Exhibit 10.2

 

Execution Version

 

FIRST LIEN TERM LOAN CREDIT AGREEMENT

consisting of a

$1,240,297,917.21
Tranche B Term Loan Facility

dated as of December 10, 2019

by and among

CONCENTRA HOLDINGS, INC.,
as Holdings

CONCENTRA INC.,
as the Borrower

The Lenders Party Hereto from Time to Time

SELECT MEDICAL CORPORATION,
as Administrative Agent and Collateral Agent

 

 

 

TABLE OF CONTENTS

 

  Page ARTICLE I   Definitions

 

SECTION 1.01   Defined Terms 1 SECTION 1.02   Classification of Loans and
Borrowings 34 SECTION 1.03   Terms Generally 34 SECTION 1.04   Accounting Terms;
GAAP 35 SECTION 1.05   [Reserved] 35 SECTION 1.06   Available Amount
Transactions 35 SECTION 1.07   Pro Forma Calculations 35

 

ARTICLE II

 

The Credits

 

SECTION 2.01   Commitments 37 SECTION 2.02   Loans and Borrowings 37 SECTION
2.03   Requests for Borrowings 37 SECTION 2.04   [Reserved] 38 SECTION
2.05   [Reserved] 38 SECTION 2.06   Funding of Borrowings 38 SECTION
2.07   Interest Elections 38 SECTION 2.08   Termination and Reduction of
Commitments 39 SECTION 2.09   Repayment of Loans; Evidence of Debt 40 SECTION
2.10   Amortization of Tranche B Term Loans 40 SECTION 2.11   Prepayment of
Loans 41 SECTION 2.12   [Reserved] 44 SECTION 2.13   Interest 44 SECTION
2.14   Alternate Rate of Interest; Illegality 44 SECTION 2.15   Increased Costs
46 SECTION 2.16   Break Funding Payments 47 SECTION 2.17   Taxes 47 SECTION
2.18   Payments Generally; Pro Rata Treatment; Sharing of Setoffs 49 SECTION
2.19   Mitigation Obligations; Replacement of Lenders 50 SECTION
2.20   Incremental Extensions of Credit 51 SECTION 2.21   Extended Term Loans 54
SECTION 2.22   [Reserved] 55

 

ARTICLE III

 

Representations and Warranties

 

SECTION 3.01   Organization; Power 55 SECTION 3.02   Authorization;
Enforceability 55 SECTION 3.03   Governmental Approvals; No Conflicts 56 SECTION
3.04   Financial Condition; No Material Adverse Effect 56 SECTION
3.05   Properties 56 SECTION 3.06   Litigation and Environmental Matters 57
SECTION 3.07   Compliance with Laws and Agreements 57 SECTION 3.08   Investment
Company Status 57

 

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SECTION 3.09   Taxes 57 SECTION 3.10   ERISA 57 SECTION 3.11   Disclosure 57
SECTION 3.12   Subsidiaries 57 SECTION 3.13   Insurance 57 SECTION 3.14   Labor
Matters 57 SECTION 3.15   Solvency 57 SECTION 3.16   Federal Reserve Regulations
57 SECTION 3.17   Reimbursement from Third Party Payors 57 SECTION 3.18   Fraud
and Abuse 59 SECTION 3.19   Patriot Act, Etc. 59 SECTION 3.20   Security
Documents 60 SECTION 3.21   Compliance with Healthcare Laws 60 SECTION
3.22   HIPAA Compliance 61

 

ARTICLE IV

 

Conditions

 

SECTION 4.01   Closing Date 61 SECTION 4.02   Each Credit Event 63

 

ARTICLE V

 

Affirmative Covenants

 

SECTION 5.01   Financial Statements and Other Information 63 SECTION
5.02   Notices of Material Events 65 SECTION 5.03   Information Regarding
Collateral 66 SECTION 5.04   Existence; Conduct of Business 66 SECTION
5.05   Payment of Obligations 67 SECTION 5.06   Maintenance of Properties 67
SECTION 5.07   Insurance 67 SECTION 5.08   Casualty and Condemnation 67 SECTION
5.09   Books and Records; Inspection and Audit Rights 67 SECTION
5.10   Compliance with Laws 67 SECTION 5.11   Use of Proceeds 68 SECTION
5.12   Additional Subsidiaries; Succeeding Holdings 68 SECTION 5.13   Further
Assurances 68 SECTION 5.14   Designation of Subsidiaries 69 SECTION
5.15   Maintenance of Ratings 69 SECTION 5.16   Quarterly Lender Calls 69
SECTION 5.17   ERISA Compliance 69 SECTION 5.18   [Reserved] 69

 

ARTICLE VI

 

Negative Covenants

 

SECTION 6.01   Indebtedness; Certain Equity Securities 69 SECTION 6.02   Liens
72 SECTION 6.03   Fundamental Changes 74 SECTION 6.04   Investments, Loans,
Advances, Guarantees and Acquisitions 75 SECTION 6.05   Asset Sales 77 SECTION
6.06   Sale and Leaseback Transactions 78

 

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SECTION 6.07   Swap Agreements 78 SECTION 6.08   Restricted Payments; Certain
Payments of Indebtedness 79 SECTION 6.09   Transactions with Affiliates 81
SECTION 6.10   Restrictive Agreements 83 SECTION 6.11   Amendment of Material
Documents 84 SECTION 6.12   [Reserved] 84 SECTION 6.13   Fiscal Year 84

 

ARTICLE VII

 

Events of Default

 

SECTION 7.01   Events of Default 84 SECTION 7.02   [Reserved] 86 SECTION
7.03   Exclusion of Immaterial Subsidiaries 86

 

ARTICLE VIII

 

The Agents

 

SECTION 8.01   The Agents 87 SECTION 8.02   Withholding Taxes 88 SECTION
8.03   Certain ERISA Matters 89

 

ARTICLE IX

 

Miscellaneous

 

SECTION 9.01   Notices 89 SECTION 9.02   Waivers; Amendments 90 SECTION
9.03   Expenses; Indemnity; Damage Waiver 92 SECTION 9.04   Successors and
Assigns 94 SECTION 9.05   Survival 97 SECTION 9.06   Counterparts; Integration;
Effectiveness 97 SECTION 9.07   Severability 97 SECTION 9.08   Right of Setoff
97 SECTION 9.09   Governing Law; Jurisdiction; Consent to Service of Process 98
SECTION 9.10   WAIVER OF JURY TRIAL 98 SECTION 9.11   Headings 98 SECTION
9.12   Confidentiality 99 SECTION 9.13   Interest Rate Limitation 99 SECTION
9.14   USA Patriot Act 100 SECTION 9.15   Release of Collateral 100 SECTION
9.16   No Fiduciary Duty 100 SECTION 9.17   [Reserved] 100 SECTION
9.18   Material Non-Public Information 100 SECTION 9.19   Acknowledgement and
Consent to Bail-In of EEA Financial Institutions 101 SECTION
9.20   Acknowledgement Regarding Any Supported QFCs 101

 

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SCHEDULES:

 

Schedule 1.01-A Mortgaged Property     Schedule 1.01-B Disqualified Institutions
    Schedule 2.01 Commitments     Schedule 2.05 [Reserved]     Schedule 3.05
Real Property     Schedule 3.06 Litigation and Environmental Matters    
Schedule 3.12 Subsidiaries     Schedule 3.13 Insurance     Schedule 4.01 Local
Counsel Jurisdictions     Schedule 5.20 Post-Closing Matters     Schedule 6.01
Existing Indebtedness     Schedule 6.02 Existing Liens     Schedule 6.04
Existing Investments     Schedule 6.05 Asset Sales     Schedule 6.09 Existing
Transactions with Affiliates     Schedule 6.10 Existing Restrictions

 

EXHIBITS:

 

Exhibit A Form of Assignment and Assumption     Exhibit B Form of Collateral
Agreement     Exhibit C Form of Perfection Certificate     Exhibit D Form of
Borrowing Request     Exhibit E Form of Interest Election Request     Exhibit F
Form of Compliance Certificate     Exhibit G [Reserved]     Exhibit H [Reserved]
    Exhibit I [Reserved]     Exhibit J [Reserved]     Exhibits K-1 to K-4
[Reserved]

 

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FIRST LIEN TERM LOAN CREDIT AGREEMENT dated as of December 10, 2019, by and
among CONCENTRA HOLDINGS, INC., a Delaware corporation (“Holdings”), CONCENTRA
INC., a Delaware corporation (“Concentra” or the “Borrower”), the LENDERS party
hereto from time to time and SELECT MEDICAL CORPORATION, as Administrative Agent
and Collateral Agent.

 

The Borrower has requested that, immediately prior to the consummation of the
prepayment of all of the term loans outstanding under the Existing Credit
Agreement on the Closing Date with the net proceeds of the Tranche B Term Loans,
the Lender extend credit in the form of Tranche B Term Loans on the Closing Date
to the Borrower in an aggregate principal amount not to exceed
$1,240,297,917.21.

 

The net proceeds of the Tranche B Term Loans borrowed on the Closing Date will
be used by the Borrower on the Closing Date, solely to prepay the term loans
outstanding under the Existing Credit Agreement, including the payment of fees,
costs and expenses related therewith.

 

The Lender is willing to extend such credit to the Borrower on the terms and
subject to the conditions set forth herein. Accordingly, the parties hereto
agree as follows:

 

ARTICLE I

 

Definitions

 

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

 

“ABR” when used in reference to any Loan or Borrowing, refers 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 Indebtedness” means, with respect to any specified Person,

 

(a)       Indebtedness of any other Person existing at the time such other
Person is merged, consolidated or amalgamated with or into or became a
Restricted Subsidiary of such specified Person, including Indebtedness incurred
in connection with, or in contemplation of, such other Person merging,
amalgamating or consolidating with or into, or becoming a Restricted Subsidiary
of, such specified Person, and

 

(b)       Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.

 

“Additional Credit Extension Amendment” means 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) and any other applicable Loan
Document providing for any Incremental Term Loans, Replacement Term Loans or
Extended Term Loans which shall be consistent with the applicable provisions of
this Agreement relating to Incremental Term Loans, loans under any Replacement
Term Loans or Extended Term Loans and otherwise satisfactory to the
Administrative Agent.

 

“Additional Lender” means any Person that is not an existing Lender and has
agreed to provide Incremental Commitments pursuant to Section 2.20.

 

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to (a) the LIBO Rate for the applicable Class of
Loans for such Interest Period multiplied by (b) the Statutory Reserve Rate.

 

“Administrative Agent” means Select Medical Corporation, in its capacity as
administrative agent for the Lenders under the Loan Documents.

 

 

 

 

“Administrative Questionnaire” means an administrative questionnaire in a form
supplied by the Administrative Agent.

 

“Affiliate” means, with respect to a specified Person, any other Person that
directly, or indirectly through one or more intermediaries, Controls, is
Controlled by or is under common Control with the Person specified.

 

“Agents” means the Administrative Agent and the Collateral Agent.

 

“Agreement” means this First Lien Term Loan Credit Agreement, as the same may be
renewed, extended, modified, supplemented, amended or amended and restated from
time to time.

 

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on
such day plus ½ of 1% and (c) the Adjusted LIBO Rate for the applicable Class of
Loans (after giving effect to any applicable minimum rate set forth therein) for
a one month Interest Period on such day (or if such day is not a Business Day,
the immediately preceding Business Day) plus 1%, provided that, subject to any
applicable minimum rate specified for any Class of Loans in the definition of
“LIBO Rate”, the Adjusted LIBO Rate for any day shall be based on the LIBO Rate
at approximately 11:00 a.m. London time on such day subject to the interest rate
floors set forth therein, if any. Any change in the Alternate Base Rate due to a
change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO Rate shall be
effective from and including the effective date of such change in the Prime
Rate, the NYFRB Rate or the Adjusted LIBO Rate, respectively.

 

“Amendment No. 3 Acquisition Transactions” has the meaning assigned thereto in
the Existing Credit Agreement (as in effect on the Closing Date).

 

“Amendment No. 3 Transactions” has the meaning assigned thereto in the Existing
Credit Agreement (as in effect on the Closing Date).

 

“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to the Borrower or any of its Subsidiaries from time to
time concerning or relating to bribery or corruption by virtue of such Person
being organized or operating in such jurisdiction.

 

“Applicable Rate” means, for any day (a) with respect to any Term Loan, (x) on
the Closing Date, a percentage per annum equal to (i) for ABR Loans, 1.50% and
(ii) for Eurodollar Loans, 2.50% and (y) thereafter, a percentage per annum
equal to (i) for ABR Loans, the applicable rate per annum set forth below under
the caption “Term Loan ABR Spread” and (ii) for Eurodollar Loans, the applicable
rate per annum set forth below under the caption “Term Loan Eurodollar Spread”;
provided that (1) if the ratings established by S&P and Moody’s shall fall
within different “Pricing Levels,” then the Applicable Rate shall be the rate
set forth in Level 1, (2) if at any time the Loans and Commitments shall fail to
be rated by either S&P or Moody’s, then Level 2 shall be deemed applicable for
the period commencing one (1) Business Day after the date that the Loans and
Commitments cease to be so rated and ending on the date which is one (1)
Business Day after the Loans and Commitments are again rated by both S&P and
Moody’s, after which the “Pricing Level” shall be determined in accordance with
the table below, as applicable, and (3) adjustments (other than pursuant to the
immediately foregoing subclause (2)), if any, to the “Pricing Level” then in
effect shall be effective one (1) Business Day after the date that a change in a
rating requiring such adjustment is first announced by either S&P or Moody’s, as
applicable (it being understood and agreed that each change in “Pricing Level”
shall apply during the period commencing on the effective date of such change
and on the date immediately preceding the effective date of the next such
change):

 

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Pricing Level  Credit Rating  Term Loan ABR Spread   Term Loan Eurodollar
Spread  Level 1  < B+ (stable) from S&P
or B1 (stable) from
Moody’s      1.75%   2.75% Level 2  ≥ B+ (stable) from S&P
and B1 (stable) from
Moody’s   1.50%   2.50%

 

Notwithstanding the foregoing, (a) the Applicable Rate in respect of any Class
of Incremental Term Loans, any Class of Extended Term Loans or any Class of
Replacement Term Loans shall be the applicable percentages per annum set forth
in the relevant Additional Credit Extension Amendment and (b) in the case of the
Term Loans of any Class, the Applicable Rate shall be increased as, and to the
extent, necessary to comply with the provisions of Section 2.20.

 

“Approved Fund” has the meaning assigned to such term in Section 9.04(b).

 

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 9.04) and accepted by the Administrative Agent, in the form of
Exhibit A or any other form (including electronic records generated by the use
of an electronic platform) approved by the Administrative Agent.

 

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

 

“Available Amount” means, at any date, an amount, not less than zero in the
aggregate, determined on a cumulative basis equal to, without duplication:

 

(a)       $25,000,000 plus 50% of the Consolidated Net Income of the Borrower
for the period (taken as one accounting period) from the first day of the
Borrower’s fiscal quarter during which the Original Closing Date occurred to the
end of the Borrower’s most recently ended fiscal quarter for which internal
financial statements are available at the time of a Restricted Payment (or, if
such Consolidated Net Income for such period is a deficit, less 100% of such
deficit), plus

 

(b)       100% of the sum of (i) Qualified Proceeds (other than Permitted
Investments) and (ii) Permitted Investments, in each case, received by the
Borrower since the Original Closing Date as a contribution to its equity capital
(other than Disqualified Stock) or from the issue or sale of Equity Interests of
the Borrower or any direct or indirect parent company of the Borrower (other
than Disqualified Stock) or from the issue or sale of convertible or
exchangeable Disqualified Stock or convertible or exchangeable debt securities
of the Borrower that have been converted into or exchanged for such Equity
Interests (other than Equity Interests (or Disqualified Stock or debt
securities) sold to a Restricted Subsidiary of the Borrower) (it being
understood that the amount of increase pursuant to this clause (b) resulting
from the contribution to the Borrower of 30% of the outstanding Equity Interests
of U.S. Healthworks in connection with the Amendment No. 3 Acquisition
Transactions shall be deemed to be $238,000,000), plus

 

(c)       an amount equal to the net reduction in Investments made pursuant to
Section 6.04(r) by the Borrower and its Restricted Subsidiaries resulting from
(A) the sale or other disposition (other than to the Borrower or a Restricted
Subsidiary) of any such Investment and (B) repurchases, redemptions and
repayments of such Investments and the receipt of any dividends or distributions
from such Investments, plus

 

(d)       to the extent that any Unrestricted Subsidiary of the Borrower is
redesignated as a Restricted Subsidiary, an amount equal to the lesser of
(A) the Fair Market Value of the Borrower’s interest in such Subsidiary
immediately following such redesignation and (B) the aggregate amount of the
Borrower’s Investments in such Subsidiary pursuant to Section 6.04(r), plus

 

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(e)       in the event the Borrower and/or any Restricted Subsidiary of the
Borrower makes any Investment pursuant to Section 6.04(r) in a Person that, as a
result of or in connection with such Investment, becomes a Restricted Subsidiary
of the Borrower (and, if such Investment was made by a Loan Party, such Person
becomes a Guarantor), an amount equal to the existing Investment of the Borrower
and/or any of its Restricted Subsidiaries in such Person that was previously
treated as a Restricted Payment, plus

 

(f)       Borrower Retained Prepayment Amounts, minus

 

(g)       any amount of the Available Amount used to make Investments pursuant
to Section 6.04(r) after the Original Closing Date and prior to such time, minus

 

(h)       any amount of the Available Amount used to make Restricted Payments
and prepayments of Specified Indebtedness pursuant to Section 6.08(a)(x) and
Section 6.08(b)(iii) after the Original Closing Date and prior to such time.

 

“Bail-In Action” means 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” means, 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.

 

“Bankruptcy Event” means, with respect to any Person, such Person becomes the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, custodian, assignee for the benefit of
creditors or similar Person charged with the reorganization or liquidation of
its business appointed for it, or, in the good faith determination of the
Administrative Agent, has taken any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any such proceeding or appointment;
provided that a Bankruptcy Event shall not result solely by virtue of any
ownership interest, or the acquisition of any ownership interest, in such Person
by a Governmental Authority or instrumentality thereof; provided, further, that
such ownership interest does not result in or provide such Person 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 Person (or such
Governmental Authority or instrumentality) to reject, repudiate, disavow or
disaffirm any contracts or agreements made by such Person.

 

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Securities Exchange Act, except that in calculating the
beneficial ownership of any particular “person” (as that term is used in
Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have
beneficial ownership of all securities that such “person” has the right to
acquire by conversion or exercise of other securities, whether such right is
currently exercisable or is exercisable only after the passage of time.

 

“Beneficial Ownership Certification” means a certification regarding beneficial
ownership as required by the Beneficial Ownership Regulation.

 

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

 

“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA)
that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of
the Code or (c) any Person whose assets include (for purposes of ERISA Section
3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code)
the assets of any such “employee benefit plan” or “plan”.

 

“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined
under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

 

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

 

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“Board of Directors” means:

 

(a)       with respect to a corporation, the board of directors of the
corporation or any committee thereof duly authorized to act on behalf of such
board,

 

(b)       with respect to a partnership, the board of directors of the general
partner of the partnership,

 

(c)       with respect to a limited liability company, the managing member or
members or any controlling committee of managing members thereof, and

 

(d)       with respect to any other Person, the board or committee of such
Person serving a similar function.

 

“Borrower” has the meaning assigned to such term in the preamble of this
Agreement.

 

“Borrower Retained Prepayment Amounts” has the meaning specified in Section
2.11(g).

 

“Borrowing” means (a) 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, or (b) [reserved].

 

“Borrowing Request” means a request by the Borrower for a Borrowing in
accordance with Section 2.03; provided that a Borrowing Request shall be
substantially in the form of Exhibit D, or such other form as shall be approved
by the Administrative Agent.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that when used in connection with a Eurodollar Loan, 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” means, for any period (and without duplication), (a) the
additions to property, plant and equipment and other capital expenditures of the
Borrower and any of the Subsidiaries that are (or would be) set forth in a
consolidated statement of cash flows of the Borrower for such period prepared in
accordance with GAAP and (b) Capital Lease Obligations incurred by the Borrower
and the Subsidiaries during such period; provided that Capital Expenditures
shall not include (i) expenditures to the extent they are made with the Net
Proceeds of the issuance by Holdings of Equity Interests (or capital
contributions in respect thereof) after the Original Closing Date to the extent
not Otherwise Applied, (ii) investments that constitute a portion of the
purchase price of a Permitted Acquisition, (iii) expenditures that constitute a
reinvestment of the Net Proceeds of any event described in clause (a) or (b) of
the definition of the term “Prepayment Event”, to the extent permitted by
Section 2.11(c), and (iv) the purchase price of equipment purchased during such
period to the extent the consideration therefor consists of any combination of
(x) used or surplus equipment traded in at the time of such purchase and (y) the
proceeds of a concurrent sale of used or surplus equipment.

 

“Capital Lease Obligations” of any Person means, at the time the determination
is to be made, 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.

 

“Captive Insurance Subsidiary” means a Subsidiary established by the Borrower or
any of its Subsidiaries for the sole purpose of insuring the business,
facilities and/or employees of the Borrower and its Subsidiaries.

 

“CFC” means a “controlled foreign corporation” within the meaning of Section
957(a) of the Code.

 

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“CFC Holdco” means any U.S. Subsidiary that owns (directly or indirectly) no
material assets other than Equity Interests (or Equity Interest and
indebtedness) of one or more non-U.S. subsidiaries that are CFCs.

 

“Change in Law” means (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, for purposes of
Section 2.15(b), by any lending office of such Lender or by such Lender’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, the Dodd-Frank Wall Street Reform and Consumer Protection Act and
Basel III and all requests, rules, guidelines or directives thereunder or issued
in connection therewith shall be deemed to be a “Change in Law”, regardless of
the date enacted, adopted, or issued; provided, further, that a Lender shall be
entitled to compensation with respect to any such adoption set forth in the
first proviso to this sentence taking effect, making or issuance becoming
effective after the date of the this Agreement only if it is the applicable
Lender’s general policy or practice to demand compensation in similar
circumstances under comparable provisions of other financing agreements to the
extent it is permitted to do so.

 

“Change of Control” means:

 

(a)       any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act), other than one or more Permitted Holders or a Parent,
becomes the Beneficial Owner, directly or indirectly, of more than 50% of the
total voting power of the voting Equity Interests of the Borrower; provided that
(x) so long as the Borrower is a Subsidiary of any Parent, no “person” shall be
deemed to be or become a Beneficial Owner of more than 50% of the total voting
power of the voting Equity Interests of the Borrower unless such “person” shall
be or become a Beneficial Owner of more than 50% of the total voting power of
the voting Equity Interests of such Parent and (y) any voting stock of which any
Permitted Holder is the Beneficial Owner shall not in any case be included in
any voting stock of which any such “person” is the Beneficial Owner,

 

(b)       the Borrower sells or transfers, in one or a series of related
transactions, all or substantially all of the assets of the Borrower and its
Restricted Subsidiaries to, another Person (other than one or more Permitted
Holder) and any “person” (as defined in clause (i) above), other than one or
more Permitted Holder or any Parent, is or becomes the Beneficial Owner,
directly or indirectly, of more than 50% of the total voting power of the voting
Equity Interests of the transferee Person in such sale or transfer of assets, as
the case may be; provided that (x) so long as such transferee Person is a
Subsidiary of a parent Person, no “person” shall be deemed to be or become a
Beneficial Owner of more than 50% of the total voting power of the voting Equity
Interests of such transferee Person unless such “person” shall be or become a
Beneficial Owner of more than 50% of the total voting power of the voting Equity
Interests of such parent Person and (y) any voting Equity Interests of which any
Permitted Holder is the Beneficial Owner shall not in any case be included in
any voting Equity Interests of which any such “person” is the Beneficial Owner,

 

(c)       the acquisition of record ownership by any Person other than Holdings
of any Equity Interests in the Borrower, or

 

(d)       a “change of control” (or similar event) shall occur under any
instrument governing Material Indebtedness.

 

“Charges” has the meaning set forth in Section 9.13.

 

“Class”, means (i) when used in reference to any Loan or Borrowing, whether such
Loan, or the Loans comprising such Borrowing, are Tranche B Term Loans,
Incremental Term Loans of any series, Extended Term Loans of any series or
Replacement Term Loans of any series, (ii) when used in reference to any
Commitment, refers to whether such Commitment is a Tranche B Commitment or an
Incremental Commitment relating to an additional Class of Loans and (iii) when
used in reference to any Lender, refers to whether such Lender has Loans,
Borrowings or Commitments of a particular Class.

 

-6-

 

 

“CLO” has the meaning assigned to such term in Section 9.04(b).

 

“Closing Date” means the date on which the conditions specified in Section 4.01
are satisfied (or waived), which date occurred on December 10, 2019.

 

“CMS” means the United States Department of Health and Human Services, Centers
for Medicare and Medicaid Services.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Collateral” means any and all “Collateral”, as defined in any applicable
Security Document and all other property that is from time to time pledged to
secure the Obligations pursuant to any Security Document.

 

“Collateral Agent” means Select Medical Corporation, in its capacity as
collateral agent for the Secured Parties under this Agreement and any Security
Document.

 

“Collateral Agreement” means the First Lien Guarantee and Collateral Agreement
among the Loan Parties and the Collateral Agent, substantially in the form of
Exhibit B.

 

“Collateral and Guarantee Requirement” means the requirement that:

 

(a)       the Collateral Agent shall have received from each Loan Party either
(i) a counterpart of the Collateral Agreement duly executed and delivered on
behalf of such Loan Party or (ii) in the case of any Person that becomes a Loan
Party after the Closing Date, a supplement to the Collateral Agreement, in the
form specified therein, duly executed and delivered on behalf of such Loan
Party, subject, in each case, to the limitations and exceptions set forth in
this Agreement and the Security Documents,

 

(b)       all Obligations shall have been unconditionally guaranteed by
Holdings, the Borrower (other than with respect to its direct Obligations as a
primary obligor) and each Subsidiary Loan Party (each, a “Guarantor”),

 

(c)       the Obligations and the Guarantee shall have been secured by a
perfected first-priority security interest (subject to prior Liens to the extent
permitted by Section 6.02) in (i) all the Equity Interests of the Borrower, (ii)
all Equity Interests of each Restricted Subsidiary directly owned by the
Borrower or a Subsidiary Loan Party; provided that in the case of any Restricted
Subsidiary that is a CFC or a CFC Holdco, such pledge shall be limited to 65% of
the issued and outstanding voting Equity Interests and 100% of any non-voting
Equity Interests (it being understood, for the avoidance of doubt, that any
Equity Interest treated as stock entitled to vote within the meaning of Treasury
Regulations Section 1.956-2(c)(2) shall be treated as voting Equity Interests
for purposes of this clause (c)),

 

(d)       all documents and instruments, including Uniform Commercial Code
financing statements, required by law or reasonably requested by the Collateral
Agent to be filed, registered or recorded to create the Liens intended to be
created by the Collateral Agreement and perfect such Liens to the extent
required by the Collateral Agreement, shall have been executed, filed,
registered or recorded or delivered to the Collateral Agent for filing,
registration or recording,

 

(e)       the Collateral Agent shall have received (i) counterparts of a
Mortgage with respect to each Mortgaged Property duly executed and delivered by
the record owner of such Mortgaged Property, (ii) a policy or policies of title
insurance issued by a nationally recognized title insurance company insuring the
Lien of each such Mortgage as a valid first priority Lien on the Mortgaged
Property described therein, free of any other Liens except as expressly
permitted by Section 6.02 in amounts reasonably acceptable to the Collateral
Agent (not to exceed 100% of the Fair Market Value of such Mortgaged Property in
jurisdictions that impose mortgage recording taxes or 110% otherwise), together
with such endorsements, coinsurance and reinsurance as the Collateral Agent or
the Required Lenders may reasonably request, and such surveys, appraisals, legal
opinions and other documents as the Collateral Agent or the Required Lenders may
reasonably request with respect to any such Mortgage or Mortgaged Property, and

 

-7-

 

 

(f)       each Loan Party shall have obtained all material consents and
approvals required to be obtained by it in connection with the execution and
delivery of all Security Documents to which it is a party, the performance of
its obligations thereunder and the granting by it of the Liens thereunder.

 

Notwithstanding anything to the contrary in this Agreement or any Security
Document, no Loan Party shall be required to pledge or grant security interests
(i) in particular assets if, in the reasonable judgment of the Administrative
Agent or the Collateral Agent, the costs (including any adverse tax
consequences) of creating or perfecting such pledges or security interests in
such assets (including any title insurance or surveys) are excessive in relation
to the benefits to the Lenders therefrom, (ii) in any owned real property other
than Material Real Property, (iii) in any leasehold interests, and (iv) with
respect to any Excluded Assets.

 

The Collateral Agent may grant extensions of time for the perfection of security
interests in, or the delivery of the Mortgages and the obtaining of title
insurance and surveys with respect to, particular assets and the delivery of
assets (including extensions beyond the Closing Date for the perfection of
security interests in the assets of the Loan Parties on such date) where it
determines, in consultation with the Borrower, that perfection cannot be
accomplished without undue effort or expense by the time or times at which it
would otherwise be required by this Agreement or the Security Documents.
Notwithstanding any provision of any Loan Document to the contrary, if a
mortgage tax or any similar tax or charge will be owed on the entire amount of
the Obligations evidenced hereby, then the amount secured by the applicable
Mortgage shall be limited to 100% of the fair market value of the Mortgaged
Property at the time the Mortgage is entered into if such limitation results in
such mortgage tax or similar tax or charge being calculated based upon such fair
market value.

 

No actions in any non-U.S. jurisdiction or required by the laws of any non-U.S.
jurisdiction shall be required in order to create any security interests in
assets located or titled outside of the U.S. or to perfect such security
interests, including any intellectual property registered in any non-U.S.
jurisdiction (it being understood that there shall be no security agreements or
pledge agreements governed under the laws of any non-U.S. jurisdiction).  Except
as set forth in the next sentence, perfection by possession with respect to any
item of Collateral shall not be required. Control agreements and perfection by
control shall not be required with respect to Collateral requiring perfection
through control agreements or perfection by “control” (as defined in the Uniform
Commercial Code) (including deposit accounts or other bank accounts or
securities accounts), other than in respect of certificated Equity Interests of
the Borrower and wholly owned Restricted Subsidiaries that are Material
Subsidiaries directly owned by the Loan Parties otherwise required to be pledged
pursuant to the provisions of clause (c) of this definition of “Collateral and
Guarantee Requirement” and not otherwise constituting an Excluded Asset.

 

Notwithstanding anything to the contrary herein or in any other Loan Document,
to the extent the provisions of this Agreement (or any other Loan Document)
require the delivery of, or control over, Collateral to be granted to the
Collateral Agent at any time prior to the earlier of (x) the Discharge of Credit
Agreement Debt (as defined in the First Lien Intercreditor Agreement) and (y)
the Non-Controlling Authorized Representative Enforcement Date (as defined in
the First Lien Intercreditor Agreement), then delivery of, or control over, such
Collateral shall instead be made to the Applicable Collateral Agent (as defined
in the First Lien Intercreditor Agreement), to be held in accordance with the
First Lien Intercreditor Agreement.

 

“Commitment” means a Tranche B Commitment, any Commitment in respect of an
Incremental Extension of Credit or any combination thereof (as the context
requires).

 

“Competitors” means any Person who is not an Affiliate of a Loan Party and who
engages (or whose Affiliate engages), as its primary business, in the same or
similar business as a material business of the Loan Parties.

 

“Compliance Certificate” means a certificate substantially in the form of
Exhibit F.

 

“Concentra” has the meaning set forth in the preamble to this Agreement.

 

-8-

 

 

“Consolidated EBITDA” means, for any period, Consolidated Net Income for such
period, plus

 

(a)       without duplication and to the extent deducted (and not added back or
excluded) in determining such Consolidated Net Income for such period (except in
the case of clause (xiii)), the sum of: (i) consolidated interest expense of the
Borrower and its Restricted Subsidiaries for such period determined in
accordance with GAAP, (ii) consolidated income tax expense of the Borrower and
its Restricted Subsidiaries for such period, (iii) all amounts attributable to
depreciation and amortization expense of the Borrower and its Restricted
Subsidiaries for such period, (iv) any non-cash charges for such period (but
excluding (A) any non-cash charge in respect of amortization of a prepaid cash
item that was included in Consolidated Net Income in a prior period and (B) any
non-cash charge that relates to the write-down or write-off of inventory or
accounts receivable); provided that if any non-cash charges referred to in this
clause (iv) represents an accrual or reserve for potential cash items in any
future period, (1) the Borrower may elect not to add back such non-cash charge
in the current period and (2) to the extent the Borrower elects to add back such
non-cash charge, the cash payment in respect thereof in such future period shall
be subtracted from Consolidated EBITDA in such future period to such extent
paid, (v) any net after-tax gains or losses realized upon the disposition of
assets outside the ordinary course of business (including any gain or loss
realized upon the disposition of any Equity Interests of any Person) and any net
gains or losses on disposed, abandoned and discontinued operations (including in
connection with any disposal thereof) and any accretion or accrual of discounted
liabilities, (vi) any non-recurring out-of-pocket expenses or charges for the
period (including, without limitation, any premiums, make-whole or penalty
payments) relating to any offering of Equity Interests by the Holdings, the
Borrower or any other direct or indirect parent company of the Borrower or
merger, recapitalization or acquisition transactions made by the Borrower or any
of its Restricted Subsidiaries, or any Indebtedness incurred or repaid by the
Borrower or any of its Restricted Subsidiaries (in each case, whether or not
successful), (vii) any Transaction Expenses made or incurred by the Borrower and
its subsidiaries in connection with the Transactions that are paid or accrued
within 180 days of the consummation of the Transactions (including retention
payments paid as an incentive to retained employees in connection with the
Transactions), (viii) other cash expenses incurred during such period in
connection with a Permitted Acquisition to the extent that such expenses are
reimbursed in cash during such period pursuant to indemnification provisions of
any agreement relating to such transaction, (ix) fees paid by the Borrower or
any of its Restricted Subsidiaries to any Permitted Holders and/or any of their
Affiliates under Section 6.09(h), (x) any non-cash costs or expenses, incurred
pursuant to any management equity plan, stock option plan or any other
management or employee benefit plan or agreement or any stock subscription or
shareholder agreement, (xi) Consolidated Net Income attributable to
non-controlling interests of a Restricted Subsidiary (less the amount of any
mandatory cash distribution with respect to any non-controlling interest other
than in connection with a proportionate discretionary cash distribution with
respect to the interest held by the Borrower or any Restricted Subsidiary),
(xii) earn-out and contingent consideration obligations (including to the extent
accounted for as bonuses, compensation or otherwise) and adjustments thereof and
purchase price adjustments, in each case in connection with any acquisitions,
(xiii) the amount of extraordinary, unusual or non-recurring charges or any
costs, charges, accruals, reserves or expenses attributable to the undertaking
and/or implementation of cost savings initiatives and operating expense
reductions, restructuring and similar charges, severance, relocation costs,
integration and facilities opening costs and other business optimization
expenses, signing costs, retention or completion bonuses, transition costs,
costs related to closure/consolidation of facilities and curtailments or
modifications to pension and post-retirement employee benefit plans (including
any settlement of pension liabilities), (xiv) (A) pro forma “run rate” cost
savings, operating expense reductions and synergies related to the Transactions
that are reasonably identifiable, factually supportable and projected by the
Borrower in good faith to result from actions that have been taken or with
respect to which substantial steps have been taken or are expected to be taken
(in the good faith determination of the Borrower) within 12 months after the
Original Closing Date, subject to an aggregate cap of $36,000,000 of such cost
savings, operating expense reductions and synergies in any Test Period that ends
within two years after the Original Closing Date, and (B) pro forma “run rate”
cost savings, operating expense reductions and synergies (including
post-acquisition price or administration fee increases) related to acquisitions,
dispositions and other specified transactions following the Original Closing
Date, restructurings, cost savings initiatives and other initiatives that are
reasonably identifiable, factually supportable and projected by the Borrower in
good faith to from actions that have been taken or with respect to which
substantial steps have been taken or are expected to be taken (in the good faith
determination of the Borrower) within 18 months after such acquisition,
disposition or other specified transaction, restructuring, cost savings
initiative or other initiative, (xv) any reduction in Consolidated Net Income
for such period attributable to facilities open and operating for a period of 18
months or less as of the end of the relevant test period, (xvi) any net
unrealized gain or loss (after any offset) resulting from currency transaction
or translation gains or losses and any net gains or losses related to currency
remeasurements of Indebtedness (including intercompany indebtedness and foreign
currency hedges for currency exchange risk) and (xvii) cash expenses incurred
during such period in connection with extraordinary casualty events to the
extent such expenses are reimbursed in cash by insurance during such period,
minus

 

-9-

 

 

(b)       without duplication, other non-cash items (other than the accrual of
revenue in accordance with GAAP consistently applied in the ordinary course of
business) increasing Consolidated Net Income for the period (excluding any such
non-cash item to the extent it represents the reversal of an accrual or reserve
for potential cash item in any prior period), and

 

(c)       (without duplication) plus unrealized losses and minus unrealized
gains in each case in respect of Swap Agreements, as determined in accordance
with GAAP.

 

For the avoidance of doubt, Consolidated EBITDA shall be calculated, including
pro forma adjustments, in accordance with Section 1.07 with respect to events
occurring following the Original Closing Date.

 

“Consolidated First Lien Net Indebtedness” means, as of any date of
determination, (a) the principal amount of Indebtedness described in clause (a)
of the definition of “Consolidated Total Net Indebtedness” outstanding on such
date that is secured by a Lien on any assets of the Loan Parties but excluding
any such Indebtedness in which the applicable Liens are expressly subordinated
to the Liens securing the Obligations minus (b) the aggregate amount of
unrestricted cash and Permitted Investments, in each case, included on the
consolidated balance sheet of the Borrower and its Restricted Subsidiaries as of
such date.

 

“Consolidated Net Income” means, for any period, the net income or loss of the
Borrower and its Restricted Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP and before any reduction in respect
of preferred stock dividends; provided that there shall be excluded from
Consolidated Net Income (a) the net income of any Person that is not a
Restricted Subsidiary of the Borrower or that is accounted for by the equity
method of accounting; provided that Consolidated Net Income of the Borrower will
be increased by the amount of dividends or other distributions or other payments
actually paid in cash (or to the extent subsequently converted into cash) or
Permitted Investments to the Borrower or a Restricted Subsidiary thereof in
respect of such period, to the extent not already included therein (and if such
net income is a loss, it will be included only to the extent that such loss has
been funded with cash by the Borrower or a Restricted Subsidiary of the
Borrower), (b) the cumulative effect of a change in accounting principles during
such period to the extent included in Consolidated Net Income, (c) any gains or
losses (less all fees, expenses and charges relating thereto) attributable to
any sale of assets outside the ordinary course of business, the disposition of
any Equity Interests of any Person or any of its Restricted Subsidiaries, or the
extinguishment of any Indebtedness of such Person or any of its Restricted
Subsidiaries, in each case, other than in the ordinary course of business, (d)
any extraordinary, unusual or non-recurring gain or loss, together with any
related provision for taxes on such extraordinary, unusual or non-recurring gain
or loss for such period, (e) income or losses attributable to discontinued
operations (including, without limitation, operations disposed during such
period whether or not such operations were classified as discontinued), (f) any
non-cash charges (i) attributable to applying the purchase method of accounting
in accordance with GAAP, (ii) resulting from the application of Accounting
Standards Codification (“ASC”) Topic 350 or ASC Topic 360, and (iii) relating to
the amortization of intangibles resulting from the application of ASC Topic 805,
(g) all non-cash charges relating to employee benefit or other management or
stock compensation plans of the Borrower or a Restricted Subsidiary (excluding
any such non-cash charge to the extent that it represents an accrual of or
reserve for cash expenses in any future period or amortization of a prepaid cash
expense incurred in a prior period) to the extent that such non-cash charges are
deducted in computing Consolidated Net Income; provided, that if the Borrower or
any Restricted Subsidiary of the Borrower makes a cash payment in respect of
such non-cash charge in any period, such cash payment will (without duplication)
be deducted from the Consolidated Net Income of the Borrower for such period,
(h) all unrealized gains and losses relating to hedging transactions and
mark-to-market of Indebtedness denominated in foreign currencies resulting from
the application of ASC Topic 830 and (i) any unrealized foreign currency
translation gains or losses, including in respect of Indebtedness of any Person
denominated in a currency other than the functional currency of such Person.
Notwithstanding the foregoing, for purposes of calculating the “Available
Amount”, Consolidated Net Income of any Restricted Subsidiary of the Borrower
will be excluded to the extent that the declaration or payment of dividends or
other distributions by that Restricted Subsidiary of that net income is not at
the date of determination permitted by a Requirement of Law (that has not been
obtained) or, directly or indirectly, by operation of the terms of its charter
or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders; provided that Consolidated Net Income of the Borrower shall be
increased by the amount of dividends or distributions or other payments that are
actually paid in cash or Permitted Investments to (or to the extent subsequently
converted into cash or Permitted Investments by) the Borrower or a Restricted
Subsidiary (subject to provisions of this clause (b)) during such period, to the
extent not previously included therein.

