of such period (in the case of such other financial
statements); it being understood and agreed that such pro forma financial
information is not a guarantee of financial performance and actual results may
differ from such pro forma financial information and such differences may be
material.

 

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SECTION 3.06 No Material Adverse Effect.

Since December 31, 2016, except as disclosed in the periodic and other reports,
proxy statements and other materials filed by the Borrower or any Subsidiary
with the SEC prior to the Closing Date, there has been no event or circumstance
that has had or could reasonably be expected to result in, individually or in
the aggregate, a Material Adverse Effect.

SECTION 3.07 Title to Properties; Possession Under Leases.

(a) Each of the Borrower and the Subsidiaries has good and marketable title to,
or valid leasehold interests in, all its tangible properties and assets
(including all Mortgaged Property), except for minor defects in title that do
not interfere with its ability to conduct its business as currently conducted or
to utilize such properties and assets for their intended purposes and except
where the failure to have such title or interest could not reasonably be
expected to result in, individually or in the aggregate, a Material Adverse
Effect. All such material tangible properties and assets are free and clear of
Liens, other than Liens expressly permitted by Section 6.02.

(b) Each of the Borrower and the Subsidiaries has complied with all obligations
under all leases to which it is a party and all such leases are in full force
and effect and except where the failure of such compliance or leases to be in
full force and effect could not reasonably be expected to result in,
individually or in the aggregate, a Material Adverse Effect. As of the Closing
Date, each of the Borrower and the Subsidiaries enjoys peaceful and undisturbed
possession under all material leases.

(c) As of the Closing Date, the Borrower has not received any notice of, nor has
any knowledge of, any pending or contemplated material condemnation proceeding
affecting the Mortgaged Properties or any sale or disposition thereof in lieu of
condemnation.

(d) As of the Closing Date, none of the Borrower or any of the Subsidiaries is
obligated under any right of first refusal, option or other contractual right to
sell, assign or otherwise dispose of any Mortgaged Property or any interest
therein.

SECTION 3.08 Subsidiaries.

Schedule 3.08 sets forth as of the Closing Date a list of all Subsidiaries and
the percentage ownership interest of the Borrower therein. The shares of capital
stock or other ownership interests so indicated on Schedule 3.08 are fully paid
and non-assessable (to the extent such concepts are applicable to the capital
stock of Subsidiaries that are corporations) and are owned by the Borrower,
directly or indirectly, free and clear of all Liens (other than Liens created
under the Security Documents).

 

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SECTION 3.09 Litigation; Compliance with Laws.

(a) Except as disclosed in the periodic and other reports, proxy statements and
other materials filed by the Borrower or any Subsidiary with the SEC prior to
the Closing Date, there are no actions, suits, investigations or proceedings at
law or in equity or by or before any Governmental Authority now pending or, to
the knowledge of the Borrower, threatened in writing against or affecting the
Borrower or any Subsidiary or any business, property or rights of any such
Person (i) that involve any Loan Document or the Transactions or (ii) as to
which there is a reasonable possibility of a determination that could reasonably
be expected to result in, individually or in the aggregate, a Material Adverse
Effect.

(b) The Borrower and its Subsidiaries are in full compliance with the terms of
the Permanent Injunction and Final Judgment, entered into on October 21, 2016,
by and among the American Addiction Centers, Inc. (formerly known as Forterus,
Inc.), Forterus Health Care Services, Inc., ABTTC and the Bureau of Medi-Cal
Fraud and Elder Abuse.

(c) None of the Borrower or any of the Subsidiaries or any of their respective
properties or assets is in violation of, nor will the continued operation of
their respective properties and assets as currently conducted violate, any law,
rule or regulation (including any zoning, building, ordinance, code or approval
or any building permits) or any restrictions of record or agreements affecting
the Mortgaged Property, or is in default with respect to any judgment, writ,
injunction, decree or order of any Governmental Authority, where such violation
or default could reasonably be expected to result in, individually or in the
aggregate, a Material Adverse Effect. Nothing in the foregoing is to be
construed as a representation or warranty with respect to Intellectual Property
or noninfringement, which is the subject matter of Section 3.27.

(d) Certificates of occupancy and material permits are in effect for each
Mortgaged Property as currently constructed.

(e) Each of the Borrower and the Subsidiaries has all permits, licenses,
authorizations and all legally required accreditations (including, for the
avoidance of doubt, all material Healthcare Authorizations) for the operation of
its business, except where the failure to have any such licenses, authorizations
or accreditations, could not reasonably be expected to result in, individually
or in the aggregate, a Material Adverse Effect.

SECTION 3.10 Agreements.

None of the Borrower or any of the Subsidiaries is in default in any manner
under any provision of any indenture or other agreement or instrument evidencing
Indebtedness, or any other agreement or instrument to which it is a party or by
which it or any of its properties or assets are or may be bound, where such
default could reasonably be expected to result in, individually or in the
aggregate, a Material Adverse Effect.

SECTION 3.11 Federal Reserve Regulations.

(a) None of the Borrower or any of the Subsidiaries is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of buying or carrying Margin Stock.

 

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(b) No part of the proceeds of any Loan or any Letter of Credit will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of the Regulations of the Board, including Regulation T, U
or X.

SECTION 3.12 Investment Company Act.

None of the Borrower or any Subsidiary is an “investment company” as defined in,
or subject to regulation under, the Investment Company Act of 1940.

SECTION 3.13 Use of Proceeds.

The Borrower will (a) use the proceeds of the Loans (other than Incremental Term
Loans) and will request the issuance of Letters of Credit only for the purposes
specified in the preamble to this Agreement and (b) use the proceeds of
Incremental Term Loans and Incremental Revolving Credit Loans only for the
purposes specified in the applicable Incremental Loan Assumption Agreement.

SECTION 3.14 Tax Returns.

Each of the Borrower and the Subsidiaries has timely filed (or caused to be
filed), or has timely requested an extension to file or has received an approved
extension to file, all federal income and all other Tax returns or materials
required to have been filed by it and has paid or caused to be paid all Taxes
due and payable by it and all assessments received by it, except Taxes that are
being contested in good faith by appropriate proceedings and for which the
Borrower or such Subsidiary, as applicable, shall have set aside on its books
adequate reserves in accordance with GAAP and except any such filings or taxes,
fees or charges, the failure of which to make or pay, could not reasonably be
expected to result in, individually or in the aggregate, a Material Adverse
Effect.

SECTION 3.15 No Material Misstatements.

Any information, report, financial statement, exhibit or schedule furnished by
or on behalf of the Borrower to the Administrative Agent, any Arranger or any
Lender, taken as a whole, in connection with the negotiation of any Loan
Document or included therein or delivered pursuant thereto is complete and
correct in all material respects and does not, as of the date on which such
information, report, financial statement, exhibit or schedule was furnished,
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not materially
misleading in light of the circumstances under which such information, report,
financial statement, exhibit or scheduled was made; provided that to the extent
any such information, report, financial statement, exhibit or schedule was based
upon or constitutes a forecast, projection or other forward-looking information,
such forecast, projection or other forward-looking information furnished by or
on behalf of the Borrower to the Administrative Agent, any Arranger or any
Lender have been prepared in good faith based upon assumptions that Borrower
believed to be reasonable at the time made and at the time made available to the
Administrative Agent, any Arranger or any Lender; it being understood and agreed
that projections are not a guarantee of financial performance and actual results
may differ from projections and such differences may be material.

 

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SECTION 3.16 Employee Benefit Plans.

With respect to each Plan, the Borrower is in compliance in all respects with
the applicable provisions of ERISA and the Code and the regulations thereunder,
except where such non-compliance could not reasonably be expected to result in,
individually or in the aggregate, a Material Adverse Effect to the Borrower. No
ERISA Event has occurred or is reasonably expected to occur that, when taken
together with all other such ERISA Events, could reasonably be expected to
result in, individually or in the aggregate, a Material Adverse Effect to the
Borrower or any of its ERISA Affiliates. The present value of all benefit
liabilities under each Plan (based on the assumptions used for purposes of
Financial Accounting Standards Board Accounting Standards Codification 715) did
not, as of the last annual valuation date applicable thereto, exceed the fair
market value of the assets of such Plan in such amount that could reasonably be
expected to result in, individually or in the aggregate, a Material Adverse
Effect, and the present value of all benefit liabilities of all underfunded
Plans (based on the assumptions used for purposes of Financial Accounting
Standards Board Accounting Standards Codification 715) did not, as of the last
annual valuation dates applicable thereto, exceed the fair market value of the
assets of all such underfunded Plans that could reasonably be expected to result
in, individually or in the aggregate, a Material Adverse Effect. As of the most
recent valuation date for each Multiemployer Plan, the potential Withdrawal
Liability of the Borrower and its ERISA Affiliates for a complete or partial
withdrawal from such Multiemployer Plan is zero.

SECTION 3.17 Environmental Matters.

Except with respect to any matters that could not reasonably be expected to
result in, individually or in the aggregate, a Material Adverse Effect, none of
the Borrower or any of the Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) to the knowledge of
the Borrower, has become subject to any Environmental Liability, (iii) has
received notice of any claim with respect to any Environmental Liability,
(iv) knows of any basis for any Environmental Liability or (v) has Released any
Hazardous Materials or owned or operated any real property on which any
Hazardous Materials are present, which, in either case, would reasonably be
expected to require any investigation or remedial action by Borrower or of the
Subsidiaries pursuant to any Environmental Law.

SECTION 3.18 Insurance.

The properties of the Borrower and its Subsidiaries are insured with financially
sound and reputable insurance companies not Affiliates of the Borrower, in such
amounts, with such deductibles and covering such risks as are customarily
carried by companies of similar size engaged in similar businesses and owning
similar properties in localities where the applicable Loan Party or the
applicable Subsidiary operates. The general liability, casualty, property,
terrorism and business interruption insurance coverage of the Loan Parties as in
effect on the Closing Date is outlined as to carrier, policy number, expiration
date, type, amount and deductibles on Schedule 3.18 and such insurance coverage
complies with the requirements set forth in this Agreement and the other Loan
Documents.

 

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SECTION 3.19 Security Documents.

(a) Except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally, (i) the Guarantee and Collateral Agreement, upon
execution and delivery thereof by the parties thereto, will create in favor of
the Collateral Agent, for the ratable benefit of the Secured Parties, a legal,
valid and enforceable security interest in the Collateral (as defined in the
Guarantee and Collateral Agreement) and the proceeds thereof and (ii) when the
Pledged Collateral (as defined in the Guarantee and Collateral Agreement) is
delivered to the Collateral Agent, the Lien created under Guarantee and
Collateral Agreement shall constitute a fully perfected first priority Lien on,
and security interest in, all right, title and interest of the Loan Parties in
such Pledged Collateral, in each case prior and superior in right to any other
Person, other than with respect to the rights of Persons pursuant to Permitted
Liens and (iii) when financing statements in appropriate form are filed in the
appropriate offices, the Lien created under the Guarantee and Collateral
Agreement will constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Loan Parties in such Collateral in which a
security interest may be perfected by filing (other than in respect of the
Intellectual Property as set forth in clause (b) below), in each case prior and
superior in right to any other Person, other than with respect to the rights of
Persons pursuant to Permitted Liens.

(b) Upon the recordation of the Guarantee and Collateral Agreement (or a
short-form security agreement in form and substance reasonably satisfactory to
the Borrower and the Collateral Agent) with the United States Patent and
Trademark Office and the United States Copyright Office, together with the
financing statements in appropriate form filed in the appropriate offices, the
Lien created under the Guarantee and Collateral Agreement shall constitute a
fully perfected Lien on, and security interest in, all right, title and interest
of the Loan Parties in the registered Intellectual Property (as defined in the
Guarantee and Collateral Agreement) in which a security interest may be
perfected by filing in the United States and its territories and possessions, in
each case prior and superior in right to any other Person, other than with
respect to the rights of Persons pursuant to Permitted Liens (it being
understood that subsequent recordings in the United States Patent and Trademark
Office and the United States Copyright Office may be necessary to perfect a Lien
on registered trademarks and patents, trademark and patent applications and
registered copyrights acquired by the Loan Parties after the date hereof).

(c) Except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally, the Mortgages, if any, when delivered, are
effective to create in favor of the Collateral Agent, for the ratable benefit of
the Secured Parties, a legal, valid and enforceable Lien on all of the Loan
Parties’ right, title and interest in and to the Mortgaged Property thereunder
and the proceeds thereof, and when the Mortgages are filed in the appropriate
offices, the Mortgages shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such Mortgaged
Property and the proceeds thereof, in each case prior and superior in right to
any other Person, other than with respect to the rights of Persons pursuant to
Permitted Liens.

 

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SECTION 3.20 Location of Real Property and Leased Premises.

(a) Schedule 3.20(a) lists completely and correctly as of the Closing Date all
real property owned by the Borrower and the Subsidiaries and the addresses
thereof. The Borrower and the Subsidiaries own in fee all the real property set
forth on Schedule 3.20(a).

(b) Schedule 3.20(b) lists completely and correctly as of the Closing Date all
real property leased by the Borrower and the Subsidiaries where any tangible
personal property having a value in excess of $2,000,000 is located and the
addresses thereof. The Borrower and the Subsidiaries have valid leases in all
the real property set forth on Schedule 3.20(b).

SECTION 3.21 Labor Matters.

As of the Closing Date, there are no strikes, lockouts or slowdowns against the
Borrower or any Subsidiary pending or, to the knowledge of the Borrower,
threatened in writing. Except as could not reasonably be expected to result in,
individually or in the aggregate, a Material Adverse Effect, 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. Except as could
not reasonably be expected to result in, individually or in the aggregate, a
Material Adverse Effect, all payments due from the Borrower or any Subsidiary,
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. The consummation of the Transactions will not give rise to any right
of termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which the Borrower or any Subsidiary is
bound.

SECTION 3.22 Solvency.

Immediately after the consummation of the Transactions to occur on the Closing
Date and immediately following the making of each Loan and issuance of each
Letter of Credit and after giving effect to the application of the proceeds of
each Loan and each Letter of Credit, the Borrower and its Subsidiaries, on a
consolidated basis, are Solvent.

SECTION 3.23 Senior Indebtedness.

The Obligations constitute “Senior Debt” and “Designated Senior Debt,” as
applicable, under the indenture or other agreement governing any Subordinated
Debt then outstanding.

SECTION 3.24 Sanctioned Persons.

None of the Borrower or any Subsidiary or any director, officer, agent, employee
or Affiliate of the Borrower or any Subsidiary is currently the subject or
target of any sanctions administered by the U.S. government (including the
Office of Foreign Assets Control of the U.S. Department of the Treasury and the
U.S. Department of State), the United Nations Security Council, the European
Union or any European Union member state, the United Kingdom (including Her
Majesty’s Treasury) or any other relevant national or supra-national sanctions
authority (collectively, “Sanctions”); and the Borrower will not, directly or
indirectly, use the

 

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proceeds of the Loans or the Letters of Credit or otherwise make available such
proceeds to any Person to finance any activities or business of or with any
Person that is the subject or target of any Sanctions, or in any Designated
Jurisdiction, or otherwise in any manner that constitutes or would give rise to
a violation of Sanctions by any Person, including any Lender.

SECTION 3.25 USA PATRIOT Act.

To the extent applicable, each Loan Party is in compliance with all laws or
regulations concerning or relating to terrorism financing or money laundering,
including the USA PATRIOT Act.

SECTION 3.26 Foreign Corrupt Practices Act.

Each of the Borrower and the Subsidiaries and their respective directors,
officers, agents, employees and any Person acting for or on behalf of the
Borrower or any Subsidiary, has complied with, and will comply with, the U.S.
Foreign Corrupt Practices Act, as amended from time to time (the “FCPA”), and
any other applicable anti-bribery, anti-terrorism or anti-corruption law, and it
and they have not made, offered, promised or authorized, and will not make,
offer, promise or authorize, whether directly or indirectly, any payment of
anything of value to a Government Official while knowing or having a reasonable
belief that all or some portion will be used for the purpose of: (a) influencing
any act, decision or failure to act by a Government Official in his or her
official capacity, (b) inducing a Government Official to use his or her
influence with a government or instrumentality to affect any act or decision of
such government or entity or (c) securing an improper advantage, in each case in
order to obtain, retain, or direct business.

SECTION 3.27 Intellectual Property.

(a) Except as could not reasonably be expected to result in, individually or in
the aggregate, a Material Adverse Effect, each of the Borrower and the
Subsidiaries own, or hold licenses in or sufficient rights to use, the
Intellectual Property used in and necessary to the conduct of the business of
the Borrower and each of the Subsidiaries as such business is currently
conducted. Attached hereto as Schedule 3.27(a) (which the Borrower may amend
from time to time provided that notice and copies thereof are provided to the
Administrative Agent in accordance with Section 5.13 is a true, correct, and
complete listing of all material (i) issued patents and patent applications,
(ii) registered trademarks and trademark applications, (iii) registered domain
names and (iv) registered copyrights and works for which an application to
register the copyright has been filed, as to which the Borrower or any
Subsidiary is the owner and which is used in and necessary to the conduct of the
business of the Borrower and each of the Subsidiaries as such business is
currently conducted. Except as could not reasonably be expected to result in,
individually or in the aggregate, a Material Adverse Effect, no claim has been
asserted in writing and is pending by any Person challenging or questioning the
use of any such Intellectual Property or the validity or effectiveness of any
such Intellectual Property, nor does the Borrower or any Subsidiary know of any
valid basis for any such claim. To the knowledge of each of the Borrower and the
Subsidiaries, the conduct of the business of each of the Borrower and the
Subsidiaries as currently conducted does not infringe, misappropriate or
otherwise violate the Intellectual Property of any Person, except as could not
reasonably be expected to result in, individually or in the aggregate, a
Material Adverse Effect.

 

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(b) To the knowledge of each of the Borrower and the Subsidiaries, on and as of
the date hereof, there is no material violation by others of any right of the
Borrower or any Subsidiary with respect to any Intellectual Property owned by
the Borrower or any Subsidiary.

(c) The Borrower and each of the Subsidiaries have taken actions reasonably
necessary to protect their respective material Intellectual Property owned by
the Borrower or any Subsidiary, including, to the extent necessary,
(i) protecting the secrecy and confidentiality of the confidential information
and trade secrets of the Borrower and the Subsidiaries, (ii) taking commercially
reasonable steps to prevent any trade secret of the Borrower or any Subsidiary
from falling into the public domain and (iii) using commercially reasonable
efforts to protect the secrecy and confidentiality of all software of which the
Borrower or any Subsidiary is the owner.

(d) Each of the Borrower and the Subsidiaries has made all reasonably necessary
payments, filings and recordations to protect and maintain its interest in
material registered Intellectual Property used in the conduct of the business of
each of the Borrower and the Subsidiaries as currently conducted in the United
States of America or any other jurisdiction in which such material registered
Intellectual Property is filed, including (i) making all necessary registration,
maintenance, and renewal fee payments, and (ii) filing all reasonably necessary
documents, including all applications for registration of copyright, trademarks
and patents with respect to such material registered Intellectual Property.

(e) Except as could not reasonably be expected to result in, individually or in
the aggregate, a Material Adverse Effect, the Borrower and each of the
Subsidiaries is in compliance with all agreements relating to the license or
transfer of Intellectual Property to or from the Borrower or any Subsidiary.

SECTION 3.28 Healthcare Matters.

(a) Each of the Borrower and its Subsidiaries is in compliance with all
Healthcare Laws applicable to it and its assets, business or operations, except
such non-compliance that could not reasonably be expected to result in,
individually or in the aggregate, a Material Adverse Effect. To the extent any
of the following would violate any law applicable to the Borrower or any
Subsidiary and except where such non-compliance could not reasonably be expected
to result in, individually or in the aggregate, a Material Adverse Effect, no
officer, manager or, to Borrower’s knowledge, employee of Borrower or any
Subsidiary or Person with a “direct or indirect ownership interest” (as that
phrase is defined in 42 C.F.R. §420.201) in any Loan Party has: (i) had a civil
monetary penalty assessed against him or her pursuant to 42 U.S.C. §1320a-7a;
(ii) been convicted (as that term is defined in 42 C.F.R. §1001.2) of any of
those offenses described in 42 U.S.C. §1320a-7b or 18 U.S.C. §§669, 1035, 1347,
1518, including any of the following categories of offenses: (A) criminal
offenses under federal or state law relating to patient neglect or abuse in
connection with the delivery of a healthcare item or service, (B) criminal
offenses under laws related to fraud and abuse, theft, embezzlement, false
statements to third parties, money laundering, kickback, breach of fiduciary
responsibility or other financial misconduct in connection with the delivery of
a healthcare item or service or with

 

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respect to any act or omission in a program operated by or financed in whole or
in part by any federal, state or local governmental agency, (C) laws relating to
the interference with or obstruction of any investigations into any criminal
offenses described in this Section 3.28, or (D) criminal offenses under laws
relating to the unlawful manufacturing, distribution, prescription or dispensing
of a controlled substance; or (iii) been named in a Governmental Authority
unsealed complaint made, or any other action taken pursuant to, the False Claims
Act.

(b) To the Borrower’s knowledge, there is no audit, claim, action, suit,
investigation or administrative or other legal proceeding pending or threatened
in writing against the Borrower or any Subsidiary relating to the Borrower’s or
any Subsidiary’s participation in any Nongovernmental Payor program, except as
could not reasonably be expected to result in, individually or in the aggregate,
a Material Adverse Effect. To the Borrower’s knowledge, no Nongovernmental Payor
has requested or threatened in writing any recoupment, refund or set-off from
the Borrower or any Subsidiary, which could reasonably be expected to result in,
individually or in the aggregate, a Material Adverse Effect. To the Borrower’s
knowledge, there is no suit, claim, action, proceeding, arbitration, mediation
or investigation pending or received or threatened in writing against the
Borrower or any of Subsidiaries which relates in any way to a violation of any
legal requirement pertaining to any Nongovernmental Payor, except where any such
violation could not reasonably be expected to result in, individually or in the
aggregate, a Material Adverse Effect.

(c) Except as could not reasonably be expected to result in, individually or in
the aggregate, a Material Adverse Effect on the ability of the Borrower and the
Subsidiaries to conduct their respective businesses in the ordinary course
consistent with past practice, each of the Borrower and Subsidiaries is in
compliance with all applicable Healthcare Laws regarding the selection,
deselection, and credentialing of employed contractors of professional services,
including, but not limited to, verification of licensing status and eligibility
for reimbursement under Nongovernmental Payor programs. Except as could not
reasonably be expected to result in, individually or in the aggregate, a
Material Adverse Effect on the ability of the Borrower and Subsidiaries to
conduct their respective businesses in the ordinary course consistent with past
practice, all of Borrower’s and the Subsidiaries’ employed contractors of
professional services are properly licensed and hold appropriate clinical
privileges and provider numbers, as applicable, for the services which they
provide.

(d) Each of the Borrower and the Subsidiaries has all Healthcare Authorizations
for the operation of its business, except where the failure to have any such
Healthcare Authorizations to operate its business could not reasonably be
expected to result in, individually or in the aggregate, a Material Adverse
Effect. All Healthcare Authorizations have been duly obtained and are in full
force and effect without any known conflict with the rights of others and free
from any restrictions, except where the failure to duly obtain such Healthcare
Authorizations and maintain them in full force and effect without any known
conflict with the rights of others and free from restrictions could not
reasonably be expected to result in, individually or in the aggregate, a
Material Adverse Effect.

 

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(e) To the extent applicable to Borrower, any Subsidiary, or any Person acting
on behalf of Borrower or any Subsidiary, and for so long as (1) Borrower, any
Subsidiary, or any Person acting on behalf of Borrower or any Subsidiary, is a
“covered entity” as defined in 45 C.F.R. § 160.103, (2) Borrower, any
Subsidiary, or any Person acting on behalf of Borrower or any Subsidiary, is a
“business associate” as defined in 45 C.F.R. § 160.103, (3) Borrower, any
Subsidiary, or any Person acting on behalf of Borrower or any Subsidiary, is
subject to or covered by the HIPAA Administrative Requirements codified at 45
C.F.R. Parts 160 & 162 and/or the HIPAA Security and Privacy Requirements
codified at 45 C.F.R. Parts 160 & 164, and/or (4) Borrower, any Subsidiary, or
any Person acting on behalf of Borrower or any Subsidiary, sponsors any “group
health plans” as defined in 45 C.F.R. § 160.103, Borrower, such Subsidiary or
any Person acting on behalf of Borrower or any Subsidiary, as the case may be,
is compliant with HIPAA, except any noncompliance that could not reasonably be
expected to result in, individually or in the aggregate, a Material Adverse
Effect.

ARTICLE IV

Conditions of Lending

The obligations of the Lenders to make Loans and of the Issuing Bank to issue
Letters of Credit hereunder are subject to the satisfaction of the following
conditions:

SECTION 4.01 All Credit Events. On the date of each Borrowing (other than a
conversion or a continuation of a Borrowing), including on the date of each
issuance, amendment, extension or renewal of a Letter of Credit (each such event
being called a “Credit Event”):

(a) The Administrative Agent shall have received a notice of such Borrowing as
required by Section 2.03 (or such notice shall have been deemed given in
accordance with Section 2.02) or, in the case of the issuance, amendment,
extension or renewal of a Letter of Credit, the Issuing Bank and the
Administrative Agent shall have received a notice requesting the issuance,
amendment, extension or renewal of such Letter of Credit as required by
Section 2.22(b).

(b) Except to the extent expressly set forth in Section 2.23(c)(i), the
representations and warranties set forth in Article III and in each other Loan
Document shall be true and correct in all material respects on and as of the
date of such Credit Event with the same effect as though made on and as of such
date, except to the extent such representations and warranties expressly relate
to an earlier date and except that such materiality qualifier shall not be
applicable to any representation and warranty that is already qualified by
materiality.

(c) Except to the extent expressly set forth in Section 2.23(c)(i), at the time
of and immediately after such Credit Event, no Default or Event of Default shall
have occurred and be continuing.

Each Credit Event shall be deemed to constitute a representation and warranty by
the Borrower on the date of such Credit Event as to the matters specified in
paragraphs (b) and (c) of this Section 4.01.

 

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SECTION 4.02 First Credit Event. Except as otherwise expressly set forth on
Schedule 5.17, on the Closing Date:

(a) The Administrative Agent shall have received, on behalf of itself, the
Lenders and the Issuing Bank, a written opinion of Bass Berry & Sims PLC,
Tennessee counsel to the Loan Parties, Ballard Spahr LLP, Nevada counsel to the
Loan Parties, and Hodgson Russ LLP, New York counsel to the Loan Parties,
(i) dated the Closing Date, (ii) addressed to the Issuing Bank, the
Administrative Agent, the Arrangers and the Lenders, and (iii) covering such
matters relating to the Loan Documents and the Transactions as the
Administrative Agent shall reasonably request, and the Borrower hereby requests
such counsel to deliver such opinions.

(b) The Administrative Agent shall have received (i) a copy of the certificate
or articles of incorporation, including all amendments thereto, of each Loan
Party, certified as of a recent date by the Secretary of State of the state of
its organization, and a certificate as to the good standing of each Loan Party
as of a recent date, from such Secretary of State; (ii) a certificate of the
Secretary or Assistant Secretary of each Loan Party dated the Closing Date and
certifying (A) that attached thereto is a true and complete copy of the by-laws
of such Loan Party as in effect on the Closing Date and at all times since a
date prior to the date of the resolutions described in clause (B) below,
(B) that attached thereto is a true and complete copy of resolutions duly
adopted by the board of directors of such Loan Party authorizing the execution,
delivery and performance of the Loan Documents to which such Person is a party
and, in the case of the Borrower, the borrowings hereunder, and that such
resolutions have not been modified, rescinded or amended and are in full force
and effect, (C) that the certificate or articles of incorporation of such Loan
Party have not been amended since the date of the last amendment thereto shown
on the certificate of good standing furnished pursuant to clause (i) above, and
(D) as to the incumbency and specimen signature of each officer executing any
Loan Document or any other document delivered in connection herewith on behalf
of such Loan Party; (iii) a certificate of another officer as to the incumbency
and specimen signature of the Secretary or Assistant Secretary executing the
certificate pursuant to clause (ii) above; and (iv) such other documents as the
Lenders, the Issuing Bank or the Administrative Agent may reasonably request.

(c) The Administrative Agent shall have received a certificate, dated the
Closing Date and signed by a Financial Officer of the Borrower, confirming
compliance with the conditions precedent set forth in paragraphs (b) and (c) of
Section 4.01 and paragraph (i) of this Section 4.02.

(d) The Administrative Agent, the Arrangers and the Lenders shall have received
all Fees and other amounts due and payable on or prior to the Closing Date,
including, to the extent invoiced, reimbursement or payment of all reasonable
out-of-pocket expenses required to be reimbursed or paid by the Borrower
hereunder or under any other Loan Document.

(e) The Security Documents shall have been duly executed by each Loan Party that
is to be a party thereto and shall be in full force and effect on the Closing
Date. The Collateral Agent on behalf of the Secured Parties shall have a
security interest in the Collateral of the type and priority described in each
Security Document.

