Exhibit 10.25

 

 

CREDIT AGREEMENT

 

DATED AS OF DECEMBER 22, 2003

 

AMONG

 

MEDICAL STAFFING NETWORK, INC.,

 

THE OTHER CREDIT PARTIES SIGNATORY HERETO

 

THE LENDERS REFERRED TO HEREIN,

 

GENERAL ELECTRIC CAPITAL CORPORATION,

AS ADMINISTRATIVE AGENT,

 

AND

 

LASALLE BANK NATIONAL ASSOCIATION,

AS SYNDICATION AGENT

 

 

 

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

 

TABLE OF CONTENTS

 

INTRODUCTORY STATEMENT

1

 

 

Article I.  Definitions

2

 

Section 1.1.  Certain Defined Terms

2

 

Section 1.2.  Accounting Terms and Determinations

38

 

Section 1.3.  Other Definitional Provisions

38

 

 

 

Article II.  The Facilities

39

 

Section 2.1.  The Facilities

39

 

Section 2.2.  Notes

40

 

Section 2.3.  Method of Borrowing; Funding of Loans; Administrative Agent
May Assume Funding; Failure to Fund

41

 

Section 2.4.  Interest on Loans

42

 

Section 2.5.  Letters of Credit

43

 

Section 2.6.  Swingline Loans

50

 

Section 2.7.  Certain Fees

53

 

Section 2.8.  Mandatory Repayments and Prepayments

54

 

Section 2.9.  Optional Prepayments

56

 

Section 2.10.  Application of Payments

56

 

Section 2.11.  Reduction of Commitments

57

 

Section 2.12.  Loan Account and Accounting

58

 

Section 2.13.  Computation of Interest and Fees

58

 

Section 2.14.  General Provisions Regarding Payments

58

 

Section 2.15.  Maximum Interest

59

 

 

 

Article III.  Conditions

60

 

Section 3.1.  Conditions to Closing

60

 

Section 3.2.  Conditions to Each Extension of Credit

61

 

 

 

Article IV.  Representations and Warranties

62

 

Section 4.1.  Existence and Organizational Power; Compliance with Organizational
Documents

62

 

Section 4.2.  Governmental Approvals; Compliance with Laws andCompliance with
Agreements with Third Parties

62

 

Section 4.3 . Organizational and Governmental Approvals; No Contravention

63

 

Section 4.4.  Binding Effect; Liens of Collateral Documents

63

 

Section 4.5.  Financial Statements

63

 

Section 4.6.  Material Adverse Effect

64

 

Section 4.7.  Litigation

64

 

Section 4.8.  Due Diligence Questionnaire; Full Disclosure

64

 

Section 4.9.  No Adverse Fact

65

 

Section 4.10.  Ownership of Property, Liens

65

 

Section 4.11.  Environmental Laws

65

 

i

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Section 4.12.  ERISA

65

 

Section 4.13.  Subsidiaries Capitalization

65

 

Section 4.14.  Government Regulations

66

 

Section 4.15.  Margin Regulations

66

 

Section 4.16.  Taxes

66

 

Section 4.17.  Intellectual Property

67

 

Section 4.18.  Solvency

67

 

Section 4.19.  Insurance

67

 

Section 4.20.  Brokers

67

 

Section 4.21  HIPAA Compliance

67

 

Section  4.22  Third Party Reimbursement

68

 

Section 4.23  Tax Shelter Representation

68

 

 

 

Article V.  REPORTING Covenants

68

 

Section 5.1.  Financial Statements and Reports

68

 

Section 5.2.  Collateral Reports

71

 

Section 5.3.  Financial Statements and Information

73

 

Section 5.4.  Confidential Health Information

73

 

 

 

Article VI.  Affirmative Covenants

74

 

Section 6.1.  Payment of Obligations

74

 

Section 6.2.  Preservation of Existence and Franchises

74

 

Section 6.3.  Insurance; Damage to or Destruction of Collateral

74

 

Section 6.4  Compliance with Law

76

 

Section 6.5  Payment of Taxes and Other Indebtedness

76

 

Section 6.6  Maintenance of Property

76

 

Section 6.7  Performance of Obligations

76

 

Section 6.8  Use of Proceeds

76

 

Section 6.9  Audits/Inspections

76

 

Section 6.10  Financial Covenants

77

 

Section 6.11  Collateral

79

 

Section 6.12  Additional Credit Parties

80

 

Section 6.13  [Reserved]

81

 

Section 6.14.  Supplemental Disclosure

81

 

Section 6.15.  Further Assurances

81

 

Section 6.16.  Environmental Matters

81

 

Section 6.17.  Landlord and Warehouseman Waivers

82

 

Section 6.18.  Mortgages on Real Property; Title Insurance and Survey

82

 

Section 6.19.  Compliance Program

83

 

Section 6.20.  Cash Management Systems

83

 

Section 6.21.  SEC Filings

85

 

 

 

Article VII.  Negative Covenants

85

 

Section 7.1  Indebtedness

85

 

Section 7.2  Liens

86

 

Section 7.3  Nature of Business

86

 

Section 7.4  Consolidation and Merger

86

 

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Section 7.5  Sale or Lease of Assets

87

 

Section 7.6  Advances, Investments and Loans

87

 

Section 7.7  Restricted Payments

87

 

Section 7.8  Transactions with Affiliates

88

 

Section 7.9  Fiscal Year; Organizational Documents

88

 

Section 7.10  Limitations

88

 

Section 7.11  Sale Leasebacks

88

 

Section 7.12  Negative Pledges

89

 

Section 7.13  Capital Expenditures

89

 

Section 7.14  Prepayments of Indebtedness, etc.

89

 

Section 7.15  Ownership of Subsidiaries; Limitations on Borrower

89

 

Section 7.16  Earn-Out Obligations

89

 

Section 7.17.  Guaranteed Obligations

90

 

Section 7.18.  ERISA

90

 

Section 7.19.  Amendments or Waivers

90

 

Section 7.20.  Limitations on Holdings

90

 

Section 7.21.  Limitations on Parent

90

 

 

 

Article VIII.  Events of Default

91

 

Section 8.1  Events of Default

91

 

Section 8.2  Acceleration; Remedies

93

 

Section 8.3  Allocation of Payments After Event of Default

94

 

 

 

Article IX.  Expenses and Indemnities

96

 

Section 9.1.  Expenses

96

 

Section 9.2.  Indemnity

97

 

Section 9.3.  Taxes

98

 

Section 9.4.  Capital Adequacy; Increased Costs; Illegality; Funding Losses

98

 

 

 

Article X.  The Agent

99

 

Section 10.1.  Appointment and Authorization

99

 

Section 10.2.  Delegation of Duties.

100

 

Section 10.3.  Administration Agent and Affiliates.

100

 

Section 10.4.  Action by Administrative Agent

100

 

Section 10.5.  Consultation with Experts

100

 

Section 10.6.  Liability of Administrative Agent

100

 

Section 10.7.  Indemnification

101

 

Section 10.8.  Credit Decision

101

 

Section 10.9.  Successor Administrative Agent

102

 

Section 10.10.  Reliance by Administrative Agent

102

 

Section 10.11.  Notice of Default

102

 

 

 

Article XI.  Miscellaneous

103

 

Section 11.1.  Survival

 

103

 

Section 11.2.  No Waivers; Remedies Cumulative.

 

103

 

Section 11.3.  Notices

 

103

 

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Section 11.4.  Severability

 

104

 

Section 11.5.  Amendments and Waivers

 

104

 

Section 11.6.  Successors and Assigns; Registration

 

106

 

Section 11.7.  Setoffs and Sharing of Payments

 

108

 

Section 11.8.  Collateral

 

109

 

Section 11.9.  Headings

 

109

 

Section 11.10.  Governing Law; Submission To Jurisdiction

 

109

 

Section 11.11.  Notice of Breach by Agents or Lender

 

110

 

Section 11.12.  Waiver Of Jury Trial

 

110

 

Section 11.13.  Counterparts; Entire Agreement

 

110

 

Section 11.14.  Confidentiality; Press Release

 

110

 

Section 11.15.  Reinstatement

 

111

 

Section 11.16.  Advice of Counsel

 

112

 

Section 11.17.  No Strict Construction

 

112

 

Section 11.18.  Conflict of Terms

 

112

 

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EXHIBIT A

-

Revolving Note

EXHIBIT B

-

Term Loan Note

EXHIBIT C

-

Swingline Note

EXHIBIT D-1

-

Notice of Borrowing

EXHIBIT D-2

-

Notice of Swingline Borrowing

EXHIBIT E

-

Borrower Security Agreement

EXHIBIT F

-

Borrower Pledge Agreement

EXHIBIT G

 

Subsidiary Guaranty

EXHIBIT H

-

Subsidiary Pledge Agreement

EXHIBIT I

-

Subsidiary Security Agreement

EXHIBIT J

-

Application for Standby Letter of Credit

EXHIBIT K

-

Master Agreement for Standby Letter of Credit

EXHIBIT L

-

Application for Documentary Letter of Credit

EXHIBIT M

-

Master Agreement for Documentary Letter of Credit

EXHIBIT N

-

Borrowing Base Certificate

EXHIBIT O

-

Opinion of Counsel to the Credit Parties

EXHIBIT P

-

Authorized Signatory Letter

EXHIBIT Q

-

Closing Checklist

EXHIBIT R

-

Assignment Agreement

EXHIBIT S

-

Form of Holdings Guaranty Agreement

EXHIBIT T

-

Form of Holdings Pledge Agreement

EXHIBIT U

-

Form of Holdings Security Agreement

EXHIBIT V

-

Form of Parent Guaranty Agreement

EXHIBIT W

-

Form of Parent Pledge Agreement

EXHIBIT X

-

Form of Parent Security Agreement

EXHIBIT Y

-

Business Associate Agreement

 

EXHIBIT 5.1(a)

Compliance Certificate (Monthly)

EXHIBIT 5.1(b)

Compliance Certificate (Quarterly)

EXHIBIT 5.1(c)

Compliance Certificate (Annual)

 

DISCLOSURE SCHEDULE 4.5(a)

 

-

 

Financial Statements

DISCLOSURE SCHEDULE 4.5(b)

 

-

 

Pro Forma Balance Sheet

DISCLOSURE SCHEDULE 4.5(c)

 

-

 

Borrower’s Financial Projections

DISCLOSURE SCHEDULE 4.5(d)

 

-

 

Fair Salable Balance Sheet

DISCLOSURE SCHEDULE 4.7

 

-

 

Litigation

DISCLOSURE SCHEDULE 4.13

 

-

 

Subsidiaries, Other Equity Investments

DISCLOSURE SCHEDULE 4.16

 

-

 

Taxes

DISCLOSURE SCHEDULE 4.19

 

-

 

Insurance Policies

DISCLOSURE SCHEDULE 6.20

 

-

 

Bank Accounts

DISCLOSURE SCHEDULE 7.1

 

-

 

Indebtedness

DISCLOSURE SCHEDULE 7.6

 

-

 

Existing Investments

 

v

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CREDIT AGREEMENT

 

CREDIT AGREEMENT, dated as of December 22, 2003, among MEDICAL STAFFING NETWORK,
INC., THE OTHER CREDIT PARTIES SIGNATORY HERETO, the LENDERS listed on the
signature pages hereof, and GENERAL ELECTRIC CAPITAL CORPORATION, as
Administrative Agent.

 

INTRODUCTORY STATEMENT

 

A.                                             The Borrower as herein defined
desires that Lenders extend a term loan and a revolving credit facility to the
Borrower to refinance an existing credit facility, to provide working capital
financing for the Borrower and to provide funds for other general corporate
purposes of the Borrower;

 

B.                                             The Borrower desires to secure
all of its Obligations (as hereinafter defined) under the Loan Documents (as
hereinafter defined) by granting to the Administrative Agent, for the benefit of
itself and Lenders, a security interest in and lien upon all of its personal and
Real Property including a pledge of the capital stock of all of its
subsidiaries;

 

C.                                             Medical Staffing Holdings, LLC, a
Delaware limited liability company (“Holdings”) that owns all of the capital
stock of the Borrower is willing to guaranty all of the Obligations of the
Borrower to Lenders under the Loan Documents, to grant to Administrative Agent,
for the benefit of itself and Lenders, a security interest in and lien upon all
of its personal and Real Property to secure the Obligations and to pledge to the
Administrative Agent, for the benefit of itself and Lenders, all of the capital
stock of the Borrower to secure the Obligations;

 

D.                                            Medical Staffing Network Holdings,
Inc., a Delaware corporation (“Parent”) that owns all of the capital stock of
Holdings is willing to guaranty all of the Obligations of the Borrower to
Lenders under the Loan Documents, to grant to Administrative Agent, for the
benefit of itself and Lenders, a security interest in and lien upon all of its
personal and Real Property to secure the Obligations and to pledge to the
Administrative Agent, for the benefit of itself and Lenders, all of the capital
stock of the Holdings to secure the Obligations; and

 

E.                                              Each of the Borrower’s
Subsidiaries is willing to guaranty all of the Obligations of the Borrower to
Lenders under the Loan Documents and to grant to Administrative Agent, for the
benefit of itself and Lenders, a security interest in and lien upon all of its
personal and Real Property to secure the Obligations.

 

The parties hereto agree as follows:

 

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ARTICLE I.

 

DEFINITIONS

 

Section 1.1.  Certain Defined Terms.  The following terms used herein shall have
the following meanings:

 

“Adjusted Current Assets” means, at any date, the consolidated current assets
(excluding cash and cash equivalents) of the Credit Parties and their
Subsidiaries determined as of such date.

 

“Administrative Agent” means General Electric Capital Corporation, a Delaware
corporation, together with any permitted successors and assigns.

 

“Account Debtor” means any Person who may become obligated to a Credit Party
under, with respect to, or on account of an Account of such Credit Party
(including without limitation any guarantor of the payment or performance of an
Account).

 

“Accounts Receivable Advance Rate” means up to 85%, subject to adjustment
pursuant to Section 2.1(e).

 

“Acquisition” means the acquisition by any Person of (a) a majority of the
Voting Stock of another Person (b) all or substantially all of the assets of
another Person or (c) all or substantially all of a line of business of another
Person, in each case whether or not involving a merger or consolidation with
such other Person.

 

“Administrative Agent” means GE Capital in its capacity as Administrative Agent
for the Lenders hereunder and under the Loan Documents, and its successors in
such capacity.

 

“Advance” means either a LIBOR Loan Advance or a Base Rate Advance, as
applicable.

 

“Affiliate” means, with respect to any Person, (a) each Person that, directly or
indirectly, owns or controls, whether beneficially or as a trustee, guardian or
other fiduciary, five percent (5%) or more of the Stock of such Person, (b) each
Person that controls, is controlled by or is under common control with such
Person, (c) each of such Person’s officers, directors, joint venturers and
partners and (d) in the case of the Borrower, the immediate family members,
spouses and lineal descendants of individuals who are Affiliates of the
Borrower.  For the purposes of this definition, “control” of a Person means the
possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of voting
securities, by contract or otherwise; provided, however, that the term
“Affiliate” when used with respect to any Credit Party shall specifically
exclude each Lending Party.

 

“Aggregate L/C Exposure” means, at any time, the sum, without duplication, of
(a) the aggregate amount that is (or may thereafter become) available for
drawing under all

 

2

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Letters of Credit outstanding at such time plus (b) the aggregate unpaid
principal amount of all Reimbursement Obligations outstanding at such time.

 

“Agreement” means this Credit Agreement, including all schedules and exhibits
hereto as the same may be amended, modified, supplemented or restated from time
to time.

 

“Applicable Law” means, anything in Section 11.10 to the contrary
notwithstanding, (i) all applicable common law and principles of equity and (ii)
all applicable provisions of all (A) constitutions, statutes, rules, regulations
and orders of Governmental Authorities, (B) Governmental Approvals and (C)
orders, decisions, judgments and decrees of all courts and arbitrators.

 

“Applicable Margin” means: (a) (i) 2.25% per annum for LIBOR Loan Advances and
1.00% per annum for Base Rate Advances, (ii) 1.00% per annum for Swingline
Loans, (iii) 2.25% per annum for the Letter of Credit Fee Applicable Margin and
(iv) 0.50% for the Unused Line Fee Applicable Margin; and (b) (i) from the
Closing Date until the Initial Adjustment Date 9.00% per annum for Term Loans
constituting LIBOR Loans and (ii) commencing on the Initial Adjustment Date and
on the first day of each calendar month thereafter that follows by at least five
(5) days the receipt of financial statements delivered pursuant to
Section 5.1(a), the Applicable Margin for Term Loans shall be that determined
from the chart below based on such financial statements:

 

 

If Leverage Ratio is:

 

Level of
Applicable Margins:

<2.5 to 1.0

 

Level I

<3.0 to 1.0, but > 2.5 to 1.0

 

Level II

<3.5 to 1.0, but > 3.0 to 1.0

 

Level III

>3.5 to 1.0

 

Level IV

 

 

 

Level I

 

Level II

 

Level III

 

Level IV

 

Applicable Margin for Term Loans constituting LIBOR Loans

 

8.50

%

9.00

%

9.50

%

10.00

%

Applicable Margin for Term Loans constituting Base Rate Loans

 

7.00

%

7.50

%

8.00

%

8.50

%

 

Notwithstanding the foregoing, if the Borrower shall fail to timely deliver to
the Administrative Agent the financial statements required for the calculation
of the Leverage Ratio for any Fiscal Month, then commencing after the date such
financial statements were due and continuing through the next Business Day
following the date of delivery thereof, the Leverage Ratio for such period shall
be conclusively presumed to be, and the Applicable Margin shall be calculated
based upon, the highest Leverage Ratio level listed in the table set forth
above.

 

3

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Furthermore, notwithstanding the foregoing, at the election of the
Administrative Agent so long as a Default shall have occurred and be continuing,
the Applicable Margins shall be the highest rate specified in the table above
for all Classes of Extensions of Credit.

 

“Applicable Percentage” means one and one-quarter percent (1.25%).

 

“Asset Disposition” means any disposition, whether by sale, lease, transfer,
loss, damage, destruction, casualty, condemnation or otherwise (including any
such transaction effected by way of merger or consolidation), of any Stock or
other property (whether real, personal or mixed) of any Credit Party, but
excluding (a) dispositions of inventory in the ordinary course of business,  (b)
dispositions of Temporary Cash Investments and cash payments otherwise permitted
under this Agreement and (c) dispositions pursuant to the exercise of remedies
against the Collateral by the Administrative Agent.

 

“Assignment Agreement” has the meaning ascribed to it in Section 11.6(a).

 

“Authorized Signatory” means any Person or Persons designated as such by the
Borrower to the Administrative Agent in a writing in the form of Exhibit P.

 

“Availability Block” means an amount equal to $5,000,000, provided that such
amount shall equal $0 for all times that the Borrower demonstrates that the
Borrower’s EBITDA for the twelve month period ending on such date of
determination is greater than $25,000,000.

 

“Base Rate” means, for any day, a floating rate equal to the greater of (a) the
rate publicly quoted from time to time by The Wall Street Journal as the “Prime
Rate” (or, if The Wall Street Journal ceases quoting a prime rate of the type
described, the highest per annum rate of interest published by the Federal
Reserve Board in Federal Reserve statistical release H.15 (519) entitled
“Selected Interest Rates” as the Bank prime loan rate or its equivalent), and
(b) the Federal Funds Rate plus 50 basis points per annum.  Any change in the
Base Rate due to a change in the prime rate or the Federal Funds Rate shall be
effective as of the opening of business on the effective day of such change in
the prime rate or the Federal Funds Rate, respectively.

 

“Base Rate Advance” means a Revolving Credit Advance bearing interest by
reference to the Base Rate.

 

“Base Rate Borrowing” means a Borrowing that is constituted of Base Rate Loans.

 

“Base Rate Loan” means that portion of a Loan, the interest on which is, or is
to be, as the context may require, computed on the basis of the Base Rate.

 

“Benefit Arrangement” means, at any time, an employee benefit plan within the
meaning of Section 3(3) of ERISA that is not a Plan or a Multiemployer Plan and
which is maintained or otherwise contributed to by any member of the Controlled
Group.

 

“Blocked Account” has the meaning ascribed to it in Section 6.20.

 

4

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“Borrower” means Medical Staffing Network, Inc.

 

“Borrower Account” means the deposit account specified on the signature pages
hereof into which all Advances to the Borrower shall be made available, or such
other account as the Borrower shall from time to time specify by written notice
to the Administrative Agent.

 

“Borrower Bank of America Investment Account” means that certain securities
investment account number 223-06353-1-6 held in the name of the Borrower at Bank
of America.

 

“Borrower Bank of America Lockbox Account” means that certain lockbox account
number 3664920358 held in the name of the Borrower at Bank of America.

 

“Borrower Pledge Agreement” means the Borrower Pledge Agreement dated as of the
date hereof between the Borrower and the Administrative Agent, substantially in
the form of Exhibit F.

 

“Borrower Security Agreement” means the Security Agreement dated as of the date
hereof between the Borrower and the Administrative Agent, substantially in the
form of Exhibit E.

 

“Borrowing” means the aggregation of Advances to be made to the Borrower by the
Lenders pursuant to Article II on the same day, all of which Advances are of the
same Type (subject to Article II) and, except in the case of Base Rate Advances,
have the same initial LIBOR Period.  Borrowings are also classified for purposes
hereof by reference to the pricing of Advances comprising such Borrowing (for
example, a “LIBOR Borrowing” is a Borrowing comprised of LIBOR Loan Advances).

 

“Borrowing Availability” means, as of any date of determination, Revolving
Credit Limit minus the sum of the aggregate Revolving Loans and Swing Line Loans
then outstanding.

 

“Borrowing Base” means, on any date, a dollar amount equal to the Account
Receivable Advance Rate multiplied by the aggregate Collection Value of Eligible
Accounts.

 

“Borrowing Base Certificate” means a certificate, duly executed by the chief
financial officer, controller or treasurer of the Borrower, appropriately
completed and substantially in the form of Exhibit N.

 

“Borrowing Base Party” means Borrower and its Subsidiaries.

 

“Budget” has the meaning ascribed to such term in Section 5.1(d).

 

“Business Associate Agreement” means, collectively, one or more Business
Associate Agreements in substantially the form attached hereto as Exhibit Y,
between Administrative Agent and one or more Credit Parties, as amended,
restated, supplemented or otherwise modified from time to time.

 

5

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“Business Day” means any day that is not a Saturday, a Sunday or a day on which
banks are required or permitted to be closed in the State of New York and, in
reference to LIBOR Loans, means any such day that is also a LIBOR Business Day.

 

“Capital Expenditures” means all expenditures of the Credit Parties and their
Subsidiaries which, in accordance with GAAP, would be classified as capital
expenditures, including, without limitation, Capital Leases and capitalized
software costs.

 

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

 

“Capital Lease Obligation” means, with respect to any Capital Lease of any
Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.

 

“Cash Collateral Account” has the meaning ascribed to it in Section 2.5(k)(i).

 

“Cash Equivalents” means cash or cash equivalents acceptable to Administrative
Agent.

 

“Cash Management System” has the meaning ascribed to it in Section 6.20.

 

“Cash Taxes” means, as of any date for the twelve month period ending on such
date with respect to the Credit Parties and their Subsidiaries on a consolidated
basis, the aggregate of all taxes, as determined in accordance with GAAP, to the
extent the same are paid in cash during such period.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (42 U.S.C. Sections 9601 et seq.), as amended from time to
time, and the regulations promulgated thereunder.

 

“CHAMPVA” means, collectively, the Civilian Health and Medical Program of the
Department of Veteran Affairs, a program of medical benefits covering retirees
and dependents of former members of the armed services administered by the
United States Department of Veteran Affairs, and all laws, rules, regulations,
manuals, orders, guidelines or requirements pertaining to such program
including, without limitation, (a) all federal statutes (whether set forth in 38
U.S.C. §1713 or elsewhere) affecting such program or, to the extent applicable
to CHAMPVA and (b) all rules, regulations (including 38 C.F.R. §17.54), manuals,
orders and administrative, reimbursement and other guidelines of all
Governmental Authorities promulgated in connection with such program (whether or
not having the force of law), in each case as the same may be amended,
supplemented or otherwise modified from time to time.

 

“CHAMPVA Account” means an Account payable pursuant to CHAMPVA.

 

“Change of Control” means any event, transaction or occurrence as a result of
which (a) (i) any “person” or “group” (within the meaning of Section 13(d) or
14(d) of the Exchange Act) (other than the Sponsor, the management of the Parent
or any entity in which any

 

6

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member of the management of Parent owns a controlling interest) has become,
directly or indirectly, the “beneficial owner” (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a Person shall be deemed to have
“beneficial ownership” of all shares that any such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), by way of merger, consolidation or otherwise, of 35% or more of the
voting power of the Voting Stock of Parent on a fully-diluted basis, after
giving effect to the conversion and exercise of all outstanding warrants,
options and other securities of Parent convertible into or exercisable for
voting stock of Parent (whether or not such securities are then currently
convertible or exercisable), and (ii) such Person or group is or becomes,
directly or indirectly, the beneficial owner of a greater percentage of the
voting power of the Voting Stock of Parent calculated on such fully-diluted
basis, than the percentage beneficially owned by the Sponsor and the management
of the Parent; or (b) during any period of two consecutive calendar years,
individuals who at the beginning of such period constituted the board of
directors of Parent together with any new members of such board of directors
whose elections by such board of directors or whose nomination for election by
the stockholders of Parent was approved by a vote of a majority of the members
of such board of directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority of the
directors of Parent then in office; or (c) Parent shall fail to own and have the
right to vote 100% of the outstanding Voting Stock of Holdings, determined on a
fully diluted basis after giving effect to the conversion and exercise of all
outstanding warrants, options and other securities of Holdings, convertible into
or exercisable for voting stock of Holdings (whether or not such securities are
then currently convertible or exercisable); (d) Holdings shall fail to own and
have the right to vote 100% of the outstanding Voting Stock of the Company,
determined on a fully diluted basis after giving effect to the conversion and
exercise of all outstanding warrants, options and other securities of the
Company, convertible into or exercisable for voting stock of the Company
(whether or not such securities are then currently convertible or exercisable);
or (e)  the occurrence of a “Change of Control” under and as defined in any of
the Employment Agreements as in effect on the Closing Date.

 

“Charges” means any and all federal, state, county, city, municipal, local,
foreign or other governmental taxes (including taxes owed to the PBGC at the
time due and payable), levies, assessments, charges, liens, claims or
encumbrances upon or relating to (a) the Collateral, (b) the Obligations, (c)
the employees, payroll, income or gross receipts of any Credit Party, (d) any
Credit Party’s ownership or use of any properties or other assets, or (e) any
other aspect of any Credit Party’s business including, without limitation,
charges for necessary business permits and governmental authorizations.

 

“Class” defines an Extension of Credit by reference to the Commitment and/or
subfacility under which it is made.

 

“Closing Checklist” means the Closing Checklist in the form of Exhibit Q
attached hereto.

 

“Closing Date” means December 22, 2003.

 

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“CMS” means the Centers for Medicare and Medicaid Services, formerly known as
the Health Care Financing Administration or HCFA.

 

“Collateral” means the property covered by the Security Agreements and the other
Collateral Documents and any other property, real or personal, tangible or
intangible, now existing or hereafter acquired, that may at any time be or
become subject to a security interest or Lien in favor of Administrative Agent,
on behalf of itself and Lenders, to secure the Obligations.

 

“Collateral Documents” means the Security Agreements, the Pledge Agreements, the
Guaranty Agreements, the Mortgages and all similar agreements entered into
guaranteeing payment of, or granting a Lien upon property as security for, the
Obligations.

 

“Collateral Reports” means the reports with respect to the Collateral referred
to in Section 5.2.

 

“Collection Account” means that certain account of Administrative Agent, account
number 50-271-079 in the name of Administrative Agent at Deutsche Bank Trust
Company Americas in New York, New York ABA No. 021-001-033, or such other
account as may be specified in writing by Administrative Agent as the
“Collection Account.”

 

“Collection Value” means, with respect to each Eligible Account, the amount
determined by the Agent in its reasonable credit judgment to be the amount
likely to be paid by the Account Debtor on such Account.

 

“Commitment” means (a) as to any Lender, such Lender’s Revolving Credit
Commitment (including without duplication the Swingline Lender’s Swingline
Commitment) and Term Loan Commitment as set forth on the signature pages hereto
or in the most recent Assignment Agreement executed by such Lender and (b) as to
all Lenders, the aggregate of all of Lenders’ Revolving Credit Commitments
(including without duplication the Swingline Lender’s Swingline Commitment) and
Term Loan Commitments, as such Commitments may be reduced, amortized or adjusted
from time to time in accordance with this Agreement.

 

“Commitment Termination Date” means the earliest of (a) December 22, 2006, (b)
the date of termination of Lenders’ obligations to make Advances and to incur
L/C Obligations or the date of acceleration of the maturity date of all or any
portion of the Obligations pursuant to Section 8.2(b), and (c) the date of
indefeasible payment in full by the Borrower of the Loans and the cancellation
and return of (or issuance of a stand-by guarantee with respect to) all Letters
of Credit or the cash collateralization of all L/C Obligations pursuant to
Section 2.5(k), and the permanent reduction of all Commitments to Zero Dollars
($0).

 

“Compliance Certificate” means any of the compliance certificates delivered
pursuant to Sections 5.1(a)(ii), (b)(iii) and/or (c)(iii).

 

“Continuation” has the meaning ascribed to it in Section 2.3(a).

 

“Control Letter” means a letter agreement between Administrative Agent and (a)
the issuer of uncertificated securities with respect to uncertificated
securities in the name of any Credit Party, (b) a securities intermediary with
respect to securities, whether certificated or

 

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uncertificated, securities entitlements and other financial assets held in a
securities account in the name of any Credit Party, (c) a futures commission
merchant or clearing house, as applicable, with respect to commodity accounts
and commodity contracts held by any Credit Party, in each case whereby, among
other things, the issuer, securities intermediary or futures commission merchant
disclaims any security interest in the applicable financial assets, acknowledges
the Lien of Administrative Agent, on behalf of itself and Lenders, on such
financial assets, and agrees to follow the instructions or entitlement orders of
Administrative Agent without further consent by the affected Credit Party.

 

“Controlled Group” means, with respect to any Credit Party, any trade or
business (whether or not incorporated) that, together with such Credit Party, is
treated as a single employer within the meaning of Sections 414(b), (c), (m) or
(o) of the IRC or Section 4001 of ERISA.

 

“Conversion” has the meaning set forth in Section 2.3(a).

 

“Credit Parties” means the Borrower and each Guarantor.

 

“Current Assets” means, with respect to any Person, all current assets of such
Person as of any date of determination calculated in accordance with GAAP, but
excluding cash, cash equivalents and debts due from Affiliates.

 

“Current Liabilities” means, at any date, (a) the consolidated current
liabilities (excluding Indebtedness) of the Credit Parties plus (b) the current
liabilities of any Person (other than the Credit Parties) which are guaranteed
by the Credit Parties, all determined as of such date.

 

“Days Sales Outstanding” means, with respect to the Credit Parties on any date
of determination, the amount obtained by dividing (i) the ending accounts
receivable balance of the Credit Parties on such date by (ii) the revenues of
the Credit Parties for the three month period ending on such date and then
multiplying the result of such division by 91.5 days.

 

“Default” means any condition or event which constitutes an Event of Default or
which with the giving of notice or lapse of time or both would, unless cured or
waived within any applicable grace or cure period, become an Event of Default.

 

“Default Rate” means, subject to Section 2.15, the rate otherwise applicable to
an Obligation plus 2.00% per annum, or if no such rate is provided, the Base
Rate, plus the Applicable Margin for Base Rate Advances, plus 2.00%.

 

“Disbursement Account” has the meaning ascribed to it in Section 6.20.

 

“Discontinued Operation Fees First Quarter 2003” means the amount of charges
incurred by the Borrower in the first Fiscal Quarter of Fiscal Year 2003 for the
fees assessed in connection with the discontinuation of operations of the
physician staffing business, not to exceed $103,200.

 

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“Discontinued Operation Fees Second Quarter 2003” means the amount of charges
incurred by the Borrower in the second Fiscal Quarter of Fiscal Year 2003 for
the fees assessed in connection with the discontinuation of operations of the
physician staffing business, not to exceed $402,000.

 

“Dollars” or “$” means lawful currency of the United States of America.

 

“Domestic Subsidiaries” means all direct and indirect Subsidiaries of a Credit
Party that are domiciled, incorporated or organized under the laws of any state
of the United States or the District of Columbia (or has any material assets
located in the United States).

 

“EBITDA” means, for any period, with respect to the Credit Parties and their
Subsidiaries on a consolidated basis, the sum of (a) Net Income for such period
(excluding the effect of any (i) intercompany items, (ii) all earnings
attributable to equity interests in Persons that are not Subsidiaries unless
actually received by such Person, (iii) all income arising from the forgiveness,
adjustment or negotiated settlement of any Indebtedness, (iv) any extraordinary
items of income and (v) any increase or decrease in income arising from any
change in such Person’s method of accounting, subject to Section 1.2) plus (b)
an amount which, in the determination of Net Income for such period has been
deducted for (i) Interest Expense for such period, (ii) total Federal, state,
foreign or other income taxes for such period and (iii) depreciation and
amortization expense for such period, all as determined in accordance with GAAP
minus (c) the amount of all earn-out payments made during such period in
connection with Permitted Acquisitions consummated subsequent to the Closing
Date; provided that, for the calculation of EBITDA made (i) for the first Fiscal
Quarter of Fiscal Year 2003, EBITDA shall be the sum of the amounts set forth
above plus the amount of the Discontinued Operation Fees First Quarter 2003,
(ii) for the second Fiscal Quarter of Fiscal Year 2003, EBITDA shall be the sum
of the amounts set forth above plus the amount of the Discontinued Operation
Fees Second Quarter 2003 plus the amount of the Restructuring Fees and (iii)
during and for the fourth Fiscal Quarter of Fiscal Year 2003, EBITDA shall be
the sum of the amounts set forth above plus the amount of the Prior Facility
Financing Fees.

 

“EBITDAR” means, for any period, with respect to the Credit Parties and their
Subsidiaries on a consolidated basis, the sum of (a) Net Income for such period
(excluding the effect of any (i) intercompany items, (ii) all earnings
attributable to equity interests in Persons that are not Subsidiaries unless
actually received by such Person, (iii) all income arising from the forgiveness,
adjustment or negotiated settlement of any Indebtedness, (iv) any extraordinary
items of income and (v) any increase or decrease in income arising from any
change in such Person’s method of accounting, subject to Section 1.2) plus (b)
an amount which, in the determination of Net Income for such period has been
deducted for (i) Interest Expense for such period, (ii) total Federal, state,
foreign or other income taxes for such period, (iii) depreciation and
amortization expense for such period and (iv) Rent Expense for such period, all
as determined in accordance with GAAP minus (c) the amount of all earn-out
payments made during such period in connection with Permitted Acquisitions
consummated subsequent to the Closing Date; provided that, for the calculation
of EBITDAR made (i) for the first Fiscal Quarter of Fiscal Year 2003, EBITDAR
shall be the sum of the amounts set forth above plus the amount of the
Discontinued Operation Fees First Quarter 2003, (ii) for the second Fiscal
Quarter of Fiscal Year 2003, EBITDAR shall be the sum of the amounts set forth
above plus the amount of

 

10

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the Discontinued Operation Fees Second Quarter 2003 plus the amount of the
Restructuring Fees and (iii) during and for the fourth Fiscal Quarter of Fiscal
Year 2003, EBITDAR shall be the sum of the amounts set forth above plus the
amount of the Prior Facility Financing Fees.