 

-10-

 

 

“Consolidated Practice” means any therapist- or physician-owned professional
organization, association or corporation that employs or contracts with
physicians and has entered into a management services agreement with the
Borrower or any other Subsidiary, the accounts of which are consolidated with
the Borrower and its subsidiaries in accordance with GAAP.

 

“Consolidated Secured Net Indebtedness” means, as of any date of determination,
(a) the principal amount of Indebtedness described in clause (a) of the
definition of “Consolidated Total Net Indebtedness” outstanding on such date
that is secured by a Lien on any assets of the Loan Parties minus (b) the
aggregate amount of unrestricted cash and Permitted Investments, in each case,
included on the consolidated balance sheet of the Borrower and its Restricted
Subsidiaries as of such date.

 

“Consolidated Total Net Indebtedness” means, as of any date of determination,
(a) the aggregate principal amount of Indebtedness of the Borrower and its
Restricted Subsidiaries outstanding on such date consisting of Indebtedness for
borrowed money, Attributable Indebtedness, purchase money debt, unreimbursed
amounts under letters of credit (subject to the proviso below) and all
Guarantees of the foregoing, in each case (except in the case of Guarantees) in
an amount that would be reflected on a balance sheet prepared as of such date on
a consolidated basis in accordance with GAAP (but excluding the effects of any
discounting of Indebtedness resulting from the application of acquisition
accounting in connection with the Transactions or any acquisition constituting
an Investment permitted under this Agreement) minus (b) the aggregate amount of
unrestricted cash and Permitted Investments included on the consolidated balance
sheet of the Borrower and its Restricted Subsidiaries as of such date; provided
that Consolidated Total Net Indebtedness shall not include Indebtedness in
respect of (i) letters of credit, except to the extent of unreimbursed amounts
under commercial letters of credit that are not reimbursed within three (3)
Business Days after such amount is drawn and (ii) Unrestricted Subsidiaries. For
the avoidance of doubt, obligations under Swap Agreements permitted by Section
6.07 do not constitute Consolidated Total Net Indebtedness.

 

“Contract Consideration” has the meaning set forth in the clause (k) of the
definition of “Excess Cash Flow.”

 

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

 

“Corporate Practice of Medicine Laws” means all laws, regulations, common law,
and attorney general opinions in whatever form, that prohibit any Person other
than a licensed physician or professional corporation or professional
association whose shareholders are exclusively licensed physicians from
employing licensed physicians to provide professional medical services.

 

-11-

 

 

“Covered Entity” means any of the following:

 

(i)a “covered entity” as that term is defined in, and interpreted in accordance
with, 12 C.F.R. § 252.82(b);

 

(ii)a “covered bank” as that term is defined in, and interpreted in accordance
with, 12 C.F.R. § 47.3(b); or

 

(iii)a “covered FSI” as that term is defined in, and interpreted in accordance
with, 12 C.F.R. § 382.2(b).

 

“Covered Party” has the meaning set forth in Section 9.20.

 

“Declined Proceeds” has the meaning specified in Section 2.11(g).

 

“Default” means any event or condition that constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

 

“Default Right” has the meaning assigned to that term in, and shall be
interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as
applicable.

 

“Disqualified Institutions” means (a) the Persons identified in Schedule 1.01-B,
(b) any Competitors of the Borrower and their Subsidiaries (other than bona fide
fixed income investors or debt funds) that (i) are listed on Schedule 1.01-B and
(ii) on or after the Closing Date, have been specified in writing by the
Borrower to the Administrative Agent from time to time in the form of an update
to such Schedule, (c) Affiliates of such Persons set forth in clauses (a) and
(b) above (in the case of Affiliates of such Persons set forth in clause (b)
above other than bona fide fixed income investors or debt funds) that (i)(A) are
listed on Schedule 1.01-B and (B) on or after the Closing Date, have been
specified in writing by the Borrower to the Administrative Agent from time to
time in the form of an update to such Schedule or (ii) are clearly identifiable
as an Affiliate of such Persons solely on the basis of the similarity of such
Affiliate’s name to the name of the listed Person and (d) [reserved]; provided,
that, until the disclosure of the identity of a Disqualified Institution or
Affiliate of a Disqualified Institution to the Lenders generally by the
Administrative Agent, such Person shall not constitute a Disqualified
Institution; provided, further that, to the extent Persons are identified as
Disqualified Institutions in writing by the Borrower to the Administrative Agent
after the Closing Date pursuant to clauses (b)(ii) or (c)(i)(B), the inclusion
of such Persons as Disqualified Institutions shall not retroactively apply to
prior assignments or participations in respect of any Loan under this Agreement
or to any Person that was a party to a pending trade at the time such update
would have otherwise become effective pursuant to the following sentence.
Updates to Schedule 1.01-B shall become effective three (3) Business Days after
being posted to the Lenders. The Administrative Agent shall not be responsible
for monitoring the list of Disqualified Institutions and shall not have any
liability in connection therewith. Notwithstanding the foregoing, the Borrower,
by written notice to the Administrative Agent, may from time to time in its sole
discretion remove any entity from Schedule 1.01-B (or otherwise modify such list
to exclude any particular entity), and such entity removed or excluded from
Schedule 1.01-B shall no longer be a Disqualified Institution for any purpose
under this Agreement or any other Loan Document. A Lender may provide the list
to any potential assignee or participant on a confidential basis in accordance
with Section 9.12 hereof for the purpose of verifying whether such Person is a
Disqualified Institution.

 

“Disqualified Stock” means any Equity Interest that, by its terms (or by the
terms of any security or other Equity Interests into which it is convertible or
for which it is exchangeable), or upon the happening of any event or condition
(a) matures or is mandatorily redeemable (other than solely for Qualified
Preferred Stock), pursuant to a sinking fund obligation or otherwise (except as
a result of a change of control or asset sale so long as any rights of the
holders thereof upon the occurrence of a change of control or asset sale event
shall be subject to the prior repayment in full of the Loans and all other
Obligations (other than contingent indemnification obligations as to which no
claim has been asserted) that are accrued and payable and the termination of the
Commitments), (b) is redeemable at the option of the holder thereof (other than
solely for Qualified Preferred Stock and other than as a result of a change of
control or asset sale so long as any rights of the holders thereof upon the
occurrence of a change of control or asset sale event shall be subject to the
prior repayment in full of the Loans and all other Obligations (other than
contingent indemnification obligations as to which no claim has been asserted)
that are accrued and payable and the termination of the Commitments), in whole
or in part, (c) provides for the scheduled payments of dividends in cash, or (d)
is or becomes convertible into or exchangeable for Indebtedness or any other
Equity Interests that would constitute Disqualified Stock, in each case, prior
to the date that is 91 days after the Latest Maturity Date at the time of
issuance of such Equity Interests; provided, that if such Equity Interests are
issued pursuant to a plan for the benefit of future, current or former
employees, directors, officers, members of management or consultants of Holdings
(or a Parent), the Borrower or the Restricted Subsidiaries or by any such plan
to such employees, directors, officers, members of management or consultants,
such Equity Interests shall not constitute Disqualified Stock solely because
they may be permitted to be repurchased by Holdings, the Borrower or its
Restricted Subsidiaries in order to satisfy applicable statutory or regulatory
obligations or as a result of such employee’s, director’s, officer’s, management
member’s or consultant’s termination of employment or service, as applicable,
death or disability.

 

-12-

 

 

“Dividing Person” has the meaning assigned to it in the definition of
“Division”.

 

“Division” means the division of the assets, liabilities and/or obligations of a
Person (the “Dividing Person”) among two or more Persons (whether pursuant to a
“plan of division” or similar arrangement), which may or may not include the
Dividing Person and pursuant to which the Dividing Person may or may not
survive.

 

“Division Successor” means any Person that, upon the consummation of a Division
of a Dividing Person, holds all or any portion of the assets, liabilities and/or
obligations previously held by such Dividing Person immediately prior to the
consummation of such Division. A Dividing Person which retains any of its
assets, liabilities and/or obligations after a Division shall be deemed a
Division Successor upon the occurrence of such Division.

 

“dollars” or “$” refers to lawful money of the United States of America.

 

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

 

“ECF Percentage” means 50%; provided that the ECF Percentage with respect to
Excess Cash Flow for any year shall instead be (x) 25% in the event that the
Secured Net Leverage Ratio on the last day of such year is less than or equal to
4.25 to 1.0 and greater than 3.75 to 1.0 and (y) 0% in the event that the
Secured Net Leverage Ratio on the last day of such year is less than 3.75 to
1.0.

 

“EEA Financial Institution” means (a) any institution 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
institution established in an EEA Member Country which is a subsidiary of an
institution described in clauses (a) or (b) of this definition and is subject to
consolidated supervision with its parent.

 

“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.

 

“EEA Resolution Authority” means 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.

 

“Environment” means ambient air, indoor air, surface water, groundwater,
drinking water, land surface, sediments, and subsurface strata & natural
resources such as wetlands, flora and fauna.

 

“Environmental Laws” means all laws (including the common law), rules,
regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices
or binding agreements issued, promulgated or entered into by or with any
Governmental Authority, relating in any way to the Environment, the preservation
or reclamation of or damage to natural resources, the presence, management,
storage, treatment, transports, exposure to, Release or threatened Release of
any Hazardous Material, or to health and safety matters.

 

-13-

 

 

“Environmental Liability” means liabilities, obligations, damages, claims,
actions, suits, judgments, orders, fines, penalties, fees, expenses and costs
(including administrative oversight costs, natural resource damages and medical
monitoring, investigation or 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 or treatment of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the Release or threatened 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” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest from the issuer thereof (but excluding any debt security that is
convertible into, or exchangeable for, any of the foregoing).

 

“ERISA” means the Employee Retirement Income Security Act of 1974 and the
regulations promulgated thereunder, as amended from time to time.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code, and including Section 414(m) and (o) of the
Code solely for purposes of Section 412 of the Code and Section 302 of ERISA.

 

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder, with respect to a Plan (other than
an event for which the 30 day notice period is waived), (b) a failure to satisfy
the minimum funding standard under Section 412 of the Code or Section 302 of
ERISA, whether or not waived, occurs with respect to any Plan, (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 or Multiemployer Plan, (d) the incurrence by the Borrower or any of its
ERISA Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan, (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any written notice relating to an
intention to terminate any Plan or Multiemployer Plan or to appoint a trustee to
administer any Plan or Multiemployer Plan, (f) the receipt by the Borrower or
any ERISA Affiliate of any written notice relating to the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan, (g) the
withdrawal of the Borrower or any of its ERISA Affiliates from a Plan subject to
Section 4063 of ERISA during a plan year in which such entity was a “substantial
employer” (as defined in Section 4001(a)(2) of ERISA) or a cessation of
operations that is treated as such a withdrawal under Section 4062(e) of ERISA,
(h) the receipt by the Borrower or any ERISA Affiliate of any written notice, or
the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate
of any written notice, concerning a determination that a Multiemployer Plan is,
or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA or that a Multiemployer Plan is in “critical” status (within
the meaning of Section 432 of the Code or Section 305 of ERISA) or (i) the
occurrence of a non-exempt prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Code) with respect to any Plan.

 

“EU Bail-In Legislation Schedule” means 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, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.

 

“Event of Default” has the meaning assigned to such term in Section 7.01.

 

“Excess Cash Flow” means, for any fiscal year of the Borrower, commencing with
and including the fiscal year ending on December 31, 2019, the sum (without
duplication) of:

 

(a)       Consolidated Net Income for such fiscal year, adjusted to exclude any
gains or losses attributable to Prepayment Events, plus

 

(b)       depreciation, amortization and other non-cash charges or losses
(including deferred income taxes) deducted in determining such Consolidated Net
Income for such fiscal year, plus

 

-14-

 

 

(c)       the amount, if any, by which Net Working Capital decreased during such
fiscal year (except as a result of reclassification of items from short-term to
long-term), minus

 

(d)       the sum of (i) any non-cash gains or non-cash items of income included
in determining Consolidated Net Income for such fiscal year plus (ii) the
amount, if any, by which Net Working Capital increased during such fiscal year
(except as a result of reclassification of items from long-term to short-term),
minus

 

(e)       the greater of (x) the amount of Capital Expenditures of the Borrower
and its Restricted Subsidiaries in such fiscal year (except to the extent
attributable to the incurrence of Capital Lease Obligations or otherwise
financed by incurring Long-Term Indebtedness) and (y) the amount of Capital
Expenditures budgeted by the Borrower and its Restricted Subsidiaries for the
next succeeding fiscal year (except to the extent attributable to the incurrence
of Capital Lease Obligations or otherwise to be financed by incurring Long-Term
Indebtedness), minus

 

(f)       the aggregate principal amount of Long-Term Indebtedness repaid or
prepaid by the Borrower and its Restricted Subsidiaries during such fiscal year,
excluding (i) Indebtedness in respect of revolving loans and letters of credit
(unless there is a corresponding reduction in the aggregate revolving
commitments of the Borrower and its Restricted Subsidiaries), (ii) Tranche B
Term Loans prepaid pursuant to Section 2.11(a), (c) or (d), and (iii) repayments
or prepayments of Long-Term Indebtedness financed by the incurrence of other
Long-Term Indebtedness by a Parent or any Loan Party or the issuance of Equity
Interests (or capital contributions in respect thereof) after the Original
Closing Date, minus

 

(g)       the amount of Restricted Payments made by a Loan Party in such fiscal
year pursuant to clause (iii) of Section 6.08(a), minus

 

(h)       cash Taxes paid in such fiscal year that did not reduce Consolidated
Net Income for such fiscal year, minus

 

(i)       cash payments made during such fiscal year in respect of non-cash
charges that increased Excess Cash Flow in any prior fiscal year, minus

 

(j)       without duplication of amounts deducted pursuant to clause (k) below
in prior fiscal years, the amount of Investments made pursuant to clauses (j),
(l) and (s) of Section 6.04 to the extent such Investments were not funded with
the proceeds of Long-Term Indebtedness, minus

 

(k)       without duplication of (i) amounts deducted from Excess Cash Flow in
prior periods or (ii) amounts included in subclause (e)(y) above and, at the
option of the Borrower, the aggregate consideration required to be paid in cash
by the Borrower and its Restricted Subsidiaries pursuant to binding contracts
(the “Contract Consideration”) entered into prior to or during such period
relating to Permitted Acquisitions, Capital Expenditures, or acquisitions of
intellectual property to the extent expected to be consummated or made, in each
case during the period of four consecutive fiscal quarters of the Borrower
following the end of such period; provided that to the extent the aggregate
amount of expenditures excluding expenditures from the proceeds of Long-Term
Indebtedness) is actually utilized to finance such Permitted Acquisitions,
Capital Expenditures, or acquisitions of intellectual property during such
period of four consecutive fiscal quarters is less than the Contract
Consideration, the amount of such shortfall shall be added to the calculation of
Excess Cash Flow at the end of such period of four consecutive fiscal quarters.

 

“Excluded Assets” has the meaning assigned to such term in the Collateral
Agreement.

 

“Excluded Domestic Subsidiary” means any Domestic Subsidiary that is (i) a
Subsidiary of a Subsidiary of the Borrower that is a CFC or (ii) a CFC Holdco.

 

-15-

 

 

“Excluded Subsidiary” means (i) any Subsidiary to the extent (and for so long
as) a Guarantee by such Subsidiary would be prohibited or restricted by
applicable law or by any restriction in any contract existing on the Original
Closing Date or, so long as any such restriction in any contract is not entered
into in contemplation of such Subsidiary becoming a Subsidiary, at the time such
Subsidiary becomes a Subsidiary (including any requirement to obtain the consent
of any governmental authority or third party), (ii) Excluded Domestic
Subsidiaries, (iii) Unrestricted Subsidiaries, (iv) Captive Insurance
Subsidiaries, (v) not-for-profit Subsidiaries, (vi) special purpose entities
reasonably satisfactory to the Administrative Agent, (vii) any Subsidiary that
is not a Material Subsidiary and (viii) any subsidiary where the Administrative
Agent and the Borrower agree that the cost (including any adverse tax
consequences) of obtaining a Guarantee by such Subsidiary would be excessive in
light of the practical benefit to the Lenders afforded thereby); provided that
the Borrower may notify the Administrative Agent that it intends to comply with
the Guarantee and Collateral Requirement with respect to any Excluded Subsidiary
that is a Domestic Subsidiary and a Restricted Subsidiary and, as of the date of
such compliance, such Subsidiary shall become a Subsidiary Loan Party and cease
to constitute an Excluded Subsidiary (including, without limitation, for
purposes of this definition and Section 5.12(a)).

 

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender or
any other recipient of any payment to be made by or on account of any obligation
of the Borrower or any Loan Party hereunder, (a) Taxes imposed on (or measured
by) its net income (however denominated) (including any backup withholding with
respect thereto) and franchise Taxes imposed on it (in lieu of net income
Taxes), in each case as a result of (i) such recipient being organized under the
laws of, or having its principal office or, in the case of any Lender, its
applicable lending office, located in the jurisdiction imposing such Tax, or
(ii) any other present or former connection between such Person and the
jurisdiction imposing such Tax (other than a connection arising by such Person
having executed, delivered, become a party to, performed its obligations or
received payments under, received or perfected a security interest under,
engaged in any other transaction pursuant to, or enforced, any Loan Document, or
sold or assigned an interest in any Loan or Loan Document ), (b) any branch
profits Taxes, or any similar Tax, imposed by any jurisdiction described in
clause (a) above, (c) in the case of a Lender, any U.S. federal withholding
Taxes imposed on amounts payable to or for the account of such Lender with
respect to an applicable interest in a Commitment (or, to the extent a Lender
acquires an interest in a Term Loan without acquiring an interest in the
corresponding Commitment, the Term Loan) pursuant to a law in effect on the date
on which (i) such Lender acquires such interest in the Commitment (or, to the
extent a Lender acquires an interest in a Term Loan without acquiring an
interest in the corresponding Commitment, the Term Loan) (in each case other
than pursuant to an assignment request by the Borrower under Section 2.19(b)),
or (ii) such Lender changes its lending office, except in each case to the
extent that, pursuant to Section 2.17(a), amounts with respect to such Taxes
were payable either to such Lender's assignor immediately before such Lender
became a party hereto or to such Lender immediately before it changed its
lending office, (d) any withholding Tax that is attributable to a Lender’s
failure to comply with Section 2.17(e), and (e) any withholding Taxes imposed
under FATCA.

 

“Existing CA Amendment No. 3 Effective Date” means February 1, 2018.

 

“Existing CA Amendment No. 6 Effective Date” means September 20, 2019.

 

“Existing Credit Agreement” means the First Lien Credit Agreement, dated as of
June 1, 2015 (and amended by Amendment No. 1, dated as of September 26, 2016,
Amendment No. 2, dated as of March 20, 2017, Amendment No. 3, dated as of
February 1, 2018, Amendment No. 4, dated as of October 26, 2018, Amendment No.
5, dated as of April 8, 2019 and Amendment No. 6, dated as of September 20,
2019), among MJ Acquisition Corporation, as initial borrower, the Borrower,
Holdings, the lenders and issuing banks from time to time party thereto,
JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, as the
same may be renewed, extended, modified, supplemented, amended or amended and
restated from time to time.

 

“Existing Credit Agreement Agent” means JPMorgan Chase Bank, N.A., in its
capacity as administrative agent and collateral agent under the Existing Credit
Agreement.

 

“Existing Term Loan Class” has the meaning set forth in Section 2.21(a).

 

“Extended Term Loans” has the meaning set forth in Section 2.21(a).

 

-16-

 

 

“Extending Term Lender” has the meaning set forth in Section 2.21(c).

 

“Extension Election” has the meaning set forth in Section 2.21(c).

 

“Extension Request” has the meaning set forth in Section 2.21(a).

 

“Facility” means a given Class of Term Loans, as the context may require.

 

“Fair Market Value” means the value that would be paid by a willing buyer to an
unaffiliated willing seller in a transaction not involving distress or necessity
of either party, determined in good faith by the Board of Directors, chief
executive officer or chief financial officer of the Borrower.

 

“FATCA” means Sections 1471 through 1474 of the Code as of the date hereof (and
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 agreements entered into pursuant to
Section 1471(b)(1) of the current Code (or any amended or successor version
described above) and any applicable law or regulation pursuant to an
intergovernmental agreement entered into to implement the foregoing.

 

“FCPA” means the United States Foreign Corrupt Practices Act of 1977, as
amended.

 

“Federal Funds Effective Rate” means, for any day, the rate calculated by the
NYFRB based on such day’s federal funds transactions by depositary institutions,
as determined in such manner as the NYFRB shall set forth on its public website
from time to time, and published on the next succeeding Business Day by the
NYFRB as the federal funds effective rate. In no event shall the Federal Funds
Effective Rate be less than 0%.

 

“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower, in each case in his or her
capacity as such.

 

“First Lien Intercreditor Agreement” means the First Lien Intercreditor
Agreement dated the Closing Date by and between Select Medical Corporation, as
Collateral Agent and Administrative Agent and JPMorgan Chase Bank, N.A., as
Existing Credit Agreement Agent, and acknowledged by the Loan Parties.

 

“First Lien Net Leverage Ratio” means, with respect to any Test Period, the
ratio of (a) Consolidated First Lien Net Indebtedness as of the last day of such
Test Period to (b) Consolidated EBITDA for such Test Period.

 

“Flood Insurance Laws” means, collectively, (i) National Flood Insurance Reform
Act of 1994 (which comprehensively revised the National Flood Insurance Act of
1968 and the Flood Disaster Protection Act of 1973) as now or hereafter in
effect or any successor statute thereto, (ii) the Flood Insurance Reform Act of
2004 as now or hereafter in effect or any successor statute thereto and (iii)
the Biggert-Waters Flood Insurance Reform Act of 2012 as now or hereafter in
effect or any successor statute thereto.

 

“Foreign Casualty Event” has the meaning specified in Section 2.11(h).

 

“Foreign Disposition” has the meaning specified in Section 2.11(h).

 

“Foreign Lender” means any Lender that is not a United States person within the
meaning of Section 7701(a)(30) of the Code.

 

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

 

“Free and Clear Usage Amount” means, at any time, the sum of the aggregate
principal amount of (i) Incremental Term Loans, incurred hereunder in reliance
on Section 2.20(d)(iii)(B) hereunder and (ii) Permitted Debt incurred in
reliance on Section 6.01(xvi)(b) hereunder following the Closing Date.

 

-17-

 

 

“GAAP” means generally accepted accounting principles in the United States of
America, including those set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which are in
effect from time to time. If at any time the SEC permits or requires domestic
companies subject to the reporting requirements of the Securities Exchange Act
to use IFRS in lieu of GAAP for financial reporting purposes, the Borrower may
elect by written notice to the Administrative Agent to so use IFRS in lieu of
GAAP and, upon any such notice, references herein to GAAP shall thereafter be
construed to mean (a) for periods beginning on and after the date specified in
such notice, IFRS as in effect on the date specified in such notice and as in
effect from time to time (for all other purposes of this Agreement) and (b) for
prior periods, GAAP as defined in the first sentence of this definition.
Notwithstanding any change to IFRS, all ratios and computations contained in
this Agreement shall be computed in conformity with GAAP.

 

“Government Programs” means (i) the Medicare and Medicaid Programs, (ii) the
United States Department of Defense Civilian Health Program for Uniformed
Services and (iii) other similar foreign or domestic federal, state or local
reimbursement or governmental health care programs.

 

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.

 

“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, 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 thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party or applicant in
respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided that the term “Guarantee” shall not include
endorsements for collection or deposit in the ordinary course of business. The
amount of any Guarantee of any guaranteeing person shall be deemed to be the
lower of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which the Guarantee is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee.

 

“Guarantors” has the meaning set forth in the definition of “Collateral and
Guarantee Requirement” and shall include each Subsidiary Loan Party that shall
have become a Guarantor pursuant to Section 5.12(a).

 

“Hazardous Materials” means all explosive, radioactive, infectious, chemical,
biological, medical, hazardous or toxic materials, substances, wastes or other
pollutants or contaminants, including petroleum or petroleum byproducts,
asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas
and all other materials, substances or wastes of any nature regulated pursuant
to any Environmental Law.

 

“Healthcare Laws” means all applicable statutes, laws, ordinances, rules and
regulations of any Governmental Authority with respect to the regulation of
patient health care and the submission of claims for reimbursement including:
(a) federal fraud and abuse laws and regulations, including, the federal patient
referral law, 42 U.S.C. § 1395nn, commonly known as “Stark II”, the federal
anti-kickback law, 42 U.S.C. § 1320a-7b, the federal civil monetary penalty
statute 42 U.S.C. § 1320a-7a, federal laws regarding the submission of false
claims, false billing, false coding, and similar state laws and regulations, (b)
federal and state laws applicable to reimbursement and reassignment, (c) HIPAA,
(d) Medicare, (e) statutes affecting the Tricare/CHAMPUS, Veterans, and black
lung disease programs and any other health care program financed with United
States government funds, (f) all federal statutes and regulations affecting the
medical assistance program established by Titles V, XIX, XX, and XXI of the
Social Security Act and any statutes succeeding thereto, and all state statutes
and plans for medical assistance enacted in connection with the federal statutes
and regulations, (g) the Emergency Medical Treatment and Labor Act, commonly
known as “EMTALA”, and (h) any other federal or state law or regulation
governing health care.

 

-18-

 

 

“HIPAA” means the Health Insurance Portability and Accountability Act of 1996,
as the same may be amended, modified or supplemented from time to time
(including, without limitation, the provisions of the Health Information
Technology for Economic and Clinical Health Act contained in the American
Recovery and Reinvestment Act), and any successor statute thereto, and any and
all rules or regulations promulgated from time to time thereunder.

 

“HIPAA Compliance Date” has the meaning set forth in Section 3.22.

 

“Holdings” means (A) Concentra Holdings, Inc., a Delaware corporation, or (B)
any other entity (such entity, a “Succeeding Holdings”) that becomes the
immediate parent of the Borrower.

 

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

 

“Impacted Interest Period” has the meaning set forth in the definition of “LIBO
Rate.”

 

“Incremental Commitments” has the meaning set forth in Section 2.20(a).

 

“Incremental Extensions of Credit” has the meaning set forth in Section 2.20(b).

 

“Incremental Facility Closing Date” has the meaning set forth in
Section 2.20(b).

 

“Incremental Loan Request” has the meaning set forth in Section 2.20(a).

 

“Incremental Term Commitments” has the meaning set forth in Section 2.20(a).

 

“Incremental Term Lender” has the meaning set forth in Section 2.20(c).

 

“Incremental Term Loan” has the meaning set forth in Section 2.20(b).

 

“Indebtedness” of any Person means, 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
acquired by such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding trade accounts
payable and accrued obligations incurred in the ordinary course of business),
(f) all obligations of others secured by (or for which the holder of such
obligations 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, in the event such
secured obligations are nonrecourse to such Person, to the fair value of such
property, (g) all Guarantees by such Person of the obligations of any other
Person, (h) all Capital Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party or applicant in
respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers’ acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
Notwithstanding the foregoing, the term “Indebtedness” shall not include (a)
contingent obligations, including Guarantees, incurred in the ordinary course of
business or in respect of operating leases, and not in respect of borrowed
money, (b) deferred or prepaid revenues, (c) purchase price holdbacks in respect
of a portion of the purchase price of an asset to satisfy warranty or other
unperformed obligations of the respective seller or (d) or amounts that any
member of management, the employees or consultants of Holdings, the Borrower or
any of the Subsidiaries may become entitled to under any cash incentive plan in
existence from time to time.

 

-19-

 

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Indemnitee” has the meaning set forth in Section 9.03(b).

 

“Information” has the meaning set forth in Section 9.12.

 

“Information Memorandum” has the meaning assigned thereto in the Existing Credit
Agreement (as in effect on the Closing Date).

 

“Intellectual Property Security Agreement” has the meaning assigned to such term
in the Collateral Agreement.

 

“Interest Election Request” means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.07; provided that an Interest
Election Request shall be substantially in the form of Exhibit E, or such other
form as shall be approved by the Administrative Agent.

 

“Interest Payment Date” means (a) with respect to any ABR Loan, the last 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 prior to the last day of
such Interest Period that occurs at intervals of three months’ duration after
the first day of such Interest Period.

 

“Interest Period” means, with respect to any Eurodollar Borrowing, with respect
to any Borrowing, the period commencing on the date of such Borrowing and ending
on the numerically corresponding day in the calendar month that is one, two,
three or six months thereafter (or twelve months or a shorter period as may be
agreed by the Borrower, the Administrative Agent and all Lenders participating
therein) and, in each case as the Borrower may elect in the Borrowing Request;
provided 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, and (b) any Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month 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.

 

“Interpolated Rate” means, at any time, for any Interest Period, the rate per
annum (rounded to the same number of decimal places as the LIBO Screen Rate)
determined by the Administrative Agent (which determination shall be conclusive
and binding absent manifest error) to be equal to the rate that results from
interpolating on a linear basis between: (a) the LIBO Screen Rate for the
longest period for which the LIBO Screen Rate is available) that is shorter than
the Impacted Interest Period; and (b) the LIBO Screen Rate for the shortest
period (for which that LIBO Screen Rate is available) that exceeds the Impacted
Interest Period, in each case, at such time.

 

“Investments” has the meaning set forth in Section 6.04.

 

“IRS” means the United States Internal Revenue Service.

 

“Junior Lien Intercreditor Agreement” means any intercreditor agreement (other
than the First Lien Intercreditor Agreement) as may be mutually agreed by the
Borrower and the Administrative Agent.

 

“Latest Maturity Date” means, at any date of determination and with respect to
the specified Loans or Commitments (or in the absence of any such specification,
all outstanding Loans and Commitments hereunder), the latest Maturity Date
applicable to any such Loans or Commitments hereunder at such time, including
the latest maturity date of any Extended Term Loan, and any Incremental Term
Loans, in each case as extended in accordance with this Agreement from time to
time.

 

-20-

 

 

“LCT Election” has the meaning set forth in Section 1.07(f).

 

“LCT Test Date” has the meaning set forth in Section 1.07(f).

 

“Lenders” means each Person that was a lender on the Closing Date and any other
Person that shall have become a party hereto pursuant to an Assignment and
Assumption or an Additional Credit Extension Amendment, other than any such
Person that ceases to be a party hereto pursuant to an Assignment and
Assumption.

 

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the London interbank offered rate as administered by ICE Benchmark
Administration (or any other Person that takes over the administration of such
rate for dollars for a period equal in length to such Interest Period as
displayed on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such
rate (or, in the event such rate does not appear on a Reuters page or screen, on
any successor or substitute page on such screen that displays such rate, or on
the appropriate page of such other information service that publishes such rate
from time to time as selected by the Administrative Agent in its reasonable
discretion; in each case the “LIBO Screen Rate”) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period; provided that if the LIBO Screen Rate shall be less than zero, such rate
shall be deemed to be zero for the purposes of this Agreement; provided,
further, that if the LIBO Screen Rate shall not be available at such time for
such Interest Period (an “Impacted Interest Period”) then the LIBO Rate shall be
the Interpolated Rate; provided that if any Interpolated Rate shall be less than
zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“LIBO Screen Rate” has the meaning provided in the definition of “LIBO Rate.”

 

“Licensed Personnel” has the meaning set forth in Section 3.21.

 

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset or other arrangement to provide priority or preference with respect
to such asset, (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 and (c) in the case of securities, any purchase option,
call or similar right of a third party (other than customary rights of first
refusal and tag, drag and similar rights in joint venture agreements (other than
any such agreement in respect of any Subsidiary)) with respect to such
securities.

 

“Limitation” means a revocation, suspension, termination, impairment, probation,
limitation, nonrenewal, forfeiture, declaration of ineligibility, loss of status
as a participating provider in any Third Party Payor Arrangement, and the loss
of any other rights.

 

“Limited Condition Transaction” means (i) any acquisition by one or more of the
Borrower or its Restricted Subsidiaries of any assets, business or Person whose
consummation is not conditioned on the availability of, or on obtaining, third
party financing, (ii) any permitted Investment whose consummation is not
conditioned on the availability of, or on obtaining, third party financing and
(iii) any redemption, repurchase, defeasance, satisfaction and discharge or
repayment of Indebtedness requiring irrevocable notice in advance of such
redemption, repurchase, defeasance, satisfaction and discharge or repayment.

 

-21-

 

 

“Loan Document Obligations” means (a) the due and punctual payment by the
Borrower of (i) the principal of and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, (ii) [reserved], and (iii) all other
monetary obligations of the Borrower to any of the Secured Parties under this
Agreement and each other Loan Document, including obligations to pay fees,
expense reimbursement obligations and indemnification obligations, whether
primary, secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), (b) the due and punctual performance of all other
obligations of the Borrower under or pursuant to this Agreement and each other
Loan Document, and (c) the due and punctual payment and performance in full of
all the obligations of each other Loan Party under or pursuant to the Collateral
Agreement and each other Loan Document. Notwithstanding the foregoing, the term
“Loan Document Obligations” shall not include any amounts described above in
respect of any Commitment or Loan that is subordinated in right of payment or
security to any other Commitment or Loan.

 

“Loan Documents” means, collectively, (i) this Agreement, (ii) the promissory
notes, if any, executed and delivered pursuant to Section 2.09(e), (iii) any
Additional Credit Extension Amendment, (iv) the Security Documents, (v) the
First Lien Intercreditor Agreement, (vi) legal opinions issued in connection
with the Loan Documents, if any, (vii) Uniform Commercial Code filings, flood
determinations and any other documents prepared in connection with the other
Loan Documents, if any, and (viii) any other amendment or joinder to this
Agreement.

 

“Loan Parties” means Holdings, the Borrower, the Subsidiary Loan Parties and
each Permitted Joint Venture Loan Party.

 

“Loans” means the loans made by the Lenders to the Borrower pursuant to this
Agreement or an Additional Credit Extension Amendment.

 

“Long-Term Indebtedness” means any Indebtedness that, in accordance with GAAP,
constitutes (or, when incurred, constituted) a long-term liability (excluding
extensions of credit under any other revolving credit or similar facility).

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
operations, assets, liabilities, financial condition or results of operations of
Holdings, the Borrower and the Subsidiaries, taken as a whole, (b) the ability
of any Loan Party to perform any obligation under any Loan Document or (c) the
rights of or benefits available to the Lenders under any Loan Document.

 

“Material Disposition” means the sale by the Borrower or any Subsidiary of
assets (including the capital stock of a Subsidiary or a business unit) for
aggregate consideration (including amounts received in connection with
post-closing payment adjustments, earn-outs and noncompete payments) of at least
$15,000,000.

 

“Material Indebtedness” means Indebtedness (other than the Loans), or
obligations in respect of one or more Swap Agreements, of any one or more of
Holdings, the Borrower and the Subsidiaries in an aggregate principal amount
exceeding $20,000,000. For purposes of determining Material Indebtedness, the
“principal amount” of the obligations of the Borrower or any Subsidiary in
respect of any Swap Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Borrower or such Subsidiary
would be required to pay if such Swap Agreement were terminated at such time.

 

“Material Real Property” means a real property with a gross book value of at
least $5,000,000, as reasonably determined by the Borrower in good faith.

 

-22-

 

 

“Material Subsidiary” means, at any date of determination, each wholly owned
Restricted Subsidiary (when combined with the assets of such Subsidiary’s
Restricted Subsidiaries after eliminating intercompany obligations) (i) whose
total assets at the last day of the Test Period ending on the last day of the
most recent fiscal period for which financial statements pursuant to
Section 5.01(a) or (b) have been delivered were equal to or greater than 2.5% of
the Total Assets of the Borrower and the Restricted Subsidiaries at such date or
(ii) whose revenues during such Test Period were equal to or greater than 2.5%
of the consolidated revenues of the Borrower and the Restricted Subsidiaries for
such period (in the case of any determination relating to any Specified
Transaction, on a Pro Forma Basis including the revenues of any Person being
acquired in connection therewith), in each case determined in accordance with
GAAP; provided that if, at any time and from time to time after the Original
Closing Date, Restricted Subsidiaries that are not Material Subsidiaries (other
than Excluded Subsidiaries (except pursuant to clause (vii) of the definition
thereof)) have, in the aggregate, (a) total assets at the last day of such Test
Period equal to or greater than 5.0% of the Total Assets of the Borrower and the
Restricted Subsidiaries at such date or (b) revenues during such Test Period
equal to or greater than 5.0% of the consolidated revenues of the Borrower and
the Restricted Subsidiaries for such period, in each case determined in
accordance with GAAP, then the Borrower shall, on or prior to the date on which
financial statements for the last quarter of such Test Period are delivered
pursuant to this Agreement, designate in writing to the Administrative Agent one
or more of such Restricted Subsidiaries as Material Subsidiaries for each fiscal
period until this proviso is no longer applicable.

 

“Maturity Date” means (i) with respect to the Tranche B Term Loans, the Tranche
B Maturity Date, (ii) with respect to any Incremental Term Loans, the final
maturity date as specified in the applicable Additional Credit Extension
Amendment and (iii) with respect to any Class of Extended Term Loans, the final
maturity date as specified in the applicable Additional Credit Extension
Amendment with respect thereto accepted by the respective Lender or Lenders;
provided that, in each case, if such day is not a Business Day, the Maturity
Date shall be the Business Day immediately succeeding such day.

 

“Maximum Rate” has the meaning set forth in Section 9.13.

 

“Medical Services” means medical and health care services provided to a Person
by Licensed Personnel provided by a Loan Party and other respective employees,
independent contractors and leased personnel whether or not covered by a policy
of insurance issued by an insurer, and includes physician services, nurse
practitioner services and physician’s assistant services provided by Licensed
Personnel supplied by a Loan Party, its respective employees, independent
contractors and leased personnel to a Person for a valid and proper medical or
health purpose.

 

“Medicare and Medicaid Programs” means the programs established under Title
XVIII and XIX of the Social Security Act and any successor programs performing
similar functions.

 

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

 

“Mortgage” means a mortgage, deed of trust, assignment of leases and rents,
leasehold mortgage or other security document granting a Lien on any Mortgaged
Property to secure the Obligations. Each Mortgage shall be reasonably
satisfactory in form and substance to the Collateral Agent.

 

“Mortgaged Property” means, initially, each Material Real Property identified on
Schedule 1.01-A and includes each other Material Real Property with respect to
which a Mortgage is granted pursuant to Section 5.12 or 5.13.

 

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA that is contributed to, or required to be contributed to, by the
Borrower or any ERISA Affiliate, or with respect to which the Borrower or any
ERISA Affiliate has or may have any liability.

 

-23-

 

 

“Net Proceeds” means, with respect to any event, (a) the cash proceeds received
in respect of such event including (i) any cash received in respect of any
non-cash proceeds (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or purchase
price adjustment receivable or otherwise, but excluding any interest payments),
but only as and when received, (ii) in the case of a casualty, insurance
proceeds and (iii) in the case of a condemnation or similar event, condemnation
awards and similar payments, net of (b) the sum of (i) all reasonable fees and
out-of-pocket expenses paid to third parties (other than Affiliates) in
connection with such event, (ii) in the case of a sale, transfer or other
disposition of an asset (including pursuant to a sale and leaseback transaction
or a casualty or a condemnation or similar proceeding), the amount of all
payments required to be made as a result of such event to repay Indebtedness
(other than Loans and other Indebtedness secured by Liens ranking pari passu or
junior to the Liens securing the Obligations) secured by such asset or otherwise
subject to mandatory prepayment as a result of such event and (iii) the amount
of all taxes paid (or reasonably estimated to be payable) and the amount of any
reserves established to fund liabilities reasonably estimated to be payable, in
each case during the year that such event occurred or the next succeeding year
and that are directly attributable to such event (as determined reasonably and
in good faith by a Financial Officer); provided that no net proceeds calculated
in accordance with the foregoing of less than $2,500,000 realized in a single
transaction or series of related transactions shall constitute Net Proceeds.