 

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(f) The Collateral Agent shall have received a Perfection Certificate with
respect to the Loan Parties dated the Closing Date and duly executed by a
Responsible Officer of the Borrower, and shall have received the results of a
search of the Uniform Commercial Code filings (or equivalent filings) made with
respect to the Loan Parties in the states (or other jurisdictions) of formation
of such Persons, in which the chief executive office of each such Person is
located and in the other jurisdictions in which such Persons maintain property,
in each case as indicated on such Perfection Certificate, together with copies
of the financing statements (or similar documents) disclosed by such search, and
accompanied by evidence reasonably satisfactory to the Collateral Agent that the
Liens indicated in any such financing statement (or similar document) would be
permitted under Section 6.02 or have been or will be contemporaneously released
or terminated.

(g) (i) Subject to Section 5.17, each of the Security Documents, in form and
substance reasonably satisfactory to the Lenders, relating to each of the
Mortgaged Properties shall have been duly executed by the parties thereto and
delivered to the Collateral Agent and shall be in full force and effect,
(ii) each of such Mortgaged Properties shall not be subject to any Lien other
than those permitted under Section 6.02, (iii) subject to Section 5.17, each of
such Security Documents shall have been delivered to the title insurance company
to be filed and recorded in accordance with Section 3.19 (provided that in
jurisdictions that impose mortgage recording taxes, such Security Documents
shall not secure indebtedness in an amount exceeding 110% of the fair market
value of the Mortgaged Property, as reasonably determined in good faith by the
Loan Parties and reasonably acceptable to Collateral Agent), (iv) the applicable
Loan Party shall have used commercially reasonable efforts to obtain a Landlord
Personal Property Collateral Access Agreement executed by the landlord of any
real property leased by the Borrower and the Subsidiaries at which tangible
personal property with a value in excess of $10,000,000 is located and by the
applicable Loan Party for the benefit of Collateral Agent and (v) the Collateral
Agent shall have received such other documents, including but not limited to a
policy or policies of title insurance issued by a nationally recognized title
insurance company, together with such endorsements, coinsurance and reinsurance
as may be requested by the Collateral Agent and the Lenders, insuring the
Mortgages as valid first liens on the Mortgaged Properties, free of Liens other
than those permitted under Section 6.02, together with such surveys (or existing
surveys, together with affidavits stating there has been no change, that are
acceptable to the title insurance company) and legal opinions and flood zone
determinations required to be furnished pursuant to the terms of the Mortgages
or as reasonably requested by the Collateral Agent or the Lenders.

(h) The Administrative Agent shall have received a copy of, or a certificate as
to coverage under, the insurance policies required by Section 5.02 and the
applicable provisions of the Security Documents, each of which shall be endorsed
or otherwise amended to include a customary lender’s loss payable endorsement
and to name the Collateral Agent as additional insured, in form and substance
reasonably satisfactory to the Administrative Agent.

(i) All principal, premium, if any, interest, fees and other amounts due or
outstanding under the Existing Indebtedness shall have been paid in full, the
commitments thereunder terminated and all guarantees and security in support
thereof discharged and released, and the Administrative Agent shall have
received reasonably satisfactory evidence thereof. Immediately after giving
effect to the Transactions and the other transactions contemplated hereby, the
Borrower and the Subsidiaries shall have outstanding no Indebtedness or
preferred stock other than (i) Indebtedness outstanding under this Agreement and
(ii) Indebtedness set forth on Schedule 6.01.

 

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(j) The Arrangers and the Lenders shall have received the financial statements
referred to in Section 3.05.

(k) The Administrative Agent, the Arrangers and the Lenders shall have received
a certificate from the chief financial officer of the Borrower in form and
substance reasonably satisfactory to the Arrangers certifying that the Borrower
and its Subsidiaries, on a consolidated basis after giving effect to the
Transactions, are Solvent.

(l) All requisite Governmental Authorities and third parties shall have approved
or consented to the Transactions and the other transactions contemplated hereby
to the extent required, all applicable appeal periods shall have expired and
there shall not be any pending or threatened litigation, governmental,
administrative or judicial action that could reasonably be expected to restrain,
prevent or impose burdensome conditions on the Transactions or the other
transactions contemplated hereby in any material respect.

(m) The Administrative Agent, the Arrangers and the Lenders shall have received,
at least five Business Days prior to the Closing Date, all documentation and
other information required by regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including the USA
PATRIOT Act.

ARTICLE V

Affirmative Covenants

The Borrower covenants and agrees with each Lender that so long as this
Agreement shall remain in effect and until the Commitments have been terminated
and the principal of and interest on each Loan, all Fees and all other expenses
or amounts payable under any Loan Document shall have been paid in full and all
Letters of Credit have been canceled or have expired and all amounts drawn
thereunder have been reimbursed in full (or, with respect to outstanding Letters
of Credit, have been fully Cash Collateralized), unless the Required Lenders
shall otherwise consent in writing, the Borrower will, and will cause each of
the Subsidiaries to:

SECTION 5.01 Existence; Compliance with Laws; Businesses and Properties.

(a) Do or cause to be done all things reasonably necessary to preserve, renew
and keep in full force and effect its legal existence, except as otherwise
expressly permitted under Section 6.05.

(b) Do or cause to be done all things reasonably necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, registrations, patents, copyrights, trademarks and
trade names material to the conduct of its business (including, for the
avoidance of doubt, the Healthcare Authorizations), except as could not
reasonably be expected to result in, individually or in the aggregate, a
Material Adverse Effect; maintain and operate such business in substantially the
manner in which it is presently conducted and operated (other than as permitted
by Section 6.08); comply in all material respects with all applicable laws,
rules, regulations and decrees and orders of any Governmental Authority, whether
now in effect or hereafter enacted, except as could not reasonably be expected
to result in, individually or in the aggregate, a Material Adverse Effect; and
at all times

 

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maintain and preserve all property material to the conduct of such business and
keep such property in good repair, working order and condition (ordinary wear
and tear and casualty or condemnation exempt) and from time to time make, or
cause to be made, all repairs, renewals, additions, improvements and
replacements thereto that are required or necessary to the conduct of their
business, except as could not reasonably be expected to result in, individually
or in the aggregate, a Material Adverse Effect.

(c) Comply with all Contractual Obligations and Requirements of Law (including,
without limitation ERISA, Sanctions, the USA PATRIOT Act, the FCPA, all
applicable anti-bribery, anti-terrorism, anti-money laundering laws and all
applicable Environmental Laws), except, other than in the case of the USA
PATRIOT Act, the FCPA or Sanctions, (x) to the extent that failure to comply
therewith could not reasonably be expected to result in, individually or in the
aggregate, a Material Adverse Effect or (y) such instances in which such
Contractual Obligation or Requirement of Law is being contested in good faith by
appropriate proceedings diligently conducted.

SECTION 5.02 Insurance.

(a) Keep its insurable properties adequately insured at all times by financially
sound and reputable insurers; maintain such other insurance, to such extent and
against such risks, including fire and other risks insured against by extended
coverage, as is customary with companies in the same or similar businesses
operating in the same or similar locations, including public liability insurance
against claims for personal injury or death or property damage occurring upon,
in, about or in connection with the use of any properties owned, occupied or
controlled by it; and maintain such other insurance as may be required by law.

(b) Cause all such policies covering any Collateral to be endorsed or otherwise
amended to include a customary lender’s loss payable endorsement, in form and
substance reasonably satisfactory to the Administrative Agent and the Collateral
Agent, which endorsement shall provide, to the extent such provisions are
obtainable by the use of commercially reasonable efforts, that, from and after
the Closing Date, if the insurance carrier shall have received written notice
from the Administrative Agent or the Collateral Agent of the occurrence of an
Event of Default, the insurance carrier shall pay all proceeds otherwise payable
to the Borrower or the Loan Parties under such policies directly to the
Collateral Agent; cause all such policies to provide that neither the Borrower,
the Administrative Agent, the Collateral Agent nor any other party shall be a
coinsurer thereunder and to contain a “Replacement Cost Endorsement”, without
any deduction for depreciation, and such other provisions as the Administrative
Agent or the Collateral Agent may reasonably require from time to time to
protect their interests; if requested by the Collateral Agent, deliver original
or certified copies of all such policies to the Collateral Agent; will use
commercially reasonable efforts to cause each such policy to provide that it
shall not be canceled, modified or not renewed (i) by reason of nonpayment of
premium upon not less than 10 days’ prior written notice thereof by the insurer
to the Administrative Agent and the Collateral Agent (giving the Administrative
Agent and the Collateral Agent the right to cure defaults in the payment of
premiums) or (ii) for any other reason upon not less than 30 days’ prior written
notice thereof by the insurer to the Administrative Agent and the Collateral
Agent; deliver to the Administrative Agent and the Collateral Agent, prior to
the cancellation, modification or nonrenewal of any such policy of insurance, a
copy of a renewal or replacement policy (or other evidence of renewal of a
policy previously delivered to the Administrative Agent and the Collateral
Agent) together with evidence reasonably satisfactory to the Administrative
Agent and the Collateral Agent of payment of the premium therefor.

 

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(c) If at any time the area in which the Premises (as defined in the Mortgages)
are located is designated (i) a “flood hazard area” in any Flood Insurance Rate
Map published by the Federal Emergency Management Agency (or any successor
agency), obtain flood insurance in such total amount as the Administrative
Agent, the Collateral Agent or any Lender may from time to time require, and
otherwise comply with the National Flood Insurance Program as set forth in the
Flood Disaster Protection Act of 1973, as it may be amended from time to time,
or (ii) a “Zone 1” area, obtain earthquake insurance in such total amount as the
Administrative Agent, the Collateral Agent or the Required Lenders may from time
to time require.

(d) Carry and maintain comprehensive general liability insurance and umbrella
liability insurance against any and all claims, in no event for a combined
single limit of less than that which is customary for companies in the same or
similar businesses operating in the same or similar locations, naming the
Collateral Agent as an additional insured, on forms reasonably satisfactory to
the Collateral Agent.

SECTION 5.03 Obligations and Taxes.

Pay its Material Indebtedness and other obligations promptly and in accordance
with their terms and pay and discharge promptly when due all federal income
Taxes and all other Taxes imposed upon it or upon its income or profits or in
respect of its property, before the same shall become delinquent or in default,
as well as all lawful claims for labor, materials and supplies or otherwise
that, if unpaid, might give rise to a Lien (other than Permitted Liens) upon
such properties or any material part thereof; provided, however, that such
payment and discharge shall not be required with respect to any such other
obligation or Tax so long as (i) the validity or amount thereof shall be
contested in good faith by appropriate proceedings and the Borrower shall have
set aside on its books adequate reserves with respect thereto in accordance with
GAAP and such contest operates to suspend collection of the contested obligation
or Tax and enforcement of a Lien and, in the case of a Mortgaged Property, there
is no risk of forfeiture of such property or (ii) the failure to pay and
discharge such other obligation or Tax could not reasonably be expected to
result in, individually or in the aggregate, a Material Adverse Effect.

SECTION 5.04 Financial Statements, Reports, etc.

In the case of the Borrower, furnish to the Administrative Agent, which shall
furnish to each Lender:

(a) upon the earlier of the date that is ninety (90) days after the end of each
fiscal year of the Borrower and the date such information is filed with the SEC,
a consolidated balance sheet of the Borrower and its Subsidiaries as at the end
of such fiscal year, and the related consolidated statements of income or
operations, changes in equity holders’ 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 a report and opinion of BDO USA, LLP, or such
other independent certified public accountant of nationally recognized standing
reasonably acceptable to the Administrative Agent, which report and opinion
shall be prepared in accordance with generally accepted auditing standards 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;

 

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(b) upon the earlier of the date that is forty-five (45) days after the end of
each of the first three fiscal quarters of each fiscal year of the Borrower and
the date such information is filed with the SEC, a consolidated balance sheet of
the Borrower and its Subsidiaries as at the end of such fiscal quarter, and the
related consolidated statements of income or operations, changes in equity
holders’ equity and cash flows for such fiscal quarter and for the portion of
the Borrower’s 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 prepared in accordance with GAAP certified by the chief
executive officer, chief financial officer, treasurer or controller who is a
Responsible Officer of the Borrower as fairly presenting the financial
condition, results of operations, equity holders’ equity and cash flows of the
Borrower and its Subsidiaries, subject only to normal year-end audit adjustments
and the absence of footnotes;

(c) concurrently with any delivery of financial statements under paragraph
(a) or (b) above, a certificate of a Financial Officer in the form of Exhibit G
(i) certifying that no Event of Default or Default has occurred or, if such an
Event of Default or Default has occurred, specifying the nature and extent
thereof and any corrective action taken or proposed to be taken with respect
thereto and (ii) in the case of a certificate delivered with the financial
statements required by paragraph (a) above, setting forth the Borrower’s
calculation of Excess Cash Flow and in reasonable detail the Available Amount as
at the end of the fiscal year to which such financial statements relate;

(d) as soon as available, but in any event within sixty (60) days after the end
of each fiscal year of the Borrower, an annual business plan and budget of the
Borrower and its Subsidiaries on a consolidated basis, including forecasts
prepared by management of the Borrower, in form satisfactory to the
Administrative Agent and the Required Lenders, of consolidated balance sheets
and statements of income or operations and cash flows of the Borrower and its
Subsidiaries on a monthly basis for the immediately following fiscal year;

(e) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by the Borrower or
any Subsidiary with the SEC, or any Governmental Authority succeeding to any or
all of the functions of the SEC, or with any national securities exchange, or
distributed to its equity holders, as the case may be;

(f) promptly after the receipt thereof by the Borrower or any of its
subsidiaries, a copy of any “management letter” received by any such Person from
its certified public accountants and the management’s response thereto;

(g) promptly after the request by any Lender, all documentation and other
information that such Lender reasonably requests in order to comply with its
ongoing obligations under applicable “know your customer” and anti-money
laundering rules and regulations, including the USA PATRIOT Act;

 

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(h) promptly after the request by the Administrative Agent or any Lender, copies
of (i) any documents described in Section 101(k)(1) of ERISA that the Borrower
or any of its ERISA Affiliates may request with respect to any Multiemployer
Plan and (ii) any notices described in Section 101(l)(1) of ERISA that the
Borrower or any of its ERISA Affiliates may request with respect to any
Multiemployer Plan; provided that if the Borrower or any of its ERISA Affiliates
has not requested such documents or notices from the administrator or sponsor of
the applicable Multiemployer Plan, the Borrower or the applicable ERISA
Affiliate shall promptly make a request for such documents or notices from such
administrator or sponsor and shall provide copies of such documents and notices
promptly after receipt thereof; and

(i) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of the Borrower or any
Subsidiary, or compliance with the terms of any Loan Document, as the
Administrative Agent or any Lender may reasonably request.

Documents required to be delivered pursuant to Section 5.04(a) or (b) or
Section 5.04(e) (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 (a) on which the
Borrower posts such documents, or provides a link thereto on the Borrower’s
website on the Internet; or (b) on which such documents are posted on the
Borrower’s behalf on an Internet or intranet website, if any, to which each
Lender 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 or any Lender upon its request to the Borrower to deliver
such paper copies until a written request to cease delivering paper copies is
given by the Administrative Agent or such Lender and (ii) the Borrower shall
notify the Administrative Agent and each Lender (by fax transmission or e-mail
transmission) of the posting of any such documents and provide to the
Administrative Agent by e-mail electronic versions (i.e., soft copies) of such
documents. The Administrative Agent shall have no obligation to request the
delivery of or to maintain paper copies of the documents referred to above, and
in any event shall have no responsibility to monitor compliance by the Borrower
with any such request by a Lender for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.

SECTION 5.05 Litigation and Other Notices.

Furnish to the Administrative Agent, the Issuing Bank and each Lender prompt
written notice of the following:

(a) any Event of Default or Default, specifying the nature and extent thereof
and the corrective action (if any) taken or proposed to be taken with respect
thereto;

(b) the filing or commencement of, or any threat or notice of intention of any
Person to file or commence, any action, suit, investigation or proceeding,
whether at law or in equity or by or before any Governmental Authority, against
the Borrower or any Affiliate thereof that could reasonably be expected to
result in, individually or in the aggregate, a Material Adverse Effect;

 

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(c) the occurrence of (i) any ERISA Event that, alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower and the Subsidiaries in an aggregate amount exceeding
$5,000,000, (ii) the adoption of any new Plan by the Borrower or any ERISA
Affiliate, (iii) the adoption of an amendment to a Plan if such amendment
results in a material increase in benefits or unfunded liabilities, or (iv) the
commencement of contributions by the Borrower or any ERISA Affiliate to a Plan
or Multiemployer Plan;

(d) any event or occurrence that has resulted in, or could reasonably be
expected to result in, individually or in the aggregate, a Material Adverse
Effect; and

(e) any change in the Borrower’s corporate rating by S&P, in the Borrower’s
corporate family rating by Moody’s or in the ratings of the Credit Facilities by
S&P or Moody’s, or any notice from either such agency indicating its intent to
effect such a change or to place the Borrower or the Credit Facilities on a
“CreditWatch” or “WatchList” or any similar list, in each case with negative
implications, or its cessation of, or its intent to cease, rating the Borrower
or the Credit Facilities.

SECTION 5.06 Information Regarding Collateral.

(a) Furnish to the Administrative Agent prompt written notice of any change
(i) in any Loan Party’s corporate name, (ii) in the jurisdiction of organization
or formation of any Loan Party, (iii) in any Loan Party’s identity or corporate
structure or (iv) in any Loan Party’s Federal Taxpayer Identification Number.
The Borrower agrees not to effect or permit any change referred to in the
preceding sentence unless all filings have been made, or will be made within 30
days following such change (or such longer date as the Collateral Agent may
agree in its sole discretion), under the Uniform Commercial Code or otherwise
that are required in order for the Collateral Agent to continue at all times
following such change to have a valid, legal and perfected security interest in
all the Collateral. The Borrower also agrees promptly to notify the
Administrative Agent if any material portion of the Collateral is damaged or
destroyed.

(b) In the case of the Borrower, each year, at the time of delivery of the
annual financial statements with respect to the preceding fiscal year pursuant
to Section 5.04(a), deliver to the Administrative Agent a certificate of a
Financial Officer setting forth any information required pursuant to Sections 1,
3, 5, 8, 9 and 11 of the Perfection Certificate (or to the extent such request
relates to specific information contained in the Perfection Certificate, such
information) or confirming that there has been no change in such information
since the date of the Perfection Certificate delivered on the Closing Date or
the date of the most recent certificate delivered pursuant to this Section 5.06.

SECTION 5.07 Maintaining Records; Access to Properties and Inspections;
Maintenance of Ratings.

(a) Keep proper books of record and account in which full, true and correct
entries in conformity with GAAP in all material respects and all Requirements of
Law in all material respects are made of all dealings and transactions in
relation to its business and activities. Each Loan Party will, and will cause
each of its subsidiaries to, permit any representatives designated

 

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by the Administrative Agent or any Lender to visit and inspect the financial
records and the properties of such Person at reasonable times and as often as
reasonably requested and to make extracts from and copies of such financial
records, and permit any representatives designated by the Administrative Agent
or any Lender to discuss the affairs, finances and condition of such Person with
the officers thereof and independent accountants therefor (subject to reasonable
requests for confidentiality, including as may be imposed by law or contract);
provided that absent the existence of a Default or an Event of Default,
inspections pursuant to this Section 5.07 shall be limited to one time per
fiscal year.

(b) In the case of the Borrower, at all times after ratings have been obtained,
use commercially reasonable efforts to (a) maintain a public corporate credit
rating from S&P and a public corporate family rating from Moody’s, in each case
in respect of the Borrower and (b) maintain public ratings from S&P and Moody’s,
in each case in respect of the Credit Facilities.

SECTION 5.08 Use of Proceeds.

Use the proceeds of the Loans and request the issuance of Letters of Credit only
for the purposes specified in Section 3.13 and subject to Section 3.24.

SECTION 5.09 Employee Benefits.

(a) Except to the extent that could not reasonably be expected to result in,
individually or in the aggregate, a Material Adverse Effect, comply with the
applicable provisions of ERISA and the Code applicable to each employee benefit
plan, (b) furnish to the Administrative Agent as soon as possible after, and in
any event within ten days after any Responsible Officer of the Borrower or any
ERISA Affiliate knows or has reason to know that, any ERISA Event has occurred
that, alone or together with any other ERISA Event could reasonably be expected
to result in, individually or in the aggregate, a Material Adverse Effect, a
statement of a Financial Officer of the Borrower setting forth details as to
such ERISA Event and the action, if any, that the Borrower proposes to take with
respect thereto and, when known, any action taken or threatened by the Internal
Revenue Service, the Department of Labor or the PBGC with respect thereto, and
(c) with reasonable promptness, furnish to the Administrative Agent copies of
(i) all written notices received by the Borrower or any of its ERISA Affiliates
from a Multiemployer Plan sponsor concerning such ERISA Event and (ii) such
other documents or governmental reports or findings relating to any Plan as the
Administrative Agent shall reasonably request (but only to the extent in the
possession of any Loan Parties or any of their respective Subsidiaries).

SECTION 5.10 Compliance with Environmental Laws.

Except to the extent that could not reasonably be expected to result in,
individually or in the aggregate, a Material Adverse Effect, comply, and cause
all lessees and any other Person occupying its properties under an agreement
with, or with the consent of, Borrower or any Subsidiary to comply, in all
material respects with all Environmental Laws with respect to its operations and
properties; obtain, maintain and renew all material environmental permits
necessary for its operations and properties; and conduct any remedial action to
the extent required by law and in accordance with Environmental Laws; provided,
however, that neither the Borrower nor any Subsidiary shall be required to
undertake any remedial action required by Environmental Laws to the extent that
its obligation to do so is being contested in good faith and by proper
proceedings and appropriate reserves are being maintained with respect to such
circumstances in accordance with GAAP.

 

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SECTION 5.11 Preparation of Environmental Reports.

If a Default caused by reason of a breach of Section 3.17 or Section 5.10 shall
have occurred and be continuing for more than 20 days without the Borrower or
any Subsidiary commencing activities reasonably likely to cure such Default, at
the written request of the Required Lenders through the Administrative Agent,
provide to the Lenders within 45 days after such request, at the expense of the
Loan Parties, an environmental site assessment report regarding the matters
which are the subject of such Default prepared by an environmental consulting
firm reasonably acceptable to the Administrative Agent and indicating the
presence or absence of Hazardous Materials and the estimated cost of any
compliance or remedial action in connection with such Default.

SECTION 5.12 Further Assurances.

Execute any and all further documents, financing statements, agreements and
instruments, and take all further action (including filing Uniform Commercial
Code and other financing statements, mortgages and deeds of trust) that may be
required under applicable law, or that the Required Lenders, the Administrative
Agent or the Collateral Agent may reasonably request, in order to effectuate the
transactions contemplated by the Loan Documents and in order to grant, preserve,
protect and perfect the validity and priority of the security interests created
or intended to be created by the Security Documents. The Borrower will cause any
subsequently acquired or organized Material Subsidiary (or any Subsidiary that
becomes a Material Subsidiary) to become a Loan Party by executing the Guarantee
and Collateral Agreement and each other applicable Security Document in favor of
the Collateral Agent. In addition, from time to time, the Borrower will, at its
cost and expense, promptly secure the Obligations by pledging or creating, or
causing to be pledged or created, perfected security interests with respect to
such of its assets and properties as the Administrative Agent or the Required
Lenders shall designate (it being understood that it is the intent of the
parties that the Obligations shall be secured by substantially all the assets of
the Borrower and the Subsidiary Guarantors (including all real and other
properties acquired subsequent to the Closing Date, but excluding (a) fee owned
real property (or any interest in real property) with an aggregate fair market
value (in the Borrower’s reasonable good faith determination) less than
$15,000,000 to the extent acquired subsequent to the Closing Date, but provided
that any individual parcel of fee owned real property (or any interest in real
property) with a fair market value (in the Borrower’s reasonable good faith
determination) greater than $5,000,000 acquired subsequent to the Closing Date
shall be so pledged, (b) the Healthcare Facilities set forth on Schedule 6.03
and (c) all real property leasehold interests; provided that the Borrower may,
in its sole discretion, elect to grant a Mortgage over any fee owned real
property (or any interest in real property) in accordance with this
Section 5.12. Such security interests and Liens will be created under the
Security Documents and other security agreements, mortgages, deeds of trust and
other instruments and documents in form and substance reasonably satisfactory to
the Collateral Agent, and the Borrower shall deliver or cause to be delivered to
the Lenders all such instruments and documents (including instruments and
documents required under Section 4.02(g), legal opinions,

 

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title insurance policies and lien searches) as the Collateral Agent shall
reasonably request to evidence compliance with this Section 5.12. The Borrower
agrees to provide such evidence as the Collateral Agent shall reasonably request
as to the perfection and priority status of each security interest and Lien
created or required to be created under any Loan Document. In furtherance of the
foregoing, the Borrower will give prompt notice to the Administrative Agent of
the acquisition by it or any of the Subsidiaries of any fee owned real property
(or any interest in real property) having a value equal to or in excess of
$5,000,000 (excluding any real property leasehold interest). Notwithstanding the
foregoing, no Loan Party shall be required to pledge or grant security interests
in any Excluded Assets. No appraisals shall be required to be obtained in
connection with any mortgage of real property pursuant to this Section 5.12.

SECTION 5.13 Intellectual Property.

(a) No Loan Party shall intentionally do any act or intentionally omit to do any
act whereby any of the material Intellectual Property owned by such Loan Party
may lapse, or become abandoned, canceled, dedicated to the public, forfeited,
unenforceable or otherwise impaired, or which would adversely affect the
validity, grant, or enforceability of the security interest granted therein;
provided, however, that such Loan Party may discontinue the use and/or
maintenance of any Intellectual Property, including any material Intellectual
Property, that such Loan Party determines, in its reasonable good faith
determination, is no longer desirable in the ordinary conduct of such Loan
Party’s business. No Loan Party shall, with respect to any Trademarks (as the
term is defined in the Guarantee and Collateral Agreement) constituting material
Intellectual Property owned by such Loan Party, cease the use of any of such
Trademarks or fail to maintain a similar level of quality of products sold and
services rendered under any such Trademark as the quality of such products and
services as of the Closing Date, and such Loan Party shall take reasonable steps
necessary to insure that licensees of such Trademarks use such consistent
standards of quality; provided, however, that such Loan Party may discontinue
the use and/or maintenance of any Trademarks constituting material Intellectual
Property, that such Loan Party determines, in its reasonable good faith
determination, is no longer valuable in the ordinary conduct of such Loan
Party’s business. Each Loan Party shall take reasonable steps in the ordinary
course of business, including in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office, any state registry or
any foreign counterpart of the foregoing, to pursue any application and maintain
any registration or issuance of each Trademark, Patent, and Copyright (as each
such term is defined in the Guarantee and Collateral Agreement) owned by any
Loan Party and constituting material Intellectual Property that such Loan Party
determines is desirable in the ordinary course of business.

(b) Other than in the ordinary course of business and except as could not
reasonably be expected to result in, individually or in the aggregate, a
Material Adverse Effect, each Loan Party shall timely notify the Collateral
Agent if it knows or has reason to know that any item of material Intellectual
Property owned by a Loan Party may become (i) abandoned or dedicated to the
public or placed in the public domain, (ii) invalid or unenforceable,
(iii) subject to any adverse determination or development regarding any Loan
Party’s ownership, registration or use or the validity or enforceability of such
item of such material Intellectual Property (including but not limited to the
institution of, or any adverse development with respect to, any action or
proceeding in the United States Patent and Trademark Office, the United States
Copyright Office, any state registry, any foreign counterpart of the foregoing,
any court or any tribunal) or (iv) the subject of any reversion or termination
rights.

 

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(c) Each Loan Party shall not permit the inclusion in any contract to which it
hereafter becomes a party and pursuant to which it acquires Intellectual
Property any provision that could or may in any way materially impair or prevent
the creation of a security interest in, or the assignment of, such Loan Party’s
rights and interests in any property included within the definitions of any
material Intellectual Property acquired under such contracts.

(d) In the event that any material Intellectual Property owned by or exclusively
licensed to any Loan Party, to a Loan Party’s knowledge, is infringed,
misappropriated, diluted or otherwise violated by a third party, such Loan Party
shall take commercially reasonable actions, as it would otherwise in such Loan
Party’s reasonable good faith determination and in the ordinary course of
business take, to stop such infringement, misappropriation, dilution or other
violation and protect its rights in such material Intellectual Property
including, in such Loan Party’s reasonable good faith determination, if
necessary, the initiation of a suit for injunctive relief and to recover
damages. Each Loan Party shall use commercially reasonable efforts in the
ordinary course of business to use proper statutory notice in connection with
its use of any of the material Intellectual Property.

SECTION 5.14 Compliance with Real Estate Obligations.