 

“Eligible Accounts” means, at any date of determination thereof, the aggregate
amount of all Accounts at such date due to any Borrowing Base Party except to
the extent that (determined without duplication):

 

(a)                                         such Account does not arise from the
sale of goods or the performance of services by such Credit Party in the
ordinary course of its business;

 

(b)                                        (i) such Borrowing Base Party’s right
to receive payment is not absolute or is contingent upon the fulfillment of any
condition whatsoever or (ii) as to which such Borrowing Base Party is not able
to bring suit or otherwise enforce its remedies against the Account Debtor
through judicial process or (iii) if the Account represents a progress billing
consisting of an invoice for goods sold or used or services rendered pursuant to
a contract under which the Account Debtor’s obligation to pay that invoice is
subject to such Borrowing Base Party’s completion of further performance under
such contract or is subject to the equitable lien of a surety bond issuer;

 

(c)                                        any defense, counterclaim, setoff or
dispute exists as to such Account, provided that this clause (c) shall not apply
to adjustments in the ordinary course with respect to Government Accounts;

 

(d)                                        in respect of which there is no right
to payment from any Third Party Payor, but only to the extent that there is no
such right of payment from a Third Party Payor;

 

(e)                                        such Account is not a true and
correct statement of bona fide indebtedness incurred in the amount of the
Account for merchandise sold to or services rendered and accepted by the
applicable Account Debtor;

 

(f)                                          an invoice, reasonably acceptable
to Administrative Agent in form and substance, has not been sent to the
applicable Account Debtor in respect of such Account;

 

(g)                                        such Account (i) is not owned by such
Borrowing Base Party or (ii) is subject to any right, claim, security interest
or other interest of any other Person, other than Liens in favor of
Administrative Agent, on behalf of itself and Lenders;

 

(h)                                        such Account arises from a sale to
any director, officer, other employee or Affiliate of any Borrowing Base Party,
or to any entity that has any common officer or director with any Borrowing Base
Party;

 

(i)                                           except for Government Accounts,
such Account is the obligation of an Account Debtor that is the United States
government or a political subdivision thereof, or any state, county or
municipality or department, agency or instrumentality thereof unless
Administrative Agent, in its sole discretion, has agreed to the contrary in
writing and such Borrowing Base Party, if necessary or desirable, has complied
with respect to such obligation

 

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with the Federal Assignment of Claims Act of 1940, or any applicable state,
county or municipal law restricting assignment thereof;

 

(j)                                           such Account is the obligation of
an Account Debtor located in a foreign country other than Canada (excluding the
province of Newfoundland, the Northwest Territories and the Territory of
Nunavit) unless payment thereof is assured by a letter of credit assigned and
delivered to Administrative Agent, reasonably satisfactory to Administrative
Agent as to form, amount and issuer;

 

(k)                                        such  Borrowing Base Party or any
Subsidiary thereof is liable for goods sold or services rendered by the
applicable Account Debtor to such Borrowing Base Party or any Subsidiary thereof
but only to the extent of the potential offset;

 

(l)                                           such Account arises with respect
to goods that are delivered on a bill and hold, cash on delivery basis or placed
on consignment, guaranteed sale or other terms by reason of which the payment by
the Account Debtor is or may be conditional;

 

(m)                                   such Account is in default; provided that,
without limiting the generality of the foregoing, an Account shall be deemed in
default upon the occurrence of any of the following:

 

(i)                                           the Account is not paid within one
hundred twenty (120) days following its original invoice date; provided that,
for purposes of determining eligibility, (x) not more than 70% of the aggregate
amount of all Accounts that have not been paid 91 to 120 days following the
original invoice date will be eligible, subject to the provisions set forth
herein, and (y) the aggregate amount of all such Accounts that are eligible
pursuant to clause (x) above may not exceed $2,500,000; provided further that,
if the aggregate amount of such Accounts is less than $2,500,000, Administrative
Agent shall, upon the request and at the expense of the Borrower, perform a due
diligence review reasonably satisfactory to Administrative Agent and
Administrative Agent shall adjust the eligibility percentage set forth in clause
(x) above if such due diligence review reasonably supports such adjustment;

 

(ii)                                      the Account Debtor obligated upon such
Account suspends business, makes a general assignment for the benefit of
creditors or fails to pay its debts generally as they come due; or

 

(iii)                                 a petition is filed by or against any
Account Debtor obligated upon such Account under any bankruptcy law or any other
federal, state or foreign (including any provincial) receivership, insolvency
relief or other law or laws for the relief of debtors;

 

(n)                                        such Account is the obligation of an
Account Debtor if fifty percent (50%) or more of the Dollar amount of all
Accounts owing by that Account Debtor are ineligible under the other criteria
set forth in this definition, except such Accounts as deemed allowable by the
Required Revolving Lenders from time to time;

 

(o)                                       such Account, as to which
Administrative Agent’s Lien attaches thereon on behalf of itself and Lenders, is
not a first priority perfected Lien;

 

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(p)                                        any of the representations or
warranties in the Loan Documents with respect to such Account are untrue or
incomplete with respect to such Account;

 

(q)                                        such Account is evidenced by a
judgment, Instrument or Chattel Paper;

 

(r)                                          such Account, together with all
other Accounts owing by such Account Debtor and its Affiliates as of any date of
determination exceed 5% of all Eligible Accounts;

 

(s)                                         such Account is payable in any
currency other than Dollars; or

 

(t)                                           such Account is otherwise
unacceptable to Administrative Agent in its reasonable credit judgment.

 

“Eligible Assets” means any assets or any business (or any substantial part
thereof) used or useful in the same or a similar line of business as the Credit
Parties and their Subsidiaries were engaged in on the Closing Date.

 

“Employment Agreements” means, collectively, the employee agreements, dated as
of August 20, 2001 as amended to the date hereof, among the Borrower, Holdings
and each of Robert J. Adamson, Patricia Donohoe, and Kevin S. Little.

 

“Environmental Laws” means all applicable federal, state, local and foreign
laws, statutes, ordinances, codes, rules, standards and regulations, now or
hereafter in effect, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation).  Without limiting the generality of the
foregoing, Environmental Laws include CERCLA, the Hazardous Materials
Transportation Authorization Act of 1994 (49 U.S.C. §§ 5101 et seq.), the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §§ 136 et seq.),
the Solid Waste Disposal Act (42 U.S.C. §§ 6901 et seq.), the Toxic Substance
Control Act (15 U.S.C. §§ 2601 et seq.), the Clean Air Act (42 U.S.C. §§ 7401 et
seq.), the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et seq.), the
Occupational Safety and Health Act (29 U.S.C. §§ 651 et seq.), and the Safe
Drinking Water Act (42 U.S.C. §§ 300(f) et seq.), and any rules and regulations
promulgated thereunder, and all analogous state, local and foreign counterparts
or equivalents and any transfer of ownership notification or approval statutes.

 

“Environmental Liabilities” means, with respect to any Person, all liabilities,
obligations, responsibilities, response, remedial and removal costs,
investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws or Environmental Permits or in

 

13

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connection with any Release or threatened Release or the presence of a Hazardous
Material whether on, at, in, under, from or about or in the vicinity of any real
or personal property.

 

“Environmental Permits” means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.

 

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

 

“ERISA Event” means, with respect to any Credit Party or any member of a
Controlled Group, (a) any event described in Section 4043(c) of ERISA with
respect to a Title IV Plan, (b) the withdrawal of any Credit Party or any member
of a Controlled Group from a Title IV Plan subject to Section 4063 of ERISA
during a plan year in which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA, (c) the complete or partial withdrawal of any
Credit Party or any member of a Controlled Group from any Multi-employer Plan,
(d) the termination of, the filing of a notice of intent to terminate a Title IV
Plan or the treatment of a plan amendment as a termination under Section 4041 of
ERISA, (e) the institution of proceedings to terminate a Title IV Plan or
Multi-employer Plan by the PBGC, (f) the failure by any Credit Party or any
member of a Controlled Group to make when due required contributions to a
Multi-employer Plan or Title IV Plan unless such failure is cured within thirty
(30) days, (g) any other event or condition that might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Title IV Plan or Multi-employer Plan
or for the imposition of liability under Section 4069 or 4212(c) of ERISA, (h)
the termination of a Multi-employer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multi-employer Plan under Section 4241 or 4245
of ERISA, (i) the loss of a Qualified Plan’s qualification or tax exempt status,
or (j) the termination of a Plan described in Section 4064 of ERISA.

 

“Event of Default” has the meaning ascribed to it in Section 8.1.

 

“Excess Cash Flow” means, for any fiscal year period of the Credit Parties and
their Subsidiaries on a consolidated basis, an amount equal to (a) Free Cash
Flow for such period plus (b) any interest income of the Credit Parties and
their Subsidiaries for such period minus (c) the Total Debt Service (exclusive
of amortization of debt discount or premium) for such period plus (or minus) (d)
any decrease (or increase) in the Net Working Investment at the end of such
period, when compared with the Net Working Investment at the end of the prior
fiscal year period minus (e) cash Investments of the type described in clauses
(f) and (g) of the definition of Permitted Investments and actually made
pursuant to Section 7.6 minus (f) the Net Cash Proceeds of any Asset Disposition
to the extent applied during such period toward the acquisition of Eligible
Assets pursuant to Section 7.6.

 

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

 

“Extension of Credit” means, as the context requires, (a) an Advance, (b) the
making of an Advance, (iii) the conversion of a Base Rate Loan to a LIBOR Loan
or the

 

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continuation of a LIBOR Loan as a LIBOR Loan for an additional LIBOR Period, or
(c) the issuance of any Letter of Credit or the incurrence of any Reimbursement
Obligation.

 

“Fair Salable Balance Sheet” means a balance sheet of Borrower prepared in
accordance with Section 4.5(d), in form and substance satisfactory to the
Administrative Agent.

 

“Federal Funds Rate” means, for any day, a floating rate equal to the weighted
average of the rates on overnight federal funds transactions among members of
the Federal Reserve System, as published for such day (or if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by the Administrative Agent from three (3) federal funds brokers of
recognized standing selected by the Administrative Agent, which determination
shall be final, binding and conclusive (absent manifest error).

 

“Fees” means any and all fees payable to Administrative Agent or any Lender
pursuant to this Agreement or any of the other Loan Documents or the GE Capital
Fee Letter.

 

“Fiscal Month” means any of the monthly accounting periods of Borrower.

 

“Fiscal Quarter” means any of the quarterly accounting periods of Borrower,
ending on or about March 31, June 30, September 30 and December 31 of each year.

 

“Fiscal Year” means any of the annual accounting periods of the Borrower ending
on the Sunday closest to December 31 of each calendar year.

 

“Fixed Charge Coverage Ratio” means, as of any date of determination, for the
twelve month period ending on such date with respect to the Credit Parties and
their Subsidiaries on a consolidated basis, the ratio of (a) the sum of (i)
EBITDAR for the applicable period minus (ii) cash Capital Expenditures for the
applicable period minus (iii) Cash Taxes for the applicable period to (b) Fixed
Charges for the applicable period.

 

“Fixed Charges” means, as of any date for the twelve month period ending on such
date with respect to the Credit Parties and their Subsidiaries on a consolidated
basis, the sum of (i) cash Interest Expense for the applicable period plus (ii)
Scheduled Funded Debt Payments for the applicable period plus (iii) Rent Expense
for the applicable period.

 

“Foreign Subsidiaries” means all Subsidiaries of a Credit Party that are not
Domestic Subsidiaries.

 

“Free Cash Flow” means, for any fiscal year period, EBITDA for such period minus
the following amounts, without duplication, (a) all cash payments of income
taxes by the Credit Parties and their Subsidiaries during such period; (b)
Capital Expenditures for such period, to the extent that such Capital
Expenditures are permitted by Section 7.13 and are not financed during such
period (and are not reasonably expected by any Credit Party to be financed in
the upcoming fiscal year) with the proceeds of Indebtedness of any Credit Party
or any Subsidiary of any Credit Party under Section 7.1(d); (c) all Restricted
Payments made in such period to the extent permitted under Section 7.7(b); and
(d) capitalized costs of internal

 

15

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development of software for such period; plus (e) cash extraordinary items of
income or expense during such period.

 

“Funded Indebtedness” means, without duplication, the sum of (a) all
Indebtedness (other than Hedging Agreements) of the Credit Parties and their
Subsidiaries for borrowed money (it being understood that with respect to
Indebtedness incurred with an original issue discount, the obligations shall
consist of the then accreted value), (b) all obligations of a Credit Party or
any of its Subsidiaries evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made (not including
trade debt incurred in the ordinary course of business and due within six months
of the incurrence thereof), (c) all obligations of a Credit Party or any of its
Subsidiaries under conditional sale or other title retention agreements relating
to property purchased by a Credit Party or any of its Subsidiaries (other than
customary reservations or retentions of title under agreements with suppliers
entered into in the ordinary course of business), (d) all obligations of a
Credit Party or any of its Subsidiaries issued or assumed as the deferred
purchase price of property or services purchased by a Credit Party or any of its
Subsidiaries (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of a Credit Party or any of its Subsidiaries,
prepared in accordance with GAAP, (e) the principal portion of all obligations
of the Credit Parties and their Subsidiaries under (i) Capital Leases and (ii)
Synthetic Leases, (f) commercial letters of credit and the maximum amount of all
performance and standby letters of credit issued or bankers’ acceptance
facilities created for the account of a Credit Party or one of its Subsidiaries
and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (g) all preferred Stock issued by a Credit Party or any of its
Subsidiaries and which by the terms thereof could be (at the request of the
holders thereof or otherwise) subject to mandatory sinking fund payments,
redemption or other acceleration at any time on or prior to the Commitment
Termination Date, (h) all obligations of a Credit Party or any of its
Subsidiaries to repurchase any securities issued by a Credit Party or any of its
Subsidiaries at any time on or prior to the Commitment Termination Date, which
repurchase obligations are related to the issuance thereof, including, without
limitation, obligations commonly known as residual equity appreciation potential
shares, (i) the aggregate amount of uncollected accounts receivable of a Credit
Party or any of its Subsidiaries subject at such time to a sale of receivables
(or similar transaction) to the extent such transaction is effected with
recourse to a Credit Party or any of its Subsidiaries (whether or not such
transaction would be reflected on the balance sheet of a Credit Party or any of
its Subsidiaries in accordance with GAAP), (j) all Guaranteed Obligations of the
Credit Parties and their Subsidiaries with respect to Funded Indebtedness of
another Person, (k) all Funded Indebtedness of another entity secured by a Lien
on any property of a Credit Party or any of its Subsidiaries whether or not such
Funded Indebtedness has been assumed by a Credit Party or any of its
Subsidiaries and (l) all Funded Indebtedness of any partnership or
unincorporated joint venture to the extent a Credit Party or one of its
Subsidiaries is legally obligated or has a reasonable expectation of being
liable with respect thereto, net of any assets of such partnership or joint
venture.

 

“GAAP” has the meaning ascribed to it in Section 1.2.

 

“GE Capital” means General Electric Capital Corporation, a Delaware corporation.

 

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“GE Capital Commitment Letter” means that certain letter, dated as of
December 1, 2003, between GE Capital and the Borrower setting forth certain
commitments of GE Capital to Borrower.

 

“GE Capital Fee Letter” means that certain letter, dated as of December 1, 2003,
between GE Capital and the Borrower with respect to certain fees to be paid from
time to time by the Borrower to GE Capital.

 

“Government Accounts” means, collectively, any and all Accounts which are (a)
Medicare Accounts, (b) Medicaid Accounts, (c) TRICARE Accounts, (d) CHAMPVA
Accounts, or (e) any other Account payable by a Governmental Authority
acceptable to the Administrative Agent in its reasonable discretion.

 

“Governmental Approval” means an authorization, consent, approval, license or
exemption of, registration or filing with, or report or notice to any
Governmental Authority.

 

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.

 

“Guaranteed Obligations” means as to any Person, without duplication, any
obligation of such Person guaranteeing, providing comfort or otherwise
supporting any Indebtedness, lease, dividend, or other obligation (“primary
obligation”) of any other Person (the “primary obligor”) in any manner,
including any obligation or arrangement of such Person to (a) purchase or
repurchase any such primary obligation, (b) advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency or any balance sheet condition of the primary obligor, (c)
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation, (d) protect the beneficiary of such
arrangement from loss (other than product warranties given in the ordinary
course of business) or (e) indemnify the owner of such primary obligation
against loss in respect thereof; provided that the term Guaranteed Obligations
shall not include endorsements for collection or deposit in the ordinary course
of business.  The amount of any Guaranteed Obligations at any time shall be
deemed to be an amount equal to the lesser at such time of (x) the stated or
determinable amount of the primary obligation in respect of which such
Guaranteed Obligations are incurred and (y) the maximum amount for which such
Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Obligations, or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect thereof.

 

“Guarantors” means Parent, Holdings, each Subsidiary of the Borrower, and each
other Person, if any, that executes a Guaranty Agreement or other similar
agreement in favor of Administrative Agent, for itself and the ratable benefit
of Lenders, in connection with the transactions contemplated by this Agreement
and the other Loan Documents.

 

“Guaranty Agreements” means, collectively, the Parent Guaranty Agreement, the
Holdings Guaranty Agreement, the Subsidiary Guaranty and any other guaranty now
or hereafter

 

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executed by any Person in favor of Administrative Agent and Lenders to guarantee
the Obligations.

 

“Hazardous Material” means any substance, material or waste that is regulated
by, or forms the basis of liability now or hereafter under, any Environmental
Laws, including any material or substance that is (a) defined as a “solid
waste,” “hazardous waste,” “hazardous material,” “hazardous substance,”
“extremely hazardous waste,”  “restricted hazardous waste,” “pollutant,”
“contaminant,” “hazardous constituent,” “special waste,” “toxic substance” or
other similar term or phrase under any Environmental Laws, or (b) petroleum or
any fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB’s),
or any radioactive substance.

 

“Healthcare Laws” means, collectively, any and all federal, state or local laws,
rules, regulations and administrative manuals, orders, guidelines and
requirements issued under or in connection with Medicare, Medicaid CHAMPVA,
TRICARE or any government payment program or any law governing the licensure of
or regulating healthcare providers, professionals, facilities or payors or
otherwise governing or regulating the provision of, or payment for, Medical
Services, or the sale of medical supplies.  Without limiting the generality of
the foregoing, Healthcare Laws include, without limitation, Section 1128B(b) of
the Social Security Act, as amended, 42 U.S.C. Section 1320a-7(b) (Criminal
Penalties Involving Medicare or State Health Care Programs), commonly referred
to as the “Federal Anti-Kickback Statute,” and the Social Security Act, as
amended, and Section 1877, 42 U.S.C Section 1395nn (Prohibition Against Certain
Referrals), commonly referred to as “Stark Statute”.

 

“Hedging Agreements” means any interest rate protection agreement, foreign
exchange contract, currency swap agreement, commodity purchase or option
agreement or other interest or exchange rate or commodity price hedging
agreement or other similar agreement, designed to protect a Credit Party or any
of its Subsidiaries against fluctuations in currency.

 

“HIPAA” means the Health Insurance Portability and Accountability Act of 1996,
as amended from time to time, and any rules or regulations promulgated from time
to time thereunder.

 

“Holdings” has the meaning ascribed to it in Paragraph C of the Introductory
Statement.

 

“Holdings Guaranty Agreement” means the Holdings Guaranty Agreement dated as of
the date hereof by Holdings in favor of Administrative Agent, on behalf of
itself and Lenders, substantially in the form of Exhibit S.

 

“Holdings Pledge Agreement” means the Holding Pledge Agreement dated as of the
date hereof between Holdings and Administrative Agent, substantially in the form
of Exhibit T.

 

“Holdings Security Agreement” means the Holding Security Agreement dated as of
the date hereof between Holdings and the Administrative Agent, substantially in
the form of Exhibit U.

 

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“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, or upon which interest payments
are customarily made (not including trade debt incurred in the ordinary course
of business and due within six months of the incurrence thereof), (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person to the extent of the
value of such property (other than customary reservations or retentions of title
under agreements with suppliers entered into in the ordinary course of
business), (d) all obligations of such Person issued or assumed as the deferred
purchase price of property or services purchased by such Person (other than
trade debt incurred in the ordinary course of business and due within six months
of the incurrence thereof) which would appear as liabilities on a balance sheet
of such Person, (e) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien on, or payable out of the proceeds of production from,
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (f) all Guaranty Obligations of such Person,
(g) the principal portion of all obligations of such Person under (i) Capital
Leases and (ii) Synthetic Leases, (h) all obligations of such Person in respect
of Hedging Agreements, (i) commercial letters of credit and the maximum amount
of all performance and standby letters of credit issued or bankers’ acceptances
facilities created for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent unreimbursed), (j) all preferred Capital
Stock issued by such Person and which by the terms thereof could be (at the
request of the holders thereof or otherwise) subject to mandatory sinking fund
payments, redemption or other acceleration by a fixed date, (k) all obligations
of such Person to repurchase any securities issued by such Person at any time on
or prior to the Maturity Date, which repurchase obligations are related to the
issuance thereof, including, without limitation, obligations commonly known as
residual equity appreciation potential shares, (l) the aggregate amount of
uncollected accounts receivable of such Person subject at such time to a sale of
receivables (or similar transaction) regardless of whether such transaction is
effected without recourse to such Person or in a manner that would not be
reflected on the balance sheet of such Person in accordance with GAAP and (m)
the Indebtedness of any partnership or unincorporated joint venture in which
such Person is a general partner or a joint venturer to the extent such
Indebtedness is recourse to such Person.

 

“Indemnitees” has the meaning ascribed to it in Section 9.2.

 

“Initial Adjustment Date” means the date upon which Administrative Agent
receives financial statements required to be delivered pursuant to
Section 5.1(a) for the first full month commencing after the Closing Date.

 

“Information” means written data, reports, statements (including, but not
limited to, financial statements delivered pursuant to or referred to in
Sections 5.01 and 5.02), documents and other information, whether, in the case
of any such in writing, the same was prepared by any Credit Party or any other
Person on behalf of any Credit Party.

 

“Insurer” means a Person that insures a Patient against certain of the costs
incurred in the receipt by such Patient of Medical Services, or that has an
agreement with a Credit Party to compensate such Credit Party for providing
goods or services to a Patient.

 

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“Interest Expense” means, for any period, with respect to the Credit Parties and
their Subsidiaries on a consolidated basis, all interest expense, including the
interest component under Capital Leases and the implied interest component under
Synthetic Leases, as determined in accordance with GAAP; it being understood
that Interest Expense shall include the amortized cost of any Hedging Agreement,
to the extent permitted by GAAP.

 

“Interest Payment Date” means (a) as to any Base Rate Loan and Swingline Loan,
the first Business Day of each month to occur while such Loan is outstanding,
and (b) as to any LIBOR Loan, the last day of the applicable LIBOR Period;
provided that, in addition to the foregoing, each of (x) the date upon which all
of the Commitments have been terminated and the Loans have been paid in full and
(y) the Commitment Termination Date and the Term Loan Maturity Date, shall be
deemed to be an “Interest Payment Date” with respect to any interest (including
interest accruing at the Default Rate) that has then accrued under this
Agreement.

 

“Investment” means (a) the acquisition (whether for cash, property, services,
assumption of Indebtedness, securities or otherwise) of assets, shares of Stock,
bonds, notes, debentures, partnership, joint ventures or other ownership
interests or other securities of any Person or (b) any deposit with, or advance,
loan or other extension of credit to, such Person (other than deposits made in
connection with the purchase of equipment or other assets in the ordinary course
of business) or (c) any other capital contribution to or investment in such
Person, including, without limitation, any Guaranteed Obligation (including any
support for a Letter of Credit issued on behalf of such Person) incurred for the
benefit of such Person.

 

“IRC” means the Internal Revenue Code of 1986, as amended from time to time, and
all regulations promulgated thereunder.

 

“IRS” means the Internal Revenue Service.

 

“L/C Exposure” means, with respect to any Lender at any time, its Percentage of
the Aggregate L/C Exposure at such time.

 

“L/C Issuer” means (a) GE Capital and (b) any other Lender designated as an “L/C
Issuer” for purposes hereof in a notice to the Administrative Agent signed by
the Borrower and such Lender, acting in each case in the capacity of an L/C
Issuer under the letter of credit facility described in Section 2.5, and their
respective successors.

 

“L/C Limit” means $5,000,000.

 

“L/C Obligations” means all outstanding obligations incurred by L/C Issuer and
Revolving Lenders, whether direct or indirect, contingent or otherwise, due or
not due, in connection with the issuance of Letters of Credit by Administrative
Agent or another L/C Issuer or the purchase of a participation as set forth in
Section 2.5 with respect to any Letter of Credit.  The amount of such L/C
Obligations shall equal the maximum amount that may be payable at such time or
at any time thereafter by Administrative Agent or Revolving Lenders thereupon or
pursuant thereto.

 

“L/C Payment Date” has the meaning ascribed to it in Section 2.5(f).

 

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“Lenders” means GE Capital, the other Lenders named on the signature pages of
this Agreement, and, if any such Lender shall decide to assign all or any
portion of the Obligations, such term shall include any assignee of such Lender.

 

“Lending Party” means the Administrative Agent, the Lenders and any Letter of
Credit Issuer.

 

“Letter of Credit Fee” has the meaning ascribed to it in Section 2.7(d).

 

“Letters of Credit” has the meaning ascribed to it in Section 2.5(a).

 

“Leverage Ratio” means, as of the date of determination, with respect to the
Credit Parties and their Subsidiaries on a consolidated basis, the ratio of (a)
the sum of Funded Indebtedness on such date to (b) EBITDA for the most recent
twelve month period for which Administrative Agent has received financial
statements.

 

“LIBOR Borrowing” means a Borrowing that is constituted of LIBOR Loans.

 

“LIBOR Business Day” means a Business Day on which banks in the City of London,
England are generally open for interbank or foreign exchange transactions.

 

“LIBOR Loan” means a Loan or any portion thereof bearing interest by reference
to the LIBOR Rate.

 

“LIBOR Loan Advance” means a Revolving Credit Advance bearing interest by
reference to the LIBOR Rate.

 

“LIBOR Period” means, with respect to any LIBOR Loan, each period commencing on
a LIBOR Business Day and ending one (1), two (2) or three (3) months thereafter,
in each case as selected by the Borrower’s irrevocable notice to Administrative
Agent as set forth in Section 2.3; provided that the foregoing provision
relating to LIBOR Periods is subject to the following:

 

(a)                                         if any LIBOR Period would otherwise
end on a day that is not a LIBOR Business Day, such LIBOR Period shall be
extended to the next succeeding LIBOR Business Day unless the result of such
extension would be to carry such LIBOR Period into another calendar month in
which event such LIBOR Period shall end on the immediately preceding LIBOR
Business Day;

 

(b)                                        any LIBOR Period that would otherwise
extend beyond the Commitment Termination Date with respect to  Revolving Loans
or the Term Loan Maturity Date with respect to Term Loans shall end two (2)
LIBOR Business Days prior to such date;

 

(c)                                        any LIBOR Period that begins on the
last LIBOR Business Day of a calendar month (or on a day for which there is no
numerically

 

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corresponding day in the calendar month at the end of such LIBOR Period) shall
end on the last LIBOR Business Day of a calendar month;

 

(d)                                        the Borrower shall select LIBOR
Periods so as not to require a payment or prepayment of any LIBOR Loan during a
LIBOR Period for such Loan;

 

(e)                                        the Borrower shall select LIBOR
Periods so that there shall be no more than five (5) separate LIBOR Loans in
existence at any one time;

 

(f)                                          no Interest Period for any portion
of the Term Loan shall extend beyond the date of the final scheduled installment
thereof; and

 

(g)                                        an Interest Period may not be
selected for any portion of the Term Loan if a scheduled installment of
principal for such Term Loan is payable during such Interest Period and the
portion of such Term Loan which constitutes a Base Rate Loan does not equal or
exceed the amount of such scheduled installment of principal.

 

“LIBOR Rate” means for each LIBOR Period, a rate of interest determined by
Administrative Agent equal to:

 

(a)                                         the offered rate for deposits in
Dollars for the applicable LIBOR Period that appears on Telerate Page 3750 (or
any successor or substitute page) as of 11:00 a.m. (London time) on the second
full LIBOR Business Day next preceding the first day of such LIBOR Period
(unless such date is not a Business Day, in which event the next succeeding
Business Day will be used); divided by

 

(b)                                        a number equal to 1.0 minus the
aggregate (but without duplication) of the rates (expressed as a decimal
fraction) of reserve requirements in effect on the day that is two (2) LIBOR
Business Days prior to the beginning of such LIBOR Period (including basic,
supplemental, marginal and emergency reserves under any regulations of the
Federal Reserve Board or other Governmental Authority having jurisdiction with
respect thereto, as now and from time to time in effect) for Eurocurrency
funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of
the Federal Reserve Board that are required to be maintained by a member bank of
the Federal Reserve System.

 

provided, however, that with respect to a Term Loan constituting a LIBOR Loan,
the LIBOR Rate will never be less than 2.00%.

 

If such interest rates shall cease to be available from Telerate News Service,
the LIBOR Rate shall be determined from such financial reporting service or
other information as shall be determined by Administrative Agent.

 

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“Lien” means any mortgage or deed of trust, pledge, hypothecation, assignment,
deposit arrangement, lien (statutory or other), charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease, conditional sale or title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing statement
perfecting a security interest under the Code or comparable law of any
jurisdiction).

 

“Litigation” has the meaning ascribed to it in Section 4.7.

 

“Loan Account” has the meaning ascribed to it in Section 2.12.

 

“Loan Documents” means this Agreement, the Notes, the GE Capital Fee Letter, the
Collateral Documents, the Master Standby Agreement, the Master Documentary
Agreement, the Business Associate Agreement, Hedging Agreements entered into
between Borrower and any Lender and all other agreements, instruments, documents
and certificates identified in the Closing Checklist executed and delivered to,
or in favor of, Administrative Agent or any Lenders and including all other
pledges, powers of attorney, consents, assignments, contracts, notices, and all
other written matter whether heretofore, now or hereafter executed by or on
behalf of any Credit Party, or any employee of any Credit Party, and delivered
to Administrative Agent or any Lender in connection with this Agreement or the
transactions contemplated thereby.  Any reference in this Agreement or any other
Loan Document to a Loan Document shall include all appendices, exhibits or
schedules thereto, and all amendments, restatements, supplements or other
modifications thereto, and shall refer to this Agreement or such Loan Document
as the same may be in effect at any and all times such reference becomes
operative.

 

“Loans” means any one or more of the Revolving Loan, the Term Loan or the
Swingline Loan, as the context may require.

 

“Lock Box” has the meaning ascribed to it in Section 6.20.

 

“Margin Stock” has the meaning assigned thereto in Regulation U of the Federal
Reserve Board, as the same may be amended, supplemented or modified from time to
time.

 

“Master Documentary Agreement” means the Master Agreement for Documentary
Letters of Credit dated as of the Closing Date among the Borrower, as Applicant,
and GE Capital.

 

“Master Standby Agreement” means the Master Agreement for Standby Letters of
Credit dated as of the Closing Date among the Borrower, as Applicant, and GE
Capital, as issuer.

 

“Material Adverse Effect” means, with respect to any event, act, condition or
occurrence of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), whether
singly or in conjunction with any other event or events, act or acts, condition
or conditions, occurrence or occurrences, whether or not related, a material
adverse change in, or a material adverse effect upon, any of (a) the financial
condition, operations, business, properties or prospects of the Credit Parties
taken as a whole, (b) the rights and remedies of the Administrative Agent or the
Lenders under the Loan Documents,

 

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or the ability of any Credit Party to perform its obligations under the Loan
Documents to which it is a party, as applicable, (c) the legality, validity or
enforceability of any Loan Document, or (d) the existence, perfection or
priority of any security interest granted in the Loan Documents or the value of
the Collateral (including its value to the Administrative Agent and the Lenders
as security for the Obligations).  If (x) a fact or circumstance disclosed in
the financial statements referred to in Section 4.5 or a Disclosure Statement,
or if an investigation, action, suit or proceeding disclosed in Disclosure
Schedule 4.7, that, at the time of such disclosure did not appear reasonably
likely to have a Material Adverse Effect, should in the future have, or appear
reasonably likely to have, a Material Adverse Effect, or (y) a development or
change shall occur with respect to any fact or circumstance disclosed in any
financial statement, Disclosure Schedule or previously described investigation,
action, suit or proceeding that should in the future have or appear reasonably
likely to have a Material Adverse Effect, then in each case ((x) and (y)) such
Material Adverse Effect shall be a change or event subject to Section 4.6
notwithstanding such prior disclosure.

 

“Maximum Commitment Amount” means, as of any date of determination, an amount
equal to the Revolving Credit Commitments of all Lenders as of that date.

 

“Maximum Lawful Rate” has the meaning ascribed to it in Section 2.15(b).

 

“Medicaid” means, collectively, the healthcare assistance program established by
Title XIX of the Social Security Act (42 U.S.C. §§1396 et seq.) and any statutes
succeeding thereto, and all laws, rules, regulations, manuals, orders,
guidelines or requirements (whether or not having the force of law) pertaining
to such program, in each case as the same may be amended, supplemented or
otherwise modified from time to time.

 

“Medicaid Account” means an Account payable pursuant to a Medicaid Provider
Agreement.

 

“Medicaid Certification” means certification of a facility by CMS or a state
agency or entity under contract with CMS that such healthcare facility fully
complies with all the conditions of Medicaid.

 

“Medicaid Provider Agreement” means an agreement entered into between a state
agency or other entity administering Medicaid in such state and a health care
facility or physician under which the health care facility or physician agrees
to provide services or merchandise for Medicaid patients.

 

“Medical Services” means medical and/or health care services provided to a
Patient, including, but not limited to, medical and/or health care services
provided to a Patient and performed by a Credit Party which are covered by a
policy of insurance issued by an Insurer, and includes, without limitation,
physician services, nurse and therapist services, dental services, hospital
services, skilled nursing facility services, comprehensive outpatient
rehabilitation services, home health care services, residential and out-patient
behavioral healthcare services, and medicine or health care equipment provided
by a Credit Party to a Patient for a necessary or specifically requested valid
and proper medical or health purpose.

 

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“Medicare” means, collectively, the health insurance program for the aged and
disabled established by Title XVIII of the Social Security Act (42 U.S.C. §§1395
et seq.) and any statutes succeeding thereto, and all laws, rules, regulations,
manuals, orders or guidelines (whether or not having the force of law)
pertaining to such program, in each case as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Medicare Account” means an Account payable pursuant to a Medicare Provider
Agreement.

 

“Medicare Certification” means certification of a facility by CMS or a state
agency or entity under contract with CMS that such healthcare facility fully
complies with all conditions for such facility’s participation in Medicare.