 

“Net Working Capital” means, at any date, (a) the consolidated current assets of
the Borrower and its subsidiaries as of such date (excluding cash and Permitted
Investments) minus (b) the consolidated current liabilities of the Borrower and
its subsidiaries as of such date (excluding current liabilities in respect of
Indebtedness). Net Working Capital at any date may be a positive or negative
number. Net Working Capital increases when it becomes more positive or less
negative and decreases when it becomes less positive or more negative.

 

“Non-Consenting Lender” has the meaning set forth in Section 9.02(b).

 

“Non-Loan Party” means any Restricted Subsidiary of the Borrower that is not a
Loan Party.

 

“NPI” has the meaning set forth in Section 3.21(b).

 

“NYFRB” means the Federal Reserve Bank of New York.

 

“NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective
Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on
such day(or for any day that is not a Business Day, for the immediately
preceding Business Day); provided that if none of such rates are published for
any day that is a Business Day, the term “NYFRB Rate” means the rate for a
federal funds transaction quoted at 11:00 a.m. on such day received by the
Administrative Agent from a Federal funds broker of recognized standing selected
by it; provided, further, that if any of the aforesaid rates shall be less than
zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“Obligations” means Loan Document Obligations.

 

“OFAC” means the Office of Foreign Assets Control of the U.S. Department of the
Treasury.

 

“OID” means original issue discount.

 

“Original Closing Date” means June 1, 2015.

 

“Other Taxes” means any and all present or future recording, stamp, documentary,
excise, transfer, sales, property or similar Taxes arising from any payment made
under any Loan Document or from the execution, delivery, enforcement,
registration, filing or recording of, from the receipt or perfection of a
security interest under, or otherwise with respect to, any Loan Document.

 

“Otherwise Applied” means, with respect to any Net Proceeds, the amount of such
Net Proceeds that was (i) required to prepay the Loans pursuant to Section 2.11
or (ii) otherwise previously applied under the Loan Documents.

 

“Parent” means any Other Parent and any other Person that is a Subsidiary of any
Other Parent and of which the Borrower is a Subsidiary. As used herein, “Other
Parent” means a Person of which the Borrower becomes a Subsidiary after the
Original Closing Date that is designated by the Borrower as an “Other Parent”;
provided that either (x) immediately after the Borrower first becomes a
Subsidiary of such Person, more than 50% of the voting stock of such Person
shall be held by one or more Persons that held more than 50% of the voting stock
of the Borrower or a Parent of the Borrower immediately prior to the Borrower
first becoming such Subsidiary or (y) such Person shall be deemed not to be an
Other Parent for the purpose of determining whether a Change of Control shall
have occurred by reason of the Borrower first becoming a Subsidiary of such
Person. The Borrower shall not in any event be deemed to be a “Parent.”

 

“Participant” has the meaning set forth in Section 9.04(c).

 

“Participant Register” has the meaning set forth in Section 9.04(c).

 

“Patriot Act” has the meaning set forth in Section 9.14.

 

-24-

 

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

 

“Perfection Certificate” means a certificate in the form of Exhibit C or any
other form approved by the Collateral Agent.

 

“Permits” shall mean, with respect to any Person, any permit, approval,
authorization, license, registration, certificate, concession, grant, franchise,
variance or permission from, and any other contractual obligations with, any
Governmental Authority, in each case whether or not having the force of law and
applicable to or binding upon such Person or any of its property or operations
or to which such Person or any of its property or operations is subject.

 

“Permitted Acquisition” means any Investment by the Borrower or any of its
Restricted Subsidiaries consisting of (a) the acquisition of all or
substantially all of the assets of any other Person (a “Target”) or of assets
constituting a business unit, a division or line of business of a Target or a
facility of such Target (including research and development and related assets
in respect of any product) or (b) all or substantially all of the Equity
Interests of a Target, if as a result of such Investment (i) such Target becomes
a Restricted Subsidiary or (ii) such Target, in one transaction or a series of
related transactions, is amalgamated, merged or consolidated with or into, or
transfers or conveys substantially all of its assets (or such business unit,
division or line of business) to, or is liquidated into, the Borrower or a
Restricted Subsidiary; provided that the aggregate amount of Investments in
Non-Loan Parties by Loan Parties in connection with all Permitted Acquisitions
shall not, except as otherwise permitted by Section 6.04 (other than
Section 6.04(a)), exceed $25,000,000.

 

“Permitted Business” means (i) any business engaged in by the Borrower or any of
its Restricted Subsidiaries on the Original Closing Date and (ii) any business
or other activities that are reasonably similar, ancillary, complementary or
related to, or a reasonable extension, development or expansion of, the
businesses in which the Borrower and its Restricted Subsidiaries are engaged on
the Original Closing Date.

 

“Permitted Debt” means Indebtedness (including Acquired Indebtedness) incurred
or assumed by the Borrower and any Restricted Subsidiary in the form of loans or
debt securities; provided that, except in the case of Refinancing Debt
Securities, to the extent such Indebtedness is in the form of senior term loans
secured by Liens ranking pari passu with the Liens securing the Obligations, the
provisions of Section 2.20(e)(iii) shall apply to any such Indebtedness as if
such Indebtedness were a Class of Incremental Term Loans that is pari passu in
right of payment and security with the Tranche B Term Loans); provided, further
that (A) except in the case of Refinancing Debt Securities, immediately after
the incurrence or assumption of such Indebtedness and the use of proceeds
thereof, no Event of Default shall be continuing or result therefrom (but if the
primary purpose of incurring any Permitted Debt is to finance a Limited
Condition Transaction, such Event of Default shall be limited to an Event of
Default under Section 7.01(a), (b), (h) or (i)), (B) to the extent such
Indebtedness is in the form of loans, the provisions of Section 2.20(e)(i)(B)
and Section 2.20(e)(i)(C) shall apply to any such Indebtedness as if such
Indebtedness were a Class of Incremental Term Loans, (C) to the extent such
Indebtedness is in the form of bonds, such Indebtedness does not mature or have
scheduled amortization or payments of principal (other than customary “AHYDO
catch up payments”, customary offers to repurchase and prepayment events upon a
change of control, asset sale or event of loss and a customary acceleration
right after an event of default) prior to the Tranche B Maturity Date at the
time such Indebtedness is issued, (D) such Indebtedness shall not be secured by
any assets of the Loan Parties other than Collateral and, if secured by the
Collateral shall either be secured by Liens ranking pari passu with the Liens
securing the Obligations that are subject to a First Lien Intercreditor
Agreement with the Collateral Agent or by Liens ranking junior to the Liens
securing the Obligations pursuant to a Junior Lien Intercreditor Agreement, (E)
the covenants, events of default and prepayment events applicable to such other
Indebtedness shall be substantially similar to, or no more favorable (taken as a
whole), than the terms of this Agreement, in each case as reasonably determined
by the Borrower (except for restrictions that apply only after the Latest
Maturity Date) and (F) Non-Loan Parties may not incur Indebtedness pursuant to
this definition if, after giving Pro Forma Effect to such incurrence, the
aggregate amount of Indebtedness of Non-Loan Parties incurred pursuant to this
paragraph then outstanding, together with any Indebtedness incurred by Non-Loan
Parties pursuant to clause (vii) of Section 6.01, would exceed the greater of
$25,000,000 and 2.5% of Total Assets, in each case determined at the such time
of incurrence.

 

-25-

 

 

“Permitted Encumbrances” means:

 

(a)       Liens imposed by law for Taxes that are not yet due or are being
contested in compliance with Section 5.05,

 

(b)       carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and
other like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than 30 days or if more than
30 days overdue, are unfiled and no other action has been taken to enforce such
Liens or that are being contested in good faith and by appropriate actions, in
each case if adequate reserves with respect thereto are maintained on the books
of the applicable Person in accordance with GAAP or the equivalent accounting
principles in the relevant local jurisdiction;

 

(c)       pledges and deposits made in the ordinary course of business in
compliance with workers’ compensation, unemployment insurance, other social
security benefits or other insurance-related obligations (including, but not
limited to, in respect of deductibles, self-insured retention amounts and
premiums and adjustments thereto),

 

(d)       deposits and pledges to secure the performance of bids, trade
contracts, leases, public or statutory obligations, progress payments, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business,

 

(e)       judgment liens in respect of judgments that do not constitute an Event
of Default under paragraph (j) of Section 7.01,

 

(f)       minor survey exceptions, easements or reservations of rights for
others for, licenses, zoning restrictions, rights-of-way, sewers, electric
lines, telegraph and telephone lines and other similar purposes, minor defects
or irregularities of title and other similar encumbrances on real property
imposed by law or arising in the ordinary course of business that do not secure
any monetary obligations and do not either detract from the value of the
affected property or interfere with the ordinary conduct of business of the
Borrower or any Subsidiary, in each case in any material respect, taken as a
whole,

 

(g)       landlords’ and lessors’ and other like Liens in respect of rent not in
default,

 

(h)      any Liens shown on the title insurance policies in favor of the
Collateral Agent insuring the Liens of the Mortgages,

 

(i)       leases or subleases which are subordinate to the Lien of any Mortgage,
and

 

(j)       Liens arising from precautionary Uniform Commercial Code financing
statement or similar filings;

 

provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.

 

“Permitted Holder” means any of the following: (i) any of the Permitted
Investors or their respective Affiliates, (ii) any investment fund or vehicle
managed, sponsored or advised by a Permitted Investor or any Affiliate thereof,
and any Affiliate of or successor to any such investment fund or vehicle, (iii)
each partner, officer, director, principal or member of the Permitted Investors
or any Affiliate of the Permitted Investors and (iv) any Person acting in the
capacity of an underwriter (solely to the extent that and for so long as such
Person is acting in such capacity) in connection with a public or private
offering of capital stock of any Parent or the Borrower.

 

“Permitted Investments” means:

 

(a)       United States dollars or, in the case of any Restricted Subsidiary
which is not a Domestic Subsidiary, any other currencies held from time to time
in the ordinary course of business,

 

-26-

 

 

(b)       direct obligations of, or obligations of 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 acquisition thereof,

 

(c)       direct obligations issued by any state of the United States of America
or any political subdivision of any such state, or any public instrumentality
thereof, in each case having maturities of not more than 12 months from the date
of acquisition,

 

(d)       investments in commercial paper maturing within 365 days from the date
of acquisition thereof and having, at such date of acquisition, a credit rating
from S&P or Moody’s of at least A2 or P2, respectively,

 

(e)       investments in certificates of deposit, banker’s acceptances and time
deposits maturing within 365 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, 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 $500,000,000,

 

(f)       Indebtedness or preferred stock issued by Persons with a rating of “A”
or higher from Standard & Poor’s Rating Services or “A2” or higher from Moody’s
Investors Service, Inc. with maturities of 12 months or less from the date of
acquisition,

 

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

 

(h)       investments in money market funds that comply with the criteria set
forth in SEC Rule 2a-7 under 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 (g) above.

 

“Permitted Investors” means Welsh Carson, Anderson & Stowe XII, L.P., Select
Medical Corporation and any successors in interest thereto.

 

“Permitted Joint Venture” means any investment by which the Borrower or any
Subsidiary Loan Party acquires at least 10% but not more than 99% of the Equity
Interests of any Person; provided that the primary business of such Person is
(x) to own, lease or operate facilities which provide health care related
services or (y) to provide health care related services or any related services
to a health care facility or business.

 

“Permitted Joint Venture Loan Party” means any Permitted Joint Venture which (x)
is a Restricted Subsidiary of the Borrower or any Subsidiary Loan Party and (y)
satisfies the terms of the Collateral and Guarantee Requirement (without regard
to its potential classification as an Excluded Subsidiary).

 

“Permitted Liens” has the meaning set forth in Section 6.02.

 

“Permitted Real Estate Joint Venture” means any Permitted Joint Venture which is
a subsidiary and owns real property used in the business of the Borrower or any
Subsidiary; provided that such Permitted Real Estate Joint Venture is not
engaged in any business or activity other than the ownership of such real
property and activities incidental thereto.

 

“Permitted Refinancing” means any Indebtedness of the Borrower or any of its
Restricted Subsidiaries issued in exchange for, or the net proceeds of which are
used to extend, renew, refund, refinance, replace, defease or discharge other
Indebtedness of the Borrower or any of its Restricted Subsidiaries (other than
intercompany Indebtedness); provided that:

 

-27-

 

 

(a)       the principal amount (or accreted value, if applicable) of such
Permitted Refinancing does not exceed the principal amount (or accreted value,
if applicable) of the Indebtedness extended, renewed, refunded, refinanced,
replaced, defeased or discharged (plus all accrued interest on the Indebtedness
and the amount of all fees, commissions, discounts and expenses, including
premiums, incurred in connection therewith),

 

(b)       either (a) such Permitted Refinancing has a final maturity date later
than the final maturity date of, and has a Weighted Average Life to Maturity
equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, renewed, refunded, refinanced, replaced, defeased
or discharged or (b) all scheduled payments on or in respect of such Permitted
Refinancing (other than interest payments) shall be at least 91 days following
the final scheduled maturity of the Loans,

 

(c)       if the Indebtedness being extended, renewed, refunded, refinanced,
replaced, defeased or discharged is Subordinated Indebtedness, such Permitted
Refinancing is subordinated in right of payment to the Obligations on terms at
least as favorable to the holders of the Obligations as those contained in the
documentation governing the Subordinated Indebtedness being extended, renewed,
refunded, refinanced, replaced, defeased or discharged,

 

(d)       such Indebtedness is incurred (i) by the Borrower or by any Restricted
Subsidiary who is the obligor on the Indebtedness being renewed, refunded,
refinanced, replaced, defeased or discharged, (ii) by any Loan Party if the
obligor on the Indebtedness being renewed, refunded, refinanced, replaced,
defeased or discharged is a Loan Party; or by any Non-Loan Party if the obligor
on the Indebtedness being renewed, refunded, refinanced, replaced, defeased or
discharged is a Non-Loan Party, and

 

(e)       such Indebtedness is not secured by any assets other than the assets
that secured the Indebtedness being renewed, refunded, refinanced, replaced,
defeased or discharged and if the Liens securing such Indebtedness were subject
to a First Lien Intercreditor Agreement or Junior Lien Intercreditor Agreement
with the Collateral Agent, the Liens securing such new Indebtedness shall be
subject to a First Lien Intercreditor Agreement or Junior Lien Intercreditor
Agreement, as applicable, with the Collateral Agent on terms not less favorable
to the Secured Parties than the terms of such existing First Lien Intercreditor
Agreement or Junior Lien Intercreditor Agreement, as applicable.

 

“Permitted Security” means (a) common stock of Holdings or (b) Qualified
Preferred Stock, in each case (i) (x) issued to the Permitted Investors for cash
or (y) issued to any other Person that makes an equity investment in Holdings in
connection with the Transactions and (ii) the proceeds of which are contributed
by Holdings to the Borrower in exchange for common stock or as a capital
contribution.

 

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

 

“Plan” means any “employee pension benefit plan” (as defined in Section 3(2) of
ERISA) that is subject to the provisions of Title IV or Section 302 of ERISA or
Section 412 of the Code, 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.

 

“Prepayment Event” means:

 

(a)       any sale, transfer or other disposition (excluding pursuant to a sale
and leaseback transaction permitted under Section 6.06) of any property or asset
of Holdings, the Borrower or any Restricted Subsidiary in excess of $2,500,000
per transaction (or series of related transactions) and $5,000,000 in any fiscal
year, other than dispositions described in clauses (a), (b), (c) and (d) of
Section 6.05, or

 

(b)       any casualty or other insured damage to, or any taking under power of
eminent domain or by condemnation or similar proceeding of, any property or
asset of Holdings, the Borrower or any Restricted Subsidiary with a fair value
immediately prior to such event equal to or greater than $2,500,000, or

 

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(c)       the incurrence by Holdings, the Borrower or any Restricted Subsidiary
of (x) any Refinancing Indebtedness or (y) any Indebtedness not permitted under
Section 6.01.

 

“Prime Rate” has the meaning provided in the Existing Credit Agreement.

 

“Pro Forma Basis” and “Pro Forma Effect” mean, with respect to compliance with
any test or covenant or calculation of any ratio hereunder, the determination or
calculation of such test, covenant or ratio (including in connection with
Specified Transactions) in accordance with Section 1.07.

 

“Proposed Change” has the meaning set forth in Section 9.02(b).

 

“PTE” means a prohibited transaction class exemption issued by the U.S.
Department of Labor, as any such exemption may be amended from time to time.

 

“Public-Sider” means a Lender whose representatives may trade in securities of
the Borrower or its controlling person or any of its Subsidiaries while in
possession of the financial statements provided by the Borrower under the terms
of this Agreement.

 

“QFC” has the meaning assigned to the term “qualified financial contract” in,
and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

 

“QFC Credit Support” has the meaning set forth in Section 9.20.

 

“Qualified IPO” means the issuance by Borrower or any direct or indirect parent
company of Borrower of its common Equity Interests in an underwritten primary
public offering (other than a public offering pursuant to a registration
statement on Form S-8) pursuant to an effective registration statement filed
with the SEC in accordance with the Securities Exchange Act (whether alone or in
connection with a secondary public offering).

 

“Qualified Preferred Stock” means common stock or preferred stock of Holdings
that (a) does not require the payment of cash dividends (it being understood
that cumulative dividends shall be permitted), (b) is not mandatorily redeemable
pursuant to a sinking fund obligation or otherwise prior to the date that is 180
days after the Latest Maturity Date at the time of incurrence thereof (other
than upon an event of default or change of control; provided that any such
payment is subordinated (whether by contract or pursuant to Holdings’ charter or
the certificate of designations of such preferred stock) in right of payment to
the Obligations on the terms set forth in the certificate of incorporation of
Holdings in existence on the Original Closing Date or such other terms
reasonably satisfactory to the Administrative Agent), (c) contains no
maintenance covenants, other covenants materially adverse to the Lenders or
remedies (other than voting rights) and (d) is convertible only into common
equity of Holdings or securities that would constitute Qualified Preferred
Stock.

 

“Qualified Proceeds” means any of the following or any combination of the
following:

 

(a)                 Investments permitted under Section 6.04,

 

(b)                the Fair Market Value of assets that are used or useful in a
Permitted Business, and

 

(c)                 the Fair Market Value of the Equity Interests of any Person
engaged primarily in a Permitted Business if such Person is a non-wholly owned
Restricted Subsidiary prior to such transaction or, if in connection with the
receipt by the Borrower or any of its Restricted Subsidiaries of such Equity
Interests, such Person becomes a Restricted Subsidiary or such Person is merged
or consolidated into the Borrower or any Restricted Subsidiary.

 

“Refinancing Debt Securities” means any Permitted Debt designated as
“Refinancing Debt Securities” in a certificate of a Responsible Officer of the
Borrower delivered to the Administrative Agent on or prior to the date such
Permitted Debt is incurred.

 

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“Refinancing Indebtedness” means (i) any Refinancing Term Loans and (ii) any
Refinancing Debt Securities.

 

“Refinancing Term Loans” means any Incremental Term Loans that are designated by
a Responsible Officer of the Borrower as “Refinancing Term Loans” in the
applicable Additional Credit Extension Amendment.

 

“Register” has the meaning set forth in Section 9.04(b).

 

“Reimbursement Approvals” means, with respect to all Government Programs, any
and all certifications, provider numbers, provider agreements, participation
agreements, accreditations and any other similar agreements with or approvals by
any Governmental Authority or other Person.

 

“Rejection Notice” has the meaning specified in Section 2.11(g).

 

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, members, partners, officers, employees,
agents, advisors and other representatives of such Person and such Person’s
Affiliates.

 

“Release” means any release, spill, emission, leaking, dumping, injection,
pouring, deposit, disposal, discharge, dispersal, leaching or migration into or
through the environment or within, into or from any building, structure,
facility or fixture.

 

“Replacement Term Loans” has the meaning assigned to such term in
Section 9.02(c).

 

“Required Lenders” means, at any time, Lenders having outstanding Term Loans and
unused Commitments representing more than 50% of the aggregate outstanding Term
Loans and unused Commitments at such time.

 

“Requirement of Law” means, with respect to any Person, (i) the charter,
articles or certificate of organization or incorporation and bylaws or other
organizational or governing documents of such Person and (ii) any statute, law,
treaty, rule, regulation, order, decree, writ, injunction or determination of
any arbitrator or court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

 

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

 

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the
Holdings, the Borrower or any Restricted Subsidiary, or any payment thereon
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such Equity Interests; provided
that the repurchase, redemption or other acquisition or retirement for value of
any Equity Interests of a Restricted Subsidiary by the Borrower or a Restricted
Subsidiary shall not constitute a Restricted Payment but shall constitute an
Investment.

 

“Restricted Subsidiary” means any Subsidiary of the Borrower other than an
Unrestricted Subsidiary.

 

“S&P” means Standard & Poor’s Ratings Group, Inc.

 

“Sanctioned Country” means, at any time, a country, region or territory which is
itself the subject or target of any comprehensive, country-based Sanctions (at
the time of this Agreement, Crimea, Cuba, Iran, North Korea and Syria).

 

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“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by OFAC, the U.S.
Department of State, the European Union or Her Majesty’s Treasury of the United
Kingdom, (b) any other Person located, organized or ordinarily resident in a
Sanctioned Country or (c) any Person 50% or more of the Equity Interests of
which are owned by one or more Persons referenced in clause (a).

 

“Sanctions” means all economic or financial sanctions or trade embargoes
imposed, administered or enforced from time to time by (a) the U.S. government,
including those administered by OFAC or the U.S. Department of State, or (b) the
European Union or Her Majesty’s Treasury of the United Kingdom.

 

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

 

“Secured Indebtedness” at any date means the aggregate principal amount of Total
Indebtedness outstanding at such date that consists of Indebtedness that in each
case is then secured by Liens on any property or assets of Borrower or its
Subsidiaries.

 

“Secured Net Leverage Ratio” means, with respect to any Test Period, the ratio
of (a) Consolidated Secured Net Indebtedness as of the last day of such Test
Period to (b) Consolidated EBITDA for such Test Period.

 

“Secured Parties” means (a) the Lenders, (b) the Collateral Agent, (c) the
Administrative Agent and (d) the successors and assigns of each of the
foregoing.

 

“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.

 

“Security Documents” means the Collateral Agreement, the Mortgages, the
Intellectual Property Security Agreements (if applicable), and each other
security agreement or other instrument or document executed and delivered
pursuant to Section 5.12 or 5.13 to secure any of the Obligations.

 

“series” means, with respect to any Extended Term Loans, Incremental Term Loans
or Replacement Term Loans, all such Term Loans that have the same maturity date,
amortization and interest rate provisions and that are designated as part of
such “series” pursuant to the applicable Additional Credit Extension Amendment.

 

“Services Agreements” means (i) the Amended and Restated Tax Sharing Agreement
by and among Select Medical Holdings Corporation, Concentra Group Holdings, LLC
and Concentra Group Holdings Parent, LLC, dated as of the date hereof and (ii)
the Amended and Restated Shared Services Agreement between Select Medical
Corporation and the Borrower dated as of the Amendment No. 3 Effective Date.

 

“Solvent” and “Solvency” mean, with respect to any Person on any date of
determination, that on such date (a) the fair value of the assets of such Person
and its Subsidiaries, on a consolidated basis, exceeds, on a consolidated basis,
their debts and liabilities, subordinated, contingent or otherwise, (b) the
present fair saleable value of the property of such Person and its Subsidiaries,
on a consolidated basis, is greater than the amount that will be required to pay
the probable liability, on a consolidated basis, of their debts and other
liabilities, subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured, (c) such Person and its Subsidiaries,
on a consolidated basis, are able to pay their debts and liabilities,
subordinated, contingent or otherwise, as such liabilities become absolute and
matured and (d) such Person and its Subsidiaries, on a consolidated basis, are
not engaged in, and are not about to engage in, business for which they have
unreasonably small capital. The amount of any contingent liability at any time
shall be computed as the amount that would reasonably be expected to become an
actual and matured liability.

 

“Specified Indebtedness” has the meaning set forth in Section 6.08(b).

 

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“Specified Transactions” means (a) the Transactions, any acquisition (including
a Permitted Acquisition), any Material Disposition, any sale, transfer or other
disposition that results in a Person ceasing to be a Restricted Subsidiary, any
involuntary disposition, any Investment that results in a Person becoming a
Restricted Subsidiary, in each case, whether by merger, consolidation or
otherwise, any incurrence or repayment of Indebtedness, any Restricted Payment,
any designation of a Restricted Subsidiary as an Unrestricted Subsidiary and any
redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary or (b)
any other event that by the terms of the Loan Documents requires pro forma
compliance with a test or covenant or requires such test or covenant to be
calculated on a Pro Forma Basis.

 

“Statutory Reserve Rate” means 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 to which the bank serving as the Administrative Agent
is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding
(currently referred to as “Eurocurrency Liabilities” in Regulation D of the
Board). Such reserve percentages shall include those imposed pursuant to such
Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency
funding 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 any Lender under such Regulation D or any comparable regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.

 

“Subordinated Indebtedness” means Indebtedness of Holdings, the Borrower or any
Subsidiary that is subordinated in right of payment to the Obligations expressly
by its terms.

 

“Subsequent Transaction” has the meaning set forth in Section 1.07(f).

 

“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
of which securities or other ownership interests representing more than 50% of
the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held.

 

“Subsidiary” means any subsidiary of the Borrower, other than any Permitted
Joint Venture that is not a Permitted Joint Venture Loan Party.

 

“Subsidiary Loan Party” means any Domestic Subsidiary (other than an Excluded
Subsidiary or any Consolidated Practice).

 

“Succeeding Holdings” has the meaning set forth in the definition of “Holdings.”

 

“Supported QFC” has the meaning set forth in Section 9.20.

 

“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement involving, or settled
by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions; provided that no phantom stock or similar
plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of the Borrower or the
Subsidiaries shall be a Swap Agreement.

 

“Swap Obligation” means, with respect to any Loan Party, any obligation to pay
or perform under any agreement, contract or transaction that constitutes a
“swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

 

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, withholdings (including backup withholding), assessments, fees or
other charges imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.

 

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“Term Lender” means, at any time, any Lender that has a Term Loan at such time.

 

“Term Loans” means the Tranche B Term Loans, the Incremental Term Loans of each
series, the Replacement Term Loan and the Extended Term Loans of each series,
collectively, or as the context may require.

 

“Test Period” means, for any date of determination under this Agreement, the
four consecutive fiscal quarters of the Borrower most recently ended as of such
date of determination.

 

“Third Party Payor” means any Government Program and any quasipublic agency,
Blue Cross, Blue Shield and any managed care plans and organizations, including
health maintenance organizations and preferred provider organizations and
private commercial insurance companies and any similar third party arrangements,
plans or programs for payment or reimbursement in connection with health care
services, products or supplies.

 

“Third Party Payor Arrangement” means any arrangement, plan or program for
payment or reimbursement by any Third Party Payor in connection with the
provision of healthcare services, products or supplies.

 

“Total Assets” means, as of any date of determination, the amount that would, in
conformity with GAAP, be set forth opposite the caption “total assets” (or any
like caption) on the most recent consolidated balance sheet of the Borrower and
the Restricted Subsidiaries at such date (and, in the case of any determination
relating to any Specified Transaction, on a Pro Forma Basis including any
property or assets being acquired in connection therewith).

 

“Total Indebtedness” means, as of any date, the aggregate principal amount of
Indebtedness of the Borrower and the Subsidiaries outstanding as of such date,
in the amount that would be reflected on a balance sheet prepared as of such
date on a consolidated basis in accordance with GAAP.

 

“Total Net Leverage Ratio” means, with respect to any Test Period, the ratio of
(a) Consolidated Total Net Indebtedness as of the last day of such Test Period
to (b) Consolidated EBITDA for such Test Period.

 

“Tranche B Commitment” means, with respect to each Lender, the commitment, if
any, of such Lender to make a Tranche B Term Loan hereunder on the Closing Date,
expressed as an amount representing the maximum principal amount of the Tranche
B Term Loan to be made by such Lender hereunder, as such commitment may be
reduced or increased from time to time pursuant to this Agreement.

 

“Tranche B Maturity Date” means June 1, 2022.

 

“Tranche B Term Loan” has the meaning provided in Section 2.01.

 

“Transaction Expenses” has the meaning provided in the Existing Credit
Agreement.

 

“Transactions” has the meaning provided in the Existing Credit Agreement.

 

“Transformative Acquisition” means any acquisition by the Borrower or any
Restricted Subsidiary that is either (a) not permitted by the terms of this
Agreement immediately prior to the consummation of such acquisition or (b) if
permitted by the terms of this Agreement immediately prior to the consummation
of such acquisition, would not provide the Borrower and its Subsidiaries with
adequate flexibility under this Agreement for the continuation and/or expansion
of their combined operations following such consummation, as determined by the
Borrower acting in good faith.

 

“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

 

“Unrestricted Subsidiary” means any Subsidiary of the Borrower designated by the
Board of Directors of the Borrower as an Unrestricted Subsidiary pursuant to
Section 5.14 subsequent to the Closing Date.

 

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“U.S. Healthworks” has the meaning set forth in the Existing Credit Agreement
(as in effect on the Closing Date).

 

“U.S. Tax Compliance Certificate” has the meaning set forth in Section
2.17(e)(ii)(B)(3).

 

“U.S. Special Resolutions Regime” has the meaning set forth in Section 9.20.

 

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

 

“wholly owned” means with respect to any Person, a subsidiary of such Person all
the outstanding Equity Interests of which (other than (x) directors’ qualifying
shares and (y) shares issued to foreign nationals to the extent required by
applicable law) are owned by such Person and/or by one or more wholly owned
subsidiaries of such Person.

 

“Write-Down and Conversion Powers” means, 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” for any Indebtedness on any date of determination will be determined by
the Administrative Agent utilizing (a) if applicable, any “LIBOR floor”
applicable to such Indebtedness on such date, (b) the interest margin for such
Indebtedness on such date, and (c) the issue price of such Indebtedness (after
giving effect to any OID (with OID being equated to interest based on an assumed
four-year average life to maturity on a straight-line basis)) or upfront fees
(which shall be deemed to constitute like amounts of OID) paid to the market in
respect of such Indebtedness but excluding customary arranger, underwriting,
commitment, structuring, ticking, unused line, amendment fees and other similar
fees not paid generally to all lenders in the primary syndication of such
Indebtedness.

 

SECTION 1.02       Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a “Term
Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a
“Eurodollar Term Loan”). Borrowings also may be classified and referred to by
Class (e.g., a “Term Loan Borrowing”) or by Type (e.g., a “Eurodollar
Borrowing”) or by Class and Type (e.g., a “Eurodollar Term Loan Borrowing”).

 

SECTION 1.03       Terms Generally. The definitions of terms herein shall apply
equally to 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.”
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented, amended and restated or otherwise modified (subject to any
restrictions on such amendments, supplements, amendment and restatements or
modifications set forth herein), (b) any reference herein to any Person shall be
construed to include such Person’s successors and assigns, (c) the words
“herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (e) the words “asset” and “property” shall
be construed to have 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.

 

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SECTION 1.04       Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP as in effect from time to time, provided that
if the Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision (including any definition) hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the Administrative
Agent notifies the Borrower that the Required Lenders request an amendment to
any provision (including any definition) hereof for such purpose), regardless of
whether any such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be interpreted on the basis of
GAAP as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision amended
in accordance herewith.  In addition, notwithstanding any other provision
contained herein, (i) the definitions set forth in the Loan Documents and any
financial calculations required by the Loan Documents shall be computed to
exclude any change to lease accounting rules from those in effect pursuant to
Financial Accounting Standards Board Accounting Standards Codification 840
(Leases) and other related lease accounting guidance as in effect on the
Original Closing Date and (ii) all terms of an accounting or financial nature
used herein shall be construed, and all computations of amounts and ratios
referred to herein shall be made, without giving effect to any election under
Financial Accounting Standards Board Accounting Standards Codification 825 (or
any other Financial Accounting Standard having a similar result or effect) to
value any Indebtedness or other liabilities of Holdings, the Borrower or any
Subsidiary at “fair value”, as defined therein.

 

SECTION 1.05       [Reserved].

 

SECTION 1.06       Available Amount Transactions. If more than one action occurs
on any given date the permissibility of the taking of which is determined
hereunder by reference to the amount of the Available Amount immediately prior
to the taking of such action, the permissibility of the taking of each such
action shall be determined independently and in no event may any two or more
such actions be treated as occurring simultaneously.

 

SECTION 1.07       Pro Forma Calculations.

 

(a)                 Notwithstanding anything to the contrary herein, financial
ratios and tests, including the First Lien Net Leverage Ratio, the Secured Net
Leverage Ratio and the Total Net Leverage Ratio, and compliance with covenants
determined by reference to Consolidated EBITDA or Total Assets, shall be
calculated in the manner prescribed by this Section 1.07; provided, that
notwithstanding anything to the contrary in clauses (b), (c), (d) or (f) of this
Section 1.07, (A) when calculating any such ratio or test for purposes of (i)
the definition of “Applicable Rate”, and (ii) [reserved], the events described
in this Section 1.07 that occurred subsequent to the end of the applicable Test
Period shall not be given Pro Forma Effect and cash and Permitted Investments
included on the consolidated balance sheet of the Borrower and its Restricted
Subsidiaries as of the date of the event for which the calculation of any such
ratio is made shall be taken into account in lieu of cash or Permitted
Investments as of the last day of the relevant Test Period and (B) when
calculating any such ratio or test for purposes of the incurrence of any
Indebtedness, cash and Permitted Investments resulting from the incurrence of
any such Indebtedness shall be excluded from the pro forma calculation of any
applicable ratio or test. In addition, whenever a financial ratio or test is to
be calculated on a Pro Forma Basis, the reference to the “Test Period” for
purposes of calculating such financial ratio or test shall be deemed to be a
reference to, and shall be based on, the most recently ended Test Period for
which internal financial statements of the Borrower are available (as determined
in good faith by the Borrower).

 

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(b)                For purposes of calculating any financial ratio or test or
compliance with any covenant determined by reference to Consolidated EBITDA or
Total Assets, Specified Transactions (with any incurrence or repayment of any
Indebtedness in connection therewith to be subject to clause (d) of this Section
1.07) that (i) have been made during the applicable Test Period or (ii) if
applicable as described in clause (a) above, have been made subsequent to such
Test Period and prior to or substantially concurrently with the event for which
the calculation of any such ratio is made shall be calculated on a Pro Forma
Basis assuming that all such Specified Transactions (and any increase or
decrease in Consolidated EBITDA, Total Assets and the component financial
definitions used therein attributable to any Specified Transaction) had occurred
on the first day of the applicable Test Period (or, in the case of Total Assets,
on the last day of the applicable Test Period). If since the beginning of any
applicable Test Period any Person that subsequently became a Restricted
Subsidiary or was merged, amalgamated or consolidated with or into the Borrower
or any of its Restricted Subsidiaries since the beginning of such Test Period
shall have made any Specified Transaction that would have required adjustment
pursuant to this Section 1.07, then such financial ratio or test (or Total
Assets) shall be calculated to give Pro Forma Effect thereto in accordance with
this Section 1.07.

 

(c)                 Whenever Pro Forma Effect is to be given to a Specified
Transaction, the pro forma calculations shall be made in good faith by a
responsible financial or accounting officer of the Borrower and, in the case of
any “Test Period” determined by reference to internal financial statements of
the Borrower (as opposed to the financial statements most recently delivered
pursuant to Section 5.01(a) or Section 5.01(b)), as set forth in a certificate
of a responsible financial or accounting officer of the Borrower (with
supporting calculations), and may include, for the avoidance of doubt, the
amount of “run-rate” cost savings, operating expense reductions and synergies
resulting from or relating to, any Specified Transaction (including the
Transactions) to the extent permitted by the definition of “Consolidated
EBITDA.”

 

(d)                In the event that the Borrower or any Restricted Subsidiary
incurs (including by assumption or guarantees) or repays (including by
repurchase, redemption, repayment, retirement, discharge, defeasance or
extinguishment) any Indebtedness (in each case, other than Indebtedness incurred
or repaid (other than Indebtedness incurred or repaid (other than any repayment
from the proceeds of other Indebtedness) under any revolving credit facility
unless such Indebtedness has been permanently repaid and not replaced))
subsequent to the end of the applicable Test Period and prior to or
simultaneously with the event for which the calculation of any such ratio is
made, then such financial ratio or test shall be calculated giving Pro Forma
Effect to such incurrence, assumption, guarantee, repurchase, redemption,
repayment, retirement, discharge, defeasance or extinguishment of Indebtedness,
or such issuance, repurchase or redemption of Disqualified Stock, in each case
to the extent required, as if the same had occurred on the last day of the
applicable Test Period.

 

(e)                 [Reserved].

 

(f)                  As relates to any action being taken solely in connection
with a Limited Condition Transaction, for purposes of:

 

(i)               determining compliance with any provision of this Agreement
which requires the calculation of any financial ratio or test, including the
First Lien Net Leverage Ratio, Secured Net Leverage Ratio and Total Net Leverage
Ratio, or

 

(ii)               testing availability under baskets set forth in this
Agreement (including baskets determined by reference to Consolidated EBITDA or
Total Assets),

 

in each case, at the option of the Borrower (the Borrower’s election to exercise
such option in connection with any Limited Condition Transaction, an “LCT
Election”), the date of determination of whether any such action is permitted
hereunder shall be deemed to be the date the definitive agreements for such
Limited Condition Transaction are entered into (the “LCT Test Date”), and if,
after giving Pro Forma Effect to the Limited Condition Transaction (and the
other transactions to be entered into in connection therewith, including any
incurrence of Indebtedness and the use of proceeds thereof, as if they had
occurred on the first day of the most recent Test Period ending prior to the LCT
Test Date (except with respect to any incurrence or repayment of Indebtedness
for purposes of the calculation of any leverage-based test or ratio, which shall
in each case be treated as if they had occurred on the last day of such Test
Period)), the Borrower or any of its Restricted Subsidiaries would have been
permitted to take such action on the relevant LCT Test Date in compliance with
such ratio, test or basket, such ratio, test or basket shall be deemed to have
been complied with; provided that if financial statements for one or more
subsequent fiscal periods shall have become available, the Borrower may elect,
in its sole discretion, to redetermine all such ratios, tests or baskets on the
basis of such financial statements, in which case, such date of redetermination
shall thereafter be deemed to be the applicable LCT Test Date. For the avoidance
of doubt, if the Borrower has made an LCT Election and any of the ratios, tests
or baskets for which compliance was determined or tested as of the LCT Test Date
would have failed to have been complied with as a result of fluctuations in any
such ratio, test or basket, including due to fluctuations in Consolidated EBITDA
or Total Assets of the Borrower or the Person subject to such Limited Condition
Transaction, at or prior to the consummation of the relevant transaction or
action, such baskets, tests or ratios will not be deemed to have failed to have
been complied with as a result of such fluctuations. If the Borrower has made an
LCT Election for any Limited Condition Transaction, then in connection with any
calculation of any ratio, test or basket availability with respect to the
incurrence of Indebtedness or Liens, the making of Restricted Payments, the
making of any Investment, mergers, the conveyance, lease or other transfer of
all or substantially all of the assets of the Borrower, the prepayment,
redemption, purchase, defeasance or other satisfaction of Indebtedness, or the
designation of an Unrestricted Subsidiary (each, a “Subsequent Transaction”)
following the relevant LCT Test Date and prior to the earlier of the date on
which such Limited Condition Transaction is consummated or the date that the
definitive agreement or irrevocable notice for such Limited Condition
Transaction is terminated or expires without consummation of such Limited
Condition Transaction, for purposes of determining whether such Subsequent
Transaction is permitted under this Agreement, any such ratio, test or basket
shall be required to be satisfied on a Pro Forma Basis (i) assuming such Limited
Condition Transaction and other transactions in connection therewith (including
any incurrence of Indebtedness and the use of proceeds thereof) have been
consummated and (ii) assuming such Limited Condition Transaction and other
transactions in connection therewith (including any incurrence of Indebtedness
and the use of proceeds thereof) have not been consummated.