Make all payments and otherwise perform all obligations in respect of all leases
of real property to which the Borrower or any of its Subsidiaries is a party,
keep such leases in full force and effect and not allow such leases to lapse or
be terminated or any rights to renew such leases to be forfeited or cancelled,
notify the Administrative Agent of any default by any party with respect to such
leases and cooperate with the Administrative Agent in all respects to cure any
such default, and cause each of its Subsidiaries to do so, except, in any case,
where the failure to do so could not reasonably be expected to result in,
individually or in the aggregate, a Material Adverse Effect.

SECTION 5.15 Lender Calls.

The Borrower will, upon the request of the Administrative Agent or the Required
Lenders, participate in a conference call with the Administrative Agent and the
Lenders once during each fiscal quarter at such times as may be agreed to be the
Borrower and the Administrative Agent.

SECTION 5.16 Healthcare Laws.

The Borrower and its Subsidiaries shall:

(a) Within five (5) Business Days after obtaining knowledge thereof, provide
notice to the Administrative Agent of (i) any material investigation, audit or
proceeding (or any of the foregoing threatened in writing) relating to any
violation by the Borrower or its Subsidiaries of any Healthcare Laws and (ii) to
the extent that it could reasonably be expected to result in, individually or in
the aggregate, a Material Adverse Effect, any written recommendation from any
Governmental Authority that the Borrower or any of its Subsidiaries should have
its licensure, accreditation or registration suspended, revoked or limited;

 

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(b) Take all reasonable action to cause each provider of professional services
employed or contracted by Borrower or its Subsidiaries to be in compliance with
all laws, rules, regulations, restrictions and requirements pertaining to a
healthcare providers imposed by any Governmental Authority;

(c) Obtain and maintain and take all reasonable action to cause each provider of
professional services employed or contracted by Borrower or its Subsidiaries to
obtain and maintain all Healthcare Authorizations as are required for the
conduct of its business as currently conducted and contemplated;

(d) Ensure and take all reasonable action to cause each provider of professional
services employed or contracted by Borrower or its Subsidiaries to ensure that
coding and billing policies, arrangements, protocols and instructions are in
compliance with all applicable laws and all Nongovernmental Payor reimbursement
requirements and will be administered by properly trained personnel;

(e) Keep and maintain all records required by Governmental Authorities in
compliance with applicable Healthcare Laws;

(f) Implement and take all reasonable action to cause each provider of
professional services employed or contracted by Borrower or its Subsidiaries to
implement practices that are consistent with the applicable regulations
implementing the requirements of the Health Insurance Portability and
Accountability Act (“HIPAA”), the Mental Health Parity and Addiction Equity Act
of 2008 (“MHPAEA”) and the Health Information Technology for Economic and
Clinical Health Act (the “HITECH Act”);

(g) Maintain the storage, use, transportation and disposal of all medical
equipment, supplies, products, gases and waste in compliance with Healthcare
Laws;

(h) Maintain all deposits relating to Healthcare Laws in compliance with
regulatory requirements;

(i) Ensure that each Healthcare Facility is operated in compliance with
applicable Healthcare Laws relating thereto and agreements necessary for
certification, licensure or operation of such Healthcare Facility; and

(j) Ensure all residency and other similar agreements with Persons at a
Healthcare Facility are in compliance with Healthcare Laws.

Notwithstanding anything to the contrary in this Section 5.16, any failure by
the Borrower or any of its Subsidiaries to comply with the requirements of
clauses (b)-(j) above shall not be deemed to be a Default or an Event of Default
if such failure to comply could not reasonably be expected to result in,
individually or in the aggregate, a Material Adverse Effect.

 

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SECTION 5.17 Post-Closing Obligations.

Within the periods of time after the Closing Date set forth on Schedule 5.17 (or
such later date as the Administrative Agent may agree in its sole discretion),
each of the items listed on Schedule 5.17 shall have been duly executed by the
parties thereto and delivered to the Agents, as applicable.

ARTICLE VI

Negative Covenants

The Borrower covenants and agrees with each Lender that, so long as this
Agreement shall remain in effect and until the Commitments have been terminated
and the principal of and interest on each Loan, all Fees and all other expenses
or amounts payable under any Loan Document have been paid in full and all
Letters of Credit have been cancelled or have expired and all amounts drawn
thereunder have been reimbursed in full (or, with respect to outstanding Letters
of Credit, have been fully Cash Collateralized or other arrangements acceptable
to the Issuing Bank and the Administrative Agent have been made), unless the
Required Lenders shall otherwise consent in writing, the Borrower will not, nor
will it cause or permit any of the Subsidiaries to:

SECTION 6.01 Indebtedness.

Incur, create, assume or permit to exist any Indebtedness, except:

(a) Indebtedness existing on the Closing Date and set forth in Schedule 6.01 and
any extensions, renewals, refinancings or replacements of such Indebtedness to
the extent the principal amount of such Indebtedness is not increased (except by
an amount equal to any interest capitalized in connection with any premium or
other reasonable amount paid, and fees and expenses (including original issue
discount and upfront fees) reasonably incurred, in connection with such
extension, renewal, refinancing or replacement), neither the final maturity nor
the Weighted Average Life to Maturity of such Indebtedness is decreased, such
Indebtedness, if subordinated to the Obligations, remains so subordinated on
terms no less favorable to the Lenders, and the original Loan Party obligors in
respect of such Indebtedness remain the only Loan Party obligors thereon;

(b) Indebtedness created hereunder and under the other Loan Documents;

(c) unsecured intercompany Indebtedness of the Borrower and the Subsidiaries to
the extent permitted by Section 6.04(c) so long as such Indebtedness is
subordinated to the Obligations pursuant to an Affiliate Subordination Agreement
to the extent required by Section 6.04(c);

(d) (i) Capital Lease Obligations and (ii) other Indebtedness of the Borrower or
any Subsidiary incurred to finance the acquisition, construction or improvement
of any fixed or capital assets, and extensions, refinancings, renewals and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof (except by an amount equal to any interest capitalized
in connection with, any premium or other reasonable amount paid, and fees and
expenses (including original issue discount and upfront fees) reasonably
incurred, in connection with such extension, renewal, refinancing or
replacement); provided that such Indebtedness is incurred prior to or within 270
days after such acquisition or the completion of such construction or
improvement; provided, further that all such Indebtedness permitted by this
Section 6.01(d) shall not exceed $10,000,000 at any time outstanding;

 

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(e) Indebtedness under performance bonds, bid bonds, appeal bonds, surety bonds
and completion guarantees and similar obligations, or with respect to workers’
compensation claims, in each case incurred in the ordinary course of business;

(f) Indebtedness in respect of netting services, overdraft protections, Cash
Management Services, credit card or debit card or similar processors and
otherwise in connection with deposit accounts, in each case, in the ordinary
course of business;

(g) obligations arising under indemnity agreements or other arrangements with
title insurers to cause such title insurers to issue title policies in the
ordinary course of business;

(h) Indebtedness of any Person that becomes a Subsidiary after the date hereof;
provided that (i) such Indebtedness exists at the time such Person becomes a
Subsidiary and is not created in contemplation of or in connection with such
Person becoming a Subsidiary, (ii) immediately before and after such Person
becomes a Subsidiary, no Default or Event of Default shall have occurred and be
continuing and (iii) the aggregate principal amount of Indebtedness permitted by
this Section 6.01(h) shall not exceed $10,000,000 at any time outstanding;

(i) Indebtedness in respect of those Hedging Agreements incurred in the ordinary
course of business, not for speculative purposes and consistent with prudent
business practice;

(j) unsecured Indebtedness in respect of the repurchase or redemption of Equity
Interests of the Borrower or any of the Subsidiaries issued to employees,
officers or directors of the Borrower or any of the Subsidiaries in an aggregate
principal amount not to exceed $5,000,000 at any time outstanding; provided that
such Indebtedness is subordinated to the Obligations on terms reasonably
acceptable to the Administrative Agent;

(k) Indebtedness representing deferred compensation or reimbursable expenses
owed to employees of the Borrower or any of the Subsidiaries incurred in the
ordinary course of business;

(l) unsecured Indebtedness of the Borrower or any Loan Party to finance
Permitted Acquisitions in an aggregate principal amount not to exceed
$15,000,000 at any time outstanding;

(m) unsecured Indebtedness of the Borrower that matures at least 91 days after
the later of the Term Loan Maturity Date and the Incremental Term Loan Maturity
Date as in effect at the time of the issuance of such unsecured Indebtedness and
so long as the Total Leverage Ratio would not exceed 4.75:1.00, calculated on a
pro forma basis as of the most recently completed period of four consecutive
fiscal quarters for which the financial statements and certificates required by
Section 5.04(a) or (b), as the case may be, have been or were required to have
been delivered;

 

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(n) unsecured Indebtedness in the form of obligations under indemnification,
purchase price adjustments, incentive, non-compete, consulting, deferred
compensation, earn-out and similar obligations incurred in connection with any
Permitted Acquisition;

(o) Indebtedness consisting of the financing of insurance premiums in the
ordinary course of business;

(p) Indebtedness of the Borrower or any Subsidiary Guarantor as an account party
in respect of trade letters of credit issued in the ordinary course of business;

(q) Guarantees in respect of Indebtedness of the Borrower or any Subsidiary
otherwise permitted hereunder; provided that if the Indebtedness that is being
Guaranteed is unsecured and/or subordinated to the Obligations, the Guarantee
shall also be unsecured and/or subordinated to the Obligations on the same
basis;

(r) other Indebtedness of the Borrower in an aggregate principal amount not to
exceed $10,000,000 (or, so long as at the time of the incurrence of such
Indebtedness the Senior Secured Leverage Ratio would not exceed 3.25:1.00,
calculated on a pro forma basis as of the most recently completed period of four
consecutive fiscal quarters for which the financial statements and certificates
required by Section 5.04(a) or (b), as the case may be, have been or were
required to have been delivered, $20,000,000) at any time outstanding;

(s) from and after the Revolving Credit Maturity Date (or such earlier date if
the Revolving Credit Commitments have been terminated), revolving Indebtedness
up to the aggregate principal amount of the Revolving Credit Commitments so
terminated from time to time; and

(t) any Attributable Indebtedness incurred in connection with any Sale and
Leaseback Transaction permitted by Section 6.03.

SECTION 6.02 Liens.

Create, incur, assume or permit to exist any Lien on any property or assets
(including Equity Interests or other securities of any Person, including the
Borrower or any Subsidiary) now owned or hereafter acquired, created, developed
or invented by it or on any income or revenues or rights in respect of any
thereof, except (collectively, “Permitted Liens”):

(a) Liens on property or assets of the Borrower and its Subsidiaries existing on
the Closing Date and set forth in Schedule 6.02; provided that such Liens shall
secure only those obligations which they secure on the date hereof and
extensions, refinancing, renewals and replacements thereof permitted hereunder;

(b) any Lien created under the Loan Documents;

(c) any Lien existing on any property or asset prior to the acquisition thereof
by the Borrower or any Subsidiary or existing on any property or assets of any
Person that becomes a Subsidiary after the date hereof prior to the time such
Person becomes a Subsidiary, as the case may be; provided that (i) such Lien is
not created in contemplation of or in connection with such

 

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acquisition or such Person becoming a Subsidiary, (ii) such Lien does not apply
to any other property or assets of the Borrower or any Subsidiary and (iii) such
Lien secures only those obligations which it secures on the date of such
acquisition or the date such Person becomes a Subsidiary, as the case may be,
and any extensions, refinancing, renewals and replacements thereof permitted
hereunder;

(d) Liens for Taxes not yet delinquent or that are being contested in compliance
with Section 5.03;

(e) Liens in favor of customs and revenue authorities arising as a matter of law
to secure payments of customs duties in connection with the importation of goods
in the ordinary course of business;

(f) Liens on insurance policies and the proceeds thereof in favor of the
provider of such policies securing the financing of the premiums with respect
thereto;

(g) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business and securing obligations
that are not delinquent for a period of more than 30 days or which are being
contested in compliance with Section 5.03;

(h) Liens incurred and pledges and deposits made in the ordinary course of
business in compliance with workmen’s compensation, unemployment insurance,
general liability, property insurance and other social security laws or
regulations;

(i) deposits to secure the performance of bids, trade contracts (other than for
Indebtedness), leases (other than Capital Lease Obligations), statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business;

(j) easements, rights-of-way, restrictions on use of real property, minor
defects or irregularities in title and other similar charges or encumbrances
which, in the aggregate, do not materially detract from the value of the
property subject thereto or do not interfere in any material respect with the
business of the Borrower and the Subsidiaries, taken as a whole;

(k) Liens securing Indebtedness to finance the acquisition, construction or
improvement of any fixed or capital assets; provided that (i) such security
interests secure Indebtedness permitted by Section 6.01(d), (ii) such security
interests are incurred, and the Indebtedness secured thereby is created, within
270 days after such acquisition (or construction), (iii) the Indebtedness
secured thereby does not exceed the lesser of the cost or the fair market value
of such real property, improvements or equipment at the time of such acquisition
(or construction) and (iv) such security interests do not apply to any other
property or assets of the Borrower or any Subsidiary;

(l) Liens securing reimbursement obligations in respect of documentary letters
of credit or bankers’ acceptances in the ordinary course of business, provided
that such Liens attach only to the documents and goods covered thereby and
proceeds thereof;

 

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(m) leases, subleases, licenses or sublicenses (but only including non-exclusive
licenses of Intellectual Property) granted to other Persons in the ordinary
course of business of the Borrower or its Subsidiaries;

(n) any interest of title of a lessor under any lease entered into by the
Borrower or any other Subsidiary as tenant in the ordinary course of business
and covering only the assets so leased;

(o) judgment Liens securing judgments not constituting an Event of Default under
Section 7.01(i);

(p) zoning, building codes and other land use laws, regulations and ordinances
regulating the use or occupancy of real property or the activities conducted
thereon which are imposed by any Governmental Authority having jurisdiction over
such real property which are not violated by the current use or occupancy of
such real property or the operation of the business of the Borrower or any of
the Subsidiaries, any violation of which could not reasonably be expected to
result in, individually or in the aggregate, a Material Adverse Effect;

(q) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for the sale or purchase of goods entered into by the
Borrower or any of the Subsidiaries in the ordinary course of business permitted
hereunder;

(r) Liens solely on any cash earnest money deposits made by the Borrower or any
of the Subsidiaries in connection with any letter of intent or purchase
agreement permitted hereunder;

(s) Liens on property rented to, or leased by, Borrower or any of its
Subsidiaries pursuant to a Sale and Leaseback Transaction; provided that
(i) such Sale and Leaseback Transaction is permitted by Section 6.03, (ii) such
Liens do not encumber any other property of Borrower or its Subsidiaries and
(iii) such Liens secure only the Attributable Indebtedness incurred in
connection with such Sale and Leaseback Transaction; and

(t) other Liens securing liabilities hereunder in an aggregate principal amount
not to exceed $10,000,000 at any time outstanding.

SECTION 6.03 Sale and Leaseback Transactions.

Enter into any arrangement, directly or indirectly, with any Person whereby it
shall sell or transfer any property, real or personal, used or useful in its
business, whether now owned or hereafter acquired, and thereafter rent or lease
such property or other property which it intends to use for substantially the
same purpose or purposes as the property being sold or transferred (any such
arrangement, a “Sale and Leaseback Transaction”) unless (a) (i) such Sale and
Leaseback Transaction is consummated within 270 days after the date on which
such property is sold or transferred, (ii) any Liens arising in connection with
such Sale and Leaseback Transaction are permitted by Section 6.02(s) and
(iii) the sale or transfer of such property is made for cash consideration in an
amount not less than the fair market value of such property and does not exceed
$22,000,000 in the aggregate when taken together with all other Sale and
Leaseback Transactions consummated after the Closing Date other than any Sale
and Leaseback Transaction consummated pursuant to Section 6.03(b) or (b) any
Sale and Leaseback Transaction is a sale or transfer after the Closing Date of
any of the Healthcare Facilities set forth on Schedule 6.03.

 

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SECTION 6.04 Investments, Loans and Advances.

Purchase, hold or acquire any Equity Interests, evidences of indebtedness or
other securities of, make or permit to exist any loans or advances to, or make
or permit to exist any investment or any other interest in, any other Person,
except:

(a) (i) investments by the Borrower and the Subsidiaries existing on the Closing
Date in the Equity Interests of the Borrower and the Subsidiaries and
(ii) additional investments by the Borrower and the Subsidiaries in the Equity
Interests of the Borrower and the Subsidiaries; provided that (A) any such
Equity Interests held by a Loan Party shall be pledged pursuant to the Guarantee
and Collateral Agreement (subject to the limitations referred to therein and in
Section 5.12) and (B) the aggregate amount of investments (other than in respect
of Permitted Acquisitions) made after the Closing Date by Loan Parties in, and
loans and advances made after the Closing Date by Loan Parties to, Subsidiaries
that are not Loan Parties (determined without regard to any write-downs or
write-offs of such investments, loans and advances) shall not exceed the
Floating Investments Basket at any time;

(b) Permitted Investments;

(c) loans or advances made by the Borrower to any Subsidiary and made by any
Subsidiary to the Borrower or any other Subsidiary; provided that (i) any such
loans and advances made by a Loan Party to a non-Loan Party in an aggregate
principal amount in excess of $10,000,000 shall be evidenced by a promissory
note pledged to the Collateral Agent for the ratable benefit of the Secured
Parties pursuant to the Guarantee and Collateral Agreement, (ii) such loans and
advances shall be unsecured and subordinated to the Obligations pursuant to an
Affiliate Subordination Agreement and (iii) the aggregate principal amount of
such loans and advances made by Loan Parties to Subsidiaries that are not Loan
Parties shall be subject to the limitation set forth in clause (a) above;

(d) investments received in connection with the bankruptcy or reorganization of,
or settlement of delinquent accounts and disputes with, customers and suppliers,
in each case in the ordinary course of business;

(e) the Borrower and the Subsidiaries may make loans and advances in the
ordinary course of business to their respective employees, officers and
directors so long as the aggregate principal amount thereof at any time
outstanding (determined without regard to any write-downs or write-offs of such
loans and advances) shall not exceed $5,000,000;

(f) the Borrower or any Subsidiary may acquire all or substantially all the
assets of a Person or line of business of such Person (or, in the case of an
acquisition by the Borrower or any Wholly-Owned Subsidiary of any Person that
will constitute a Controlled Physician Affiliate, may acquire, in its own name
or through a nominee, the right to acquire all of the Voting Equity Interests

 

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of such Person and enter into a long-term business agreement with such Person to
provide management services to such Person to the extent the Voting Equity
Interests of such Person cannot, pursuant to applicable Laws, or should not, in
the reasonable good faith determination of the Borrower, be owned by the
Borrower or any Wholly-Owned Subsidiary), in one transaction or a series of
related transactions (provided that all such related transactions shall be
consummated on or prior to the date that is the six-month anniversary of the
date on which the first of such related transactions was consummated), or not
less than 85% (or, in the case of any Person that will constitute a Controlled
Physician Affiliate, 50%) of the Equity Interests (other than directors’
qualifying shares) of such Person (referred to herein as the “Acquired Entity”);
provided that (i) the Acquired Entity shall be in a similar, related, incidental
or complementary line of business as that of the Borrower and the Subsidiaries
as conducted during the current and most recent calendar year; and (ii) at the
time of consummation of such transaction (A) both before and after giving effect
thereto, no Default or Event of Default shall have occurred and be continuing;
(B) the Borrower would be in compliance with the covenant set forth in
Section 6.10 as of the most recently completed period of four consecutive fiscal
quarters ending prior to such transaction for which the financial statements and
certificates required by Section 5.04(a) or (b), as the case may be, have been
or were required to have been delivered after giving pro forma effect to such
transaction and to any other event occurring after such period as to which pro
forma recalculation is required (including any other transaction described in
this Section 6.04(f) occurring after such period) as if such transaction had
occurred as of the first day of such period; (C) the Borrower shall have
delivered a certificate of a Financial Officer, certifying as to the foregoing
and containing reasonably detailed calculations in support thereof, in form and
substance reasonably satisfactory to the Administrative Agent, (D) the Borrower
shall comply, and shall cause the Acquired Entity to comply, with the applicable
provisions of Section 5.12 and the Security Documents and (E) the pro forma
Available Liquidity shall not be less than $17,500,000 (any acquisition of an
Acquired Entity meeting all the criteria of this Section 6.04(f) being referred
to herein as a “Permitted Acquisition”);

(g) investments by the Borrower in Hedging Agreements permitted under
Section 6.01(i);

(h) investments in joint ventures and unconsolidated subsidiaries useful in the
business of the Borrower and its Subsidiaries in an aggregate amount not to
exceed the Floating Investments Basket at any time; and

(i) in addition to investments permitted by paragraphs (a) through (h) above,
additional investments, loans and advances by the Borrower and the Subsidiaries
so long as the aggregate amount invested, loaned or advanced pursuant to this
paragraph (i) (determined without regard to any write-downs or write-offs of
such investments, loans and advances) does not exceed (i) the Floating
Investments Basket at any time plus (ii) so long as no Event of Default or
Default is continuing or would result therefrom, the Available Amount at the
time of such investment.

SECTION 6.05 Mergers, Consolidations, Sales of Assets and Acquisitions.

(a) Merge into or consolidate with any other Person, or permit any other Person
to merge into or consolidate with it, or sell, transfer, lease or otherwise
dispose of (in one transaction or in a series of transactions) all or
substantially all the assets (whether now owned or hereafter acquired) of the
Borrower or any Subsidiary, or purchase, lease or otherwise acquire (in

 

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one transaction or a series of transactions) all or any substantial part of the
assets of any other Person, except that (i) the Borrower and any Subsidiary may
purchase and sell inventory in the ordinary course of business, (ii) if at the
time thereof and immediately after giving effect thereto no Event of Default or
Default shall have occurred and be continuing (x) any Wholly-Owned Subsidiary
may merge into the Borrower in a transaction in which the Borrower is the
surviving corporation, (y) any Wholly-Owned Subsidiary may merge into or
consolidate with any other Wholly-Owned Subsidiary in a transaction in which the
surviving entity is a Wholly-Owned Subsidiary and no Person other than the
Borrower or a Wholly-Owned Subsidiary receives any consideration (provided that
if any party to any such transaction is a Loan Party, the surviving entity of
such transaction shall be a Loan Party), (iii) any Loan Party (other than
Borrower) may dispose of any or all of its assets or any Equity Interests of any
Subsidiary to any other Loan Party, (iv) the Borrower or any Subsidiary may
consummate any Sale and Leaseback Transaction permitted by Section 6.03 and
(v) the Borrower and the Subsidiaries may make Permitted Acquisitions and
investments pursuant to Section 6.04(h) and Section 6.04(i).

(b) Make any Asset Sale otherwise permitted under paragraph (a) above unless
such Asset Sale is for consideration at least 75% of which is cash.

SECTION 6.06 Restricted Payments; Restrictive Agreements.

(a) Declare or make, or agree to declare or make, directly or indirectly, any
Restricted Payment (including pursuant to any Synthetic Purchase Agreement), or
incur any obligation (contingent or otherwise) to do so; provided that (i) so
long as no Event of Default or Default shall have occurred and be continuing or
would result therefrom, the Borrower and the Subsidiaries may, and may make
distributions to one another so that any of the Borrower or the Subsidiaries
may, (x) repurchase Equity Interests issued to employees, directors and officers
of the Borrower or the Subsidiaries (including repurchases of Equity Interests
from severed or terminated employees, directors and officers) and (y) make
payments to employees, directors and officers of the Borrower or the
Subsidiaries in connection with Equity Interests (and the exercise thereof)
pursuant to incentive plans or arrangements, in an aggregate amount under this
clause (i) not to exceed $5,000,000 in the aggregate and (ii) so long as (x) no
Event of Default or Default is continuing or would result therefrom and (y) the
Senior Secured Leverage Ratio calculated on a pro forma basis both before and
after giving effect to any such Restricted Payment is not greater than
3.50:1.00, the Borrower may make Restricted Payments to pay dividends to the
equity holders of the Borrower in an aggregate amount not to exceed the
Available Amount at the time of such Restricted Payment.

(b) Enter into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (i) the ability of the
Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any
of its property or assets to secure the Obligations, or (ii) the ability of any
Subsidiary to pay dividends or other distributions with respect to any of its
Equity Interests or to make or repay loans or advances to the Borrower or any
other Subsidiary or to Guarantee Indebtedness of the Borrower or any other
Subsidiary; provided that (A) the foregoing shall not apply to (w) restrictions
and conditions imposed by law or by any Loan Document as in effect on the
Closing Date, (x) customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary (or any other sale of assets or Equity
Interests permitted hereunder) pending such sale, provided such restrictions and

 

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conditions apply only to the Subsidiary, asset or Equity Interest that is to be
sold and such sale is permitted hereunder, and (y) any agreement in effect at
the time a Person became a Subsidiary, so long as such agreement (1) was not
entered into solely in contemplation of such Person becoming a Subsidiary,
(2) applies only to such Person, (3) does not extend to any other Loan Party and
(4) is otherwise permitted hereunder and does not conflict with the provisions
of this Agreement or any other Loan Document, and (B) clause (i) of the
foregoing shall not apply to (x) restrictions or conditions imposed by any
agreement relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness, and (y) customary provisions in leases and other contracts
restricting the assignment thereof.

SECTION 6.07 Transactions with Affiliates.

Except for transactions between or among Loan Parties, sell or transfer any
property or assets to, or purchase or acquire any property or assets from, or
otherwise engage in any other transactions with, any of its Affiliates, except
for transactions (a) as set forth on Schedule 6.07, (b) for compensation or
employment, separation and severance of officers, directors or employees in the
ordinary course of business and for any issuance of Equity Interests, or other
payments, awards or grants in cash, securities or otherwise pursuant to, or the
funding of, employment arrangements, stock options and stock ownership plans, or
indemnities provided on behalf of employees or directors, all which are approved
by the board of directors or similar management body of any Loan Party, (c) for
the maintenance of benefit programs or arrangements with employees, officers or
directors, including, without limitation, vacation plans, health and life
insurance plans, deferred compensation plans and retirement or savings plans and
similar plans, in each case, in the ordinary course of business or (d) at prices
and on terms and conditions not less favorable to the Borrower or such
Subsidiary than could be obtained on an arm’s-length basis from unrelated third
parties.

SECTION 6.08 Business of Borrower and Subsidiaries.

Engage at any time in any business or business activity other than the business
currently conducted by it and business activities reasonably similar,
incidental, related or complementary thereto and reasonable extensions thereof,
including without limitation a business which is a Healthcare Service Business.

SECTION 6.09 Other Indebtedness and Agreements.

(a) Permit any waiver, supplement, modification, amendment, termination or
release of any indenture, instrument or agreement pursuant to which any Material
Indebtedness of the Borrower or any of the Subsidiaries is outstanding if the
effect of such waiver, supplement, modification, amendment, termination or
release would materially increase the obligations of the obligor or confer
additional material rights on the holder of such Indebtedness in a manner
adverse to the Borrower, any of the Subsidiaries or the Lenders or (b) permit
any waiver, supplement, modification or amendment of its certificate of
incorporation, by-laws, operating, management or partnership agreement or other
organizational documents, to the extent any such waiver, supplement,
modification or amendment would be adverse to the Lenders in any material
respect.

 

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(b) Make any distribution, whether in cash, property, securities or a
combination thereof, other than regular scheduled payments of principal and
interest as and when due (to the extent not prohibited by applicable
subordination provisions), in respect of, or pay, or commit to pay, or directly
or indirectly (including pursuant to any Synthetic Purchase Agreement) redeem,
repurchase, retire or otherwise acquire for consideration, or set apart any sum
for the aforesaid purposes, any Indebtedness except (i) the payment of the
Indebtedness created hereunder, (ii) refinancings, renewals or extensions of
Indebtedness permitted by Section 6.01, (iii) the payment of secured
Indebtedness that becomes due as a result of the voluntary sale or transfer of
the property or assets securing such Indebtedness and (iv) the payment of any
Indebtedness permitted under Section 6.01 in an aggregate amount not to exceed
the Available Amount at the time of such payment so long as (x) no Event of
Default or Default is continuing or would result therefrom and (y) the Senior
Secured Leverage Ratio calculated on a pro forma basis both before and after
giving effect to any such payment is not greater than 3.50:1.00.

SECTION 6.10 Maximum Senior Secured Leverage Ratio.

On the last day of any fiscal quarter (commencing with the first full fiscal
quarter ending after the Closing Date), the Borrower shall not permit the Senior
Secured Leverage Ratio to be greater than (a) 5.25:1.00 as of the last day of
each such fiscal quarter ending before March 31, 2019, (b) 4.75:1.00 as of the
last day of each such fiscal quarter ending on or after March 31, 2019 and
(c) 4.25:1.00 as of the last day of each such fiscal quarter ending on or after
March 31, 2020.

SECTION 6.11 Fiscal Year.

With respect to the Borrower, change its fiscal year-end to a date other than
December 31.

SECTION 6.12 Sanctions.

The Borrower and its Subsidiaries shall not directly or indirectly fund any
activities of or business with any Person that is the subject of Sanctions, or
in any Designated Jurisdiction, or in any other manner that constitutes or would
give rise to a violation by any Person (including any Person participating in
the Transactions, whether as Lender, Arranger, Administrative Agent, Issuing
Bank or otherwise) of Sanctions.