 

“Medicare Provider Agreement” means an agreement entered into between a state
agency or other entity administering Medicare in such state and a health care
facility or physician under which the health care facility or physician agrees
to provide services or merchandise for Medicare patients.

 

“Mortgaged Property” has the meaning set forth to it in Section 6.18.

 

“Mortgages” means each of the mortgages, deeds of trust, leasehold mortgages,
leasehold deeds of trust, collateral assignments of leases or other Real
Property security documents delivered by any Credit Party to Administrative
Agent on behalf of itself and Lenders with respect to the Mortgaged Properties,
all in form and substance reasonably satisfactory to Administrative Agent.

 

“MSN License Agreements” means, collectively that certain License Agreement
dated as of July 30, 2003 between Medical Staffing Network Assets, LLC and
Medical Staffing Network, Inc. and that certain License Agreement dated as of
August 18, 2003 between Medical Staffing Network Assets, LLC and Medical
Staffing Network of Illinois, LLC.

 

“MSN Management and Administrative Services Agreements” means, collectively,
that certain Management and Administrative Services Agreement dated July 30,
2003 between Medical Staffing Network Assets, LLC and Medical Staffing Network,
Inc. and that certain Management and Administrative Services Agreement dated
August 18, 2003 between Medical Staffing Network, Inc. and Medical Staffing
Network of Illinois, LLC.

 

“Multi-employer Plan” means a “multi-employer plan” as defined in
Section 4001(a)(3) of ERISA, and to which any Credit Party or any member of a
Controlled Group is making, is obligated to make or has made or been obligated
to make, contributions on behalf of participants who are or were employed by any
of them.

 

“Nautic Partners” means Nautic Partners V, LP, Fleet Equity Partners VI, LP,
Fleet Ventures Resources, Inc., Kennedy Plaza Partners III, LP, Chisholm
Partners IV, LP and Kennedy Plaza Partners II, LLC.

 

“Net Cash Proceeds” means, with respect to any transaction, an amount equal to
the cash proceeds received by a Credit Party or any Subsidiary from or in
respect of such

 

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transaction (including any cash proceeds received as income or other cash
proceeds of any non-cash proceeds of such transaction), less (x) any commissions
and other reasonable and customary transaction costs, fees and expenses properly
attributable to such transaction and payable by the Credit Party in connection
therewith (in each case, paid to non-Affiliates) and (y) in the case of an Asset
Disposition, any amounts payable to holders of senior Liens (to the extent such
Liens are permitted by Section 7.2) and any taxes paid or payable by such Person
(as reasonably estimated by the chief financial officer of Holdings giving
effect to the overall tax position of such Person) in respect of such Asset
Disposition and (z) the amount of any reasonable reserve established in
accordance with GAAP against any liabilities retained by such Person (other than
taxes deducted pursuant to the foregoing clause (y)) associated with the asset
disposed of in such Asset Disposition.

 

“Net Income” means, for any period, the net income as determined in accordance
with GAAP.

 

“Net Working Investment” means, at any date, Adjusted Current Assets minus
Current Liabilities, all determined at such date.

 

“Notes” means, collectively, the Revolving Notes, the Swingline Notes and the
Term Notes.

 

“Notice of Borrowing” has the meaning ascribed to it in Section 2.3(a).

 

“Obligations” means all Loans, fees, indebtedness, liabilities, obligations,
covenants and duties of any Credit Party to any Lending Party of every kind,
nature and description, direct or indirect, absolute or contingent, due or not
due, in contract or tort, liquidated or unliquidated, arising under this
Agreement, or under the other Loan Documents, by operation of law or otherwise
in connection with the transactions contemplated hereby, now existing or
hereafter arising, and whether or not for the payment of money or the
performance or non-performance of any act, including, but not limited to, all
damages that any Credit Party may owe to the Administrative Agent and/or the
Lenders by reason of any breach by any Credit Party of any representation,
warranty, covenant, agreement or other provision of this Agreement or any of the
other Loan Documents and all obligations of the Borrower under any Hedging
Agreement.  Without limiting the generality of the foregoing, this term includes
all principal, interest (including all interest that accrues after the
commencement of any case or proceeding by or against any Credit Party in
bankruptcy, whether or not allowed in such case or proceeding), Fees, Charges,
expenses, attorneys’ fees and any other sum payable by any Credit Party to a
Lending Party under this Agreement or any of the other Loan Documents.

 

“Officer’s Certificate” means a certificate executed on behalf of a Person by
one or more of its chairman of the board (if an officer), chief executive
officer, president, chief financial officer or treasurer.

 

“Operating Lease” means, as applied to any Person, any lease (including, without
limitation, leases which may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) which is not a Capital Lease other
than any such lease in which that Person is the lessor.

 

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“Organizational Documents” means, for any corporation, the certificate or
articles of incorporation, the bylaws, or other similar organizational
documents, any certificate of designation or instrument relating to the rights
of preferred shareholders of such corporation, any shareholder rights agreement,
and all applicable resolutions of the board of directors (or any committee
thereof) of such corporation adopting, supplementing or modifying any of the
foregoing and, for any entity other than a corporation, the equivalent of the
foregoing, including, without limitations, the partnership agreement, and the
operating agreement (or comparable agreement) of any partnership or limited
liability company, respectively.

 

“Outstanding Revolving Amount” means, with respect to any Lender at any time,
the sum of (a) the aggregate outstanding principal amount of its Advances, plus
(b) its Percentage of the aggregate outstanding principal amount of the
Swingline Loans (if any) plus (c) its L/C Exposure, all determined at such time
after giving effect to any prior assignments by or to such Lender pursuant to
Section 11.6.

 

“Parent” has the meaning ascribed to it in Paragraph D of the Introductory
Statement.

 

“Parent Guaranty Agreement” means the Parent Guaranty Agreement dated as of the
date hereof by the Parent in favor of Administrative Agent, on behalf of itself
and Lenders, substantially in the form of Exhibit V.

 

“Parent Pledge Agreement” means the Parent Pledge Agreement dated as of the date
hereof between Parent and Administrative Agent, substantially in the form of
Exhibit W.

 

“Parent Security Agreement” means the Parent Security Agreement dated as of the
date hereof between Parent and the Administrative Agent, substantially in the
form of Exhibit X.

 

“Patient” means any Person receiving Medical Services from any Credit Party and
all Persons legally liable to pay such Credit Party for such Medical Services
other than Insurers or Governmental Authorities.

 

“Payment Account” means, with respect to each Lender, the account specified on
the signature pages hereof into which all payments by or on behalf of the
Borrower to such Lender under the Loan Documents shall be made, or such other
account as such Lender shall from time to time specify by notice to the Borrower
and Administrative Agent.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.

 

“Pension Plan” means a Plan described in Section 3(2) of ERISA.

 

“Percentage” means, with respect to any Lender at any time, the percentage which
the amount of its Commitment for a particular Class at such time represents of
the aggregate amount of all the Commitments for such Class at such time.  At any
time after the Commitments for a Class shall have terminated, the term
“Percentage” shall refer to a Lender’s Percentage for

 

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that Class immediately before such termination, adjusted to reflect any
subsequent assignments pursuant to Section 11.6.

 

“Permitted Acquisition” means an Acquisition by a Credit Party (other than the
Parent) or any Subsidiary of a Credit Party for consideration no greater than
the fair market value (as conclusively determined in good faith by the Board of
Directors of the Borrower) of the Stock or property acquired; provided that (a)
the property acquired (or the property of the Person acquired) in such
Acquisition constitutes Eligible Assets (or goodwill associated therewith), (b)
the Administrative Agent shall have received all items in respect of the Stock
or property acquired in such Acquisition required to be delivered by the terms
of Section 6.11 and/or Section 6.12, (c) in the case of an Acquisition of the
Stock of another Person, the board of directors (or other comparable governing
body) of such other Person shall have duly approved such Acquisition, (d) the
Borrower shall have delivered to the Administrative Agent, prior to the closing
of such Acquisition, a certificate of its chief financial officer demonstrating
that, upon giving effect to such Acquisition on a pro forma basis, the Credit
Parties are in compliance with all of the covenants set forth in Section 6.10,
(e) the representations and warranties made by the Credit Parties in any Loan
Document shall be true and correct in all material respects at and as if made as
of the date of such Acquisition (after giving effect thereto) except to the
extent such representations and warranties expressly relate to an earlier date,
(f) at the time of such Acquisition and after giving effect thereto, no Default
or Event of Default shall exist or be continuing, and (g) after giving effect to
such Acquisition, the aggregate consideration (including cash and non-cash
consideration and any assumption of liabilities) for all such Acquisitions
during the term of this Credit Agreement shall not exceed the sum of $5,000,000.

 

“Permitted Contest” means, with respect to any Credit Party, a good faith
contest by such Credit Party, by appropriate proceedings, of the validity or
amount of any Charges, claims, obligations or liabilities of such Credit Party;
provided, that (a) such contest is maintained and prosecuted continuously and
with diligence and operates to suspend collection or enforcement of such
Charges, (b) no Lien shall be imposed to secure payment of such Charges, claims,
obligations or liabilities (other than payments to warehousemen and/or bailees)
that is superior to any of the Liens securing the Obligations, (c) none of the
Collateral becomes subject to forfeiture or loss as a result of such contest,
(d) such Credit Party shall promptly pay or discharge such contested Charges,
claims, obligations, liabilities and all additional charges, interest, penalties
and expenses, if any, and shall deliver to Administrative Agent evidence
reasonably acceptable to Administrative Agent of such compliance, payment or
discharge, if such contest is terminated or discontinued adversely to such
Credit Party or the conditions set forth above in clause (a), (b) and (c) of
this definition are no longer met, and (e) Administrative Agent has not advised
Borrower in writing that Administrative Agent reasonably believes that
nonpayment or nondischarge thereof could have, or result in, a Material Adverse
Effect.

 

“Permitted Investments” means Investments which are (a) cash or Cash
Equivalents, (b) accounts receivable created, acquired or made in the ordinary
course of business of a Credit Party and payable or dischargeable in accordance
with customary trade terms or otherwise in the prudent judgment of a Credit
Party, (c) inventory, raw materials and general intangibles (to the extent such
general intangibles are not a Capital Expenditure) acquired in the ordinary
course of business, (d) Investments by one Credit Party in another Credit Party
other than the Parent, (e) Investments by the Credit Parties (other than the
Parent) in the Parent in an

 

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aggregate amount not to exceed $250,000 during the term of this Credit
Agreement, (f) Investments in Permitted Acquisitions, (g) loans to directors,
officers, employees or agents in the ordinary course of business for reasonable 
business expenses or in connection with relocation, not to exceed $250,000 in
the aggregate at any one time, (h) Investments made as a result of the receipt
of non-cash consideration from an Asset Disposition permitted by this Credit
Agreement in an amount not to exceed $500,000 in the aggregate during the term
of this Credit Agreement, (i) Investments in Capital Expenditures to the extent
such Capital Expenditures are permitted by Section 7.13 and (j) Investments
existing as of the Closing Date and set forth on Disclosure Schedule 7.6.

 

“Permitted Liens” means (a) Liens securing Obligations, (b) Liens for taxes not
yet due or Liens for taxes being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with GAAP have
been established (and as to which the property subject to any such Lien is not
yet subject to foreclosure, sale or loss on account thereof), (c) Liens in
respect of property imposed by law arising in the ordinary course of business
such as materialmen’s, mechanics’, warehousemen’s, carrier’s, landlords’ and
other nonconsensual statutory Liens which are not yet due and payable, which
have been in existence less than 90 days or which are being contested in good
faith by appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which the property subject
to any such Lien is not yet subject to foreclosure, sale or loss on account
thereof), (d) pledges or deposits made in the ordinary course of business to
secure payment of worker’s compensation insurance, unemployment insurance,
pensions or social security programs (excluding Liens under ERISA), (e) Liens
arising from good faith deposits in connection with or to secure performance of
tenders, bids, leases, government contracts, performance and return-of-money
bonds and other similar obligations incurred in the ordinary course of business
(other than obligations in respect of the payment of borrowed money), (f) Liens
arising from good faith deposits in connection with or to secure performance of
statutory obligations and surety and appeal bonds, (g) easements, rights-of-way,
restrictions (including zoning restrictions), minor defects or irregularities in
title and other similar charges or encumbrances not, in any material respect,
impairing the use of the encumbered property for its intended purposes, (h)
judgment Liens that would not constitute an Event of Default, (i) Liens on
property of any Person securing purchase money Indebtedness of such Person
permitted under Section 7.1(d) and provided that any such Lien attaches to such
property concurrently or within 90 days after the acquisition thereof and
provided further that the principal amount of the Indebtedness secured shall not
be less than 70% of the value of the asset subject to such Lien, (j) Liens
arising by virtue of any statutory or common law provision relating to banker’s
liens, rights of setoff or similar rights as to deposit accounts or other funds
maintained with a creditor depository institution, (k) Liens on property of any
Person securing purchase money Indebtedness of such Person assumed in connection
with a Permitted Acquisition and permitted under Section 7.1(f) and (l) Liens on
a time deposit account to secure the outstanding letter of credit issued by Bank
of America in an amount not to exceed $52,500.

 

“Person” means any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, limited liability
company, institution, public benefit corporation, other entity or government
(whether federal, state, county, city, municipal, local, foreign, or otherwise,
including any instrumentality, division, agency, body or department thereof).

 

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“Plan” means, at any time, an “employee benefit plan” as defined in Section 3(3)
of ERISA, that any Credit Party or any member of a Controlled Group maintains,
contributes to or has an obligation to contribute to or has maintained,
contributed to or had an obligation to contribute to at any time within the past
7 years on behalf of participants who are or were employed by any Credit Party
or any member of a Controlled Group.

 

“Pledge Agreements” means, collectively, the Borrower Pledge Agreement, the
Subsidiary Pledge Agreement, the Holdings Pledge Agreement, the Parent Pledge
Agreement and any pledge agreements entered into after the Closing Date by any
Credit Party (as required by this Agreement or any other Loan Document).

 

“Prior Facility Financing Fees” means the amount of non-cash charges incurred by
the Borrower in the fourth Fiscal Quarter of Fiscal Year 2003 for the
unamortized financing fees assessed in connection with the credit facilities
under the Prior Lenders Credit Agreement, not to exceed $3,500,000.

 

“Prior Lenders” means the “Lenders” signatory to the Prior Lenders Credit
Agreement.

 

“Prior Lenders Credit Agreement” means that certain credit agreement dated as of
October 26, 2001 by and among Medical Staffing Network, Inc., as borrower, the
other parties signatory thereto, and Bank of America, N.A. as Administrative
Agent, as such agreement has been amended, restated, supplemented or otherwise
modified to the date hereof.

 

“Prior Lenders Obligations” means all obligations of the borrower, the
guarantors, and the other credit parties signatory to the Prior Lenders Credit
Agreement and the documents executed in connection therewith.

 

“Private Accounts” means, collectively, any and all Accounts that are not
Government Accounts.

 

“Pro Forma” means the unaudited consolidated and consolidating balance sheet of
Borrowers and their Subsidiaries as of September 30, 2003  after giving pro
forma effect to the Related Transactions, in form and substance satisfactory to
the Administrative Agent.

 

“Pro Forma Excess Availability” means for the Borrower and it Subsidiaries on a
consolidated basis, the sum of (a) Cash Equivalents on hand plus (b) Borrowing
Availability minus (c) the aggregate amount of all then outstanding and unpaid
trade payables and other obligations of the Borrower and its Subsidiaries which
are outstanding more than sixty (60) days past due as of such time (other than
trade payables or other obligations being contested or disputed by the Borrower 
in good faith), minus (d) without duplication, the amount of checks issued by
the Borrower to pay trade payables and other obligations which are more than
sixty (60) days past due as of such time (other than trade payables or other
obligations being contested or disputed by the Borrower in good faith) but not
yet sent and the book overdraft of the Borrower, all as determined on a pro
forma basis before and after giving effect to an applicable payment.

 

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“Projections” means Credit Parties’ forecasted consolidated and consolidating: 
(a) balance sheets; (b) profit and loss statements; (c) cash flow statements;
and (d) capitalization statements, all prepared on a Subsidiary by Subsidiary or
division-by-division basis, if applicable, and otherwise consistent with the
historical financial statements of the Credit Parties, together with appropriate
supporting details and a statement of underlying assumptions, all in form and
substance satisfactory to the Administrative Agent.

 

“Qualified Assignee” means (a) any Lender, any Affiliate of any Lender and, with
respect to any Lender that is an investment fund that invests in commercial
loans, any other investment fund that invests in commercial loans and that is
managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor, and (b) any commercial bank, savings and
loan association or savings bank or any other entity which is an “accredited
investor” (as defined in Regulation D under the Securities Act) that extends
credit or buys loans as one of its businesses, including insurance companies,
mutual funds, lease financing companies and commercial finance companies, and
that in each case, has a rating of BBB or higher from Standard & Poor’s Rating
Group and a rating of Baa2 or higher from Moody’s Investors Service, Inc. at the
date that it becomes a Lender and that, through its applicable lending office,
is capable of lending to the Borrower without the imposition of any withholding
or similar taxes; provided that no Person determined by Administrative Agent to
be acting in the capacity of a vulture fund or distressed debt purchaser shall
be a Qualified Assignee, and no Person or Affiliate of such Person (other than a
Person that is already a Lender) holding Subordinated Debt or Stock issued by
any Credit Party shall be a Qualified Assignee.

 

“Qualified Plan” means a Pension Plan that is intended to be tax-qualified under
Section 401(a) of the IRC.

 

“Questionnaire” means that certain due diligence request letter, dated as of
November 25, 2003, drafted by Kilpatrick Stockton LLP and provided to the
Borrower, and all written responses of the Borrower to such due diligence
request letter.

 

“Real Property” with respect to any Person, means all of such Person’s right,
title and interest in and to any owned or leased real property and any buildings
and Fixtures located thereon.

 

“Refinancing” means the repayment in full by the Borrower of the Prior Lenders
Obligations on the Closing Date.

 

“Reimbursement Obligations” means, at any time, all obligations of the Borrower
to reimburse the L/C Issuers pursuant to Section 2.5 for amounts paid by the L/C
Issuers in respect of drawings under any Letters of Credit, including any
portion of any such obligation to which a Lender has become subrogated pursuant
to Section 2.5.

 

“Related Person” has the meaning ascribed to it in Section 6.20.

 

“Related Transactions” means the initial borrowing under the Revolving Loan and
the Term Loan on the Closing Date, the Refinancing, and the payment of all fees,
costs and expenses associated with all of the foregoing and the execution and
delivery of all of the Related Transactions Documents.

 

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“Related Transaction Documents” means the Loan Documents and all other
agreements or instruments executed in connection with the Related Transactions.

 

“Relationship Bank” has the meaning ascribed to it in Section 6.20.

 

“Release” means any release, threatened release, spill, emission, leaking,
pumping, pouring, emitting, emptying, escape, injection, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Hazardous Material in
the indoor or outdoor environment, including the movement of Hazardous Material
through or in the air, soil, surface water, ground water or property.

 

“Rent Expense” means, for any period, with respect to the Credit Parties and
their Subsidiaries on a consolidated basis, all rent payable under Operating
Leases (whether a lease of real property, personal property or mixed), as
determined in accordance with GAAP.

 

“Reportable Event” means a reportable event as defined in Section 4043 of ERISA
other than a reportable event for which the requirement to provide notice to the
PBGC has been waived by regulation.

 

“Required Lenders” means Lenders having more than 50% of the sum of (i) the
Revolving Credit Commitments of all Lenders (or if the Revolving Credit
Commitments shall have been terminated, the aggregate outstanding principal
amount of the Revolving Loan), plus (ii) the aggregate outstanding principal
amount of the Term Loans; provided if a single Lender shall hold sufficient
commitments and/or Loans to constitute the Required Lenders, then the Required
Lenders shall mean such Lender plus at least one other Lender.

 

“Required Revolving Lenders” means Lenders having more than 50% of the Revolving
Credit Commitments of all Lenders (or if the Revolving Credit Commitments shall
have been terminated, the aggregate outstanding principal amount of the
Revolving Loan); provided if a single Lender shall hold sufficient commitments
and/or Loans to constitute the Required Revolving Lenders, then the Required
Revolving Lenders shall mean such Lender plus at least one other Revolving
Lender.

 

“Required Term Lenders” means Lenders having more than 50% of the aggregate
outstanding principal amount of the Term Loans; provided if a single Lender
shall hold sufficient commitments/and or Loans to constitute the Required Term
Lenders, then the Required Term Lenders shall mean such Lender plus at least one
other Term Lender.

 

“Reserves” means reserves established by the Administrative Agent in its
reasonable credit judgment from time to time pursuant to Section 2.1(e) against
the Revolving Credit Limit, the Borrowing Base or any  component thereof of the
Borrower.  Without limiting the generality of the foregoing, Reserves
established to ensure the payment of accrued Interest Expenses or any
Indebtedness shall be deemed to be a reasonable exercise of the Administrative
Agent’s reasonable credit judgment.

 

“Restricted Payment” means (i) any dividend or other payment or distribution,
direct or indirect, on account of any shares of any class of Stock of any
Person, now or hereafter outstanding (including without limitation any payment
in connection with any dissolution,

 

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merger, consolidation or disposition involving any Person), or to the holders,
in their capacity as such, of any shares of any class of Stock of any Person,
now or hereafter outstanding (other than dividends or distributions payable in
Stock of the applicable Person), (ii) any redemption, retirement, sinking fund
or similar payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of Stock of any Person, now or hereafter outstanding,
(iii) any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of Stock of any
Person, now or hereafter outstanding and (iv) any payment of any management fee
to any Person.

 

“Restructuring Fees” means the amount of charges incurred by the Borrower in the
second Fiscal Quarter of Fiscal Year 2003 for the fees assessed in connection
with restructuring, not to exceed $763,000.

 

“Revolving Credit Advance” has the meaning ascribed to it in Section 2.1(a).

 

“Revolving Credit Commitment” means (a) with respect to any Lender listed on the
signature pages hereof, the amount (if any) set forth thereon opposite the name
of such Lender under the heading “Revolving Credit Commitment”, (b) with respect
to any assignee of a Revolving Credit Commitment, the amount of the transferor
Lender’s Revolving Credit Commitment assigned to such assignee pursuant to
Section 11.6, and (c) as to all Lenders having a Revolving Credit Commitment,
the aggregate commitment of all Lenders to make Revolving Credit Advances, which
aggregate commitment shall be sixty-five million dollars ($65,000,000) on the
Closing Date, in each case, as such amount may be reduced from time to time
pursuant to Section 2.8 or changed as a result of an assignment pursuant to
Section 11.6.  The term “Revolving Credit Commitment” does not include the
Swingline Commitment.

 

“Revolving Credit Commitments” means the sum of the Revolving Credit Commitments
of all Lenders in effect at such time.

 

“Revolving Credit Limit” means as of any date of determination as to Borrower,
the lesser of (a) the Maximum Commitment Amount and (b) the Borrowing Base, in
each case, minus the Availability Block and minus any Reserves established by
the Administrative Agent.

 

“Revolving Lenders” means, as of any date of determination, Lenders having a
Revolving Credit Commitment.

 

“Revolving Loan” means, at any time, the sum of (a) the aggregate amount of
Revolving Credit Advances outstanding to the Borrower plus (b) the aggregate L/C
Obligations incurred on behalf of the Borrower.  Unless the context otherwise
requires, references to the outstanding principal balance of the Revolving Loan
shall include the outstanding balance of L/C Obligations.

 

“Revolving Loan Collateral” means all Accounts, Cash Equivalents and General
Intangibles of each Credit Party.

 

“Revolving Note” has the meaning ascribed to it in Section 2.2.

 

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“Scheduled Funded Debt Payments” means, for any period, the sum of all scheduled
payments of principal on Funded Indebtedness (including the implied principal
component of payments due on Capital Leases and Synthetic Leases, but excluding
any voluntary prepayments or mandatory prepayments required pursuant to Sections
2.8 or 2.9), as determined in accordance with GAAP; provided that, payments of
principal made pursuant to the Prior Lenders Credit Agreement shall be excluded
from calculations of Scheduled Funded Debt Payments made for the period
January 1, 2003, through September 30, 2003.

 

“Securities Act” means the Securities Act of 1933, as amended from time to time,
and the rules and regulations promulgated thereunder.

 

“Security Agreements” means collectively, the Borrower Security Agreement, the
Parent Security Agreement, the Holdings Security Agreement, the Subsidiary
Security Agreement, and any other security agreements now or hereafter executed
by any Person in favor of Administrative Agent and Lenders to secure the
Obligations.

 

“Single Employer Plan” means a Plan maintained by the Borrower or any member of
the Controlled Group for employees of the Borrower or any member of the
Controlled Group.

 

“Solvent” means, with respect to any Person on a particular date, that on such
date (a) the assets of such Person, at a fair valuation, exceed its liabilities,
including contingent liabilities, (b) the remaining capital of such Person is
not unreasonably small to conduct its business and (c) such Person will not have
incurred debts, and does not have the present intent to incur debts, beyond its
ability to pay such debts as they mature.  For purposes of this definition,
“debt” means any liability on a claim, and “claim” means any (i) right to
payment, whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured, or (ii) right to an equitable remedy for
breach of performance if such breach gives rise to a right to payment, whether
or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, undisputed, secured or unsecured.  In
computing the amount of contingent liabilities of any Person on any date, such
liabilities shall be computed at the amount that, in the judgment of the
Administrative Agent in light of all facts and circumstances existing at such
time, represents the amount of such liabilities that reasonably can be expected
to become actual or matured liabilities.

 

“Sponsor” means Warburg Pincus and Nautic Partners and their respective
Subsidiaries.

 

“Stated Rate” has the meaning ascribed to it in Section 2.15(b).

 

“Stock” means all shares, options, warrants, general or limited partnership
interests, membership interests or other equivalents (regardless of how
designated) of or in a corporation, partnership, limited liability company or
equivalent entity whether voting or nonvoting, including common stock, preferred
stock or any other “equity security” (as such term is defined in Rule 3a11-1 of
the General Rules and Regulations promulgated by the Securities and Exchange
Commission under the Exchange Act).

 

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“Subordinated Debt” means the Indebtedness of the Borrower or any of its
Subsidiaries incurred in connection with Permitted Acquisitions in an aggregate
amount not to exceed $1,000,000 at any one time outstanding which is
subordinated to the Obligations in a manner and form satisfactory to the
Administrative Agent and the Required Lenders in their sole discretion.

 

“Subsidiary” means, with respect to any Person, (a) any corporation of which an
aggregate of more than fifty percent (50%) of the outstanding Stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether, at the time, Stock of any other class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of fifty percent (50%) or more of such Stock whether by
proxy, agreement, operation of law or otherwise, and (b) any partnership or
limited liability company in which such Person and/or one or more Subsidiaries
of such Person shall have an interest (whether in the form of voting or
participation in profits or capital contribution) of more than fifty percent
(50%) or of which any such Person is a general partner or may exercise the
powers of a general partner.  Unless the context otherwise requires, each
reference to a Subsidiary shall be a reference to a Subsidiary of the Borrower.

 

“Subsidiary Guaranty” means the Subsidiary Guaranty of even date herewith
executed by each Subsidiary of the Borrower in favor of Administrative Agent, on
behalf of the Agent and Lenders, substantially in the form of Exhibit G.

 

“Subsidiary Pledge Agreement” means the Subsidiary Pledge Agreement dated as of
the date hereof among Subsidiary Guarantors and Administrative Agent,
substantially in the form of Exhibit H.

 

“Subsidiary Security Agreement” means the Subsidiary Security Agreement dated as
of the date hereof among Subsidiary Guarantors and Administrative Agent,
substantially in the form of Exhibit I.

 

“Swingline Advance” has the meaning ascribed to it in Section 2.1(c).

 

“Swingline Availability Period” means the period from and including the Closing
Date to but excluding the Swingline Maturity Date.

 

“Swingline Borrowing” means a borrowing of a Swingline Loan pursuant to
Section 2.6(a).

 

“Swingline Commitment” means the obligation of the Swingline Lender to make
Swingline Loans to the Borrower in an aggregate principal amount at any one time
outstanding not to exceed $3,000,000.

 

“Swingline Lender” means GE Capital, in its capacity as the Swingline Lender
under the swingline facility described in Section 2.6, and its successors in
such capacity.

 

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“Swingline Loan” means a loan made by the Swingline Lender pursuant to
Section 2.6(a).

 

“Swingline Maturity Date” means the day that is thirty (30) days before the
Commitment Termination Date.

 

“Swingline Note” has the meaning ascribed to it in Section 2.2(c).

 

“Synthetic Lease” means any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product where such
transaction is considered borrowed money indebtedness for tax purposes but is
classified as an Operating Lease under GAAP.

 

“Target” means a Person, group of assets or business line that is the subject of
an Acquisition.

 

“Temporary Cash Investment” means any Investment in (a) direct obligations of
the United States or any agency thereof, or obligations fully guaranteed by the
United States or any agency thereof, (b) commercial paper rated at least A-1 by
Standard & Poor’s Rating Group and P-1 by Moody’s Investors Service, Inc., (c)
time deposits with, including certificates of deposit issued by, any office
located in the United States of any bank or trust company which is organized
under the laws of the United States or any State thereof and has capital,
surplus and undivided profits aggregating at least $500,000,000 and which issues
(or the parent of which issues) certificates of deposit or commercial paper with
a rating described in clause (b) above, (d) repurchase agreements with respect
to securities described in clause (a) above entered into with an office of a
bank or trust company meeting the criteria specified in clause (c) above,
provided in each case that such Investment matures within one (1) year from the
date of acquisition thereof by any Credit Party or (e) any money market or
mutual fund that invests only in the foregoing and the manager of which and the
liquidity of which is reasonably satisfactory to the Administrative Agent.

 

“Term Lenders” means, as of any date of determination, Lenders having a Term
Loan Commitment, or after the Closing Date, holding a Term Loan.

 

“Term Loan” has the meaning ascribed to it in Section 2.1(b).

 

“Term Loan Collateral” means all Real Property and personal property of each
Credit Party other than the Revolving Loan Collateral and Stock of the Credit
Parties.

 

“Term Loan Commitment” means (a) as to any Lender listed on the signature pages
hereof, the amount (if any) set forth opposite the name of such Lender under the
heading “Term Loan Commitment”, (b) with respect to any assignee of a Term Loan
Commitment, the amount of the transferor Lender’s Term Loan Commitment assigned
to such assignee pursuant to Section 11.6, and (c) as to all Lenders with a Term
Loan Commitment, the aggregate commitment of all Lenders to make the Term Loan,
which aggregate commitment shall be seventeen million dollars ($17,000,000) on
the Closing Date.  After advancing the Term Loan on the Closing Date, each
reference to a Lender’s Term Loan Commitment shall refer to the outstanding
principal amount of that Lender’s Term Loan.

 

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“Term Loan Maturity Date” means December 22, 2005.

 

“Term Note” has the meaning set forth in Section 2.2(b).

 

“Third Party Payor” means any governmental entity, insurance company, health
maintenance organization, professional provider organization or similar entity
that is obligated to make payments on any Account.

 

“Title IV Plan” means a Pension Plan (other than a Multi-employer Plan), that is
covered by Title IV of ERISA, and that any Credit Party or any member of a
Controlled Group maintains, contributes to or has an obligation to contribute to
on behalf of participants who are or were employed by any of them.

 

“Total Debt Service” means, for any period, the sum of (a) the aggregate
interest charges incurred by the Credit Parties and their Subsidiaries for such
period, whether expensed or capitalized, including the portion of any obligation
under Capital Leases allocable to interest expense in accordance with GAAP and
the portion of any debt discount or premium (but not expenses of issuance) that
shall be amortized in such period and (b) the aggregate amount of all Scheduled
Funded Debt Payments for such period.

 

“TRICARE” means, collectively, a program of medical benefits covering former and
active members of the uniformed services and certain of their dependents,
financed and administered by the United States Departments of Defense, Health
and Human Services and Transportation, which program was formerly known as the
Civilian Health and Medical Program of the Uniformed Services (CHAMPUS), and all
laws, rules, regulations, manuals, orders and administrative, reimbursement and
other guidelines of all Governmental Authorities promulgated in connection with
such program (whether or not having the force of law), in each case as the same
may be amended, supplemented or otherwise modified from time to time.

 

“TRICARE Account” means an Account payable pursuant to TRICARE.

 

“Type” defines a Loan or Borrowing by reference to whether such Loan or
Borrowing is a LIBOR Loan or Borrowing or a Base Rate Loan or Borrowing. 
Identification of a Borrowing or group of Advances by Type indicates that such
Borrowing or group of Advances is comprised of Advances of the specified Type.

 

“Unfunded Pension Liability” means, at any time, the aggregate amount, if any,
of the sum of (a) the amount by which the present value of all accrued benefits
under each Title IV Plan exceeds the fair market value of all assets of such
Title IV Plan allocable to such benefits in accordance with Title IV of ERISA,
all determined as of the most recent valuation date for each such Title IV Plan
using the actuarial assumptions for funding purposes in effect under such Title
IV Plan, plus (b) for a period of five (5) years following a transaction which
might reasonably be expected to be covered by Section 4069 of ERISA, the
liabilities (whether or not accrued) that could be avoided by any Credit Party
or any member of a Controlled Group as a result of such transaction.

 

“Unused Line Fee” has the meaning ascribed to it in Section 2.7(b).

 

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“Voting Stock” of a corporation means all classes of the Stock of such
corporation then outstanding and normally entitled to vote in the election of
directors.

 

“Warburg Pincus” means Warburg Pincus Private Equity VIII, L.P.

 

“Welfare Plan” means a Plan described in Section 3(i) of ERISA.

 

“Wholly Owned Subsidiary” means any Person 100% of whose Voting Stock is at the
time owned by the Borrower directly or indirectly through other Persons 100% of
whose Voting Stock is at the time owned, directly or indirectly, by the
Borrower.

 

Section 1.2.  Accounting Terms and Determinations.  Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required to
be delivered hereunder shall be prepared in accordance with generally accepted
accounting principles as in effect from time to time in the United States
(“GAAP”), applied on a basis consistent (except for changes concurred in by the
Credit Parties’ independent public accountants) with the most recent audited
consolidated financial statements of the Credit Parties delivered to the
Lenders; provided that, if:  (a) the Borrower notifies the Lenders that the
Borrower wishes to amend any provision of any Loan Document to eliminate the
effect of any change in GAAP on the operation of such provision, or (b) the
Administrative Agent notifies the Borrower that the Required Lenders wish to
amend any provision of any Loan Document for such purpose, then compliance with
such provision shall be determined on the basis of GAAP in effect immediately
before the relevant change in GAAP became effective, until either such notice is
withdrawn or such provision is amended in a manner satisfactory to the Borrower
and the Required Lenders.