 

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ARTICLE II

The Credits

 

SECTION 2.01       Commitments. Subject to the terms and conditions set forth
herein, each Lender agrees to make a term loan to the Borrower in dollars (a
“Tranche B Term Loan”) on the Closing Date in a principal amount not exceeding
its Tranche B Commitment. The Borrower shall designate in the relevant Borrowing
Request whether each Borrowing will be maintained as a Eurodollar Loan or an ABR
Loan and, if such Borrowing is to be a Eurodollar Borrowing, the Interest Period
with respect thereto. Amounts repaid or prepaid in respect of Tranche B Term
Loans may not be reborrowed. As of the Closing Date the aggregate outstanding
principal amount of Tranche B Term Loans is $1,240,297,917.21.

 

SECTION 2.02       Loans and Borrowings.

 

(a)                 Each Loan shall be made as part of a Borrowing consisting of
Loans of the same Class and Type made by the Lenders ratably in accordance with
their respective Commitments of the applicable Class. The failure of any Lender
to make any Loan required to be made by it shall not relieve any other Lender of
its obligations hereunder; provided that the Commitments of the Lenders are
several and no Lender shall be responsible for any other Lender’s failure to
make Loans as required.

 

(b)                Subject to Section 2.14, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith.

 

(c)                 At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $500,000 and not less than $2,000,000. At the time that
each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that
is an integral multiple of $500,000 and not less than $1,000,000. Borrowings of
more than one Type and Class may be outstanding at the same time. There shall
not at any time be more than a total of 20 Eurodollar Borrowings outstanding.

 

(d)                Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Tranche B Maturity Date.

 

SECTION 2.03       Requests for Borrowings. To request a Tranche B Term Loan
Borrowing, the Borrower shall notify the Administrative Agent of such request by
submitting a Borrowing Request (a) in the case of a Eurodollar Borrowing, not
later than 12:00 noon, New York City time, three (3) Business Days before the
date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later
than 12:00 noon, New York City time, on the date of the proposed Borrowing. Each
such Borrowing Request shall be irrevocable and shall be signed by a Responsible
Officer of the Borrower. Each such Borrowing Request shall specify the following
information in compliance with Section 2.02:

 

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(i)               that the requested Borrowing is to be a Tranche B Term Loan
Borrowing,

 

(ii)              the aggregate amount of such Borrowing,

 

(iii)             the date of such Borrowing, which shall be a Business Day,

 

(iv)             whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing,

 

(v)              in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by the
definition of the term “Interest Period”, and

 

(vi)             the location and number of the Borrower’s account to which
funds are to be disbursed, which shall comply with the requirements of Section
2.06.

 

If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month’s duration. Promptly following
receipt of a Borrowing Request in accordance with this Section 2.03, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender’s Loan to be made as part of the requested Borrowing.

 

SECTION 2.04       [Reserved].

 

SECTION 2.05       [Reserved].

 

SECTION 2.06       Funding of Borrowings.

 

(a)                 Each Lender shall make each Loan to be made by it hereunder
on the proposed date thereof by wire transfer of immediately available funds by
12:00 noon, New York City time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders. The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received in like funds, to each account designated by
the Borrower in the applicable Borrowing Request.

 

(b)                Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with paragraph (a) of this Section 2.06 and may, in
reliance upon such assumption and in its sole discretion, make available to the
Borrower a corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable Borrowing available to the Administrative Agent,
then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the Borrower to but excluding the date of payment to the Administrative
Agent, at (i) in the case of such Lender, the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation or (ii) in the case of the
Borrower, the interest rate applicable to ABR Loans. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender’s Loan included in such Borrowing.

 

SECTION 2.07       Interest Elections.

 

(a)                 Each Tranche B Term Loan Borrowing initially shall be of the
Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request or as designated by Section 2.01 or 2.03. Thereafter, the
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section 2.07. The Borrower may elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing.

 

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(b)                To make an election pursuant to this Section 2.07, the
Borrower shall notify the Administrative Agent of such election by the time that
a Borrowing Request would be required under Section 2.03. Each such Interest
Election Request shall be irrevocable and shall be signed by a Responsible
Officer of the Borrower.

 

(c)                Each Interest Election Request shall specify the following
information in compliance with Section 2.02:

 

(i)               the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing (in
which case the information to be specified pursuant to clauses (iii) and (iv)
below shall be specified for each resulting Borrowing),

 

(ii)              the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day,

 

(iii)             whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing, and

 

(iv)             if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such election,
which shall be a period contemplated by the definition of the term “Interest
Period.”

 

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.

 

(d)                Promptly following receipt of an Interest Election Request,
the Administrative Agent shall advise each Lender of the details thereof and of
such Lender’s portion of each resulting Borrowing.

 

(e)                 If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing.

 

(f)                 Notwithstanding any contrary provision hereof, if an Event
of Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so long as an
Event of Default is continuing, (i) no outstanding Borrowing may be converted to
or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.

 

SECTION 2.08       Termination and Reduction of Commitments.

 

(a)                 Unless previously terminated, the Tranche B Commitments
shall terminate at 5:00 p.m., New York City time, on the Closing Date.

 

(b)                The Borrower may at any time terminate, or from time to time
reduce, the Commitments of any Class; provided that each reduction of the
Commitments of any Class shall be in an amount that is an integral multiple of
$500,000 and not less than $5,000,000.

 

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(c)                 The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section 2.08 at least three (3) Business Days prior to the effective date of
such termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section 2.08 shall be irrevocable. Any termination or
reduction of the Commitments of any Class shall be permanent. Each reduction of
the Commitments of any Class shall be made ratably among the Lenders in
accordance with their respective Commitments of such Class.

 

SECTION 2.09       Repayment of Loans; Evidence of Debt.

 

(a)                 The Borrower hereby unconditionally promises to pay (i)
[reserved], (ii) to the Administrative Agent for the account of each Lender the
then unpaid principal amount of each Tranche B Term Loan of such Lender as
provided in Section 2.10, and (iii) [reserved].

 

(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, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.

 

(c)                 The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and 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 for the account of the Lenders and each
Lender’s share thereof.

 

(d)                The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section 2.09 shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided 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 obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.

 

(e)                 Any Lender may request that Loans of any Class made by it be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).

 

SECTION 2.10       Amortization of Tranche B Term Loans.

 

(a)                 The Borrower shall repay Tranche B Term Loan Borrowings on
each date set forth below in the aggregate principal amount set forth opposite
such date (as adjusted from time to time following the Closing Date pursuant to
Section 2.11(e) and 2.11(i)):

 

Date  Amount  December 31, 2019  $250,000.00  March 31, 2020  $250,000.00  June
30, 2020  $250,000.00  September 30, 2020  $250,000.00 

 

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Date  Amount  December 31, 2020  $250,000.00  March 31, 2021  $250,000.00  June
30, 2021  $250,000.00  September 30, 2021  $250,000.00  December 31, 2021 
$250,000.00  March 31, 2022  $250,000.00 

 

(b)              To the extent not previously paid, the Borrower shall repay all
Tranche B Term Loans on the Tranche B Maturity Date.

 

SECTION 2.11       Prepayment of Loans.

 

(a)              The Borrower shall have the right at any time and from time to
time to prepay any Borrowing of any Class of Loans, in whole or in part, as
selected by the Borrower in its sole discretion and subject to the requirements
of this Section 2.11.

 

(b)              [Reserved].

 

(c)               In the event and on each occasion that any Net Proceeds are
received by or on behalf of Holdings, the Borrower or any Restricted Subsidiary
in respect of any Prepayment Event, the Borrower shall, promptly after such Net
Proceeds are received by Holdings, the Borrower or such Restricted Subsidiary
(and in any event not later than the fifth Business Day after such Net Proceeds
are received), prepay Term Loan Borrowings in an amount equal to 100% of such
Net Proceeds; provided that to the extent required by the terms of any Permitted
Debt that is secured by the Collateral on a pari passu basis with the
Obligations, the Borrower may, in lieu of prepaying Term Loans with such portion
of the Net Proceeds of any prepayment event described in clause (a) or clause
(b) of the definition of “Prepayment Event”, apply a portion of such Net
Proceeds (based on the respective principal amounts at such time of (A) such
Permitted Debt and (B) the Term Loans) to repurchase or redeem such Permitted
Debt; provided further that in the case of any event described in clause (a) or
(b) of the definition of the term “Prepayment Event”, if the Borrower shall
deliver to the Administrative Agent a certificate of a Financial Officer to the
effect that the Borrower and the Restricted Subsidiaries intend to apply the Net
Proceeds from such event (or a portion thereof specified in such certificate),
within 365 days after receipt of such Net Proceeds, to acquire or replace real
property, equipment or other tangible assets (excluding inventory) to be used in
the business of the Borrower and the Restricted Subsidiaries, and certifying
that no Default has occurred and is continuing, then no prepayment shall be
required pursuant to this paragraph in respect of the Net Proceeds specified in
such certificate, except to the extent of any such Net Proceeds therefrom that
have not been so applied or contractually committed in writing by the end of
such 365-day period (and, if so contractually committed in writing but not
applied prior to the end of such 365-day period, applied within 180 days of the
end of such period), promptly after which time a prepayment shall be required in
an amount equal to such Net Proceeds that have not been so applied.

 

(d)              Following the end of each fiscal year of the Borrower,
commencing with the fiscal year ending December 31, 2019, the Borrower shall
prepay Term Loan Borrowings in an amount equal to the excess of (A) the ECF
Percentage of Excess Cash Flow for such year over (B) the sum of (x) the
principal amount of Term Loans prepaid pursuant to Section 2.11(a) and the
amount expended to prepay Term Loans pursuant to Section 2.11(i), in each case,
during such year or, at the option of the Borrower, and without duplication of
amounts included in this clause (B) for any other year, following the last day
of such year and prior to the date of such prepayment, (y) the amount expended
to prepay Permitted Debt that is secured on a pari passu basis with the
Obligations during such year or, at the option of the Borrower, and without
duplication of amounts included in this clause (B) for any other year, following
the last day of such year and prior to the date of such prepayment and (z) the
amount of Loans under revolving commitments that are repaid during such year or,
at the option of the Borrower, and without duplication of amounts included in
this clause (B) for any other year, following the last day of such year and
prior to the date of such prepayment, in the case of this clause (z), to the
extent accompanied by a reduction in the related commitment and, in the case of
each of the foregoing clauses (x), (y) and (z), other than any repayment in
connection with a refinancing.

 

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Each prepayment pursuant to this paragraph shall be made within five (5)
Business Days of the date on which financial statements are delivered pursuant
to Section 5.01 with respect to the fiscal year for which Excess Cash Flow is
being calculated and the related Compliance Certificate has been delivered
pursuant to Section 5.01(c) (and in any event within 95 days after the end of
such fiscal year).

 

(e)              Each prepayment of Term Loans pursuant to clauses (a), (c) or
(d) of this Section 2.11 (A) shall be applied either (x) ratably to each Class
of Term Loans then outstanding or (y) as selected by the Borrower in its sole
discretion in the notice delivered pursuant to clause (f) below, to any Class or
Classes of Term Loans, (B) shall be applied to scheduled amortization with
respect to each such Class for which prepayments will be made, in a manner
determined at the discretion of the Borrower in the applicable notice and, if
not specified, in direct order of maturity to repayments thereof required
pursuant to Section 2.10(a) and (C) shall be paid to the Class of Lenders in
accordance with their respective pro rata share (or other applicable share
provided by this Agreement) of each such Class of Term Loans, subject to clause
(f) below. Notwithstanding clause (A) above, prepayments with Net Proceeds from
any event described in clause (c) of the definition of the term “Prepayment
Event” shall be applied to the Class or Classes of Term Loans selected by the
Borrower. Prior to any optional or mandatory prepayment of Borrowings hereunder,
the Borrower shall determine in accordance with the foregoing provisions of this
Section 2.11 the Borrowing or Borrowings of each applicable Class to be prepaid
and shall specify such determination in the notice of such prepayment pursuant
to paragraph (f) of this Section 2.11.

 

(f)              The Borrower shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 12:00 noon, New York City
time, three (3) Business Days before the date of prepayment, (ii) in the case of
prepayment of an ABR Borrowing, not later than 12:00 noon, New York City time,
one (1) Business Day before the date of prepayment or (iii) [reserved]. Each
such notice shall be irrevocable and shall specify the prepayment date, the
principal amount of each Borrowing or portion thereof to be prepaid, the Class
of Loans to be prepaid and, in the case of a mandatory prepayment, a reasonably
detailed calculation of the amount of such prepayment; provided that, (i)
[reserved] and (ii) otherwise if a notice of prepayment is given under this
Section 2.11, such notice of prepayment may be conditioned upon the
effectiveness of other credit facilities or the closing of a refinancing
transaction, a sale of all or substantially all of the assets of the Borrower
and its Subsidiaries or a Change of Control and such notice of prepayment may be
revoked if such condition is not satisfied. Promptly following receipt of any
such notice, the Administrative Agent shall advise the Lenders of the contents
thereof. Each partial prepayment of any Borrowing shall be in an amount that
would be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.02, except as necessary to apply fully the required amount
of a mandatory prepayment. Each prepayment of a Borrowing shall be applied
ratably to the Loans of each applicable Lender included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.13 but shall in no event include premium or penalty.

 

(g)              Each Term Lender may reject all or a portion of its pro rata
share of any mandatory prepayment (such declined amounts, the “Declined
Proceeds”) of Term Loans required to be made pursuant to clauses (c) and (d) of
this Section 2.11 (except in respect of mandatory prepayments made with Net
Proceeds from any event described in clause (c) of the definition of the term
“Prepayment Event”) by providing written notice (each, a “Rejection Notice”) to
the Administrative Agent and the Borrower no later than 5:00 p.m. one (1)
Business Day after the date of such Lender’s receipt of notice from the
Administrative Agent regarding such prepayment. Each Rejection Notice from a
given Lender shall specify the principal amount of the mandatory repayment of
Term Loans to be rejected by such Lender. If a Lender of Term Loans fails to
deliver a Rejection Notice to the Administrative Agent within the time frame
specified above or such Rejection Notice fails to specify the principal amount
of the Term Loans to be rejected, any such failure will be deemed an acceptance
of the total amount of such mandatory prepayment of its Term Loans. Any Declined
Proceeds shall be offered to the Lenders of Term Loans not so declining such
prepayment on a pro rata basis in accordance with the amounts of the Term Loans
of each such Lender (with such non-declining Lenders having the right to decline
any prepayment with Declined Proceeds at the time and in the manner specified by
the Administrative Agent). To the extent such non-declining Lenders of its Term
Loans elect to decline their pro rata shares of such Declined Proceeds, any
Declined Proceeds remaining thereafter shall be retained by the Borrower (other
than Declined Proceeds being applied to repay any Specified Indebtedness
pursuant to Section 6.08(b)(viii)) (such remaining Declined Proceeds, the
“Borrower Retained Prepayment Amounts”).

 

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(h)              Notwithstanding any other provisions of this Section 2.11, (i)
to the extent that any of or all the Net Proceeds of any disposition by a
Foreign Subsidiary (“Foreign Disposition”), the Net Proceeds of any casualty
event from a Foreign Subsidiary (a “Foreign Casualty Event”) or Excess Cash Flow
attributable to Foreign Subsidiaries are prohibited or delayed by applicable
local law from being repatriated to the United States, the portion of such Net
Proceeds or Excess Cash Flow so affected will not be required to be applied to
repay Term Loans at the times provided in this Section 2.11 but may be retained
by the applicable Foreign Subsidiary so long, but only so long, as the
applicable local law will not permit repatriation to the United States (the
Borrower hereby agreeing to use commercially reasonable efforts to cause the
applicable Foreign Subsidiary to promptly take all actions reasonably required
by the applicable local law to permit such repatriation), and once such
repatriation of any of such affected Net Proceeds or Excess Cash Flow is
permitted under the applicable local law, such repatriation will be promptly
effected and an amount equal to such repatriated Net Proceeds or Excess Cash
Flow will be promptly (and in any event not later than five (5) Business Days
after such repatriation) applied (net of additional taxes payable or reserved
against as a result thereof) to the repayment of the Term Loans pursuant to this
Section 2.11 to the extent provided herein and (ii) to the extent that the
repatriation of any of or all the Net Proceeds of any Foreign Disposition or any
Foreign Casualty Event or Excess Cash Flow attributable to Foreign Subsidiaries
would have material adverse tax consequences (as reasonably determined in good
faith by the Borrower) with respect to such Net Proceeds or Excess Cash Flow,
such Net Proceeds or Excess Cash Flow so affected will not be required to be
applied to repay Term Loans at the times provided in this Section 2.11 but may
be retained by the applicable Foreign Subsidiary.

 

(i)                In addition to any prepayment of Term Loans pursuant to
Section 2.11(a), Holdings, the Borrower or any Subsidiary of the Borrower may at
any time prepay Term Loans of any Class of any Lender at such price or prices as
may be mutually agreed by Holdings, the Borrower or such Subsidiary, on the one
hand, and such Lender, on the other hand (which, for avoidance of doubt, may be
a prepayment at a discount to par), pursuant to individually negotiated
transactions or offers to prepay that are open to Lenders of Term Loans of any
Class(es) selected by Holdings, the Borrower or such Subsidiary so long as (x)
immediately after giving effect to any such prepayment pursuant to this Section
2.11(i), no Event of Default has occurred and is continuing, (y) no proceeds of
swingline loans or revolving loans under the Existing Credit Agreement are
utilized to fund any such prepayment and (z) Holdings, the Borrower or such
Subsidiary, as applicable, and each Lender whose Term Loans are to be prepaid
pursuant to this Section 2.11(i) execute and deliver to the Administrative Agent
an instrument identifying the amount of Term Loans of each Class of each such
Lender to be so prepaid, the date of such prepayment and the prepayment price
therefor. The principal amount of any Term Loans of any Class prepaid pursuant
to this paragraph (i) shall reduce remaining scheduled amortization for such
Class of Term Loans on a pro rata basis.

 

(j)                Notwithstanding anything in this Agreement to the contrary,
in the event that on any date, an outstanding Term Loan of a Lender would
otherwise be repaid or prepaid from the proceeds of any new Term Loans to be
established on such date then, if agreed to by the Borrower and such Lender and
notified to the Administrative Agent, such outstanding Term Loan of such Lender
may be converted on a “cashless” basis into a new Term Loan of the applicable
Class being established on such date.

 

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SECTION 2.12       [Reserved].

 

SECTION 2.13       Interest.

 

(a)               The Loans comprising each ABR Borrowing shall bear interest at
the Alternate Base Rate plus the Applicable Rate.

 

(b)              The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.

 

(c)               Notwithstanding the foregoing, if any principal of or interest
on any Loan or any fee or other amount payable by the Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section 2.13 or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Loans as provided in paragraph (a) of this Section 2.13.

 

(d)              Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan; provided that (i) interest accrued
pursuant to paragraph (c) of this Section 2.13 shall be payable on demand, (ii)
in the event of any repayment or prepayment of any Loan, accrued interest on the
principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.

 

(e)               All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.

 

SECTION 2.14       Alternate Rate of Interest; Illegality.

 

(a)              If prior to the commencement of any Interest Period for a
Eurodollar Borrowing:

 

(x)              the Administrative Agent determines (which determination shall
be conclusive absent manifest error) that (i) dollar deposits are not being
offered to banks in the London interbank Eurodollar market for the applicable
amount and Interest Period of such Eurodollar Borrowing or (ii) adequate and
reasonable means do not exist for ascertaining the Adjusted LIBO Rate for such
Interest Period, or

 

(y)             the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders of making or maintaining their Loans included
in such Borrowing for such Interest Period,

 

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.

 

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(b)              If at any time the Administrative Agent determines (which
determination shall be conclusive absent manifest error) that (i) the
circumstances set forth in clause (a)(x)(ii) or (a)(y) of this Section 2.14 have
arisen and such circumstances are unlikely to be temporary or (ii) the
circumstances set forth in clause (a)(x)(ii) or (a)(y) of this Section 2.14 have
not arisen but either (w) the supervisor for the administrator of the LIBO
Screen Rate has made a public statement that the administrator of the LIBO
Screen Rate is insolvent (and there is no successor administrator that will
continue publication of the LIBO Screen Rate), (x) the administrator of the LIBO
Screen Rate has made a public statement identifying a specific date after which
the LIBO Screen Rate will permanently or indefinitely cease to be published by
it (and there is no successor administrator that will continue publication of
the LIBO Screen Rate), (y) the supervisor for the administrator of the LIBO
Screen Rate has made a public statement identifying a specific date after which
the LIBO Screen Rate will permanently or indefinitely cease to be published or
(z) the supervisor for the administrator of the LIBO Screen Rate or a
Governmental Authority having jurisdiction over the Administrative Agent has
made a public statement identifying a specific date after which the LIBO Screen
Rate may no longer be used for determining interest rates for loans, then the
Administrative Agent and the Borrower shall endeavor to establish an alternate
rate of interest to the LIBO Rate that gives due consideration to the then
prevailing market convention for determining a rate of interest for syndicated
loans in the United States at such time, and shall enter into an amendment to
this Agreement to reflect such alternate rate of interest and such other related
changes to this Agreement as may be applicable (but for the avoidance of doubt,
such related changes shall not include a reduction of the Applicable Rate).
Notwithstanding anything to the contrary in Section 9.02, such amendment shall
become effective without any further action or consent of any other party to
this Agreement so long as the Administrative Agent shall not have received,
within five Business Days of the date notice of such alternate rate of interest
is provided to the Lenders, a written notice from the Required Lenders stating
that such Required Class Lenders object to such amendment. Until an alternate
rate of interest shall be determined in accordance with this clause (b) (but, in
the case of the circumstances described in clause (a)(y) of this Section 2.14,
only to the extent the LIBO Screen Rate for such Interest Period is not
available or published at such time on a current basis), (x) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (y) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing
shall be made as an ABR Borrowing; provided that, if such alternate rate of
interest for any Class of Loans shall be less than 0.00%, such rate shall be
deemed to be 0.00% for the purposes of this Agreement.

 

(c)               If any Lender determines that any law has made it unlawful, or
that any Governmental Authority has asserted that it is unlawful, for any Lender
to make, maintain or fund Loans whose interest is determined by reference to the
LIBO Rate, or to determine or charge interest rates based upon the LIBO Rate, or
any Governmental Authority has imposed material restrictions on the authority of
such Lender to purchase or sell, or to take deposits of, dollars in the London
interbank market, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, (i) any obligation of such Lender to make or continue
Eurodollar Loans or to convert ABR Loans to Eurodollar Loans shall be suspended,
and (ii) if such notice asserts the illegality of such Lender making or
maintaining ABR Loans the interest rate on which is determined by reference to
the Adjusted LIBO Rate component of the Alternate Base Rate, the interest rate
on which ABR Loans of such Lender shall, if necessary to avoid such illegality,
be determined by the Administrative Agent without reference to the Adjusted LIBO
Rate component of the Alternate Base Rate, in each case until such Lender
notifies the Administrative Agent and the Borrower that the circumstances giving
rise to such determination no longer exist. Upon receipt of such notice, (x) the
Borrower shall, upon demand from such Lender (with a copy to the Administrative
Agent), prepay or, if applicable, convert all Eurodollar Loans of such Lender to
ABR Loans (the interest rate on which ABR Loans of such Lender shall, if
necessary to avoid such illegality, be determined by the Administrative Agent
without reference to the Adjusted LIBO Rate component of the Alternate Base
Rate), either on the last day of the Interest Period therefor, if such Lender
may lawfully continue to maintain such Eurodollar Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such
Eurodollar Loans and (y) if such notice asserts the illegality of such Lender
determining or charging interest rates based upon the Adjusted LIBO Rate, the
Administrative Agent shall during the period of such suspension compute the
Alternate Base Rate applicable to such Lender without reference to the Adjusted
LIBO Rate component thereof until the Administrative Agent is advised in writing
by such Lender that it is no longer illegal for such Lender to determine or
charge interest rates based upon the LIBO Rate. Upon any such prepayment or
conversion, the Borrower shall also pay accrued interest on the amount so
prepaid or converted.

 

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SECTION 2.15       Increased Costs.

 

(a)              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 (except any such reserve requirement reflected
in the Adjusted LIBO Rate),

 

(ii)               subject the Administrative Agent or any Lender to any Taxes
(other than (A) Indemnified Taxes or Other Taxes indemnified under Section 2.17,
or (B) Excluded Taxes) on its loans, letters of credit, commitments or other
obligations, or its deposits, reserves, other liabilities or capital
attributable thereto, or

 

(iii)              impose on any Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender or
any participation therein,

 

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by the Administrative Agent or such Lender hereunder (whether of
principal, interest or otherwise), then the Borrower will pay to the
Administrative Agent or such Lender, as applicable, such additional amount or
amounts as will compensate such Lender, as applicable, for such additional costs
incurred or reduction suffered.

 

(b)               If any Lender determines that any Change in Law regarding
capital or liquidity requirements has or would have the effect of reducing the
rate of return on such Lender’s capital or on the capital of such Lender’s
holding company, if any, as a consequence of this Agreement or the Loans made by
such Lender to a level below that which such Lender or such Lender’s holding
company could have achieved but for such Change in Law (taking into
consideration such Lender’s policies and the policies of such Lender’s holding
company with respect to capital adequacy), then from time to time the Borrower
will pay to such Lender, as applicable, such additional amount or amounts as
will compensate such Lender or such Lender’s holding company for any such
reduction suffered.

 

(c)              A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as applicable, as
specified in paragraph (a) or (b) of this Section 2.15 shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender, as applicable, the amount shown as due on any such certificate
within 10 days after receipt thereof.

 

(d)              Failure or delay on the part of any Lender to demand
compensation pursuant to this Section 2.15 shall not constitute a waiver of such
Lender’s right to demand such compensation; provided that the Borrower shall not
be required to compensate a Lender pursuant to this Section 2.15 for any
increased costs or reductions incurred more than 270 days prior to the date that
such Lender notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s intention to claim
compensation therefor; provided, further, that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 270-day period
referred to above shall be extended to include the period of retroactive effect
thereof.

 

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SECTION 2.16       Break Funding Payments. In the event of (a) the payment of
any principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under Section
2.11(f) and is revoked in accordance therewith), or (d) the assignment of any
Eurodollar Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant to Section 2.19, then,
in any such event, the Borrower shall compensate each Lender for the loss, cost
and expense attributable to such event. In the case of a Eurodollar Loan, such
loss, cost or expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest that would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan (excluding any “floor” applicable pursuant to the definition of
Adjusted LIBO Rate), for the period from the date of such event to the last day
of the then current Interest Period therefor (or, in the case of a failure to
borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest that would accrue on
such principal amount for such period at the interest rate that such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the Eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
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. The
Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof. Notwithstanding the foregoing, no
additional amounts shall be due and payable pursuant to this Section 2.16 to the
extent that on the relevant due date the Borrower deposits in a Prepayment
Account an amount equal to any payment of Eurodollar Loans otherwise required to
be made on a date that is not the last day of the applicable Interest Period;
provided that on the last day of the applicable Interest Period, the
Administrative Agent shall be authorized, without any further action by or
notice to or from the Borrower or any other Loan Party, to apply such amount to
the prepayment of such Eurodollar Loans. For purposes of this Agreement, the
term “Prepayment Account” means a non-interest bearing account established by
the Borrower with the Administrative Agent and over which the Administrative
Agent shall have exclusive dominion and control, including the right of
withdrawal for application in accordance with this Section 2.16.

 

SECTION 2.17       Taxes.

 

(a)               Any and all payments by or on account of any obligation of any
Loan Party hereunder or under any other Loan Document shall be made without
deduction or withholding for any Taxes, except to the extent required by
applicable law. If any applicable law requires the deduction or withholding of
any Tax from any such payment, then (i) the applicable withholding agent shall
make such deduction or withholding and shall pay the full amount deducted or
withheld to the relevant Governmental Authority in accordance with applicable
law, and (ii) to the extent such Tax is an Indemnified Tax or Other Tax, the sum
payable by the applicable Loan Party shall be increased as necessary so that
after making all required deductions and withholdings (including deductions or
withholdings applicable to additional sums payable under this Section 2.17), the
Lender (or, in the case of any amount received by the Administrative Agent for
its own account, the Administrative Agent) receives an amount equal to the sum
it would have received had no such deduction or withholding been made.

 

(b)              Without duplication of other amounts payable by the Borrower
under this Section 2.17, the Borrower shall timely pay to the relevant
Governmental Authority in accordance with applicable law, or at the option of
the Administrative Agent timely reimburse it for the payment of, any Other
Taxes.

 

(c)              The Borrower shall indemnify the Administrative Agent and each
Lender, within 30 days after written demand therefor, for the full amount of any
Indemnified Taxes on or with respect to any payment by or on account of any
obligation of the Borrower hereunder or under any other Loan Document, or Other
Taxes payable or paid by the Administrative Agent or such Lender, as applicable,
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section 2.17), and any reasonable
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 by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error. Notwithstanding anything to the contrary
contained in this Section 2.17(c), the Borrower shall not be required to
indemnify the Administrative Agent or any Lender pursuant to this Section
2.17(c) for any amount to the extent the Administrative Agent or such Lender
fails to notify the Borrower of such possible indemnification claim within 270
days after the Administrative Agent or such Lender receives written notice from
the applicable taxing authority of the specific tax assessment giving rise to
such indemnification claim.

 

(d)              As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by a Loan Party to a Governmental Authority pursuant to this
Section 2.17, 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, if any, a copy of the return reporting such payment or
other evidence of such payment reasonably satisfactory to the Administrative
Agent.

 

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(e)              (i) Any Lender that is entitled to an exemption from or
reduction of withholding Tax with respect to payments under any Loan Document
shall deliver to the Borrower and the Administrative Agent, on or prior to the
Closing Date in the case of each Foreign Lender that is a signatory hereto, and
on the date of assignment pursuant to which it becomes a Lender in the case of
each other Lender and from time to time thereafter as reasonably requested by
either of the Borrower or the Administrative Agent, such properly completed and
executed documentation prescribed by applicable law or reasonably requested by
the Borrower or the Administrative Agent as will permit such payments to be made
without withholding or at a reduced rate. Each Lender shall, whenever a lapse in
time or change in circumstances renders such documentation (including any
specific documentation required below in this Section 2.17(e) obsolete, expired
or inaccurate in any material respect, deliver promptly to the Borrower and the
Administrative Agent updated or other appropriate documentation (including any
new documentation reasonably requested by the Borrower or the Administrative
Agent) or promptly notify the Borrower and the Administrative Agent in writing
of its inability to do so.

 

(ii)               Without limiting the generality of the foregoing:

 

(A)               each Lender that is a “United States person” within the
meaning of Section 7701(a)(30) of the Code shall deliver to the Borrower and the
Administrative Agent two duly completed and executed original copies of IRS Form
W-9, certifying that such Lender is exempt from U.S. federal backup withholding
Tax,

 

(B)               each Foreign Lender shall deliver to the Borrower and the
Administrative Agent two duly completed and executed original copies of
whichever of the following is applicable:

 

(1)                IRS Form W-8BEN or W-8BEN-E, as applicable, claiming
eligibility for benefits under an income tax treaty to which the United States
is a party,

 

(2)                IRS Form W-8ECI,

 

(3)                in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under Section 881(c) of the Code, (x) a
certificate in a form acceptable to the Administrative Agent to the effect that
such Foreign Lender is not (A) a “bank” within the meaning of Section
881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower within
the meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled foreign
corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax
Compliance Certificate”) and (y) IRS Form W-8BEN or W-8BEN-E, as applicable, or

 

(4)                to the extent a Foreign Lender is not the beneficial owner,
executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form
W-8BEN, IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate in a form
acceptable to the Administrative Agent, IRS Form W-9, and/or other certification
documents from each beneficial owner, as applicable; provided that if the
Foreign Lender is a partnership and one or more direct or indirect partners of
such Foreign Lender are claiming the portfolio interest exemption, such Foreign
Lender may provide a U.S. Tax Compliance Certificate in a form acceptable to the
Administrative Agent on behalf of each such direct and indirect partner;

 

(5)                any other form prescribed by applicable law as a basis for
claiming exemption from or a reduction in U.S. federal withholding Tax duly
completed together with such supplementary documentation as may be prescribed by
applicable law to permit the Borrower or the Administrative Agent to determine
the withholding or deduction required to be made; and

 

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(C)               if a payment made to a Lender under any Loan Document would be
subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to
fail to comply with the applicable reporting requirements of FATCA (including
those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such
Lender shall deliver to the Borrower and the Administrative Agent at the time or
times prescribed by law and at such time or times reasonably requested by the
Borrower or the Administrative Agent such documentation prescribed by applicable
law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine whether such
Lender has complied with such Lender’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment. Solely for purposes of this
clause (C), “FATCA” shall include any amendments made to FATCA after the date of
this Agreement.

 

(iii)              Notwithstanding any other provision of this Section 2.17(e),
a Lender shall not be required to deliver any form or other documentation that
such Lender is not legally eligible to deliver.

 

(iv)              Each Lender hereby authorizes the Administrative Agent to
deliver to the Loan Parties and to any successor Administrative Agent any
documentation provided by such Lender pursuant to this Section 2.17(e).

 

(f)               On or before the date the Administrative Agent becomes a party
to this Agreement, the Administrative Agent shall provide to the Borrower, two
duly-signed, properly completed copies of (i) IRS Form W-9, or (ii) a U.S.
branch withholding certificate on IRS Form W-8IMY evidencing its agreement with
the Borrower to be treated as a “United States person” within the meaning of
Section 7701(a)(30) of the Code with respect to amounts received on account of
any Lender, and IRS Form W-8ECI (with respect to amounts received on its own
account). At any time thereafter, the Administrative Agent shall provide updated
documentation previously provided (or a successor form thereto) when any
documentation previously delivered has expired or become obsolete or invalid or
otherwise upon the reasonable request of the Borrower.

 

(g)              If the Administrative Agent or a Lender determines, in its sole
discretion exercised in good faith, that it has received a refund (whether in
cash or by offset against taxes otherwise due) of any Taxes as to which it has
been indemnified (including by the payment of additional amounts) pursuant to
this Section 2.17, it shall pay over such refund to the Borrower (but only to
the extent of indemnity payments made, or additional amounts paid, by the
Borrower under this Section 2.17 with respect to the Taxes giving rise to such
refund), net of all out-of-pocket expenses of 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 repay the
amount paid over to the Borrower pursuant to this Section 2.17(g) (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) 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 Section
2.17(g), in no event will the Administrative Agent or any Lender be required to
pay any amount to the Borrower or any other Loan Party pursuant to this Section
2.17(g) to the extent that such payment would place the Administrative Agent or
such Lender, as applicable, in a less favorable net after-Tax position than the
Administrative Agent or such Lender, as applicable would have been in if the Tax
subject to the 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 Section
2.17 shall not be construed to require the Administrative Agent or any Lender to
make available its Tax returns (or any other information relating to its Taxes
that it deems confidential) to the Borrower or any other Person.

 

SECTION 2.18       Payments Generally; Pro Rata Treatment; Sharing of Setoffs.

 

(a)              The Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest or
fees, or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) at
or prior to the time expressly required hereunder or under such other Loan
Document for such payment (or, if no such time is expressly required, prior to
3:00 p.m., New York City time), on the date when due, in immediately available
funds, without setoff or counterclaim. Any amounts received after such time on
any date may, in the discretion of the Administrative Agent, be deemed to have
been received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at
its offices as from time to time the Administrative Agent shall designate by
notice to the Borrower and except that payments pursuant to Sections 2.15, 2.16,
2.17 and 9.03 shall be made directly to the Persons entitled thereto and
payments pursuant to other Loan Documents shall be made to the Persons specified
therein. The Administrative Agent shall distribute any such payments received by
it for the account of any other Person to the appropriate recipient promptly
following receipt thereof. If any payment under any Loan Document shall be due
on a day that is not a Business Day, the date for payment shall be extended to
the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.
All payments under each Loan Document shall be made in dollars.

 

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(b)              If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal, interest and
fees then due hereunder, such funds shall be applied (i) first, towards payment
of interest and fees then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of interest and fees then due to such
parties, and (ii) second, towards payment of principal then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal then due to such parties.

 

(c)               If any Lender shall, by exercising any right of setoff or
counterclaim or otherwise except as expressly provided in this Agreement, obtain
payment in respect of any principal of or interest on any of its Loans resulting
in such Lender receiving payment of a greater proportion of the aggregate amount
of its Loans and accrued interest thereon than the proportion received by any
other Lender, then the Lender receiving such greater proportion shall purchase
(for cash at face value) participations in the Loans of other Lenders to the
extent necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans; provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by Holdings, the Borrower or any Subsidiary pursuant to and in accordance with
the express terms of this Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans (but excluding, for the avoidance of doubt, prepayments pursuant to
Section 2.11(i)) to any assignee or participant, other than to the Borrower or
any Subsidiary (as to which the provisions of this paragraph shall apply). The
Borrower consents to the foregoing and agrees, to the extent it may effectively
do so under applicable law, that any Lender acquiring a participation pursuant
to the foregoing arrangements may exercise against the Borrower rights of setoff
and counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of the Borrower in the amount of such participation.

 

(d)              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 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 and in its sole discretion, distribute to the Lenders the amount due.
In such event, if the Borrower has not in fact made such payment, then each of
the Lenders severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender with 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 the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.

 

(e)               If any Lender shall fail to make any payment required to be
made by it pursuant to Section 2.06(a), 2.18(d) or 9.03(c), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender’s obligations under
such Sections until all such unsatisfied obligations are fully paid.

 

SECTION 2.19       Mitigation Obligations; Replacement of Lenders.

 

(a)               If any Lender requests compensation under Section 2.15, or if
any Loan Party is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.15 or 2.17, as applicable, in
the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

 

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(b)              If any Lender is affected in the manner described in Section
2.14(b) and as a result thereof any of the actions described in such Section is
required to be taken, or if any Lender requests compensation under Section 2.15,
or if any Loan Party is required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section
2.17, or if any Lender defaults in its obligation to fund Loans hereunder, then
the Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent, which
consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and (iii)
in the case of any such assignment resulting from a claim for compensation under
Section 2.15 or payments required to be made pursuant to Section 2.17, such
assignment will result in a material reduction in such compensation or payments.
A Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

 

SECTION 2.20       Incremental Extensions of Credit.

 

(a)               Subject to the terms and conditions set forth herein, the
Borrower may at any time or from time to time after the Closing Date, by notice
to the Administrative Agent (an “Incremental Loan Request”), request (A) one or
more new commitments which may be of the same Class as any outstanding Term
Loans (a “Term Loan Increase”) or a new Class of term loans (collectively with
any Term Loan Increase, the “Incremental Term Commitments” or “Incremental
Commitments”), whereupon the Administrative Agent shall promptly deliver a copy
to each of the Lenders.

 

(b)              On the applicable date (each, an “Incremental Facility Closing
Date”) specified in the applicable Additional Credit Extension Amendment
(including through any Term Loan Increase, as applicable), subject to the
satisfaction of the terms and conditions in this Section 2.20 and in the
applicable Additional Credit Extension Amendment, (i) (A) each Incremental Term
Lender of such Class shall make a Loan to the Borrower (an “Incremental Term
Loan” or, an “Incremental Extension of Credit”) in an amount equal to its
Incremental Term Commitment of such Class and (B) each Incremental Term Lender
of such Class shall become a Lender hereunder with respect to the Incremental
Term Commitment of such Class and the Incremental Term Loans of such Class made
pursuant thereto and (ii) [reserved].

 

(c)               Each Incremental Loan Request from the Borrower pursuant to
this Section 2.20 shall set forth the requested amount and proposed terms of the
relevant Incremental Term Loans. Incremental Term Loans may be made by any
existing Lender (but no existing Lender will have an obligation to make any
Incremental Commitment, nor will the Borrower have any obligation to approach
any existing Lender to provide any Incremental Commitment) or by any Additional
Lender (each such existing Lender or Additional Lender providing such Commitment
or Loan, an “Incremental Term Lender”, as applicable, and, collectively, the
“Incremental Lenders”); provided that the Administrative Agent shall have
consented (not to be unreasonably withheld or delayed) to such Additional
Lender’s making such Incremental Term Loans to the extent such consent, if any,
would be required under Section 9.04(b) for an assignment of Term Loans to such
Lender or Additional Lender.