SECTION 6.13 Anti-Corruption, Anti-Bribery, Anti-Terrorism and Anti-Money
Laundering Laws.

The Borrower and its Subsidiaries shall not directly or indirectly breach the
FCPA, USA PATRIOT Act, the UK Bribery Act 2010 or any other applicable
anti-corruption, anti-bribery, anti-terrorism or anti-money laundering
legislation in the United States, United Kingdom and other jurisdictions.

 

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SECTION 6.14 Use of Proceeds.

The Borrower and its Subsidiaries shall not use the proceeds of the Loans and
request the issuance of Letters of Credit other than for the purposes specified
in Section 3.13 and subject to Section 3.24.

SECTION 6.15 Healthcare Authorizations.

(a) The Borrower and its Subsidiaries will not transfer or assign any Healthcare
Authorization, reimbursement or care contract or Nongovernmental Payor contract
except in connection with a permitted sale of a healthcare asset or if transfer
could not reasonably be expected to result in, individually or in the aggregate,
a Material Adverse Effect; and

(b) The Borrower and its Subsidiaries will not fail to maintain in effect all
Healthcare Authorizations, except to the extent that such failure to maintain a
Healthcare Authorization could not reasonably be expected to result in,
individually or in the aggregate, a Material Adverse Effect.

ARTICLE VII

Events of Default

SECTION 7.01 Events of Default.

In case of the happening of any of the following events (“Events of Default”):

(a) any representation or warranty made or deemed made in or in connection with
any Loan Document or the borrowings or issuances of Letters of Credit hereunder,
or any representation, warranty, statement or information contained in any
report, certificate, financial statement or other instrument furnished in
connection with or pursuant to any Loan Document, shall prove to have been false
or misleading in any material respect when so made, deemed made or furnished,
except that such materiality qualifier shall not be applicable to any
representation and warranty that is already qualified by materiality;

(b) default shall be made in the payment of any principal of any Loan or the
reimbursement with respect to any L/C Disbursement when and as the same shall
become due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or by acceleration thereof or otherwise;

(c) default shall be made in the payment of any interest on any Loan or any Fee
or L/C Disbursement or any other amount (other than an amount referred to in
paragraph (b) above) due under any Loan Document, when and as the same shall
become due and payable, and such default shall continue unremedied for a period
of five Business Days;

(d) default shall be made in the due observance or performance by the Borrower
or any Subsidiary of any covenant, condition or agreement contained in
Section 5.05(a) or 5.08 or in Article VI;

 

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(e) default shall be made in the due observance or performance by the Borrower
or any Subsidiary of any covenant, condition or agreement contained in any Loan
Document (other than those specified in paragraph (b), (c) or (d) above) and
such default shall continue unremedied for a period of 30 days after the earlier
of (i) notice thereof from the Administrative Agent to the Borrower (which
notice shall also be given at the request of any Lender) or (ii) knowledge
thereof of the Borrower;

(f) (i) the Borrower or any Subsidiary shall fail to pay any principal, interest
or amount, regardless of amount, due in respect of any Material Indebtedness,
when and as the same shall become due and payable beyond the grace period, if
any, provided therefor, (ii) any other event or condition occurs that results in
any Material Indebtedness becoming due prior to its scheduled maturity or
(iii) any other event or condition occurs that enables or permits (after giving
effect to any grace period) the holder or holders of any Material Indebtedness
or any trustee or agent on its or their behalf to cause any Material
Indebtedness to become due, or to require the prepayment, repurchase, redemption
or defeasance thereof, prior to its scheduled maturity; provided that
clauses (ii) and (iii) above shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;

(g) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed in a court of competent jurisdiction seeking (i) relief in
respect of the Borrower or any Material Subsidiary or of a substantial part of
the property or assets of the Borrower or a Material Subsidiary, under Title 11
of the United States Code, as now constituted or hereafter amended, or any other
Federal, state or foreign bankruptcy, insolvency, receivership or similar law,
(ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Material Subsidiary or
for a substantial part of the property or assets of the Borrower or a Material
Subsidiary or (iii) the winding-up or liquidation of the Borrower or any
Material Subsidiary; and such proceeding or petition shall continue undismissed
for 60 days or an order or decree approving or ordering any of the foregoing
shall be entered;

(h) the Borrower or any Material Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other Federal,
state or foreign bankruptcy, insolvency, receivership or similar law,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition described in
paragraph (g) above, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
the Borrower or any Material Subsidiary or for a substantial part of the
property or assets of the Borrower or any Material Subsidiary, (iv) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of creditors,
(vi) become unable, admit in writing its inability or fail generally to pay its
debts as they become due or (vii) take any corporate action for the purpose of
effecting any of the foregoing;

(i) one or more judgments shall be rendered against the Borrower, any Subsidiary
or any combination thereof (to the extent not fully covered by independent and
unaffiliated third-party insurance as to which the insurer has not denied
coverage or does not deny coverage (or, if the applicable claim is pending, the
Borrower reasonably expects the insurer not to deny coverage)) and the same
shall remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally taken
by a judgment creditor to levy upon assets or properties of the Borrower or any
Subsidiary to enforce any such judgment and such judgment either (i) is for the
payment of money in an aggregate amount in excess of $15,000,000 or (ii) is for
injunctive relief and could reasonably be expected to result in, individually or
in the aggregate, a Material Adverse Effect;

 

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(j) there shall occur an ERISA Event, that, when taken together with all other
such ERISA Events, could reasonably be expected to result in, individually or in
the aggregate, a Material Adverse Effect to the Borrower and its ERISA
Affiliates;

(k) any Guarantee under the Guarantee and Collateral Agreement for any reason
shall cease to be in full force and effect (other than in accordance with its
terms), or any Subsidiary Guarantor shall deny in writing that it has any
further liability under the Guarantee and Collateral Agreement (other than as a
result of the discharge of such Subsidiary Guarantor in accordance with the
terms of the Loan Documents);

(l) the security interests purported to be created by the Security Documents
shall cease to be, or shall be asserted by the Borrower or any other Loan Party
not to be, for any reason a valid and perfected Lien with the priority required
by the applicable Loan Documents on and security interest in any material
portion of the Collateral purported to be covered thereby, subject to Liens
permitted under Section 6.02, except (i) as a result of the Collateral Agent’s
action or failure to take any action required to be taken by it following the
due performance by the Loan Parties of any related obligation of a Loan Party
and (ii) as to Collateral consisting of material owned or leased real property
to the extent that covered by a lender’s title insurance policy and such insurer
has not denied coverage;

(m) any Subordinated Debt of the Borrower and the Subsidiaries constituting
Material Indebtedness shall cease (or any Loan Party or an Affiliate of any Loan
Party shall so assert in writing), for any reason, to be validly subordinated to
the Obligations as provided in the indenture or other agreement evidencing such
Subordinated Debt;

(n) there occurs the loss, suspension or revocation of, or failure to renew, any
registrations, licenses, permits, authorizations or clearances (including, for
the avoidance of doubt, the Healthcare Authorizations) now held or hereafter
acquired by the Borrower or any other Loan Party, if such loss, suspension,
revocation or failure to renew could reasonably be expected to result in,
individually or in the aggregate, a Material Adverse Effect;

(o) there shall have occurred a Change in Control; or

(p) any Loan Party is excluded from any Nongovernmental Payor program that has
resulted or could reasonably be expected to result in non-compliance with the
financial covenant in Section 6.10;

then, and in every such event (other than an event with respect to the Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to the Borrower, take either or both of
the following actions, at the same or different times: (i) terminate forthwith
the Commitments and (ii) declare the Loans then outstanding to be forthwith due
and payable in whole or in part, whereupon the principal of the Loans so
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to be due and payable, together with accrued interest thereon and any unpaid
accrued Fees and all other liabilities of the Borrower accrued hereunder and
under any other Loan Document, shall become forthwith due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived by the Borrower, anything contained herein or in any
other Loan Document to the contrary notwithstanding; and in any event with
respect to the Borrower described in paragraph (g) or (h) above, the Commitments
shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and any unpaid accrued Fees and all other
liabilities of the Borrower accrued hereunder and under any other Loan Document,
shall automatically become due and payable, without presentment, demand, protest
or any other notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Loan Document to the
contrary notwithstanding.

SECTION 7.02 Right to Cure.

(a) Notwithstanding anything to the contrary contained in Section 7.01, in the
event that the Borrower fails to comply with the financial covenant in
Section 6.10, from the day after the end of the applicable four fiscal quarter
period until the date that is ten Business Days after the date on which the
Compliance Certificate is required to be delivered pursuant to Section 5.04(c)
for such fiscal period, the Borrower shall have the right to issue Junior
Capital for cash or otherwise receive the net cash proceeds of any cash capital
contribution (collectively, the “Cure Right”), and upon the receipt by the
Borrower of such cash net proceeds (the “Cure Amount”), the financial covenant
in Section 6.10 shall be recalculated giving effect to the following pro forma
adjustments:

(i) Consolidated EBITDA shall be increased, solely for the purpose of measuring
the financial covenant in Section 6.10 and not for any other purpose under this
Agreement, by an amount equal to the Cure Amount for the fiscal quarter with
respect to which the Cure Right is exercised and each of the following three
fiscal quarters; and

(ii) if, after giving effect to the foregoing recalculations, the Borrower shall
then be in compliance with the requirements of the financial covenant in
Section 6.10, the Borrower shall be deemed to have satisfied the requirements of
such financial covenant, as of the relevant date of determination with the same
effect as though there had been no failure to comply therewith at such date, and
the applicable breach or default of such financial covenant that had occurred
shall be deemed cured for all purposes of this Agreement.

(b) Notwithstanding anything herein to the contrary, (i) in each
four-fiscal-quarter period there shall be at least two fiscal quarters in which
the Cure Right is not exercised, (ii) the Cure Right may be exercised on no more
than four occasions, (iii) the Cure Amount shall be no greater than the amount
required for purposes of complying with the financial covenant in Section 6.10,
(iv) all Cure Amounts and the use of proceeds therefrom shall be disregarded for
all other purposes under the Loan Documents (including calculating Consolidated
EBITDA and for purposes of Section 6.06), (v) upon the Administrative Agent’s
receipt of a notice from the Borrower that it intends to exercise the Cure
Right, neither

 

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the Administrative Agent nor any Lender shall exercise the right to accelerate
the Loans or terminate the Commitments and neither the Administrative Agent nor
any Lender, Collateral Agent or any other Secured Party shall exercise any right
to foreclose on or take possession of the Collateral solely on the basis of an
Event of Default having occurred and being continuing under the financial
covenant in Section 6.10 until the expiration of the ten-Business-Day period
referred to in the first sentence of Section 7.02(a) (unless prior to the
expiration thereof, the application of the Cure Right so cured such Event of
Default in accordance with the foregoing provisions), and (vi) if, after
increasing the amount of Consolidated EBITDA in accordance with
Section 7.02(a)(i), the Borrower shall be in compliance with the requirements of
Section 6.10 in accordance with Section 7.02(a)(ii), then any Event of Default
arising from the failure of the Borrower to be in compliance with Section 6.10
shall automatically, without any further action by any party hereto, be deemed
not to have occurred hereunder.

ARTICLE VIII

The Administrative Agent and the Collateral Agent; Etc.

Each Lender and the Issuing Bank hereby irrevocably appoints the Administrative
Agent and the Collateral Agent (for purposes of this Article VIII, the
Administrative Agent and the Collateral Agent are referred to collectively as
the “Agents”) its agent and authorizes the Agents to take such actions on its
behalf and to exercise such powers as are delegated to such Agent by the terms
of the Loan Documents, together with such actions and powers as are reasonably
incidental thereto. Without limiting the generality of the foregoing, the Agents
are hereby expressly authorized to (i) execute any and all documents (including
releases) with respect to the Collateral and the rights of the Secured Parties
with respect thereto, as contemplated by and in accordance with the provisions
of this Agreement and the Security Documents and (ii) negotiate, enforce or the
settle any claim, action or proceeding affecting the Lenders in their capacity
as such, at the direction of the Required Lenders, which negotiation,
enforcement or settlement will be binding upon each Lender.

The institution serving as the Administrative Agent and/or the Collateral Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not an Agent, and
such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or
other Affiliate thereof as if it were not an Agent hereunder.

No Agent shall have any duties or obligations except those expressly set forth
in the Loan Documents. Without limiting the generality of the foregoing,
(a) neither Agent shall be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing, (b) neither
Agent shall have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby that such Agent is instructed in writing to exercise by the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.08); provided that
the Administrative Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, may expose the Administrative Agent to
liability or that is contrary to any Loan Document or Requirement of Law,
including for the avoidance of doubt any action that may be in violation of the
automatic stay under any Debtor Relief Law or that may effect a forfeiture,
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violation of any Debtor Relief Law, and (c) except as expressly set forth in the
Loan Documents, neither Agent shall have any duty to disclose, nor shall it be
liable for the failure to disclose, any information relating to the Borrower or
any of the Subsidiaries that is communicated to or obtained by the bank serving
as Administrative Agent and/or Collateral Agent or any of its Affiliates in any
capacity. Neither Agent shall be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.08) or in the absence of its own gross negligence or
willful misconduct. Neither Agent shall be deemed to have knowledge of any
Default unless and until written notice thereof is given to such Agent by the
Borrower or a Lender, and neither Agent shall be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered thereunder or in connection
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Loan Document, (iv) the
validity, enforceability, effectiveness or genuineness of any Loan Document or
any other agreement, instrument or document or (v) the satisfaction of any
condition set forth in Article IV or elsewhere in any Loan Document, other than
to confirm receipt of items expressly required to be delivered to such Agent.

Each Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument,
document or other writing believed by it to be genuine and to have been signed
or sent by the proper Person. Each Agent may also rely upon any statement made
to it orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon. Each Agent may
consult with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

Each Agent may perform any and all its duties and exercise its rights and powers
by or through any one or more sub-agents appointed by it. Each Agent and any
such sub-agent may perform any and all its duties and exercise its rights and
powers by or through their respective Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of each Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the Credit
Facilities as well as activities as Agent.

Subject to the appointment and acceptance of a successor Agent as provided
below, either Agent may resign at any time by notifying the Lenders, the Issuing
Bank and the Borrower. Upon any such resignation, the Required Lenders shall
have the right, with the consent (not to be unreasonably withheld, conditioned
or delayed) of the Borrower, to appoint a successor; provided that during the
existence and continuation of an Event of Default, no consent of the Borrower
shall be required. If no successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Agent gives notice of its resignation, then the retiring Agent may, on
behalf of the Lenders and the Issuing Bank, appoint a successor Agent which
shall be a bank with an office in New York, New York, having a combined capital
and surplus of at least $1,000,000,000, or an Affiliate of any such bank. If no
successor Agent has been appointed pursuant to the immediately preceding
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by the 30th day after the date such notice of resignation was given by such
Agent, such Agent’s resignation shall become effective and the Required Lenders
shall thereafter perform all the duties of such Agent hereunder and/or under any
other Loan Document until such time, if any, as the Required Lenders appoint a
successor Administrative Agent and/or Collateral Agent, as the case may be, with
the consent (not to be unreasonably withheld, conditioned or delayed) of the
Borrower; provided that during the existence and continuation of an Event of
Default, no consent of the Borrower shall be required. Any such resignation by
such Agent hereunder shall also constitute, to t he extent applicable, its
resignation as an Issuing Bank, in which case such resigning Agent (x) shall not
be required to issue any further Letters of Credit hereunder and (y) shall
maintain all of its rights as Issuing Bank with respect to any Letters of Credit
issued by it prior to the date of such resignation. Upon the acceptance of its
appointment as Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Borrower to a successor Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After an Agent’s resignation hereunder,
the provisions of this Article and Section 9.05 shall continue in effect for the
benefit of such retiring Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while acting as Agent.

If the Person serving as Administrative Agent is a Defaulting Lender pursuant to
clause (d) of the definition thereof, the Required Lenders may, to the extent
permitted by applicable law, by notice in writing to the Borrower and such
Person remove such Person as Administrative Agent and, in consultation with the
Borrower, appoint a successor. If no such successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
(or such earlier day as shall be agreed by the Required Lenders) (the “Removal
Effective Date”), then such removal shall nonetheless become effective in
accordance with such notice on the Removal Effective Date and the Required
Lenders shall thereafter perform all the duties of the Administrative Agent
hereunder and/or under any other Loan Document until such time, if any, as the
Required Lenders appoint a successor Administrative Agent.

Each Lender acknowledges that it has, independently and without reliance upon
the Agents or any other Lender and based on such documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon the Agents or any other Lender and based on such documents
and information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement or any other Loan Document, any related agreement or any document
furnished hereunder or thereunder.

Notwithstanding any other provision of this Agreement or any provision of any
other Loan Document and each of the Arrangers are named as such for recognition
purposes only, and in their respective capacities as such shall have no duties,
responsibilities or liabilities with respect to this Agreement or any other Loan
Document; it being understood and agreed that each of the Arrangers shall be
entitled to all indemnification and reimbursement rights in favor of the Agents
provided herein and in the other Loan Documents. Without limitation of the
foregoing, none of the Arrangers in their respective capacities as such shall,
by reason of this Agreement or any other Loan Document, have any fiduciary
relationship in respect of any Lender, Loan Party or any other Person. Each
party hereto agrees that each Agent not a signatory hereto shall be a third
party beneficiary of the rights herein set forth applicable to such Agent.

 

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ARTICLE IX

Miscellaneous

SECTION 9.01 Notices; Electronic Communications.

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, sent by fax or via electronic mail, as follows:

(a) if to the Borrower, to it at AAC Holdings, Inc., 200 Powell Place,
Brentwood, TN 37027, Attention: Kirk R. Manz, Chief Financial Officer
(Telephone: 615-679-4737; Email: kmanz@contactaac.com) and Attention: Andrew W.
McWilliams, Chief Accounting Officer (Telephone: 615-732-1385; Email:
amcwilliams@contactaac.com) and Attention: Kathryn Sevier Phillips, Chief Legal
Officer, General Counsel and Secretary (Telephone: 615-732-1366; Email:
ksphillips@contactaac.com);

(b) if to the Administrative Agent, to Credit Suisse AG, Agency Manager, Eleven
Madison Avenue, 9th Floor, New York, NY 10010, Fax No. 212-322-2291, Email:
agency.loanops@credit-suisse.com;

(c) if to the Issuing Bank, to Credit Suisse AG, Trade Finance/Services
Department, Eleven Madison Avenue, 9th Floor, New York, NY 10010, Fax
No. 212-325-8315, Email: list.ib-lettersofcredit-ny@credit-suisse.com; and

(d) if to a Lender, to it at its address (or fax number) set forth on Schedule
2.01 or in the Assignment and Acceptance pursuant to which such Lender shall
have become a party hereto.

All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by fax
or on the date five Business Days after dispatch by certified or registered mail
if mailed, in each case delivered, sent or mailed (properly addressed) to such
party as provided in this Section 9.01 or in accordance with the latest
unrevoked direction from such party given in accordance with this Section 9.01.
As agreed to among the Borrower, the Administrative Agent and the applicable
Lenders from time to time, notices and other communications may also be
delivered by e-mail to the e-mail address of a representative of the applicable
Person provided from time to time by such Person.

The Borrower hereby agrees, unless directed otherwise by the Administrative
Agent or unless the electronic mail address referred to below has not been
provided by the Administrative Agent to the Borrower, that it will, or will
cause its Subsidiaries to, provide to the Administrative Agent all information,
documents and other materials that it is obligated to furnish to the
Administrative Agent pursuant to the Loan Documents or to the Lenders under
Article V,

 

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including all notices, requests, financial statements, financial and other
reports, certificates and other information materials, but excluding any such
communication that (i) is or relates to a Borrowing Request, a notice pursuant
to Section 2.10 or a notice requesting the issuance, amendment, extension or
renewal of a Letter of Credit pursuant to Section 2.22, (ii) relates to the
payment of any principal or other amount due under this Agreement prior to the
scheduled date therefor, (iii) provides notice of any Default or Event of
Default under this Agreement or any other Loan Document or (iv) is required to
be delivered to satisfy any condition precedent to the effectiveness of this
Agreement and/or any Borrowing or other extension of credit hereunder (all such
non-excluded communications being referred to herein collectively as
“Communications”), by transmitting the Communications in an electronic/soft
medium that is properly identified in a format acceptable to the Administrative
Agent to an electronic mail address as directed by the Administrative Agent. In
addition, the Borrower agrees, and agrees to cause its Subsidiaries, to continue
to provide the Communications to the Administrative Agent or the Lenders, as the
case may be, in the manner specified in the Loan Documents but only to the
extent requested by the Administrative Agent.

The Borrower hereby acknowledges that (a) the Administrative Agent will make
available to the Lenders and the Issuing Bank materials and/or information
provided by or on behalf of the Borrower hereunder (collectively, the “Borrower
Materials”) by posting the Borrower Materials on Intralinks or another similar
electronic system (the “Platform”) and (b) certain of the Lenders may be
“public-side” Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to the Borrower, their respective
subsidiaries or their respective securities) (each, a “Public Lender”). The
Borrower hereby agrees that (w) all 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; (x) by marking Borrower Materials “PUBLIC,” the
Borrower shall be deemed to have authorized the Administrative Agent and the
Lenders to treat such Borrower Materials as not containing any material
non-public information with respect to the Borrower, their respective
subsidiaries or their respective securities for purposes of foreign, United
States federal and state securities laws (provided that, to the extent such
Borrower Materials constitute Information, they shall be treated as set forth in
Section 9.16); (y) all Borrower Materials marked “PUBLIC” are permitted to be
made available through a portion of the Platform designated as “Public
Investor”; and (z) the Administrative Agent 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 marked as “Public Investor”.
Notwithstanding the foregoing, the following Borrower Materials shall be deemed
to be marked “PUBLIC” unless the Borrower notifies the Administrative Agent
promptly that any such document contains material non-public information:
(1) the Loan Documents, (2) any notification of changes in the terms of the
Credit Facilities and (3) all information delivered pursuant to Sections
5.04(a), (b) and (c).

Each Public Lender agrees to cause at least one individual at or on behalf of
such Public Lender to at all times have selected the “Private Side Information”
or similar designation on the content declaration screen of the Platform in
order to enable such Public Lender or its delegate, in accordance with such
Public Lender’s compliance procedures and applicable law, including foreign,
United States Federal and state securities laws, to make reference to
Communications that are not made available through the “Public Side Information”
portion of the Platform and that may contain material non-public information
with respect to the Borrower or its securities for purposes of foreign, United
States Federal or state securities laws.

 

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THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” NEITHER THE ADMINISTRATIVE
AGENT NOR ANY OF ITS RELATED PARTIES WARRANTS THE ACCURACY OR COMPLETENESS OF
THE COMMUNICATIONS OR THE ADEQUACY OF THE PLATFORM AND EACH EXPRESSLY DISCLAIMS
LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS IS MADE BY THE ADMINISTRATIVE AGENT
OR ANY OF ITS RELATED PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE
PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED
PARTIES HAVE ANY LIABILITY TO ANY LOAN PARTY, ANY LENDER OR ANY OTHER PERSON FOR
DAMAGES OF ANY KIND, WHETHER OR NOT BASED ON STRICT LIABILITY AND INCLUDING
DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR
EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY LOAN
PARTY’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE
INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY SUCH PERSON IS FOUND IN A
FINAL RULING BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY
FROM SUCH PERSON’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

The Administrative Agent agrees that the receipt of the Communications by the
Administrative Agent at its e-mail address set forth above shall constitute
effective delivery of the Communications to the Administrative Agent for
purposes of the Loan Documents. Each Lender agrees that receipt of notice to it
(as provided in the next sentence) specifying that the Communications have been
posted to the Platform shall constitute effective delivery of the Communications
to such Lender for purposes of the Loan Documents. Each Lender agrees to notify
the Administrative Agent in writing (including by electronic communication) from
time to time of such Lender’s e-mail address to which the foregoing notice may
be sent by electronic transmission and that the foregoing notice may be sent to
such e-mail address.

Nothing herein shall prejudice the right of the Administrative Agent or any
Lender to give any notice or other communication pursuant to any Loan Document
in any other manner specified in such Loan Document.

SECTION 9.02 Survival of Agreement.

All covenants, agreements, representations and warranties made by the Borrower
herein and in the certificates or other instruments prepared or delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the Lenders and the Issuing Bank and
shall survive the making by the Lenders of the Loans and the issuance of Letters
of Credit by the Issuing Bank, regardless of any investigation made by the
Lenders or the Issuing Bank or on their behalf, and shall continue in full force
and effect as long

 

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as the principal of or any accrued interest on any Loan or any Fee or any other
amount payable under this Agreement or any other Loan Document is outstanding
and unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not been terminated. The provisions of Sections 2.14, 2.16, 2.20 and 9.05
shall remain operative and in full force and effect regardless of the expiration
of the term of this Agreement, the consummation of the transactions contemplated
hereby, the repayment of any of the Loans, the expiration of the Commitments,
the expiration of any Letter of Credit, the invalidity or unenforceability of
any term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent, the Collateral
Agent, any Lender or the Issuing Bank.

SECTION 9.03 Binding Effect.

This Agreement shall become effective when it shall have been executed by the
Borrower and the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto.

SECTION 9.04 Successors and Assigns.

(a) Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the permitted successors and assigns of
such party; and all covenants, promises and agreements by or on behalf of the
Borrower, the other Loan Parties, the Administrative Agent, the Collateral
Agent, the Issuing Bank or the Lenders that are contained in this Agreement
shall bind and inure to the benefit of their respective successors and assigns.

(b) Each Lender may assign to one or more Eligible Assignees all or a portion of
its interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided,
however, that (i) the amount of the Commitment or Loans of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative
Agent) shall be in an integral multiple of, and not less than, $1,000,000 (or,
if less, the entire remaining amount of such Lender’s Commitment or Loans of the
relevant Class); provided that simultaneous assignments by two or more Related
Funds shall be combined for purposes of determining whether the minimum
assignment requirement is met, (ii) the parties to each assignment shall
(A) execute and deliver to the Administrative Agent an Assignment and Acceptance
via an electronic settlement system acceptable to the Administrative Agent or
(B) if previously agreed with the Administrative Agent, manually execute and
deliver to the Administrative Agent an Assignment and Acceptance, and, in each
case, shall pay to the Administrative Agent a processing and recordation fee of
$3,500 (which fee may be waived or reduced in the sole discretion of the
Administrative Agent) and (iii) the assignee, if it shall not be a Lender, shall
deliver to the Administrative Agent an Administrative Questionnaire (in which
the assignee shall designate one or more credit contacts to whom all
syndicate-level information (which may contain material non-public information
about the Loan Parties and their Related Parties or their respective securities)
will be made available and who may receive such information in accordance with
the assignee’s compliance procedures and applicable laws, including foreign,
United States Federal and state securities laws) and all applicable tax forms.
Upon acceptance and recording pursuant to paragraph (e) of this Section 9.04,
from and after the

 

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effective date specified in each Assignment and Acceptance, (A) the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement and (B) the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender’s rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of, and subject to the
obligations of, Sections 2.14, 2.16, 2.20 and 9.05, as well as to any Fees
accrued for its account and not yet paid); provided that, except to the extent
otherwise expressly agreed by the affected parties, no assignment by a
Defaulting Lender will constitute a waiver or release of any claim of any party
hereunder arising from that Lender’s having been a Defaulting Lender.

(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the assignee thereunder shall be deemed to confirm to and
agree with each other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim and that its
Term Loan Commitment and Revolving Credit Commitment, and the outstanding
balances of its Term Loans and Revolving Loans, in each case without giving
effect to assignments thereof which have not become effective, are as set forth
in such Assignment and Acceptance, (ii) except as set forth in clause (i) above,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto, or the financial condition of the Borrower or any Subsidiary or the
performance or observance by the Borrower or any Subsidiary of any of its
obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee represents
and warrants that it is an Eligible Assignee legally authorized to enter into
such Assignment and Acceptance; (iv) such assignee confirms that it has received
a copy of this Agreement, together with copies of the most recent financial
statements referred to in Section 3.05(a) or delivered pursuant to Section 5.04
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Assignment and
Acceptance; (v) such assignee will independently and without reliance upon the
Administrative Agent, the Collateral Agent, such assigning Lender 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; (vi) such assignee appoints and authorizes the
Administrative Agent and the Collateral Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement as are delegated to
the Administrative Agent and the Collateral Agent, respectively, by the terms
hereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all the obligations which by the terms of this Agreement are required to be
performed by it as a Lender.

 

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(d) The Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at one of its offices in The City of New York a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount (and stated interest) of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive absent manifest error and the Borrower, the
Administrative Agent, the Issuing Bank, the Collateral Agent and the Lenders
shall 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; provided that except to the extent
otherwise expressly agreed by the affected parties, no assignment by a
Defaulting Lender will constitute a waiver or release of any claim of any party
hereunder arising from the Lender’s having been a Defaulting Lender. The
Register shall be available for inspection by the Borrower, the Issuing Bank,
the Collateral Agent and any Lender, at any reasonable time and from time to
time upon reasonable prior notice.