 

Section 1.3.  Other Definitional Provisions.  The terms “Accounts”, “Chattel
Paper”, “Code”, “Contracts”, “Deposit Accounts”, “Documents”, “Fixtures”,
“Equipment”, “General Intangibles”, “Goods”, “Intellectual Property”,
“Instruments”, “Inventory”, “Investment Property”, “Letter-of-Credit Rights”,
“License” and “Software” have the meanings assigned to such terms in Section 1
of the Borrower Security Agreement, Subsidiary Security Agreement, Holdings
Security Agreement, or Parent Security Agreement as applicable.  References in
this Agreement to “Articles”, “Sections”, “Schedules” or “Exhibits” shall be to
Articles, Sections, Schedules or Exhibits of or to this Agreement unless
otherwise specifically provided.  Any of the terms defined in Section 1.1 may,
unless the context otherwise requires, be used in the singular or plural
depending on the reference.  “Include”, “includes” and “including” shall be
deemed to be followed by “without limitation” whether or not they are in fact
followed by such words or words of like import.  “Writing”, “written” and
comparable terms refer to printing, typing and other means of reproducing words
on paper.  Except as otherwise expressly provided herein, references to any
agreement or contract are to such agreement or contract as amended, modified or
supplemented from time to time in accordance with the terms hereof and thereof. 
References to any Person include the successors and permitted assigns of such
Person; provided that no Credit Party may assign its rights or obligations under
any Loan Document without the prior written consent of the Administrative Agent
and the Lenders.  References “from,” “through” or “to” any date mean, unless
otherwise specified, mean “from and including,” “through and including”, and “to
but excluding”, respectively.  References to any

 

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statute and related regulation shall include any amendments, modifications and
supplements of the same and any successor statutes and regulations.

 

ARTICLE II.

 

THE FACILITIES

 

Section 2.1.  The Facilities.

 

(a)                                         Revolving Loans.    Upon the terms
and subject to the conditions set forth herein, from time to time during the
period from the Closing Date to the Commitment Termination Date, each Revolving
Lender, severally and not jointly, agrees to advance funds to the Borrower (each
a “Revolving Credit Advance”); provided that immediately after each such Advance
is made (and after giving effect to any substantially concurrent application of
the proceeds thereof to repay outstanding Advances, Reimbursement Obligations or
Swingline Loans):

 

(i)                                           such Revolving Lender’s
Outstanding Revolving Amount shall not exceed its Revolving Credit Commitment,
and

 

(ii)                                      the aggregate Outstanding Revolving
Amount of all the Revolving Lenders shall not exceed the Revolving Credit Limit
then in effect.

 

Each Revolving Credit Advance shall be in a minimum amount of $1,000,000 or
integral multiples of $500,000 in excess thereof.  The several Revolving Lenders
shall make each Revolving Credit Advance under this subsection ratably in
proportion to their respective Revolving Credit Commitments.  Within the limits
specified in this subsection and subject to the conditions set forth elsewhere
in this Agreement, the Borrower may borrow pursuant to this subsection, repay
such Advances and reborrow pursuant to this subsection. The Revolving Credit
Commitment of each Revolving Lender shall terminate at the opening of business
on the Commitment Termination Date, and there shall become due and the Borrower
shall pay on the Commitment Termination Date, the entire outstanding principal
amount of each Revolving Loan and of each L/C Obligation, together with accrued
and unpaid interest thereon to but excluding the Commitment Termination Date.

 

(b)    Term Loans.  Upon the terms and subject to the conditions set forth
herein, on the Closing Date each Term Lender, severally and not jointly, agrees
to advance funds to the Borrower (each a “Term Loan”) in a principal amount
equal to its Term Loan Commitment.  The several Term Lenders shall make the Term
Loans under this subsection ratably in proportion to their respective Term Loan
Commitments.  Term Loans are not revolving in nature and any portion of such
Loan that is repaid or prepaid may not be reborrowed.  The entire outstanding
principal amount of the Term Loans, together with all accrued and unpaid
interest thereon, shall become due and payable in full upon the opening of
business on the Term Loan Maturity Date; provided that, prior to payment in full
of the Term Loans on the Term Loan Maturity Date, Borrower must demonstrate to
the reasonable satisfaction of the Administrative Agent that immediately before
and after giving effect to such

 

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payment, no Default has occurred and is continuing and the Pro Forma Excess
Availability is not less than $5,000,000.  Notwithstanding anything to the
contrary contained herein, the failure of the Borrower to pay the Term Loans in
full on the Term Loan Maturity Date shall be an Event of Default as set forth in
Section 8.1(a)(i).

 

(c)                                        Swingline Facility.    The Swingline
Lender agrees to advance funds to the Borrower (each a “Swingline Advance”), and
the Revolving Lenders agree to purchase participations therein from time to
time, all upon the terms and conditions specified in Section 2.6.

 

(d)                                        Letter of Credit Facility.    The
Revolving Lenders agree to incur, or purchase participations in, L/C Obligations
incurred by the L/C Issuer upon the terms and subject to the conditions
specified in Section 2.5.

 

(e)                                        Reserves; Borrowing Base
Adjustment.    The Administrative Agent shall have the right to establish,
modify or eliminate Reserves against the Revolving Credit Limit, the Borrowing
Base or any component thereof from time to time in its reasonable credit
judgment. In addition, Administrative Agent reserves the right, at any time and
from time to time after the Closing Date, to adjust any of the criteria used to
determine eligibility of any component of the Borrowing Base, to establish new
criteria, to adjust Collection Values, and to adjust advance rates with respect
to such component, in its reasonable credit judgment, subject to the approval of
the Required Revolving Lenders in the case of adjustments or new criteria or
changes in advance rates or the elimination of Reserves which have the effect of
making more credit available to the Borrower.

 

Section 2.2.  Notes.

 

(a)                                         Revolving Notes.   The Revolving
Loan of each Revolving Lender shall be evidenced by a single revolving note,
substantially in the form of Exhibit A (each such note, a “Revolving Note”),
dated the Closing Date in an aggregate principal amount equal to the amount of
such Revolving Lender’s Revolving Credit Commitment, duly executed and delivered
and payable by the Borrower to such Revolving Lender.  Each Revolving Lender
shall record the date and amount of each Revolving Credit Advance made by it,
and the date and amount of each payment of principal made by the Borrower with
respect thereto, and prior to any transfer of its Revolving Note shall endorse
on Schedule A thereto (or any continuation thereof) forming a part thereof
appropriate notations to evidence the foregoing information with respect to such
Revolving Loan then outstanding; provided that the failure of any Lender to make
any such recordation or endorsement shall not affect the obligations of the
Borrower hereunder or under any Revolving Note.  Each Revolving Lender is hereby
irrevocably authorized by the Borrower to so endorse its Revolving Note and to
attach to and make a part of its Revolving Note a continuation of any such
schedule as and when required.

 

(b)                                        Term Loan Notes.    The Term Loan of
each Term Lender shall be evidenced by a term note substantially in the form of
Exhibit B (each such note, a “Term Note”), dated the Closing Date in a principal
amount equal to the initial principal amount of such Term Loan or the portion of
such Term Loan assigned to such Lender in accordance with Section 11.6, duly
executed and delivered by the Borrower and payable to the Lender of such Term
Loan.

 

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(c)                                        Swingline Notes.  The Swingline Loan
shall be evidenced by a swingline note substantially in the form of Exhibit C
(such note, the “Swingline Note”), dated the Closing Date in a principal amount
equal to the Swingline Commitment or the portion of such Swingline Loan assigned
to any Lender in accordance with Section 11.6, duly executed and delivered by
the Borrower and payable to the Swingline Lender or other holder of such
Swingline Loan.

 

Section 2.3.  Method of Borrowing; Funding of Loans; Administrative Agent
May Assume Funding; Failure to Fund.

 

(a)                                         Method of Borrowing.  Whenever the
Borrower desires to receive an Advance, including the initial Advance, or to
convert any portion of the outstanding Base Rate Loans into one or more LIBOR
Borrowings (a “Conversion”), or to continue all or any portion of an outstanding
LIBOR Loan for another or additional LIBOR Period (a “Continuation”), it shall
give the Administrative Agent notice in writing (by telecopy or by telephone
confirmed immediately in writing) in the form of a duly completed Exhibit D-1 (a
“Notice of Borrowing”) duly executed by an Authorized Signatory, in the case of
an Advance or Continuation of, or a Conversion into, a LIBOR Borrowing, three
(3) Business Days before the requested date of such Advance, Conversion or
Continuation, and in the case of an Advance of a Base Rate Borrowing, not later
than 11:00 a.m. (New York City time) on the Business Day before the requested
date of such Advance (which shall be a Business Day).  Such Notice of Borrowing
shall specify (i) the requested date of the Advance, Conversion or Continuation,
which shall be a Business Day, (ii) in the case of a Conversion or Continuation,
which existing Borrowings include the Loans or portions thereof to be affected
by such Notice, (iii) the amount of the Advances to be incurred, and/or the
Borrowings to be created by such Conversion or Continuation, (iv) the Class of
the Loans comprising each requested Borrowing, (v) in the case of a LIBOR
Advance, Conversion or Continuation, the duration of the LIBOR Period of the
requested Borrowing and (vi) such other information as the Administrative Agent
shall request.  If a request for a Conversion or Continuation is not timely made
prior to the expiration of a LIBOR Period, or is not made in accordance with
this Section, the portions of the Loans proposed to be affected thereby shall be
converted into, or continued as, Base Rate Loans.  Any Notice of Borrowing
received after 2:00 p.m. (New York City time) shall be deemed received on the
following Business Day.  Each Notice of Borrowing shall be irrevocable upon
receipt by the Administrative Agent.

 

(b)                                        Funding of Loans.  Promptly after
receiving a Notice of Borrowing, the Administrative Agent shall notify each
Lender of the contents of such Notice of Borrowing, of such Lender’s Percentage
of the Advances or Borrowings requested by such Notice of Borrowing and, in the
case of a LIBOR Borrowing, the applicable LIBOR Period.  In the case of an
Advance, each Lender shall make available to the Administrative Agent at the
Administrative Agent’s Office its Lender’s Percentage of such requested Advance,
in lawful money of the United States of America in immediately available funds,
prior to 1:00 p.m. (New York City time) on the specified date.  The
Administrative Agent shall, unless it shall have determined that one of the
conditions set forth in Article III has not been satisfied, by 3:00 p.m. (or in
the case of a LIBOR Borrowing, 12 p.m.) (New York City time) on such day, credit
the amounts received by it in like funds to the Borrower Account, to repay
Swingline Loans, to repay Reimbursement Obligations, to pay expenses incurred by
the Administrative Agent for the Borrower’s account or in such other manner as
the Administrative Agent shall determine.

 

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(c)                                        Administrative Agent May Assume
Funding.  Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any particular Advance that such Lender will not
make available to the Administrative Agent such Lender’s Percentage of such
Advance, the Administrative Agent may assume that such Lender has made such
amount available to it on the date of such Advance in accordance with
subsection (b) of this Section 2.3, and may (but shall not be obligated to), in
reliance upon such assumption, make available a corresponding amount for the
account of the Borrower on such date.  If and to the extent that such Lender
shall not have so made such amount available to the Administrative Agent, such
Lender and the Borrower severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the day such amount is made available to the Borrower until
the day such amount is repaid to the Administrative Agent, at (i) in the case of
the Borrower, a rate per annum equal to the greater of (x) the Federal Funds
Rate and (y) the interest rate applicable thereto pursuant to Section 2.4, and
(ii) in the case of such Lender, a rate per annum equal to (x) for each day from
the day such amount is made available to the Borrower through the third
succeeding Business Day, the Federal Funds Rate for such day as determined by
the Administrative Agent and (y) for each day thereafter until the day such
amount is repaid to the Administrative Agent, the Base Rate for such day.  If
such Lender shall repay such corresponding amount to the Administrative Agent,
the amount so repaid shall constitute such Lender’s Loan included in such
Borrowing for purposes of this Agreement.

 

(d)                                        Lender’s Failure to Fund.  The
failure of any Lender to make an Advance on the date of any Borrowing shall not
relieve any other Lender of its obligation hereunder, if any, to make its
Advance on that date.  Neither the Administrative Agent nor any Lender shall be
responsible for the failure of any other Person to make any Advance hereunder on
the date required therefor.

 

Section 2.4.  Interest on Loans.

 

(a)                                         Interest.  Each Loan shall bear
interest on the outstanding principal amount thereof from the date of the
applicable Advance until repaid in full, whether before or after default,
judgment or the institution of proceedings under any bankruptcy, insolvency or
other similar law, as provided in this Section 2.4.  Unless the Default Rate has
been imposed, each Loan shall bear interest on the outstanding principal amount
thereof until due at a rate per annum equal to (i) to the extent and so long as
it is a Base Rate Loan, the Base Rate as in effect from time to time plus the
Applicable Margin, and (ii) to the extent and so long as it is a LIBOR Loan, the
LIBOR Rate plus the Applicable Margin.

 

(b)                                        Interest Options.  Subject to the
provisions hereof, all or portions of the Loans, at the option of the Borrower,
may be made or Continued as, or Converted into, Base Rate Loans or one or more
LIBOR Loan, or any combination thereof; provided that Term Loans will be made as
LIBOR Loans on the Closing Date and may be Continued or Converted on the Initial
Adjustment Date; provided that LIBOR Loans may not be Converted, but may be
Continued, and such Continuation may occur on (and only on) the last day of an
applicable LIBOR Period; provided, further, that Loans of any Class may only be
part of a Borrowing consisting of Loans of the same Class; and provided,
further, that no Advances shall be made as part of, and no Loans shall be
Continued as, LIBOR Loans, and all existing LIBOR Loans shall

 

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be Converted into Base Rate Loans on the last day of the applicable LIBOR
Period, so long as a Default shall have occurred and be continuing.  Each LIBOR
Borrowing shall be in a minimum amount of $1,000,000 and in greater whole
multiples of $500,000.  There shall at no time be in effect more than five (5)
LIBOR Borrowings.

 

(c)                                        Post-Default Interest.  During the
period that any Default or Event of Default shall have occurred and be
continuing, at the election of the Administrative Agent (or at the written
request of Required Lenders), all Loans and other outstanding Obligations shall
bear interest at the Default Rate.

 

(d)                                        Payments.  Interest due pursuant to
this Agreement shall be payable (i) in the case of any Loans, on the Interest
Payment Date, and (ii) in the case of any other Obligation, when any portion of
such Obligation shall be due (whether at maturity, by reason of prepayment or
acceleration or otherwise), but only to the extent then accrued on the amount
then so due.  Interest at the Default Rate shall be payable on demand.

 

(e)                                        Determination.  Each determination by
the Administrative Agent of the interest rate hereunder shall be conclusive and
binding for all purposes, absent clear and convincing evidence to the contrary.

 

Section 2.5.  Letters of Credit.

 

(a)                                         Letters of Credit.  Upon the terms
and subject to the conditions set forth herein, from time to time during the
period commencing on the Closing Date and ending on the date that is thirty (30)
days prior to the Commitment Termination Date, the Revolving Credit Commitment
may, in addition to Advances under the Revolving Loan, be utilized, upon the
request of Borrower, for (i) the issuance of standby letters of credit for the
account of Borrower by GE Capital or any other L/C Issuer approved by the
Administrative Agent, (ii) the issuance of commercial letters of credit for the
account of Borrower by any L/C Issuer other than GE Capital approved by
Administrative Agent or (iii) the issuance of standby letters of credit or
commercial letters of credit for the account of Borrower under risk
participation agreements entered into by GE Capital, as L/C Issuer, with other
banks or financial institutions (the letters of credit described in clauses (i),
(ii) and (iii) will be referred to hereinafter collectively as “Letters of
Credit”).  Immediately upon the issuance by a L/C Issuer of a Letter of Credit,
and without further action on the part of Administrative Agent or any of the
Lenders, each Revolving Lender shall be deemed to have purchased from such L/C
Issuer a participation in such Letter of Credit (or in its obligation under a
risk participation agreement with respect thereto) equal to such Revolving
Lender’s Percentage of the aggregate amount available to be drawn under such
Letter of Credit.  Immediately after each such Letter of Credit is issued and
participations therein are sold to the Revolving Lenders as provided in this
subsection:

 

(i)                                           the Aggregate L/C Exposure shall
not exceed the L/C Limit;

 

(ii)                                      in the case of each Revolving Lender,
its Outstanding Revolving Amount shall not exceed its Revolving Credit
Commitment; and

 

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(iii)                                 the aggregate Outstanding Revolving Amount
of all the Lenders shall not exceed the lesser of the Maximum Commitment Amount
or the Borrowing Base then in effect.

 

If required to obtain such issuance by an L/C Issuer that is not Administrative
Agent, an affiliate or a subsidiary thereof or a Lender, Administrative Agent
agrees to enter into risk participation agreements with respect to the
obligations of the Borrower under the Letter of Credit pursuant to which
Administrative Agent acquires the credit risk with respect to the Borrower’s
payment and performance of its obligations arising under and with respect to
such Letter of Credit to the L/C Issuer.  Upon any such issuance and/or entering
in to a risk participation agreement, without further action by any party
hereto, (x) each Revolving Lender shall be deemed to have purchased from
Administrative Agent and/or such L/C Issuer, and (y) such L/C Issuer and/or
Administrative Agent shall be deemed to have sold to each Revolving Lender, a
participation in the then existing or thereafter arising Reimbursement
Obligations with respect to such Letter of Credit, on the terms specified in
this Agreement, in each case equal to such Revolving Lender’s Percentage
thereof.

 

(b)                                        Permitted Terms.  Each Letter of
Credit must (i) support a transaction entered into in the ordinary course of
business of the Borrower and (ii) be in a form, for an amount and contain such
terms and conditions as are reasonably satisfactory to each of the L/C Issuer
and the Administrative Agent in its sole discretion.  No Letter of Credit shall
have an expiration date later than the close of business on the earlier of:  (A)
the date that is one (1) year after such Letter of Credit is issued (or, in the
case of any renewal or extension thereof, one (1) year after the expiration of
such renewal or extension) and (B) the date that is thirty (30) Business Days
prior to the Commitment Termination Date.  Notwithstanding the foregoing, a
Letter of Credit may provide for automatic extensions of its expiration date for
one (1) or more successive one year periods; provided that the L/C Issuer that
issued such Letter of Credit has the right to terminate such Letter of Credit on
each such annual expiration date and no renewal term may extend the term of the
Letter of Credit to a date that is later than thirty (30) Business Days prior to
the Commitment Termination Date.

 

(c)                                        Request for Issuance of Letter of
Credit.  The Borrower shall give Administrative Agent at least three (3)
Business Days’ prior written notice requesting the issuance of any Letter of
Credit.  The notice shall be accompanied by the form of the Letter of Credit
(which shall be acceptable to the Administrative Agent and the L/C Issuer) and a
completed Application for Standby Letter of Credit, Master Standby Agreement,
Application for Agreement for Documentary Letter of Credit or Master Documentary
Agreement (as applicable) in the form of Exhibit J, K, L, or M attached hereto,
respectively.

 

(d)                                        Notice of Proposed Extensions of
Expiration Dates.  The L/C Issuer or the Borrower shall give the Administrative
Agent at least three (3) Business Days’ notice before such L/C Issuer extends
(or allows an automatic extension of) the expiration date of any Letter of
Credit issued by it (whether such extension results from a request therefor by
the Borrower or, in the case of an evergreen Letter of Credit, from the absence
of a request by the Borrower for the termination thereof).  Such notice shall
(i) identify such Letter of Credit, (ii) specify the date on which such
extension is to be made (or the last day on which such L/C Issuer can give
notice to prevent such extension from occurring) and (iii) specify the date to
which such expiration date is

 

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to be so extended.  Upon receipt of such notice, the Administrative Agent shall
promptly notify each Revolving Lender of the contents thereof.  No L/C Issuer
shall extend (or allow the extension of) the expiration date of any Letter of
Credit if (x) the extended expiration date would be after (A) the date that is
one (1) year after the date on which such Letter of Credit is to be extended or
(B) the date that is the thirty (30) Business Days before the Commitment
Termination Date or (y) such L/C Issuer shall have been notified by the
Administrative Agent or the Required Revolving Lenders expressly to the effect
that any condition specified in Section 3.2 is not satisfied at the time such
Letter of Credit is to be extended, provided that, in the case of such notice
from the Administrative Agent or Required Revolving Lenders, such L/C Issuer
receives such notice prior to the date notice of non-renewal is required to be
given by such L/C Issuer and such L/C Issuer has had a reasonable period of time
to act on such notice.

 

(e)                                        Notice of Issuances.  Promptly upon
issuing any Letter of Credit, the relevant L/C Issuer will notify the
Administrative Agent of the date of such Letter of Credit, the amount thereof,
the beneficiary or beneficiaries thereof and the expiration date.  Upon receipt
of such notice, the Administrative Agent shall promptly notify each Revolving
Lender of the contents thereof and the amount of such Revolving Lender’s
participation in the relevant Letter of Credit.  Promptly upon issuing any
Letter of Credit, the relevant L/C Issuer will send a copy of such Letter of
Credit to the Administrative Agent.

 

(f)                                          Drawings.  Upon receiving a demand
for payment under any Letter of Credit from the beneficiary thereof, the
relevant L/C Issuer shall determine, in accordance with the terms of such Letter
of Credit, whether such demand for payment should be honored.  If such L/C
Issuer determines that any such demand for payment should be honored, such L/C
Issuer shall (i) promptly notify the Borrower and the Administrative Agent as to
the amount to be paid by such L/C Issuer as a result of such demand and the date
on which such amount is to be paid (an “L/C Payment Date”) and (ii) on such L/C
Payment Date make available to such beneficiary in accordance with the terms of
such Letter of Credit the amount of the drawing under such Letter of Credit.

 

(g)                                        Reimbursement and Other Payments by
the Borrower.  If any amount is drawn under any Letter of Credit:

 

(i)                                           the Borrower irrevocably and
unconditionally agrees to reimburse the relevant L/C Issuer for all amounts paid
by such L/C Issuer immediately upon such drawing, together with interest on the
amount drawn at the rate applicable to Base Rate Loans for each day from and
including the date such amount is drawn to but excluding the date such
reimbursement payment is due and payable.  Such reimbursement payment shall be
due and payable on the relevant L/C Payment Date and Borrower hereby authorizes
and directs Administrative Agent, at Administrative Agent’s option, to debit
Borrower’s account (by increasing the outstanding principal balance of the
Revolving Loan) in the amount of any payment made by an L/C Issuer with respect
to any Letter of Credit; and

 

(ii)                                      in addition, the Borrower agrees to
pay to the relevant L/C Issuer interest on any and all amounts not paid by the
Borrower when due

 

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hereunder with respect to a Letter of Credit, for each day from and including
the date when such amount becomes due to but excluding the date such amount is
paid in full, payable on demand, at a rate per annum equal to the Default Rate.

 

Each payment to be made by the Borrower pursuant to this Section 2.5(g) shall be
made to the relevant L/C Issuer in federal or other funds immediately available
to it at its address specified in or pursuant to Section 11.3.

 

(h)                                        Payments by Revolving Lenders with
Respect to Letters of Credit.  In the event Administrative Agent elects not to
debit Borrower’s account for any Reimbursement Obligations and the Borrower
fails to reimburse the relevant L/C Issuer as and when required by
Section 2.5(g) above for all or any portion of any amount drawn under a Letter
of Credit issued by it:

 

(i)                                           such L/C Issuer may notify the
Administrative Agent of such unpaid Reimbursement Obligation and request that
the Revolving Lenders reimburse such L/C Issuer for their respective Percentages
thereof.  Upon receiving any such notice from an L/C Issuer, the Administrative
Agent shall promptly notify each Revolving Lender of such unpaid Reimbursement
Obligation and such Revolving Lender’s Percentage thereof.  Upon receiving such
notice from the Administrative Agent, each Revolving Lender shall make available
to such L/C Issuer, at its address specified in or pursuant to Section 11.3, an
amount equal to such Revolving Lender’s Percentage of such unpaid Reimbursement
Obligation as set forth in such notice, in federal or other funds immediately
available to such L/C Issuer, by 3:00 p.m. (New York City time) (A) on the day
such Revolving Lender receives such notice if it is received at or before 12:00
Noon (New York City time) on such day or (B) on the first Business Day following
such Revolving Lender’s receipt of such notice if it is received after 12:00
Noon (New York City time) on the date of receipt, in each case together with
interest on such amount for each day from and including the relevant L/C Payment
Date to but excluding the day such payment is due from such Revolving Lender at
the Federal Funds Rate for such day.  Upon payment in full thereof, such
Revolving Lender shall be subrogated to the rights of such L/C Issuer against
the Borrower to the extent of such Revolving Lender’s Percentage of such unpaid
Reimbursement Obligation (including interest accrued thereon).  Nothing in this
Section 2.5(h) shall affect any rights any Revolving Lender may have against any
L/C Issuer for any action or omission for which such L/C Issuer is not
indemnified under Section 2.5(j); and

 

(ii)                                      if any Revolving Lender fails to pay
any amount required to be paid by it pursuant to this Section 2.5(h) on the date
on which such payment is due, interest shall accrue on such Revolving Lender’s
obligation to make such payment, for each day from and including the date such
payment became due to but excluding the date such Revolving Lender makes such
payment, at a rate per annum equal to (x) for each day from the day such payment
is due through the third succeeding Business Day, inclusive, the Federal Funds
Rate for such day as determined by the relevant L/C Issuer and (y) for each day
thereafter, the Base

 

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Rate for such day.  Any payment made by any Revolving Lender after 3:00 p.m.
(New York City time) on any Business Day shall be deemed for purposes of the
preceding sentence to have been made on the next succeeding Business Day.

 

If the Borrower shall reimburse any L/C Issuer for any drawing with respect to
which any Revolving Lender shall have made funds available to such L/C Issuer in
accordance with this Section 2.5(h), such L/C Issuer shall promptly upon receipt
of such reimbursement distribute to such Revolving Lender its Percentage
thereof, including interest, to the extent received by such L/C Issuer.

 

(i)                                           Obligation Absolute.  The
obligation of the Borrower to reimburse Administrative Agent and any applicable
Revolving Lenders for payments made with respect to any L/C Obligation shall be
absolute, unconditional and irrevocable, without necessity of presentment,
demand, protest or other formalities, and the obligation of each applicable
Revolving Lender to make payments to Administrative Agent with respect to
Letters of Credit shall be unconditional and irrevocable.  Such obligations of
the Borrower and Revolving Lenders shall be paid strictly in accordance with the
terms hereof under all circumstances including the following:

 

(i)                                           any lack of validity or
enforceability of any Letter of Credit or this Agreement or the other Loan
Documents or any other agreement relating to the Letter of Credit;

 

(ii)                                      the existence of any claim, setoff,
defense or other right that any Credit Party or any of their respective
Affiliates or any Lender may at any time have against a beneficiary or any
transferee of any Letter of Credit (or any Persons or entities for whom any such
transferee may be acting), Administrative Agent, any Lender, or any other
Person, whether in connection with this Agreement, the Letter of Credit, the
transactions contemplated herein or therein or any unrelated transaction
(including any underlying transaction between the Credit Party or any of their
respective Affiliates and the beneficiary of the Letter of Credit);

 

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

 

(iv)                                    payment by Administrative Agent (except
as otherwise expressly provided in paragraph (k)(ii)(C) below) or any L/C Issuer
under any Letter of Credit or L/C Obligation against presentation of a demand,
draft or certificate or other document that does not comply with the terms of
such Letter of Credit or L/C Obligation;

 

(v)                                         any other circumstance or event
whatsoever that is similar to any of the foregoing;

 

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(vi)                                    the fact that a Default or an Event of
Default has occurred and is continuing;

 

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

 

(viii)                          any other act or omission to act or delay of any
kind of any L/C Issuer, Administrative Agent, any Lender or any other Person or
any other event or circumstance whatsoever that might, but for the provisions of
this subsection, constitute a legal or equitable discharge of Borrower’s
obligations hereunder.

 

(j)                                           Indemnification; Nature of
Revolving Lenders’ Duties.

 

(i)                                           In addition to amounts payable as
elsewhere provided in this Agreement, the Borrower hereby agrees to pay and to
protect, indemnify and save harmless Administrative Agent and each Revolving
Lender from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable attorneys’ fees and
allocated costs of internal counsel) that Administrative Agent or any Revolving
Lender may incur or be subject to as a consequence, direct or indirect, of (A)
the issuance of any Letter of Credit or the incurrence of any L/C Obligation in
respect thereof, or (B) the failure of Administrative Agent or any Revolving
Lender seeking indemnification or of any L/C Issuer to honor a demand for
payment under any Letter of Credit or of the Administrative Agent to make any
payment under any L/C Obligation as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto government or
Governmental Authority, in each case other than to the extent solely as a result
of the gross negligence or willful misconduct of Administrative Agent or such
Revolving Lender (as finally determined by a court of competent jurisdiction).

 

(ii)                                      As between Administrative Agent and
any Lender, on the one hand, and the Borrower, on the other hand, the Borrower
assumes all risks of the acts and omissions of, or misuse of any Letter of
Credit by, beneficiaries of any Letter of Credit.  In furtherance and not in
limitation of the foregoing, to the fullest extent permitted by law, neither
Administrative Agent nor any Lender shall be responsible for (A) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
issued by any party in connection with the application for and issuance of any
Letter of Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged, (B) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason, (C) the failure of the beneficiary of any Letter of
Credit to comply fully with conditions required to demand payment under such
Letter of Credit; provided that in the case of any payment by L/C Issuer under
any Letter of

 

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Credit or L/C Obligation, L/C Issuer shall be liable only to the extent such
payment was made solely as a result of its gross negligence or willful
misconduct (as finally determined by a court of competent jurisdiction) in
determining that the demand for payment under such Letter of Credit or L/C
Obligation complies on its face with any applicable requirements for a demand
for payment under such Letter of Credit or any guaranty thereof, (D) errors,
omissions, interruptions or delays in transmission or delivery of any messages
by mail, cable, telegraph, telex or otherwise, whether or not they may be in
cipher, (E) errors in interpretation of technical terms, (F) any loss or delay
in the transmission or otherwise of any document required to make a payment
under any Letter of Credit or L/C Obligation, (G) the credit of the proceeds of
any drawing under any Letter of Credit or L/C Obligation and (H) any
consequences arising from causes beyond the control of Administrative Agent or
any Lender. None of the above shall affect, impair or prevent the vesting of any
of Administrative Agent’s or any Lender’s rights or powers hereunder or under
this Agreement.

 

(iii)                                 Nothing contained herein shall be deemed
to limit or expand any waivers, covenants or indemnities made by the Borrower in
favor of any L/C Issuer in any letter of credit application, reimbursement
agreement or similar document, instrument or agreement between the Borrower and
such L/C Issuer, including the Application for Standby Letter of Credit, Master
Standby Agreement, Application for Documentary Letter of Credit or Master 
Agreement for Documentary Letter of Credit.

 

(k)                                        Cash Collateral.

 

(i)                                           If the Borrower is required to
provide cash collateral for any L/C Obligations pursuant to this Agreement prior
to the Commitment Termination Date, the Borrower will pay to Administrative
Agent for the ratable benefit of itself and the Revolving Lenders cash in an
amount equal to one hundred ten percent (110%) of the maximum amount then
available to be drawn under each applicable Letter of Credit.  Such cash shall
be held by Administrative Agent in a cash collateral account (the “Cash
Collateral Account”) maintained at a bank or financial institution acceptable to
Administrative Agent in its sole discretion.  The Cash Collateral Account shall
be in the name of the Borrower and shall be pledged to, and subject to the
control of, Administrative Agent, for the benefit of Administrative Agent and
the Revolving Lenders, in a manner satisfactory to Administrative Agent.  The
Borrower hereby pledges and grants to Administrative Agent, on behalf of itself
and the Revolving Lenders, a security interest in all such funds and Cash
Equivalents held in the Cash Collateral Account from time to time and all
proceeds thereof, as security for the payment of all amounts due in respect of
the L/C Obligations and other Obligations, whether or not then due.  This
Agreement, including the provisions of this Section 2.5(k), Obligations shall
constitute a security agreement under applicable law.

 

(ii)                                      If any L/C Obligations, whether or not
then due and payable, shall for any reason be outstanding on the Commitment
Termination

 

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Date, the Borrower shall either (A) provide cash collateral therefor in the
manner described above, (B) cause all such Letters of Credit and L/C
Obligations, if any, to be canceled and returned, or (C) deliver a stand-by
letter (or letters) of credit in guaranty of such L/C Obligations, which
stand-by letter (or letters) of credit shall be of like tenor and duration (plus
thirty (30) additional days) as, and in an amount equal to one hundred ten
percent (110%) of the aggregate maximum amount then available to be drawn under,
the Letters of Credit to which such outstanding L/C Obligations relate and shall
be issued by a Person, and shall be subject to such terms and conditions, as are
satisfactory to Administrative Agent in its sole discretion.

 

(iii)                                 From time to time after funds are
deposited in the Cash Collateral Account by the Borrower, whether before or
after the Commitment Termination Date, Administrative Agent may apply such funds
or Cash Equivalents then held in the Cash Collateral Account to the payment of
any amounts, and in such order as Administrative Agent may elect, as shall be or
shall become due and payable by the Borrower to Administrative Agent and the
Revolving Lenders with respect to such L/C Obligations and, upon the
satisfaction in full of all L/C Obligations, to any other Obligations of the
Borrower then due and payable.

 

(iv)                                    Neither the Borrower nor any Person
claiming on behalf of or through the Borrower shall have any right to withdraw
any of the funds or Cash Equivalents held in the Cash Collateral Account, except
that upon the termination of all L/C Obligations and the payment of all amounts
payable by the Borrower to Administrative Agent and Revolving Lenders in respect
thereof, any funds remaining in the Cash Collateral Account shall be applied to
other Obligations then due and owing and upon payment in full of such
Obligations, any remaining amount shall be paid to the Borrower or as otherwise
required by law.  Interest earned on deposits in the Cash Collateral Account
shall be for the account of Administrative Agent.

 

(v)                                         Borrower agrees to execute such
Control Letters and such other documents and instruments as the Administrative
Agent shall require with respect to the security interests created under this
Section.

 

Section 2.6.  Swingline Loans.

 

(a)                                         Swingline Commitment.              
Upon the terms and subject to the conditions set forth herein, from time to time
during the Swingline Availability Period, the Swingline Lender agrees to advance
funds to the Borrower pursuant to this Section; provided that, immediately after
each such Advance is made (and after giving effect to any substantially
concurrent application of the proceeds thereof to repay outstanding Advances or
Reimbursement Obligations and to any Lender interest therein):

 

(i)                                           the aggregate outstanding
principal amount of the Swingline Loans shall not exceed the Swingline
Commitment;

 

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(ii)                                      in the case of each Revolving Lender,
its Outstanding Revolving Amount shall not exceed its Revolving Credit
Commitment; and

 

(iii)                                 the aggregate Outstanding Revolving Amount
of all the Lenders shall not exceed the Revolving Credit Limit then in effect.

 

Each Swingline Advance shall be in a minimum amount of $500,000 or integral
multiples of $500,000 in excess thereof.  Subject to the foregoing limits, the
Borrower may borrow, repay and reborrow Swingline Advances at any time during
the Swingline Availability Period.

 

(b)                                        Notice of Swingline
Borrowing.                      The Borrower shall give the Swingline Lender
notice (a “Notice of Swingline Borrowing”), substantially in the form of Exhibit
D-2 hereto, not later than 1:00 p.m. (New York City time) on the date of each
requested Swingline Advance, specifying:

 

(i)                                           the date of such Advance, which
shall be a Business Day; and

 

(ii)                                      the amount of such Advance.