 

(d)              The effectiveness of any Additional Credit Extension Amendment
pursuant to this Section 2.20, and the Incremental Commitments thereunder, shall
be subject to the satisfaction on the applicable date specified therein (the
“Incremental Amendment Date”) of each of the following conditions, together with
any other conditions set forth in the applicable Additional Credit Extension
Amendment:

 

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(i)               after giving effect to such Incremental Commitments, the
conditions of Section 4.02 shall be satisfied; provided, that, in connection
with any Incremental Commitment, which is being used to finance a Limited
Condition Transaction, the Incremental Lenders party to such Additional Credit
Extension Amendment shall be permitted to waive or limit (or not require the
satisfaction of) in full or in part any of the conditions set forth in Section
4.02(a) (other than the accuracy, to the extent required under Section 4.02(a),
of any Specified Representations) and Section 4.02(b) (other than with respect
to any Event of Default under Section 7.01(a), (b), (h) or (i)) without the
consent of the existing Lenders,

 

(ii)               each Incremental Term Commitment shall be in an aggregate
principal amount that is not less than $5,000,000 and shall be in an increment
of $1,000,000 (provided that such amount may be less than $5,000,000 if such
amount represents all remaining availability under the limit set forth in
Section 2.20(d)(iii)),

 

(iii)               except in the case of Refinancing Term Loans, (A) after
giving Pro Forma Effect to both (x) the making of Incremental Term Loans under
such Additional Credit Extension Amendment and (y) any Specified Transactions
consummated in connection therewith, (1) if such Incremental Commitments rank
pari passu in right of security with the Obligations, the First Lien Net
Leverage Ratio as of the last day of the most recently ended Test Period for
which financial statements are internally available does not exceed 4.50:1.00,
(2) if such Incremental Commitments rank junior in right of security to the
Obligations, the Secured Net Leverage Ratio as of the last day of the most
recently ended Test Period for which financial statements are internally
available does not exceed 5.75:1.00, or (3) if such Incremental Commitments are
unsecured, the Total Net Leverage Ratio as of the last day of the most recently
ended Test Period for which financial statements are internally available does
not exceed 6.00:1.00, or (B) together with the Incremental Term Loans made under
such Additional Credit Extension Amendment, the aggregate principal amount of
Incremental Term Loans made in reliance on this clause (B) on such date, when
aggregated with the other Free and Clear Usage Amount on such date, does not
exceed the sum of (i) $250,000,000 plus (ii) the principal amount of any
voluntary prepayments of Term Loans, any other Indebtedness incurred in reliance
on the Free and Clear Usage Amount (in the case of revolving Indebtedness, to
the extent accompanied by a corresponding reduction in commitments) or any
Indebtedness constituting a Permitted Refinancing of any of the foregoing (in
each case, other than to the extent made with the proceeds of Long-Term
Indebtedness); provided, that, it is understood that (1) Incremental Term Loans
may be incurred under either clause (A) or clause (B) above as selected by the
Borrower in its sole discretion and (2) Incremental Term Loans may be incurred
under both clause (A) and clause (B) above, and proceeds from any such
incurrence under both clause (A) and clause (B) may be utilized in a single
transaction or series of related but substantially concurrent transactions by
first calculating the incurrence under clause (A) (without giving effect to any
Incremental Term Loans incurred (or to be incurred) under clause (B)) and then
calculating the incurrence under clause (B), and

 

(iv)              to the extent reasonably requested by the Administrative
Agent, receipt by the Administrative Agent of (A) customary legal opinions,
board resolutions and officers’ certificates (including solvency certificates)
in form and substance reasonably satisfactory to the Administrative Agent and
(B) reaffirmation agreements and/or such amendments to the Security Documents as
may be reasonably requested by the Administrative Agent in order to ensure that
such Incremental Lenders are provided with the benefit of the applicable Loan
Documents.

 

(e)               The terms, provisions and documentation of the Incremental
Term Loans and Incremental Term Commitments, as the case may be, of any Class
shall be as agreed between the Borrower and the applicable Incremental Lenders
providing such Incremental Commitments, and except as otherwise set forth
herein, to the extent not identical to any Class of Term Loans, as applicable,
each existing on the Incremental Facility Closing Date, shall be consistent with
clauses (i) through (iii) below, as applicable, and otherwise reasonably
satisfactory to the Administrative Agent (except for covenants or other
provisions (a) conformed (or added) in the Loan Documents pursuant to the
related Additional Credit Extension Amendment, (x) in the case of any Class of
Incremental Term Loans and Incremental Term Commitments, for the benefit of the
Term Lenders and (y) [reserved] or (b) applicable only to periods after the
Latest Maturity Date as of the Incremental Amendment Date); provided that in the
case of a Term Loan Increase, the terms, provisions and documentation (other
than the Additional Credit Extension Amendment evidencing such increase) of such
Term Loan Increase shall be identical (other than with respect to upfront fees,
OID or similar fees) to the applicable Class of Term Loans being increased, in
each case, as existing on the Incremental Facility Closing Date. In any event:

 

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(i)               the Incremental Term Loans:

 

(A)       (I) shall rank pari passu or junior in right of payment with the
Obligations and (II) shall be secured by the Collateral and shall rank pari
passu or junior in right of security with the Obligations or be unsecured (and,
subject to a subordination agreement (if subject to payment subordination), or
(if subject to lien subordination) a Junior Lien Intercreditor Agreement),

 

(B)       as of the Incremental Amendment Date, shall not have a final scheduled
maturity date earlier than the Tranche B Maturity Date,

 

(C)       as of the Incremental Amendment Date, shall have a Weighted Average
Life to Maturity not shorter than the remaining Weighted Average Life to
Maturity of the Tranche B Term Loans,

 

(D)       shall have an Applicable Rate, and subject to clauses (e)(i)(B) and
(e)(i)(C) above, amortization determined by the Borrower and the applicable
Incremental Term Lenders; provided the Applicable Rate and amortization for a
Term Loan Increase shall be (x) the Applicable Rate and amortization for the
Class being increased or (y) in the case of the Applicable Rate, higher than the
Applicable Rate for the Class being increased as long as the Applicable Rate for
the Class being increased shall be automatically increased as and to the extent
necessary to eliminate such deficiency,

 

(E)       shall have fees determined by the Borrower and the applicable
Incremental Term Loan arranger(s), and

 

(F)       may participate (I) in any voluntary prepayments of any Class of Term
Loans hereunder, in whole or in part, as selected by the Borrower in its sole
discretion and subject to the requirements of Section 2.11 and (II) on a pro
rata basis or less than pro rata basis (but not on a greater than pro rata basis
(except for prepayments with Net Proceeds from any event described in clause (c)
of the definition of the term “Prepayment Event”) in any mandatory prepayments
of Term Loans hereunder.

 

(ii)               [reserved];

 

(iii)              [reserved].

 

(f)               Commitments in respect of Incremental Term Loans shall become
additional Commitments pursuant to an Additional Credit Extension Amendment,
executed by the Borrower, each Incremental Lender providing such Commitments and
the Administrative Agent. The Additional Credit Extension Amendment may, without
the consent of any other Loan Party, Agent or 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
effect the provisions of this Section 2.20, including amendments as deemed
necessary by the Administrative Agent in its reasonable judgment to effect any
lien or payment subordination and associated rights of the applicable Lenders to
the extent any Incremental Extensions of Credit are to rank junior in right of
security or payment or to address technical issues relating to funding and
payments. The Borrower will use the proceeds of the Incremental Term Loans for
any purpose not prohibited by this Agreement.

 

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(g)               [Reserved].

 

(h)              The Incremental Term Loans made under each Term Loan Increase
shall be made by the applicable Lenders participating therein pursuant to the
procedures set forth in Section 2.01 and 2.02 (as may be conformed as necessary
or appropriate as reasonably determined by the Administrative Agent) and on the
date of the making of such Incremental Term Loans, and notwithstanding anything
to the contrary set forth in Section 2.01 and 2.02, such Incremental Term Loans
shall be added to (and form part of) each Borrowing of outstanding Term Loans
under the applicable Class of Term Loans on a pro rata basis (based on the
relative sizes of the various outstanding Borrowings), so that each Lender under
such Class will participate proportionately in each then outstanding Borrowing
of Term Loans of such Class.

 

(i)                This Section 2.20 shall supersede any provisions in Sections
2.18 or 9.02 to the contrary.

 

SECTION 2.21       Extended Term Loans.

 

(a)               The Borrower may at any time and from time to time request
that all or a portion of the Term Loans of any Class (an “Existing Term Loan
Class”) be amended to extend the scheduled maturity date(s) of any payment of
principal with respect to all or a portion of any principal amount of such Term
Loans (any such Term Loans which have been so converted, “Extended Term Loans”)
and to provide for other terms consistent with this Section 2.21. In order to
establish any Extended Term Loans, the Borrower shall provide a notice to the
Administrative Agent (who shall provide a copy of such notice to each of the
Lenders under the Existing Term Loan Class) (an “Extension Request”) setting
forth the proposed terms of the Extended Term Loans to be established, which
shall be consistent with the Term Loans under the Existing Term Loan Class from
which such Extended Term Loans are to be converted except that:

 

(i)               all or any of the scheduled amortization payments of principal
of the Extended Term Loans may be delayed to later dates than the scheduled
amortization payments of principal of the Term Loans of such Existing Term Loan
Class to the extent provided in the applicable Additional Credit Extension
Amendment,

 

(ii)               the Yield with respect to the Extended Term Loans (whether in
the form of interest rate margin, upfront fees, original issue discount or
otherwise) may be different than the Yield for the Term Loans of such Existing
Term Loan Class and upfront fees may be paid to the existing Term Lenders, in
each case, to the extent provided in the applicable Additional Credit Extension
Amendment, and

 

(iii)               the Additional Credit Extension Amendment may provide for
other covenants and terms that apply only after the Tranche B Maturity Date.

 

(b)                Any Extended Term Loans converted pursuant to any Extension
Request shall be designated a series of Extended Term Loans for all purposes of
this Agreement; provided that, subject to the limitations set forth in clause
(a) above, any Extended Term Loans converted from an Existing Term Loan Class
may, to the extent provided in the applicable Additional Credit Extension
Amendment and consistent with the requirements set forth above, be designated as
an increase in any previously established Class of Term Loans.

 

(c)                 The Borrower shall provide the applicable Extension Request
at least five (5) Business Days prior to the date on which Lenders under the
applicable Existing Term Loan Class are requested to respond. No Lender shall
have any obligation to agree to have any of its Term Loans of any Existing Term
Loan Class converted into Extended Term Loans pursuant to any Extension Request.
Any Lender wishing to have all or a portion of its Term Loans under the Existing
Term Loan Class subject to such Extension Request (such Lender an “Extending
Term Lender”) converted into Extended Term Loans shall notify the Administrative
Agent (an “Extension Election”) on or prior to the date specified in such
Extension Request of the amount of its Term Loans under the Existing Term Loan
Class which it has elected to request be converted into Extended Term Loans
(subject to any minimum denomination requirements reasonably imposed by the
Administrative Agent and acceptable to the Borrower). In the event that the
aggregate amount of Term Loans under the Existing Term Loan Class subject to
Extension Elections exceeds the amount of Extended Term Loans requested pursuant
to an Extension Request, Term Loans of the Existing Term Loan Class subject to
Extension Elections shall be converted to Extended Term Loans on a pro rata
basis based on the amount of Term Loans included in each such Extension Election
(subject to any minimum denomination requirements reasonably imposed by the
Administrative Agent and acceptable to the Borrower).

 

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(d)              [Reserved].

 

(e)              Extended Term Loans shall be established pursuant to an
Additional Credit Extension Amendment to this Agreement among the Borrower, the
Administrative Agent and each Extending Term Lender which shall be consistent
with the provisions set forth above (but which shall not require the consent of
any other Lender other than those consents provided in this Section 2.21). Each
Additional Credit Extension Amendment shall be binding on the Lenders, the Loan
Parties and the other parties hereto. In connection with any Additional Credit
Extension Amendment, the Loan Parties and the Administrative Agent shall enter
into such amendments to the Security Documents as may be reasonably requested by
the Administrative Agent (which shall not require any consent from any Lender
other than those consents provided pursuant to this Agreement) in order to
ensure that the Extended Term Loans are provided with the benefit of the
applicable Security Documents and shall deliver such other documents,
certificates and opinions of counsel in connection therewith as may be
reasonably requested by the Administrative Agent.

 

(f)               The provisions of this Section 2.21 shall override any
provision of Section 9.02 to the contrary. No conversion of Loans pursuant to
any extension in accordance with this Section 2.21 shall constitute a voluntary
or mandatory payment or prepayment for purposes of this Agreement.

 

SECTION 2.22       [Reserved].

 

ARTICLE III

 

Representations and Warranties

 

The Borrower represents and warrants to the Lenders that:

 

SECTION 3.01       Organization; Power. Each of Holdings, the Borrower and the
Restricted Subsidiaries (a) is duly organized or formed, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or
organization (to the extent such concept exists in such jurisdiction), (b) has
the requisite power and authority and all governmental rights, qualifications,
approvals, authorizations, permits, accreditations, Reimbursement Approvals,
licenses and franchises material to the business of the Borrower and the
Restricted Subsidiaries taken as a whole that are necessary to own its assets,
to carry on its business as now conducted and as proposed to be conducted and to
execute, deliver and perform its obligations under each Loan Document to which
it is a party and (c) except where the failure to do so, individually or in the
aggregate, is not reasonably likely to result in a Material Adverse Effect, is
qualified to do business in, and is in good standing in, every jurisdiction
where such qualification is required.

 

SECTION 3.02       Authorization; Enforceability. The transactions contemplated
hereby to be entered into by each Loan Party have been duly authorized by all
necessary corporate or other action and, if required, stockholder action. This
Agreement has been duly executed and delivered by each of Holdings and the
Borrower and constitutes, and each other Loan Document to which any Loan Party
is to be a party, when executed and delivered by such Loan Party, will
constitute, a legal, valid and binding obligation of Holdings, the Borrower or
such Loan Party, as applicable, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.

 

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SECTION 3.03       Governmental Approvals; No Conflicts. The transactions
contemplated hereby (a) do not require any consent or approval of, registration
or filing with, or any other action by, any Governmental Authority, except such
as have been obtained or made and are in full force and effect and except
filings necessary to perfect Liens created under the Loan Documents, (b) will
not violate any Requirement of Law applicable to Holdings, the Borrower or any
of the Restricted Subsidiaries, as applicable, (c) will not violate or result in
a default under any indenture or other material agreement or instrument binding
upon Holdings, the Borrower or any of the Restricted Subsidiaries or any of
their assets, or give rise to a right thereunder to require any payment to be
made by Holdings, the Borrower or any of the Restricted Subsidiaries or give
rise to a right of, or result in, termination, cancellation or acceleration of
any material obligation thereunder, (d) will not result in a Limitation on any
right, qualification, approval, permit, accreditation, authorization,
Reimbursement Approval, license or franchise or authorization granted by any
Governmental Authority, Third Party Payor or other Person applicable to the
business, operations or assets of the Borrower or any of the Restricted
Subsidiaries or adversely affect the ability of the Borrower or any of the
Restricted Subsidiaries to participate in any Third Party Payor Arrangement
except for Limitations, individually or in the aggregate, that are not material
to the business of the Borrower and the Restricted Subsidiaries, taken as a
whole, and (e) will not result in the creation or imposition of any Lien on any
asset of Holdings, the Borrower or any of the Restricted Subsidiaries, except
Liens created under the Loan Documents and the documents governing the Existing
Credit Agreement. There is no pending or, to the knowledge of the Borrower,
threatened Limitation by any Governmental Authority, Third Party Payor or any
other Person of any right, qualification, approval, permit, authorization,
accreditation, Reimbursement Approval, license or franchise of the Borrower, or
any Restricted Subsidiary, except for such Limitations, individually or in the
aggregate, as are not reasonably likely to result in a Material Adverse Effect.
No certifications by any Governmental Authority or any Third Party Payor are
required for operation of the business of the Borrower and the Restricted
Subsidiaries that are not in place, except for such certifications or
agreements, the absence of which do not materially and adversely affect the
operation of the business.

 

SECTION 3.04       Financial Condition; No Material Adverse Effect.

 

(a)                 The Borrower has heretofore delivered to the Lenders audited
consolidated financial statements of the Borrower and its Subsidiaries for the
fiscal years ended December 31, 2015 and December 31, 2016, reported on by
PricewaterhouseCoopers LLP, independent public accountants and unaudited
consolidated financial statements of the Borrower and its Subsidiaries for the
fiscal quarter and nine month period ended September 30, 2017. Such financial
statements present fairly, in all material respects, the financial position and
results of operations and cash flows of the Borrower and its Subsidiaries as of
such dates and for such periods in accordance with GAAP consistently applied.

 

(b)                Since December 31, 2016, there has been no event or
circumstance, either individually or in the aggregate, that has had or could
reasonably be expected to have a Material Adverse Effect.

 

SECTION 3.05       Properties.

 

(a)                 Each of Holdings, the Borrower and the Restricted
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business (including its Mortgaged
Properties), free and clear of all Liens, except for Permitted Liens and minor
defects in title that do not interfere in any material respect with its ability
to conduct its business or to utilize such properties for their intended
purposes.

 

(b)                Each of Holdings, the Borrower and the Restricted
Subsidiaries owns, licenses or possesses the right to use all trademarks, trade
names, copyrights, patents and other intellectual property material to its
business. The conduct of the businesses of Holdings, the Borrower and the
Restricted Subsidiaries does not infringe upon the intellectual property rights
of any other Person, except for any such infringements that, individually or in
the aggregate, are not reasonably likely to result in a Material Adverse Effect.

 

(c)                 Schedule 3.05 sets forth the address of each real property
that is owned or leased by Holdings, the Borrower or any of the Restricted
Subsidiaries as of the Original Closing Date after giving effect to the
Transactions.

 

(d)                As of the Original Closing Date, neither Holdings or the
Borrower nor any of the Subsidiaries has received written notice of, or has
knowledge of, any pending or contemplated condemnation proceeding affecting any
Mortgaged Property or any sale or disposition thereof in lieu of condemnation.
As of the Original Closing Date, except as set forth on Schedule 3.05, neither
any Mortgaged Property nor any interest therein is subject to any right of first
refusal, option or other contractual right to purchase such Mortgaged Property
or interest therein.

 

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SECTION 3.06       Litigation and Environmental Matters.

 

(a)                 Except as set forth on Schedule 3.06, there are no actions,
suits or proceedings by or before any arbitrator or Governmental Authority
pending against or, to the knowledge of Holdings, the Borrower or any Restricted
Subsidiary, threatened against or affecting Holdings, the Borrower or any
Restricted Subsidiary, including any relating to any Environmental Law, that are
reasonably likely to (i) have a Material Adverse Effect or (ii) adversely affect
in any material respect the ability of the Loan Parties to consummate the
Transactions or the other transactions contemplated hereby.

 

(b)                Except with respect to any other matters that, individually
or in the aggregate, are not reasonably likely to result in a Material Adverse
Effect, (A) neither Holdings, the Borrower nor any Restricted Subsidiary (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) has become subject to any Environmental Liability, (iii) knows of any basis
for any Environmental Liability or (iv) has received any written claim or notice
of violation or of potential responsibility regarding any alleged violation of
or liability under any Environmental Law, and (B)(i) there has been no Release
of Hazardous Materials at, on, under or from any property currently, or to the
knowledge of Holdings, the Borrower or any of the Restricted Subsidiaries,
formerly owned, leased or operated by any of them which could reasonably be
expected to result in liability under any Environmental Law on the part of any
of them, and (ii) all Hazardous Materials generated, used or stored at, or
transported for treatment or disposal from, any properties currently, or to the
knowledge of Holdings, Borrower and the Restricted Subsidiaries, formerly owned,
leased or operated by Holdings, the Borrower or any of the Subsidiaries have
been disposed of in a manner that could not reasonably be expected to result in
liability under any Environmental Law on the part of any of them.

 

SECTION 3.07       Compliance with Laws and Agreements. Except with respect to
any matters that, individually or in the aggregate, are not material to the
business of the Borrower and the Restricted Subsidiaries, taken as a whole, each
of Holdings, the Borrower and the Restricted Subsidiaries is in compliance with
all material Requirements of Law applicable to it or its property or operations
and all material indentures, agreements and other instruments binding upon it or
its property.

 

SECTION 3.08       Investment Company Status. Neither Holdings, the Borrower,
nor any Restricted Subsidiary is an “investment company” as defined in, or
subject to regulation under, the Investment Company Act of 1940, as amended.

 

SECTION 3.09       Taxes. Each of Holdings, the Borrower and the Restricted
Subsidiaries has timely filed or caused to be filed all federal and other Tax
returns and reports required to have been filed and has paid or caused to be
paid all Taxes required to have been paid by it, except (a) any Taxes that are
being contested in good faith by appropriate proceedings and for which Holdings,
the Borrower or such Restricted Subsidiary, as applicable, has set aside on its
books adequate reserves in accordance with GAAP or (b) to the extent that the
failure to do so is not reasonably likely to result, individually or in the
aggregate, in a Material Adverse Effect. None of Holdings, the Borrower and the
Restricted Subsidiaries is aware of any proposed or pending Tax assessments,
deficiencies or audits that are reasonably likely to result, individually or in
the aggregate, in a Material Adverse Effect.

 

SECTION 3.10       ERISA. No ERISA Event has occurred or is reasonably likely to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably likely to occur, is reasonably likely to result in a
Material Adverse Effect. The present value of all accumulated benefit
obligations under each Plan did not, as of the date of the most recent financial
statements reflecting such amounts, exceed the fair value of the assets of such
Plan, except as would not reasonably be likely to result in a Material Adverse
Effect.

 

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SECTION 3.11       Disclosure. Neither the Information Memorandum nor any of the
other reports, financial statements, certificates or other written information
furnished by or on behalf of any Loan Party to the Administrative Agent or any
Lender in connection with the negotiation of this Agreement or any other Loan
Document or delivered hereunder or thereunder (as modified or supplemented by
other information so furnished) contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein (when
taken as a whole), in the light of the circumstances under which they were made,
not misleading; provided that the foregoing shall not apply to any projected
financial information, and with respect to such projected financial information,
Holdings and the Borrower represent only that such information was prepared in
good faith based upon assumptions believed by them to be reasonable at the time
delivered and as of the Original Closing Date, it being understood that such
projections may vary from actual results and that such variances may be
material.

 

SECTION 3.12       Subsidiaries. Holdings does not have any subsidiaries other
than the Borrower and the Subsidiaries, Permitted Joint Ventures and
Subsidiaries that are not Material Subsidiaries listed on Schedule 3.12.
Schedule 3.12 sets forth the name of, and the ownership or beneficial interest
of Holdings in, each subsidiary, including the Borrower, and identifies each
Subsidiary that is a Subsidiary Loan Party, in each case as of the Original
Closing Date.

 

SECTION 3.13       Insurance. Schedule 3.13 sets forth a description of all
insurance maintained by or on behalf of Holdings, the Borrower and the
Restricted Subsidiaries as of the Original Closing Date. As of the Original
Closing Date, all premiums in respect of such insurance have been paid. Holdings
and the Borrower believe that the insurance maintained by or on behalf of the
Borrower and the Restricted Subsidiaries is adequate.

 

SECTION 3.14       Labor Matters. As of the Original Closing Date, there are no
strikes, lockouts or slowdowns against Holdings, the Borrower or any Restricted
Subsidiary pending or, to the knowledge of Holdings or the Borrower, threatened.
The hours worked by and payments made to employees of the Borrower and the
Restricted 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. All payments due from Holdings, the Borrower or any Restricted
Subsidiary, or for which any claim may be made against Holdings, the Borrower or
any Restricted 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 Holdings, the Borrower or such Restricted Subsidiary. The consummation
of the Transactions or other transactions contemplated hereby 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 Holdings, the Borrower or any
Restricted Subsidiary is bound.

 

SECTION 3.15       Solvency. Immediately after the consummation of the
transactions contemplated hereby to occur on the Closing Date, the Borrower and
its Subsidiaries, on a consolidated basis, are Solvent, in each case after
giving effect to any rights of indemnification, contribution or subrogation
arising among the Subsidiary Loan Parties pursuant to the Collateral Agreement
or by law.

 

SECTION 3.16       Federal Reserve Regulations. No part of the proceeds of any
Loan have been used or will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations T, U and X. Neither Holdings nor any of its 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 (as
defined in Regulation U).

 

SECTION 3.17       Reimbursement from Third Party Payors. The accounts
receivable of Holdings, the Borrower and the Restricted Subsidiaries have been
and will continue to be adjusted to reflect the reimbursement policies required
by all applicable Requirements of Law and other Third Party Payor Arrangements
to which Holdings, the Borrower or such Restricted Subsidiary is subject, and do
not exceed in any material respect amounts the Borrower or such Restricted
Subsidiary is entitled to receive under any capitation arrangement, fee
schedule, discount formula, cost-based reimbursement or other adjustment or
limitation to usual charges. All billings by Holdings, the Borrower and each
Restricted Subsidiary pursuant to any Third Party Payor Arrangements have been
made in compliance with all applicable Requirements of Law, except where failure
to comply would not, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect. There has been no intentional or material
over-billing or over-collection by the Borrower or any Restricted Subsidiary
pursuant to any Third Party Payor Arrangements, other than as created by routine
adjustments and disallowances made in the ordinary course of business by the
Third Party Payors with respect to such billings.

 

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SECTION 3.18       Fraud and Abuse. None of Holdings, the Borrower or any
Subsidiary, nor any of their respective partners, members, stockholders,
officers or directors, acting on behalf of Holdings, the Borrower or any
Restricted Subsidiary, have engaged on behalf of Holdings, the Borrower or any
Subsidiary in any activities that are prohibited under 42 U.S.C. § 1320a-7, 42
U.S.C. § 1320a-7a, 42 U.S.C. § 1320a-7b, 42 U.S.C. § 1395nn, 31 U.S.C. § 3729 et
seq., or the regulations promulgated thereunder, or related Requirements of Law,
or under any similar state law or regulation, or that are prohibited by binding
rules of professional conduct, including to the extent prohibited by such laws
(a) knowingly and willfully making or causing to be made a false statement or
misrepresentation of a material fact in any application for any benefit or
payment, (b) knowingly and willfully making or causing to be made any false
statement or misrepresentation of a material fact for use in determining rights
to any benefit or payment, (c) failing to disclose knowledge by a claimant of
the occurrence of any event affecting the initial or continued right to any
benefit or payment on its own behalf or on behalf of another, with intent to
secure such benefit or payment fraudulently, (d) knowingly and willfully
soliciting or receiving any remuneration (including any kickback, bribe or
rebate), directly or indirectly, overtly or covertly, in cash or in kind, or
offering to pay or receive such remuneration (i) in return for referring an
individual to a Person for the furnishing or arranging for the furnishing of any
item or service for which payment may be made, in whole or in part, pursuant to
any Third Party Payor Arrangement to which the foregoing rules and regulations
apply or (ii) in return for purchasing, leasing or ordering or arranging for or
recommending purchasing, leasing or ordering any good, facility, service or item
for which payment may be made, in whole or in part, pursuant to any Third Party
Payor Arrangement to which the foregoing rules and regulations apply and (e)
making any prohibited referral for designated health services, or presenting or
causing to be presented a claim or bill to any individual, Third Party Payor or
other entity for designated health services furnished pursuant to a prohibited
referral. Neither Holdings, the Borrower nor any Restricted Subsidiary shall be
considered to be in breach of this Section 3.18 so long as (a) it shall have
taken such actions (including implementation of appropriate internal controls)
as may be reasonably necessary to prevent such prohibited actions and (b) such
prohibited actions as have occurred, individually or in the aggregate, are not
reasonably likely to have a Material Adverse Effect.

 

SECTION 3.19       Patriot Act, Etc. 

 

(a)              To the extent applicable, Holdings and each of its Subsidiaries
is in compliance, in all material respects, with (i) the Trading with the Enemy
Act, as amended, and each of the foreign assets control regulations of the
United States Treasury Department (31 C.F.R. Subtitle B, Chapter V, as amended)
and any other enabling legislation or executive order relating thereto and (ii)
the Patriot Act. No part of the proceeds of the Loans will be used, directly or,
to the knowledge of Holdings and its Subsidiaries, indirectly, for any payments
to any governmental official or employee, political party, official of a
political party, candidate for political office, or anyone else acting in an
official capacity, in order to obtain, retain or direct business or obtain any
improper advantage, in violation of the FCPA.

 

(b)              (i) None of Holdings or its Subsidiaries will directly or, to
the knowledge of Holdings or such Subsidiary, indirectly, (x) use the proceeds
of the Loans in violation of Sanctions or (y) otherwise make available such
proceeds to any Person for the purpose of financing activities or business of or
with any Sanctioned Person, to the extent such activities, businesses or
transaction would be prohibited by Sanctions if conducted by a corporation
incorporated in the United States or in a European Union member state, or in any
Sanctioned Country, except to the extent that such financing would be
permissible for a Person required to comply with Sanctions (including pursuant
to any applicable exemptions, licenses or other approvals), (ii) none of
Holdings, any Subsidiary or to the knowledge of Holdings or such Subsidiary,
their respective directors, officers or employees or, to the knowledge of the
Borrower, any controlled Affiliate of Holdings, the Borrower or its Subsidiaries
that will act in any capacity in connection with or benefit from the incurrence
of any Loans, is a Sanctioned Person and (iii) none of Holdings, its
Subsidiaries or, to the knowledge of Holdings or such Subsidiary, their
respective directors, officers and employees, are in violation of applicable
Sanctions in any material respect.

 

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SECTION 3.20       Security Documents. Except as otherwise contemplated hereby
or under any other Loan Documents, the provisions of the Security Documents,
together with such filings and other actions required to be taken hereby or by
the applicable Security Documents are effective to create in favor of the
Administrative Agent for the benefit of the Secured Parties, except as otherwise
provided hereunder, including subject to Permitted Liens, a legal, valid,
enforceable and perfected first priority Lien on all right, title and interest
of the respective Loan Parties in the Collateral described therein.

 

Notwithstanding anything herein (including this Section 3.20) or in any other
Loan Document to the contrary, neither the Borrower nor any other Loan Party
makes any representation or warranty as to (A) the effects of perfection or
non-perfection, the priority or the enforceability of any pledge of or security
interest in any Equity Interests of any Foreign Subsidiary, or as to the rights
and remedies of the Agents or any Lender with respect thereto, under foreign
Law, (B) the pledge or creation of any security interest, or the effects of
perfection or non-perfection, the priority or the enforceability of any pledge
of or security interest to the extent such pledge, security interest, perfection
or priority is not required pursuant to the Collateral and Guarantee Requirement
or (C) [reserved].

 

SECTION 3.21       Compliance with Healthcare Laws.

 

(a)              Without limiting the generality of any other representation or
warranty made herein, (i) each of the physicians, nurse practitioners, and
physicians assistants, whether employees, independent contractors or leased
personnel of each Loan Party (“Licensed Personnel”) holds a valid and
unrestricted license to practice his or her profession from each state in which
he or she provides professional services, and, when required, holds a valid and
unrestricted Drug Enforcement Administration license and applicable state
license to prescribe controlled substances, (ii) all Licensed Personnel, in the
exercise of their respective duties on behalf of a Loan Party, are in compliance
in all material respects with all Healthcare Laws, (iii) all agreements between
a Loan Party and a hospital and all agreements between a Loan Party and Licensed
Personnel are in compliance in all material respects with all Healthcare Laws
and (iv) no Loan Party is and no Licensed Personnel are excluded from
participation in any federal or state healthcare program or are listed on the
General Services Administration list of excluded parties. To the Borrower’s
knowledge, each Loan Party has maintained in all material respects all records
required to be maintained by state licensing boards and agencies, CMS, Drug
Enforcement Agency and state boards of pharmacy and the federal and/or state
healthcare programs as required by the Healthcare Laws and, to the Borrower’s
knowledge, there are no presently existing circumstances which would result or
likely would result in violations of the Healthcare Laws except such of the
foregoing that, individually or in the aggregate, would not have a Material
Adverse Effect. Each Loan Party will have, effective as of the Original Closing
Date and at all times thereafter, such Permits, licenses, franchises,
certificates and other material approvals or authorizations of governmental or
regulatory authorities as are necessary under applicable Requirements of Law to
own their respective properties and conduct their respective business (including
such Permits as are required under such federal, state and other Healthcare Laws
as are applicable thereto), and to receive reimbursement under federal and state
healthcare programs. To the Borrower’s knowledge, there currently exist no
restrictions, deficiencies, required plans of corrective actions or other such
remedial measures with respect to federal and state Medicare and Medicaid
Programs’ certifications or licensure, except such of the foregoing that,
individually or in the aggregate, would not have a Material Adverse Effect. The
Borrower has no knowledge that any condition exists or event has occurred which,
in itself or with the giving of notice or lapse of time or both, reasonably
would be expected to result in the suspension, revocation, forfeiture,
non-renewal of any governmental consent applicable to any Loan Party or
Subsidiary of a Loan Party or service Subsidiary of a Loan Party or such Loan
Party’s participation in any federal and/or state healthcare program, any other
material Third Party Payor Arrangement, or of any participation agreements,
which suspension, revocation, forfeiture or non-renewal would have, either
individually or in the aggregate, a Material Adverse Effect; provided, however,
nothing in the foregoing shall prohibit or prevent any Loan Party from
terminating or causing the termination of any contract for the provision of
Medical Services in the ordinary course of the Loan Party’s business.

 

(b)                Each Loan Party that provides professional Medical Services
and each of its Licensed Personnel has the requisite National Provider
Identifier (“NPI”) or other authorizations requisite to bill the Medicare and
Medicaid programs (in the state or states in which such entities operate), and
all other Third Party Payor Arrangements that such Loan Party currently bills or
in the past billed except where the failure to have such authorization would not
have, either individually or in the aggregate, a Material Adverse Effect. There
is no investigation, audit, claim review or other action pending or, to the
Borrower’s knowledge, threatened which could result in a revocation, suspension,
termination, probation, restriction, limitation, or non-renewal of any Third
Party Payor Arrangement, provider number or authorization or result in the
exclusion of any Loan Party from the Medicare and Medicaid Programs, or from any
Third Party Payor Arrangement, which revocation, suspension, termination,
probation, restriction, limitation, non-renewal or exclusion would have, either
individually or in the aggregate, a Material Adverse Effect.

 

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(c)                 As applicable, the Borrower has adopted a compliance plan
the purpose of which is to assure that each Loan Party and its Licensed
Personnel is in material compliance with applicable Healthcare Laws.

 

(d)                Each Loan Party and professional corporation and professional
association with which a Loan Party has entered into a management services
agreement or other affiliation agreement conducts its business in compliance
with all applicable Corporate Practice of Medicine Laws.

 

(e)                 Each Loan Party will have, effective as of the Original
Closing Date and at all times thereafter, such Permits, licenses, franchises,
certificates and other approvals or authorizations of governmental or regulatory
authorities as are necessary under applicable Requirements of Law to own their
respective properties and conduct their respective business (including such
Permits as are required under such federal, state and other Healthcare Laws as
are applicable thereto), and to receive reimbursement under federal and state
healthcare programs.

 

SECTION 3.22       HIPAA Compliance.

 

To the extent that and for so long any Loan Party is a “covered entity” or
“business associate” within the meaning of HIPAA, the Borrower (x) is or will be
in compliance in all material respects with each of the applicable requirements
of the so-called “Administrative Simplification” provisions of HIPAA on and as
of each date that any part thereof, or any final rule or regulation thereunder,
becomes effective in accordance with its or their terms, as the case may be
(each such date, a “HIPAA Compliance Date”) and (y) is not and could not
reasonably be expected to become, as of any date following any such HIPAA
Compliance Date, the subject of any civil or criminal penalty, process, claim,
action or proceeding, or any administrative or other regulatory review, survey,
process or proceeding (other than routine surveys or reviews conducted by any
government health plan or other accreditation entity) that would result in any
of the foregoing or that would materially adversely affect a Loan Party’s
business, operations, assets, properties or condition (financial or otherwise),
in connection with any actual or potential violation by a Loan Party of the then
effective provisions of HIPAA except, in each case, for such non-compliance as
would not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.

 

ARTICLE IV

 

Conditions

 

SECTION 4.01       Closing Date. The obligations of the Lenders to make Loans
hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived):

 

(a)      The Administrative Agent shall have received from each party hereto
either (i) a counterpart of this Agreement signed on behalf of such party or
(ii) written evidence satisfactory to the Administrative Agent (which may
include telecopy transmission of a signed signature page of this Agreement) that
such party has signed a counterpart of this Agreement.

 

(b)        [Reserved].

 

(c)        [Reserved].

 

(d)       [Reserved].

 

(e)        [Reserved].

 

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(f)                 The Collateral and Guarantee Requirement shall have been
satisfied and the Administrative Agent shall have received a completed
Perfection Certificate dated February 25, 2019 and signed by a Responsible
Officer of the Borrower, together with all attachments contemplated thereby,
including the results of a search of the Uniform Commercial Code (or equivalent)
filings made with respect to the Loan Parties in the jurisdictions contemplated
by the Perfection Certificate and copies of the financing statements (or similar
documents) disclosed by such search and evidence reasonably satisfactory to the
Administrative Agent that the Liens indicated by such financing statements (or
similar documents) are permitted by Section 6.02 or have been released; provided
that the Collateral Agent may, in its reasonable judgment, grant extensions of
time for compliance with the Collateral and Guarantee Requirement by any Loan
Party.

 

(g)                 (i) The Administrative Agent shall have received a completed
“Life-of-Loan” Federal Emergency Management Agency Standard Flood Hazard
Determination with respect to each Mortgaged Property (together with a notice
about special flood hazard area status and flood disaster assistance duly
executed by the Borrower and each Loan Party relating thereto) and (ii) the
Administrative Agent shall have received a copy of, or a certificate as to
coverage under, and a declaration page relating to, the insurance policies
required by Section 5.07 including, without limitation, flood insurance policies
(to the extent required in order to comply with applicable law) and the
applicable provisions of the Security Documents, each of which (w) shall be
endorsed or otherwise amended to include a “standard” or “New York” lender’s
loss payable or mortgagee endorsement (as applicable), (x) shall name the
Collateral Agent, on behalf of the Secured Parties, as additional insured, (y)
in the case of flood insurance, shall (I) identify the addressee of each
property located in a special flood hazard area, (II) indicate the applicable
flood zone designation, the flood insurance coverage and the deductible relating
thereto and (III) provide that the insurer will give the Administrative Agent 45
days’ written notice of cancellation or non-renewal and (z) shall be otherwise
in form and substance reasonably satisfactory to the Administrative Agent.

 

(h)                 The representations and warranties of each Loan Party set
forth in the Loan Documents shall be true and correct in all material respects
on the Closing Date (or, if qualified by “materiality”, “Material Adverse
Effect” or similar language, in all respects (after giving effect to such
qualification)).

 

(i)                 [Reserved].

 

(j)                 [Reserved].

 

(k)                 Since December 31, 2018, there shall not have occurred a
Material Adverse Effect, or any event, change, development, effect, condition,
circumstance, matter, occurrence or state of facts that would reasonably be
expected to have a Material Adverse Effect.

 

(l)                 Substantially concurrently with the initial Borrowing on the
Closing Date, all of the term loans outstanding under the Existing Credit
Agreement as of the Closing Date shall have been prepaid in full.

 

(m)               The Administrative Agent shall have received, at least three
(3) Business Days prior to the Closing Date, all documentation and other
information about the Borrower and the Subsidiary Loan Parties required under
applicable “know your customer” and anti-money laundering rules and regulations,
including the Patriot Act, that has been requested by the Administrative Agent
in writing at least 10 Business Days prior to the Closing Date.

 

(n)                 The Administrative Agent shall have received a Borrowing
Request in accordance with the requirements hereof.

 

(o)                 [Reserved].

 

(p)                 [Reserved].