(e) Upon its receipt of, and consent to, a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) above, if applicable, and the written consent of the
Administrative Agent and, if required, the Borrower and the Issuing Bank to such
assignment and any applicable tax forms, the Administrative Agent shall promptly
(i) accept such Assignment and Acceptance and (ii) record the information
contained therein in the Register. No assignment shall be effective unless it
has been recorded in the Register as provided in this paragraph (e).

(f) Each Lender may without the consent of the Borrower, the Issuing Bank or the
Administrative Agent sell participations to one or more banks or other Persons
(other than to any Disqualified Institution or any natural person) in all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans owing to it); provided, however, that
(i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) the participating banks or other
Persons shall be entitled to the benefit of the cost protection provisions
contained in, and subject to the obligations contained in, Section 2.14, 2.16
and 2.20 to the same extent as if they were Lenders (provided that such
participating bank or other Person (A) agrees to be subject to the provisions of
Sections 2.21 as if it were an assignee under paragraph (b) of this Section; and
(B) shall not be entitled to receive any greater payment under Section 2.14 or
2.20, with respect to any participation, than its participating Lender would
have been entitled to receive, except to the extent such entitlement to receive
a greater payment results from a Change in Law that occurs after the
participating bank or other Person acquired the applicable participation) and
(iv) the Borrower, the Administrative Agent, the Issuing Bank and the Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrower relating to the
Loans or L/C Disbursements and to approve any amendment, modification or waiver
of any provision of this Agreement (other than amendments, modifications or
waivers decreasing any fees payable to such participating bank or Person
hereunder or the amount of principal of or the rate at which interest is payable
on the Loans in which such participating bank or Person has an interest,
extending any scheduled principal payment date or date fixed for the payment of
interest on the Loans in which such participating bank or Person has an
interest, increasing or extending the Commitments in which such participating
bank or Person has an interest or releasing any

 

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Subsidiary Guarantor (other than in connection with the sale of such Subsidiary
Guarantor in a transaction permitted by Section 6.05) or all or substantially
all of the Collateral). To the extent permitted by law, each participating bank
or other Person also shall be entitled to the benefits of Section 9.06 as though
it were a Lender, provided such participating bank or other Person agrees to be
subject to Section 2.18 as though it were a Lender. Each Lender that sells a
participation shall, acting solely for this purpose as a non-fiduciary agent of
the Borrower, maintain a register on which it enters the name and address of
each participating bank or other Person and the principal amounts (and stated
interest) of each participant’s interest in the Loans or other obligations under
the Loan Documents (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 any Commitments, Loans, Letters of
Credit or its other obligations under any Loan Document) except to the extent
that such disclosure is necessary to establish that such commitment, loan,
letter of credit or other obligation 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.

(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower furnished to such Lender by
or on behalf of the Borrower; provided that, prior to any such disclosure of
information designated by the Borrower as confidential, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of such confidential information on
terms no less restrictive than those applicable to the Lenders pursuant to
Section 9.16.

(h) Any Lender may at any time assign all or any portion of its rights under
this Agreement to secure extensions of credit to such Lender or in support of
obligations owed by such Lender; provided that no such assignment shall release
a Lender from any of its obligations hereunder or substitute any such assignee
for such Lender as a party hereto.

(i) Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle (an “SPV”),
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower, the option to provide to the Borrower all
or any part of any Loan that such Granting Lender would otherwise be obligated
to make to the Borrower pursuant to this Agreement; provided that (i) nothing
herein shall constitute a commitment by any SPV to make any Loan and (ii) if an
SPV elects not to exercise such option or otherwise fails to provide all or any
part of such Loan, the Granting Lender shall be obligated to make such Loan
pursuant to the terms hereof. The making of a Loan by an SPV hereunder shall
utilize the Commitment of the Granting Lender to the same extent, and as if,
such Loan were made by such Granting Lender. Each party hereto hereby agrees
that no SPV shall be liable for any indemnity or similar payment obligation
under this Agreement (all liability for which shall remain with the Granting
Lender). In furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive

 

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the termination of this Agreement) that, prior to the date that is one year and
one day after the payment in full of all outstanding commercial paper or other
senior indebtedness of any SPV, it will not institute against, or join any other
Person in instituting against, such SPV any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any State or territory thereof. In addition, notwithstanding anything
to the contrary contained in this Section 9.04, any SPV may (i) with notice to,
but without the prior written consent of, the Borrower and the Administrative
Agent and without paying any processing fee therefor, assign all or a portion of
its interests in any Loans to the Granting Lender or to any financial
institutions (consented to in writing by the Borrower and Administrative Agent)
providing liquidity and/or credit support to or for the account of such SPV to
support the funding or maintenance of Loans and (ii) disclose on a confidential
basis any non-public information relating to its Loans to any rating agency,
commercial paper dealer or provider of any surety, guarantee or credit or
liquidity enhancement to such SPV.

(j) The Borrower shall not assign or delegate any of its rights or duties
hereunder without the prior written consent of the Administrative Agent, the
Issuing Bank and each Lender, and any attempted assignment without such consent
shall be null and void.

(k) In connection with any assignment of rights and obligations of any
Defaulting Lender hereunder, no such assignment shall be effective unless and
until, in addition to the other conditions thereto set forth herein, the parties
to the assignment shall make such additional payments to the Administrative
Agent in an aggregate amount sufficient, upon distribution thereof as
appropriate (which may be outright payment, purchases by the assignee of
participations or subparticipations, or other compensating actions, including
funding, with the consent of the Borrower and the Administrative Agent, the
applicable pro rata share of Loans previously requested but not funded by the
Defaulting Lender, to each of which the applicable assignee and assignor hereby
irrevocably consent), to (x) pay and satisfy in full all payment liabilities
then owed by such Defaulting Lender to the Administrative Agent, the Issuing
Bank and each other Lender hereunder (and interest accrued thereon), and
(y) acquire (and fund as appropriate) its full pro rata share of all Loans and
participations in Letters of Credit in accordance with its Pro Rata Percentage.
Notwithstanding the foregoing, in the event that any assignment of rights and
obligations of any Defaulting Lender hereunder shall become effective under
applicable law without compliance with the provisions of this paragraph, then
the assignee of such interest shall be deemed to be a Defaulting Lender for all
purposes of this Agreement until such compliance occurs.

(l) Notwithstanding anything in this Agreement to the contrary, any Term Lender
may, at any time, assign all or a portion of its Term Loans on a non-pro rata
basis to the Borrower or any Subsidiary through Dutch Auctions open to all Term
Lenders on a pro rata basis, subject to the following limitations:

(i) the Borrower and each Subsidiary (as applicable) shall represent and warrant
as of the date of any such assignment, that neither it nor any of its respective
directors or officers has any material non-public information with respect to
the Borrower or the Subsidiaries or any of their respective securities that has
not been disclosed to the Term Lenders generally (other than because such Term
Lenders do not wish to receive material non-public information with respect to
the Borrower or the Subsidiaries or any of their respective securities) prior to
such date;

 

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(ii) immediately upon the effectiveness of such assignment of Term Loans from a
Term Lender to the Borrower or any Subsidiary, such Term Loans and all rights
and obligations as a Term Lender related thereto shall, for all purposes under
this Agreement, the other Loan Documents and otherwise, be deemed to be
irrevocably prepaid, terminated. extinguished, cancelled and of no further force
and effect and the Borrower and such Subsidiary (as applicable) shall neither
obtain nor have any rights as a Term Lender hereunder or under the other Loan
Documents by virtue of such assignment;

(iii) the Borrower and each Subsidiary shall not use the proceeds of any
Revolving Loans for any such assignment; and

(iv) no Default or Event of Default shall have occurred and be continuing.

SECTION 9.05 Expenses; Indemnity.

(a) The Borrower agrees to pay (i) all reasonable documented out-of-pocket
expenses incurred by the Administrative Agent, the Collateral Agent, the Issuing
Bank and the Arrangers in connection with (x) the syndication of the Credit
Facilities and the preparation, negotiation and execution of this Agreement and
the other Loan Documents (including, without limitation, the reasonable
documented fees, charges and disbursements of Milbank, Tweed, Hadley & McCloy
LLP, counsel for the Administrative Agent and the Collateral Agent, it being
understood that indemnification for legal counsel is limited to one lead counsel
and one local counsel in each appropriate jurisdiction), and (y) the
administration of this Agreement and the other Loan Documents or in connection
with any amendments, modifications or waivers of the provisions hereof or
thereof and (ii) all documented out-of-pocket expenses incurred by the
Administrative Agent, the Collateral Agent and each Lender in connection with
the enforcement or protection of its rights in connection with this Agreement
and the other Loan Documents or in connection with the Loans made or Letters of
Credit issued hereunder, including the reasonable documented fees, charges and
disbursements of Milbank, Tweed, Hadley & McCloy LLP, counsel for the
Administrative Agent and the Collateral Agent, and, in connection with any such
enforcement or protection, the fees, charges and disbursements of any other
counsel for the Administrative Agent, the Collateral Agent or any Lender.

(b) The Borrower agrees to indemnify the Administrative Agent, the Collateral
Agent, the Arrangers, each Lender, the Issuing Bank and each Related Party of
any of the foregoing Persons (each such Person being called an “Indemnitee”)
against, and to hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable documented
counsel fees, charges and disbursements, incurred by or asserted against any
Indemnitee arising out of, in any way connected with, or as a result of (i) the
execution or delivery of this Agreement or any other Loan Document or any
agreement or instrument contemplated thereby, the performance by the parties
thereto of their respective obligations thereunder or the consummation of the
Transactions and the other transactions contemplated thereby (including the
syndication of the Credit Facilities), (ii) the use of the

 

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proceeds of the Loans or issuance of Letters of Credit, (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto (and regardless of whether such
matter is initiated by a third party or by the Borrower, any other Loan Party or
any of their respective Affiliates), or (iv) any actual or alleged presence or
Release of Hazardous Materials on any property currently or formerly owned or
operated by the Borrower or any of the Subsidiaries, or any Environmental
Liability related in any way to the Borrower or the Subsidiaries and this
Agreement; provided that such indemnity shall not, as to an Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses (i) are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted primarily from the gross
negligence or willful misconduct of such Indemnitee, (ii) result from a material
breach of the Loan Documents by such Indemnitee or (iii) result from any dispute
solely among Indemnitees not involving an act or omission by the Borrower or its
Subsidiaries other than claims against any Indemnitee in its capacity or in
fulfilling its role as an agent or arranger or any other similar role under this
Agreement.

(c) To the extent that the Borrower fails to pay any amount required to be paid
by it to the Administrative Agent, the Collateral Agent, any Arranger or the
Issuing Bank under paragraph (a) or (b) of this Section, each Lender severally
agrees to pay to the Administrative Agent, the Collateral Agent or the Issuing
Bank, as the case may be, such Lender’s pro rata share (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent, the Collateral Agent, any Arranger
or the Issuing Bank in its capacity as such. For purposes hereof, a Lender’s
“pro rata share” shall be determined based upon its share of the sum of the
Aggregate Revolving Credit Exposure, outstanding Term Loans and unused
Commitments at the time (in each case, determined as if no Lender were a
Defaulting Lender).

(d) To the extent permitted by applicable law, the Borrower shall not assert,
and hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Transactions,
any Loan or Letter of Credit or the use of the proceeds thereof.

(e) The provisions of this Section 9.05 shall remain operative and in full force
and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the expiration of the Commitments, the expiration of any Letter of
Credit, the invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Document, or any investigation made by or on behalf
of the Administrative Agent, the Collateral Agent, any Lender or the Issuing
Bank. All amounts due under this Section 9.05 shall be payable within 10
Business Days of written demand therefor and, reasonably promptly following a
request by the Borrower therefor, a reasonably detailed summary of such amounts.

(f) The provisions of this Section 9.05 shall not apply with respect to Taxes
other than any Taxes that represent losses, claims, damages, etc. arising from
any non-Tax claim.

 

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SECTION 9.06 Right of Setoff.

If an Event of Default shall have occurred and be continuing, each Lender is
hereby authorized at any time and from time to time, except to the extent
prohibited by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower against any of and all the obligations of the Borrower
now or hereafter existing under this Agreement and other Loan Documents held by
such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement or such other Loan Document and although such
obligations may be unmatured. The rights of each Lender under this Section 9.06
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have; provided that in the event that any Defaulting
Lender shall exercise any such right of setoff, (x) all amounts so set off shall
be paid over immediately to the Administrative Agent for further application in
accordance with the provisions of Section 2.24 and, pending such payment, shall
be segregated by such Defaulting Lender from its other funds and deemed held in
trust for the benefit of the Administrative Agent, the Issuing Banks, and the
Lenders, and (y) the Defaulting Lender shall provide promptly to the
Administrative Agent a statement describing in reasonable detail the Obligations
owing to such Defaulting Lender as to which it exercised such right of setoff.
The rights of each Lender, the Issuing Bank and their respective Affiliates
under this Section are in addition to other rights and remedies (including other
rights of setoff) that such Lender, the Issuing Bank or their respective
Affiliates may have. Each Lender and the Issuing Bank agrees to notify the
Borrower and the Administrative Agent promptly after any such setoff and
application; provided that the failure to give such notice shall not affect the
validity of such setoff and application. Notwithstanding the provisions of this
Agreement or any other Loan Document, if at any time any Lender, the Issuing
Bank or any of their respective Affiliates maintains one or more deposit
accounts for the Borrower or any other Loan Party into which Medicare and/or
Medicaid receivables or any other government program receivables subject to
federal reassignment prohibitions are deposited, then, in each case, such Person
hereby waives and shall continue to waive the right of setoff set forth herein
and therein.

SECTION 9.07 Applicable Law.

THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND AS
EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH LETTER OF CREDIT
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OR
RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES ARE
DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS MOST
RECENTLY PUBLISHED AND IN EFFECT, ON THE DATE SUCH LETTER OF CREDIT WAS ISSUED,
BY THE INTERNATIONAL CHAMBER OF COMMERCE (THE “UNIFORM CUSTOMS”) AND, AS TO
MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.

 

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SECTION 9.08 Waivers; Amendment.

(a) No failure or delay of the Administrative Agent, the Collateral Agent, any
Lender or the Issuing Bank in exercising any power or right hereunder or under
any other Loan Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Collateral Agent, the Issuing Bank
and the Lenders hereunder and under the other Loan Documents are cumulative and
are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or any other Loan Document or consent
to any departure by the Borrower or any other Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) below,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No notice or demand on the Borrower in any
case shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances.

(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Borrower and the Required Lenders; provided, however, that no such
agreement shall (i) decrease the principal amount of, or extend the maturity of
or any scheduled principal payment date or date for the payment of any interest
on any Loan or any date for reimbursement of an L/C Disbursement, or waive or
excuse any such payment or any part thereof, or decrease the rate of interest on
any Loan or L/C Disbursement, without the prior written consent of each Lender
directly adversely affected thereby, (ii) increase or extend the Commitment or
decrease or extend the date for payment of any Fees of any Lender without the
prior written consent of such Lender, (iii) amend or modify the pro rata
requirements of Section 2.17, the provisions of Section 9.04(j) or (l) or the
provisions of this Section 9.08 or release any Subsidiary Guarantor (other than
in connection with the sale of such Subsidiary Guarantor in a transaction
permitted by Section 6.05) or all or substantially all of the Collateral,
without the prior written consent of each Lender, (iv) change the provisions of
any Loan Document in a manner that by its terms adversely affects the rights in
respect of payments due to Lenders holding Loans of one Class differently from
the rights of Lenders holding Loans of any other Class without the prior written
consent of Lenders holding a majority in interest of the outstanding Loans and
unused Commitments of each adversely affected Class, (v) modify the protections
afforded to an SPV pursuant to the provisions of Section 9.04(i) without the
written consent of such SPV or (vi) amend or modify the definition of the term
“Required Lenders” without the prior written consent of each Lender (it being
understood that, with the consent of the Required Lenders, additional extensions
of credit pursuant to this Agreement may be included in the determination of the
Required Lenders on substantially the same basis as the Term Loan Commitments
and Revolving Credit Commitments on the date hereof); provided, however, that no
such agreement shall amend, modify or otherwise affect the rights or duties of
the Administrative Agent, the Collateral Agent or the Issuing Bank hereunder or
under any other Loan Document without the prior written consent of the
Administrative Agent, the Collateral Agent or the Issuing Bank; provided,
further that no such agreement shall change (x) Section 2.18 in a manner that
would alter the pro rata sharing of payments required thereby or (y) the
definition of “Class” without the written consent of each Lender directly and
adversely affected thereby.

 

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(c) The Administrative Agent and the Borrower may amend any Loan Document to
correct administrative errors or omissions, or to effect administrative changes
that are not adverse to any Lender, or to make modifications contemplated by
Section 2.23 or 2.25. Notwithstanding anything to the contrary contained herein,
such amendment shall become effective without any further consent of any other
party to such Loan Document.

SECTION 9.09 Interest Rate Limitation.

Notwithstanding anything herein to the contrary, if at any time the interest
rate applicable to any Loan or participation in any L/C Disbursement, together
with all fees, charges and other amounts which are treated as interest on such
Loan or participation in such L/C Disbursement under applicable law
(collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum
Rate”) which may be contracted for, charged, taken, received or reserved by the
Lender holding such Loan or participation in accordance with applicable law, the
rate of interest payable in respect of such Loan or participation hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan or participation but were not payable as a
result of the operation of this Section 9.09 shall be cumulated and the interest
and Charges payable to such Lender in respect of other Loans or participations
or periods shall be increased (but not above the Maximum Rate therefor) until
such cumulated amount, together with interest thereon at the Federal Funds
Effective Rate to the date of repayment, shall have been received by such
Lender.

SECTION 9.10 Entire Agreement.

This Agreement, the Engagement Letter (solely for purposes of Section 2.05) and
the other Loan Documents constitute the entire contract between the parties
relative to the subject matter hereof. Any other previous agreement among the
parties with respect to the subject matter hereof is superseded by this
Agreement and the other Loan Documents. Nothing in this Agreement or in the
other Loan Documents, expressed or implied, is intended to confer upon any
Person (other than the parties hereto and thereto, their respective successors
and assigns permitted hereunder (including any Affiliate of the Issuing Bank
that issues any Letter of Credit) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Administrative Agent, the Collateral
Agent, the Issuing Bank and the Lenders) any rights, remedies, obligations or
liabilities under or by reason of this Agreement or the other Loan Documents.

SECTION 9.11 WAIVER OF JURY TRIAL.

EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER

 

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AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.

SECTION 9.12 Severability.

In the event any one or more of the provisions contained in this Agreement or in
any other Loan Document should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or impaired
thereby (it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.

SECTION 9.13 Counterparts.

This Agreement may be executed in counterparts (and by different parties hereto
on different counterparts), each of which shall constitute an original but all
of which when taken together shall constitute a single contract, and shall
become effective as provided in Section 9.03. Delivery of an executed signature
page to this Agreement by facsimile (or other electronic) transmission shall be
as effective as delivery of a manually signed counterpart of this Agreement.

SECTION 9.14 Headings.

Article and Section headings and the Table of Contents used herein are for
convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.

SECTION 9.15 Jurisdiction; Consent to Service of Process.

(a) The Borrower hereby irrevocably and unconditionally submits, for itself and
its property, to the exclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in the Borough of
Manhattan in New York City, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in such
New York State or, to the extent permitted by law, in such Federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that the Administrative Agent, the Collateral
Agent, the Issuing Bank or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or the other Loan Documents against the
Borrower or its properties in the courts of any jurisdiction.

 

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(b) The Borrower hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or the other Loan Documents in any New York
State or Federal court. Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

(c) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

SECTION 9.16 Confidentiality.

Each of the Administrative Agent, the Collateral Agent, the Issuing Bank and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates’
officers, directors, employees and agents, including accountants, legal counsel
and other advisors and any numbering, administration and settlement service
providers (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to keep such Information confidential), (b) to the extent requested by any
regulatory authority or quasi-regulatory authority (such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process,
(d) in connection with the exercise of any remedies hereunder or under the other
Loan Documents or any suit, action or proceeding relating to the enforcement of
its rights hereunder or thereunder, (e) subject to an agreement containing
provisions substantially the same as those of this Section 9.16, to (i) any
actual or prospective assignee of or participant in any of its rights or
obligations under this Agreement and the other Loan Documents and their
respective financing sources or (ii) any actual or prospective counterparty (or
its advisors) to any swap or derivative transaction relating to the Borrower or
any Subsidiary or any of their respective obligations, (f) with the consent of
the Borrower or (g) to the extent such Information becomes publicly available
other than as a result of a breach of this Section 9.16. For the purposes of
this Section, “Information” shall mean all information received from the
Borrower and related to the Borrower or its business, other than any such
information that was available to the Administrative Agent, the Collateral
Agent, the Issuing Bank or any Lender on a nonconfidential basis prior to its
disclosure by the Borrower; provided that, in the case of Information received
from the Borrower after the date hereof, such information is clearly identified
at the time of delivery as confidential or is information that a reasonably
prudent person would presume to be confidential. Any Person required to maintain
the confidentiality of Information as provided in this Section 9.16 shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord its own confidential information.

SECTION 9.17 Lender Action.

Each Lender agrees that it shall not take or institute any actions or
proceedings, judicial or otherwise, for any right or remedy against any Loan
Party or any other obligor under any of the Loan Documents (including the
exercise of any right of setoff, rights on account of any banker’s lien or
similar claim or other rights of self-help), or institute any actions or
proceedings,

 

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or otherwise commence any remedial procedures, with respect to any Collateral or
any other property of any such Loan Party, unless expressly provided for herein
or in any other Loan Document, without the prior written consent of the
Administrative Agent. The provisions of this Section 9.17 are for the sole
benefit of the Lenders and shall not afford any right to, or constitute a
defense available to, any Loan Party.

SECTION 9.18 USA PATRIOT Act Notice.

Each Lender and the Administrative Agent (for itself and not on behalf of any
Lender) hereby notifies the Borrower that pursuant to the requirements of the
USA PATRIOT Act, it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify the Borrower in accordance with the USA
PATRIOT Act.

SECTION 9.19 Withholding Taxes.

To the extent required by any applicable law, the Administrative Agent may
withhold from any interest payment to any Lender an amount equivalent to any
applicable withholding Tax. If any taxing authority 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 was
not properly executed or because such Lender failed to notify the Administrative
Agent of a change in circumstance which rendered the exemption from, or
reduction of, withholding Tax 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 or otherwise, including any
penalties or interest and together with all expenses (including legal expenses,
allocated internal costs and out-of-pocket expenses) incurred.

SECTION 9.20 No Fiduciary Duty.

The parties hereto hereby acknowledge that the Administrative Agent, the
Collateral Agent, the Issuing Bank, the Arrangers, each Lender and their
respective Affiliates (collectively, solely for purposes of this paragraph, the
“Lenders”), may have economic interests that conflict with those of any Loan
Party, its stockholders and/or their respective Affiliates. The Borrower agrees,
on behalf of itself and each other Loan Party, that nothing in the Loan
Documents or otherwise will be deemed to create an advisory, fiduciary or agency
relationship or fiduciary or other implied duty between any Lender, on the one
hand, and any Loan Party, its stockholders or their respective Affiliates, on
the other hand. The Borrower acknowledges and agrees, on behalf of itself and
each other Loan Party, that (a) the transactions contemplated by the Loan
Documents (including the exercise of rights and remedies hereunder and
thereunder) are arm’s-length commercial transactions between the Lenders, on the
one hand, and the Loan Parties, on the other hand, and (b) in connection
therewith and with the process leading thereto, (i) no Lender has assumed an
advisory or fiduciary responsibility in favor of any Loan Party, its
stockholders or their respective Affiliates with respect to the transactions
contemplated hereby (or the exercise of rights or remedies with respect thereto)
or the process leading thereto (irrespective of whether any Lender has advised,
is currently advising or will advise any Loan Party, its stockholders or their
respective Affiliates on other matters) or any other obligation to

 

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any Loan Party except the obligations expressly set forth in the Loan Documents
and (ii) each Lender is acting solely as principal and not as the agent or
fiduciary of any Loan Party, its management, stockholders, their respective
Affiliates, creditors or any other Person. The Borrower acknowledges and agrees,
on behalf of itself and each other Loan Party, that it has consulted its own
legal and financial advisors to the extent it deemed appropriate and that it is
responsible for making its own independent judgment with respect to such
transactions and the process leading thereto. The Borrower agrees, on behalf of
itself and each other Loan Party, that it will not claim that any Lender has
rendered advisory services of any nature or respect, or owes a fiduciary or
similar duty to any Loan Party, in connection with such transaction or the
process leading thereto.

SECTION 9.21 Acknowledgment and Consent to Bail-In of EEA Financial
Institutions.

Notwithstanding anything to the contrary in any Loan Document or in any other
agreement, arrangement or understanding among any such parties, each party
hereto acknowledges that any liability of any EEA Financial Institution arising
under any Loan Document, to the extent such liability is unsecured, may be
subject to the Write-Down and Conversion Powers of an EEA Resolution Authority
and agrees and consents to, and acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-In Action on any such liability, including, if
applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other
instrumentals of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the
exercise of the Write-Down and Conversion Powers of any EEA Resolution
Authority.

SECTION 9.22 Cashless Settlement .

Notwithstanding anything to the contrary contained in this Agreement, any Lender
may exchange, continue or rollover all or a portion of its Loans in connection
with any refinancing, extension, loan modification or similar transaction
permitted by the terms of this Agreement, pursuant to a cashless settlement
mechanism approved by the Borrower, the Administrative Agent and such Lender.

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

AAC HOLDINGS, INC. By:  

/s/ Michael T. Cartwright

  Name: Michael T. Cartwright   Title: Chairman and Chief Executive Officer

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Administrative Agent, Collateral
Agent, Issuing Bank and a Lender         By    

/s/ Christopher Day

  Name: Christopher Day   Title: Authorized Signatory By    

/s/ Tino Schaufelberger

  Name: Tino Schaufelberger   Title: Authorized Signatory

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

BMO Harris Bank, N.A., as Lender     By:  

/s/ Eric Oppenheimer

  Name: Eric Oppenheimer   Title: Managing Director

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

Exhibit A

to the Credit Agreement

 

WHITNEY BANK dba HANCOCK BANK, as a Lender         By:  

/s/ Megan Brearey

  Name: Megan Brearey   Title: SVP

 

A-1

--------------------------------------------------------------------------------

Administrative Questionnaire

 

I. Borrower Name:    AAC HOLDINGS, INC.   

 

II. Legal Name of Lender for Signature Page:   

 

III. Legal Address:      

 

  

 

  

IV. Contact Information:

    

Credit Contact

  

Operations Contact

  

Legal Counsel

Name:   

 

  

 

  

 

Title:   

 

  

 

  

 

Address:   

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

Telephone:   

 

  

 

  

 

Facsimile:   

 

  

 

  

 

Email: Address:   

 

  

 

  

 

 

V. Lender’s Wire Payment Instructions:

 

Pay to:   

 

  

(Name of Lender)

  

(ABA#)                         (City/State)

   (Account #)                   (Account Name)

Please return this form, by fax, to the attention of Administrative Agent, fax
(212) 322-2291, no later than 5:00 p.m. New York City time, on [__], 20[__].

 

A-2

--------------------------------------------------------------------------------

Administrative Questionnaire

 

Borrower Name:    AAC HOLDINGS, INC. VI. Organizational Structure: Foreign
Branch, organized under which laws etc.   

 

Lender’s Tax ID:   

 

 

Tax withholding Form Attached (For Foreign Buyers)

☐       Form W-9

☐       Form W-8BEN/W-8BEN-E/W-8ECI

☐       Form 4224 effective:

☐       Form 1001

☐       W/Hold             % Effective

☐       Form 4224 on file with Administrative Agent from previous year’s
transaction

 

VII. Payment Instructions:

Servicing

Site:

Pay To:

 

VIII. Name of Authorized

Officer:

 

 

Name:  

 

Signature:  

 

Date:  

 

 

A-2

--------------------------------------------------------------------------------

Administrative Questionnaire

 

IX. Institutional Investor Sub-Allocations   Institution Legal Name:  

 

Fund Manager:  

 

Sub-Allocations:  

 

Exact Legal Name

(for documentation purposes)

  

Sub-Allocation

(Indicate US$)

  

Direct Signer to Credit
Agreement

(Yes / No)

  

Purchase by Assignment

(Yes / No)

  

Date of Post Closing
Assignment

1.

  

 

  

 

  

 

  

 

2.

  

 

  

 

  

 

  

 

3.

  

 

  

 

  

 

  

 

4.

  

 

  

 

  

 

  

 

5.

  

 

  

 

  

 

  

 

6.

  

 

  

 

  

 

  

 

7.