 

(c)                                        Funding of Swingline Loans.  As
promptly as practicable following receipt of a Notice of Swingline Borrowing,
the Swingline Lender shall, unless the Swingline Lender determines that any
applicable condition specified in Article III has not been satisfied, make
available the amount of such Swingline Advance in federal or other funds
immediately available as provided in Section 2.3(b).

 

(d)                                        Interest.  The Swingline Loans shall
bear interest on the outstanding principal amount thereof, for each day from and
including the day such Swingline Advance is made to but excluding the date
repaid, at a rate per annum equal to the rate applicable to Base Rate Loans for
such day.  Such interest shall be payable on the Interest Payment Date.

 

(e)                                        Optional Prepayment of Swingline
Loans.  The Borrower may prepay the Swingline Loans in whole at any time, or
from time to time in part, by giving notice of such prepayment to the Swingline
Lender not later than 12:00 Noon (New York City time) on the date of prepayment
and paying the principal amount to be prepaid, together with interest accrued
thereon to the date of prepayment, to the Swingline Lender in the manner
provided in Section 2.14 not later than 3:00 p.m. (New York City time) on the
date of prepayment.

 

(f)                                          Mandatory Prepayment of Swingline
Loan.  The Borrower shall prepay the Swingline Loans, together with interest
accrued thereon to the date of prepayment, upon the acceleration of the
Obligations pursuant to Article VIII.  On the date of each Revolving Credit
Advance, the Administrative Agent shall apply the proceeds thereof to prepay all
Swingline Loans then outstanding, together with interest accrued thereon to the
date of prepayment.

 

(g)                                        Maturity of Swingline Loan.  The
Swingline Loans outstanding on the Swingline Maturity Date shall be due and
payable on such date, together with interest accrued thereon to such date.

 

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(h)                                        Refunding Unpaid Swingline Loans. 
The Swingline Lender, at any time and from time to time in its sole and absolute
discretion, but not less frequently than weekly, and immediately if (x) the
Swingline Loans are not paid in full on the Swingline Maturity Date or (y) the
Swingline Loans become immediately due and payable pursuant to Article VIII,
shall on behalf of Borrower (and Borrower hereby irrevocably authorizes the
Swingline Lender to so act on its behalf) by notice to the Revolving Lenders
(including the Swingline Lender, in its capacity as a Lender), require each
Revolving Lender to pay to the Swingline Lender an amount equal to such
Revolving Lender’s Percentage of the aggregate unpaid principal amount of the
Swingline Loans then outstanding.  Such notice shall specify the date on which
such payments are to be made, which shall be the first Business Day after such
notice is given.  Not later than 12:00 Noon (New York City time) on the date so
specified, each Revolving Lender shall pay the amount so notified to it to the
Swingline Lender at its address specified in or pursuant to Section 11.3, in
federal or other funds immediately available in New York, New York.  The amount
so paid by each Revolving Lender shall constitute a Base Rate Advance to the
Borrower and each Revolving Lender hereby irrevocably agrees (absent gross
negligence or willful misconduct of the Swingline Lender as determined by a
court of competent jurisdiction) to the making of such Base Rate Advance
notwithstanding (i) the amount of such Advance may not comply with the minimum
amount for borrowings of Revolving Loans otherwise required hereunder, (ii)
whether any conditions specified in Section 3.2 are then satisfied, (iii)
whether a Default or an Event of Default then exists, (iv) the failure of any
such request or deemed request for Revolving Loans to be made by the time
otherwise required in Section 2.1, (v) the date of such mandatory Advance or
(vi) any reduction in the Revolving Credit Commitments or termination of the
Revolving Credit Commitments immediately prior to such mandatory Advance
contemporaneously therewith; provided that, if the Revolving Lenders are
prevented from making such Base Rate Revolving Credit Advances to the Borrower
by the provisions of the United States Bankruptcy Code or otherwise, the amount
so paid by each Revolving Lender shall constitute a purchase by it of a
participation in the unpaid principal amount of the Swingline Loan and interest
accruing thereon after the date of such payment; provided that (x) all interest
payable on the Swingline Loans shall be for the account of the Swingline Lender
until the date as of which the respective participation is purchased and (y) at
the time any purchase of participations pursuant to this sentence is actually
made, the purchasing Lender shall be required to pay to the Swingline Lender, to
the extent not paid to the Swingline Lender by the Borrower in accordance with
the terms of subsection (d) hereof, interest on the principal amount of
participation purchased for each day from and including the day upon which such
borrowing would otherwise have occurred to, but excluding, the date of payment
for such participation.  Each Lender’s obligation to make such payment or to
purchase such participation under this subsection shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (1) any set-off, counterclaim, recoupment, defense or other right
which such Lender or any other Person may have against the Swingline Lender or
the Borrower, (2) the occurrence or continuance of a Default or an Event of
Default or the termination of the Commitments, (3) any adverse change in the
condition (financial or otherwise) of the Borrower or any other Person, (4) any
breach of this Agreement by any party hereto or (5) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.

 

(i)                                           Termination of Swingline
Commitment.  The Borrower may, upon at least three (3) Business Days’ notice to
the Swingline Lender and the Administrative Agent, terminate the Swingline
Commitment at any time, if no Swingline Loans are outstanding at such time.

 

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Unless previously terminated, the Swingline Commitment shall terminate at the
close of business on the Swingline Maturity Date.

 

Section 2.7.  Certain Fees.

 

(a)                                         Administrative Agent Fees.  The
Borrower shall pay to GE Capital, individually, the Fees as and when required
pursuant to the GE Capital Fee Letter at the times specified for payment
therein.

 

(b)                                        Unused Line Fee.  As additional
compensation for the Revolving Lenders, the Borrower shall pay to Administrative
Agent, for the ratable benefit of such Revolving Lenders, in arrears, on the
first Business Day of each month prior to the Commitment Termination Date and on
the Commitment Termination Date, a fee (the “Unused Line Fee”) for the
Borrower’s non-use of available funds in an amount equal to (i) the Applicable
Margin (calculated on the basis of a 360 day year for the number of actual days
elapsed) multiplied by (ii) the difference between (x) the Maximum Commitment
Amount (as it may be reduced from time to time) minus (y) the average for the
period of the daily closing balances of the aggregate Revolving Loans and the
Swingline Loans outstanding during the period for which such Fee is due.

 

(c)                                        Prepayment Fee.  If the Borrower
shall voluntarily prepay all or any portion of the Term Loan within the first
twelve months after the Closing Date, whether before or after acceleration of
the Obligations, the Borrower shall pay to Administrative Agent, for the ratable
benefit of Term Lenders as liquidated damages and compensation for the costs of
being prepared to make funds available hereunder an amount equal to (i) the
Applicable Percentage multiplied by the principal amount of the Term Loan
prepaid.  The Credit Parties agree that the Applicable Percentages are a
reasonable calculation of Term Lenders’ lost profits in view of the difficulties
and impracticality of determining actual damages resulting from an early
termination of the Commitments.

 

(d)                                        Letter of Credit Fee.  (i) The
Borrower agrees to pay to the Administrative Agent for the ratable benefit of
Revolving Lenders, with respect to the L/C Obligations incurred hereunder, (A)
for the benefit of the Administrative Agent and the L/C Issuer, all costs and
expenses incurred by the Administrative Agent and the L/C Issuer on account of
such L/C Obligations, (B) for the ratable benefit of the Revolving Lenders, for
each day during any month in which any L/C Obligation shall remain outstanding,
a fee (the “Letter of Credit Fee”) in an amount equal to (x) the Applicable
Margin (calculated on the basis of a 360 day year for actual days elapsed)
multiplied by (y) the maximum amount available for drawing (whether or not such
day is a Business Day and whether or not the conditions for drawing thereunder
have been satisfied) under all Letters of Credit at the close of business on
such day.  The Letter of Credit Fee shall be paid to Administrative Agent for
the ratable benefit of the Revolving Lenders quarterly in arrears, on the first
Business Day of each Fiscal Quarter prior to the Commitment Termination Date and
on the Commitment Termination Date.  In addition, the Borrower shall pay to any
L/C Issuer, on demand, such fees (including all per annum fees), charges and
expenses of such L/C Issuer in respect of the issuance, negotiation, acceptance,
amendment, transfer and payment of any Letter of Credit or otherwise payable
pursuant to the application and related documentation under which any Letter of
Credit is issued.  During any period during

 

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which the Default Rate shall have been imposed pursuant Section 2.4(c), or, in
the absence of such imposition, during any period during which the Required
Lenders could have imposed the Default Rate pursuant to such Section and instead
elect to impose the provisions of this paragraph, the Letter of Credit Fee
otherwise in effect pursuant to the preceding paragraph shall be increased by
two percent (2%) per annum.

 

Section 2.8.  Mandatory Repayments and Prepayments.

 

(a)                                         Prepayment of Excess Outstanding
Revolving Amount; Maturity of Obligations.   (i)  If at any time the aggregate
Outstanding Revolving Amount of all Lenders exceeds the Revolving Credit Limit
then in effect, the Borrower shall immediately prepay Loans and Swingline Loans
(or if no such Loans and Swingline Loans are outstanding, deposit cash in a
collateral account in accordance with Section 2.5(k)) in an aggregate principal
amount sufficient to eliminate such excess; provided that if any such excess
results from the establishment or modification of a Reserve or an adjustment to
the Borrowing Base or Collection Values pursuant to Section 2.1(e), such
prepayments will be due within 30 days after such establishment, modification or
adjustment; provided further that, during such 30 day period, Borrower shall be
able to request Revolving Credit Advances without giving effect to the
Availability Block in an amount not to exceed the lesser of (i) the amount of
any such Reserve or the amount attributable to any such Borrowing Base or
Collection Value adjustment, as applicable, and (ii) the Availability Block.

 

(b)                                        Asset Dispositions.   Immediately
upon any Credit Party’s receipt of Net Cash Proceeds of any Asset Disposition
(other than any Asset Dispositions permitted by Section 7.5 or any sale of Stock
of any Subsidiary of any Credit Party), the Borrower shall prepay an aggregate
principal amount of Loans (and to the extent that any Net Cash Proceeds in
excess of the outstanding principal amount of Loans, cash collateralize L/C
Obligations in accordance with Section 2.5(k)) equal to (i) one hundred percent
(100%) of all such Net Cash Proceeds.  Notwithstanding the foregoing, with
respect to Net Cash Proceeds resulting from the sale of fixed assets, if
Borrower delivers to the Administrative Agent a certificate, signed by
Borrower’s chief financial officer, that it intends to reinvest all or any
portion of such Net Cash Proceeds in productive replacement assets of a kind
then used or usable in the business of a Credit Party within 180 days of receipt
thereof, the Borrower may reinvest such Net Cash Proceeds in the manner set
forth in such certificate; provided that (i) the aggregate amount of such Net
Cash Proceeds shall not exceed $1,000,000 during the term of the Credit
Agreement, and (ii) any amounts not so used within the period set forth in such
certificate shall, on the first Business Day immediately following such period,
be applied as provided in the last  sentence of this subsection.  Any prepayment
under this Section 2.8(b) shall be applied in accordance with Section 2.10(d).

 

(c)                                        Stock Issuances.   Subject to the
following sentence, if any Credit Party issues Stock, immediately upon receipt
of the Net Cash Proceeds thereof (other than (i) proceeds from the issuance of
Stock to members of the management of the Borrower pursuant to employee option
or stock plans, (ii) proceeds of the issuance of Stock to any Credit Party and
(iii) issuance of common Stock of Parent pursuant to a follow-on public offering
on terms and conditions reasonably satisfactory to the Required Lenders), the
Borrower shall prepay an aggregate principal amount of Loans (and to the extent
of any Net Cash Proceeds in excess of the

 

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outstanding principal amount of Loans, cash collateralize L/C Obligations in
accordance with Section 2.5(k)) in an amount equal to (x) seventy-five percent
(75%) of such Net Cash Proceeds if the Leverage Ratio is greater than 3.0 to
1.0, (y) fifty percent (50%) of all such Net Cash Proceeds if the Leverage Ratio
is equal to or less than 3.0 to 1.0 but greater than 2.0 to 1.0 and (z)
twenty-five percent (25%) of all such Net Cash Proceeds if the Leverage Ratio is
equal to or less than 2.0 to 1.0; provided that any such Net Cash Proceeds
received from the sale of common stock of Holdings in a follow-on public
offering which are not applied within 135 days from receipt thereof must be used
to prepay the Loans as set forth in this Section 2.8(c).   Prior to any
prepayment pursuant to this Section 2.8(c), Borrower must demonstrate to the
reasonable satisfaction of the Administrative Agent that immediately before and
after giving effect to such prepayment, no Default has occurred and is
continuing and the Pro Forma Excess Availability is not less than $5,000,000. 
Notwithstanding anything to the contrary contained herein, the failure of the
Borrower to make the payments set forth in this Section 2.8(c) shall be an Event
of Default as set forth in Section 8.1(a)(i).  Any prepayment under this
Section 2.8(c) shall be applied in accordance with Section 2.10(d).

 

(d)                                        Issuance of Indebtedness.  Subject to
the following sentence, if any Credit Party incurs any Indebtedness, immediately
upon the receipt of the Net Cash Proceeds thereof, the Borrower shall prepay an
aggregate principal amount of Loans (and to the extent of any Net Cash Proceeds
in excess of the outstanding principal amount of Loans, cash collateralize L/C
Obligations in accordance with Section 2.5(k)) in an amount equal to one hundred
percent (100%) of all such Net Cash Proceeds.  Prior to any prepayment pursuant
to this Section 2.8(d), Borrower must demonstrate to the reasonable satisfaction
of the Administrative Agent that immediately before and after giving effect to
such prepayment, no Default has occurred and is continuing and the Pro Forma
Excess Availability is not less than $5,000,000.  Notwithstanding anything to
the contrary contained herein, the failure of the Borrower to make the payments
set forth in this Section 2.8(d) shall be an Event of Default as set forth in
Section 8.1(a)(i). Any prepayment under this Section 2.8(d) shall be applied in
accordance with Section 2.10(d).

 

(e)                                        Excess Cash Flow.  Subject to the
following sentence, beginning with Fiscal Year 2004, on the date that is ten
(10) days after the earlier of (i) the date on which the Borrower’s annual
audited financial statements for any Fiscal Year are delivered pursuant to
Section 5.1(d) or (ii) the date on which such annual audited financial
statements were required to be delivered for such Fiscal Year pursuant to such
Section, the Borrower shall prepay an aggregate principal amount of the Loans
(and to the extent of any Excess Cash Flow in excess of the outstanding
principal amount of Loans and Swingline Loans, cash collateralize L/C
Obligations in accordance with Section 2.5(k)) in an amount equal to 50% (if the
Excess Cash Flow as of the end of such fiscal year is equal to or greater than
$2,500,000) or 80% (if the Excess Cash Flow as of the end of such fiscal year is
less than $2,500,000) of Excess Cash Flow for such prior fiscal year.  Prior to
any prepayment pursuant to this Section 2.8(e), Borrower must demonstrate to the
reasonable satisfaction of the Administrative Agent that immediately before and
after giving effect to such prepayment, no Default has occurred and is
continuing and the Pro Forma Excess Availability is not less than $5,000,000. 
Notwithstanding anything to the contrary contained herein, the failure of the
Borrower to make the payments set forth in this Section 2.8(e) shall be an Event
of Default as set forth in Section 8.1(a)(i).   Any prepayment of Loans under
this Section 2.8(e) shall be applied in accordance with Section 2.10(d) and
shall be accompanied by a certificate signed by the Borrower’s chief financial
officer certifying the

 

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manner in which Excess Cash Flow and the resulting prepayment were calculated,
which certificate shall be in form and substance reasonably satisfactory to
Administrative Agent.

 

Section 2.9.  Optional Prepayments.  Subject to the following sentence, the
Borrower may prepay the Loans in whole or in part (and with respect to the Term
Loans, in minimum principal amounts of $500,000 or in any larger integral
multiple of $500,000, or the total remaining amount outstanding) upon at least
three (3) Business Days’ (or, in the case of Base Rate Revolving Loans, one (1)
Business Day’s) prior irrevocable written notice to the Lenders, subject to the
payment of any prepayment fee provided in Section 2.7(c) and the payment of any
prepayment charges incurred pursuant to Section 9.4(d), provided that in the
case of repayments of Revolving Loans or Swingline Loans pursuant to the cash
sweep mechanism specified in Section 6.20, such notice shall be waived.  Prior
to any Term Loan prepayment pursuant to this Section 2.9, Borrower must
demonstrate to the reasonable satisfaction of the Administrative Agent that
immediately before and after giving effect to such prepayment, no Default has
occurred and is continuing and the Pro Forma Excess Availability is not less
than $5,000,000.  The aggregate principal amount of Loans designated for
prepayment in any notice of optional prepayment given pursuant to this
section shall become due and payable on the date fixed for prepayment as
specified in such notice.

 

Section 2.10.  Application of Payments.  (a)  So long as no Event of Default has
occurred and is continuing, (i) payments consisting of proceeds of Accounts
received in the ordinary course of business, including without limitation the
cash sweeps described in Section 6.20, shall be applied, first, to pay interest
on the Loans, Fees, expenses, Charges and costs due and payable by the Borrower,
second to the Swingline Loan and, third, to the Revolving Loan; (ii) payments
matching specific scheduled payments then due shall be applied to those
scheduled payments; (iii) voluntary prepayments shall be applied in accordance
with the provisions of Section 2.10(c); and (iv) mandatory prepayments shall be
applied as set forth in Section 2.10(d).  All payments and prepayments applied
to a particular Loan shall be applied ratably to the portion thereof held by
each Lender as determined by its pro rata share.  As to any other payment, and
as to all payments made when an Event of Default has occurred and is continuing
or following the Commitment Termination Date, Borrower hereby irrevocably waives
the right to direct the application of any and all payments received from or on
behalf of Borrower, and Borrower hereby irrevocably agrees that Administrative
Agent shall apply any and all such payments against the Obligations as set forth
in Section 8.3.

 

(b)                                        Administrative Agent is authorized
to, and at its sole election may, charge to the Revolving Loan balance on behalf
of Borrower and cause to be paid all Fees, expenses, Charges, costs (including
insurance premiums in accordance with Section 6.3(a)) and interest and
principal, other than principal of the Revolving Loan, owing by Borrower under
this Agreement or any of the other Loan Documents if and to the extent Borrower
fails to pay promptly any such amounts as and when due, even if the amount of
such charges would exceed the Revolving Credit Limit at such time.  At
Administrative Agent’s option and to the extent permitted by law, any charges so
made shall constitute part of the Revolving Loan hereunder; provided that the
consent of the Required Revolving Lenders is required for the Administrative
Agent to charge the Revolving Loan Balance to pay past due principal and
interest on Term Loans accrued during the continuance of a Default or Event of
Default.

 

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(c)                                        Prepayments pursuant to Section 2.9
may be applied to either Revolving Loans or Term Loans, at the Borrower’s
election.

 

(d)                                        Prepayments described in
Section 2.8(e) shall first be applied to pay the Term Loan(s) and, at any time
after the Term Loan(s) shall have been prepaid in full, such prepayments shall
be applied to reduce the outstanding principal balance of the Revolving Loans.
Prepayments described in Section 2.8(b) shall be applied first to repay
Revolving Loans to the extent of the value (if any) of any Account Receivable
related assets included in such sale (either directly or as an asset of a
subsidiary whose Stock was the subject of such sale), second, any remaining
amounts shall be applied to repay Term Loans until the Term Loans have been
repaid in full and third, any amounts remaining to be repaid after repayment in
full of the Term Loans  shall be applied to repay Revolving Loans.  Prepayments
described in Sections 2.8(c) and 2.8(d) shall be applied, pro rata (based on the
ratio of the Outstanding Revolving Amount to the aggregate Term Loan balance),
to prepay Term Loans and Revolving Loans.  When amounts are required to be
applied against Revolving Credit Loans in the section, such amounts shall be
applied first to outstanding Revolving Credit Advances until paid in full,
second to cash collateralize all outstanding L/C Obligations until paid in full
and third to repay any outstanding Swing Line Loan.  Subject to Section 2.10(e),
considering each Loan being prepaid separately, any such prepayment shall be
applied first to Base Rate Loans of the Class required to be prepaid before
application to LIBOR Loans of the Class required to be prepaid, in each case in
a manner which minimizes any resulting LIBOR breakage fee.

 

(e)                                        Each payment or prepayment of less
than all the outstanding aggregate principal amount of the Loans of any Class
shall be applied pro rata to the Loans of that Class of all Lenders according to
the respective outstanding principal amounts of Loans of that Class held by each
such Lender.

 

Section 2.11.  Reduction of Commitments.  (a) The Revolving Credit Commitment
shall permanently reduce (i) to the extent directed by the Borrower pursuant to
Section 2.11(b), and (ii) to Zero Dollars ($0) on the Commitment Termination
Date.

 

(b)                                        The Borrower shall have the right at
any time after the repayment in full of the Term Loans to terminate in whole the
Revolving Credit Commitments and this Agreement, or from time to time,
irrevocably to reduce in part the amount of the Revolving Credit Commitments
upon at least thirty (30) days’ prior written notice to the Administrative
Agent; provided that Borrower must demonstrate to the reasonable satisfaction of
the Administrative Agent that immediately before and after giving effect to a
reduction of the Revolving Credit Commitments under this Section 2.11(b), no
Default has occurred and is continuing and the Pro Forma Excess Availability is
not less than $5,000,000.   Such notice shall be irrevocable on the part of the
Borrower and shall specify the effective date of such reduction or termination,
whether a termination or reduction is being made, and, in the case of any
reduction, the amount thereof shall be in an amount of $5,000,000 or an integral
multiple $1,000,000 in excess thereof.  Upon any such reduction, the Borrower
shall simultaneously prepay any outstanding Revolving Loans (without premium
except for the prepayment fee as required by Section 2.7(c) and except for the
payment of any charges incurred pursuant to Section 9.4(d)) to the extent
necessary so that the aggregate outstanding principal amount of the Revolving
Loans does not exceed the amount of the Revolving Credit Commitment after giving
effect to any partial reduction thereof.

 

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The aforesaid prior notice requirement shall not apply to the Administrative
Agent’s exercise of remedies under Section 8.2.  The amount of the Revolving
Credit Commitment may not be reinstated if it is reduced or if this Agreement is
terminated by the Borrower.

 

(c)                                        In the event the Borrower exercises
its rights under Section 2.11(b) to reduce the Revolving Credit Commitment or
under Section 2.9 to prepay any portion of any Term Loan, the Borrower agrees
that any such prepayment or reduction shall be accompanied by (i) in the case of
a prepayment in full and termination of this Agreement, the payment by the
Borrower to the Administrative Agent for the ratable account of the Lenders of
all accrued and unpaid interest and all fees and other remaining Obligations
hereunder, (ii) if a prepayment of the Term Loan shall occur on or prior to the
first anniversary of the Closing Date, the prepayment fee provided for in
Section 2.7(c) and (iii) the payment of any prepayment charges incurred pursuant
to Section 9.4(d).

 

Section 2.12.  Loan Account and Accounting.  The Administrative Agent shall
maintain a loan account (the “Loan Account”) on its books to record all Loans,
all payments made by the Borrower, and all other debits and credits as provided
in this Agreement with respect to the Loans or any other Obligations.  All
entries in the Loan Account shall be made in accordance with the Administrative
Agent’s customary accounting practices as in effect from time to time.  The
balance in the Loan Account, as recorded on the Administrative Agent’s most
recent printout or other written statement, shall, absent clear and convincing
evidence to the contrary, be presumptive evidence of the amounts due and owing
to each Lender and the Administrative Agent by the Borrower; provided that any
failure to so record or any error in so recording shall not limit or otherwise
affect the Borrower’s duty to pay the Obligations.  The Administrative Agent
shall render to the Borrower a monthly accounting of transactions with respect
to the Loans setting forth the balance of the Loan Account.  Unless the Borrower
notifies the Administrative Agent in writing of any objection to any such
accounting (specifically describing the basis for such objection), within thirty
(30) days after the date thereof, each and every such accounting shall (absent
clear and convincing error) be deemed final, binding and conclusive upon the
Credit Parties in all respects as to all matters reflected therein.  Only those
items expressly objected to in such notice shall be deemed to be disputed by the
Borrower.

 

Section 2.13.  Computation of Interest and Fees.  Unused Line Fees pursuant to
Section 2.7(b), Letter of Credit Fees pursuant to Section 2.7(d) and all
interest hereunder and under the Notes shall be calculated for any period on the
basis of a 360-day year for the actual number of days elapsed during such
period, including the first day but excluding the last day of such period.

 

Section 2.14.  General Provisions Regarding Payments.  All payments (including
prepayments) to be made by the Credit Parties under any Loan Document, including
payments of principal of and interest on the Notes, fees, expenses and
indemnities, shall be made without set-off or counterclaim and in immediately
available funds to each Lender’s Payment Account before 2:00 p.m. (New York City
time) on the date when due.  If any payment hereunder becomes due and payable on
a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon, shall be payable at the then applicable rate during such extension. 
For purposes of computing interest and Fees and determining Borrowing
Availability as of any date, all payments

 

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shall be deemed received on the first Business Day following the Business Day on
which immediately available funds therefor are received in the Collection
Account prior to 1:00 p.m. (New York City time).  Payments received after 1:00
p.m. (New York City time) on any Business Day or on a day that is not a Business
Day shall be deemed to have been received on the following Business Day.

 

Section 2.15.  Maximum Interest.  (a)  In no event shall the interest charged
with respect to the Loans, the Notes or any other Obligations of any Credit
Party under the Loan Documents exceed the maximum amount permitted under the
laws of the jurisdiction whose law is specified as the governing law of this
document pursuant to Section 11.10 or of any other applicable jurisdiction.  For
the purposes of making any such determination hereunder, the Loans hereunder
shall be deemed a single loan in the amount of the Commitments.

 

(b)                                        Notwithstanding anything to the
contrary herein or elsewhere, if at any time the rate of interest payable for
the account of any Lender hereunder or any other Loan Document (the “Stated
Rate”) would exceed the highest rate of interest permitted under any applicable
law to be charged by such Lender (the “Maximum Lawful Rate”), then for so long
as the Maximum Lawful Rate would be so exceeded, the rate of interest payable
for the account of such Lender shall be equal to the Maximum Lawful Rate;
provided that if at any time thereafter the Stated Rate is less than the Maximum
Lawful Rate, the Borrower shall, to the extent permitted by law, continue to pay
interest for the account of such Lender at the Maximum Lawful Rate until such
time as the total interest received by such Lender is equal to the total
interest which such Lender would have received had the Stated Rate been (but for
the operation of this provision) the interest rate payable.  Thereafter, the
interest rate payable for the account of such Lender shall be the Stated Rate
unless and until the Stated Rate again would exceed the Maximum Lawful Rate, in
which event this provision shall again apply.

 

(c)                                        In no event shall the total interest
received by any Lender exceed the amount which such Lender could lawfully have
received had the interest been calculated for the full term hereof at the
Maximum Lawful Rate with respect to such Lender.

 

(d)                                        In computing interest payable with
reference to the Maximum Lawful Rate applicable to any Lender, such interest
shall be calculated at a daily rate equal to the Maximum Lawful Rate divided by
the number of days in the year in which such calculation is made.

 

(e)                                        If any Lender has received interest
hereunder in excess of the Maximum Lawful Rate with respect to such Lender, such
excess amount shall be applied to the reduction of the outstanding principal
balance of its Loans or to other amounts (other than interest) payable
hereunder, and if no such principal or other amounts are then outstanding, such
excess or part thereof remaining shall be paid to the Borrower.

 

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ARTICLE III.

CONDITIONS

 

Section 3.1.  Conditions to Closing.  The obligation of each Lender to make any
Extension of Credit on the Closing Date or for the Administrative Agent or any
Lender to take, fulfill or perform any other action hereunder, shall be subject
to satisfaction of all of the following conditions in a manner satisfactory to
Administrative Agent:

 

(a)                                         This Agreement or counterparts
hereof, the Notes and the Borrower Security Agreement shall have been duly
executed by the Borrower, and delivered to the Administrative Agent and Lenders;
and Administrative Agent shall have received such documents, instruments,
agreements and legal opinions as Administrative Agent shall reasonably request
in connection with the transactions contemplated by this Agreement and the other
Related Transactions Documents, including an opinion of counsel to the Credit
Parties substantially in the form of Exhibit O and the other documents,
instruments agreements and opinions listed in the Closing Checklist attached
hereto as Exhibit Q, each in form and substance reasonably satisfactory to the
Administrative Agent;

 

(b)                                        (i)  Administrative Agent shall have
received a fully executed original of a pay-off letter reasonably satisfactory
to Administrative Agent confirming that all of the Prior Lenders Obligations
will be repaid in full from the proceeds of the Term Loan, the initial Revolving
Credit Advance and an amount transferred from the Borrower’s account of not less
than $13,000,000 and all Liens upon any of the property of the Borrower or any
of its Subsidiaries in favor of Prior Lenders shall be terminated by Prior
Lenders immediately upon such payment, and (ii) all letters of credit issued or
guaranteed by Prior Lenders shall have been cash collateralized, supported by a
guaranty of Administrative Agent or supported by a Letter of Credit issued
pursuant to this Agreement, as mutually agreed upon by Administrative Agent and
the Borrower;

 

(c)                                        Administrative Agent shall have
received (i) evidence satisfactory to it in its sole discretion that the Credit
Parties have obtained all required consents and approvals of all Persons
including all requisite Governmental Authorities, to the execution, delivery and
performance of this Agreement and the other Loan Documents and the consummation
of the Related Transactions or (ii) an Officer’s Certificate in form and
substance satisfactory to Administrative Agent affirming that no such consents
or approvals are required;

 

(d)                                        Administrative Agent and the Lenders
shall have received the Fees required to be paid by the Borrower on the Closing
Date in the respective amounts specified in Section 2.7 and shall have
reimbursed the Administrative Agent for all fees, costs and expenses of closing
presented as of the Closing Date;

 

(e)                                        The organizational and capital
structure of each Credit Party and the terms and conditions of all Indebtedness
of each Credit Party shall be acceptable to Administrative Agent in its sole
discretion and Administrative Agent shall have received all agreements,
documents and Organizational Documents related thereto which shall be reasonably
satisfactory to Administrative Agent;

 

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(f)                                          Administrative Agent shall have
completed its business and legal due diligence, including a roll forward of its
previous Collateral audit, with results satisfactory to Administrative Agent in
its sole discretion;

 

(g)                                        Administrative Agent shall have
received fully executed copies of each of the other Related Transactions
Documents, each of which shall be in form and substance satisfactory to
Administrative Agent and its counsel in their sole discretion. The Related
Transactions shall have been consummated in accordance with the terms of the
Related Transactions Documents;

 

(h)                                        The Eligible Accounts supporting the
initial Revolving Credit Advances and the initial L/C Obligations incurred and
the amount of the Reserves to be established on the Closing Date shall be
sufficient in value, as determined by Administrative Agent, to provide the
Borrower with Borrowing Availability, after giving effect to the initial
Revolving Credit Advances made to the Borrower, the incurrence of any initial
L/C Obligations and the consummation of the Related Transactions (on a pro forma
basis, with trade payables being paid currently, and expenses and liabilities
being paid in the ordinary course of business and without acceleration of sales)
of at least $7,000,000;

 

(i)                                           Administrative Agent shall be
satisfied in its sole discretion that no breach by the Credit Parties exists
under the GE Capital Fee Letter or the GE Capital Commitment Letter; and

 

(j)                                           The Lenders shall have received
reasonably satisfactory evidence that (i) the Credit Parties and their
subsidiaries have pro-forma adjusted EBITDA (determined in accordance with
Regulation S-X including only those adjustments acceptable to the Administrative
Agent in their sole discretion) of at least $24,000,000 (excluding the accounts
receivable write-off of $3,800,000 related to Greater Southeast Hospital; other
pro forma adjustments to EBITDA to be acceptable to Administrative Agent in its
sole discretion) as of the date of the most recent financial statements prior to
the closing date and (ii) after giving effect to the transactions and the
borrowings under this Agreement to be made on the Closing Date, that the
Leverage Ratio of the Borrower and its Subsidiaries shall be less than 3.0 to
1.0.

 

Section 3.2. Conditions to Each Extension of Credit.  The obligation of any
Lender to make any Extension of Credit (including on the Closing Date), is
subject to the satisfaction of the following additional conditions:

 

(a)                                         receipt by the Administrative Agent
of a Notice of Borrowing in accordance with Section 2.3, accompanied by a
Borrowing Base Certificate as of the last day of the month preceding the date of
such proposed Borrowing;

 

(b)                                        no event or circumstance having a
Material Adverse Effect shall have occurred since the date of this Agreement as
determined by the Administrative Agent and the Required Lenders (or after the
Closing Date, the Administrative Agent and the Required Revolving Lenders);

 

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(c)                                        immediately before and after giving
effect to such Extension of Credit, no Default or Event of Default shall have
occurred and be continuing; and

 

(d)                                        the representations and warranties of
the Credit Parties contained in the Loan Documents shall be true and correct in
all material respects on and as of the date of and after giving effect to such
Extension of Credit, except for such changes therein as are expressly permitted
by the terms of this Agreement and except to the extent that such
representations and warranties are expressly stated to be made as of an earlier
date, in which case they shall be true as of such earlier date.

 

Each Extension of Credit hereunder shall be deemed to be a representation and
warranty by the Borrower on the date of such Extension of Credit as to the facts
specified in clauses (b), (c) and (d) of this Section.

 

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES

 

To induce each Lending Party to enter into the Loan Documents and to make
Extensions of Credit, the Credit Parties, jointly and severally, make the
following representations and warranties to each Lending Party, each and all of
which shall survive the execution and delivery of this Agreement:

 

Section 4.1.  Existence and Organizational Power; Compliance with Organizational
Documents.  Each Credit Party (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) is
duly qualified to conduct its business and is in good standing in each other
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure to be so
qualified could not result in a Material Adverse Effect, (c) has the requisite
power and authority and the legal right to own, pledge, mortgage or otherwise
encumber and operate its properties, (d) has all organizational powers necessary
for the conduct of its business as now conducted or hereafter proposed to be
conducted, and (e) is in material compliance with all provisions of its
Organizational Documents.

 

Section 4.2.  Governmental Approvals, Compliance with Laws and Compliance with
Agreements with Third Parties.  Each Credit Party possesses in full force and
effect all Governmental Approvals necessary for the conduct of its business and
is in compliance with all provisions of all Applicable Law, except where the
failure to possess such Governmental Approval or of such Governmental Approval
to be in full force and effect or the failure to comply with Applicable Law
could not reasonably be expected to have a Material Adverse Effect.  No Credit
Party is in breach of or default under or with respect to any contract,
agreement, lease or other instrument to which it is a party or by which any of
its property is bound or affected, which breach or default could reasonably be
expected to have a Material Adverse Effect.