 

(q)                 The First Lien Intercreditor Agreement shall have been
entered into by each party thereto.

 

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The Administrative Agent shall notify the Borrower and the Lenders of the
Closing Date, and such notice shall be conclusive and binding.

 

SECTION 4.02       Each Credit Event. The obligation of each Lender to make any
Loan or honor any Extension Request (other than a Borrowing Request requesting
only a conversion of Loans to the other Type or a continuation of Eurodollar
Loans) after the Closing Date is subject to satisfaction or waiver of the
following conditions:

 

(a)                 The representations and warranties of each Loan Party set
forth in the Loan Documents shall be true and correct in all material respects
(except to the extent any such representation or warranty is qualified by
“materially”, “Material Adverse Effect” or a similar term, in which case such
representation and warranty shall be true and correct in all respects) on and as
of the date of such Borrowing, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct (or true and correct in
all material respects, as the case may be) as of such earlier date).

 

(b)                 At the time of and immediately after giving effect to such
Borrowing, no Default shall have occurred and be continuing.

 

(c)                 The Administrative Agent shall have received a Borrowing
Request in accordance with the requirements hereof.

 

Each Borrowing (provided that a conversion or continuation of a Borrowing shall
not constitute a “Borrowing” for purposes of this Section 4.02) shall be deemed
to constitute a representation and warranty by Holdings and the Borrower on the
date thereof as to the matters specified in paragraphs (a) and (b) of this
Section 4.02.

 

ARTICLE V

 

Affirmative Covenants

 

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees, expenses and other amounts payable under any
Loan Document shall have been paid in full, each of the Borrower and its
Restricted Subsidiaries covenants and agrees with the Lenders that:

 

SECTION 5.01       Financial Statements and Other Information. The Borrower will
furnish to the Administrative Agent (for distribution to each Lender):

 

(a)                 within 90 days after the end of each fiscal year of the
Borrower commencing with the fiscal year ended December 31, 2019, (i) audited
year-end consolidated financial statements of the Borrower and its Subsidiaries
(including a balance sheet, statement of operations and statement of cash flows
and stockholders’ equity) as of the end of and for such fiscal year, and the
related notes thereto, setting forth in each case in comparative form the
figures for the previous fiscal year, all reported on by independent public
accountants of recognized national standing (without a “going concern” or like
qualification or exception and without any qualification or exception as to the
scope of such audit, except as may be required solely as a result of the
impending maturity of any Loan) to the effect that such consolidated financial
statements present fairly in all material respects the financial condition and
results of operations of the Borrower and its Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, and (ii) if at any time the
Borrower is not subject to the reporting requirements of Section 13 or 15(d) of
the Exchange Act, a “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” that describes the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries,

 

(b)                 within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Borrower commencing with the fiscal
quarter ending March 31, 2020, (i) unaudited quarterly consolidated financial
statements of the Borrower and its Subsidiaries (including a balance sheet,
statement of operations and statement of cash flows) as of the end of and for
such fiscal quarter and the then-elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for the corresponding period
or periods of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year, all certified by a Financial Officer as presenting fairly
in all material respects the financial condition and results of operations of
Holdings and the Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes and (ii) if at any time the Borrower is not subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, a
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” that describes the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries,

 

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(c)                 no later than five (5) days after the delivery of the
financial statements referred to in Section 5.01(a) and Section 5.01(b)
(commencing with the first full fiscal quarter after the Closing Date), a duly
completed Compliance Certificate signed by a Financial Officer of the Borrower,

 

(d)                 [reserved],

 

(e)                 within 30 days after the commencement of each fiscal year of
the Borrower, a reasonably detailed consolidated budget for such fiscal year
(including a projected consolidated balance sheet and consolidated statements of
projected operations and cash flows as of the end of and for such fiscal year)
and, promptly when available, any significant revisions of such budget,

 

(f)                 promptly from time to time after the occurrence of an event
required to be therein reported, such other reports containing substantially the
same information that would have been required to be contained under Item 1.01
(entry into material agreement), Item 1.02 (termination of a material
agreement), Item 1.03 (bankruptcy or receivership), Item 2.01 (completion of
acquisition or disposition), Item 2.03 (creation of a direct financial
obligation or an obligation under an off-balance sheet arrangement), Item 2.04
(accelerate or increase debt obligations or under an off-balance sheet
arrangement), Item 2.06 (material impairments), Item 4.01 (changes in certifying
accountant), Item 4.02 (non-reliance on previously issued financial statements
or a related audit report or interim review) or Item 5.02(a), (b) or
(c) (departure of directors or certain officers) (other than any information
relating to compensation arrangements with any directors or officers) in a
Current Report on Form 8-K under the Exchange Act; provided, however, that trade
secrets and other confidential information that is competitively sensitive, or
information that the Borrower is otherwise prohibited by law or contract from
disclosing, in each case in the good faith and reasonable determination of the
Borrower, may be excluded from disclosures,

 

(g)                 simultaneously with the delivery of each set of consolidated
financial statements referred to in clauses (a) and (b) of this Section 5.01,
the related unaudited consolidating financial statements reflecting the
adjustments necessary to eliminate the accounts of Unrestricted Subsidiaries (if
any) from such consolidated financial statements either on the face of the
financial statements or in the footnotes thereto, and in “Management’s
Discussion and Analysis of Financial Condition and Results of Operations”, and
reflecting the financial condition and results of operations of the Borrower and
its Restricted Subsidiaries separate from the financial condition and results of
operations of the Unrestricted Subsidiaries of the Borrower,

 

(h)                 promptly following any request therefor, (x) such other
information regarding the operations, business affairs and financial condition
of Holdings, the Borrower or any Restricted Subsidiary or any Plan, or
compliance with the terms of any Loan Document, as the Administrative Agent or
any Lender through the Administrative Agent may reasonably request and (y)
information and documentation reasonably requested by the Administrative Agent
or any Lender for purposes of compliance with applicable “know your customer”
and anti-money laundering rules and regulations, including the Patriot Act, and
the Beneficial Ownership Regulation, and

 

(i)       evidence of insurance renewals as required under Section 5.07
hereunder in form and substance reasonably acceptable to the Administrative
Agent.

 

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The Borrower represents and warrants that it, Holdings and any Subsidiary, in
each case, either (i) has no registered or publicly traded securities
outstanding, or (ii) files its financial statements with the SEC and/or makes
its financial statements available to potential holders of its 144A securities,
and, accordingly, the Borrower hereby (i) authorizes the Administrative Agent to
make the financial statements to be provided under Section 5.01(a) above, along
with the Loan Documents and the list of Disqualified Institutions, available to
Public-Siders and (ii) agrees that at the time such financial statements are
provided hereunder, they shall already have been made available to holders of
its securities. The Borrower will not request that any other material be posted
to Public-Siders without expressly representing and warranting to the
Administrative Agent in writing that such materials do not constitute material
non-public information within the meaning of the federal securities laws or that
the Borrower has no outstanding publicly traded securities, including 144A
securities. In no event shall the Administrative Agent post compliance or
borrowing base certificates or budgets to Public-Siders.

 

Notwithstanding the foregoing, the obligations in paragraphs (a), (b) and (g) of
this Section 5.01 may be satisfied with respect to financial information of the
Borrower and its Subsidiaries by furnishing (A) the Form 10-K or 10-Q (or the
equivalent), as applicable, of the Borrower (or any direct or indirect parent
company thereof (other than Select Medical Corporation or any of its parent
companies)) filed with the SEC or with a similar regulatory authority in a
foreign jurisdiction or (B) the applicable financial statements of the Borrower
(or any direct or indirect parent of the Borrower (other than Select Medical
Corporation or any of its parent companies)); provided that to the extent such
information relates to a parent of the Borrower, such information shall be
accompanied by a narrative description of any items that would cause the
financial statements so provided to be different in any material respect from
financial statements of the Borrower and its consolidated Subsidiaries.

 

Documents required to be delivered pursuant to Section 5.01 may, at the
Borrower’s option, be delivered electronically and, if so delivered, shall be
deemed to have been delivered on the date (i) on which the Borrower posts such
documents, or provides a link thereto on the Borrower’s (or Holdings’ or any
Parent’s) website on the Internet at the website address previously provided to
the Administrative Agent in writing (or such other website address as the
Borrower may specify by written notice to the Administrative Agent from time to
time), or (ii) on which such documents are posted on the Borrower’s (or
Holdings’ or any Parent’s) behalf on an Internet or intranet website to which
each Lender, the Administrative Agent and the Collateral Agent have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided that (i) upon the reasonable request of the
Administrative Agent or the Collateral Agent with respect to any specific
document so delivered electronically, the Borrower shall promptly deliver a
physical copy of such document and (ii) the Borrower shall notify (which notice
may be by facsimile or electronic mail) the Administrative Agent of the posting
by the Borrower of any such documents on any such website (other than a website
maintained for or sponsored by the Administrative Agent) and the electronic
location at which such documents may be accessed.

 

To the extent any report or other information under this Section 5.01 is not
delivered within the time periods specified under this Section 5.01 and such
report or other information is subsequently delivered prior to the time such
failure results in an Event of Default due to the Borrower’s failure to deliver
such report or other information within such requisite time periods, the
Borrower will be deemed to have satisfied its obligations under this Section
5.01 and any Default with respect to its obligations under this Section 5.01
shall be deemed to have been cured (but not any Default under any other
provision of this Agreement). The Borrower may satisfy its obligation to deliver
any report or other information to Lenders at any time by filing such
information with the SEC and providing written notice (which notice may be by
facsimile or electronic mail) to the Administrative Agent that such information
has been filed.

 

SECTION 5.02       Notices of Material Events.

 

(a)                 The Borrower will furnish to the Administrative Agent (for
distribution to each Lender through the Administrative Agent), written notice of
the following promptly after obtaining knowledge thereof:

 

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(i)               the occurrence of any Default,

 

(ii)               the filing or commencement of any action, suit or proceeding
by or before any arbitrator or Governmental Authority against the Borrower or
any of its Restricted Subsidiaries that could in each case reasonably be
expected to result in a Material Adverse Effect,

 

(iii)               the occurrence of any ERISA Event which could reasonably be
expected to result in a Material Adverse Effect,

 

(iv)               the receipt by the Borrower or any of its Restricted
Subsidiaries of (i) any notice of any loss of (A) accreditation from the Joint
Commission on Accreditation of Healthcare Organizations or (B) any governmental
right, qualification, permit, accreditation, approval, authorization,
Reimbursement Approval, license or franchise or (ii) any notice, compliance
order or adverse report issued by any Governmental Authority or Third Party
Payor that, if not promptly complied with or cured, could result in (A) the
suspension or forfeiture of any material governmental right, qualification,
permit, accreditation, approval, authorization, Reimbursement Approval, license
or franchise necessary for the Borrower or any of its Restricted Subsidiaries to
carry on its business as now conducted or as proposed to be conducted or (B) any
other material Limitation imposed upon the Borrower or any of its Restricted
Subsidiaries,

 

(v)               any Change in Law of the type described in clause (a) or (b)
of such definition relating to any Third Party Payor Arrangement that could
reasonably be expected to have a material and adverse effect on the ability of
the Borrower or any Restricted Subsidiary to carry on its business as now
conducted or as proposed to be conducted, and

 

(vi)               any other development that results in, or is reasonably
likely to result in, a Material Adverse Effect.

 

Each notice delivered under this Section 5.02 shall be accompanied by a
statement of a Financial Officer or other executive officer of the Borrower
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.

 

SECTION 5.03       Information Regarding Collateral.

 

(a)                 The Borrower will furnish to the Collateral Agent prompt
written notice (but in no event later than 90 days) of any change (i) in any
Loan Party’s legal name, (ii) in the jurisdiction of incorporation or
organization of any Loan Party or (iii) in any Loan Party’s organizational
identification number. The Borrower agrees not to effect or permit any change
referred to in the preceding sentence unless all filings have been made 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 Collateral Agent if any material portion of the
Collateral is damaged or destroyed.

 

(b)                Each year, at the time of delivery of annual financial
statements pursuant to Section 5.01(a), the Borrower shall deliver to the
Collateral Agent a certificate executed by a Financial Officer and the chief
legal officer of the Borrower setting forth the information required pursuant to
the Perfection Certificate 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.

 

SECTION 5.04       Existence; Conduct of Business. The Borrower will, and will
cause each of the Restricted Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, qualifications, permits, approvals, accreditations,
authorizations, Reimbursement Approvals, licenses, franchises, patents,
copyrights, trademarks and trade names material to the conduct of its business;
provided that the foregoing shall not prohibit any merger, consolidation,
liquidation, Division or dissolution permitted under Section 6.03.

 

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SECTION 5.05       Payment of Obligations. Each of Holdings and the Borrower
will, and will cause each of its Restricted Subsidiaries to, pay its Tax
liabilities, before the same shall become delinquent or in default, except where
(a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (b) Holdings, the Borrower or such Restricted
Subsidiary has set aside on its books adequate reserves with respect thereto in
accordance with GAAP, (c) such contest effectively suspends the enforcement of
any Lien securing such obligation and (d) the failure to make payment pending
such contest is not reasonably likely to result, individually or in the
aggregate, in a Material Adverse Effect.

 

SECTION 5.06       Maintenance of Properties. The Borrower will, and will cause
each of its Restricted Subsidiaries to, keep and maintain all property material
to the conduct of its business in good working order and condition, ordinary
wear and tear excepted.

 

SECTION 5.07       Insurance.

 

(a)                 The Borrower will, and will cause each of its Restricted
Subsidiaries to, maintain, with financially sound and reputable insurance
companies (which may include self-insurance) at the time the relevant coverage
is placed or renewed (x) insurance with respect to its properties and business
against loss or damage of such type and in such amounts (with no greater risk
retention) and against such risks as are customarily maintained by companies of
established repute engaged in the same or similar businesses operating in the
same or similar locations and (y) all insurance required to be maintained
pursuant to the Security Documents, subject to the Collateral and Guarantee
Requirements. The Borrower will deliver to the Lenders, upon request of the
Administrative Agent, information in reasonable detail as to the insurance so
maintained.

 

(b)                If any portion of any Mortgaged Property is at any time
located in an area identified by the Federal Emergency Management Agency (or any
successor agency) as a special flood hazard area with respect to which flood
insurance has been made available under the Flood Insurance Laws, then the
Borrower shall, or shall cause each Loan Party to (i) maintain, or cause to be
maintained, with a financially sound and reputable insurer, flood insurance in
an amount and otherwise sufficient to comply with all applicable rules and
regulations promulgated pursuant to the Flood Insurance Laws, (ii) cooperate
with the Administrative Agent and provide information reasonably required by the
Administrative Agent to comply with the Flood Laws and (iii) deliver to the
Administrative Agent evidence of such compliance in form and substance
reasonably acceptable to the Administrative Agent, including, without
limitation, evidence of annual renewals of such insurance.

 

SECTION 5.08       Casualty and Condemnation. The Borrower (a) will furnish to
the Administrative Agent and the Lenders prompt written notice of any casualty
or other insured damage to any material portion of the Collateral or the
commencement of any action or proceeding for the taking of any material portion
of the Collateral or interest therein under power of eminent domain or by
condemnation or similar proceeding and (b) will ensure that the Net Proceeds of
any such event (whether in the form of insurance proceeds, condemnation awards
or otherwise) are collected and applied in accordance with the applicable
provisions of this Agreement and the Security Documents.

 

SECTION 5.09       Books and Records; Inspection and Audit Rights. The Borrower
will, and will cause each of its Restricted Subsidiaries to, keep proper books
of record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities. The
Borrower will, and will cause each of its Restricted Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender, upon
reasonable prior notice, to visit and inspect its properties during normal
business hours, to examine and make extracts from its books and records,
including environment assessment reports and Phase I or Phase II studies, and to
discuss its affairs, finances and condition with its officers and independent
accountants (provided that the Borrower shall be provided the opportunity to
participate in any such discussions with its independent accountants), all at
such reasonable times and as often as reasonably requested.

 

SECTION 5.10       Compliance with Laws. The Borrower will, and will cause each
of its Restricted Subsidiaries to comply with all Requirements of Law, including
Environmental Laws, applicable to it or its property, except where the failure
to do so, individually or in the aggregate, is not reasonably likely to result
in a Material Adverse Effect. The Borrower will maintain in effect and enforce
policies and procedures designed to ensure compliance by the Borrower, its
Subsidiaries and their respective directors, officers, employees and agents with
Anti-Corruption Laws and applicable Sanctions.

 

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SECTION 5.11       Use of Proceeds. The proceeds of the Tranche B Term Loans
borrowed on the Closing Date will be used by the Borrower on the Closing Date,
solely for prepayment of the term loans outstanding under the Existing Credit
Agreement as of the Closing Date. No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations T, U and X. The
Borrower will not request any Borrowing, and the Borrower shall not use, and
shall procure that its Subsidiaries and its or their respective directors,
officers, employees and agents shall not use, the proceeds of any Borrowing (A)
in furtherance of an offer, payment, promise to pay, or authorization of the
payment or giving of money, or anything else of value, to any Person in
violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing
or facilitating any activities, business or transaction of or with any
Sanctioned Person, or in any Sanctioned Country, to the extent such activities,
businesses or transaction would be prohibited by Sanctions if conducted by a
corporation incorporated in the United States, or (C) in any manner that would
result in the violation of any Sanctions applicable to any party hereto.

 

SECTION 5.12       Additional Subsidiaries; Succeeding Holdings.

 

(a)                 If any additional Restricted Subsidiary (other than a
Consolidated Practice or an Excluded Subsidiary) is formed or acquired after the
Closing Date (or if any Excluded Subsidiary that is not a Subsidiary Loan Party
ceases to qualify as an Excluded Subsidiary, the Borrower will, within 60 days
after such Restricted Subsidiary is formed or acquired (or ceases to constitute
an Excluded Subsidiary), notify the Collateral Agent and the Lenders (through
the Administrative Agent) thereof and within such 60-day period cause the
Collateral and Guarantee Requirement to be satisfied with respect to such
Subsidiary (if it is a Subsidiary Loan Party) and with respect to any Equity
Interest in or Indebtedness of such Subsidiary owned by or on behalf of any Loan
Party.

 

(b)                Upon the addition of a Succeeding Holdings, the Borrower will
notify the Collateral Agent and the Lenders (through the Administrative Agent)
thereof and within 10 days after such Succeeding Holdings is formed or acquired
cause the Collateral and Guarantee Requirement to be satisfied with respect to
the Succeeding Holdings.

 

SECTION 5.13       Further Assurances.

 

(a)                 Each of Holdings, each Succeeding Holdings and the Borrower
will, and will cause each Subsidiary Loan Party to, execute any and all further
documents, financing statements, agreements and instruments, and take all such
further actions (including the filing and recording of financing statements,
fixture filings, mortgages, deeds of trust and other documents), which may be
required under any applicable law, or which the Administrative Agent or the
Required Lenders may reasonably request, to cause the Collateral and Guarantee
Requirement to be and remain satisfied, all at the expense of the Loan Parties.
The Borrower also agrees to provide to the Collateral Agent, from time to time
upon reasonable request, evidence reasonably satisfactory to the Administrative
Agent as to the perfection and priority of the Liens created or intended to be
created by the Security Documents.

 

(b)                If any material assets (including any real property (other
than any leased real property) which constitutes a Material Real Property) are
acquired by the Borrower or any Subsidiary Loan Party after the Closing Date
(other than assets constituting Collateral under the Collateral Agreement that
become subject to a perfected Lien in favor of the Collateral Agreement upon
acquisition thereof), the Borrower will notify the Administrative Agent and the
Lenders thereof and, if requested by the Administrative Agent or the Required
Lenders, the Borrower will cause such assets to be subjected to a Lien securing
the Obligations and will take, and cause the Subsidiary Loan Parties to take,
such actions as shall be necessary or reasonably requested by the Administrative
Agent to grant and perfect such Liens, including actions described in paragraph
(a) of this Section 5.13, all at the expense of the Loan Parties; provided that
the Collateral Agent may, in its reasonable judgment, grant extensions of time
for compliance or exceptions with the provisions of this paragraph by any Loan
Party.

 

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SECTION 5.14       Designation of Subsidiaries. The Borrower may at any time
after the Closing Date designate any Restricted Subsidiary of the Borrower as an
Unrestricted Subsidiary or any Unrestricted Subsidiary as a Restricted
Subsidiary; provided that (i) immediately before and after such designation, no
Event of Default shall have occurred and be continuing or would result
therefrom, (ii) in the case of the designation of an Unrestricted Subsidiary as
a Restricted Subsidiary, immediately after giving effect to such designation,
the Total Net Leverage Ratio on a Pro Forma Basis shall be no greater than
5.25:1.00, (iii) no Subsidiary may be designated as an Unrestricted Subsidiary
if, after such designation, it would be a “Restricted Subsidiary” for the
purpose of any Specified Indebtedness, any Permitted Debt or any Permitted
Refinancing thereof and (iv) no Restricted Subsidiary may be designated an
Unrestricted Subsidiary if it was previously designated an Unrestricted
Subsidiary. The designation of any Subsidiary as an Unrestricted Subsidiary
after the Closing Date shall constitute an Investment by the Borrower therein at
the date of designation in an amount equal to the Fair Market Value of such
Investment. The designation of any Unrestricted Subsidiary as a Restricted
Subsidiary shall constitute (i) the incurrence at the time of designation of any
Investment, Indebtedness or Liens of such Subsidiary existing at such time and
(ii) a return on any Investment by the Borrower in Unrestricted Subsidiaries
pursuant to the preceding sentence in an amount equal to the Fair Market Value
of such Investment in such Subsidiary.

 

SECTION 5.15       [Reserved].

 

SECTION 5.16       Quarterly Lender Calls. The Borrower will participate in a
conference call with the Administrative Agent and the Lenders to discuss the
financial condition and results of operations of the Borrower and its Restricted
Subsidiaries for the most recently-ended period for which financial statements
have been delivered pursuant to Section 5.01(a) or Section 5.01(b), which call
shall occur within a reasonable period of time after the delivery of such
financial statements and after the Lenders have first been provided reasonable
notice of such call; provided, however, if the Borrower is holding a conference
call open to the public to discuss the financial condition and results of
operations of the Borrower and its Restricted Subsidiaries for the most
recently-ended period for which financial statements have been delivered, the
Borrower will not be required to hold a second, separate call for the Lenders as
long as Lenders are provided access to such conference call.

 

SECTION 5.17       ERISA Compliance. The Borrower will do, and cause each of its
ERISA Affiliates to do, each of the following: (a) maintain each Plan in
compliance in all material respects with the applicable provisions of ERISA, the
Code and other federal or state law, and (b) cause each Plan that is qualified
under Section 401(a) of the Code to maintain such qualification.

 

SECTION 5.18       [Reserved].

 

ARTICLE VI

 

Negative Covenants

 

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees, expenses and other amounts payable under any
Loan Document have been paid in full, each of the Borrower (and, with respect to
Section 6.03 only, Holdings) and the Restricted Subsidiaries covenants and
agrees with the Lenders that:

 

SECTION 6.01       Indebtedness; Certain Equity Securities.

 

(a)                 Neither Holdings nor the Borrower will, nor will they permit
any Restricted Subsidiary to, create, incur, assume or permit to exist any
Indebtedness, except:

 

(i)               Indebtedness created under the Loan Documents,

 

(ii)               Indebtedness pursuant to the revolving facility under the
Existing Credit Agreement as in effect on the Closing Date (including any
guarantees thereof) in an aggregate principal amount not to exceed $100,000,000
and any Permitted Refinancing thereof,

 

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(iii)               Indebtedness existing on the Original Closing Date not to
exceed $2,500,000 and other Indebtedness existing on the Original Closing Date
set forth in Schedule 6.01 and any Permitted Refinancing thereof,

 

(iv)               Indebtedness of the Borrower owed to any Restricted
Subsidiary and of any Restricted Subsidiary owed to the Borrower or any other
Restricted Subsidiary; provided that Indebtedness of the Borrower owed to any
Restricted Subsidiary and Indebtedness of any Subsidiary Loan Party owed to the
Borrower or any other Restricted Subsidiary shall be subordinated to the
Obligations on terms reasonably satisfactory to the Administrative Agent;
provided, further that Indebtedness owed to any Captive Insurance Subsidiary
shall only be subordinated to the extent permitted by applicable laws or
regulations,

 

(v)               Guarantees by the Borrower of Indebtedness of any Restricted
Subsidiary and by any Restricted Subsidiary of Indebtedness of the Borrower or
any other Restricted Subsidiary; provided that (A) the Indebtedness so
Guaranteed is permitted by this Section 6.01, (B) Guarantees permitted under
this clause (vi) shall be subordinated to the Obligations of the Borrower or the
applicable Restricted Subsidiary to the same extent and on the same terms as the
Indebtedness so Guaranteed is subordinated to the Obligations and (C) except in
the case of Foreign Subsidiaries that provide Guarantees of Indebtedness of
other Foreign Subsidiaries, no Restricted Subsidiary shall Guarantee any
Indebtedness unless it is a Subsidiary Loan Party,

 

(vi)               Indebtedness (including Attributable Indebtedness) of the
Borrower or any Restricted Subsidiary incurred to finance the acquisition,
construction or improvement of any fixed or capital assets, including Capital
Lease Obligations, and any Indebtedness assumed by the Borrower or any
Subsidiary in connection with the acquisition of any such assets or secured by a
Lien on any such assets prior to the acquisition thereof, and Permitted
Refinancings thereof; provided that (A) such Indebtedness (other than Permitted
Refinancings) is incurred prior to or within 120 days after such acquisition or
the completion of such construction or improvement and (B) the aggregate
principal amount of Indebtedness permitted by this clause (vi) shall not (except
as permitted by the definition of “Permitted Refinancing”) exceed at any time
outstanding the greater of (x) $25,000,000 and (y) 2.5% of Total Assets as of
the time of incurrence,

 

(vii)               (x) Indebtedness of the Borrower or any Restricted
Subsidiary assumed in connection with any Permitted Acquisition and not created
in contemplation thereof or (y) Permitted Debt incurred to finance a Permitted
Acquisition; provided that after giving Pro Forma Effect to such Permitted
Acquisition and the assumption or incurrence of such Indebtedness incurred or
assumed pursuant to this clause (vii):

 

(A)               if such Indebtedness ranks pari passu in right of security
with the Obligations, (x) the First Lien Net Leverage Ratio does not exceed
4.50:1.00 or (y) the First Lien Net Leverage Ratio is equal to or less than the
First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition,

 

(B)               if such Indebtedness ranks junior in right of security with
the Obligations, (x) the Secured Net Leverage Ratio does not exceed 5.75:1.00 or
(y) the Secured Net Leverage Ratio is equal to or less than the Secured Net
Leverage Ratio immediately prior to such Permitted Acquisition, or

 

(C)               if such Indebtedness is unsecured, (x) the Total Net Leverage
Ratio does not exceed 6.00:1.00 or (y) the Total Net Leverage Ratio is equal to
or less than the Total Net Leverage Ratio immediately prior to such Permitted
Acquisition; provided that no Indebtedness may be incurred pursuant to this
clause (C) until the date that is six (6) months after the Original Closing
Date,

 

and, in the case of clauses (x) and (y) of this clause (vii), any Permitted
Refinancing of any such Indebtedness; provided that any such Indebtedness of a
Non-Loan Party does not exceed in the aggregate at any time outstanding,
together with any Indebtedness incurred by a Non-Loan Party pursuant to clause
(xiv) of this Section 6.01, the greater of $25,000,000 and 2.5% of Total Assets,
in each case determined at the such time of incurrence;

 

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(viii)               Indebtedness owed to any Person (including obligations in
respect of letters of credit for the benefit of such Person) providing workers’
compensation, health, disability or other employee benefits or property,
casualty or liability insurance pursuant to reimbursement or indemnification
obligations to such Person, in each case incurred in the ordinary course of
business,

 

(ix)               Indebtedness of the Borrower or any Restricted Subsidiary in
respect of performance bonds, bid bonds, appeal bonds, surety bonds, performance
and completion guarantees and similar obligations, in each case provided in the
ordinary course of business,

 

(x)               Indebtedness of any Loan Party pursuant to Swap Agreements
permitted by Section 6.07,

 

(xi)               [Reserved],

 

(xii)               Indebtedness representing deferred compensation to employees
of the Borrower and the Restricted Subsidiaries incurred in the ordinary course
of business,

 

(xiii)               Indebtedness in respect of promissory notes issued to
physicians, consultants, employees or directors or former employees, consultants
or directors in connection with repurchases of Equity Interests permitted by
Section 6.08(a)(iii),

 

(xiv)               Indebtedness of any Foreign Subsidiary or any Non-Loan
Party, collectively, in an amount not to exceed, together with any Indebtedness
incurred by a Non-Loan Party pursuant to clause (vii) of this Section 6.01,
$25,000,000 at any time outstanding,

 

(xv)               Refinancing Debt Securities, the Net Proceeds of which are
applied to prepay Term Loans in connection with Section 2.11 and any Permitted
Refinancing thereof,

 

(xvi)               (a) Permitted Debt, provided that (x) if such Indebtedness
is secured by Liens ranking pari passu with the Liens securing the Obligations,
the First Lien Net Leverage Ratio does not exceed 4.50:1.00, (y)  if such
Indebtedness is secured by Liens ranking junior to the Liens securing the
Obligations, the Secured Net Leverage Ratio does not exceed 5.75:1.00, and (z) 
if such Indebtedness is unsecured, the Total Net Leverage Ratio does not exceed
6.00:1.00, in each case, determined on a Pro Forma Basis after giving effect to
such assumption or incurrence and the use of proceeds thereof; and any Permitted
Refinancing thereof; and (b) other Permitted Debt in an aggregate principal
amount pursuant to this subclause (b), when aggregated with the Free and Clear
Usage Amount at such time, not to exceed $250,000,000 and any Permitted
Refinancing thereof,

 

(xvii)               the incurrence by the Borrower or any of its Restricted
Subsidiaries of Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient funds in
the ordinary course of business, so long as such Indebtedness is extinguished
within five (5) Business Days,

 

(xviii)               the incurrence of Indebtedness arising from agreements of
the Borrower or a Restricted Subsidiary providing for indemnification,
adjustment of purchase price, holdback, contingency payment obligations or
similar obligations, in each case, incurred or assumed in connection with the
disposition or acquisition of any business, assets or capital stock of the
Borrower or any Restricted Subsidiary,

 

(xix)               the incurrence of Indebtedness resulting from endorsements
of negotiable instruments for collection in the ordinary course of business,

 

(xx)               Indebtedness of the Borrower or a Restricted Subsidiary in
respect of netting services, overdraft protection and otherwise in connection
with deposit accounts; provided that such Indebtedness remains outstanding for
10 Business Days or less, and

 

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(xxi)               the incurrence or issuance by the Borrower or any of its
Restricted Subsidiaries of additional Indebtedness in an aggregate principal
amount not to exceed the greater of $50,000,000 and 5.0% of Total Assets at the
time of incurrence.

 

For purposes of determining compliance with Section 6.01, in the event that an
item of Indebtedness (or any portion thereof) at any time, whether at the time
of incurrence or upon the application of all or a portion of the proceeds
thereof or subsequently, meets the criteria of more than one of the categories
of permitted Indebtedness described in Section 6.01(a)(i) through (xxi) above,
the Borrower, in its sole discretion, will classify and may subsequently
reclassify such item of Indebtedness (or any portion thereof) in any one or more
of the types of Indebtedness described in 6.01(a)(i) through (xxi) above and
will only be required to include the amount and type of such Indebtedness in
such of the above clauses as determined by the Borrower at such time; provided
that Indebtedness that originally reduced the Free and Clear Usage Amount at the
time of incurrence may not be reclassified. The Borrower will be entitled to
divide and classify an item of Indebtedness in more than one of the types of
Indebtedness described in 6.01(a)(i) through (xxi) above.

 

For purposes of determining compliance with any dollar-denominated restriction
on the incurrence of Indebtedness, the dollar-equivalent principal amount of
Indebtedness denominated in a foreign currency shall be calculated based on the
relevant currency exchange rate in effect on the date such Indebtedness was
incurred, in the case of term debt, or first committed, in the case of revolving
credit debt; provided that if such Indebtedness is incurred to extend, replace,
refund, refinance, renew or defease other Indebtedness denominated in a foreign
currency, and such extension, replacement, refunding, refinancing, renewal or
defeasance would cause the applicable dollar-denominated restriction to be
exceeded if calculated at the relevant currency exchange rate in effect on the
date of such extension, replacement, refunding, refinancing, renewal or
defeasance, such dollar-denominated restriction shall be deemed not to have been
exceeded so long as the principal amount of such refinancing Indebtedness does
not exceed the principal amount of such Indebtedness being extended, replaced,
refunded, refinanced, renewed or defeased, plus the aggregate amount of fees,
underwriting discounts, premiums (including tender premiums) and other costs and
expenses (including OID) incurred in connection with such refinancing.

 

The accrual of interest, the accretion or amortization of OID, the payment of
interest in the form of additional Indebtedness with the same terms, shall not
be deemed to be an incurrence of Indebtedness for purposes of this Section 6.01.

 

SECTION 6.02       Liens. The Borrower will not, and will not permit any
Restricted Subsidiary to, create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable) or rights in respect of
any thereof, except (collectively, “Permitted Liens”):

 

(a)       Liens created by the Loan Documents and the documents governing the
Existing Credit Agreement,

 

(b)       Permitted Encumbrances,

 

(c)       any Lien on any property or asset of the Borrower or any Restricted
Subsidiary existing on the Original Closing Date and set forth in Schedule 6.02;
provided that (A) such Lien shall not apply to any other property or asset of
the Borrower or any Restricted Subsidiary and (B) such Lien shall secure only
those obligations which it secures on the Original Closing Date and Permitted
Refinancings thereof,

 

(d)       any Lien existing on any property or asset prior to the acquisition
thereof by the Borrower or any Restricted Subsidiary or existing on any property
or asset of any Person that becomes a Restricted Subsidiary after the date
hereof prior to the time such Person becomes a Restricted Subsidiary (including
any Liens securing Indebtedness permitted by clause (vii) of Section 6.01(a));
provided that (A) such Lien is not created in contemplation of or in connection
with such acquisition or such Person becoming a Restricted Subsidiary, as
applicable, (B) such Lien shall not apply to any other property or asset of the
Borrower or any Restricted Subsidiary and (C) such Lien shall secure only those
obligations that it secures on the date of such acquisition or the date such
Person becomes a Restricted Subsidiary, as applicable, and Permitted
Refinancings thereof,

 

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(e)       Liens on fixed or capital assets acquired, constructed or improved by
the Borrower or any Restricted Subsidiary; provided that (i) such security
interests secure Indebtedness permitted by clause (vi) of Section 6.01(a)
(including Permitted Refinancings thereof), (ii) such security interests and the
Indebtedness secured thereby (other than Permitted Refinancings) are incurred
prior to or within 120 days after such acquisition or the completion of such
construction or improvement, (iii) the Indebtedness secured thereby does not
exceed 100% of the cost of acquiring, constructing or improving such fixed or
capital assets and (iv) such security interests shall not apply to any other
property or assets of the Borrower or any Restricted Subsidiary,

 

(f)       Liens (i) arising from filing Uniform Commercial Code financing
statements regarding leases, (ii) of a collecting bank arising in the ordinary
course of business under Section 4-208 of the Uniform Commercial Code in effect
in the relevant jurisdiction covering only the items being collected upon and
(iii) in favor of banking institution encumbering deposits (including the right
of set-off) and which are within the general parameters customary in the banking
industry,

 

(g)       Liens arising out of sale and leaseback transactions permitted by
Section 6.06,

 

(h)       Liens in favor of the Borrower or another Loan Party (other than
Holdings),

 

(i)       licenses, sublicenses, leases or subleases granted to others not
interfering in any material respect with the business of the Borrower or any
Restricted Subsidiary,

 

(j)       Liens on assets of any Foreign Subsidiary or any Non-Loan Party
securing Indebtedness permitted by Section 6.01(a)(xiv),

 

(k)       Liens on assets of the Borrower or the Restricted Subsidiaries not
otherwise permitted by this Section 6.02, so long as neither (i) the aggregate
outstanding principal amount of the obligations secured thereby nor (ii) the
aggregate fair value (determined as of the date such Lien is incurred) of the
assets subject thereto exceeds the greater of $25,000,000 and 2.5% of Total
Assets at any time outstanding; provided that in no event shall Holdings, the
Borrower or any Restricted Subsidiary create, incur, assume or permit to exist
any Lien on any Equity Interests of the Borrower or any Restricted Subsidiary,

 

(l)       Liens on the Collateral securing Indebtedness permitted by paragraphs
(a)(ii), (a)(xv) and (a)(xvi) of Section 6.01,

 

(m)       Liens on Equity Interests of an Unrestricted Subsidiary that secure
Indebtedness or other obligation of such Unrestricted Subsidiary,

 

(n)       Liens encumbering reasonable customary initial deposits and margin
deposits and similar Liens attaching to brokerage accounts incurred in the
ordinary course of business and not for speculative purposes,

 

(o)       Liens created or deemed to exist by the establishment of trusts for
the purpose of satisfying government reimbursement program costs and other
actions or claims pertaining to the same or related matters or other medical
reimbursement programs, and

 

(p)       Liens solely on any cash earnest money deposits made by the Borrower
or any Restricted Subsidiary with any letter of intent or purchase agreement
permitted hereunder.

 

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SECTION 6.03       Fundamental Changes.

 

(a)                 Neither Holdings nor the Borrower will, nor will they permit
any Restricted Subsidiary to, merge into or consolidate with any other Person,
or permit any other Person to merge into or consolidate with it, consummate a
Division as the Dividing Person or otherwise or liquidate or dissolve, except
that, if at the time thereof and immediately after giving effect thereto no
Default shall have occurred and be continuing, (i) any Person may merge with and
into the Borrower in a transaction in which the surviving entity is a Person
organized or existing under the laws of the United States of America, any State
thereof or the District of Columbia and, if such surviving entity is not the
Borrower, such Person expressly assumes, in writing, all the obligations of the
Borrower under the Loan Documents, (ii) any Person may merge with and into any
Restricted Subsidiary in a transaction in which the surviving entity is a
Restricted Subsidiary and, if any party to such merger is a Subsidiary Loan
Party, is or becomes a Subsidiary Loan Party concurrently with such merger,
(iii) any Restricted Subsidiary (other than a Subsidiary Loan Party) may
liquidate or dissolve (whether effected pursuant to a Division or otherwise) if
the Borrower determines in good faith that such liquidation or dissolution is in
the best interests of the Borrower and is not materially disadvantageous to the
Lenders, (iv) any asset sale permitted by Section 6.05 or Investment permitted
by Section 6.04 may be effected through the merger of a subsidiary of the
Borrower with a third party, (v) [reserved] and (vi) the Borrower or any
Restricted Subsidiary may consummate a Division as the Dividing Person if,
immediately upon the consummation of the Division, (x) the assets of the
applicable Dividing Person are held by the Borrower or one or more Restricted
Subsidiaries at such time and, if the Dividing Person is the Borrower and is not
a Division Successor, (A) one of the Division Successors of the Borrower
organized or existing under the laws of the United States of America, any State
thereof or the District of Columbia expressly assumes, in writing, all the
obligations of the Borrower under the Loan Documents and (B) the Division
Successor described in the immediately preceding subclause (A) shall (1) own,
directly or indirectly, all of the assets (including, without limitation, any
Equity Interests) owned by the Borrower immediately prior to the Division or (2)
with respect to any assets not so owned by such Division Successor pursuant to
the immediately preceding subclause (1), such Division, shall comply with the
immediately succeeding clause (y), or, (y) with respect to assets not held by
the Borrower or one or more Restricted Subsidiaries, such Division, in the
aggregate, would otherwise be permitted by this Section 6.03 (without reliance
on this subclause (vi)), Section 6.04 and/or Section 6.05.

 

(b)                The Borrower will not, and Holdings and the Borrower will not
permit any Restricted Subsidiary to, engage to any material extent in any
business other than a Permitted Business.