  

 

  

 

  

 

  

 

Total

  

 

  

 

  

 

  

 

Special Instructions

 

 

 

 

 

 

 

 

 

A-3

--------------------------------------------------------------------------------

Exhibit B

to the Credit Agreement

FORM OF ASSIGNMENT AND ACCEPTANCE

Reference is made to the Credit Agreement, dated as of June 30, 2017 (as may be
amended, restated, replaced, refinanced, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among AAC HOLDINGS, INC., a Nevada
corporation (the “Borrower”), the Lenders from time to time party thereto and
CREDIT SUISSE AG, as administrative agent for the Lenders (in such capacity,
including any successor thereto, the “Administrative Agent”) and as collateral
agent for the Secured Parties. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement. The Standard Terms and Conditions set forth in Annex 1 attached
hereto are hereby agreed to and incorporated herein by reference and made a part
of this assignment and acceptance agreement (this “Assignment and Acceptance”)
as if set forth herein in full.

SECTION 1. For an agreed consideration, the Assignor hereby irrevocably sells
and assigns, without recourse, to the Assignee, and the Assignee hereby
irrevocably purchases and assumes, without recourse, from the Assignor, subject
to and in accordance with the Credit Agreement, effective as of the Effective
Date set forth below (but not prior to the registration of the information
contained herein in the Register pursuant to Section 9.04(d) of the Credit
Agreement), (a) the interests set forth below (the “Assigned Interest”) in the
Assignor’s rights and obligations in its capacity as a Lender under the Credit
Agreement and the other Loan Documents to the extent related to the amounts and
percentages set forth below of (i) the Commitments of the Assignor on the
Effective Date, (ii) the Loans owing to the Assignor which are outstanding on
the Effective Date and (iii) participations of the Assignor in Letters of Credit
which are outstanding on the Effective Date and (b) to the extent permitted to
be assigned under applicable law, all claims, suits, causes of action and any
other right of the Assignor (in its capacity as a Lender) against any Person,
whether known or unknown, arising under or in connection with the Credit
Agreement and the other Loan Documents or in any way based on or related to any
of the foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause
(a) above. Each of the Assignor and the Assignee hereby makes and agrees to be
bound by all the representations, warranties and agreements set forth in
Section 9.04(c) of the Credit Agreement, a copy of which has been received by
each such party. From and after the Effective Date (i) the Assignee shall be a
party to and be bound by the provisions of the Credit Agreement and, to the
extent of the interests assigned by this Assignment and Acceptance, have the
rights and obligations of a Lender thereunder and under the Loan Documents and
(ii) the Assignor shall, to the extent of the interests assigned by this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement; provided that, except to the extent
otherwise expressly agreed by the affected parties, no assignment by a
Defaulting Lender will constitute a waiver or release of any claim of any party
hereunder arising from that Lender’s having been a Defaulting Lender. The
Assignor hereby represents and warrants that it [is][is not] a Defaulting
Lender. The Assignee hereby represents and warrants that it is not a
Disqualified Institution.

 

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SECTION 2. This Assignment and Acceptance is being delivered to the
Administrative Agent together with, if the Assignee is not already a Lender
under the Credit Agreement, a completed Administrative Questionnaire.

SECTION 3. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

 

Date of Assignment:  

 

Legal Name of Assignor:  

 

Legal Name of Assignee:  

 

  [indicate [Affiliate][Related Fund][other Eligible Assignee] of [Lender]]
Assignee’s Address for Notices:  

 

 

 

Effective Date of Assignment:  

 

 

     Principal
Amount
Assigned      Percentage Assigned of
Applicable Facility/Commitment
(set forth, to at least 8 decimals,
as a percentage of the Facility
and the aggregate Commitments
of all Lenders thereunder)  

Facility/Commitment

     

Revolving Credit Commitment

   $        %  

Term Loan Commitment

   $        %  

[Remainder of page intentionally left blank]

 

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The terms set forth on the foregoing

pages are hereby agreed to:

   

 

Accepted:

                                                     ,     CREDIT SUISSE AG,
CAYMAN ISLANDS BRANCH, as Assignor     as Administrative Agent [and Issuing
Bank]1 By:  

 

    By:  

 

  Name:       Name:   Title:       Title:       By:  

 

        Name:         Title:

                                             ,

as Assignee

   

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,

as Issuing Bank

By:  

 

    By:  

 

  Name:       Name:   Title:       Title:]2       AAC HOLDINGS, INC.       By:  

 

        Name:         Title:

 

 

1  If required pursuant to Section 9.04(b) of the Credit Agreement.

2  If required pursuant to Section 9.04(b) of the Credit Agreement.

 

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ANNEX 1

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ACCEPTANCE

1. Representations and Warranties.

1.1 Assignor. The Assignor represents and warrants that (a) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(b) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Acceptance and to consummate the
transactions contemplated hereby.

1.2. Assignee. The Assignee represents and warrants that (a) it is sophisticated
with respect to decisions to acquire assets of the type represented by the
Assigned Interest and either it, or the person exercising discretion in making
its decision to acquire the Assigned Interest, is experienced in acquiring
assets of such type and (b) if it is a Foreign Lender, attached to the
Assignment and Acceptance is any documentation required to be delivered by it
pursuant to Section 2.20(e) of the Credit Agreement, duly completed and executed
by the Assignee.

2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and after the Effective Date.

3. General Provisions. This Assignment and Acceptance shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Acceptance may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Acceptance by
telecopy (or other electronic transmission) shall be effective as delivery of a
manually executed counterpart of this Assignment and Acceptance. This Assignment
and Acceptance shall be construed in accordance with and governed by the laws of
the State of New York.

 

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Exhibit C

to the Credit Agreement

FORM OF BORROWING REQUEST

Credit Suisse AG, as Administrative Agent for the

        Lenders referred to below,

Eleven Madison Avenue

New York, NY 10010

Attention of [            ]

[Date]

Ladies and Gentlemen:

The undersigned, AAC Holdings, Inc., a Nevada corporation (the “Borrower”),
refers to that certain Credit Agreement, dated as of June 30, 2017 (as may be
amended, restated, replaced, refinanced, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among the Borrower, the Lenders from time
to time party thereto and CREDIT SUISSE AG, as administrative agent for the
Lenders (in such capacity, including any successor thereto, the “Administrative
Agent”) and as collateral agent for the Secured Parties. Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to such
terms in the Credit Agreement. The Borrower hereby gives you notice pursuant to
Section 2.03 of the Credit Agreement that it requests a Borrowing under the
Credit Agreement, and in connection therewith sets forth below the terms on
which such Borrowing is requested to be made:

 

(A)   

Date of Borrowing

(which is a Business Day)

  

 

   (B)    Principal Amount of Borrowing3   

 

   (C)    Class of Borrowing4   

 

  

 

3  Except for Loans deemed made pursuant to Section 2.02(f) of the Credit
Agreement, the Loans comprising any Borrowing shall be in an aggregate principal
amount that is (i) an integral multiple of $500,000 and not less than $1,000,000
(except, with respect to any Incremental Term Borrowing, to the extent otherwise
provided in the related Incremental Loan Assumption Agreement) or (ii) equal to
the remaining available balance of the applicable Commitments.

4  Specify Term Borrowing, Incremental Term Borrowing, Revolving Credit
Borrowing or Incremental Revolving Credit Borrowing.

 

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(D)         Type of Borrowing5                                          
                       

(E)         Interest Period and the last day thereof6
                                                              

(F) Funds are requested to be disbursed to the Borrower’s account with
            (Account No.             ).

[Remainder of page intentionally left blank]

 

  

 

5  Specify Eurodollar Borrowing or ABR Borrowing.

6  Applicable only for Eurodollar Borrowings and shall be subject to the
definition of “Interest Period” and Section 2.02 of the Credit Agreement and end
not later than the Term Loan Maturity Date, the Incremental Term Loan Maturity
Date, the Revolving Credit Maturity Date or the Incremental Revolving Credit
Maturity Date.

 

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The Borrower hereby represents and warrants to the Administrative Agent and the
Lenders that, on the date of this Borrowing Request and on the date of the
related Borrowing, the conditions to lending specified in clauses (b) and (c) of
Section 4.01 of the Credit Agreement have been satisfied.

 

AAC HOLDINGS, INC. By:  

 

  Name:   Title:

 

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Exhibit D

to the Credit Agreement

FORM OF GUARANTEE AND COLLATERAL AGREEMENT

(See attached)

 

D-1

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Exhibit E

to the Credit Agreement

FORM OF MORTGAGE

(See attached)

 

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Exhibit F

to Credit Agreement

FORM OF AFFILIATE SUBORDINATION AGREEMENT

AFFILIATE SUBORDINATION AGREEMENT, dated as of June 30, 2017 (this “Agreement”),
among the subordinated lenders listed on Schedule 1 hereto (each a “Subordinated
Lender” and collectively, the “Subordinated Lenders”), AAC HOLDINGS, INC., a
Nevada corporation (the “Company”), and each Subsidiary listed on Schedule 2
hereto (together with the Company, each a “Subordinated Borrower” and
collectively, the “Subordinated Borrowers”) and Credit Suisse AG, in its
capacity as Administrative Agent (as defined below) (the “Agent”) under the
Credit Agreement (as defined below) for the benefit of the Senior Lenders (as
defined below).

Reference is made to the Credit Agreement dated as of June 30, 2017 (as may be
amended, restated, replaced, refinanced, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among the Company, the Lenders (as
defined below) from time to time party thereto and CREDIT SUISSE AG, as
administrative agent for the Lenders (in such capacity, including any successor
thereto, the “Administrative Agent”), as Collateral Agent for the Secured
Parties.

Reference is also made to the Guarantee and Collateral Agreement dated as of
June 30, 2017 (as may be amended, restated, replaced, refinanced, supplemented
or otherwise modified from time to time, the “Security Agreement”) among the
Company, the Guarantors party thereto, and CREDIT SUISSE AG, as collateral agent
(in such capacity, the “Collateral Agent”) for the lenders under the Credit
Agreement (the “Lenders”).

Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement. All references to
articles, sections, exhibits and schedules shall be deemed references to
articles and sections of, and exhibits and schedules to, this Agreement, unless
the context shall otherwise require. For purposes of this Agreement, “Senior
Lenders” means, collectively, “Secured Parties” as defined in the Credit
Agreement.

The ability under the Credit Agreement of any Subordinated Borrower to incur
Indebtedness to any Subordinated Lender is conditioned upon the execution and
delivery by such Subordinated Lender and each Subordinated Borrower of an
agreement in the form hereof pursuant to which such Subordinated Lender agrees
to subordinate its rights with respect to the Subordinated Obligations (as
defined below) to the rights of the Senior Lenders under the Credit Agreement
all on the terms set forth herein.

Accordingly, each Subordinated Lender, each Subordinated Borrower and the Agent,
on behalf of itself and each Senior Lender (and each of their respective
successors or assigns), hereby agrees as follows:

SECTION 1. Subordination. (a) Each Subordinated Lender hereby agrees that all
its right, title and interest in and to the Subordinated Obligations shall be
subordinate and junior in right of payment to the rights of the Senior Lenders
in respect of the Obligations. For purposes hereof, “Subordinated Obligations”
means all obligations of each Subordinated Borrower to each Subordinated Lender
in respect of loans, advances, extensions of credit or other Indebtedness,
including in respect of principal, premium (if any), interest (including
interest accruing after the maturity of the Loans and reimbursement obligations
in respect of amounts drawn under Letters of Credit and interest accruing after
the filing of any petition in

 

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bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding), fees, charges, expenses, indemnities, reimbursement
obligations and other amounts payable in respect thereof.

(b) Each Subordinated Borrower and each Subordinated Lender agrees (in each case
solely with respect to the Subordinated Obligations in respect of which it is
the obligor or obligee, as the case may be, and solely with respect to each
Subordinated Borrower or Subordinated Lender that is its counterparty on such
Subordinated Obligations) that no payment (whether directly, by purchase,
redemption, exercise of any right of setoff or otherwise) in respect of the
Subordinated Obligations, whether as principal, interest or otherwise, and
whether in cash, securities or other property, shall be made by or on behalf of
any Subordinated Borrower or received, accepted or demanded, directly or
indirectly, by or on behalf of any Subordinated Lender at any time upon the
occurrence and during the continuation of an Event of Default (as defined in the
Credit Agreement) for which the Borrower has received a written notice from the
Agent prohibiting any further payment in respect of the Subordinated Obligations
so long as any such Event of Default is continuing (provided that such notice
shall not be required to be given (and no payment in respect of the Subordinated
Obligations may be made at any time upon the occurrence and during the
continuation of any Event of Default) if the Event of Default is of the type set
forth in Section 7.01(g) or 7.01(h) of the Credit Agreement).

(c) Upon any distribution of the assets of any Subordinated Borrower or upon any
dissolution, winding up, liquidation or reorganization of any Subordinated
Borrower, whether in bankruptcy, insolvency, reorganization, arrangement or
receivership proceedings or otherwise, or upon any assignment for the benefit of
creditors or any other marshalling of the assets and liabilities of any
Subordinated Borrower, or otherwise:

(i) the Senior Lenders shall first be entitled to receive unconditional, final
and irrevocable Payment in Full of the Obligations before any Subordinated
Lender shall be entitled to receive any payment on account of the Subordinated
Obligations of such Subordinated Borrower, whether of principal, interest, fees
or otherwise; and

(ii) any payment by, or on behalf of, or distribution of the assets of, such
Subordinated Borrower of any kind or character on account of the Subordinated
Obligations, whether in cash, securities, property or otherwise, to which any
Subordinated Lender would be entitled except for the provisions of this
Section 1 shall be paid or delivered by the Person making such payment or
distribution (whether a trustee in bankruptcy, a receiver, custodian,
liquidating trustee or any other Person) directly to the Agent, for the benefit
of the Senior Lenders, until the unconditional, final and irrevocable Payment in
Full of the Obligations.

(d) Upon the occurrence and during the continuance of an Event of Default, each
Subordinated Lender agrees not to ask, demand, sue for or take or receive from
any Subordinated Borrower, in cash, securities, property or otherwise, or by
setoff, purchase, redemption (including, without limitation, from or by way of
collateral) or otherwise, payment of all or any part of the Subordinated
Obligations and agrees, upon the occurrence and during the continuance of an
Event of Default, that in connection with any proceeding involving any
Subordinated Borrower under any bankruptcy, insolvency, reorganization,
arrangement,

 

F-2

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receivership or similar law (A) the Agent is irrevocably authorized and
empowered (in its own name or in the name of such Subordinated Lender or
otherwise), but shall have no obligation, to demand, sue for, collect and
receive every payment or distribution referred to in the preceding sentence and
give acquittance therefor and to file claims and proofs of claim and take such
other action (including, without limitation, voting the applicable Subordinated
Obligations and enforcing any security interest or other Lien securing payment
of such Subordinated Obligations) as the Agent may deem reasonably necessary or
advisable for the exercise or enforcement of any of the rights, remedies,
benefits or interests of the Senior Lenders and (B) such Subordinated Lender
shall duly and promptly take such action as the Agent may reasonably request to
(x) collect amounts in respect of the applicable Subordinated Obligations for
the account of the Senior Lenders and to file appropriate claims or proofs of
claim in respect of such Subordinated Obligations, (y) execute and deliver to
the Agent such irrevocable powers of attorney, assignments or other instruments
as the Agent may reasonably request in order to enable the Agent to enforce any
and all claims with respect to, and any security interests and other Liens
securing payment of, the applicable Subordinated Obligations and (z) collect and
receive any and all payments or distributions which may be payable or
deliverable upon or with respect to the applicable Subordinated Obligations. A
copy of this Agreement may be filed with any court as evidence of each Senior
Lender’s right, power and authority hereunder.

(e) In the event that any payment by, or on behalf of, or distribution of the
assets of, any Subordinated Borrower of any kind or character, whether in cash,
securities, property or otherwise, and whether directly, by purchase,
redemption, exercise of any right of setoff or otherwise, shall be received by
or on behalf of any Subordinated Lender or any Affiliate thereof at a time when
such payment is prohibited by this Agreement, such payment or distribution shall
be held by such Subordinated Lender or Affiliate in trust (segregated from other
property of such Subordinated Lender or Affiliate) for the benefit of, and shall
forthwith be paid over to, the Agent, for the benefit of the Senior Lenders
until the unconditional, final and irrevocable Payment in Full of the
Obligations.

(f) Subject to the prior unconditional, final and irrevocable Payment in Full of
the Obligations, each applicable Subordinated Lender shall be subrogated to the
rights of the Senior Lenders to receive payments or distributions in cash,
securities, property or otherwise of each applicable Subordinated Borrower
applicable to the Obligations, and, as between and among a Subordinated
Borrower, its creditors (other than the Senior Lenders) and the applicable
Subordinated Lenders, no such payment or distribution made to the Senior Lenders
by virtue of this Agreement that otherwise would have been made to any
applicable Subordinated Lender shall be deemed to be a payment by the applicable
Subordinated Borrower on account of the Subordinated Obligations, it being
understood that the provisions of this Section 1(e) are intended solely for the
purpose of defining the relative rights of the Subordinated Lenders and the
Senior Lenders.

(g) Without the prior written consent of the Agent, no Subordinated Borrower
shall give, or permit to be given, and shall cause each of its subsidiaries not
to give or permit to be given, and no Subordinated Lender shall receive, accept
or demand, (i) any security of any nature whatsoever for any Subordinated
Obligations on any cash, securities, property or other assets, whether now
existing or hereafter acquired, of any Subordinated Borrower or any subsidiary
of any Subordinated Borrower, unless such security shall by its terms be subject
to enforcement and collection by the Agent or the Collateral Agent, as the case
may be, in

 

F-3

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connection with any action in respect of enforcement or collection taken under
Section 1(c) above or (ii) any Guarantee, of any nature whatsoever, by any
Subordinated Borrower or any subsidiary of any Subordinated Borrower, of any
Subordinated Obligations other than any Guarantee subordinated to the
Obligations on terms substantially identical to (and no less favorable in any
significant respect to the Senior Lenders than) those hereof. Each Subordinated
Lender agrees that all the proceeds of any such security or Guarantee shall be
subject to the provisions hereof with respect to payments and other
distributions in respect of the Subordinated Obligations.

(h) Each Subordinated Lender and each Subordinated Borrower agrees that all
Subordinated Obligations, if required to be evidenced by a promissory note
pursuant to Section 6.04(c) of the Credit Agreement, will be evidenced solely by
a single promissory note in the form attached hereto as Annex 1, and that such
promissory note and any and all instruments now or hereafter creating or
evidencing the Subordinated Obligations, whether upon refunding, extension,
renewal, refinancing, replacement or otherwise, shall contain the following
legend:

“Notwithstanding anything contained herein to the contrary, neither the
principal of nor the interest on, nor any other amounts payable in respect of,
the indebtedness created or evidenced by this instrument or record shall become
due or be paid or payable, except to the extent permitted under the Affiliate
Subordination Agreement, dated as of June 30, 2017, among the Subordinated
Lenders, the Subordinated Borrowers and Credit Suisse AG, in its capacity as
Agent for the Senior Lenders, which Affiliate Subordination Agreement is
incorporated herein with the same effect as if fully set forth herein.”

(i) Each Subordinated Lender agrees that, except for claims submitted in any
proceeding contemplated by Section 1(c), it will not take any action to cause
any Subordinated Obligations to become payable prior to their scheduled maturity
(which, in the case of any demand notes, shall be the date demand is made
thereunder) or exercise any remedies or take any action or proceeding to enforce
any Subordinated Obligation if the payment of such Subordinated Obligation is
then prohibited by this Agreement, and each Subordinated Lender further agrees
not to file, or to join with any other creditors of any Subordinated Borrower in
filing, any petition commencing any bankruptcy, insolvency, reorganization,
arrangement or receivership proceeding or any assignment for the benefit of
creditors against or in respect of such Subordinated Borrower or any other
marshalling of the assets and liabilities of such Subordinated Borrower
(provided that this prohibition shall in no event be construed so as to limit
any Subordinated Lender’s right to cause any Subordinated Obligations to become
payable prior to their scheduled maturity if all the commitments to extend
credit under the Loan Documents have forthwith been terminated and all the
outstanding Obligations under the Loan Documents have been declared forthwith
due and payable prior to their scheduled maturity date). Each Subordinated
Lender further agrees, to the fullest extent permitted under applicable law,
that it will not cause any Subordinated Borrower to file any such petition,
commence any such proceeding or make any such assignment referred to above until
Payment in Full of the Obligations.

 

F-4

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SECTION 2. Waivers and Consents. (a) Each Subordinated Lender waives the right
to compel that the Collateral (as defined in the Credit Agreement) or any other
assets or property of any Subordinated Borrower or any of its subsidiaries or
the assets or property of any guarantor of the Obligations or any other Person
be applied in any particular order to discharge the Obligations. Each
Subordinated Lender expressly waives the right to require the Senior Lenders to
proceed against any Subordinated Borrower, any of its subsidiaries, the
Collateral, any other assets or property of any Subordinated Borrower or any of
its subsidiaries or any guarantor of the Obligations or any other Person, or to
pursue any other remedy in any Senior Lender’s power which such Subordinated
Lender cannot pursue and which would lighten such Subordinated Lender’s burden,
notwithstanding that the failure of any Senior Lender to do so may thereby
prejudice such Subordinated Lender. Each Subordinated Lender agrees that it
shall not be discharged, exonerated or have its obligations hereunder to the
Senior Lenders reduced by (i) any Senior Lender’s delay in proceeding against or
enforcing any remedy against any Subordinated Borrower, any of its subsidiaries,
the Collateral or any other asset or property of any Subordinated Borrower or
any of its subsidiaries or any guarantor of the Obligations or any other Person,
(ii) any Senior Lender releasing any Subordinated Borrower, any of its
subsidiaries, the Collateral or any other asset or property of any Subordinated
Borrower or any of its subsidiaries or any other guarantor of the Obligations or
any other Person from all or any part of the Obligations or (iii) the discharge
of any Subordinated Borrower, any of its subsidiaries, the Collateral or any
other asset or property of any Subordinated Borrower or any of its subsidiaries
or any guarantor of the Obligations or any other Person by an operation of law
or otherwise, with or without the intervention or omission of a Senior Lender.
Any Senior Lender’s vote to accept or reject any plan of reorganization relating
to any Subordinated Borrower, any of its subsidiaries, the Collateral or any
other asset or property of any Subordinated Borrower or any of its subsidiaries
or any guarantor of the Obligations or any other Person, or any Senior Lender’s
receipt on account of the Obligations, other than the unconditional, final and
irrevocable payment in full in cash thereof, of any cash, securities, property
or other assets distributed in any bankruptcy, reorganization, insolvency or
similar proceeding, shall not discharge, exonerate, or reduce the obligations of
any Subordinated Lender hereunder to the Senior Lenders.

(b) Each Subordinated Lender waives all rights and defenses arising out of an
election of remedies by the Senior Lenders, even though that election of
remedies, including, without limitation, any non-judicial foreclosure with
respect to security for the Obligations, has impaired the value of such
Subordinated Lender’s rights of subrogation, reimbursement or contribution
against any Subordinated Borrower or any other guarantor of the Obligations or
any other Person. To the extent permitted by applicable law, each Subordinated
Lender expressly waives any rights or defenses it may have by reason of
protection afforded to any Subordinated Borrower or any other guarantor of the
Obligations or any other Person with respect to the Obligations pursuant to any
anti-deficiency laws or other laws of similar import which limit or discharge
the principal debtor’s indebtedness upon judicial or non-judicial foreclosure of
real property or personal property Collateral for the Obligations.

(c) Each Subordinated Lender agrees that, without the necessity of any
reservation of rights against it, and without notice to or further assent by it,
any demand for payment of any Obligations made by any Senior Lender may be
rescinded in whole or in part by such Senior Lender, and any Obligation may be
continued, and the Obligations, or the liability of the applicable Subordinated
Borrower, any of its subsidiaries or any other guarantor or any other party upon
or for any part thereof, or any Collateral or Guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, replaced, extended,

 

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modified, accelerated, compromised, waived, surrendered, or released by the
Senior Lenders, in each case without notice to or further assent by any
Subordinated Lender, which will remain bound under this Agreement and without
impairing, abridging, releasing or affecting the subordination and other
agreements of the Subordinated Lenders provided for herein.

(d) Each Subordinated Lender waives any and all notice of the creation, renewal,
extension or accrual of any of the Obligations and notice of or proof of
reliance by the Senior Lenders upon this Agreement. The Obligations, and any of
them, shall be deemed conclusively to have been created, contracted or incurred
and the consent given to create the obligations of each Subordinated Borrower in
respect of the Subordinated Obligations in reliance upon this Agreement, and all
dealings between each Subordinated Borrower and the Senior Lenders shall be
deemed to have been consummated in reliance upon this Agreement. Each
Subordinated Lender acknowledges and agrees that the Senior Lenders have relied
upon the subordination and other agreements provided for herein in consenting to
the Subordinated Obligations. Each Subordinated Lender waives notice of or proof
of reliance on this Agreement and protest, demand for payment and notice of
default.

SECTION 3. Transfers. Each Subordinated Lender shall not sell, assign or
otherwise transfer or dispose of, in whole or in part, all or any part of the
Subordinated Obligations or any interest therein to any other Person (a
“Transferee”), other than another Subordinated Lender bound by the provisions of
this Agreement, or create, incur or suffer to exist any security interest, Lien,
charge or other encumbrance whatsoever upon all or any part of the Subordinated
Obligations or any interest therein in favor of any Transferee (other than
Permitted Liens) unless (a) such action is made expressly subject to this
Agreement and (b) the Transferee, expressly acknowledges to the Agent, by a
writing in form and substance reasonably satisfactory to the Agent, the
subordination and other agreements provided for herein and in such writing
agrees to be bound by all of the terms of this Agreement, including, without
limitation, this Section 3, as if such Person were a Subordinated Lender.

SECTION 4. Obligations Unconditional. All rights and interests of the Senior
Lenders hereunder, and all agreements and obligations of the Subordinated
Lenders and the Subordinated Borrowers hereunder, shall remain in full force and
effect irrespective of:

(a) any lack of validity or enforceability of the Credit Agreement or any other
Loan Document;

(b) any change in the time, manner or place of payment of, or in any other term
of, all or any of the Obligations, or any amendment or waiver or other
modification, whether by course of conduct or otherwise, of, or consent to
departure from, the Credit Agreement or any other Loan Document;

(c) any exchange, release or non-perfection of any Lien in any Collateral, or
any release, amendment, waiver or other modification, whether in writing or by
course of conduct or otherwise, of, or consent to departure from, any Guarantee
of any of the Obligations; or

(d) any other circumstances that might otherwise constitute a defense available
to, or a discharge of, any Subordinated Borrower, any of its subsidiaries, any
guarantor of the Obligations or any other Person in respect of the Obligations,
or of the Subordinated Lender, any Subordinated Borrower, any of its
subsidiaries, any guarantor of the Obligations or any other Person in respect of
this Agreement.

 

F-6

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SECTION 5. Representations and Warranties. Each Subordinated Lender represents
and warrants to the Agent, for the benefit of the Senior Lenders, that:

(a) It has the power and authority to execute and deliver and to perform its
obligations under this Agreement and has taken all necessary action to authorize
its execution, delivery and performance of this Agreement.

(b) This Agreement has been duly executed and delivered by such Subordinated
Lender and constitutes a legal, valid and binding obligation of such
Subordinated Lender, enforceable against it in accordance with its terms.

(c) The execution, delivery and performance of this Agreement will not violate
any provision of any material requirement of law applicable to such Subordinated
Lender or of any material contractual obligation of such Subordinated Lender.

(d) No consent or authorization of filing with, or other act by or in respect
of, any Governmental Authority, is required in connection with the execution,
delivery or performance of this Agreement, except for (i) such as have been
obtained and are in full force and effect and (ii) such filings which the
failure to obtain could not reasonably be expected to have a Material Adverse
Effect.

SECTION 6. Waiver of Claims. (a) To the maximum extent permitted by law, each
Subordinated Lender waives any claim it might have against any Senior Lender
with respect to, or arising out of, any action or failure to act or any error of
judgment, negligence, or mistake or oversight whatsoever on the part of any
Senior Lender or its directors, officers, employees, agents or Affiliates with
respect to any exercise of rights or remedies under the Loan Documents or any
transaction relating to the Collateral. None of the Senior Lenders nor any of
their respective directors, officers, employees, agents or Affiliates shall be
liable for failure to demand, collect or realize upon any of the Collateral or
any Guarantee or for any delay in doing so or shall be under any obligation to
sell or otherwise dispose of any Collateral upon the request of any Subordinated
Borrower, any of its subsidiaries, any guarantor of the Obligations, any
Subordinated Lender or any other person or to take any other action whatsoever
with regard to the Security Documents, including, without limitation, the
Guarantee and Collateral Agreement, or any part thereof.

(b) To the extent permitted by applicable law, each Subordinated Lender, for
itself and on behalf of its successors and assigns, hereby waives any and all
now existing or hereafter arising rights it may have to require the Senior
Lenders to marshal assets for the benefit of such Subordinated Lender, or to
otherwise direct the timing, order or manner of any sale, collection or other
enforcement of the Collateral or enforcement of the Loan Documents. The Senior
Lenders are under no duty or obligation, and each Subordinated Lender hereby
waives, to the extent permitted by applicable law, any right it may have to
compel the Senior Lenders, to pursue any Subordinated Borrower, any of its
subsidiaries, any guarantor or other person who may be liable for the
Obligations, or to enforce any Lien or security interest in any Collateral.