 

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Section 4.3. Organizational and Governmental Approvals; No Contravention.  The
execution, delivery and performance by each Credit Party of the Loan Documents
and Related Transaction Documents to which it is a party, and the consummation
of the transactions contemplated to occur thereunder, (a) are within its
organizational powers, have been duly authorized by all necessary organizational
action, (b) require no Governmental Approval (other than the filing of UCC-1
financing statements, and such other filings as have been made and are in full
force and effect), (c) do not contravene, or constitute a default under (i) any
provision of Applicable Law the violation of which could reasonably be expected
to have a Material Adverse Effect, (ii) the Organizational Documents of such
Credit Party or (iii) any agreement, judgment, injunction, order, decree or
other instrument binding upon any Credit Party and (d) do not result in the
creation or imposition of any Lien (other than the Liens created by the Loan
Documents) on any asset of any such Credit Party.

 

Section 4.4.  Binding Effect; Liens of Collateral Documents.  (a)  Each  Loan
Document and each Related Transaction Document to which any Credit Party, is a
party constitutes a valid and binding agreement of such Credit Party in each
case enforceable in accordance with its terms, subject to (i) the effect of any
applicable bankruptcy, fraudulent transfer, moratorium, insolvency,
reorganization or other similar laws affecting the rights of creditors generally
and (ii) the effect of general principles of equity whether applied by a court
of equity or law.

 

(b)                                        The Collateral Documents create valid
security interests in the Collateral purported to be covered thereby, which
security interests are perfected security interests, prior to all other Liens
other than Permitted Prior Liens.

 

Section 4.5.  Financial Statements.  (a)  The financial information set forth in
the financial statements listed on, and attached to, Disclosure Schedule 4.5(a)
present fairly, in all material respects, in accordance with GAAP, the
consolidated and consolidating financial position of the Credit Parties as at
their respective dates and the consolidated and consolidating income,
shareholders’ equity and cash flows of the Credit Parties for the respective
periods to which such statements relate (except in the case of unaudited interim
financial statements for the absence of footnotes and normally recurring
year-end adjustments).  Any information other than financial information
presented in such statements is true, correct and complete in all material
respects.  Except as disclosed or reflected in such financial statements or in
Disclosure Schedule 4.5(a), no Credit Party has any liabilities, contingent or
otherwise, nor any unrealized or anticipated losses, that, singly or in the
aggregate, have had or could reasonably be expected to have a Material Adverse
Effect.

 

(b)                                        The Pro Forma delivered on the date
hereof and attached hereto as Disclosure Schedule 4.5(b) was prepared by the
Borrower giving pro forma effect to the Related Transactions, was based on the
unaudited consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries dated September 28, 2003, and was prepared in accordance with GAAP,
with only such adjustments thereto as would be required in accordance with GAAP.

 

(c)                                        The Projections delivered on the date
hereof and attached hereto as Disclosure Schedule 4.5(c) have been prepared by
the Borrower in light of the past operations of its businesses, but including
future payments of known contingent liabilities reflected on the Fair

 

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Salable Balance Sheet, and reflect projections for the two year period beginning
on December 30, 2003 on a month-by-month basis for the first year and on a
year-by-year basis thereafter.  The Projections are based upon estimates and
assumptions stated therein, all of which the Borrower believes to be reasonable
and fair in light of current conditions and current facts known to the Borrower
and, as of the Closing Date, reflect the Borrower’s good faith and reasonable
estimates of the future financial performance of the Borrower and its
Subsidiaries and of the other information projected therein for the period set
forth therein.

 

(d)                                        The Fair Salable Balance Sheet
delivered on the date hereof and attached hereto as Disclosure Schedule 4.5(d)
was prepared by the Borrower on the same basis as the Pro Forma, except that the
Borrower’s consolidated assets are set forth therein at their fair salable
values on a going concern basis and the liabilities set forth therein include
all consolidated contingent liabilities of the Borrower stated at the reasonably
estimated present values thereof.

 

Section 4.6.  Material Adverse Effect.  Since September 30, 2003, no act, event,
condition or occurrence has occurred or failed to occur, that has had or
reasonably could be expected to have, a Material Adverse Effect (an “Adverse
Change”).  In determining whether an Adverse Change has occurred, it is
understood that such an Adverse Change may have occurred at any particular time
notwithstanding the fact that at such time no Default shall have occurred and be
continuing.  If (x) a fact or circumstance disclosed in the financial statements
referred to in Section 4.5 or a Disclosure Statement, or if an investigation,
action, suit or proceeding disclosed in Disclosure Schedule 4.7, that, at the
time of such disclosure did not appear reasonably likely to have a Material
Adverse Effect, should in the future have, or appear reasonably likely to have,
a Material Adverse Effect, or (y) a development or change shall occur with
respect to any fact or circumstance disclosed in any financial statement,
Disclosure Schedule or previously described investigation, action, suit or
proceeding that should in the future have or appear reasonably likely to have a
Materially Adverse Effect, then in each case ((x) and (y)) such Materially
Adverse Effect shall be a change or event subject to Section 4.6 notwithstanding
such prior disclosure.

 

Section 4.7.  Litigation.  Except as disclosed on Disclosure Schedule 4.7, there
is no action, suit, investigation or proceeding (collectively, “Litigation”)
pending or, to the knowledge of any Credit Party, threatened against or
affecting any Credit Party or its property before any court or arbitrator or any
Governmental Authority which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect.  There is no Litigation pending or,
to the best knowledge of any Credit Party, threatened against or affecting, any
party to this Agreement or any of the Related Transaction Documents before any
court or arbitrator or any Governmental Authority which questions or challenges
the validity of this Agreement or any of the other Related Transaction Documents
or any transaction contemplated herein or therein.

 

Section 4.8.  Due Diligence Questionnaire; Full
Disclosure.                                          The Questionnaire is
complete and correct in all respects.  None of the Information (financial or
otherwise) contained in the Questionnaire or otherwise furnished by or on behalf
of any Credit Party to the Administrative Agent or any other Lending Party
hereunder or in connection with the Loan Documents or the Related Transaction
Documents or any of the transactions contemplated here by or thereby contains
any untrue statement of a material fact or omits to state

 

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a material fact necessary to make the statements contained herein or therein not
misleading in the light of the circumstances under which such statements were
made.

 

Section 4.9.  No Adverse Fact.  No fact or circumstance is known to any Credit
Party that, either alone or in conjunction with all other such facts and
circumstances, has had or reasonably could be expected in the future to have a
Material Adverse Effect, that has not been set forth or referred to in the
financial statements referred to in Section 4.5 or in a writing specifically
captioned “Disclosure Statement” and delivered to the Administrative Agent prior
to the Agreement Date.

 

Section 4.10.  Ownership of Property, Liens.  Each Credit Party is the lawful
owner of, has good and marketable title to and is in lawful possession of, or
has valid leasehold interests in, all properties and other assets (real or
personal, tangible, intangible or mixed) purported to be owned, leased,
subleased or used as the case may be, by such Credit Party on the most recent
balance sheet referred to in Section 4.5 or, if more recent, delivered pursuant
to Section 5.1, and none of such Credit Party’s properties or assets is subject
to any Liens, except Liens permitted pursuant to Section 7.2.

 

Section 4.11.  Environmental Laws. Each Credit Party and its respective
operations are (a) in material compliance with the requirements of all
Environmental Laws and (b) not the subject of any investigation by any
Governmental Authority evaluating whether any remedial action is needed to
respond to a Release of any Hazardous Material into the environment or the work
place or the use of any such substance in any of its products or manufacturing
operations, which noncompliance or remedial action could reasonably be expected
to have a Material Adverse Effect.

 

Section 4.12.  ERISA.  Each member of the Controlled Group has fulfilled its
obligations under the minimum funding standards of ERISA and the IRC with
respect to each Plan and is in compliance in all material respects with the
presently applicable provisions of ERISA and the IRC with respect to each Plan. 
No member of the Controlled Group has (a) sought a waiver of the minimum funding
standard under Section 412 of the IRC in respect of any Plan, (b) failed to make
any contribution or payment to any Plan or Multiemployer Plan or in respect of
any Benefit Arrangement, or made any amendment to any Plan or Benefit
Arrangement, which has resulted or could reasonably be expected to result in the
imposition of a Lien or the posting of a bond or other security under ERISA or
the IRC or (c) incurred any liability under Title IV of ERISA other than a
liability to the PBGC for premiums under Section 4007 of ERISA.

 

Section 4.13.  Subsidiaries; Capitalization.  The Credit Parties have no
Subsidiaries on the Closing Date other than as set forth on Disclosure
Schedule 4.13.  Disclosure Schedule 4.13 sets forth the correct legal name and
jurisdiction of organization of each of the Credit Parties.  The authorized
Stock of each of the Credit Parties are as set forth on Disclosure
Schedule 4.13.  All issued and outstanding Stock of each of the Credit Parties
is duly authorized and validly issued, fully paid, nonassessable, free and clear
of all Liens other than those in favor of Administrative Agent for the benefit
of the Lending Parties, and such Stock was issued in compliance with all
Applicable Laws.  The identity of the holders of the Stock of each of the Credit
Parties (other than Parent) and the percentage of their fully diluted ownership
of the Stock

 

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of each of the Credit Parties is set forth on Disclosure Schedule 4.13.  No
Stock of any Credit Party, other than that described above, is issued and
outstanding.  Except as provided in Disclosure Schedule 4.13, there are no
preemptive or other outstanding rights, options, warrants, conversion rights or
similar agreements or understandings for the purchase or acquisition from any
Credit Party of any Stock of any such entity.  All outstanding Indebtedness and
Guaranteed Obligations of each Credit Party as of the Closing Date (except for
the Obligations) is described in Disclosure Schedule 4.13. Holdings has no
assets (except Stock of its Subsidiaries) and no Indebtedness or Guaranteed
Indebtedness (except the Obligations).  Holdings has no liabilities and engages
in no activities except those liabilities that are incurred in the ordinary
course of business.  Parent has no assets (except Stock of its Subsidiaries) and
no Indebtedness or Guaranteed Indebtedness (except the Obligations).  Parent has
no liabilities and engages in no activities except those liabilities that are
incurred in the ordinary course of business.

 

Section 4.14.  Government Regulations.  No Credit Party is an “investment
company” or an “affiliated person” of, or “promoter” or “principal underwriter”
for, an “investment company,” as such terms are defined in the Investment
Company Act of 1940.  No Credit Party is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, or any other federal
or state statute that restricts or limits its ability to incur Indebtedness or
to perform its obligations hereunder.

 

Section 4.15.  Margin Regulations.  No Credit Party is engaged, nor will it
engage, principally or as one of its activities, in the business of extending
credit for the purpose of “purchasing” or “carrying” any “margin stock” as such
terms are defined in Regulation U of the Federal Reserve Board as now and from
time to time hereafter in effect (such securities being referred to herein as
“Margin Stock”).  No Credit Party owns any Margin Stock and none of the proceeds
from the Loans have been or will be used, directly or indirectly, for the
purpose of purchasing or carrying any Margin Stock, for the purpose of reducing
or retiring any indebtedness which was originally incurred to purchase or carry
any Margin Stock or for any other purpose which might cause any of the loans
under this Agreement to be considered a “purpose credit” within the meaning of
Regulations T, U or X of the Board of Governors of the Federal Reserve Board. 
No Credit Party will take or permit to be taken any action that might cause any
Loan Document to violate any regulation of the Federal Reserve Board.

 

Section 4.16.  Taxes.  All tax returns, reports and statements, including
information returns, required by any Governmental Authority to be filed by any
Credit Party have been filed with the appropriate Governmental Authority and all
Charges have been paid prior to the date on which any fine, penalty, interest or
late charge may be added thereto for nonpayment thereof (or any such fine,
penalty, interest, late charge or loss has been paid), excluding Charges or
other amounts which are the subject of a Permitted Contest.  Proper and accurate
amounts have been withheld by each Credit Party from its respective employees
for all periods in compliance with Applicable Laws and such withholdings have
been timely paid to the respective Governmental Authorities.  Disclosure
Schedule 4.16 sets forth as of the Closing Date those taxable years for which
any Credit Party’s tax returns are currently being audited by the IRS or any
other applicable Governmental Authority, and any assessments or threatened
assessments in connection with such audit, or otherwise currently outstanding. 
Except as described in Disclosure Schedule 4.16, no Credit Party has executed or
filed with the IRS or any other Governmental Authority any agreement or other
document extending, or having the effect

 

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of extending, the period for assessment or collection of any Charges.  None of
the Credit Parties and their respective predecessors are liable for any Charges
(a) under any agreement (including any tax sharing agreements) or (b) to each
Credit Party’s knowledge, as a transferee.  As of the Closing Date, no Credit
Party has agreed or been requested to make any adjustment under IRC
Section 481(a), by reason of a change in accounting method or otherwise, that
could reasonably be expected to have a Material Adverse Effect.

 

Section 4.17.  Intellectual Property.  Each Credit Party owns or has rights to
use all Intellectual Property material to the conduct of its business as now or
heretofore conducted by it or proposed to be conducted by it, without, to each
Credit Party’s knowledge, actual or claimed infringement upon the rights of
third parties.

 

Section 4.18.  Solvency.  Both before and after giving effect to (a) the
Extensions of Credit to be made or extended on the Closing Date or such other
date as Extensions of Credit requested hereunder are made or extended, the
issuance of the guaranties of the Obligations and the pledge of assets as
security therefor by all of the Credit Parties, (b) the disbursement of the
proceeds of such Extensions of Credit pursuant to the instructions of the Credit
Parties, (c) the consummation of the transactions contemplated in the Related
Transactions Documents, and (d) the payment and accrual of all transaction costs
in connection with the foregoing, each Credit Party is Solvent.

 

Section 4.19.  Insurance.  Disclosure Schedule 4.19 lists all insurance policies
of any nature maintained, as of the Closing Date, for current occurrences by
each Credit Party, as well as a summary of the terms of each such policy.

 

Section 4.20.  Brokers.  No broker or finder acting on behalf of any Credit
Party brought about the obtaining, making or closing of the Loans, and no Credit
Party has any obligation to any Person in respect of any finder’s or brokerage
fees in connection therewith.

 

Section 4.21  HIPAA
Compliance.                                                     (a) To the
extent that and for so long as (i) a Credit Party is a “covered entity” as
defined in 45 C.F.R. § 160.103, (ii) a Credit Party and/or its business and
operations are subject to or covered by the HIPAA Administrative Requirements
codified at 45 C.F.R. Parts 160 & 162 (the “Transactions Rule”) and/or the HIPAA
Security and Privacy Requirements codified at 45 C.F.R. Parts 160 & 164 (the
“Privacy and Security Rules”), and/or (iii) a Credit Party sponsors any “group
health plans” as defined in 45 C.F.R. § 160.103, each such Credit Party has: 
(x) completed, or will complete on or before any applicable compliance date,
thorough and detailed surveys, audits, inventories, reviews, analyses and/or
assessments, including risk assessments, (collectively “Assessments”) of all
areas of its business and operations subject to HIPAA and/or that could be
adversely affected by the failure of such Credit Party to be HIPAA Compliant (as
defined below) to the extent these Assessments are appropriate or required for
such Credit Party to be HIPAA Compliant; (y) developed, or will develop on or
before any applicable compliance date, a detailed plan and time line for
becoming HIPAA Compliant (a “HIPAA Compliance Plan”); and (z) implemented, or
will implement on or before any applicable compliance date, those provisions of
its HIPAA Compliance Plan necessary to ensure that such Credit Party is HIPAA
Compliant.  For purposes of this Agreement, “HIPAA Compliant” shall mean that an
applicable Credit Party (1) is, or on or before any applicable compliance date
will be, in full compliance with any and all of the

 

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applicable requirements of HIPAA, including all requirements of the Transactions
Rule and the Privacy and Security Rules and (2) is not subject to, and could not
reasonably be expected to become subject to, any civil or criminal penalty or
any investigation, claim or process that could reasonably be expected to have a
Material Adverse Effect.

 

(b)                                        Each Credit Party represents that it,
collectively with certain other affiliates of such Credit Party has elected to
be treated as a single covered entity in accordance with the Privacy and
Security Rules (45 C.F.R. § 164.504(d)) (the “Affiliated Entity”).  As such,
each Credit Party represents and warrants that it has the legal right, power and
authority to execute the Business Associate Agreement on behalf of the
Affiliated Entity, in accordance with the Privacy and Security Rules, and that
the provisions of the Business Associate Agreement shall be binding upon each
Credit Party and all of such Credit Party’s affiliates that are participating in
the Affiliated Entity, in accordance with the Privacy and Security Rules, as if
each and every such affiliate were a party to such Business Associate Agreement
directly.

 

Section  4.22  Third Party Reimbursement.  If any Credit Party is or has been
audited by Medicare, Medicaid, TRICARE, CHAMPVA or similar governmental payors,
none of such audits provides for adjustments in reimbursable costs or asserts
claims for reimbursement or repayment by such Credit Party of costs and/or
payments theretofore made by such governmental payor that, if adversely
determined, could reasonably be expected to have or result in a Material Adverse
Effect.

 

Section 4.23  Tax Shelter Representation.  The Borrower does not intend to treat
the Loans, the Letters of Credit and/or related transactions as being a
“reportable transaction” (within the meaning of Treasury Regulation
Section 1.6011-4).  In the event the Borrower determines to take any action
inconsistent with such intention, it will promptly notify the Administrative
Agent thereof.  If the Borrower so notifies the Administrative Agent, the
Borrower acknowledges that one or more of the Lenders may treat its Loans and/or
its interest in Swing Line Loans and/or Letters of Credit as part of a
transaction that is subject to Treasury Regulation Section 301.6112-1, and such
Lender or Lenders, as applicable, will maintain the lists and other records
required by such Treasury Regulation.

 

ARTICLE V.

REPORTING COVENANTS

 

So long as any Lending Party has any Commitment hereunder or any Extension of
Credit or other Obligation remains outstanding, each Credit Party shall comply
with each of the provisions in this Article V:

 

Section 5.1.  Financial Statements and Reports.  The Credit Party shall deliver
the following to each Lending Party at its address specified pursuant to
Section 11.3:

 

(a)                                         Monthly Financials.    As soon as
available, but in any event within 30 days after the end of each fiscal month:

 

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(i)                                           consolidated and consolidating
balance sheets of the Credit Parties as of the close of such fiscal month, and
related consolidated and consolidating statements of income and cash flows for
such fiscal month and for that portion of the Fiscal Year ending as of the close
of such fiscal month, in each case setting forth in comparative form the figures
for the corresponding period in the prior year and the figures contained in the
Projections and Budget for such Fiscal Year; and

 

(ii)                                      a Compliance Certificate in the form
of Exhibit 5.1(a).

 

(b)                                        Quarterly Financials.  As soon as
available, but in any event within 45 days after the end of each Fiscal Quarter:

 

(i)                                           consolidated and consolidating
balance sheets of the Credit Parties as of the close of such Fiscal Quarter and
the related consolidated and consolidating statements of income and cash flow
for such Fiscal Quarter and for that portion of the Fiscal Year ending as of the
close of such Fiscal Quarter, in each case setting forth in comparative form the
figures for the corresponding period in the prior year and the figures contained
in the Projections and Budget for such Fiscal Year;

 

(ii)                                      a management discussion and analysis
that includes a comparison of performance for such Fiscal Quarter to the
corresponding period in the prior year; and

 

(iii)                                 a Compliance Certificate in the form of
Exhibit 5.1(b).

 

(c)                                        Annual Financials.  As soon as
available, but in any event within 90 days after the end of each Fiscal Year:

 

(i)                                           audited consolidated balance
sheets and related audited consolidated statements of income, retained earnings
and cash flows for the Credit Parties, setting forth in comparative form in each
case the figures for the previous Fiscal Year, and reported on without a “going
concern” or other qualification or exception by an independent certified public
accounting firm of national standing reasonably acceptable to Administrative
Agent;

 

(ii)                                      a management discussion and analysis
that includes a comparison of performance for such Fiscal Year to the prior
year;

 

(iii)                                 a Compliance Certificate in the Form of
Exhibit 5.1(c);

 

(iv)                                    a report in form and substance
reasonably satisfactory to Administrative Agent and subject only to standard
qualifications required by nationally recognized accounting firms, signed by the

 

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accounting firm auditing the financial statements, (A) showing the calculations
used to determine compliance with each of the financial covenants set forth
herein, (B) stating that, in connection with their audit examination, nothing
has come to their attention to cause them to believe that a Default has occurred
(or specifying those Defaults that they became aware of), it being understood
that such audit examination extended only to accounting matters and that no
special investigation was made with respect to the existence of Defaults, and
(C) consistent with past practices; and

 

(v)                                         the annual letters collected by such
accountants in connection with their audit examination detailing contingent
liabilities and material litigation matters.

 

(d)                                        Annual Budgets.  As soon as available
following the end of each Fiscal Year, but in any event not later than 30 days
after the end of such Fiscal Year, an annual operating plan for the Credit
Parties (the “Budget”), on a consolidated and consolidating basis, approved by
the Board of Directors of the Borrower, for the following Fiscal Year, which (i)
includes a statement of all of the material assumptions on which such plan is
based, (ii) includes monthly balance sheets, income statements and statements of
cash flows for the following year and (iii) integrates sales, gross profits,
operating expenses, operating profit, cash flow projections and Borrowing
Availability projections, all prepared on the same basis and in similar detail
as that on which operating results are reported (and in the case of cash flow
projections, representing management’s good faith estimates of future financial
performance based on historical performance), and including plans for personnel,
Capital Expenditures and facilities.

 

(e)                                        Management Letters.  Within five
Business Days after receipt thereof by any Credit Party, copies of all
management letters, exception reports or similar letters or reports received by
such Person from its independent certified public accountants.

 

(f)                                          Defaults and other Material
Events.                                                            As soon as
practicable, and in any event within five (5) Business Days after any executive
or financial officer of any Credit Party obtains knowledge of the existence of
any event that could reasonably be expected to have a Material Adverse Effect or
of any Default, telephonic or telecopied notice specifying the nature of such
event or Default, including the anticipated effect thereof, which notice, if
given telephonically, shall be promptly confirmed in writing on the next
Business Day.

 

(g)                                        Litigation.   As soon as practicable,
and in any event within five (5) Business Days after any executive or financial
officer of any Credit Party obtains knowledge of any Litigation commenced or
threatened against any Credit Party that (i) seeks damages in excess of
$1,000,000, (ii) seeks injunctive relief and, if such relief were granted, such
injunction could reasonably be expected to have a Material Adverse Effect, (iii)
is asserted or instituted against any Plan, its fiduciaries or its assets or
against any Credit Party or any member of a Controlled Group in connection with
any Plan, (iv) alleges criminal misconduct by any Credit Party, (v) alleges
material violations of any Healthcare Laws, (vi) alleges the violation of any
law regarding, or seeks remedies in connection with, any Environmental
Liabilities, or (vii) if

 

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adversely determined against any Credit Party, could reasonably be expected to
have a Material Adverse Effect.

 

(h)                                        Other Securities Reports.  Promptly
upon their becoming available, copies of (i) all financial statements, reports,
notices and proxy statements sent by any Credit Party to its security holders,
(ii) all regular and periodic reports and all registration statements and
prospectuses, if any, filed by any Credit Party with any securities exchange or
with the Securities and Exchange Commission or any governmental or private
regulatory authority and (iii) all press releases and other statements made
available by any Credit Party to the public concerning material changes or
developments in the business of any such Credit Party.

 

(i)                                           Supplemental Disclosures.
Supplemental disclosures, if any, required by Section 6.7.

 

(j)                                           Damage to Collateral.  Disclosure
of any loss, damage, or destruction to the Collateral in the amount of $500,000
or more individually or in the aggregate, whether or not covered by insurance.

 

(k)                                        Defaults under Material
Agreements.   Immediately upon receipt, copies of any notice to any Credit Party
of claimed default by any third party to any Credit Party with respect to or by
any Credit Party of any lease or agreement to which any Credit Party is a party
that involves payments in excess of $250,000 individually or in the aggregate
per annum or involves property of any Credit Party  having a value in excess of
$250,000 individually or in the aggregate.

 

(l)                                           Other Documents.  Promptly upon
request, such other financial and other information respecting any Credit
Party’s business or financial condition as Administrative Agent or any Lender
shall from time to time reasonably request.

 

Section 5.2.  Collateral Reports.  Each Credit Party shall deliver to
Administrative Agent or to Administrative Agent and Lenders, as required, the
various Collateral Reports (including Borrowing Base Certificates in the form of
Exhibit N) at the times and in the manner set forth below:

 

(a)                                         To Administrative Agent, upon its
request, and in any event no less frequently than 12:00 p.m. (New York City
time) on the date that is fifteen (15) Business Days after the end of each
fiscal month (together with a copy of all or any part of the following reports
requested by any Lender in writing after the Closing Date), each of the
following reports, each of which shall be prepared by the Borrower as of the
last day of the immediately preceding fiscal month:

 

(i)                                           a Borrowing Base Certificate
accompanied by such supporting detail and documentation as shall be requested by
Administrative Agent in its reasonable discretion; and

 

(ii)                                      a monthly trial balance showing
Accounts outstanding aged from invoice date as follows:  one (1) to thirty (30)
days; thirty-one (31) to sixty

 

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(60) days; sixty-one (61) to ninety (90) days; ninety-one (91) days to one
hundred twenty days (120) and one hundred twenty-one days (121) or more,
accompanied by such supporting detail and documentation as shall be requested by
Administrative Agent in its reasonable discretion;

 

(b)                                        To Administrative Agent, on a monthly
basis or at such more frequent intervals as Administrative Agent may reasonably
request from time to time (together with a copy of all or any part of such
delivery requested by any Lender in writing after the Closing Date), Collateral
reports including all additions and reductions (cash and non-cash) with respect
to Accounts in each case accompanied by such supporting detail and documentation
as shall be requested by Administrative Agent in its reasonable discretion each
of which shall be prepared as of the last day of the immediately preceding month
or the date that is two (2) days prior to the date of any such request;

 

(c)                                        To Administrative Agent, at the time
of delivery of each of the monthly financial statements delivered pursuant to
Section 5.1(a):

 

(i)                                           a reconciliation of the Accounts
trial balance to the most recent Borrowing Base Certificate, general ledger and
monthly financial statements delivered pursuant to Section 5.1(a), in each case
accompanied by such supporting detail and documentation as shall be requested by
Administrative Agent in its reasonable discretion;

 

(ii)                                      an aging of accounts payable and a
reconciliation of such accounts payable aging to the general ledger and monthly
financial statements delivered pursuant to Section 5.1(a), in each case
accompanied by such supporting detail and documentation as shall be requested by
Administrative Agent in its reasonable discretion; and

 

(iii)                                 a reconciliation of the outstanding Loans
as set forth in the monthly Loan Account statement provided by Administrative
Agent to the general ledger and monthly financial statements delivered pursuant
to Section 5.1(a), in each case accompanied by such supporting detail and
documentation as shall be requested by Administrative Agent in its reasonable
discretion.

 

(d)                                        To Administrative Agent, at the time
of delivery of each of the annual financial statements delivered pursuant to
Section 5.1(d), (i) a listing of government contracts of the Borrower subject to
the Federal Assignment of Claims Act of 1940; and (ii) a list of any
applications for the registration of any patent, trademark or copyright filed by
any Credit Party with the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in the prior Fiscal
Quarter;

 

(e)                                        To the Administrative Agent, such
appraisals of the Borrower’s assets as Administrative Agent may request at any
time after the occurrence and during the continuance of a Default, such
appraisals to be conducted by an appraiser, and in form and substance reasonably
satisfactory to Administrative Agent;

 

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(f)                                          To Administrative Agent, within
five (5) Business Days after receipt thereof, copies of (i) any and all default
notices received under or with respect to any leased location or public
warehouse where any Collateral is located, and (ii) such other notices or
documents with respect to any owned or leased Real Property of any Credit Party
as Administrative Agent may reasonably request;

 

(g)                                        To Administrative Agent, within five
(5) Business Days after receipt thereof, copies of any material amendments to
any Real Property leases of any Credit Party; and

 

(h)                                        Such other reports, statements and
reconciliations with respect to the Borrowing Base, Collateral or Obligations of
any or all Credit Parties as Administrative Agent shall from time to time
request in its reasonable discretion.

 

Section 5.3.  Accuracy of Financial Statements and Information

 

(a)                                         Future Financial Statements.  All
financial statements delivered pursuant to Section 5.1(a), (b), or (c), shall
(i) in the case of the financial information set forth therein, present fairly,
in all material respects, in accordance with GAAP the consolidated and
consolidating financial position of the Credit Parties, as at their respective
dates and the consolidated and consolidating income, shareholders’ equity, and
consolidated cash flows of the Credit Parties for the respective periods to
which such statements relate (subject, in the case of the financial statements
delivered pursuant to Section 5.1(a) and (b), to the absence of footnotes and
normally recurring year-end adjustments) and (ii) in the case of any other
information presented, be true, correct and complete in all material respects,
and the furnishing of the same to the Lending Parties shall constitute a
representation and warranty by the Credit Parties made on the date the same are
furnished to the Lending Parties to that effect.

 

(b)                                        Future Information.  All Information
furnished to any Lending Party by or on behalf of any Credit Party on and after
the Closing Date in connection with or pursuant to this Agreement or any other
Loan Document or in connection with or pursuant to any amendment or modification
of, or waiver under, this Agreement or any other Loan Document, shall, at the
time the same is so furnished, but in the case of Information dated as of a
prior date, as of such date, (i) in the case of any such information prepared in
the ordinary course of business, be complete and correct in all material
respects in the light of the purpose prepared, and, in the case of any such
Information required by the terms of this Agreement or the preparation of which
was requested by any Lending Party, be complete and correct in all material
respects to the extent necessary to give true and accurate knowledge of the
subject matter thereof, and (ii) not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
contained therein, in light of the circumstances in which they are made, not
misleading, and the furnishing of the same to any Lending Party shall constitute
a representation and warranty by the Credit Parties made on the date the same
are so furnished to the effect specified in clauses (i) and (ii).

 

5.4                                      Confidential Health
Information.                                                       
Notwithstanding anything in this Agreement to the contrary, Credit Parties agree
that they will not distribute or share confidential health information with any
Lender if the sharing or distribution of such information to Lender would be a
violation of HIPAA and Credit Parties further agree to identify any such health

 

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information and protect Lenders from the receipt thereof; provided that any
Lender shall have the right to receive confidential health information if such
Lender executes a Business Associate Agreement.

 

ARTICLE VI.

AFFIRMATIVE COVENANTS

 

So long as any Lending Party has any Commitment hereunder or any Extension of
Credit or other Obligation remains outstanding, Borrower shall, and shall cause
each Credit Party to, comply with each of the covenants in this Article VI:

 

Section 6.1.  Payment of Obligations.  Each Credit Party (a) shall pay and
discharge, at or before maturity, all of its respective obligations and
liabilities, including Charges, the non-payment or discharge of which could
reasonably be expected to have a Material Adverse Effect except where the same
is the subject of a Permitted Contest, (b) shall maintain, in accordance with
GAAP, appropriate reserves for the accrual of any of the same and (c) shall not
breach in any respect, or permit to exist any default under, the terms of any
lease, commitment, contract, instrument or obligation to which it is a party, or
by which its properties or assets are bound, the breach of or default under
which could reasonably be expected to have a Material Adverse Effect, subject to
Permitted Contests.

 

Section 6.2.  Preservation of Existence and Franchises.  Each of the Credit
Parties will, and will cause each of its Subsidiaries to, do all things
necessary to preserve and keep in full force and effect its existence, rights,
franchises and authority except as permitted by Section 7.4 or except (with
respect to rights, franchises and authority only) where the failure to do so
would not have or be reasonably expected to have a Material Adverse Effect.

 

Section 6.3.  Insurance; Damage to or Destruction of Collateral.    (a)  The
Credit Parties shall, at their sole cost and expense, maintain the policies of
insurance described on Disclosure Schedule 4.19 as in effect on the date hereof
or otherwise in form and amounts and with insurers reasonably acceptable to
Administrative Agent.  Such policies of insurance (or the loss payable and
additional insured endorsements delivered to Administrative Agent) shall contain
provisions pursuant to which the insurer agrees to provide thirty (30) days
prior written notice to Administrative Agent in the event of any non-renewal,
cancellation or amendment of any such insurance policy.  If any Credit Party at
any time or times hereafter shall fail to obtain or maintain any of the policies
of insurance required above, or to pay all premiums relating thereto,
Administrative Agent may at any time or times thereafter obtain and maintain
such policies of insurance and pay such premiums and take any other action with
respect thereto that Administrative Agent deems advisable; provided that
Administrative Agent shall have no obligation to obtain insurance for any Credit
Party or pay any premiums therefor, but to the extent it does obtain such
insurance or pay such premiums, Administrative Agent shall not be deemed to have
waived any Default arising from any Credit Party’s failure to maintain such
insurance or pay any premiums therefor.  All sums so disbursed by Administrative
Agent hereunder, including reasonable attorneys’ fees, court costs and other
charges related thereto, shall be payable on demand by the Borrower to
Administrative Agent and shall constitute additional Obligations hereunder
secured by the Collateral.

 

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(b)                                        Administrative Agent reserves the
right at any time upon any change in any Credit Party’s risk profile (including
any change in the product mix maintained by any Credit Party or any laws
affecting the potential liability of such Credit Party) to require additional
forms and limits of insurance to, in Administrative Agent’s reasonable opinion,
adequately protect both Administrative Agent’s and Lender’s interests in all or
any portion of the Collateral and to ensure that each Credit Party is protected
by insurance in amounts and with coverage customary for its industry.  If
requested by Administrative Agent, each Credit Party shall deliver to
Administrative Agent from time to time a report of a reputable insurance broker,
satisfactory to Administrative Agent, with respect to its insurance policies.

 

(c)                                        Each Credit Party shall deliver to
Administrative Agent, in form and substance satisfactory to Administrative
Agent, endorsements to (i) all “All Risk” and business interruption insurance
naming Administrative Agent, on behalf of the Agent and Lenders, as loss payee,
and (ii) all general liability and other liability policies naming
Administrative Agent, on behalf of itself and Lenders, as additional insured. 
Each Credit Party irrevocably makes, constitutes and appoints Administrative
Agent (and all officers, employees or agents designated by Administrative
Agent), as such Credit Party’s true and lawful agent and attorney-in-fact for
the purpose of making, settling and adjusting claims under such “All Risk”
policies of insurance, endorsing the name of such Credit Party on any check or
other item of payment for the proceeds of such “All Risk” policies of insurance
and for making all determinations and decisions with respect to such “All Risk”
policies of insurance; provided that  Administrative Agent shall have no duty to
exercise any rights or powers granted to it pursuant to the foregoing
power-of-attorney.  After deducting from such proceeds the expenses, if any,
incurred by Administrative Agent in the collection or handling thereof,
Administrative Agent shall apply such proceeds in excess of $250,000 to the
reduction of the Obligations in accordance with Section 2.8(b); provided
however, that, absent a Default or Event of Default, the applicable Credit Party
may use such proceeds in an amount not to exceed $1,000,000, to replace, repair,
restore or rebuild the Collateral within 180 days of such casualty with
materials and workmanship of substantially the same quality as existed before
the loss, damage or destruction; provided that if such Credit Party shall not
have completed or entered into binding agreements to complete such replacement,
restoration, repair or rebuilding within 180 days of such casualty,
Administrative Agent shall apply such insurance proceeds to the Obligations in
accordance with Section 2.8(b).  All insurance proceeds that are to be made
available to any Credit Party to replace, repair, restore or rebuild the
Collateral shall be applied by Administrative Agent to reduce the outstanding
principal balance of the Revolving Loan (which application shall not result in a
permanent reduction of the Revolving Credit Commitment) and upon such
application, Administrative Agent shall establish a Reserve against the
Borrowing Base in an amount equal to the amount of such proceeds so applied. 
Thereafter, such funds shall be made available to that Credit Party to provide
funds to replace, repair, restore or rebuild the Collateral as follows: (x) the
Borrower shall request a Revolving Credit Advance be made to such Credit Party
in the amount requested to be released; (y) so long as the conditions set forth
in Section 3.2 have been met, Revolving Lenders shall make such Revolving Credit
Advance and (z) in the case of insurance proceeds applied against the Revolving
Loan, the Reserve established with respect to such insurance proceeds shall be
reduced by the amount of such Revolving Credit Advance.  To the extent not used
to replace, repair, restore or rebuild the Collateral, such insurance proceeds
shall be applied in accordance with Section 2.8(b).