 

(c)                 Holdings will not engage in any business or activity other
than the ownership of all the outstanding shares of capital stock of the
Borrower and engaging in corporate and administrative functions and other
activities incidental thereto (including payment of dividends and other amounts
in respect of its Equity Interests). Holdings will not own or acquire any assets
(other than Equity Interests of the Borrower and the cash proceeds of any
Restricted Payments permitted by Section 6.08 or proceeds of any issuance of
Indebtedness or Equity Interests permitted by this Agreement pending application
as required by this Agreement) or incur any liabilities (other than liabilities
under and permitted to be incurred under the Loan Documents, the documents
governing the Existing Credit Agreement and liabilities reasonably incurred in
connection with its maintenance of its existence (including the ability to incur
fees, costs and expenses relating to such maintenance) and activities incidental
thereto). Notwithstanding the foregoing, Holdings shall be permitted to (i)
enter into transactions, engage in activities and maintain assets or incur
liabilities in respect of Swap Agreements related to Indebtedness of Holdings
permitted hereunder, (ii) engage in any public offering of its common stock or
any other issuance or sale of its Equity Interests, (iii) participate in tax,
accounting and other administrative matters as a member of the consolidated
group of Holdings, the Borrower and its Restricted Subsidiaries, (iv) hold any
cash or property (but not operate any property), (v) provide indemnification to
officers and directors and (vi) engage in any activities incidental to the
foregoing.

 

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SECTION 6.04       Investments, Loans, Advances, Guarantees and Acquisitions.
The Borrower will not, and will not permit any Restricted Subsidiary to,
purchase or acquire (including pursuant to any merger with, or as a Division
Successor pursuant to the Division of any Person that was not a wholly owned
Restricted Subsidiary prior to such merger or Division) any Equity Interests in
or evidences of indebtedness or other securities (including any option, warrant
or other right to acquire any of the foregoing) of, make any loans or advances
to, Guarantee any obligations of, or make any investment or any other interest
in, any other Person, or purchase or otherwise acquire (in one transaction or a
series of transactions) any assets of any other Person constituting a business
unit (collectively, “Investments”; provided that any loan made by the Borrower
or any Restricted Subsidiary to any direct or indirect parent company of the
Borrower in connection with the Amendment No. 3 Transactions shall be deemed to
be a Restricted Payment but not an “Investment” for purposes of this Agreement
and any Qualified Proceeds or Permitted Investments subsequently received by the
Borrower or such Restricted Subsidiary on account of principal or interest on
any such loan shall be deemed a contribution to the capital of the Borrower for
purposes of the definition of “Available Amount”), except:

 

(a)       Permitted Acquisitions,

 

(b)       Permitted Investments,

 

(c)       Investments existing on the Original Closing Date and set forth on
Schedule 6.04 and any Investments consisting of extensions, modifications or
renewals of any such Investments (excluding any such extensions, modifications
or renewals involving additional advances, contributions or other investments of
cash or property or other increases thereof unless it is a result of the accrual
or accretion of interest or OID or payment-in-kind pursuant to the terms, as of
the Original Closing Date, of the original Investment so extended, modified or
renewed),

 

(d)       Investments by the Borrower or any Restricted Subsidiaries in Equity
Interests in their respective Restricted Subsidiaries; provided that (A) any
such Equity Interests held by a Loan Party shall be pledged pursuant to the
Collateral Agreement (subject to the limitations referred to in the definition
of “Collateral and Guarantee Requirement”) and (B) the aggregate amount of
investments in Non-Loan Parties by Loan Parties (together with outstanding
intercompany loans permitted under clause (B) to the proviso to Section 6.04(e)
and outstanding Guarantees permitted to be incurred under clause (B) to the
proviso to Section 6.04(f)) shall not exceed the greater of $25,000,000 and 2.5%
of Total Assets at any time outstanding (in each case determined without regard
to any write-downs or write-offs),

 

(e)       loans or advances made by the Borrower to any Restricted Subsidiary
and made by any Restricted Subsidiary to the Borrower or any other Restricted
Subsidiary; provided that (A) any such loans and advances made by a Loan Party
shall be evidenced by a promissory note pledged pursuant to the Collateral
Agreement and (B) the amount of such loans and advances made by Loan Parties to
Non-Loan Parties (together with outstanding investments permitted under clause
(B) to the proviso to Section 6.04(d) and outstanding Guarantees permitted under
clause (B) to the proviso to Section 6.04(f)) shall not exceed the greater of
$25,000,000 and 2.5% of Total Assets at any time outstanding (in each case
determined without regard to any write-downs or write-offs),

 

(f)       Guarantees constituting Indebtedness permitted by Section 6.01 and
performance guarantees in the ordinary course of business; provided that (and
without limiting the foregoing) the aggregate principal amount of Indebtedness
of Non-Loan Parties that is Guaranteed by any Loan Party (together with
outstanding investments permitted under clause (B) to the proviso to Section
6.04(d) and outstanding intercompany loans permitted under clause (B) to the
proviso to Section 6.04(e)) shall not exceed the greater of $25,000,000 and 2.5%
of Total Assets at any time outstanding (in each case determined without regard
to any write-downs or write-offs),

 

(g)       receivables or other trade payables owing to the Borrower or any
Restricted Subsidiary if created or acquired in the ordinary course of business
consistent with past practice and payable or dischargeable in accordance with
customary trade terms; provided that such trade terms may include such
concessionary trade terms as the Borrower or any such Restricted Subsidiary
deems reasonable under the circumstances,

 

(h)       Investments consisting of Equity Interests, obligations, securities or
other property received in settlement of delinquent accounts of and disputes
with customers and suppliers in the ordinary course of business and owing to the
Borrower or any Restricted Subsidiary or in satisfaction of judgments,

 

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(i)       Investments by the Borrower or any Restricted Subsidiary in payroll,
travel and similar advances to cover matters that are expected at the time of
such advances ultimately to be treated as expenses for accounting purposes and
that are made in the ordinary course of business,

 

(j)       loans or advances by the Borrower or any Restricted Subsidiary to
employees and other individual service providers made in the ordinary course of
business (including travel, entertainment and relocation expenses) of the
Borrower or any Restricted Subsidiary not exceeding $2,500,000 in the aggregate
at any time outstanding (determined without regard to any write-downs or
write-offs of such loans or advances),

 

(k)       Investments in the form of Swap Agreements permitted by Section 6.07,

 

(l)       Investments of any Person existing at the time such Person becomes a
Restricted Subsidiary of the Borrower or consolidates or merges, in one
transaction or a series of transactions, with the Borrower or any of the
Restricted Subsidiaries (including in connection with a Permitted Acquisition)
so long as such investments were not made in contemplation of such Person
becoming a Restricted Subsidiary or of such consolidation or merger,

 

(m)       Investments received in connection with the dispositions of assets
permitted by Section 6.05,

 

(n)       Investments constituting deposits described in clauses (c) and (d) of
the definition of the term “Permitted Encumbrances”,

 

(o)       Investments in Permitted Joint Ventures (together with the aggregate
amount of Investments in Permitted Real Estate Joint Ventures permitted under
Section 6.04(p)) in an amount not to exceed $50,000,000 plus an amount equal to
any returns (including dividends, interest, distributions, returns of principal
and profits on sale) actually received in cash in respect of any such
Investments (which amount shall not exceed the amount of such Investment valued
at cost at the time such Investment was made),

 

(p)       Investments in Permitted Real Estate Joint Ventures (together with the
aggregate amount of Investments in Permitted Joint Ventures permitted under
Section 6.04(o)) in an amount not to exceed $50,000,000 plus an amount equal to
any returns (including dividends, interest, distributions, returns of principal
and profits on sale) actually received in cash in respect of any such
Investments (which amount shall not exceed the amount of such Investment valued
at cost at the time such Investment was made),

 

(q)       payments, loans, advances to, and investments in, Consolidated
Practices in the ordinary course of business and consistent with past practice
in satisfaction of their obligations under any management services agreements,

 

(r)       Investments by the Borrower or any Restricted Subsidiary (including
Investments in Permitted Joint Ventures and Permitted Acquisitions) in an
aggregate amount, as valued at cost at the time each such Investment is made and
including all related commitments for future advances, not exceeding the
Available Amount immediately prior to the time of the making of any such
Investment,

 

(s)       (i) Investments by the Borrower or any Restricted Subsidiary
(including Investments in Permitted Joint Ventures) in an amount not to exceed
the greater of $50,000,000 and 5.0% of Total Assets and (ii) other Investments;
provided that (x) no Event of Default has occurred and is continuing or would
result therefrom and (y) immediately after giving effect to such Investment on a
Pro Forma Basis, the Total Net Leverage Ratio does not exceed 5.00:1.00,

 

(t)       Investments, loans and advances by the Borrower or any Restricted
Subsidiary to any Captive Insurance Subsidiary in an amount equal to (A) the
capital required under the applicable laws or regulations of the jurisdiction in
which such Captive Insurance Subsidiary is formed or determined by independent
actuaries as prudent and necessary capital to operate such Captive Insurance
Subsidiary plus (B) any reasonable general corporate and overhead expenses of
such Captive Insurance Subsidiary,

 

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(u)       any Investment solely in exchange for the issuance of Equity Interests
(other than Disqualified Stock) of the Borrower or Holdings (or any other direct
or indirect parent company of the Borrower), and

 

(v)       Investments in prepaid expenses, negotiable instruments held for
collection and lease, utility and workers compensation, performance and similar
deposits entered into as a result of the operations of the business in the
ordinary course of business.

 

For purposes of covenant compliance, the amount of any Investment outstanding at
any time shall be the original cost of such Investment (without adjustment for
any increases or decreases in the value of such Investments), reduced by (except
in the case of any Investments made using the Available Amount pursuant to
Section 6.04(r) and returns which are included in the Available Amount pursuant
to the definition thereof) any dividend, distribution, interest payment, return
of capital, repayment or other amount received in cash by the Borrower or a
Restricted Subsidiary in respect of such Investment.

 

SECTION 6.05       Asset Sales. The Borrower will not, and will not permit any
Restricted Subsidiary to, sell, transfer, lease or otherwise dispose (whether
effected pursuant to a Division or otherwise) of any asset, including any Equity
Interest owned by it (other than directors’ qualifying Equity Interests or
Equity Interests required by applicable law to be held by a Person other than
the Borrower a Restricted Subsidiary), nor will the Borrower permit any
Restricted Subsidiary to issue any additional Equity Interest in such Restricted
Subsidiary (other than to the Borrower or another Restricted Subsidiary in
compliance with Section 6.04) involving aggregate payments or consideration for
assets having a Fair Market Value in excess of $2,500,000 for any individual
transaction or series of related transactions, except (in each case, whether
effected pursuant to a Division or otherwise):

 

(a)       sales, transfers and dispositions of (i) inventory in the ordinary
course of business and (ii) used, damaged, obsolete, worn out, negligible or
surplus equipment or property in the ordinary course of business,

 

(b)       sales, transfers and dispositions to the Borrower or any Restricted
Subsidiary; provided that any such sales, transfers or dispositions involving a
Non-Loan Party shall be made in compliance with Section 6.09,

 

(c)       sales, transfers and dispositions of products, services or accounts
receivable (including at a discount) in connection with the compromise,
settlement or collection thereof consistent with past practice,

 

(d)       sales, transfers and dispositions of property to the extent such
property constitutes an investment permitted by clauses (b), (h), (l) and (n) of
Section 6.04,

 

(e)       sale and leaseback transactions permitted by Section 6.06,

 

(f)       dispositions resulting from any casualty or other insured damage to,
or any taking under power of eminent domain or by condemnation or similar
proceeding of, any property or asset of the Borrower or any Restricted
Subsidiary,

 

(g)       sales, transfers and other dispositions of assets (other than Equity
Interests in a Restricted Subsidiary unless all Equity Interests in such
Restricted Subsidiary are sold) that are not permitted by any other paragraph of
this Section 6.05,

 

(h)       exchanges of property for similar replacement property for fair value,

 

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(i)       assets set forth on Schedule 6.05,

 

(j)       the sale or other disposition of Permitted Investments,

 

(k)       the sale or disposition of any assets or property received as a result
of a foreclosure by the Borrower or any Restricted Subsidiary with respect to
any secured Investment or other transfer of title with respect to any secured
Investment in default,

 

(l)       the licensing of intellectual property in the ordinary course of
business or in accordance with industry practice,

 

(m)       the sale, lease, conveyance, disposition or other transfer of (a) the
Equity Interests of, or any Investment in, any Unrestricted Subsidiary or
(b) Investments (other than Investments in any Restricted Subsidiary) made
pursuant to clause (s) of Section 6.04,

 

(n)       surrender or waiver of contract rights or the settlement, release or
surrender of contract, tort or other claims of any kind,

 

(o)       leases or subleases to third persons in the ordinary course of
business that do not interfere in any material respect with the business of the
Borrower or any of its Restricted Subsidiaries, and

 

(p)       the sale of Equity Interests in joint ventures to the extent required
by or made pursuant to, customary buy/sell arrangements entered into in the
ordinary course of business between the joint venture parties and sent forth in
joint venture agreements.

 

provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by paragraphs (b), (c), (f), (l), (n) and (p)
above) shall be made for fair value and (other than those permitted by
paragraphs (b), (d), (h), (l), (n) and (p) above) for at least 75% cash
consideration, plus (for all such sales, transfers, leases and other
dispositions permitted hereby) an aggregate additional amount of non-cash
consideration in the amount of $20,000,000 (it being understood that for
purposes of paragraph (a) above, accounts receivable received in the ordinary
course and any property received in exchange for used, obsolete, worn out or
surplus equipment or property and any non-cash consideration that was actually
converted into cash within 6 months following the applicable sale, transfer,
lease or other disposition by the Borrower or any of its Restricted Subsidiaries
shall be deemed to constitute cash consideration).

 

SECTION 6.06       Sale and Leaseback Transactions. The Borrower will not, and
will not permit any Restricted Subsidiary to, enter into any arrangement,
directly or indirectly, 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 that it
intends to use for substantially the same purpose or purposes as the property
sold or transferred, except for (x) any such sale of any fixed or capital assets
by the Borrower or any Restricted Subsidiary that is made for cash consideration
in an amount not less than the fair value of such fixed or capital asset and is
consummated within 180 days after the Borrower or such Restricted Subsidiary
acquires or completes the construction of such fixed or capital asset or (y)
sale and leaseback transactions with respect to properties acquired after the
Original Closing Date, where the Fair Market Value of such properties in the
aggregate does not to exceed the greater of $25,000,000 and 2.5% of Total
Assets.

 

SECTION 6.07       Swap Agreements. The Borrower will not, and will not permit
any Restricted Subsidiary to, enter into any Swap Agreement, except (a) Swap
Agreements entered into to hedge or mitigate risks to which the Borrower or any
Restricted Subsidiary has actual exposure (other than those in respect of Equity
Interests of the Borrower or any of the Restricted Subsidiaries) and (b) Swap
Agreements entered into in order to effectively cap, collar or exchange interest
rates (from fixed to floating rates, from one floating rate to another floating
rate or otherwise) with respect to any interest-bearing liability or investment
of Holdings, the Borrower or any Restricted Subsidiary.

 

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SECTION 6.08       Restricted Payments; Certain Payments of Indebtedness.

 

(a)                 The Borrower will not, and will not permit any Restricted
Subsidiary to, declare or make, or agree to pay or make, directly or indirectly,
any Restricted Payment, or incur any obligation (contingent or otherwise) to do
so, except:

 

(i)               the Borrower may declare and pay dividends with respect to its
common stock payable solely in additional shares of its common stock, and, with
respect to its preferred stock, payable solely in additional shares of such
preferred stock or in shares of its common stock,

 

(ii)               Restricted Subsidiaries may declare and pay dividends ratably
with respect to their capital stock, membership or partnership interests or
other similar Equity Interests,

 

(iii)               the Borrower may declare and pay dividends or make other
distributions to Holdings, the proceeds of which are used by Holdings or a
Parent to purchase or redeem Equity Interests of Holdings or a Parent acquired
by employees, consultants or directors of Holdings, the Borrower or any
Restricted Subsidiary upon such Person’s death, disability, retirement or
termination of employment; provided that the aggregate amount of such purchases
or redemptions under this clause (iii) shall not exceed $10,000,000 in any
fiscal year (and, to the extent that the aggregate amount of purchases or
redemptions made in any fiscal year pursuant to this clause (iii) is less than
$10,000,000, the amount of such difference may be carried forward and used for
such purpose in the following fiscal year) and $30,000,000 in the aggregate,

 

(iv)               the Borrower may make Restricted Payments to Holdings to be
used by Holdings solely to pay (or to allow a Parent to pay) its franchise taxes
and other fees required to maintain its corporate existence and to pay for
general corporate and overhead expenses (including salaries and other
compensation of employees) and other expenses in its capacity as the parent of
Borrower incurred by Holdings or a Parent in the ordinary course of its business
or used to pay fees and expenses (other than to Affiliates) relating to any
unsuccessful debt or equity financing; provided that such Restricted Payments
shall not exceed $5,000,000 in any fiscal year,

 

(v)               with respect to any taxable period (or portion thereof) with
respect to which the Borrower and/or any of its Subsidiaries are members of a
consolidated, combined or similar income tax group for U.S. federal and/or
applicable state or local income tax purposes of which Holdings or a Parent is
the common parent (a “Tax Group”), the Borrower may make Restricted Payments to
Holdings (or any such Parent) in an amount necessary to enable Holdings (or such
Parent, as applicable) to pay the portion of any consolidated, combined or
similar U.S. federal, state or local income Taxes (as applicable) of such Tax
Group for such taxable period that are directly attributable to the taxable
income of the Borrower and/or its applicable Subsidiaries; provided that the
amount of any such Restricted Payments pursuant to this clause (v) shall not
exceed the amount of such Taxes that the Borrower and/or its applicable
Subsidiaries would have paid had the Borrower and/or such Subsidiaries, as
applicable, been a stand-alone corporate taxpayer (or a stand-alone corporate
group); provided, further, that the payment of Restricted Payments pursuant to
this clause (v) in respect of an Unrestricted Subsidiary shall be permitted only
to the extent that cash distributions were made by such Unrestricted Subsidiary
to the Borrower or any of its Restricted Subsidiaries for such purpose,

 

(vi)               cashless repurchases of Equity Interests of Holdings deemed
to occur upon exercise of stock options or warrants or upon vesting of common
stock, if such Equity Interests represent a portion of the exercise price or
withholding obligations of such options, warrants or common stock,

 

(vii)               the Borrower and its Restricted Subsidiaries may make a
payment of any dividend or other distribution or the consummation of any
irrevocable redemption within 60 days after the date of declaration of the
dividend or giving of the redemption notice, as the case may be, if at the date
of declaration or notice, the dividend or redemption payment would have complied
with the provisions of this Agreement (provided that such date of declaration or
giving of notice of redemption shall be deemed to be a Restricted Payment and
shall utilize capacity under another provision of this Section 6.08),

 

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(viii)               the Borrower and its Restricted Subsidiaries may make
payments, directly or indirectly, to Holdings or any other direct or indirect
parent company of the Borrower to pay management, consulting and advisory fees
or any other amounts payable to any Permitted Holder to the extent permitted by
Section 6.09,

 

(ix)               [Reserved],

 

(x)               the Borrower and the Restricted Subsidiaries may make
additional Restricted Payments in an aggregate amount not exceeding the
Available Amount immediately prior to the time of the making of such Restricted
Payment; provided that (x) no Event of Default has occurred and is continuing or
would result therefrom and (y) immediately after giving effect to such
Restricted Payment on a Pro Forma Basis, the Total Net Leverage Ratio does not
exceed 5.75:1.00,

 

(xi)               the Borrower may make Restricted Payments to Holdings to pay
any non-recurring fees, cash charges and cost expenses incurred in connection
with the issuance of Equity Interests or Indebtedness, in each case only to the
extent that such transaction is not consummated,

 

(xii)               the Borrower and its Restricted Subsidiaries may make
additional Restricted Payments in an aggregate amount not to exceed $40,000,000
(together with the aggregate amount of any prepayments, redemptions,
defeasances, repurchases or other retirement of Specified Indebtedness under
Section 6.08(b)(iv); provided that no Event of Default has occurred and is
continuing or would result therefrom,

 

(xiii)               the Borrower and its Restricted Subsidiaries may make other
Restricted Payments; provided that (x) no Event of Default has occurred and is
continuing or would result therefrom and (y) immediately after giving effect to
such Restricted Payment on a Pro Forma Basis, the Total Net Leverage Ratio does
not exceed 4.00:1.00,

 

(xiv)               the Borrower and its Restricted Subsidiaries may make
payments for the repurchase of Equity Interests deemed to occur upon the
exercise of options, rights or warrants to the extent such Equity Interests
represent a portion of the exercise price of those options, rights or warrants,

 

(xv)               the Borrower and its Restricted Subsidiaries may make cash
payments in lieu of fractional shares issuable as dividends on preferred stock
or upon the conversion of any convertible debt securities of the Borrower and
its Restricted Subsidiaries,

 

(xvi)               payment of fees and reimbursement of other expenses to the
Permitted Holders in connection with the U.S. Healthworks Transactions permitted
by Section 6.09 shall be permitted, and

 

(xvii)               the Borrower may make Restricted Payments of up to
$39,000,000 in connection with the Amendment No. 3 Transactions;

 

provided that cancellation of Indebtedness owing to the Borrower or any
Restricted Subsidiary from members of management of the Borrower, any of the
Borrower’s direct or indirect parent companies or any of the Borrower’s
Restricted Subsidiaries in connection with a repurchase of Equity Interests of
any of the Borrower’s direct or indirect parent companies will not be deemed to
constitute a Restricted Payment.

 

(b)                The Borrower will not, and will not permit any Restricted
Subsidiary to, make, directly or indirectly, any payment or other distribution
(whether in cash, securities or other property) of or in respect of principal of
or interest on, or any payment or other distribution (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 Permitted Debt (other than Permitted Debt secured on a pari
passu basis with the Obligations) or any Subordinated Indebtedness (other than
the intercompany loans among Restricted Subsidiaries and the Borrower)
(“Specified Indebtedness”), except:

 

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(i)               payment of regularly scheduled interest and principal payments
as and when due in respect of any Indebtedness, other than, in the case of
Subordinated Indebtedness, as prohibited by the subordination provisions
thereof,

 

(ii)               the conversion or exchange of any Specified Indebtedness
into, or redemption, repurchase, prepayment, defeasance or other retirement of
any such Indebtedness with the Net Proceeds of the issuance by Holdings or a
Parent of Equity Interests (or capital contributions in respect thereof) of
Holdings or a Parent after the Original Closing Date to the extent not Otherwise
Applied, plus any fees and expenses in connection with such conversion,
exchange, redemption, repurchase, prepayment, defeasance or other retirement,

 

(iii)               the prepayment, redemption, defeasance, repurchase or other
retirement of Specified Indebtedness for an aggregate purchase price not to
exceed the Available Amount; provided that (x) no Event of Default has occurred
and is continuing or would result therefrom and (y) immediately after giving
effect to such prepayment, redemption, defeasance, repurchase or other
retirement of Specified Indebtedness on a Pro Forma Basis, the Total Net
Leverage Ratio does not exceed 5.75:1.00,

 

(iv)               the Borrower and its Restricted Subsidiaries may make
additional prepayments, redemptions, defeasances, repurchases or other
retirement of Specified Indebtedness in an aggregate amount not to exceed
$40,000,000 (together with the aggregate amount of any Restricted Payments made
under clause Section 6.08 (a)(xii)); provided that no Event of Default has
occurred and is continuing or would result therefrom,

 

(v)               other prepayments, redemptions, defeasances, repurchases or
other retirement of Specified Indebtedness; provided that (x) no Event of
Default has occurred and is continuing or would result therefrom and (y)
immediately after giving effect to such prepayment, redemption, defeasance,
repurchase or other retirement of Specified Indebtedness on a Pro Forma Basis,
the Total Net Leverage Ratio does not exceed 4.00:1.00,

 

(vi)               refinancings of Indebtedness to the extent the Indebtedness
being incurred in connection with such refinancing is a Permitted Refinancing;
and

 

(vii)               [reserved]; and

 

(viii)              the prepayment, redemption, defeasance, repurchase or other
retirement of Specified Indebtedness with Declined Proceeds.

 

SECTION 6.09       Transactions with Affiliates. The Borrower will not, and will
not permit any Restricted Subsidiary to, sell, lease, transfer or otherwise
dispose of any property or assets to, or purchase, lease or otherwise acquire
any property or assets from, or otherwise engage in any other transactions with,
any of its Affiliates, involving aggregate payments or consideration in excess
of $2,500,000 for any individual transaction or series of related transactions,
except:

 

(a)        transactions that are at prices and on terms and conditions, taken as
a whole, not materially less favorable to the Borrower or such Restricted
Subsidiary that could be obtained on arm’s-length transaction basis from
unrelated third parties other than an Affiliate,

 

(b)        (i) transactions between or among Holdings, the Borrower, and the
Subsidiary Loan Parties or any entity that becomes a Restricted Subsidiary as a
result of such transaction, and (ii) transactions between or among the Borrower
and a Person (other than an Unrestricted Subsidiary of the Borrower) that is an
Affiliate of the Borrower solely because the Borrower owns, directly or through
a Restricted Subsidiary, an Equity Interest in, or controls, such Person,

 

(c)       any Investment permitted under Section 6.04(d), 6.04(e), 6.04(g) or
6.04(m),

 

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(d)       any Indebtedness permitted under Section 6.01(a)(v) and Section
6.01(a)(xii),

 

(e)       any Restricted Payment permitted under Section 6.08,

 

(f)        loans or advances to employees permitted under Section 6.04(e),

 

(g)       any lease entered into between the Borrower or any Restricted
Subsidiary, as lessee, and any of the Affiliates of the Borrower or entity
controlled by such Affiliates, as lessor, which is approved in good faith by a
majority of the disinterested members of the Board of Directors of the Borrower,

 

(h)       so long as no Default described in Section 7.01(b) and no Event of
Default has occurred and is continuing, the Borrower or any of its Restricted
Subsidiaries may pay, or may pay cash dividends to enable Holdings to pay, (A)
customary management, consulting, monitoring or advisory fees to any Permitted
Holder in an aggregate amount not greater than $1,000,000 during any fiscal year
(plus any unpaid management, consulting, monitoring or advisory fees within such
amount accrued in any prior year) and (B) fees in respect of any financings,
acquisitions or dispositions with respect to which any Permitted Holder acts as
an adviser to Holdings, the Borrower or any Restricted Subsidiary in an amount
not to exceed 1.5% of the value of any such transaction,

 

(i)       any contribution to the capital of Holdings directly or indirectly by
the Permitted Holders or any purchase of Equity Interests of Holdings by the
Permitted Holders not prohibited by this Agreement,

 

(j)       the payment of reasonable fees to directors of Holdings, the Borrower
or any Restricted Subsidiary who are not employees of Holdings, the Borrower or
any Restricted Subsidiary, and compensation and employee benefit arrangements
paid to, and indemnities provided for the benefit of, directors, officers or
employees of Holdings, the Borrower or any Restricted Subsidiary in the ordinary
course of business,

 

(k)       any issuances of Equity Interests, securities or other payments,
awards or grants in cash, securities or otherwise pursuant to, or the funding
of, employment agreements, stock options and stock ownership plans approved by
the Borrower’s or Holdings’ Board of Directors (or a committee thereof),

 

(l)       transactions pursuant to agreements set forth on Schedule 6.09 and any
amendments thereto to the extent such amendments are not materially less
favorable to the Borrower or such Subsidiary Loan Party than those provided for
in the original agreements,

 

(m)      any employment, change of control and severance arrangements entered
into in the ordinary course of business and approved by the Borrower’s or
Holdings’ Board of Directors (or a committee thereof) between a Parent,
Holdings, the Borrower or any Restricted Subsidiary and any employee thereof,

 

(n)      payments by the Borrower or any of its Restricted Subsidiaries of
reasonable insurance premiums to, and any borrowings or dividends received from,
any Captive Insurance Subsidiary,

 

(o)      transactions with customers, suppliers, contractors, joint venture
partners or purchasers or sellers of goods or services, in each case which are
in the ordinary course of business (including, without limitation, pursuant to
joint venture agreements) and otherwise in compliance with the terms of this
Agreement,

 

(p)      the entering into of any tax sharing agreement or arrangement with
Holdings or any direct or indirect parent company of the Borrower and any
payments thereunder by the Borrower or any of its Restricted Subsidiaries to
Holdings or any Parent to the extent permitted by Section 6.08(a)(iv),

 

(q)       the entering into the Services Agreements and any payments thereunder
to Select Medical Holdings Corporation, Select Medical Corporation or Concentra
Group Holdings Parent, LLC, as applicable,

 

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(r)       the issuance of Equity Interests (other than Disqualified Stock) (i)
of the Borrower to Affiliates of the Borrower or (ii) of the Borrower or any
Restricted Subsidiary for compensation purposes,

 

(s)       intellectual property licenses in the ordinary course of business,

 

(t)       any customary management services agreements or similar agreements
between the Borrower or any other Subsidiary and any Consolidated Practice or
Permitted Joint Ventures,

 

(u)       (i) the Transactions (including Transaction Expenses) and the payment
of fees and expenses as part of or in connection with the Transactions, (ii) the
Amendment No. 3 Transactions and the payment of fees and expenses as part of or
in connection with the Amendment No. 3 Transactions and (iii) the transactions
contemplated hereby and the payment of fees and expenses as part of or in
connection with the transactions contemplated hereby, and

 

(v)       transactions in which the Borrower or any Restricted Subsidiary
delivers to the Administrative Agent a letter from an accounting, appraisal or
investment banking firm of national standing stating that such transaction is
fair to the Borrower or such Restricted Subsidiary from a financial point of
view and which are approved by a majority of the disinterested members of the
Board of Directors of the Borrower in good faith.

 

SECTION 6.10       Restrictive Agreements.

 

(a)                 Subject to clauses (b) through (d) below, the Borrower will
not, and will not permit any Restricted Subsidiary to, directly or indirectly,
enter into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (i) the ability of Holdings,
the Borrower or any Restricted Subsidiary to create, incur or permit to exist
any Lien upon any of its property or assets or (ii) the ability of any
Restricted Subsidiary to pay dividends or other distributions with respect to
any shares of its capital stock or to make or repay loans or advances to the
Borrower or any other Restricted Subsidiary or to Guarantee Indebtedness of the
Borrower or any other Restricted Subsidiary.

 

(b)                The foregoing clause (a) shall not apply to restrictions and
conditions (i) imposed by law or by any Loan Document, any documentation
governing the Existing Credit Agreement or documentation governing any Permitted
Debt, documentation governing any Permitted Refinancing (provided that such
restrictions are not materially more restrictive (as determined in good faith by
the Borrower), taken as a whole, than those contained in such agreements
governing the Indebtedness being refinanced), or Indebtedness of a Foreign
Subsidiary permitted to be incurred under this Agreement (provided that such
restrictions shall apply only to such Foreign Subsidiary), (ii) existing on the
Original Closing Date identified on Schedule 6.10 (and shall not apply to any
extension or renewal of, or any amendment or modification expanding the scope
of, any such restriction or condition), (iii) contained in agreements relating
to the sale of a Restricted Subsidiary pending such sale; provided such
restrictions and conditions apply only to the Restricted Subsidiary that is to
be sold and such sale is permitted hereunder, (iv) contained in agreements
relating to the acquisition of property; provided that such restrictions and
conditions apply only to the property so acquired and were not created in
connection with or in anticipation of such acquisitions, (v) imposed on any
Consolidated Practice by (and for the benefit of) any Loan Party and (vi)
imposed by any customary provisions restricting assignment of any agreement
entered into the ordinary course of business.

 

(c)                 The foregoing clause (a)(i) shall not apply to restrictions
or conditions (i) 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 (ii) imposed by customary
provisions in leases restricting the assignment thereof.

 

(d)                The foregoing clause (a)(ii) shall not apply (x) to customary
provisions in joint venture agreements relating to purchase options, rights of
first refusal or call or similar rights of a third party that owns Equity
Interests in such joint venture or (y) to customary restrictions on leases,
subleases, licenses, cross-licenses, sublicenses or asset sale agreements
otherwise permitted hereby so long as such restrictions relate solely to the
property interest, rights or the assets subject thereto.

 

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(e)                 For purposes of determining compliance with this Section
6.10, (i) the priority of any preferred stock in receiving dividends or
liquidating distributions prior to dividends or liquidating distributions being
paid on common stock shall not be deemed a restriction on the ability to make
distributions on Equity Interests and (ii) the subordination of loans or
advances made to the Borrower or a Restricted Subsidiary of the Borrower to
other Indebtedness incurred by the Borrower or any such Restricted Subsidiary
shall not be deemed a restriction on the ability to make loans or advances.

 

SECTION 6.11       Amendment of Material Documents. The Borrower will not, and
will not permit any Restricted Subsidiary to, amend, modify or waive any of its
rights under (a) [reserved], (b) the documentation governing any Permitted
Securities or (c) its certificate of incorporation, by-laws or other
organizational documents, in each case to the extent such amendment,
modification or waiver would be materially adverse to the Lenders.

 

SECTION 6.12       [Reserved].

 

SECTION 6.13       Fiscal Year. The Borrower will not, and will not permit any
Restricted Subsidiary to, change its fiscal year.

 

ARTICLE VII

 

Events of Default

 

SECTION 7.01       Events of Default. If any of the following events (any such
event, an “Event of Default”) shall occur:

 

(a)      the Borrower shall fail to pay any principal of any Loan 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 otherwise,

 

(b)      the Borrower shall fail to pay any interest on any Loan or any fee or
any other amount (other than an amount referred to in paragraph (a) of this
Section 7.01) payable under this Agreement or any other Loan Document, when and
as the same shall become due and payable, and such failure shall continue
unremedied for a period of five (5) Business Days,

 

(c)      any representation or warranty made or deemed made by or on behalf of
Holdings, the Borrower or any Subsidiary Loan Party in or in connection with any
Loan Document or any amendment or modification thereof or waiver thereunder, or
in any report, certificate, financial statement or other document furnished
pursuant to or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, shall prove to have been incorrect in
any material respect (except to the extent any such representation or warranty
is qualified by “materially”, “Material Adverse Effect” or a similar term, in
which case such representation or warranty shall prove to have been incorrect in
any respect) when made or deemed made,

 

(d)      the Borrower or, in the case of Section 6.03, Holdings, fails to (or,
to the extent applicable, fails to cause any Restricted Subsidiary to) observe
or perform any covenant, condition or agreement contained in Section 5.02, 5.04
(solely with respect to the existence of the Borrower), 5.11 or in Article VI,

 

(e)      Holdings, the Borrower or any Subsidiary Loan Party shall fail to
observe or perform any covenant, condition or agreement contained in any Loan
Document (other than those specified in paragraph (a), (b) or (d) of this
Section 7.01), and such failure shall continue unremedied for a period of 30
days after receipt by the Borrower of notice thereof from the Administrative
Agent (which notice will be given at the request of any Lender),

 

(f)      Holdings, the Borrower or any Restricted Subsidiary shall fail to make
any payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness (other than Indebtedness hereunder), when
and as the same shall become due and payable (after giving effect to any
applicable grace period),

 

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(g)      any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with
the giving of notice, the lapse of time or both) 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
(other than, with respect to Indebtedness consisting of Swap Agreements, as a
result of any termination events or equivalent events (other than any additional
termination events (or equivalent events)) and not as a result of any other
default thereunder by any Loan Party); (I) provided that this paragraph (g)
shall not apply to Secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets (to the extent not
prohibited under this Agreement) securing such Indebtedness; provided, further,
that such failure is unremedied and is not waived by the holders of such
Indebtedness prior to any termination of the Commitments or acceleration of the
Loans hereunder; and (II) provided that the Financial Covenant (as defined in
the Existing Credit Agreement) is subject to cure pursuant to Section 7.02 of
the Existing Credit Agreement (as in effect on the Closing Date); provided
further, that the Borrower’s failure to comply with the Financial Covenant shall
not constitute an Event of Default with respect to any Term Loans hereunder
unless and until the Required Revolving Lenders (as defined in the Existing
Credit Agreement) shall have terminated their Revolving Commitments (as defined
in the Existing Credit Agreement) and declared all amounts outstanding
thereunder to be immediately due and payable hereunder,

 

(h)      an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of Holdings, the Borrower or any Restricted Subsidiary or its debts, or
of a substantial part of its assets, under any federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect
or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Holdings, the Borrower or any Restricted
Subsidiary or for a substantial part of its assets, and, in any such case, 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,

 

(i)      Holdings, the Borrower or any Restricted Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, (ii) consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in paragraph (h) of this Section 7.01,
(iii) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for Holdings, the Borrower or any
Restricted Subsidiary or for a substantial part of its assets, (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 or
(vi) take any formal action for the purpose of effecting any of the foregoing,

 

(j)      one or more judgments for the payment of money (to the extent not paid
or covered by independent third-party insurance as to which the insurer has been
notified of such judgment or order and has not denied coverage) in an aggregate
amount in excess of $20,000,000 shall be rendered against Holdings, the
Borrower, any Restricted Subsidiary or any combination thereof 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 attach or levy upon any assets of Holdings, the
Borrower or any Restricted Subsidiary to enforce any such judgment,

 

(k)      (i) an ERISA Event occurs that, in the opinion of the Required Lenders,
when taken together with all other ERISA Events that have occurred, has resulted
or would reasonably be expected to result in liability of a Loan Party or an
ERISA Affiliate in an aggregate amount which would reasonably be expected to
result in a Material Adverse Effect, or (ii) a Loan Party or any ERISA Affiliate
fails to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan that has resulted or would reasonably be
expected to result in liability of a Loan Party or an ERISA Affiliate in an
aggregate amount which would reasonably be expected to result in a Material
Adverse Effect,

 

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(l)      any Lien purported to be created under any Security Document shall
cease to be, or shall be asserted by any Loan Party not to be, a valid and
perfected Lien on any Collateral with a fair value in excess of $20,000,000,
with the priority required by the applicable Security Document, except (i) as a
result of the sale or other disposition of the applicable Collateral in a
transaction permitted under the Loan Documents or (ii) as a result of the
Administrative Agent’s failure to maintain possession of any stock certificates,
promissory notes or other instruments delivered to it under the Collateral
Agreement,

 

(m)      any Loan Document shall for any reason be asserted by any Loan Party
not to be a legal, valid and binding obligation of any party thereto,

 

(n)      the Guarantees of the Obligations by Holdings and the Subsidiary Loan
Parties pursuant to the Collateral Agreement shall cease to be in full force and
effect (other than in accordance with the terms of the Loan Documents) or shall
be asserted by Holdings, the Borrower or any Subsidiary Loan Party not to be in
effect or not to be legal, valid and binding obligations, or

 

(o)      a Change of Control shall occur,

 

then, and in every such event (other than an event with respect to the Borrower
described in paragraph (h) or (i) of this Section 7.01), 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 the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable
in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower; and in case of any event with respect to the Borrower described in
paragraph (h) or (i) of this Section 7.01, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued
hereunder, shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower.

 

SECTION 7.02       [Reserved].

 

SECTION 7.03       Exclusion of Immaterial Subsidiaries. Solely for the purposes
of determining whether a Default has occurred under clause (h) or (i) of Section
7.01, any reference in any such clause to any Restricted Subsidiary shall be
deemed not to include any Restricted Subsidiary affected by any event or
circumstance referred to in any such clause that did not, as of the last day of
the fiscal quarter of the Borrower most recently ended, have assets with a value
in excess of 5% of the Total Assets of the Borrower and the Restricted
Subsidiaries or 5% of the total revenues of the Borrower and the Restricted
Subsidiaries as of such date; provided that if it is necessary to exclude more
than one Restricted Subsidiary from clause (h) or (i) of Section 7.01 pursuant
to this Section 7.03 in order to avoid an Event of Default thereunder, all
excluded Restricted Subsidiaries shall be considered to be a single consolidated
Restricted Subsidiary for purposes of determining whether the condition
specified above is satisfied.

 

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ARTICLE VIII

 

The Agents

 

SECTION 8.01       The Agents. Each of the Lenders hereby irrevocably appoints
the Administrative Agent and Collateral Agent as its agent and authorizes the
Administrative Agent and Collateral Agent to take such actions on its behalf and
to exercise such powers as are delegated to the Administrative Agent and
Collateral Agent by the terms of the Loan Documents, together with such actions
and powers as are reasonably incidental thereto. For purposes of this Article
VIII, all references to the Administrative Agent shall be deemed to be
references to both the Administrative Agent and the Collateral Agent. The
Administrative Agent shall act as the Collateral Agent under the Loan Documents.