 

F-7

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(c) Each Subordinated Lender hereby waives, to the extent permitted by
applicable law, any duty on the part of the Senior Lenders to disclose to it any
fact known or hereafter known by the Senior Lenders relating to the operation or
financial condition of any Subordinated Borrower, any of its subsidiaries or any
guarantor of the Obligations, or their respective businesses. Each Subordinated
Lender enters into this Agreement based solely upon its independent knowledge of
the applicable Subordinated Borrower’s results of operations, condition
(financial or otherwise) and business and the Subordinated Lender assumes full
responsibility for obtaining any further or future information with respect to
the applicable Subordinated Borrower, any of its subsidiaries, any guarantor of
the Obligations or their respective results of operations, condition (financial
or otherwise) or business.

SECTION 7. Further Assurances. Each Subordinated Lender and each Subordinated
Borrower, at their own expense and at any time from time to time, upon the
written request of the Agent shall promptly and duly execute and deliver such
further instruments and documents and take such further actions as the Agent may
reasonably request for the purposes of obtaining, preserving or extending the
full benefits of this Agreement and of the rights, powers, remedies, benefits
and interests of the Senior Lenders herein granted.

SECTION 8. Expenses; Indemnification. (a) Each Subordinated Borrower shall pay
or reimburse the Agent, the Collateral Agent, the Issuing Bank and each other
Senior Lender (each, an “Indemnitee”), upon demand, for all their reasonable
documented out-of-pocket expenses in connection with the enforcement or
preservation of any rights under this Agreement, including, without limitation,
the documented out-of-pocket fees and disbursements of counsel to the Agent, the
Collateral Agent, the Issuing Bank and each other Senior Lender.

(b) The Subordinated Borrowers shall, and jointly and severally agree to, pay,
indemnify, and hold the Agent, the Collateral Agent, the Issuing Bank and each
other Senior Lender harmless from and against any and all losses, claims,
damages, liabilities and related expenses, including reasonable documented
counsel fees, charges and disbursements (other than the allocated costs of
internal counsel), incurred by or asserted against any Indemnitee arising out
of, in any way connected with, or as a result of the failure of such
Subordinated Borrower or any applicable Subordinated Lender to perform any of
its obligations arising out of or relating to this Agreement; provided that such
indemnity shall not, as to an Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted primarily from the gross negligence or willful misconduct of such
Indemnitee.

SECTION 9. Provisions Define Relative Rights. This Agreement is intended solely
for the purpose of defining the relative rights of the Senior Lenders, on the
one hand, and the Subordinated Lenders and the Subordinated Borrowers, on the
other hand, and no other person shall have any right, remedy, benefit or other
interest under this Agreement.

SECTION 10. Powers Coupled with an Interest. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until the Obligations are unconditionally, finally and irrevocably
paid in full in cash (other than indemnification obligations and other
contingent obligations not then due and payable).

 

F-8

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SECTION 11. Notices. All notices, requests and demands to or upon any party
hereto shall be in writing and shall be given in the manner provided in
Section 9.01 of the Credit Agreement.

SECTION 12. Counterparts. This Agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original but all of which taken together shall constitute a single
contract. Delivery of an executed signature page to this Agreement by facsimile
(or other electronic) transmission shall be as effective as delivery of a
manually signed counterpart of this Agreement.

SECTION 13. Severability. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired thereby
(it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). The parties hereto shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.

SECTION 14. Integration. This Agreement represents the agreement of the
Subordinated Borrowers, the Subordinated Lenders and the Senior Lenders with
respect to the subject matter hereof and there are no promises or
representations by any Subordinated Borrower, any Subordinated Lender or the
Senior Lenders relative to the subject matter hereof not reflected herein.

SECTION 15. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None of
the terms or provisions of this Agreement may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by the Agent, each
affected Subordinated Borrower and each affected Subordinated Lender; provided
that any provision of this Agreement may be waived by the Senior Lenders in a
letter or agreement executed by the Required Lenders, or by the Agent with the
written consent of the Required Lenders, and each affected Subordinated Lender.

(b) No failure or delay of the Agent, the Collateral Agent, the Issuing Bank or
any other Senior Lender in exercising any right, power, remedy, benefit or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power, remedy, benefit or privilege, or any
abandonment or discontinuance of steps to enforce such right, power, remedy,
benefit or privilege, preclude any other or further exercise thereof or the
exercise of any other right, power, remedy, benefit or privilege.

(c) The rights and remedies of the Agent, the Collateral Agent, the Issuing Bank
and each other Senior Lender herein provided are cumulative, may be exercised
singly or concurrently and are not exclusive of any rights or remedies that any
of them would otherwise have.

SECTION 16. Section Headings. The section headings used in this Agreement are
for convenience of reference only, are not part of this Agreement and are not to
affect the construction hereof or be taken into consideration in the
interpretation hereof.

 

F-9

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SECTION 17. Successors and Assigns. (a) This Agreement shall be binding upon the
successors and assigns of each of the Subordinated Borrowers and each of the
Subordinated Lenders and shall inure to the benefit of the Agent, the Collateral
Agent, the Issuing Bank and each other Senior Lender and their respective
successors and assigns.

(b) Notwithstanding the provisions of Section 17(a) above, nothing herein shall
be construed to limit or relieve the obligations of any Subordinated Lender
pursuant to Section 3, and no Subordinated Lender shall assign its obligations
hereunder to any person (except as otherwise specifically permitted under
Section 3); any such assignment other than as specifically permitted under
Section 3 shall be void.

SECTION 18. Governing Law; Jurisdiction; Consent to Service of Process. (a) This
Agreement shall be construed in accordance with and governed by the laws of the
State of New York.

(b) Each Subordinated Lender hereby irrevocably and unconditionally submits, for
itself and its property, to the exclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Agent, the Collateral
Agent, the Issuing Bank or each other Senior Lender may otherwise have to bring
any action or proceeding relating to this Agreement against any Subordinated
Lender or its respective properties in the courts of any jurisdiction.

(c) Each Subordinated Lender hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any New York State or
Federal court. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

(d) Each Subordinated Lender hereby irrevocably consents to service of process
in the manner provided for notices in Section 11. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

SECTION 19. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR THE CREDIT AGREEMENT. EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT

 

F-10

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AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 19.

SECTION 20. Additional Subordinated Lenders. Upon execution and delivery by the
Agent and a Subsidiary of an instrument substantially in the form of Annex 2
attached hereto, such Subsidiary shall become a Subordinated Lender and a
Subordinated Borrower hereunder with the same force and effect as if originally
named as a Subordinated Lender and a Subordinated Borrower herein. The execution
and delivery of any such instrument shall not require the consent of any other
Subordinated Lender or Subordinated Borrower hereunder. The rights and
obligations of each Subordinated Borrower and each Subordinated Lender herein
shall remain in full force and effect notwithstanding the addition of any
Subordinated Lender and Subordinated Borrower as a party to this Agreement.

[Remainder of page intentionally left blank]

 

F-11

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.

 

AAC HOLDINGS, INC., as Subordinated Lender and Subordinated Borrower By:  

 

  Name:   Title: AMERICAN ADDICTION CENTERS, INC. FORTERUS HEALTH CARE SERVICES,
INC. SAN DIEGO ADDICTION TREATMENT CENTER, INC. GREENHOUSE TREATMENT CENTER
CONCORDE TREATMENT CENTER, LLC RECOVERY FIRST OF FLORIDA, LLC RI – CLINICAL
SERVICES, LLC NEW JERSEY ADDICTION TREATMENT CENTER, LLC BEHAVIORAL HEALTHCARE
REALTY, LLC CONCORDE REAL ESTATE, LLC BHR GREENHOUSE REAL ESTATE, LLC BHR ALISO
VIEJO REAL ESTATE, LLC BHR RINGWOOD REAL ESTATE, LLC OXFORD TREATMENT CENTER,
LLC SOBER MEDIA GROUP, LLC RIVER OAKS TREATMENT CENTER, LLC LAGUNA TREATMENT
HOSPITAL, LLC SOLUTIONS TREATMENT CENTER, LLC

TOWNSEND TREATMENT CENTER, LLC,

as Subordinated Lenders and Subordinated Borrowers

By:  

 

  Name:   Title: AAC LAS VEGAS OUTPATIENT CENTER, LLC AAC DALLAS OUTPATIENT
CENTER, LLC

ADDICTION LABS OF AMERICA, LLC,

as Subordinated Lenders and Subordinated Borrowers

 

F-12

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By: American Addiction Centers, Inc., its sole member By:  

 

  Name:   Title: [OXFORD OUTPATIENT CENTER, LLC RUSH MEDICAL – LAFAYETTE, LLC
TOWNSEND RECOVERY CENTER NEW ORLEANS, LLC BHR OXFORD REAL ESTATE, LLC REFERRAL
SOLUTIONS GROUP, LLC

SAGANEX DIAGNOSTICS LABORATORY, LLC],

as Subordinated Lenders and Subordinated Borrowers

By:  

 

  Name:   Title:

THE ACADEMY REAL ESTATE, LLC,

as Subordinated Lender and Subordinated Borrower

By: Behavioral Healthcare Realty, LLC, its sole member By:  

 

  Name:   Title: RECOVERY BRANDS, LLC,as Subordinated Lender and Subordinated
Borrower By: Referral Solutions Group, LLC, its sole member By:  

 

  Name:   Title: SAN DIEGO PROFESSIONAL GROUP, P.C. PALM BEACH PROFESSIONAL
GROUP, PROFESSIONAL CORPORATION LAS VEGAS PROFESSIONAL GROUP –

 

F-13

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CALARCO, P.C. GRAND PRAIRIE PROFESSIONAL GROUP

OXFORD PROFESSIONAL GROUP, P.C.,

as Subordinated Lenders and Subordinated Borrowers

By:  

 

  Name:   Title:

AAC HEALTHCARE NETWORK, INC.,

as Subordinated Lender and Subordinated Borrower

By:  

 

  Name:   Title:

PONTCHARTRAIN MEDICAL GROUP, A PROFESSIONAL CORPORATION,

as Subordinated Lender and Subordinated Borrower

By:  

 

  Name:   Title:

B&B HOLDINGS INT’L LLC,

as Subordinated Lender and Subordinated Borrower

By:  

 

  Name:   Title:

SINGER ISLAND RECOVERY CENTER LLC,

as Subordinated Lender and Subordinated Borrower

By:  

 

  Name:   Title:

 

F-14

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FITRX, LLC,

as Subordinated Lender and Subordinated Borrower

 

By:  

 

  Name:   Title:

CLINICAL REVENUE MANAGEMENT SERVICES, LLC,

as Subordinated Lender and Subordinated Borrower

By:  

 

  Name:   Title:

ABTTC, INC.,

as Subordinated Lender and Subordinated Borrower

By:  

 

  Name:   Title:

TAJ MEDIA LLC,

as Subordinated Lender and Subordinated Borrower

By:  

 

  Name:   Title:

BRENTWOOD PROFESSIONAL GROUP, P.C.,

as Subordinated Lender and Subordinated Borrower

By:  

 

  Name:   Title:

 

F-15

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CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Administrative Agent
By:                                                                        Name:
Title: By:                                     
                                  Name: Title:

 

F-16

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Schedule 1 to

Affiliate Subordination Agreement

SUBORDINATED LENDERS

AAC Holdings, Inc.

American Addiction Centers, Inc.

Forterus Health Care Services, Inc.

San Diego Addiction Treatment Center, Inc.

Greenhouse Treatment Center, LLC

Concorde Treatment Center, LLC

Recovery First of Florida, LLC

RI – Clinical Services, LLC

New Jersey Addiction Treatment Center, LLC

AAC Las Vegas Outpatient Center, LLC

AAC Dallas Outpatient Center, LLC

Addiction Labs of America, LLC

Behavioral Healthcare Realty, LLC

Concorde Real Estate, LLC

BHR Greenhouse Real Estate, LLC (f/k/a/ Greenhouse Real Estate, LLC)

BHR Aliso Viejo Real Estate, LLC

BHR Ringwood Real Estate, LLC

Laguna Treatment Hospital, LLC

Oxford Outpatient Center, LLC

Oxford Treatment Center, LLC

River Oaks Treatment Center, LLC

Rush Medical – Lafayette, LLC

Solutions Treatment Center, LLC

Townsend Treatment Center, LLC

Townsend Recovery Center New Orleans, LLC

BHR Oxford Real Estate, LLC

Sober Media Group, LLC

Referral Solutions Group, LLC

Recovery Brands, LLC

AAC Healthcare Network, Inc.

Sagenex Diagnostics Laboratory, LLC

The Academy Real Estate, LLC

Palm Beach Professional Group, Professional Corporation

Las Vegas Professional Group – Calarco, P.C.

Grand Prairie Professional Group, P.A.

San Diego Professional Group, P.C.

Pontchartrain Medical Group, A Professional Corporation

Oxford Professional Group, P.C.

B&B Holdings Int’l LLC

Singer Island Recovery Center LLC

FITRX, LLC

 

F-17

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Clinical Revenue Management Services, LLC

ABTTC, Inc

Taj Media LLC

Brentwood Professional Group, P.C.

 

F-18

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Schedule 2 to

Affiliate Subordination Agreement

SUBORDINATED BORROWERS

AAC Holdings, Inc.

American Addiction Centers, Inc.

Forterus Health Care Services, Inc.

San Diego Addiction Treatment Center, Inc.

Greenhouse Treatment Center, LLC

Concorde Treatment Center, LLC

Recovery First of Florida, LLC

RI – Clinical Services, LLC

New Jersey Addiction Treatment Center, LLC

AAC Las Vegas Outpatient Center, LLC

AAC Dallas Outpatient Center, LLC

Addiction Labs of America, LLC

Behavioral Healthcare Realty, LLC

Concorde Real Estate, LLC

BHR Greenhouse Real Estate, LLC (f/k/a/ Greenhouse Real Estate, LLC)

BHR Aliso Viejo Real Estate, LLC

BHR Ringwood Real Estate, LLC

Laguna Treatment Hospital, LLC

Oxford Outpatient Center, LLC

Oxford Treatment Center, LLC

River Oaks Treatment Center, LLC

Rush Medical – Lafayette, LLC

Solutions Treatment Center, LLC

Townsend Treatment Center, LLC

Townsend Recovery Center New Orleans, LLC

BHR Oxford Real Estate, LLC

Sober Media Group, LLC

Referral Solutions Group, LLC

Recovery Brands, LLC

AAC Healthcare Network, Inc.

Sagenex Diagnostics Laboratory, LLC

The Academy Real Estate, LLC

Palm Beach Professional Group, Professional Corporation

Las Vegas Professional Group – Calarco, P.C.

Grand Prairie Professional Group, P.A.

San Diego Professional Group, P.C.

Pontchartrain Medical Group, A Professional Corporation

Oxford Professional Group, P.C.

B&B Holdings Int’l LLC

Singer Island Recovery Center LLC

FITRX, LLC

 

F-19

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Clinical Revenue Management Services, LLC

ABTTC, Inc

Taj Media LLC

Brentwood Professional Group, P.C.

 

F-20

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Annex 1 to

Affiliate Subordination Agreement

FORM OF INTERCOMPANY SUBORDINATED DEMAND PROMISSORY NOTE

Note Number: [    ]

Dated: [    ], 20[    ]

FOR VALUE RECEIVED, AAC Holdings, Inc., a Nevada corporation (the “Company”),
and each of its subsidiaries (collectively, the “Group Members” and each, a
“Group Member”) which is a party to this intercompany subordinated demand
promissory note (the “Promissory Note”) promises:

 

  (a) to the extent that such Group Member is the Company or a Domestic
Subsidiary,

 

  (i) to pay to the order of such other Group Member that is the Company or a
Domestic Subsidiary as makes loans to such Group Member (each Group Member which
borrows money pursuant to this Promissory Note is referred to herein as a
“Payor” and each Group Member which makes loans and advances pursuant to this
Promissory Note is referred to herein as a “Payee”), on demand, in lawful money
of the United States of America, in immediately available funds and at the
appropriate office of the Payee, the aggregate unpaid principal amount of all
loans and advances heretofore and hereafter made by such Payee to such Payor and
any other indebtedness now or hereafter owing by such Payor to such Payee as
shown either on Schedule A attached hereto (and any continuation thereof) or in
the books and records of such Payee; and

 

  (ii) to pay to such other Group Member that is a Foreign Subsidiary as makes
loans to such Group Member, on demand, in lawful money of the United States of
America, in immediately available funds and at the appropriate office of the
Payee, the aggregate unpaid principal amount of all loans and advances hereafter
made by such Payee to such Payor and any other indebtedness hereafter owing by
such Payor to such Payee as shown either on Schedule A attached hereto (and any
continuation thereof) or in the books and records of such Payee; and

 

  (b)

to the extent that such Group Member is a Foreign Subsidiary, to pay to the
order of such other Group Member that is the Company or a Domestic Subsidiary as
makes loans to such Group Member, on demand, in lawful money of the United
States of America, in immediately available funds and at

 

F-21

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  the appropriate office of the Payee, the aggregate unpaid principal amount of
all loans and advances hereafter made by such Payee to such Payor and any other
indebtedness hereafter owing by such Payor to such Payee as shown either on
Schedule A attached hereto (and any continuation thereof) or in the books and
records of such Payee.

The failure to show any such Indebtedness or any error in showing such
Indebtedness shall not affect the obligations of any Payor hereunder.
Capitalized terms used herein but not otherwise defined herein shall have the
meanings given such terms in the Credit Agreement dated as of June 30, 2017 (as
may be amended, restated, replaced, refinanced, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among the Company, the
Lenders from time to time party thereto and CREDIT SUISSE AG, as collateral
agent for the Secured Parties thereunder (in such capacity, including any
successor thereto, the “Collateral Agent”) and as administrative agent.

The unpaid principal amount hereof from time to time outstanding shall bear
interest at a rate equal to the rate as may be agreed upon from time to time by
the relevant Payor and Payee. Interest shall be due and payable on the last day
of each month commencing after the date hereof or at such other times as may be
agreed upon from time to time by the relevant Payor and Payee. Upon demand for
payment of any principal amount hereof, accrued but unpaid interest on such
principal amount shall also be due and payable. Interest shall be paid in lawful
money of the United States of America and in immediately available funds.
Interest shall be computed for the actual number of days elapsed on the basis of
a year consisting of 365 days.

Each Payor and any endorser of this Promissory Note hereby waives presentment,
demand, protest and notice of any kind. No failure to exercise, and no delay in
exercising, any rights hereunder on the part of the holder hereof shall operate
as a waiver of such rights.

This Promissory Note has been pledged by each Loan Party (as defined in the
Credit Agreement) to the Collateral Agent, for the benefit of the Secured
Parties (as defined in the Credit Agreement), as security for such Payee’s
obligations, if any, under the Credit Agreement and each other Loan Document (as
defined in the Credit Agreement) to which such Payee is a party. Each Payor
acknowledges and agrees that the Collateral Agent and the other Secured Parties
may exercise all the rights of the Payees under this Promissory Note with
respect to amounts owed to a Loan Party and will not be subject to any
abatement, reduction, recoupment, defense, setoff or counterclaim available to
such Payor.

Notwithstanding anything contained herein to the contrary, neither the principal
of nor the interest on, nor any other amounts payable in respect of, the
indebtedness created or evidenced by this instrument or record shall become due
or be paid or payable, except to the extent permitted under the Affiliate
Subordination Agreement, dated as of June 30, 2017 (as may be amended, restated,
replaced, supplemented or otherwise modified from time to time, the “Affiliate
Subordination Agreement”), among the Subordinated Lenders (as defined in the
Affiliate Subordination Agreement), the Subordinated Borrowers (as defined in
the Affiliate Subordination Agreement) and CREDIT SUISSE AG, in its capacity as
Agent for the Senior Lenders, which Affiliate Subordination Agreement is
incorporated herein with the same effect as if fully set forth herein.

 

F-22

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Notwithstanding anything to the contrary contained herein, in any other
agreement or in any such promissory note or other instrument, this Promissory
Note (i) replaces and supersedes any and all promissory notes or other
instruments which create or evidence any loans or advances made on or before the
date hereof by any Group Member that is a Domestic Subsidiary to any other Group
Member that is a Domestic Subsidiary and (ii) without the written consent of the
Collateral Agent, shall not be deemed replaced, superseded or in any way
modified by any promissory note or other instrument entered into on or after the
date hereof which purports to create or evidence any loan or advance by any
Group Member to any other Group Member.

THIS PROMISSORY NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
PROMISSORY NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK.

From time to time after the date hereof, additional subsidiaries of the Group
Members may become parties hereto by executing a counterpart signature page to
this Promissory Note (each additional subsidiary, an “Additional Payor”). Upon
delivery of such counterpart signature page to the Payees, notice of which is
hereby waived by the other Payors, each Additional Payor shall be a Payor and
shall be as fully a party hereto as if such Additional Payor were an original
signatory hereof. Each Payor expressly agrees that its obligations arising
hereunder shall not be affected or diminished by the addition or release of any
other Payor hereunder. This Promissory Note shall be fully effective as to any
Payor that is or becomes a party hereto regardless of whether any other Person
becomes or fails to become or ceases to be a Payor hereunder.

This Promissory Note may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original
but all of which taken together shall constitute a single contract. Delivery of
an executed signature page to this Promissory Note by facsimile (or other
electronic) transmission shall be as effective as delivery of a manually signed
counterpart of this Promissory Note.

[Remainder of page intentionally left blank]

 

F-23

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IN WITNESS WHEREOF, each Payor has caused this Promissory Note to be executed
and delivered by its proper and duly authorized officer as of the date set forth
above.

 

AAC HOLDINGS, INC. By:  

 

  Name:   Title: AMERICAN ADDICTION CENTERS, INC. FORTERUS HEALTH CARE SERVICES,
INC. SAN DIEGO ADDICTION TREATMENT CENTER, INC. GREENHOUSE TREATMENT CENTER
CONCORDE TREATMENT CENTER, LLC RECOVERY FIRST OF FLORIDA, LLC RI – CLINICAL
SERVICES, LLC NEW JERSEY ADDICTION TREATMENT CENTER, LLC BEHAVIORAL HEALTHCARE
REALTY, LLC CONCORDE REAL ESTATE, LLC BHR GREENHOUSE REAL ESTATE, LLC BHR ALISO
VIEJO REAL ESTATE, LLC BHR RINGWOOD REAL ESTATE, LLC OXFORD TREATMENT CENTER,
LLC SOBER MEDIA GROUP, LLC RIVER OAKS TREATMENT CENTER, LLC LAGUNA TREATMENT
HOSPITAL, LLC SOLUTIONS TREATMENT CENTER, LLC TOWNSEND TREATMENT CENTER, LLC By:
 

 

  Name:   Title: AAC LAS VEGAS OUTPATIENT CENTER, LLC AAC DALLAS OUTPATIENT
CENTER, LLC ADDICTION LABS OF AMERICA, LLC By: American Addiction Centers, Inc.,
its sole member By:  

 

  Name:   Title:

 

F-24

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[OXFORD OUTPATIENT CENTER, LLC RUSH MEDICAL – LAFAYETTE, LLC TOWNSEND RECOVERY
CENTER NEW ORLEANS, LLC BHR OXFORD REAL ESTATE, LLC REFERRAL SOLUTIONS GROUP,
LLC SAGANEX DIAGNOSTICS LABORATORY, LLC] By:  

 

  Name:   Title: THE ACADEMY REAL ESTATE, LLC By: Behavioral Healthcare Realty,
LLC, its sole member By:  

 

  Name:   Title: RECOVERY BRANDS, LLC By: Referral Solutions Group, LLC, its
sole member By:  

 

  Name:   Title: SAN DIEGO PROFESSIONAL GROUP, P.C. PALM BEACH PROFESSIONAL
GROUP, PROFESSIONAL CORPORATION LAS VEGAS PROFESSIONAL GROUP – CALARCO, P.C.
GRAND PRAIRIE PROFESSIONAL GROUP OXFORD PROFESSIONAL GROUP, P.C. By:  

 

  Name:   Title:

 

F-25

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AAC HEALTHCARE NETWORK, INC.

 

By:  

 

  Name:   Title: PONTCHARTRAIN MEDICAL GROUP, A PROFESSIONAL CORPORATION By:  

 

  Name:   Title: B&B HOLDINGS INT’L LLC By:  

 

  Name:   Title: SINGER ISLAND RECOVERY CENTER LLC By:  

 

  Name:   Title: FITRX, LLC By:  

 

  Name:   Title: CLINICAL REVENUE MANAGEMENT SERVICES, LLC By:  

 

  Name:   Title:

 

F-26

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ABTTC, INC.

 

By:  

 

  Name:   Title: TAJ MEDIA LLC By:  

 

  Name:   Title: BRENTWOOD PROFESSIONAL GROUP, P.C. By:  

 

  Name:   Title:

 

F-27

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Schedule A

TRANSACTIONS

ON

INTERCOMPANY SUBORDINATED DEMAND PROMISSORY NOTE

 

Date

 

Name of Payor

 

Name of

Payee

   Amount of
Advance
This Date    Amount of
Principal Paid
on This Date    Outstanding
Principal
Balance from
Payor to Payee
on This Date    Notation
Made By

 

F-28

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ENDORSEMENT

Dated: [            ,    ], 20[    ]

FOR VALUE RECEIVED, each of the undersigned does hereby sell, assign and
transfer to                     all of its right, title and interest in and to
the Intercompany Subordinated Demand Promissory Note, dated [    ], 20[    ] (as
amended, restated, supplemented or otherwise modified from time to time, the
“Promissory Note”), made by AAC Holdings, Inc., and each of its subsidiaries or
any other person that is or becomes a party thereto, and payable to the
undersigned. This endorsement is intended to be attached to the Promissory Note
and, when so attached, shall constitute an endorsement thereof.

The initial undersigned shall be the Group Members (as defined in the Promissory
Note) that are Loan Parties (as defined in the Credit Agreement referred to in
the Promissory Note) party to the Affiliate Subordination Agreement on the date
of the Promissory Note. From time to time after the date thereof, additional
subsidiaries of the Group Members shall become parties to the Promissory Note
(each, an “Additional Payee”) and a signatory to this endorsement by executing a
counterpart signature page to the Promissory Note and to this endorsement. Upon
delivery of such counterpart signature page to the Payors, notice of which is
hereby waived by the other Payees, each Additional Payee shall be a Payee and
shall be as fully a Payee under the Promissory Note and a signatory to this
endorsement as if such Additional Payee were an original Payee under the
Promissory Note and an original signatory hereof. Each Payee expressly agrees
that its obligations arising under the Promissory Note and hereunder shall not
be affected or diminished by the addition or release of any other Payee under
the Promissory Note or hereunder. This endorsement shall be fully effective as
to any Payee that is or becomes a signatory hereto regardless of whether any
other Person becomes or fails to become or ceases to be a Payee to the
Promissory Note or hereunder.

[Remainder of page intentionally left blank]

 

F-29

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AAC HOLDINGS, INC. By:  

 

  Name:   Title: AMERICAN ADDICTION CENTERS, INC. FORTERUS HEALTH CARE SERVICES,
INC. SAN DIEGO ADDICTION TREATMENT CENTER, INC. GREENHOUSE TREATMENT CENTER
CONCORDE TREATMENT CENTER, LLC RECOVERY FIRST OF FLORIDA, LLC RI – CLINICAL
SERVICES, LLC NEW JERSEY ADDICTION TREATMENT CENTER, LLC BEHAVIORAL HEALTHCARE
REALTY, LLC CONCORDE REAL ESTATE, LLC BHR GREENHOUSE REAL ESTATE, LLC BHR ALISO
VIEJO REAL ESTATE, LLC BHR RINGWOOD REAL ESTATE, LLC OXFORD TREATMENT CENTER,
LLC SOBER MEDIA GROUP, LLC RIVER OAKS TREATMENT CENTER, LLC LAGUNA TREATMENT
HOSPITAL, LLC SOLUTIONS TREATMENT CENTER, LLC TOWNSEND TREATMENT CENTER, LLC By:
 

 

  Name:   Title: AAC LAS VEGAS OUTPATIENT CENTER, LLC AAC DALLAS OUTPATIENT
CENTER, LLC ADDICTION LABS OF AMERICA, LLC By: American Addiction Centers, Inc.,
its sole member By:  

 

  Name:   Title:

 

F-30

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[OXFORD OUTPATIENT CENTER, LLC RUSH MEDICAL – LAFAYETTE, LLC TOWNSEND RECOVERY
CENTER NEW ORLEANS, LLC BHR OXFORD REAL ESTATE, LLC REFERRAL SOLUTIONS GROUP,
LLC SAGANEX DIAGNOSTICS LABORATORY, LLC] By:  

 

  Name:   Title: THE ACADEMY REAL ESTATE, LLC By: Behavioral Healthcare Realty,
LLC, its sole member By:  

 

  Name:   Title: RECOVERY BRANDS, LLC By: Referral Solutions Group, LLC, its
sole member By:  

 

  Name:   Title: SAN DIEGO PROFESSIONAL GROUP, P.C. PALM BEACH PROFESSIONAL
GROUP, PROFESSIONAL CORPORATION LAS VEGAS PROFESSIONAL GROUP – CALARCO, P.C.
GRAND PRAIRIE PROFESSIONAL GROUP OXFORD PROFESSIONAL GROUP, P.C. By:  

 

  Name:   Title:

 

F-31

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AAC HEALTHCARE NETWORK, INC. By:  

 

  Name:   Title: PONTCHARTRAIN MEDICAL GROUP, A PROFESSIONAL CORPORATION By:  

 

  Name:   Title:

 

F-32

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Annex 2 to the

Affiliate Subordination Agreement

SUPPLEMENT NO. [    ] dated as of [            ], 20[    ] (this “Supplement”),
to the Affiliate Subordination Agreement dated as of June 30, 2017, (the
“Affiliate Subordination Agreement”), among the subordinated lenders named
therein (the “Subordinated Lenders”), the subordinated borrowers named therein
(the “Subordinated Borrowers”) and Credit Suisse AG, as administrative agent (in
such capacity, including any successor thereto, the “Administrative Agent”) for
the Senior Lenders.