 

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Section 6.4  Compliance with Law.  Each of the Credit Parties will, and will
cause each of its Subsidiaries to, comply with all laws, rules, regulations and
orders, and all applicable restrictions imposed by all Governmental Authorities,
applicable to it and its property (including, without limitation, Environmental
Laws) if noncompliance with any such law, rule, regulation, order or restriction
would have or be reasonably expected to have a Material Adverse Effect.

 

Section 6.5  Payment of Taxes and Other Indebtedness.  Each of the Credit
Parties will, and will cause its Subsidiaries to, pay, settle or discharge (a)
all taxes, assessments and governmental charges or levies imposed upon it, or
upon its income or profits, or upon any of its properties, before they shall
become delinquent, (b) all lawful claims (including claims for labor, materials
and supplies) which, if unpaid, might give rise to a Lien upon any of its
properties, and (c) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; provided, however, that a Credit Party or
any of its Subsidiaries shall not be required to pay any such tax, assessment,
charge, levy, claim or Indebtedness which is being contested in good faith by
appropriate proceedings and as to which adequate reserves therefor have been
established in accordance with GAAP, unless the failure to make any such payment
(i) could give rise to an immediate right to foreclose on a Lien securing such
amounts or (ii) would have or be reasonably expected to have a Material Adverse
Effect.

 

Section 6.6  Maintenance of Property.  Each of the Credit Parties will, and will
cause its Subsidiaries to, maintain and preserve its properties and equipment in
good repair, working order and condition, normal wear and tear excepted, and
will make, or cause to be made, in such properties and equipment from time to
time all repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto as may be needed or proper, to the extent and in the manner
customary for companies in similar businesses.

 

Section 6.7  Performance of Obligations.  Each of the Credit Parties will, and
will cause its Subsidiaries to, perform in all respects all of its obligations
under the terms of all agreements, indentures, mortgages, security agreements or
other debt instruments to which it is a party or by which it is bound unless the
failure to do so would not have or be reasonably expected to have a Material
Adverse Effect.

 

Section 6.8  Use of Proceeds.  The Borrower will use the proceeds of the Loans
solely (a) to refinance all amounts outstanding under the Prior Lenders Credit
Agreement, and (b) for working capital and general corporate purposes including,
without limitation, Capital Expenditures as permitted in Section 7.13.

 

Section 6.9  Audits/Inspections.  Upon reasonable notice and during normal
business hours the Credit Parties will, and will cause their Subsidiaries to,
permit, subject to the provisions of Section 11.14, representatives appointed by
the Administrative Agent, including, without limitation, independent
accountants, agents, attorneys and appraisers to visit and inspect each Credit
Party’s property, including its books and records, its accounts receivable and
inventory, its facilities and its other business assets, and to make photocopies
or photographs thereof and to write down and record any information such
representative obtains and shall permit the Administrative Agent or its
representatives to investigate and verify the accuracy of information provided
to the Lenders and to discuss all such matters with the officers, employees

 

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and representatives of the Credit Parties and their Subsidiaries.  The Credit
Parties agree that the Administrative Agent and its representatives may conduct
one annual field audit and, to the extent necessary, one annual desk audit of
the Collateral at the expense of the Borrower (the Borrower being entitled to
have a representative present at discussions with its independent accountants),
provided that upon a Default or Event of Default, the Administrative Agent and
its representatives may conduct audits at the expense of the Borrower and such
audits do not count towards the limitation of one field audit and one desk audit
per year at Borrower’s expense set forth in this Section 6.9.

 

Section 6.10  Financial Covenants.  The Borrower’s fiscal year ends on the
Sunday closest to December 31 of each calendar year.  Each reference to
March 31, June 30, September 30 and December 31 in this Section 6.10 shall be
deemed to refer to the last day of the fiscal quarter or fiscal year of the
Borrower, as applicable, ending on or about such date.  In addition, each
reference to January 1, April 1, July 1 and October 1 shall be deemed to refer
to the first day of the fiscal quarter or fiscal year of the Borrower, as
applicable, beginning on or about such date.

 

(a)                                         Leverage Ratio.  The Leverage Ratio,
at all times during the periods set forth below, shall be less than or equal to
the ratio set forth opposite such period:

 

(i)                                           From the Closing Date to and
including December 31, 2003, 3.00 to 1.0.

 

(ii)                                      From January 1, 2004 to and including
June 30, 2004, 4.50 to 1.0;

 

(iii)                                 From July 1, 2004 to and including
September 30, 2004, 4.25 to 1.0.

 

(iv)                                    From October 1, 2004 to and including
December 31, 2004,  3.50 to 1.0.

 

(v)                                         From January 1, 2005 to and
including March 31, 2005, 2.75 to 1.0.

 

(vi)                                    From April 1, 2005 to and including
December 31, 2005, 2.50 to 1.0.

 

(vii)                               From January 1, 2006 and thereafter, 2.25 to
1.0.

 

(b)                                        Fixed Charge Coverage Ratio.  The
Fixed Charge Coverage Ratio, as of the end of each Fiscal Quarter of the
Borrower set forth below, shall be greater than or equal to the ratio set forth
opposite such Fiscal Quarter:

 

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Fiscal Quarter

 

Minimum Fixed

Charge Coverage Ratio

Fiscal Quarter ending December 31, 2003

 

1.15 to 1.0

Fiscal Quarter ending March 31, 2004

 

1.15 to 1.0

Fiscal Quarter ending June 30, 2004

 

1.25 to 1.0

Fiscal Quarter ending September 30, 2004

 

1.25 to 1.0

Fiscal Quarter ending December 31, 2004

 

1.50 to 1.0

Fiscal Quarter ending March 31, 2005

 

1.75 to 1.0

Fiscal Quarter ending June 30, 2005

 

1.75 to 1.0

Fiscal Quarter ending September 30, 2005

 

1.75 to 1.0

Fiscal Quarter ending December 31, 2005

 

0.60 to 1.0

Fiscal Quarter ending March 31, 2006

 

0.60 to 1.0

Fiscal Quarter ending June 30, 2006

 

0.65 to 1.0

Fiscal Quarter ending September 30, 2006

 

0.65 to 1.0

Fiscal Quarter ending December 31, 2006 and each Fiscal Quarter thereafter

 

2.25 to 1.0

 

(c)                                        EBITDA.  EBITDA, for each 12 month
period ending as of the last day of each Fiscal Quarter set forth below, shall
not be less than the amount set forth opposite such period:

 

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Fiscal Quarter

 

EBITDA

Fiscal Quarter ending December 31, 2003

 

$

21,000,000

Fiscal Quarter ending March 31, 2004

 

$

13,000,000

Fiscal Quarter ending June 30, 2004

 

$

13,000,000

Fiscal Quarter ending September 30, 2004

 

$

13,500,000

Fiscal Quarter ending December 31, 2004

 

$

18,000,000

Fiscal Quarter ending March 31, 2005

 

$

18,000,000

Fiscal Quarter ending June 30, 2005

 

$

18,000,000

Fiscal Quarter ending September 30, 2005

 

$

18,000,000

Fiscal Quarter ending December 31, 2005

 

$

18,000,000

Fiscal Quarter ending March 31, 2006

 

$

18,500,000

Fiscal Quarter ending June 30, 2004

 

$

18,500,000

Fiscal Quarter ending September 30, 2004 and each Fiscal Quarter thereafter.

 

$

19,000,000

 

(d)                                        Days Sales Outstanding.  As of the
end of each Fiscal Month from the Closing Date, Days Sales Outstanding shall not
be greater than 70 days for any Fiscal Month.

 

Section 6.11  Collateral.  If, subsequent to the Closing Date, a Credit Party
shall (a) acquire or lease any real property or (b) acquire any intellectual
property, securities, instruments, chattel paper or other personal property
required to be delivered to the

 

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Administrative Agent as Collateral hereunder or under any of the Collateral
Documents, the Borrower shall promptly (and in any event within ten (10)
Business Days) after any senior executive officer of the Borrower acquires
knowledge of same notify the Administrative Agent of same; provided that with
respect to leased real property, Credit Parties shall within five (5) Business
Days after the end of each Fiscal Quarter deliver to Administrative Agent a
schedule of the leased real property showing leased real property acquired and
closed during such Fiscal Quarter.  Each Credit Party shall take such action as
requested by the Administrative Agent and at its own expense, to ensure that the
Administrative Agent has a first priority perfected Lien in all owned real
property (and in such leased real property as reasonably requested by the
Administrative Agent or the Required Lenders) and all personal property of the
Credit Parties (whether now owned or hereafter acquired), subject only to
Permitted Liens; provided, however, that nothing in this Section 6.11 shall
require any Credit Party to take any action which would require the creation of
any Lien that would result in a breach of any agreement creating or evidencing
such Collateral so long as such agreement was not entered into with the intent
of avoiding the requirements of this Section 6.11.  Each Credit Party shall
adhere to the covenants regarding the location of personal property as set forth
in the Security Agreement.

 

Section 6.12  Additional Credit Parties.  At the time any Person becomes a
Subsidiary of a Credit Party, the Borrower shall so notify the Administrative
Agent and promptly thereafter (but in any event within 45 days after the date
thereof) shall (a) cause such Person (if it is a Domestic Subsidiary) to execute
a Joinder Agreement in form reasonably acceptable to Administrative Agent,
(b)(i) cause all of the Stock of such Person (if such Person is a Domestic
Subsidiary) or 65% of the Stock of such Person (if such Person is a Foreign
Subsidiary owned by a Credit Party) to be delivered to the Administrative Agent
(together with undated stock powers signed in blank) and pledged to the
Administrative Agent pursuant to an appropriate pledge agreement in
substantially the form of the Pledge Agreement and otherwise in a form
acceptable to the Administrative Agent, (ii) if such Person is a Domestic
Subsidiary, pledge all of its assets to the Administrative Agent pursuant to a
security agreement in substantially the form of the Security Agreement and
otherwise in a form acceptable to the Administrative Agent, (iii) if such Person
is a Domestic Subsidiary and has any Subsidiaries, (A) deliver all of the Stock
of such Domestic Subsidiaries and 65% of the Stock of such direct Foreign
Subsidiaries (together with undated stock powers signed in blank) to the
Administrative Agent and (B) execute a pledge agreement in substantially the
form of the Pledge Agreement and otherwise in a form acceptable to the
Administrative Agent, (iv) if such Person is a Domestic Subsidiary and owns or
leases any real property in the United States of America, execute any and all
necessary mortgages, deeds of trust, deeds to secure debt, collateral
assignments of leaseholds or other appropriate real estate collateral
documentation in a form acceptable to the Administrative Agent and (v) deliver
such other documentation as the Administrative Agent may reasonably request in
connection with the foregoing, including, without limitation, appropriate UCC-1
financing statements, real estate title insurance policies, environmental
reports and landlord waivers, and (c) cause such Person to deliver certified
resolutions and other organizational and authorizing documents of such Person
and favorable opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
documentation referred to above); it being understood that all of the
documentation, agreements, instruments, certificates and opinions to be
delivered pursuant to (a), (b) and (c) above shall be in form, content and scope
reasonably satisfactory to the Administrative Agent.  Notwithstanding anything
in this Section 6.12 to the contrary, no Credit Party shall be required to (x)
take any action which would violate

 

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any Requirement of Law or (y) grant a Lien on any asset that is subject to a
Permitted Lien if the granting of such Lien would violate the agreement creating
or evidencing such Permitted Lien, so long as such agreement was not entered
into with the intent of avoiding the requirements of this Section 6.12.

 

Section 6.13  [Reserved]

 

Section 6.14.  Supplemental Disclosure.  From time to time as may be reasonably
requested by Administrative Agent (which request will not be made more
frequently than once each year absent the occurrence and continuance of a
Default or an Event of Default), the Credit Parties shall supplement each
Disclosure Schedule hereto, or any representation herein or in any Loan
Document, with respect to any matter hereafter arising that, if existing or
occurring as of the date of this Agreement, would have been required to be set
forth or described in such Disclosure Schedule or as an exception to such
representation or that is necessary to correct any information in such
Disclosure Schedule or representation which has been rendered inaccurate thereby
(and, in the case of any supplements to any Disclosure Schedule, such Disclosure
Schedule shall be appropriately marked to show the changes made therein);
provided that (a) no such supplement to any such Disclosure Schedule or
representation shall amend, supplement or otherwise modify any Disclosure
Schedule or representation, or be deemed a waiver of any Default resulting from
the matters disclosed therein, except as consented to by Administrative Agent
and Required Lenders in writing, and (b) no supplement shall be required or
permitted as to representations and warranties that relate solely to the Closing
Date.

 

Section 6.15.  Further Assurances.  Each Credit Party shall, at its own cost and
expense, cause to be promptly and duly taken, executed, acknowledged and
delivered all such further acts, documents and assurances (a) as may from time
to time be necessary or as the Administrative Agent may from time to time
reasonably request to carry out the intent and purposes of the Loan Documents
and the transactions contemplated thereby, including all such actions to
establish, preserve, protect and perfect the estate, right, title and interest
of the Administrative Agent to the Collateral (including Collateral acquired
after the date hereof), including first priority Liens thereon, subject only to
Liens permitted by Section 7.2, and (b) as the Administrative Agent may from
time to time reasonably request, to establish, preserve, protect and perfect
first priority Liens in favor of the Administrative Agent on any and all assets
of the Credit Parties and the proceeds thereof, now owned or hereafter acquired,
that do not constitute Collateral on the date hereof.  The Borrower shall
promptly give notice to the Administrative Agent of the acquisition after the
Closing Date by any Credit Party of any Real Property (including leaseholds in
respect of Real Property) or any trademark, copyright or patent.

 

Section 6.16.  Environmental Matters.   Each Credit Party shall and shall cause
each Person within its control to (a) conduct its operations and keep and
maintain its Real Property in compliance with all Environmental Laws and
Environmental Permits other than noncompliance that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect,
(b) implement any and all investigative, remedial, removal and response actions
that are appropriate or necessary to maintain the value and marketability of the
Real Property or to otherwise comply with Environmental Laws and Environmental
Permits pertaining to the presence, generation, treatment, storage, use,
disposal, transportation or Release of any Hazardous Material on, at, in, under,
above, to, from or about any of the Real Property of

 

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any Credit Party, and (c) promptly forward to Administrative Agent a copy of any
order, notice, request for information or any communication or report received
by such Credit Party in connection with any such violation or Release or any
other matter relating to any Environmental Laws or Environmental Permits that
could reasonably be expected to result in Environmental Liabilities in excess of
$250,000, in each case whether or not any Governmental Authority has taken or
threatened any action in connection with any violation, Release or other
matter.  If Administrative Agent at any time has a reasonable basis to believe
that there may be a violation of any Environmental Laws or Environmental Permits
by any Credit Party or any Environmental Liability arising thereunder, or a
Release of Hazardous Materials on, at, in, under, above, to, from or about any
of the Real Property of any Credit Party, that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, then
each Credit Party shall, upon Administrative Agent’s written request (i) cause
the performance of such environmental audits including subsurface sampling of
soil and groundwater, and preparation of such environmental reports, at the
Borrower’s expense, as Administrative Agent may from time to time reasonably
request, which shall be conducted by reputable environmental consulting firms
reasonably acceptable to Administrative Agent and shall be in form and substance
reasonably acceptable to Administrative Agent, and (ii) permit Administrative
Agent or its representatives to have access to all Real Property for the purpose
of conducting such environmental audits and testing as Administrative Agent
deems appropriate, including subsurface sampling of soil and groundwater;
provided that the Borrower shall reimburse Administrative Agent for the costs of
such audits and tests and the same will constitute a part of the Obligations
secured hereunder.

 

Section 6.17.  Landlord and Warehouseman Waivers.  The Credit Parties shall
deliver to the Administrative Agent waivers of contractual and statutory
landlord’s, mortgagee’s or warehouseman’s Liens in form and substance reasonably
satisfactory to the Administrative Agent under each lease, mortgage, warehouse
agreement or similar agreement to which any Credit Party is a party.

 

Section 6.18.  Mortgages on Real Property; Title Insurance and Survey.  Within
thirty (30) days after the acquisition of any owned Real Property having a fair
market value in excess of $250,000 by any Credit Party, such Credit Party will
furnish the Administrative Agent with a Mortgage covering each parcel of Real
Property acquired by such Credit Party (the “Mortgaged Property”), together with
an ALTA extended coverage lender’s policy of title insurance in a policy amount
equal to one hundred percent (100%) of the greater of (x) the purchase price of
such acquired property (including any liabilities assumed in connection with the
acquisition) or (y) the fair market value of such property, insuring such
Mortgage as a valid, enforceable first Lien on the Credit Party’s interest in
the Mortgaged Property covered thereby, subject only to Permitted Liens and to
such other exceptions as are reasonably satisfactory to the Administrative
Agent, together with an ALTA survey with respect to each parcel of the Mortgaged
Property acquired, in form and substance reasonably satisfactory to the
Administrative Agent, and legible copies of all documents affecting title, which
shall show all recording information.  The policy, including each of the
exceptions to coverage contained therein, shall be subject to the approval of
the Administrative Agent, and shall be issued by a title company acceptable to
the Administrative Agent.  Attached to the policy shall be any and all
endorsements reasonably required by the Administrative Agent, including (a) a
comprehensive endorsement (ALTA 100 or equivalent) covering restrictions and
other matters, (b) a broad form zoning endorsement, which specifically ensures
that applicable parking requirements, if any,

 

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have been satisfied, (c) an endorsement ensuring that the lien of each Mortgage
is valid against any applicable usury laws or other laws prohibiting the
charging of interest on interest in the state(s) where such Mortgaged Property
is located, (d) an endorsement ensuring that the Mortgaged Property has access
to a dedicated public street, (e) a revolving credit endorsement, (f) a
contiguity endorsement, (g) a survey and “same as” endorsement and (h) an
endorsement deleting the so-called “doing business” exclusion.

 

Section 6.19.  Compliance Program.  To the extent required by law, each Credit
Party will maintain, and be operated in accordance with, a compliance program
which meets the compliance guidance issued by the Department of Health and Human
Services Office of Inspector General for clinical laboratories, including
without limitation (a) the implementation of internal audits and monitoring on a
regular and systematic basis to monitor compliance with the requirements of the
compliance program and applicable law, and (b) audits and monitoring of billing,
claims, and coding processes by independent third party auditors acceptable to
the Administrative Agent and the Required Lenders and on such time frames as
required by law.

 

Section 6.20.  Cash Management Systems.  The Credit Parties will establish and
maintain the cash management systems described below (the “Cash Management
Systems”):

 

(a)                                         Each Credit Party shall (i)
establish lock boxes (“Lock Boxes”) and/or at Administrative Agent’s reasonable
discretion, lockbox or blocked accounts at one or more of the banks set forth in
Disclosure Schedule 6.20 (“Blocked Accounts”), and shall request in writing and
otherwise take such reasonable steps to ensure that all Account Debtors forward
payment directly to such Lock Boxes, and (ii) deposit or cause to be deposited
promptly, and in any event no later than the first Business Day after the date
of receipt thereof at Borrower’s offices in Boca Raton, FL or North Aurora, IL,
all cash, checks, drafts or other similar items of payment relating to or
constituting payments made in respect of any and all Collateral (whether or not
otherwise delivered to a Lock Box) into one or more Blocked Accounts in such
Credit Party’s name, but under the sole dominion and control of Administrative
Agent, and at a bank identified in Disclosure Schedule 6.20 (each, a
“Relationship Bank”).   Each Credit Party and each Related Person thereof
acknowledges and agrees that all cash, checks or other items of payment
constituting proceeds of Collateral are part of the Collateral.  All proceeds of
the sale or other disposition of any Collateral, shall be deposited directly
into the applicable Blocked Accounts, subject to the provisions of Section 2.8.

 

(b)                                        The Borrower may maintain, in its
name, an account (each a “Disbursement Account” and collectively, the
“Disbursement Accounts”) at a bank reasonably acceptable to Administrative Agent
into which Administrative Agent shall, from time to time, deposit proceeds of
Revolving Credit Advances and Swingline Advances made to the Borrower pursuant
to Section 2.1 for use by the Borrower solely in accordance with the provisions
of Section 6.8.

 

(c)                                        On or before the Closing Date, each
bank where a Disbursement Account is maintained and all Relationship Banks,
shall have entered into tri-party blocked account agreements with Administrative
Agent, for the benefit of the Lending Parties, and the Credit Parties, as
applicable, in form and substance reasonably acceptable to Administrative Agent,
which shall become operative on or prior to the Closing Date.  Each such blocked
account

 

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agreement shall provide, among other things, that (i) the bank acknowledges that
all items of payment deposited in such account and proceeds thereof deposited in
the applicable Blocked Account are subject to a security interest of the
Administrative Agent, on behalf of the Lending Parties, (ii) that the parties to
such blocked account agreement agree that the bank shall comply with the
instruction originated by Administrative Agent directing disposition of the
funds in the deposit account without further consent of the applicable Credit
Party, (iii) the bank executing such agreement has no rights of setoff or
recoupment or any other claim against such account, as the case may be, other
than for payment of its service fees and other charges directly related to the
administration of such account and for returned checks or other items of
payment, and (iv) from and after the Closing Date (A) with respect to banks at
which a Blocked Account is maintained, such bank agrees to forward immediately
all amounts in each Blocked Account to the Collection Account and to commence
the process of daily sweeps from such Blocked Account into the Collection
Account and (B) with respect to banks at which a Disbursement Account is
maintained, from and after the receipt of a notice (an “Activation Notice”) from
Administrative Agent (which Activation Notice may be given by Administrative
Agent at any time at which (1) a Default or Event of Default has occurred and is
continuing after its applicable cure period, (2) Administrative Agent reasonably
believes based upon information available to it that a Default or an Event of
Default is likely to occur; (3) Administrative Agent reasonably believes that an
event or circumstance that is likely to have a Material Adverse Effect has
occurred, or (4) Administrative Agent reasonably has grounds to question the
integrity of the Borrower’s Cash Management Systems or any Credit Party’s
compliance with the provisions of this Section 6.20 or any other provisions of
the Loan Documents to the extent related to such Cash Management Systems), such
bank agrees to forward immediately all amounts in such Disbursement Account to
the Collection Account and to commence the process of daily sweeps from such
Disbursement Account into the Collection Account.  No Credit Party shall
accumulate or maintain cash in Disbursement Accounts or payroll accounts as of
any date of determination in excess of (x) the aggregate amount of checks
outstanding against such accounts as of that date plus (y) all amounts necessary
to meet minimum balance requirements.

 

(d)                                        So long as no Default has occurred
and is continuing, the Borrower may amend Disclosure Schedule 6.20 to add or
replace a Relationship Bank, Lock Box or Blocked Account or to replace any
Disbursement Account; provided that (i) Administrative Agent shall have
consented, such consent not to be unreasonably withheld conditioned or delayed,
in writing in advance to the opening of such account or Lock Box with the
relevant bank and (ii) prior to the time of the opening of such account or Lock
Box, the applicable Credit Party, and such bank shall have executed and
delivered to Administrative Agent a tri-party blocked account agreement, in form
and substance reasonably satisfactory to Administrative Agent.

 

(e)                                        The Lock Boxes, Blocked Accounts, and
Disbursement Accounts shall be cash collateral accounts, with all cash, checks
and other similar items of payment in such accounts securing payment of the
Loans and all other Obligations, and in which each Credit Party thereof shall
have granted a Lien to Agent, on behalf of the Lending Parties, pursuant to the
Security Agreement.

 

(f)                                          All amounts deposited in the
Collection Account shall be deemed received by Administrative Agent in
accordance with Section 2.14 and shall be applied (and allocated) by
Administrative Agent in accordance with Section 2.10.  In no event shall any
amount be so

 

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applied unless and until such amount shall have been credited in immediately
available funds to the Collection Account.  Each Credit Party shall and shall
cause its Affiliates, officers, employees, agents, directors or other Persons
acting for or in concert with such Credit Party (each a “Related Person”) to
hold in trust for Administrative Agent, for the benefit of the Lending Parties,
all checks, cash and other items of payment received by such Credit Party or any
such Related Person.

 

Section 6.21.  SEC Filings.  The Credit Parties will file all documents and
accompanying certifications required by the Securities and Exchange Commission
within the time required to file such documents (the “SEC Documents”).  Any
material restatement of the SEC Documents shall be an Event of Default.

 

ARTICLE VII.

NEGATIVE COVENANTS

 

So long as any Lender has any Commitment hereunder or any Extension of Credit or
other Obligation remains outstanding, Borrower shall, and shall cause each
Credit Party to, comply with each of the covenants in this Article VII:

 

Section 7.1  Indebtedness.  No Credit Party will, nor will it permit any of its
Subsidiaries to, contract, create, incur, assume or permit to exist any
Indebtedness, except:

 

(a)                                         Indebtedness arising under this
Agreement and the other Loan Documents;

 

(b)                                        Indebtedness existing as of the
Closing Date as set forth on Disclosure Schedule 7.1 (including renewal,
refinancing or extension of such Indebtedness provided that any such renewal,
refinancing or extension does not increase the principal amount of such
Indebtedness outstanding as of the date of such renewal, refinancing or
extension, decrease the weighted average life of such Indebtedness, increase the
interest rate beyond reasonable market rates in effect at the time of such
renewal, refinancing or extension and is not upon terms otherwise less favorable
to such Person than the Indebtedness being renewed, refinanced or extended);

 

(c)                                        (i) Indebtedness owing from one
Credit Party (other than the Parent) to another Credit Party and (ii)
Indebtedness owing from the Parent to the other Credit Parties in an amount not
to exceed $250,000 in the aggregate during the term of this Agreement;

 

(d)                                        purchase money Indebtedness
(including Capital Leases but excluding Synthetic Leases) incurred by the
Borrower or any of its Subsidiaries to finance the purchase of fixed assets;
provided that (i) the aggregate total of all such Indebtedness for all such
Persons (together with the aggregate amount of all Indebtedness outstanding
under subsection (f) below) shall not exceed an aggregate principal amount of
$3,000,000 at any one time outstanding; (ii) such Indebtedness when incurred
shall not exceed the purchase price of the

 

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asset(s) financed; and (iii) no such Indebtedness shall be refinanced for a
principal amount in excess of the principal balance outstanding thereon at the
time of such refinancing;

 

(e)                                        obligations under Hedging Agreements
entered into in order to manage existing or anticipated interest rate or
exchange rate risks and not for speculative purposes;

 

(f)                                          Indebtedness (including
Subordinated Debt but excluding Synthetic Leases) assumed in connection with a
Permitted Acquisition (including renewals, refinancing or extensions of such
Indebtedness in a principal amount not in excess of that outstanding as of the
date of such renewal, refinancing or extension) so long as (i) such Indebtedness
is not incurred in anticipation of or in connection with such Permitted
Acquisition and the aggregate total of all such Indebtedness, together with the
aggregate amount of any Indebtedness outstanding under subsection (d) above,
shall not exceed an aggregate principal amount of $3,000,000 at any one time
outstanding;

 

(g)                                        Indebtedness in respect of
performance, surety or appeal bonds in the ordinary course of business; and

 

(h)                                        other unsecured Indebtedness of the
Borrower and its Subsidiaries in an aggregate principal amount (whether fixed or
contingent or drawn) not to exceed at any time $500,000.

 

Section 7.2  Liens.    No Credit Party will, nor will it permit its Subsidiaries
to, contract, create, incur, assume or permit to exist any Lien with respect to
any of its property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or after acquired, except for Permitted Liens.

 

Section 7.3  Nature of Business.  No Credit Party will, nor will it permit its
Subsidiaries to, alter the character of its business from that, or substantially
similar to that, conducted as of the Closing Date or engage in any business
other than the business conducted as of the Closing Date with reasonable
extensions and expansions of such business.  Notwithstanding the foregoing, the
Parent will not engage in any operations whatsoever other than (a) owning all of
the Stock of the Borrower and obligations related thereto and otherwise
permitted hereunder and (b) guaranteeing the Obligations pursuant to the terms
of this Agreement and the other Loan Documents and performing its obligations
hereunder and thereunder.

 

Section 7.4  Consolidation and Merger.  No Credit Party will, nor will it permit
its Subsidiaries to, enter into any transaction of merger or consolidation or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution); provided that notwithstanding the foregoing provisions of this
Section 7.4, if (a) the Administrative Agent is given prior written notice of
such action, and the Credit Parties execute and deliver such documents,
instruments, certificates and opinions as the Administrative Agent may
reasonably request, including, without limitation, those necessary in order to
maintain the perfection and priority of the Liens on the assets of the Credit
Parties and (b) after giving effect thereto no Default or Event of Default
exists, any Subsidiary of the Borrower may be merged or consolidated with or
into the Borrower

 

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or another Subsidiary of the Borrower; provided that if the transaction is
between the Borrower and one of its Subsidiaries, the Borrower must be the
continuing or surviving entity.

 

Section 7.5  Sale or Lease of Assets.  No Credit Party will, nor will it permit
any of its Subsidiaries to, convey, sell, lease, transfer or otherwise dispose
of, in one transaction or a series of transactions, all or any part of its
business or assets whether now owned or hereafter acquired, including, without
limitation, inventory, receivables, leasehold interests, equipment and
securities other than (a) any inventory or other assets sold, leased, licensed
or disposed of (including through commercial accommodations and going out of
business sales) in the ordinary course of business, (b) obsolete, idle or
worn-out assets no longer used or useful in its business, (c) subject to
Section 6.11 and the location of Collateral provisions set forth in the Loan
Documents, the sale, lease or transfer or other disposal by a Credit Party of
any or all of its assets to another Credit Party so long as (i) the Credit
Parties shall cause to be executed and delivered such documents, instruments and
certificates as the Administrative Agent may request in order to maintain the
perfection and priority of the Administrative Agent’s liens on the assets of the
Credit Parties as required by Section 6.11 and 6.12 and (ii) after giving effect
to such transaction, no Default or Event of Default exists, (d) the issuance of
Stock by Parent pursuant to a follow-on public offering, (e) the transfer of
assets which constitute a Permitted Investment and (f) other sales of assets, in
addition to those permitted by the other subsections of this Section 7.5,
provided that (i) the sale is for fair market value, (ii) the sale is for cash
consideration, (iii) at the time of the sale (and after giving effect thereto)
no Default or Event of Default exists, (iv) as a result of such sale, no
Material Adverse Effect would occur or be reasonably expected to occur, (v) the
proceeds from such sale are, within 180 days from the date of such sale, applied
as a mandatory prepayment in accordance with Section 2.8(b) or reinvested by the
Credit Parties in Eligible Assets and (vi) such sales do not exceed, in the
aggregate, $1,000,000 during the term of this Agreement.

 

Section 7.6  Advances, Investments and Loans.   No Credit Party will, nor will
it permit any of its Subsidiaries to, make any Investments except for Permitted
Investments.

 

Section 7.7  Restricted Payments.  No Credit Party will, nor will it permit any
of its Subsidiaries to, directly or indirectly, declare or pay any Restricted
Payment except (a) to make dividends or other distributions payable to any
Credit Party (other than the Parent) (directly or indirectly through
Subsidiaries), (b) to purchase shares of (or options to purchase shares of)
equity securities from employees of any Credit Party upon their death,
termination or retirement in an amount not to exceed $500,000 during the term of
this Agreement, (c) the Borrower may make distributions directly or indirectly
to Parent to permit Parent to pay operating expenses; provided that such
distributions do not exceed $500,000 in the aggregate during any Fiscal Year,
(d) to purchase shares of (or options to purchase shares of) equity securities
from certain employees pursuant to the terms of the Employment Agreements as in
effect as of the Closing Date and (e) payments made by Credit Parties to Credit
Parties pursuant to the MSN Management and Administrative Services Agreements
and the MSN License Agreements provided that Borrower shall demonstrate to the
reasonable satisfaction of the Administrative Agent that immediately before and
after giving effect to any such payment, no Default shall have occurred and is
continuing and the Pro Forma Excess Availability is not less than $5,000,000.

 

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Section 7.8  Transactions with Affiliates.  Except for (a) loans or advances to
employees and officers of a Credit Party or any of its Subsidiaries (to the
extent permitted by Section 7.6), (b) fees, compensation or employee benefit
arrangements paid to and indemnity provided on behalf of directors, officers or
employees of the Borrower and its Subsidiaries in the ordinary course of
business, (c) any employment agreement (including customary benefits thereunder)
that is entered into in the ordinary course of business, (d) any dividend or
other payment that is permitted by Section 7.7 and (e) any transactions between
or among a Credit Party and any of its Subsidiaries (to the extent otherwise
permitted by this Agreement), no Credit Party will, nor will it permit its
Subsidiaries to, enter into any transaction or series of transactions, whether
or not in the ordinary course of business, with any officer, director,
shareholder, Subsidiary or Affiliate other than on terms and conditions
substantially as favorable as would be obtainable in a comparable arm’s-length
transaction with a Person other than an officer, director, shareholder,
Subsidiary or Affiliate.

 

Section 7.9  Fiscal Year; Organizational Documents.  No Credit Party will, nor
will it permit any of its Subsidiaries to, (a) change its fiscal year or (b)
change its articles or certificate of incorporation (or other similar
organizational document) or its bylaws (or other similar document) if such
change would affect the Lenders in a materially adverse manner.

 

Section 7.10  Limitations.  No Credit Party will, nor will it permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause, incur,
assume, suffer or permit to exist or become effective any consensual encumbrance
or restriction of any kind on the ability of any such Person to (a) pay
dividends or make any other distribution on any of such Person’s Stock, (b) pay
any Indebtedness owed to the Borrower or any other Credit Party, (c) make loans
or advances to any Credit Party or (d) transfer any of its property to any
Credit Party, except for encumbrances or restrictions existing under or by
reason of (i) customary non-assignment or net worth provisions in any lease
governing a leasehold interest or customary provisions in documents evidencing
the transactions permitted by Section 7.1(d) and (f), provided that any such
encumbrance or restriction relates only to the property which is the subject of
such lease, (ii) any agreement or other instrument of a Person existing at the
time it becomes a Subsidiary of a Credit Party; provided that such encumbrance
or restriction is not applicable to any other Person, or any property of any
other Person, other than such Person becoming a Subsidiary of a Credit Party and
was not entered into in contemplation of such Person becoming a Subsidiary of
such Credit Party, (iii) this Agreement and the other Loan Documents, (iv)
Applicable Law and (v) any agreement of the Borrower evidencing any unsecured
Indebtedness of the Borrower permitted under Section 7.1(i); provided that any
such encumbrance or restriction is not applicable to any Person other than the
Borrower and does not prohibit or otherwise restrict the rights and remedies of
the Administrative Agent and the Lenders in any manner whatsoever.