 

The bank serving as the Administrative 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 the Administrative 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 the Administrative Agent hereunder, and without any
duty to account therefor to the Lenders.

 

The Administrative Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) the Administrative Agent shall not be subject to any
fiduciary or other implied duties to any Lender, regardless of whether a Default
or Event of Default has occurred and is continuing, (b) each Lender agrees (i)
that the use of the term “agent” herein or in any other Loan Document with
reference to the Administrative Agent is not intended to connote any fiduciary
duty or other implied or express obligations arising under agency doctrine of
any applicable law, and is used solely as a matter of market custom to reflect
an exclusively administrative relationship between contracting parties, and (ii)
that it will not assert any claim against the Administrative Agent based on an
alleged breach of fiduciary duty by the Administrative Agent in connection with
this Agreement and the transactions contemplated hereby, (c) the Administrative
Agent shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated by the Loan Documents that the Administrative Agent is required to
exercise in writing as directed by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02), and (d) except as expressly set forth in the Loan
Documents, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to
Holdings, the Borrower or any of the Subsidiaries that is communicated to or
obtained by the bank serving as Administrative Agent or any of its Affiliates in
any capacity. The Administrative Agent shall not 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 9.02) or in the absence of its own
gross negligence or willful misconduct. The Administrative Agent shall be deemed
not to have knowledge of any Default unless and until written notice thereof is
given to the Administrative Agent by Holdings, the Borrower or a Lender, and the
Administrative Agent shall not 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 the Administrative Agent.

 

The Administrative 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. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative 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.

 

The Administrative Agent may perform any and all its duties and exercise its
rights and powers by or through any one or more subagents appointed by the
Administrative Agent; provided, however, that the Loan Parties shall make all
payments under any Loan Document directly to the Administrative Agent. The
Administrative Agent and any such subagent may perform any and all its duties
and exercise its rights and powers through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to any such
subagent and to the Related Parties of each Administrative Agent and any such
subagent, and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as Administrative Agent.

 

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The Administrative Agent may resign at any time by notifying the Lenders and the
Borrower. Upon any such resignation, the Required Lenders shall have the right,
in consultation with the Borrower, to appoint a successor who shall either be
(i) a “U.S. person” and a “financial institution” within the meaning of United
States Treasury Regulations Section 1.1441-1 or (ii) a U.S. branch of a non-U.S.
financial institution that has agreed to be treated as a “United States person”
within the meaning of Section 7701(a)(30) of the Code. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the Administrative Agent’s
resignation hereunder, the provisions of this Article and Section 9.03 shall
continue in effect for the benefit of such retiring Administrative Agent, its
subagents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while it was acting as Administrative
Agent.

 

Each Lender (i) represents that it is engaged in making, acquiring or holding
commercial loans in the ordinary course of its business, and that it is capable
of evaluating and understanding the terms, conditions and risks of becoming a
Lender under this Agreement, including in the context of related transactions to
be entered into by the Borrower, and multiple roles to be performed by the
Administrative Agent or its Affiliates, in connection herewith or therewith, and
(ii) acknowledges that it has, independently and without reliance upon the
Administrative Agent, any other Lender or any Related Party of any of the
foregoing, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement, and will, independently and without reliance upon the Administrative
Agent, any other Lender or any Related Party of any of the foregoing, 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, any other Loan Document or related agreement
or any document furnished hereunder or thereunder.

 

Each Lender irrevocably agrees that the Administrative Agent may enter into any
and all documents with respect to Collateral and the rights of the Secured
Parties with respect thereto (including the First Lien Intercreditor Agreement
or any Junior Lien Intercreditor Agreement, if applicable) as contemplated by
and in accordance with the provisions of this Agreement and the Security
Documents without any further consent from any Secured Party, which terms shall
be reasonably satisfactory to Administrative Agent.

 

SECTION 8.02       Withholding Taxes. To the extent required by any applicable
laws, the Administrative Agent may withhold from any payment to any Lender an
amount equivalent to any applicable withholding Tax. Without limiting or
expanding the provisions of Section 2.17, each Lender shall indemnify and hold
harmless the Administrative Agent against, within 10 days after written demand
therefor, any and all Taxes and any and all related losses, claims, liabilities
and expenses (including fees, charges and disbursements of any counsel for the
Administrative Agent) incurred by or asserted against the Administrative Agent
by the IRS or any other Governmental Authority as a result of the failure of the
Administrative Agent to properly withhold Tax from amounts paid to or for the
account of any Lender for any reason (including, without limitation, because the
appropriate form was not delivered or not properly executed, or because such
Lender failed to notify the Administrative Agent of a change in circumstance
that rendered the exemption from, or reduction of withholding Tax ineffective).
A certificate as to the amount of such payment or liability delivered to any
Lender by the Administrative Agent shall be conclusive absent manifest error.
Each Lender hereby authorizes the Administrative Agent to set off and apply any
and all amounts at any time owing to such Lender under this Agreement or any
other Loan Document against any amount due the Administrative Agent under this
Section 8.02. The agreements in this Section 8.02 shall survive the resignation
and/or replacement of the Administrative Agent, any assignment of rights by, or
the replacement of, a Lender, the termination of the Commitments and the
repayment, satisfaction or discharge of all other Obligations.

 

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SECTION 8.03       Certain ERISA Matters. (a) Each Lender (x) represents and
warrants, as of the date such Person became a Lender party hereto, to, and (y)
covenants, from the date such Person became a Lender party hereto to the date
such Person ceases being a Lender party hereto, for the benefit of the
Administrative Agent and not, for the avoidance of doubt, to or for the benefit
of the Borrower or any other Loan Party, that at least one of the following is
and will be true:

 

(i) such Lender is not using “plan assets” (within the meaning of Section 3(42)
of ERISA or otherwise) of one or more Benefit Plans with respect to such
Lender’s entrance into, participation in, administration of and performance of
the Loans, the Commitments or this Agreement,

 

(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14
(a class exemption for certain transactions determined by independent qualified
professional asset managers), PTE 95-60 (a class exemption for certain
transactions involving insurance company general accounts), PTE 90-1 (a class
exemption for certain transactions involving insurance company pooled separate
accounts), PTE 91-38 (a class exemption for certain transactions involving bank
collective investment funds) or PTE 96-23 (a class exemption for certain
transactions determined by in-house asset managers) is applicable with respect
to such Lender’s entrance into, participation in, administration of and
performance of the Loans, the Commitments and this Agreement,

 

(iii) (A) such Lender is an investment fund managed by a “Qualified Professional
Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified
Professional Asset Manager made the investment decision on behalf of such Lender
to enter into, participate in, administer and perform the Loans, the Commitments
and this Agreement, (C) the entrance into, participation in, administration of
and performance of the Loans, the Commitments and this Agreement satisfies the
requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to
the best knowledge of such Lender, the requirements of subsection (a) of Part I
of PTE 84-14 are satisfied with respect to such Lender’s entrance into,
participation in, administration of and performance of the Loans, the
Commitments and this Agreement, or

 

(iv) such other representation, warranty and covenant as may be agreed in
writing between the Administrative Agent, in its sole discretion, and such
Lender.

 

(b) In addition, unless either (1) sub-clause (i) in the immediately preceding
clause (a) is true with respect to a Lender or (2) a Lender has provided another
representation, warranty and covenant in accordance with sub-clause (iv) in the
immediately preceding clause (a), such Lender further (x) represents and
warrants, as of the date such Person became a Lender party hereto, to, and (y)
covenants, from the date such Person became a Lender party hereto to the date
such Person ceases being a Lender party hereto, for the benefit of, the
Administrative Agent and not, for the avoidance of doubt, to or for the benefit
of the Borrower or any other Loan Party, that the Administrative Agent is not a
fiduciary with respect to the assets of such Lender involved in such Lender’s
entrance into, participation in, administration of and performance of the Loans,
the Commitments and this Agreement (including in connection with the reservation
or exercise of any rights by the Administrative Agent under this Agreement, any
Loan Document or any documents related hereto or thereto).

 

ARTICLE IX

 

Miscellaneous

 

SECTION 9.01       Notices.

 

(a)                 Except in the case of notices and other communications
expressly permitted to be given by telephone (and subject to clause (b) below),
all notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

 

(i)               if to the Borrower, to Concentra Inc., 4714 Gettysburg Rd.,
Mechanicsburg, PA 17055, Attention: Joel T. Veit (Telecopy No. (717) 303-0824),

 

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(ii)               if to the Administrative Agent, to Select Medical
Corporation, 4714 Gettysburg Rd., Mechanicsburg, PA 17055, Attention: Joel T.
Veit (Telecopy No. (717) 303-0824),

 

(iii)               [reserved],

 

(iv)               [reserved],

 

(v)               if to the Collateral Agent, to Select Medical Corporation,
4714 Gettysburg Rd., Mechanicsburg, PA 17055, Attention: Joel T. Veit (Telecopy
No. (717) 303-0824), and

 

(vi)               if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.

 

(b)                Notices and other communications to the Lenders hereunder may
be delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Article II unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications. Unless the Administrative Agent
otherwise prescribes, (i) notices and other communications sent to an e-mail
address shall be deemed received upon the sender’s receipt of an acknowledgement
from the intended recipient (such as by the “return receipt requested” function,
as available, return e-mail or other written acknowledgement), and (ii) notices
or communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient, at its e-mail
address as described in the foregoing clause (i), of notification that such
notice or communication is available and identifying the website address
therefor; provided that, for both clauses (i) and (ii) above, if such notice,
email or other communication is not sent during the normal business hours of the
recipient, such notice or communication shall be deemed to have been sent at the
opening of business on the next Business Day for the recipient.

 

(c)                 Any party hereto may change its address or telecopy number
for notices and other communications hereunder by notice to the Administrative
Agent (and, in the case of the Administrative Agent, by written notice to the
Borrower). 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.

 

SECTION 9.02       Waivers; Amendments.

 

(a)                 No failure or delay by the Administrative Agent, the
Collateral Agent, or any Lender in exercising any right or power 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 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 any Loan Document or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section 9.02, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent, any Lender or the Collateral Agent may have had notice or
knowledge of such Default at the time.

 

(b)                Except as provided in Section 2.20 with respect to an
Additional Credit Extension Amendment (or to give effect to any restatement of
this Agreement, the substantive terms of which are otherwise permitted hereby),
neither this Agreement nor any other Loan Document nor any provision hereof or
thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by
Holdings, the Borrower and the Required Lenders or, in the case of any other
Loan Document, pursuant to an agreement or agreements in writing entered into by
the Administrative Agent and the Loan Party or Loan Parties that are parties
thereto, in each case with the consent of the Required Lenders; provided that no
such agreement shall

 

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(i)               increase the Commitment of any Lender without the written
consent of such Lender (it being understood that a waiver of any condition
precedent set forth in Section 4.02 or of any Default or mandatory prepayment or
mandatory reduction of any Commitments shall not constitute an increase of any
Commitment of any Lender),

 

(ii)               reduce the principal amount of any Loan or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written
consent of each Lender directly and adversely affected thereby, it being
understood that any change to the definition of “First Lien Net Leverage Ratio”,
“Secured Net Leverage Ratio” or “Total Net Leverage Ratio” or, in each case, in
the component definitions thereof shall not constitute a reduction in any rate
of interest; provided that, for the avoidance of doubt, only the consent of the
Required Lenders shall be necessary to amend Section 2.13(c) or to waive any
obligation of the Borrower to pay interest thereunder,

 

(iii)               postpone the maturity of any Loan, or any scheduled date of
payment of the principal amount of any Loan, or any date for the payment of any
interest or fees payable hereunder, or reduce the amount of, waive or excuse any
such payment, or postpone the scheduled date of expiration of any Commitment,
without the written consent of each Lender directly and adversely affected
thereby,

 

(iv)               change Section 2.18(b) or (c) in a manner that would alter
the pro rata sharing of payments required thereby, without the written consent
of each Lender adversely affected thereby,

 

(v)               change any of the provisions of this Section 9.02 or the
percentage set forth in the definition of “Required Lenders” or any other
provision of any Loan Document specifying the number or percentage of Lenders
(or Lenders of any Class) required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender (or each Lender of such Class, as
applicable),

 

(vi)               release Holdings or any Subsidiary Loan Party from its
Guarantee under the Collateral Agreement (except as provided in Section 9.15 or
in the Collateral Agreement) or limit its liability in respect of such
Guarantee, without the written consent of each Lender,

 

(vii)               release all or substantially all the Collateral from the
Liens of the Security Documents (except as provided in Section 9.15 or in the
Collateral Agreement), without the written consent of each Lender,

 

(viii)               change any 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 any Class differently than those holding Loans of any other
Class, without the written consent of Lenders holding a majority in interest of
the outstanding Loans and unused Commitments of each adversely affected Class,

 

(ix)               [reserved], or

 

(x)               [reserved],

 

provided, further, that (A) no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent without the prior
written consent of the Administrative Agent, and (B) any waiver, amendment or
modification of this Agreement that by its terms affects the rights or duties
under this Agreement of a particular Class of Lenders (but not any other
Lenders) may be effected by an agreement or agreements in writing entered into
by Holdings, the Borrower and requisite percentage in interest of the affected
Class of Lenders that would be required to consent thereto under this Section
9.02(b) if such Class of Lenders were the only Class of Lenders hereunder at the
time. No Lender consent is required to effect an Additional Credit Extension
Amendment (except as expressly provided in Sections 2.20 or 2.21 as applicable).
In connection with any proposed amendment, modification, waiver or termination
(a “Proposed Change”) requiring the consent of all Lenders or all adversely
affected Lenders, if the consent of the Required Lenders to such Proposed Change
is obtained, but the consent to such Proposed Change of other Lenders whose
consent is required is not obtained (any such Lender whose consent is not
obtained as described in this Section 9.02(b) being referred to as a
“Non-Consenting Lender”), then, at the Borrower’s request, any Lender assignee
that is reasonably acceptable to the Administrative Agent shall have the right
to purchase from such Non-Consenting Lender, and such Non-Consenting Lender
agrees that it shall, upon the Borrower’s request, sell and assign to such
Lender assignee, at no expense to such Non-Consenting Lender, all the
Commitments and Loans of such Non-Consenting Lender for an amount equal to the
principal balance of all Loans held by such Non-Consenting Lender and all
accrued interest and fees with respect thereto through the date of sale
(including amounts under Sections 2.15, 2.16 and 2.17), such purchase and sale
to be consummated pursuant to an executed Assignment and Assumption in
accordance with Section 9.04(b) (which Assignment and Assumption need not be
signed by such Non-Consenting Lender); provided, that, if any such
Non-Consenting Lender does not execute and deliver to the Administrative Agent a
duly executed Assignment and Assumption reflecting such replacement within two
(2) Business Days of the date on which the Lender assignee executes and delivers
such Assignment and Assumption to such Non-Consenting Lender, then such
Non-Consenting Lender shall be deemed to have executed and delivered such
Assignment and Assumption without any action on the part of the Non-Consenting
Lender.

 

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(c)                 Notwithstanding the provisions of clause (b), this Agreement
may be amended (or amended and restated) with the written consent of the
Required Lenders, the Administrative Agent and the Borrower (i) to add one or
more additional credit facilities to this Agreement and to permit the extensions
of credit from time to time thereunder and the accrued interest and fees in
respect thereof to share ratably in the benefits of this Agreement and the other
Loan Documents with the Tranche B Term Loans and the accrued interest and fees
in respect thereof, and (ii) to include appropriately the Lenders holding such
credit facilities in any determination of the Required Lenders. In addition,
this Agreement may be amended with the written consent of the Administrative
Agent, the Borrower and the Lenders providing the relevant Replacement Term
Loans to permit the refinancing of all outstanding Term Loans of a Class with a
replacement term loan tranche hereunder (the “Replacement Term Loans”); provided
that (i) the aggregate principal amount of such Replacement Term Loans shall not
exceed the aggregate principal amount of such Refinancing Term Loans, (ii) the
Applicable Rate for such Replacement Term Loans shall not be higher than the
Applicable Rate for such Refinancing Term Loans, (iii) the Weighted Average Life
to Maturity of such Replacement Term Loans shall not be shorter than the
Weighted Average Life to Maturity of such Refinancing Term Loans at the time of
such refinancing (except to the extent of nominal amortization for periods where
amortization has been eliminated as a result of prepayment of the Refinancing
Term Loans) and (iv) all other terms applicable to such Replacement Term Loans
shall be substantially identical to, or less favorable to the Lenders providing
such Replacement Term Loans than, those applicable to such Refinancing Term
Loans, except to the extent necessary to provide for covenants and other terms
applicable to any period after the Latest Maturity Date in effect immediately
prior to such refinancing.

 

(d)                Notwithstanding anything in this Section 9.02 to the
contrary, (a) technical and conforming modifications to the Loan Documents may
be made with the consent of the Borrower and the Administrative Agent to the
extent necessary (i) to integrate any Incremental Term Loans or any Extended
Term Loans or (ii) to cure any ambiguity, omission, defect or inconsistency and
(b) without the consent of any Lender, the Loan Parties and the Administrative
Agent or any collateral agent may (in their respective sole discretion, or
shall, to the extent required by any Loan Document) enter into (x) any
amendment, modification or waiver of any Loan Document, or enter into any new
agreement or instrument, to effect the granting, perfection, protection,
expansion or enhancement of any security interest in any Collateral or
additional property to become Collateral for the benefit of the Secured Parties
or as required by local law to give effect to, or protect any security interest
for benefit of the Secured Parties, in any property or so that the security
interests therein comply with applicable law or this Agreement or in each case
to otherwise enhance the rights or benefits of any Lender under any Loan
Document or (y) the First Lien Intercreditor Agreement or any Junior Lien
Intercreditor Agreement.

 

SECTION 9.03       Expenses; Indemnity; Damage Waiver.

 

(a)                 The Borrower shall pay or reimburse (i) all reasonable and
documented out-of-pocket expenses incurred by the Administrative Agent and the
Collateral Agent, including the reasonable fees, charges and disbursements of
counsel for the Agents (within 30 days of a written demand therefor, together
with backup documentation supporting such reimbursement request), in connection
the preparation, execution, delivery and administration of the Loan Documents or
any amendments, modifications or waivers of the provisions thereof (but,
limited, in the case of legal fees and expenses, to the reasonable and
documented fees, disbursements and other charges of one counsel to the
Administrative Agent, and, if necessary, of one local counsel in any relevant
jurisdiction) and (ii) all reasonable and documented out-of-pocket expenses
incurred by the Administrative Agent and the Lenders (within 30 days of a
written demand therefor, together with backup documentation supporting such
reimbursement request) incurred in connection with the enforcement of any rights
or remedies under this Agreement or the other Loan Documents (but, limited, in
the case of legal fees and expenses, to the reasonable and documented fees,
disbursements and other charges of one counsel to the Administrative Agent and
the Lenders taken as a whole, and, if necessary, of one local counsel to the
Administrative Agent and the Lenders taken as a whole in any relevant
jurisdiction and one additional counsel in each relevant jurisdiction for each
group of similarly situated parties in the event of a conflict of interest). If
any Loan Party fails to pay when due any costs, expenses or other amounts
payable by it hereunder or under any Loan Document, such amount may be paid on
behalf of such Loan Party by the Administrative Agent in its discretion. For the
avoidance of doubt, this Section 9.03(a) shall not apply to Taxes, except any
Taxes that represent costs and expenses arising from any non-Tax claim.

 

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(b)                The Borrower shall indemnify the Administrative Agent, the
Collateral Agent and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an “Indemnitee”), and hold each
Indemnitee harmless, from and against any and all losses, claims, damages,
liabilities or out-of-pocket expenses incurred by or asserted against any
Indemnitee (but, limited, in the case of legal fees and expenses, to the
reasonable and documented fees, disbursements and other charges of one counsel
to the Administrative Agent and the Lenders taken as a whole, and, if necessary,
of one local counsel to the Administrative Agent and the Lenders taken as a
whole in any relevant jurisdiction and one additional counsel in each relevant
jurisdiction for each group of similarly situated parties in the event of a
conflict) incurred in connection with, or as a result of the execution or
delivery of any Loan Document or any other agreement or instrument contemplated
hereby, the performance by the parties to the Loan Documents of their respective
obligations thereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or the use of the proceeds
therefrom, (iii) any actual or alleged presence or Release or threat of Release
of Hazardous Materials on, at, under or from any Mortgaged Property or any other
property currently or formerly owned, leased or operated by the Borrower or any
of its Subsidiaries, or any actual or alleged Environmental Liability related in
any way to the Borrower or any of its Subsidiaries or their respective
properties or operations, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such liabilities, losses, damages, claims or
out-of-pocket expenses resulted from (x) the gross negligence, bad faith or
willful misconduct of such Indemnitee or of any of its Related Parties, as
determined by a final non-appealable judgment of a court of competent
jurisdiction, (y) a material breach of any obligations under any Loan Document
by such Indemnitee or of any of its Related Parties, as determined by a final
non-appealable judgment of a court of competent jurisdiction or (z) any dispute
solely among Indemnitees other than any claims against an Indemnitee in its
capacity or in fulfilling its role as an administrative agent or arranger or any
similar role under this Agreement and other than any claims arising out of any
act or omission of the Borrower or any of its Affiliates (in the case of any
such act or omission, as determined in a final and non-appealable judgment of a
court of competent jurisdiction). All amounts due under this Section 9.03(b)
shall be paid within 30 days after written demand therefor (together with backup
documentation supporting such reimbursement request); provided that, that such
Indemnitee shall promptly refund and return such amounts to the extent that
there is a final non-appealable judicial determination by a court of competent
jurisdiction that such Indemnitee was not entitled to indemnification rights
with respect to such payment pursuant to the express terms of this
Section 9.03(b).

 

(c)                 To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent or the Collateral Agent
under paragraph (a) or (b) of this Section 9.03, each Lender severally agrees to
pay to the Administrative Agent or the Collateral Agent, as applicable, 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 applicable, was incurred by or asserted against
the Administrative Agent or the Collateral Agent in its capacity as such. For
purposes hereof, a Lender’s “pro rata share” shall be determined based upon its
share of the aggregate outstanding Term Loans, and unused Commitments at the
time.

 

(d)                To the extent permitted by applicable law, neither Holdings
nor the Borrower shall assert, and each 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 the use of the
proceeds thereof.

 

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SECTION 9.04       Successors and Assigns.

 

(a)                 The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that (i) the Borrower may not assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (except as permitted by Section 6.03) (and any
attempted assignment or transfer by the Borrower without such consent shall be
null and void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section 9.04. Nothing in
this Agreement, express or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants (to the extent provided in paragraph (c) of this
Section 9.04) and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

 

(b)                (i)      Subject to the limitations set forth in paragraph
(a) above and the conditions set forth in paragraph (b)(ii) below, any Lender
may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it) with the prior written consent (such
consent not to be unreasonably withheld or delayed) of:

 

(1)                the Borrower; provided that the Borrower shall be deemed to
have consented to an assignment unless it shall have objected thereto by written
notice to the Administrative Agent within seven Business Days after having
received notice thereof; provided further that no consent of the Borrower shall
be required for an assignment to a Lender, an Affiliate of a Lender, an Approved
Fund or, if an Event of Default pursuant to clauses (a), (b), (h) and (i) under
Section 7.01 has occurred and is continuing, any other assignee,

 

(2)                the Administrative Agent; provided that no consent of the
Administrative Agent shall be required for an assignment of all or any portion
of a Term Loan to a Lender, an Affiliate of a Lender or an Approved Fund, and

 

(3)                [reserved].

 

(ii)      Assignments shall be subject to the following conditions:

 

(1)                except in the case of an assignment of the entire remaining
amount of the assigning Lender’s Commitment or Loans of any Class, the amount of
the Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent) shall not be less than an
amount of $500,000 (in the case of a Term Loan), and shall be in increments of
an amount of $500,000 in excess thereof (or, in each case, if less, all of such
Lender’s Commitment or Loans of the applicable Class) unless each of the
Borrower and the Administrative Agent otherwise consent; provided that such
assignments shall be aggregated in respect of each Lender and its Affiliates or
Approved Funds, if any,

 

(2)                each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations under
this Agreement; provided that this clause shall not be construed to prohibit
assignment of a proportionate part of all the assigning Lender’s rights and
obligations in respect of one Class of Commitments or Loans,

 

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(3)                the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500,

 

(4)                the assignee, if it shall not be a Lender, shall deliver to
the Administrative Agent an Administrative Questionnaire, and

 

(5)                no assignment may be made to (i) a Disqualified Institution
without the prior written consent of the Borrower, (ii) a natural person or
(iii) [reserved].

 

For purposes of this Section 9.04(b):

 

“Approved Fund” means (a) a CLO and (b) with respect to any Lender that is a
fund which invests in bank loans and similar extensions of credit, any other
fund that invests in bank loans and similar extensions of credit and is managed
or advised by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.

 

“CLO” means any entity (whether a corporation, partnership, trust or otherwise)
that is engaged in making, purchasing, holding or otherwise investing in bank
loans and similar extensions of credit in the ordinary course and is
administered or managed by a Lender or an Affiliate of such Lender.

 

(iii)      Subject to acceptance and recording thereof pursuant to paragraph
(b)(iv) of this Section 9.04, from and after the effective date specified in
each Assignment and Assumption the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment and Assumption,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all the
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 Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this Section 9.04 shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section 9.04.

 

(iv)      The Administrative Agent, acting solely for this purpose as an agent
of the Borrower, shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the 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 and
the Lenders shall treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender for all purposes of the Loan Documents,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower, and solely with respect to their respective
interests by any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

 

(v)      Upon its receipt of a duly completed Assignment and Assumption executed
by an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section 9.04
and any written consent to such assignment required by paragraph (b) of this
Section 9.04, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.

 

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(c)                 Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a “Participant”) in all or a portion of such Lender’s rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
owing to it); provided that (A) such Lender’s obligations under this Agreement
shall remain unchanged, (B) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (C) the
Borrower, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.

 

(i)               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 Participant and the principal
amounts (and related interest amounts) 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 or its other obligations under this Agreement) except to the
extent that the relevant parties, acting reasonably and in good faith, determine
that such disclosure is necessary to establish that such Commitment, Loan or
other obligation is in registered form under Section 5f.103-1(c) of the United
States Treasury Regulations. Unless otherwise required by the IRS, any
disclosure required by the foregoing sentence shall be made by the relevant
Lender directly and solely to the IRS. The entries in the Participant Register
shall be conclusive absent manifest error, and the Borrower, the Administrative
Agent and each Lender shall treat each person whose name is recorded in the
Participant Register as the owner of the participation in question for all
purposes of this Agreement notwithstanding any notice to the contrary.

 

(ii)               Subject to paragraph (c)(ii) of this Section 9.04, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.15, 2.16 and 2.17 (subject to the requirements and limitations of
such Sections, provided that any forms required to be provided by any
Participant pursuant to Section 2.17(e) shall be provided solely to the
applicable Lender) to the same extent as if it were a Lender and had acquired
its interest by assignment pursuant to paragraph (b) of this Section 9.04;
provided that a Participant shall not be entitled to receive any greater payment
under Section 2.15 or 2.17 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower’s
prior written consent not to be unreasonably withheld or delayed. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 9.08 as though it were a Lender; provided such Participant agrees to be
subject to Section 2.18(c) as though it were a Lender.

 

(iii)               Any Lender may at any time pledge, assign or grant a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge, assignment or grant to
secure obligations to a Federal Reserve Bank, and this Section 9.04 shall not
apply to any such pledge, assignment or grant of a security interest; provided
that no such pledge, assignment or grant of a security interest shall release a
Lender from any of its obligations hereunder or substitute any such pledge or
assignee for such Lender as a party hereto. Without limiting the foregoing, each
of the parties hereto acknowledges and agrees that Select Medical Corporation
has, and Select Medical Corporation and any other Secured Party may at any time,
pledge, assign or grant a security interest in all its rights under this
Agreement and the other Loan Documents (including, for the avoidance of doubt,
the Loans and other Obligations owing to it) to JPMorgan Chase Bank, N.A., as
administrative agent and or collateral agent (and its successors and assigns in
such capacities) under the Credit Agreement, dated as of March 6, 2017 (as
amended, restated, replaced, refinanced, supplemented or otherwise modified from
time to time), and none of the requirements, restrictions or conditions set
forth in this Section 9.04 shall apply to any such pledge, assignment or grant.

 

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(iv)               Notwithstanding any other provision of this Agreement, no
Lender will assign its rights and obligations under this Agreement, or sell
participations in its rights and/or obligations under this Agreement, to any
Person who is (i) a Disqualified Institution (with respect to participations to
the extent the identity of such Disqualified Institution has been made available
in writing to all Lenders), (ii) a natural person, (iii) a Person listed on the
Specially Designated Nationals and Blocked Persons List maintained by OFAC
and/or on any other similar list maintained by OFAC pursuant to any authorizing
statute, executive order or regulation, (iv) a Person either (A) included within
the term “designated national” as defined in the Cuban Assets Control
Regulations, 31 C.F.R. Part 515 or (B) designated under Section 1(a), 1(b), 1(c)
or 1(d) of Executive Order No. 13224, 66 Fed. Reg. 49079 (published September
25, 2001) or similarly designated under any related enabling legislation or any
other similar executive orders or (v) [reserved].

  

(d)                [Reserved].

 

(e)                 [Reserved].

 

(f)                  [Reserved].

 

(g)                [Reserved].

 

SECTION 9.05       Survival. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall have independent significance
and be considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of the Loan Documents and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under this Agreement is outstanding and
unpaid and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Commitments or the termination of this Agreement or any
provision hereof.

 

SECTION 9.06       Counterparts; Integration; Effectiveness. 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. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.

 

SECTION 9.07       Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof, and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

 

SECTION 9.08       Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender and each of its Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted 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 obligations at any time owing
by such Lender or Affiliate 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 held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement and although such
obligations may be unmatured. The applicable Lender shall notify the Borrower
and the Administrative Agent of such setoff or application; provided that any
failure to give or any delay in giving such notice shall not affect the validity
of any such setoff or application under this Section 9.08. The rights of each
Lender under this Section 9.08 are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.

 

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SECTION 9.09       Governing Law; Jurisdiction; Consent to Service of Process.

 

(a)                 This Agreement shall be construed in accordance with and
governed by the law of the State of New York.

 

(b)                Each of Holdings and the Borrower hereby irrevocably and
unconditionally (i) 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, in each case, sitting in the Borough of Manhattan in the City of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, any other Loan Document, or the
transactions contemplated hereby or thereby, 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 shall be heard and determined in such New York State or, to the
extent permitted by law, in such federal court and (ii) 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 or any other Loan Document shall
affect any right that the Administrative Agent or any Lender may otherwise have
to bring any action or proceeding relating to this Agreement or any other Loan
Document against Holdings, the Borrower or their respective properties in the
courts of any jurisdiction.

 

(c)                 Each of the parties hereto hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that 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
any other Loan Document or the transactions contemplated hereby or thereby in
any court referred to in paragraph (b) of this Section 9.09. 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 party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 9.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.

 

SECTION 9.10       WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE). 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 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 9.10.

 

SECTION 9.11       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 shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

 

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SECTION 9.12       Confidentiality. Each of the Agents and the Lenders agrees to
maintain the confidentiality of the Information, except that Information may be
disclosed (a) to its and its Affiliates and its and its Affiliates’ directors,
officers, employees, legal counsel, independent auditors and other experts,
professionals, advisors or agents (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 or demanded by any Governmental Authority or self-regulatory
authority having jurisdiction over it or any of its Affiliates; provided that
the Administrative Agent or such Lender, as applicable, agrees that it will
promptly notify the Borrower (other than at the request of a regulatory
authority or any self-regulatory authority having or asserting jurisdiction over
such Person) unless such notification is prohibited by law, rule or regulation,
(c) to the extent required by applicable laws or regulations or by any subpoena
or similar legal process or order of any court or administrative agency;
provided that the Administrative Agent or such Lender, as applicable, agrees
that it will notify the Borrower as soon as practicable in the event of any such
disclosure by such Person (other than at the request of a regulatory authority
or any self-regulatory authority having or asserting jurisdiction over such
Person) unless such notification is prohibited by law, rule or regulation, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section 9.12, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Borrower and its
obligations, (g) with the consent of the Borrower, (h) to any rating agency when
required by it on a customary basis and after consultation with the Borrower (it
being understood that, prior to any such disclosure, such rating agency shall
undertake to preserve the confidentiality of any Information relating to Loan
Parties and their Subsidiaries received by it from such Lender), (i) in
connection with the exercise of any remedies hereunder, under any other Loan
Document or the enforcement of its rights hereunder or thereunder, (j) for
purposes of establishing a “due diligence” defense, (k) to the extent such
Information is independently developed by such Person or its Affiliates so long
as not based on Information obtained in a manner that would otherwise violate
this Section 9.12 or (l) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section 9.12 or (ii)
becomes available to the Administrative Agent or any Lender on a nonconfidential
basis from a source other than Holdings or the Borrower; provided that such
source is not actually known by such disclosing party to be bound by an
agreement containing provisions substantially the same as those contained in
this Section 9.12. For the purposes of this Section 9.12, the term “Information”
means all information received from Holdings or the Borrower relating to
Holdings or the Borrower or its business, other than any such information that
is available to the Administrative Agent, any Lender or any of their respective
Affiliates on a nonconfidential basis prior to disclosure by Holdings or the
Borrower and other than information pertaining to this Agreement routinely
provided by arrangers to data service providers, including league table
providers, that serve the lending industry; provided that, in the case of
information received from Holdings, the Borrower or any Subsidiary after the
date hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section 9.12 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 to
its own confidential information.

 

SECTION 9.13       Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts that are treated as interest on such
Loan under applicable law (collectively, the “Charges”), shall exceed the
maximum lawful rate (the “Maximum Rate”) that may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan 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 but were not payable as a result of the
operation of this Section 9.13 shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans 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.

 

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SECTION 9.14       USA Patriot Act. Each Lender hereby notifies each Loan Party
that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required
to obtain, verify and record information that identifies the Borrower, which
information includes the name and address of each Loan Party and other
information that will allow such Lender to identify such Loan Party in
accordance with the Patriot Act.

 

SECTION 9.15       Release of Collateral.

 

(a)                 Upon any sale or other transfer by any Loan Party of any
Collateral that is permitted under this Agreement to a Person that is not a Loan
Party, or upon the effectiveness of any written consent to the release of the
security interest granted hereby in any Collateral pursuant to Section 9.02 of
this Agreement, the security interest in such Collateral shall be automatically
released.

 

(b)                Upon the addition of a Succeeding Holdings and satisfaction
by such Succeeding Holdings of the Collateral and Guarantee Requirement, the
prior Holdings shall be automatically released from all of its obligations under
the Security Documents.

 

SECTION 9.16       No Fiduciary Duty. In connection with all aspects of each
transaction contemplated by this Agreement, the Borrower acknowledges and
agrees, and acknowledges the other Loan Parties’ understanding, that (i) each
transaction contemplated by this Agreement is an arm’s-length commercial
transaction between the Loan Parties, on the one hand, and the Administrative
Agent and the Lenders, on the other hand, (ii) in connection with each such
transaction and the process leading thereto, the Administrative Agent and the
Lenders will act solely as principals and not as agents or fiduciaries of the
Loan Parties or any of their stockholders, affiliates, creditors, employees or
any other party, (iii) neither the Administrative Agent nor any Lender will
assume an advisory or fiduciary responsibility in favor of the Borrower or any
of its Affiliates with respect to any of the transactions contemplated hereby or
the process leading thereto (irrespective of whether the Administrative Agent or
any Lender has advised or is currently advising any Loan Party on other matters)
and neither the Administrative Agent nor any Lender will have any obligation to
any Loan Party or any of its Affiliates with respect to the transactions
contemplated in this Agreement except the obligations expressly set forth
herein, (iv) the Administrative Agent and each Lender may be engaged in a broad
range of transactions that involve interests that differ from those of the Loan
Parties and their affiliates, and (v) neither the Administrative Agent nor any
Lender has provided or will provide any legal, accounting, regulatory or tax
advice with respect to any of the transactions contemplated hereby and the Loan
Parties have consulted and will consult their own legal, accounting, regulatory,
and tax advisors to the extent it deems appropriate. The matters set forth in
this Agreement and the other Loan Documents reflect an arm’s-length commercial
transaction between the Loan Parties, on the one hand, and the Administrative
Agent and the Lenders, on the other hand. The Borrower agrees that the Loan
Parties shall not assert any claims against the Administrative Agent or any
Lender based on any alleged breach of fiduciary duty.

 

SECTION 9.17       [Reserved].

 

SECTION 9.18       Material Non-Public Information.

 

(a)                EACH LENDER ACKNOWLEDGES THAT INFORMATION (AS DEFINED IN
SECTION 9.12) FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL
NON-PUBLIC INFORMATION CONCERNING THE BORROWER AND ITS RELATED PARTIES OR THEIR
RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES
REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE
SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND
APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

 

(b)                ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND
AMENDMENTS, FURNISHED BY THE BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO,
OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL
INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE
BORROWER AND ITS RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY,
EACH LENDER REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS
IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE
INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH
ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW.

 

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SECTION 9.19       Acknowledgement 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 to Amendment No. 1 and each Person that becomes a party to any Loan
Document after the Amendment No. 1 Effective Date acknowledges that any
liability of any party hereto (other than a Loan Party) that is an EEA Financial
Institution arising under any Loan Document 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 (other than a Loan Party) 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 instruments of ownership in such EEA Financial Institution,
its parent entity, 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 9.20       Acknowledgement Regarding Any Supported QFCs. To the extent
that the Loan Documents provide support, through a guarantee or otherwise, for
any agreement or instrument that is a QFC (such support “QFC Credit Support” and
each such QFC a “Supported QFC”), the parties acknowledge and agree as follows
with respect to the resolution power of the Federal Deposit Insurance
Corporation under the Federal Deposit Insurance Act and Title II of the
Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the
regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in
respect of such Supported QFC and QFC Credit Support (with the provisions below
applicable notwithstanding that the Loan Documents and any Supported QFC may in
fact be stated to be governed by the laws of the State of New York and/or of the
United States or any other state of the United States):

 

In the event a Covered Entity that is party to a Supported QFC (each, a “Covered
Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime,
the transfer of such Supported QFC and the benefit of such QFC Credit Support
(and any interest and obligation in or under such Supported QFC and such QFC
Credit Support, and any rights in property securing such Supported QFC or such
QFC Credit Support) from such Covered Party will be effective to the same extent
as the transfer would be effective under the U.S. Special Resolution Regime if
the Supported QFC and such QFC Credit Support (and any such interest, obligation
and rights in property) were governed by the laws of the United States or a
state of the United States. In the event a Covered Party or a BHC Act Affiliate
of a Covered Party becomes subject to a proceeding under a U.S. Special
Resolution Regime, Default Rights under the Loan Documents that might otherwise
apply to such Supported QFC or any QFC Credit Support that may be exercised
against such Covered Party are permitted to be exercised to no greater extent
than such Default Rights could be exercised under the U.S. Special Resolution
Regime if the Supported QFC and the Loan Documents were governed by the laws of
the United States or a state of the United States.

 

SECTION 9.21       First Lien Intercreditor Agreement. Each Lender agrees that
it will be bound by and will take no actions contrary to the provisions of the
First Lien Intercreditor Agreement. In the event of any conflict or
inconsistency between the terms of the First Lien Intercreditor Agreement and
the terms of this Agreement, the terms of the First Lien Intercreditor Agreement
shall govern and control.

 

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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.

 

  CONCENTRA INC., as Borrower       By: /s/ Martin F. Jackson     Name: Martin
F. Jackson     Title:   Vice President       CONCENTRA HOLDINGS, INC., as
Holdings       By: /s/ Martin F. Jackson     Name: Martin F. Jackson     Title:
  Vice President       SELECT MEDICAL CORPORATION, as Administrative Agent and
Collateral Agent       By: /s/ Joel T. Veit     Name: Joel T. Veit     Title:
  Senior Vice President and Treasurer       SELECT MEDICAL CORPORATION, as a
Lender       By: /s/ Joel T. Veit     Name: Joel T. Veit     Title:   Senior
Vice President and Treasurer