A. Reference is made to the Affiliate Subordination Agreement.

B. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Affiliate Subordination Agreement.

C. Each of the Subordinated Lenders and each of the Subordinated Borrowers have
entered into the Affiliate Subordination Agreement in order to induce the Senior
Lenders to make Loans and other extensions of credit under the Credit Agreement.
Section 20 of the Affiliate Subordination Agreement provides that subsidiaries
of the Borrower may become Subordinated Lenders and Subordinated Borrowers under
the Affiliate Subordination Agreement by execution and delivery of an instrument
in the form of this Supplement. The undersigned Subsidiary (the “New
Subordinated Party”) is executing this Supplement to become a Subordinated
Lender and a Subordinated Borrower under the Affiliate Subordination Agreement
in accordance with the terms of the Credit Agreement as consideration for Loans
and Letters of Credit previously made or issued or to be made or issued under
the Credit Agreement.

Accordingly, the Administrative Agent and the New Subordinated Party agree as
follows:

SECTION 1. In accordance with Section 20 of the Affiliate Subordination
Agreement, the New Subordinated Party by its signature below becomes a
Subordinated Lender and a Subordinated Borrower under the Affiliate
Subordination Agreement with the same force and effect as if originally named
therein as a Subordinated Lender and a Subordinated Borrower and the New
Subordinated Party hereby (a) agrees to all the terms and provisions of the
Affiliate Subordination Agreement applicable to it as a Subordinated Lender and
a Subordinated Borrower thereunder and (b) represents and warrants that the
representations and warranties made by it as a Subordinated Lender and a
Subordinated Borrower thereunder are true and correct in all material respects,
except that such materiality qualifier shall not be applicable to any
representation that is already qualified by materiality, on and as of the date
hereof except for representations and warranties which by their terms refer to a
specific date, which representations and warranties were true and correct on
such specific date. Each reference to a “Subordinated Lender” or a “Subordinated
Borrower” in the Affiliate Subordination Agreement shall be deemed to include
the New Subordinated Party. The Affiliate Subordination Agreement is hereby
incorporated herein by reference.

SECTION 2. The New Subordinated Party represents and warrants to the
Administrative Agent and the other Senior Lenders that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms.

 

F-33

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SECTION 3. This Supplement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. Delivery of an executed signature page to this Supplement by facsimile
(or other electronic) transmission shall be as effective as delivery of a
manually signed counterpart of this Supplement. This Supplement shall become
effective when the Administrative Agent shall have received counterparts of this
Supplement that, when taken together, bear the signatures of the New
Subordinated Party and the Administrative Agent.

SECTION 4. Except as expressly supplemented hereby, the Affiliate Subordination
Agreement shall remain in full force and effect.

SECTION 5. THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK.

SECTION 6. In the event that any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Affiliate Subordination Agreement shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
hereto shall endeavor in good-faith negotiations to replace the invalid, illegal
or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

SECTION 7. All communications and notices hereunder shall be in writing and
given as provided in Section 11 of the Affiliate Subordination Agreement. All
communications and notices hereunder to the New Subordinated Party shall be
given to it at the address set forth under its signature below, with a copy to
the Borrower.

SECTION 8. The New Subordinated Party agrees to pay or reimburse the
Administrative Agent, the Collateral Agent, the Issuing Bank and each other
Senior Lender, upon demand, for all their reasonable documented out-of-pocket
expenses in connection with the enforcement or preservation of any rights under
this Agreement, including, without limitation, the documented out-of-pocket fees
and disbursements of counsel to the Administrative Agent, the Collateral Agent,
the Issuing Bank and each other Senior Lender.

[Remainder of page intentionally left blank]

 

F-34

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IN WITNESS WHEREOF, the New Subordinated Party and the Administrative Agent have
duly executed this Supplement to the Affiliate Subordination Agreement as of the
day and year first above written.

 

[NAME OF NEW SUBORDINATED PARTY], as New Subordinated Party By:  

 

  Name:   Title: Address: CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,as
Administrative Agent By:  

 

  Name:   Title: By:  

 

  Name:   Title:

 

F-35

--------------------------------------------------------------------------------

Exhibit G

to Credit Agreement

FORM OF COMPLIANCE CERTIFICATE

The undersigned hereby certifies that he or she is the [Chief Financial
Officer][Treasurer][Controller] of AAC Holdings, Inc., a Nevada corporation (the
“Borrower”), and certifies in such capacity, and not in his or her individual
capacity, as follows:

1. I have reviewed the terms of the Credit Agreement, dated as of June 30, 2017
(as amended, restated, replaced, supplemented or otherwise modified from time to
time, the “Credit Agreement”; capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement), among the Borrower, the lenders party thereto from time to time, and
Credit Suisse AG, as administrative agent for the Lenders (in such capacity,
including any successor thereto, the “Administrative Agent”), as collateral
agent for the Secured Parties, and I have made, or have caused to be made under
my supervision, a review in reasonable detail of the transactions and condition
of the Borrower and its Subsidiaries during the accounting period covered by the
attached financial statements.

2. The examination described in paragraph 1 above did not disclose, and I have
no knowledge of, the existence of any condition or event which constitutes an
Event of Default or Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
compliance certificate (this “Certificate”), except as set forth in a separate
attachment, if any, to this Certificate, specifying the nature and extent
thereof and the corrective action taken or proposed to be taken with respect
thereto by the Borrower.

The foregoing certifications[, together with the computations set forth in the
Annex A hereto] 1 and the financial statements delivered with this Certificate
in support hereof, are made and delivered as of [            ], 20[    ]
pursuant to Section 5.04(c) of the Credit Agreement.

 

AAC Holdings, INC. By:  

 

Name:

Title: [Chief Financial Officer] [Treasurer]

        [Controller]

 

 

1  Delivery of computations on Annex A required only in connection with
financials statements delivered pursuant to paragraphs (a) and (b) of
Section 5.04 of the Credit Agreement.

 

G-1

--------------------------------------------------------------------------------

Annex A

to Compliance Certificate

FOR THE FISCAL [QUARTER][YEAR] ENDING [            ], 20[__].

 

1.    Consolidated EBITDA: (i) - (ii) =    $[            ]    (i)    (a)
Consolidated Net Income:    $[            ]       (b) Consolidated Interest
Expense:    $[            ]       (c) consolidated income tax expense8:   
$[            ]       (d) amounts attributable to depreciation and amortization:
   $[            ]       (e) any non-cash charges, expenses or losses9:   
$[            ]       (f) extraordinary, unusual, or non-recurring cash charges
or expenses10:    $[            ]   

(g) deferred compensation, stock-option or employee benefits-based and other
equity-based compensation expenses:

   $[            ]      

(h)    fees, costs and expenses in connection with the Transactions:

   $[            ]   

(i) fees, costs and expenses in connection with any investment (including any
Permitted Acquisition), asset disposition (including any Asset Sale), issuance
of Equity Interests or issuance, modification or refinancing of any
Indebtedness, in each case, to the extent permitted under the Credit Agreement
and whether or not such transaction shall have been consummated:

   $[            ]   

(j) any losses or expenses to the extent reimbursable by third parties in
connection with any Permitted Acquisition11:

   $[            ]      

(k)    unrealized losses in respect of Obligations under Hedging Agreements:

   $[            ]

 

8  To include any franchise taxes imposed in lieu of income taxes and any income
taxes.

9  To include impairment of goodwill or other intangible assets and exchange
rate losses, but excluding any charges, expenses or losses incurred that
constitutes an accrual of or a reserve for cash charges for any future period.

10  To include severance, retention bonuses or other similar one time
compensation payments made to employees of the Borrower or any of its
Subsidiaries or made in connection with a Permitted Acquisition.

11  If the Administrative Agent, acting reasonably, determines in any relevant
period or the immediately succeeding period that such any losses or expenses, or
any portion thereof (which, in each case, were included in Consolidated EBITDA
for such period or such immediately preceding period pursuant to clause (i)(j)),
are no longer reimbursable or are not likely to be reimbursed, then such losses
or expenses, or any portion thereof, shall be subtracted from Consolidated Net
Income in calculating Consolidated EBITDA for such applicable period.

 

G-2

--------------------------------------------------------------------------------

  

(l) any losses or expenses from discontinued operations or incurred in
connection with the disposal of discontinued operations in accordance with GAAP
(or if not in accordance with GAAP as otherwise reasonably acceptable to the
Administrative Agent):

   $[            ]   

(m) non-cash charges or amounts recorded in connection with purchase accounting
under FASB Accounting Standards Codification Topic 805 (ASC 805), Business
Combinations (including any applicable to future Permitted Acquisitions):

   $[            ]   

(n) non-cash purchase accounting adjustments relating to the writedown of
deferred revenue (whether billed or unbilled) that are the result of accounting
for any acquisition:

   $[            ]   

(o) the cumulative effect of a change in accounting principles to the extent
permitted by Section 1.02(b) of the Credit Agreement:

   $[            ]   

(p) any expense in connection with any litigation or claim involving the
Borrower or its Subsidiaries:

   $[            ]            

(q) debt discount and debt issuance costs, fees, charges and commissions, in
each case incurred in connection with Indebtedness permitted to be incurred
under the Credit Agreement (whether or not such Indebtedness has been incurred):

   $[            ]   

(r) any losses or expenses incurred by the Borrower or its Subsidiaries in
connection with establishing new or materially expanding existing Healthcare
Facilities for a period of 6 months prior to the new establishment or material
expansion of such Healthcare Facilities and continuing for 12 months after the
new establishment or completed material expansion of such Healthcare Facilities,
as reasonably determined in good faith by the Borrower, for such period, not to
exceed an amount equal to 25% (or, for any period including or occurring after
the fiscal quarter ending December 31, 2017, 20%) of Consolidated EBITDA for the
period of four consecutive fiscal quarters most recently ended prior to the
determination date (without giving effect to any adjustments pursuant to this
clause (r))12:

   $[            ]   

(s) net cost savings, operating expense reductions, other operating improvements
and acquisition synergies projected by the Borrower in good faith to be realized
during such period (calculated on a pro forma basis as though such items had
been realized on the first day of such period) as a result of actions taken or
to be taken in connection with any acquisition, disposition or restructuring by
the Borrower or any Subsidiary, net of the amount of actual benefits realized
during such period that are otherwise included in the calculation of
Consolidated EBITDA from such actions13:

   $[            ]

 

12  For any period including or occurring after the fiscal quarter ending
March 31, 2018, the aggregate amount of add backs made pursuant to clauses
(i)(r) and clause (i)(s) shall not exceed an amount equal to 25% of Consolidated
EBITDA for the period of four consecutive fiscal quarters most recently ended
prior to the determination date (without giving effect to any adjustments
pursuant to clause (i)(r) and clause (i)(s)).

13  To be included provided that (A) a duly completed certificate signed by a
Financial Officer of the Borrower shall be delivered to the Administrative Agent
together herewith certifying that (x) such cost savings, operating expense
reductions and synergies are reasonably expected and factually supportable as
determined in good faith by the Borrower, and (y) such actions are to be taken
within 12 months after the consummation of the acquisition, disposition or
restructuring, which is expected to result in such cost savings, expense
reductions or synergies, (B) no such cost savings, operating expense reductions
and synergies shall be added pursuant to clause (i)(s) to the extent duplicative
of any losses, expenses or charges otherwise added to Consolidated EBITDA,
whether through a pro forma adjustment or otherwise, for such period,
(C) projected amounts (and not yet realized) may no longer be added in
calculating Consolidated EBITDA pursuant to clause (i)(s) to the extent
occurring more than four full fiscal quarters after the specified action taken
in order to realize such projected cost savings, operating expense reductions
and synergies, (D) the aggregate amount of add backs made pursuant to clause
(i)(s) shall not exceed an amount equal to 20% (or, for any period including or
occurring after the fiscal quarter ending December 31, 2017, 10%) of
Consolidated EBITDA for the period of four consecutive fiscal quarters most
recently ended prior to the determination date (without giving effect to any
adjustments pursuant to clause (i)(s)) and (E) for any period including or
occurring after the fiscal quarter ending March 31, 2018, the aggregate amount
of add backs made pursuant to the foregoing clause (i)(r) and (i)(s) shall not
exceed an amount equal to 25% of Consolidated EBITDA for the period of four
consecutive fiscal quarters most recently ended prior to the determination date
(without giving effect to any adjustments pursuant to the clause (i)(r) and
clause (i)(s).

 

G-3

--------------------------------------------------------------------------------

            (ii)  (a) to the extent included in determining such Consolidated
Net Income, any extraordinary, unusual or non-recurring cash gains and all
non-cash items of income for such period, all determined on a consolidated basis
in accordance with GAAP:    $[            ]   

(b) unrealized gains in respect of Obligations under Hedging Agreements:

   $[            ]   

(c) any gain from discontinued operations or any gain incurred in connection
with the disposal discontinued operations in accordance with GAAP for such
period (or if not in accordance with GAAP as otherwise reasonably acceptable to
the Administrative Agent)14:

   $[            ]

 

14  To include the Consolidated EBITDA of any Acquired Entity acquired by the
Borrower or any Subsidiary pursuant to a Permitted Acquisition on a pro forma
basis (assuming the consummation of such acquisition and the incurrence or
assumption of any Indebtedness in connection therewith occurred as of the first
day of such period), and excluding the Consolidated EBITDA of any Person or line
of business sold or otherwise disposed of by the Borrower or any Subsidiary
(assuming the consummation of such sale or other disposition and the repayment
of any Indebtedness in connection therewith occurred as of the first day of such
period).

 

G-4

--------------------------------------------------------------------------------

2. Maximum Senior Secured Leverage Ratio: (i)/(ii) =       Actual:   
$[            ]             Required by Section 6.10 of the Credit Agreement:   
$[            ]    (i)  Senior Secured Debt:       (ii) Consolidated EBITDA:   
2. Total Leverage Ratio15: (i)/(ii) =       Actual:    $[            ]   
(i) Total Debt:       (ii) Consolidated EBITDA:    4. Excess Cash Flow16: (i) -
(ii) =       (i)  (a) Consolidated EBITDA:    $[            ]   

(b) reductions to noncash working capital of Borrower and Subsidiaries
(excluding any changes in working capital due to the effects of purchase
accounting adjustments):

   $[            ]    (ii)  (a) amount of any Taxes paid in cash by the Borrower
and the Subsidiaries17:    $[            ]   

(b) Consolidated Interest Expense paid in cash:

   $[            ]   

(c) Capital Expenditures and investments (including any Permitted Acquisition)
permitted under the Credit Agreement (whether or not such Capital Expenditure,
investment or acquisition shall have been consummated) and that are made in
cash, except to the extent financed with the proceeds of Indebtedness, equity
issuances, casualty proceeds, condemnation proceeds or other proceeds that would
not be included in Consolidated EBITDA:

   $[            ]   

(d) permanent repayments of Indebtedness (other than mandatory prepayments of
Loans under Section 2.13 of the Credit Agreement, but including any voluntary
prepayments of Term Loans under Section 2.12 of the Credit Agreement to the
extent they reduce scheduled repayments of Term Loans under Section 2.11 of the
Credit Agreement) made in cash by the Borrower and the Subsidiaries to the
extent that such Indebtedness so prepaid by its terms cannot be reborrowed or
redrawn and such prepayments do not occur in connection with a refinancing of
all or any portion of such Indebtedness:

  

 

15  To be computed only if incurring Indebtedness in reliance on Section
6.01(m).

16  Delivery of computations of Excess Cash Flow required only in connection
with financials statements delivered pursuant to paragraph (a) of Section 5.04
of the Credit Agreement.

17  To include any franchise taxes imposed in lieu of income taxes.

 

G-5

--------------------------------------------------------------------------------

$[                     ]

 

(e) solely to the extent representing a cash item actually paid in cash during
such fiscal year, amounts added back to Consolidated EBITDA pursuant to clauses
(v), (vi), (vii), (viii), (xv), (xvi) and (xvii) of the definition of
Consolidated EBITDA in the Credit Agreement:

   $[                    ]

(f) additions to noncash working capital:

   $[                    ]

(g) the aggregate amount of Restricted Payments made in cash in accordance with
Section 6.06(a)(i) of the Credit Agreement (but solely with respect to clause
(x) thereof):

   $[                    ] 5. Available Amount18: (i) – (ii) =   
$[                    ]

(i) (a) (x) the cumulative amount of Excess Cash Flow for all fiscal years of
the Borrower completed after the Closing Date (commencing with the fiscal year
ending December 31, 2017) and prior to the Reference Date minus (y) the portion
of such Excess Cash Flow that has been (or will be) after the Closing Date and
on or prior to the Reference Date applied to the prepayment or repayment of
Loans in accordance with Section 2.13 of the Credit Agreement:

$[                    ]

(b) the amount of any capital contributions (whether in cash or Permitted
Investments) received by the Borrower or proceeds of equity issuances by the
Borrower or any direct or indirect parent of the Borrower and directly or
indirectly contributed in cash or Permitted Investments as common equity to the
Borrower, in each case to the extent permitted hereunder (other than in
connection with Cure Amounts) after the Closing Date and on or prior to the
Reference Date:

$[                    ]

(c) an amount equal to any repayments, interest, returns, profits,
distributions, income and similar amounts actually theretofore received in cash
or Permitted Investments in respect of any investment made pursuant to Section
6.04(i)(ii) of the Credit Agreement after the Closing Date and on or prior to
the Reference Date:

$[                    ]

(d) an amount equal to any Declined Proceeds retained by the Borrower after the
Closing Date and on or prior to the Reference Date (and not, for the avoidance
of doubt, applied for any other purposes, including as permitted by Section
2.12(b) of the Credit Agreement):

$[                    ]

(ii) the sum, without duplication, of (i) the aggregate amount of investments,
loans and advances made pursuant to Section 6.04(j)(ii) of the Credit Agreement
by any Loan Party after the Closing Date and on or prior to the Reference Date
and (ii) the aggregate amount of Restricted Payments made pursuant to Section
6.06(a)(iii) of the Credit Agreement, (iii) after the Closing Date and on or
prior to the Reference Date and (iv) the aggregate amount of distributions,
payments, commitments, redemptions, repurchase, retirements, acquisitions or set
aside made pursuant to Section 6.09(b)(iv) of the Credit Agreement after the
Closing Date and on or prior to the Reference Date: $[                    ]

  

 

18  Delivery of computations of Available Amount required only in connection
with financials statements delivered pursuant to paragraph (a) of Section 5.04
of the Credit Agreement.

 

G-6

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6. Consolidated Net Income: (i) - (ii) =    $[                    ]

 

(i) the net income or loss of the Borrower and the Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP:

  $[                    ]

(ii) (a) the income of any Subsidiary to the extent that the declaration or
payment of dividends or similar distributions by the Subsidiary of that income
is not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, statute, rule or governmental
regulation applicable to such Subsidiary except that (x) the Borrower’s equity
in any net loss of any such Subsidiary for such period shall be included in
determining Consolidated Net Income and (y) the net income of any Controlled
Physician Affiliate shall be included in the determination of Consolidated Net
Income for any period to the extent that any Loan Party has received cash
payments under the management agreement with such Controlled Physician’s
Affiliate during such period:

  $[                    ]

(b) the income or loss of any Person accrued prior to the date it becomes a
Subsidiary or is merged into or consolidated with the Borrower or any Subsidiary
or the date that such Person’s assets are acquired by the Borrower or any
Subsidiary:

  $[                    ]

(c) the income of any Person in which any other Person (other than the Borrower
or a Wholly Owned Subsidiary or any director holding qualifying shares in
accordance with applicable law) has a joint interest, except to the extent of
the amount of dividends or other distributions actually paid to the Borrower or
a Wholly Owned Subsidiary by such Person during such period:

  $[                    ]

(d) any gains attributable to sales of assets out of the ordinary course of
business:

  $[                    ] 7. Senior Secured Debt: the total Indebtedness of the
Borrower and the Subsidiaries that is secured by a Lien on that property or
assets of the Borrower or the Subsidiaries:   $[                    ] 8. Total
Debt: the total Indebtedness of the Borrower and the Subsidiaries at such time
(excluding Indebtedness of the type described in clauses (j) and (l) of the
definition of such term, except, in the case of clause (l), to the extent of any
unreimbursed drawings thereunder):     $[                    ] 9. Consolidated
Interest Expense19: (i) + (ii) =   $[                    ]

(i) the interest expense (including imputed interest expense in respect of
Capital Lease Obligations and Synthetic Lease Obligations) of the Borrower and
the Subsidiaries,

 

 

19 

Interest expense shall be determined after giving effect to any net payments
made or received by the Borrower or any Subsidiary with respect to interest rate
Hedging Agreements.

 

G-7

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determined on a consolidated basis in accordance with GAAP20:

$[                    ]

 

(ii) any interest accrued in respect of Indebtedness of the Borrower or any
Subsidiary required to be capitalized rather than included in consolidated
interest expense for such period in accordance with GAAP:

  $[                    ]

 

 

20  To include (i) any amounts of premium or penalty payable in connection with
the payment of make-whole amounts or other prepayment premiums payable in
connection with any Indebtedness of the Borrower or any of its Subsidiaries, and
(ii) all commissions, discounts and other fees and charges owed in respect of
interest rates to the extent such net costs are allocable to such period in
accordance with GAAP.

 

G-8

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FORM OF LANDLORD PERSONAL PROPERTY COLLATERAL ACCESS AGREEMENT

LANDLORD’S WAIVER AND CONSENT

THIS LANDLORD’S WAIVER AND CONSENT (“Waiver and Consent”) is made and entered
into as of this [__] day of [            ] by and between [            ], a
[            ] (“Landlord”), and CREDIT SUISSE AG, as administrative and
collateral agent (in such capacities, including any successors thereto, the
“Agent”) for the lenders (collectively, “Lenders”) from time to time party to
the Credit Agreement described below and each other Secured Party (as defined in
the Credit Agreement).

A. Landlord is the owner of the real property commonly known as             (the
“Premises”).

B. Landlord has entered into that certain Lease Agreement dated
            (together with all amendments and modifications thereto and waivers
thereof, the “Lease”) with [            ], a [            ] (“Company”), with
respect to the Premises.

C. Agent and the Secured Parties are party to that certain Credit Agreement,
dated as of June 30, 2017 (as may be amended, restated, replaced, refinanced,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among AAC HOLDINGS, INC., a Nevada corporation (the “Borrower”), the Lenders
from time to time party thereto and CREDIT SUISSE AG, as Agent, and to secure
the obligations arising under such Credit Agreement, Company has granted to
Agent, for its own benefit and the ratable benefit of the Secured Parties, a
security interest in and lien upon certain assets of Company, including, without
limitation, all of Company’s cash, cash equivalents, goods, inventory,
machinery, equipment, and furniture and trade fixtures (such as equipment bolted
to floors), together with all additions, substitutions, replacements and
improvements to, and proceeds of, the foregoing, but excluding building fixtures
(such as plumbing, lighting and HVAC systems) (collectively, the “Collateral”).

NOW, THEREFORE, in consideration of any financial accommodations extended by the
Secured Parties to Company at any time, and other good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:

1. Landlord acknowledges that (a) the Lease is in full force and effect and
(b) Landlord is not aware of any existing default under the Lease.

2. Landlord will use commercially reasonable efforts to provide Agent with
written notice of any default by Company under the Lease resulting in
termination of the Lease (a “Default Notice”). Agent shall have at least [15]
days following receipt of such Default Notice to cure such default, but neither
Agent nor any Secured Party shall be under any obligation to cure any default by
Company under the Lease. No action by Agent or any Secured Party pursuant to
this Waiver and Consent shall be deemed to be an assumption by Agent or Secured
Parties of any obligation under the Lease, and, except as provided in paragraphs
6 and 7 below, Agent shall not have any obligation to Landlord.

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3. Landlord acknowledges the validity of Agent’s Lien on the Collateral and,
until such time as the Obligations (as defined in the Credit Agreement) of
Company to the Secured Parties are unconditionally, finally and irrevocably paid
in full, Landlord waives any interest in the Collateral and agrees not to
distrain or levy upon any Collateral or to assert any landlord lien, right of
distraint or other claim against the Collateral for any reason.

4. Landlord agrees that the Collateral consisting of trade fixtures such as
equipment bolted to the floor shall not be deemed a fixture or part of the real
estate but shall at all times be considered personal property.

5. Prior to a termination of the Lease, Agent or its representatives or invitees
may enter upon the Premises at any time without any interference by Landlord to
inspect or remove any or all of the Collateral, including, without limitation,
by public auction or private sale pursuant to the provisions of paragraph 7
below.

6. Upon a termination of the Lease, Landlord will permit Agent and its
representatives and invitees to occupy and remain on the Premises; provided,
that (a) such period of occupation (the “Disposition Period”) shall not exceed
up to [150] days following receipt by Agent of a Default Notice or, if the Lease
has expired by its own terms (absent a default thereunder), up to [30] days
following Agent’s receipt of written notice of such expiration, (b) for the
actual period of occupancy by Agent, Agent will pay to Landlord the basic rent
due under the Lease pro-rated on a per diem basis determined on a 30-day month,
and shall provide and retain liability and property insurance coverage,
electricity and heat to the extent required by the Lease, and (c) such amounts
paid by Agent to Landlord shall exclude any rent adjustments, indemnity payments
or similar amounts for which the Company remains liable under the Lease for
default, holdover status or other similar charges. If any injunction or stay is
issued that prohibits Agent from removing the Collateral, the commencement of
the Disposition Period will be deferred until such injunction or stay is lifted
or removed.

7. During any Disposition Period, (a) Agent and its representatives and invitees
may inspect, repossess, remove and otherwise deal with the Collateral, and Agent
may advertise and conduct public auctions or private sales of the Collateral at
the Premises, in each case without interference by Landlord or liability of
Agent or any Secured Party to Landlord, and (b) Agent shall make the Premises
available for inspection by Landlord and prospective tenants and shall cooperate
in Landlord’s reasonable efforts to re-lease the Premises. If Agent conducts a
public auction or private sale of the Collateral at the Premises, Agent shall
use reasonable efforts to notify Landlord first and to hold such auction or sale
in a manner which would not unduly disrupt Landlord’s or any other tenant’s use
of the Premises.

8. Agent shall promptly repair, at Agent’s expense, or reimburse Landlord for
any physical damage to the Premises actually caused by the conduct of such
auction or sale and any removal of Collateral by or through Agent (ordinary wear
and tear excluded). Neither Agent nor any Secured Party shall be liable for any
diminution in value of the Premises caused by the absence of Collateral removed,
and neither Agent nor any Secured Party shall have any duty or obligation to
remove or dispose of any Collateral or any other property left on the Premises
by Company.

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9. This Waiver and Consent shall continue in effect until the earlier of (i) the
payment in full of the Obligations (other than contingent indemnification
obligations for which no claim has been asserted) of Company to the Secured
Parties and (ii) subject to the provisions of paragraph 6 above, the expiration
or early termination of the Lease.

10. All notices hereunder shall be in writing, sent by certified mail, return
receipt requested or by telecopy, to the respective parties and the addresses
set forth on the signature page or at such other address as the receiving party
shall designate in writing.

11. This Waiver and Consent may be executed in any number of several
counterparts, shall be governed and controlled by, and interpreted under, the
laws of the State of New York, and shall inure to the benefit of Agent and its
successors and assigns and shall be binding upon Landlord and its successors and
assigns (including any transferees of the Premises).

IN WITNESS WHEREOF, this Landlord’s Waiver and Consent is entered into as of the
date first set forth above.

 

LANDLORD

 

[                    ]

By:  

 

Title:  

 

AGENT

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as the Agent

By:  

 

Title:  

 

Its: Duly Authorized Signatory By:  

 

Title:  

 

Its: Duly Authorized Signatory