 

Section 7.11  Sale Leasebacks.  No Credit Party will, nor will it permit any of
its Subsidiaries to, directly or indirectly become or remain liable as lessee or
as guarantor or other surety with respect to any lease of any property (whether
real or personal or mixed), whether now owned or hereafter acquired, (a) which
such Credit Party or Subsidiary has sold or transferred or is to sell or
transfer to any other Person other than a Credit Party or (b) which such Credit
Party or Subsidiary intends to use for substantially the same purpose as any
other property which has been sold or is to be sold or transferred by a Credit
Party or Subsidiary to any Person in connection with such lease.

 

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Section 7.12  Negative Pledges.  None of the Credit Parties will, nor will it
permit any of its Subsidiaries to, enter into, assume or become subject to any
agreement prohibiting or otherwise restricting the creation or assumption of any
Lien upon its properties or assets, whether now owned or hereafter acquired, or
requiring the grant of any security for such obligation if security is given for
some other obligation; provided, however, the Indebtedness incurred or assumed,
as applicable, pursuant to Sections 7.1(d) and (f) may restrict the creation of
any additional Liens on the assets securing such Indebtedness.

 

Section 7.13  Capital Expenditures.  The Credit Parties will not permit
aggregate Capital Expenditures for each period set forth below to exceed the
amount set forth opposite such period:

 

Fiscal Quarter ending on or about December 31, 2003

 

$

1,500,000

 

 

 

 

 

Fiscal Year ending on or about December 31, 2004

 

$

5,500,000

 

 

 

 

 

Fiscal Year ending on or about December 31, 2005

 

$

5,500,000

 

 

 

 

 

Fiscal Year ending on or about December 31, 2006

 

$

5,500,000

 

 

Section 7.14  Payments of Indebtedness, etc.  No Credit Party will, nor will it
permit any of its Subsidiaries to, (a) after the issuance thereof, amend or
modify (or permit the amendment or modification of) any of the terms of any
Indebtedness if such amendment or modification would add or change any terms in
a manner materially adverse to the issuer of such Indebtedness, or shorten the
final maturity or average life to maturity or require any payment to be made
sooner than originally scheduled or increase the interest rate applicable
thereto or change any subordination provision thereof, (b) make or offer to make
any principal or interest payments with respect to Subordinated Debt, (c) redeem
or offer to redeem any of Subordinated Debt or (d) deposit any funds intended to
discharge Subordinated Debt.  Notwithstanding any terms to the contrary
contained herein, Subordinated Debt may not be amended or modified in any manner
that would adversely affect the Lenders without the prior written consent of the
Required Lenders.

 

Section 7.15  Ownership of Subsidiaries; Limitations on Borrower. 
Notwithstanding any other provisions of this Agreement to the contrary, no
Credit Party will, nor will it permit any of its Subsidiaries to, (a) permit any
Person (other than the Borrower or any Wholly-Owned Subsidiary of the Borrower)
to own any Stock of any Subsidiary of the Borrower, (b) permit any Subsidiary of
the Borrower to issue Stock (except to the Borrower or to a Wholly-Owned
Subsidiary of the Borrower), (c) permit, create, incur, assume or suffer to
exist any Lien thereon, (d) notwithstanding anything to the contrary contained
in clause (b) above, permit any Subsidiary of the Borrower to issue any shares
of preferred Stock, and (e) permit the sale of any Stock of any of its
Subsidiaries.

 

Section 7.16  Earn-Out Obligations.   The Credit Parties will not permit
projected earn-out obligations in excess of $2,000,000 in the aggregate at any
one time in connection with Permitted Acquisitions.

 

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Section 7.17.  Guaranteed Obligations.  No Credit Party shall create, incur,
assume or permit to exist any Guaranteed Obligations except (a) by endorsement
of instruments or items of payment for deposit to the general account of any
Credit Party, and (b) for Guaranteed Obligations incurred for the benefit of any
other Credit Party if the primary obligation is expressly permitted by this
Agreement.

 

Section 7.18.  ERISA.  No Credit Party shall, or shall cause or permit any
member of a Controlled Group to, cause or permit to occur an event that could
result in the imposition of a Lien under Section 412 of the IRC or Section 302
or 4068 of ERISA or cause or permit to occur an ERISA Event to the extent such
ERISA Event could reasonably be expected to have a Material Adverse Effect.

 

Section 7.19.  Amendments or Waivers.  Without the prior written consent of the
Administrative Agent and the Required Lenders, no Credit Party will agree to (a)
any amendment to or waiver of or in respect of any Loan Documents, (b) any other
material amendment to or waiver of any material contract constituting a part of
the Collateral which could reasonably be expected to have a Material Adverse
Effect on the Credit Parties, or (c) any amendment or waiver of any document
governing any Subordinated Debt.

 

Section 7.20.  Limitations on Holdings.  Holdings shall not, directly or
indirectly, (i) enter into or permit to exist any transaction or agreement
(including any agreement for the incurrence or assumption of Indebtedness, other
than the Holdings Guaranty, any purchase, sale, lease or exchange of any
property or the rendering of any service), between itself and any other Person,
(ii) engage in any business or conduct any activity (including the making of any
Investment or payment) or transfer any of its assets, other than Investments in
the Borrower and the performance of ministerial activities and payment of taxes
and administrative fees necessary for the compliance with the next succeeding
sentence or (iii) consolidate or merge with or into any other Person.  Holdings
shall further preserve, renew and keep in full force and effect its corporate
existence and any rights, privileges and franchises necessary or desirable in
the conduct of its business, and shall comply in all material respects with all
material applicable laws, ordinances, rules, regulations and requirements of
Governmental Authorities.  Holdings shall have no direct Subsidiaries other than
the Borrower.

 

Section 7.21.  Limitations on Parent.  Parent shall not, directly or indirectly,
(i) enter into or permit to exist any transaction or agreement (including any
agreement for the incurrence or assumption of Indebtedness, other than the
Parent Guaranty, any purchase, sale, lease or exchange of any property or the
rendering of any service), between itself and any other Person, provided that
Parent may enter into transactions with Persons necessary to complete a
follow-on public offering (ii) engage in any business or conduct any activity
(including the making of any Investment or payment) or transfer any of its
assets, other than Investments in Holdings and the Borrower and the performance
of ministerial activities and payment of taxes and administrative fees necessary
for the compliance with the next succeeding sentence or (iii) consolidate or
merge with or into any other Person.  Parent shall further preserve, renew and
keep in full force and effect its corporate existence and any rights, privileges
and franchises necessary or desirable in the conduct of its business, and shall
comply in all material respects with all material applicable laws, ordinances,
rules, regulations and requirements of Governmental Authorities.  Parent shall
have no direct Subsidiaries other than the Holdings.

 

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ARTICLE VIII.

EVENTS OF DEFAULT

 

Section 8.1                                       Events of Default. An Event of
Default shall exist upon the occurrence of any of the following specified events
(each an “Event of Default”):

 

(a)                                         Payment.  Any Credit Party shall:

 

(i)                                           default in the payment when due of
any principal of any of the Loans or of any reimbursement obligation arising
from drawings under Letters of Credit; or

 

(ii)                                      default, and such default shall
continue for three or more Business Days, in the payment when due of any
interest on the Loans, or of any fees or other amounts owing hereunder, under
any of the other Loan Documents or in connection herewith.

 

(b)                                        Representations.  Any representation,
warranty or statement made or deemed to be made by any Credit Party herein, in
any of the other Loan Documents, or in any statement or certificate delivered or
required to be delivered pursuant hereto or thereto shall prove untrue in any
material respect on the date as of which it was made or deemed to have been
made.

 

(c)                                        Covenants.  Any Credit Party shall:

 

(i)                                           default in the due performance or
observance of any term, covenant or agreement contained in Sections 6.1, 6.2,
6.3, 6.4, 6.6 through 6.21, Section 7; or

 

(ii)                                      default in the due performance or
observance by it of any term, covenant or agreement contained in Section 5 and
Section 6.5, and such default shall continue unremedied for a period of 30 days;
or

 

(iii)                                 default in the due performance or
observance by it of any term, covenant or agreement (other than those referred
to in subsections (a), (b) or (c)(i) or (ii) of this Section 8.1) contained in
this Credit Agreement and such default shall continue unremedied for a period of
at least 10 days after the earlier of an executive officer of a Credit Party
becoming aware of such default or notice thereof given by the Administrative
Agent.

 

(d)                                        Other Loan Documents.  (i) Any Credit
Party shall default in the due performance or observance of any term, covenant
or agreement in any of the other Loan Documents and such default shall continue
unremedied for a period of at least 10 days after the earlier of an executive
officer of a Credit Party becoming aware of such default or notice thereof given
by the Administrative Agent, (ii) except pursuant to the terms thereof, any Loan
Document shall fail to be in full force and effect or any Credit Party shall so
assert or (iii) except pursuant to the terms thereof, any Loan Document shall
fail to give the Administrative Agent and/or the Lenders the security interests,
liens, rights, powers and privileges purported to be created thereby.

 

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(e)                                        Bankruptcy, etc.  The occurrence of
any of the following with respect to any Credit Party or any of their
Subsidiaries:  (i) a court or governmental agency having jurisdiction in the
premises shall enter a decree or order for relief in respect of any Credit Party
or any of their Subsidiaries in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appoint a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of any Credit Party or any of their Subsidiaries or for any
substantial part of its property or ordering the winding up or liquidation of
its affairs; or (ii) an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect is commenced against
any Credit Party or any of their Subsidiaries and such petition remains unstayed
and in effect for a period of 60 consecutive days; or (iii) any Credit Party or
any of their Subsidiaries shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under any
such law, or consent to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of
such Person or any substantial part of its property or make any general
assignment for the benefit of creditors; or (iv) any Credit Party or any of
their Subsidiaries shall admit in writing its inability to pay its debts
generally as they become due or any action shall be taken by such Person in
furtherance of any of the aforesaid purposes.

 

(f)                                          Defaults under Other Agreements. 
With respect to any Indebtedness (other than Indebtedness outstanding under this
Credit Agreement) of a Credit Party or any of their Subsidiaries in an aggregate
principal amount in excess of $1,000,000, (i) a Credit Party or one of its
Subsidiaries shall (A) default in any payment (beyond the applicable grace
period with respect thereto, if any) with respect to any such Indebtedness, or
(B) default (after giving effect to any applicable grace period) in the
observance or performance relating to such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event or condition shall occur or condition exist, the effect of which default
or other event or condition is to cause, or permit, the holder or holders of
such Indebtedness (or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of time is required)
any such Indebtedness to become due prior to its stated maturity; (ii) any such
Indebtedness shall be declared due and payable, or required to be prepaid other
than by a regularly scheduled required prepayment prior to the stated maturity
thereof; or (iii) any such Indebtedness shall mature and remain unpaid.

 

(g)                                        Judgments.  One or more judgments,
orders, or decrees shall be entered against any Credit Party or any of its
Subsidiaries involving a liability of $1,000,000 or more, in the aggregate, (to
the extent not paid or covered by insurance provided by a carrier who has
acknowledged coverage) and such judgments, orders or decrees (i) are the subject
of any enforcement proceeding commenced by any creditor or (ii) shall continue
unsatisfied, undischarged and unstayed for a period ending on the first to occur
of (A) the last day on which such judgment, order or decree becomes final and
unappealable or (B) 60 days.

 

(h)                                        ERISA.  The occurrence of any of the
following events or conditions if such event or condition could involve possible
taxes, penalties and other liabilities in an aggregate amount in excess of
$1,000,000:  (A) any “accumulated funding deficiency,” as such term is defined
in Section 302 of ERISA and Section 412 of the Code, whether or not waived,
shall exist with respect to any Plan, or any lien shall arise on the assets of
any Credit Party or any

 

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of their Subsidiaries or any ERISA Affiliate in favor of the PBGC or a Plan; (B)
a Termination Event shall occur with respect to a Single Employer Plan, which
is, in the reasonable opinion of the Administrative Agent, likely to result in
the termination of such Plan for purposes of Title IV of ERISA; (C) a
Termination Event shall occur with respect to a Multiemployer Plan or Multiple
Employer Plan, which is, in the reasonable opinion of the Administrative Agent,
likely to result in (i) the termination of such Plan for purposes of Title IV of
ERISA, or (ii) any Credit Party or any of their Subsidiaries or any ERISA
Affiliate incurring any liability in connection with a withdrawal from,
reorganization of (within the meaning of Section 4241 of ERISA), or insolvency
(within the meaning of Section 4245 of ERISA) of such Plan; or (D) any
prohibited transaction (within the meaning of Section 406 of ERISA or
Section 4975 of the Code) or breach of fiduciary responsibility shall occur
which may subject any Credit Party or any of their Subsidiaries or any ERISA
Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA
or Section 4975 of the Code, or under any agreement or other instrument pursuant
to which any Credit Party or any of their Subsidiaries or any ERISA Affiliate
has agreed or is required to indemnify any Person against any such liability.

 

(i)                                           Guaranties.  The guaranty given by
the Credit Parties hereunder or by any Additional Credit Party hereafter or any
provision thereof shall, except pursuant to the terms thereof, cease to be in
full force and effect, or any guarantor thereunder or any Person acting by or on
behalf of such guarantor shall deny or disaffirm such Guarantor’s obligations
under such guaranty.

 

(j)                                           Ownership.  There shall occur a
Change of Control.

 

Section 8.2                                       Acceleration; Remedies.  Upon
the occurrence of an Event of Default, and at any time thereafter unless and
until such Event of Default has been waived in writing by the Required Lenders
(and/or the Lenders, the Required Revolving Lenders or the Required Term Lenders
as may be required pursuant to Section 11.5), the Administrative Agent shall,
upon the request and direction of the Required Lenders (and/or the Lenders, the
Required Revolving Lenders or the Required Term Lenders as may be required
pursuant to Section 11.5), by written notice to the Borrower, take any of the
following actions:

 

(a)                                         Termination of Commitments.  Declare
the Commitments terminated whereupon the Commitments shall be immediately
terminated.

 

(b)                                        Acceleration of Loans.  Declare the
unpaid  principal of and any accrued interest in respect of all Loans, any
reimbursement obligations arising from drawings under Letters of Credit and any
and all other indebtedness or obligations of any and every kind owing by a
Credit Party to any of the Lenders hereunder to be due whereupon the same shall
be immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Credit Parties.

 

(c)                                        Cash Collateral.  Direct the Borrower
to pay (and the Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 8.1(e), it will immediately pay)
to the Administrative Agent additional cash, to be held by the Administrative
Agent, for the benefit of the Lenders, in a cash collateral account as
additional security for the L/C Obligations in respect of subsequent drawings
under all then outstanding

 

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Letters of Credit in an amount equal to the maximum aggregate amount which may
be drawn under all Letters of Credits then outstanding.

 

(d)                                        Enforcement of Rights.  Enforce any
and all rights and interests created and existing under the Loan Documents,
including, without limitation, all rights and remedies existing under the
Collateral Documents, all rights and remedies against a Guarantor and all rights
of set-off.

 

Notwithstanding the foregoing, if an Event of Default specified in
Section 8.1(e) shall occur, then the Commitments shall automatically terminate
and all Loans, all reimbursement obligations under Letters of Credit, all
accrued interest in respect thereof, all accrued and unpaid fees and other
indebtedness or obligations owing to the Lenders hereunder shall immediately
become due and payable without the giving of any notice or other action by the
Administrative Agent or the Lenders, which notice or other action is expressly
waived by the Credit Parties.

 

Notwithstanding the fact that enforcement powers reside primarily with the
Administrative Agent, each Lender has, to the extent permitted by law, a
separate right of payment and shall be considered a separate “creditor” holding
a separate “claim” within the meaning of Section 101(5) of the Bankruptcy Code
or any other insolvency statute.

 

Section 8.3  Allocation of Payments After Event of Default.  Notwithstanding any
other provisions of this Credit Agreement, after the occurrence and during the
continuance of an Event of Default, all amounts collected or received by the
Administrative Agent or any Lender on account of amounts outstanding under any
of the Loan Documents or in respect of the Collateral shall be paid over or
delivered as follows:

 

FIRST, to the payment of all reasonable out-of-pocket costs and expenses
(including without limitation reasonable attorneys’ fees) of the Administrative
Agent or any of the Lenders in connection with enforcing the rights of the
Lenders and/or the Administrative Agent under the Loan Documents and any
protective advances made by the  Administrative Agent with respect to the
Collateral under or pursuant to the terms of the Collateral Documents;

 

SECOND, to payment of any fees owed to the Administrative Agent or the L/C
Issuer;

 

THIRD, to the extent of any amounts received as proceeds of the Revolving Loan
Collateral:

 

A.                                             to the payment of any and all
costs, liabilities and/or expenses incurred by the Administrative Agent in
connection with the collection or administration of the Revolving Loan or the
Revolving Loan Collateral;

 

B.                                             to the payment of all amounts due
to any L/C Issuer in respect of Letters of Credit hereunder;

 

C.                                             to the payment of all accrued
interest (including interest accrued following the filing of a petition under
any bankruptcy law or any other federal, state

 

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or foreign (including any provincial) receivership, insolvency relief or other
law or laws for the relief of debtors), fees, costs, liabilities and/or expenses
payable to the Revolving Lenders hereunder in their capacity as such;

 

D.                                            to the payment of the outstanding
principal amount of the Revolving Credit Advances, to the payment or cash
collateralization of the outstanding L/C Obligations and to any principal
amounts outstanding under Hedging Agreements between a Credit Party and a Lender
or an Affiliate of a Lender (to the extent, but only to the extent, that such
Hedging Agreement was incurred for the purpose of hedging exposure with respect
to the Term Loans), pro rata, as set forth below; and

 

E.                                              to the payment of any amounts
described in clause FOURTH below, in the order and manner set forth therein;

 

FOURTH, to the extent of any amounts received as proceeds of the Term Loan
Collateral:

 

A.                                             to the payment of any and all
costs, liabilities and/or expenses incurred by the Administrative Agent in
connection with the collection or administration of the Term Loan or the Term
Loan Collateral;

 

B.                                             to the payment of all accrued
interest (including interest accrued following the filing of a petition under
any bankruptcy law or any other federal, state or foreign (including any
provincial) receivership, insolvency relief or other law or laws for the relief
of debtors), fees, costs, liabilities and/or expenses payable to the Term
Lenders hereunder in their capacity as such;

 

C.                                             to the payment of the outstanding
principal amount of the Term Loans and to any principal amounts outstanding
under Hedging Agreements between a Credit Party and a Lender or an Affiliate of
a Lender (to the extent, but only to the extent, that such Hedging Agreement was
incurred for the purpose of hedging exposure with respect to the Term Loans),
pro rata, as set forth below; and

 

D.                                            to the payment of any amounts
described in clause THIRD above, in the order and manner set forth therein;

 

FIFTH, to the extent of any amounts received as proceeds of a sale of Stock:

 

A.                                             proceeds in the amount
attributable to the Accounts shall be applied as set forth in clause “THIRD”
above;

 

B.                                             proceeds in the amount
attributable to tangible assets shall be applied as set forth in clause “FOURTH”
above; and

 

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C.                                             any remaining proceeds shall be
applied as set forth in clause “SIXTH” below;

 

SIXTH, to all other obligations which shall have become due and payable under
the Loan Documents and not repaid pursuant to clauses “FIRST” through “FIFTH”
above; and

 

SEVENTH, to the payment of the surplus, if any, to whoever may be lawfully
entitled to receive such surplus.

 

In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (b) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans, L/C
Obligations and obligations under Hedging Agreements of such Class held by such
Lender bears to the aggregate then outstanding Loans, L/C Obligations and
obligations under Hedging Agreements with respect to that Class held by all
Lenders) of amounts available to be applied pursuant to clauses “THIRD,”
“FOURTH,” “FIFTH,” and “SIXTH” above; and (c) to the extent that any amounts
available for distribution pursuant to clause “THIRD,” “FOURTH,” “FIFTH,” or
“SIXTH” above are attributable to the issued but undrawn amount of outstanding
Letters of Credit, such amounts shall be held by the Administrative Agent in a
cash collateral account and applied (x) first, to reimburse the L/C Issuer from
time to time for any drawings under such Letters of Credit and (y) then,
following the expiration of all Letters of Credit, to all other obligations of
the types described in clauses “THIRD”, “FOURTH,”  “FIFTH,” or “SIXTH” above in
the manner provided in this Section 8.3.  If any Lending Party shall receive any
proceeds in contradiction of this Section 8.3, such Lending Party shall forward
such proceeds to Administrative Agent for distribution pursuant to this
Section 8.3.

 

ARTICLE IX.

EXPENSES AND INDEMNITIES

 

Section 9.1.  Expenses.  Whether or not the transactions contemplated hereby are
consummated, the Credit Parties, jointly and severally, agree (a) to pay on
demand all fees, costs and expenses (including reasonable attorneys’ fees and
expenses and the allocated cost of internal legal staff) incurred by
Administrative Agent and any appraisers, auditors and consultants retained by
the Administrative Agent in connection with (i) the examination, review, due
diligence investigation, documentation, negotiation, closing and syndication of
the transactions contemplated herein and in the Related Transactions Documents
and in connection with the continued administration of the Loan Documents
including any amendments, modifications, consents and waivers, (ii) creating,
perfecting and maintaining Liens pursuant to the Loan Documents, including
filing and recording fees and expenses, the costs of any bonds required to be
posted in respect of future filing and recording fees and expenses, and title
investigations and (iii) any matters contemplated by or arising out of the Loan
Documents, including the Administrative Agent’s customary field and desk audit
charges and the reasonable fees, expenses and disbursements of the
Administrative Agent or any accountants or other experts retained by the
Administrative Agent (including any affiliate of Administrative Agent as shall
be engaged for such purpose) in connection with accounting and collateral audits
or reviews

 

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of the Credit Parties and their affairs, (b) to promptly pay reasonable
documentation charges assessed the Administrative Agent for amendments, waivers,
consents and any of the documentation prepared by the Administrative Agent’s
internal legal staff, and (c) to promptly pay all fees, costs and expenses
(including attorneys’ fees and expenses and the allocated cost of internal legal
staff) incurred by the Administrative Agent and Lenders in connection with any
action to enforce any Loan Document or to collect any payments due from Borrower
or any other Credit Party.  All fees, costs and expenses for which any Credit
Party is responsible under this Section 9.1 shall be deemed part of the
Obligations when incurred, and shall payable on demand in accordance with
Section 2.14.

 

Section 9.2.  Indemnity.  Whether or not the transactions contemplated hereby
are consummated, the Credit Parties, jointly and severally, agree to indemnify,
pay and hold harmless each Lending Party and any subsequent holder of any of the
Notes or any other Obligation, and each of such Person’s officers, directors,
employees, attorneys, agents and Affiliates (collectively, the “Indemnitees”)
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and disbursements
of any kind or nature whatsoever (including the fees and disbursements of
counsel for such Indemnitee and the allocated cost of internal legal staff) in
connection with any claim, investigative, administrative or judicial proceeding,
whether or not such Indemnitee shall be designated a party thereto and including
any such proceeding initiated by or on behalf of any Credit Party, and the
expenses of investigation by experts, engineers, environmental consultants and
similar technical personnel and any commission, fee or compensation claimed by
any broker (other than any broker retained by any Lending Party) asserting any
right to payment for the transactions contemplated hereby, which may be imposed
on, incurred by or asserted against such Indemnitee as a result of or in
connection with the transactions contemplated hereby or by the Loan Documents or
the other Related Transactions Documents (including, without limitation, (i)(A)
as a direct or indirect result of the presence on or under, or Release from, any
Real Property now or previously owned, leased or operated by any Credit Party of
any Hazardous Materials or any Hazardous Materials contamination, (B) arising
out of or relating to the offsite disposal of any Hazardous Materials generated
or present on any such Real Property or (C) arising out of or resulting from the
environmental condition of any such Real Property or the applicability of any
governmental requirements relating to Hazardous Materials, whether or not
occasioned wholly or in part by any condition, accident or event caused by any
act or omission of any Credit Party, and (ii) proposed and actual Extensions of
Credit under this Agreement) and the use or intended use of any Extension of
Credit or the proceeds thereof, except that the Credit Parties shall have no
obligation hereunder to an Indemnitee with respect to any liability resulting
solely from the gross negligence or willful misconduct of such Indemnitee as
finally determined by a court of competent jurisdiction.  To the extent that the
undertaking set forth in the immediately preceding sentence may be
unenforceable, each Credit Party shall contribute the maximum portion which it
is permitted to pay and satisfy under Applicable Law to the payment and
satisfaction of all such indemnified liabilities incurred by the Indemnitees or
any of them.  Without limiting the generality of any provision of this Section,
to the fullest extent permitted by law, each Credit Party hereby waives all
rights for contribution or any other rights of recovery with respect to
liabilities, losses, damages, costs and expenses arising under or relating to
Environmental Laws that it might have by statute or otherwise against any
Indemnitee, except to the extent that such items are finally determined by a
court of competent jurisdiction to have resulted solely from the gross
negligence or willful misconduct of such Indemnitee.

 

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Section 9.3.  Taxes.  The Credit Parties jointly and severally agree to pay each
Lending Party, promptly following demand therefor, all Charges (excluding income
taxes or other similar taxes imposed on any Lender or any holder of a Note),
including any interest or penalties thereon, at any time payable or ruled to be
payable in respect of the existence, execution or delivery of this Agreement,
the Related Transactions Documents or the making of any Extension of Credit, and
to indemnify and hold each Lending Party, and each and every holder of the Notes
or any other Obligation harmless against liability in connection with any such
Charges.

 

Section 9.4.  Capital Adequacy; Increased Costs; Illegality; Funding Losses.

 

(a)                                         If any Lender shall have determined
that the introduction of or any change in after the date hereof of any law,
treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy, reserve requirements or similar requirements
or compliance by any Lender with any request or directive regarding capital
adequacy, reserve requirements or similar requirements (whether or not having
the force of law) from any central bank or other Governmental Authority
increases or would have the effect of increasing the amount of capital, reserves
or other funds required to be maintained by such Lender and thereby reducing the
rate of return on such Lender’s capital as a consequence of its obligations
hereunder, then the Borrower shall from time to time upon demand by such Lender
(with a copy of such demand to the Administrative Agent) promptly pay to the
Administrative Agent, for the account of such Lender, additional amounts
sufficient to compensate such Lender for such reduction.  A certificate as to
the amount of such reduction that, at a minimum, shows the basis of the
computation thereof submitted by such Lender to the Borrower and to the
Administrative Agent shall be conclusive and binding on the Borrower for all
purposes, absent manifest error.

 

(b)                                        If, as a result of either (i) the
introduction of or any change in any law or regulation (or any change in the
interpretation thereof) or (ii) the compliance with any guideline or request
from any central bank or other Governmental Authority (whether or not having the
force of law), there shall be any increase in the cost to any Lender of agreeing
to make or making, funding or maintaining any Loan, then the Borrower shall from
time to time, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), promptly pay to the Administrative Agent for the account
of such Lender additional amounts sufficient to compensate such Lender for such
increased cost.  A certificate as to the amount of such increased cost,
submitted to the Borrower and to the Administrative Agent by such Lender, shall
be conclusive and binding on the Borrower for all purposes, absent manifest
error.

 

(c)                                        Notwithstanding anything to the
contrary contained herein, if the introduction of or any change in any law or
regulation (or any change in the interpretation thereof) shall make it unlawful,
or any central bank or other Governmental Authority shall assert that it is
unlawful, for any Lender to agree to make or to make or to continue to fund or
maintain any Loan based on LIBOR, then, unless that Lender is able to make or to
continue to fund or to maintain such LIBOR Loan at another branch or office of
that Lender without, in that Lender’s opinion, adversely affecting it or its
Loans or the income obtained therefrom, on notice thereof and demand therefor by
such Lender to the Borrower through the Administrative Agent, (i) the obligation
of such Lender to agree to make or to make or to continue to fund or maintain
LIBOR Loans shall terminate and (ii) the Borrower shall forthwith prepay in full
all outstanding LIBOR

 

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Loans owing to such Lender, together with interest accrued thereon, unless the
Borrower, within five (5) Business Days after the delivery of such notice and
demand, converts all such Loans into Base Rate Loans.

 

(d)                                        To induce Lenders to permit LIBOR
Loans on the terms provided herein, if (i) any LIBOR Loan is repaid in whole or
in part prior to the last day of any applicable LIBOR Period (whether that
repayment is made pursuant to any provision of this Agreement or any other Loan
Document or is the result of acceleration, by operation of law or otherwise),
(ii) the Borrower shall default in payment when due of the principal amount of
or interest on any LIBOR Loan, (iii) the Borrower shall default in making any
borrowing of, Conversion into or Continuation of any LIBOR Loan after the
Borrower has given notice requesting the same in accordance herewith, or (iv)
the Borrower shall fail to make any prepayment of a LIBOR Loan after the
Borrower has given a notice thereof in accordance herewith, then the Borrower
shall indemnify and hold harmless each Lender from and against all losses, costs
and expenses resulting from or arising from any of the foregoing.  Such
indemnification shall include any loss (but excluding loss of margin) or expense
arising from the reemployment of funds obtained by it or from fees payable to
terminate deposits from which such funds were obtained.  For the purpose of
calculating amounts payable to a Lender under this subsection, each Lender shall
be deemed to have actually funded its relevant LIBOR Loan through the purchase
of a deposit bearing interest at the LIBOR Rate in an amount equal to the amount
of such LIBOR Loan and having a maturity comparable to the relevant LIBOR
Period; provided, that each Lender may fund each of its LIBOR Loans in any
manner it sees fit, and the foregoing assumption shall be utilized only for the
calculation of amounts payable under this subsection.  As promptly as
practicable under the circumstances, each Lender shall provide the Borrower with
its written calculation of all amounts payable pursuant to this Section 9.4(d),
and such calculation shall be conclusive and binding on the Borrower for all
purposes, absent manifest error.  The Borrower shall pay to Lenders all amounts
required to be paid by it hereunder promptly upon demand therefor.

 

ARTICLE X.

THE ADMINISTRATIVE AGENT

 

Section 10.1.  Appointment and Authorization.  L/C Issuer and each Lender hereby
irrevocably designates and appoints GE Capital as the Administrative Agent of
L/C Issuer and Lenders under this Agreement, and L/C Issuer and each such Lender
irrevocably authorizes as the Administrative Agent for L/C Issuer and Lenders,
to take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to the Administrative Agent by the terms of this Agreement
and the other Loan Documents, together with such other powers as are reasonably
incidental thereto.  Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with L/C Issuer or any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement, the other Loan Documents or otherwise exist against the
Administrative Agent.  In performing its functions and duties under this
Agreement, Administrative Agent shall act solely as agent of Lenders and the L/C
Issuer and does not assume and shall not be deemed to

 

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have assumed any obligation toward or relationship of agency or trust with or
for the Borrower or any other Credit Party.  The Administrative Agent, as
collateral agent hereunder and under the Collateral Documents, is hereby
authorized to act on behalf of the Lenders, in its own capacity and through
other agents and sub-agents appointed by it, under the Collateral Documents,
provided that, unless otherwise expressly provided in this Agreement, the
Administrative Agent shall not agree to the release of any Collateral, or any
property encumbered by any mortgage, pledge or security interests.  In
connection with its role as secured party with respect to the Collateral
hereunder, the Administrative Agent shall act as collateral agent, for itself
and for the ratable benefit of the Lenders and such role as collateral agent
shall be disclosed on all appropriate accounts, certificates, filings,
mortgages, and other collateral documentation.

 

Section 10.2.  Delegation of Duties.  The Administrative Agent may execute any
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties.  The Administrative Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.  Without limiting the
foregoing, the Administrative Agent may appoint one of its affiliates as its
agent to perform the functions of the Administrative Agent hereunder relating to
the advancing of funds to the Borrower and distribution of funds to L/C Issuer
and the Lenders and to perform such other related functions of the
Administrative Agent hereunder as are reasonably incidental to such functions.

 

Section 10.3.  Administrative Agent and Affiliates.  Administrative Agent shall
have the same rights and powers under the Loan Documents as any other Lender and
may exercise or refrain from exercising the same as though it were not an
Administrative Agent, and the terms “Lender” and “Lenders” shall include the
Administrative Agent in its individual capacity.  The Administrative Agent and
its Affiliates may lend money to and generally engage in any kind of business
with any Credit Party or Affiliate thereof as if it were not an Administrative
Agent hereunder.

 

Section 10.4.  Action by Administrative Agent.  The duties of Administrative
Agent shall be mechanical and administrative in nature.  Administrative Agent
shall not have by reason of this Agreement a fiduciary relationship to any
Lending Party or any other Person.  The obligations of the Administrative Agent
hereunder are only those expressly set forth herein and under the other Loan
Documents.  Without limiting the generality of the foregoing, the Administrative
Agent shall not be required to take any action with respect to any Default,
except as expressly provided in Article VIII.

 

Section 10.5.  Consultation with Experts.  The Administrative Agent may consult
with legal counsel (who may be counsel for the Borrower), accountants and other
experts selected by it and shall not be liable for (a) any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts, or (b) any negligence or misconduct of any of
its legal counsel, accountants or other experts, provided that Administrative
Agent has exercised due care in the selection of such Persons.

 

Section 10.6.  Liability of Administrative Agent.  Neither the Administrative
Agent nor any of its directors, officers, agents, representatives, employees or
Affiliates shall be

 

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liable for any action taken or not taken by it in connection with the Loan
Documents (a) with the consent or at the request or direction of the Lenders,
the Required Lenders, the Required Term Lenders or the Required Revolving
Lenders, as applicable, or (b) in the absence of its own gross negligence or
willful misconduct.  Neither the Administrative Agent nor any of its directors,
officers, agents, representatives, employees or Affiliates shall be responsible
for or have any duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made under or in connection with any Loan Document or
any Extension of Credit hereunder, (ii) the performance or observance of any of
the covenants or agreements of any Credit Party, (iii) the satisfaction of any
condition specified in Article III, except to confirm receipt of items required
to be delivered to the Administrative Agent, (iv) the validity, effectiveness,
sufficiency or genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith, or (v) the value, validity,
effectiveness, genuineness, enforceability or sufficiency of any of the Loan
Documents or for any failure of the Borrower or any other Credit Party to
perform its obligations under this Agreement or any other Loan Document.  The
Administrative Agent shall not incur any liability by acting in reliance upon
any notice, consent, certificate, statement, other writing (which may be a bank
wire, telex, facsimile transmission or similar writing) or conversation believed
by it to be genuine or to be signed by the proper party or parties.

 

Section 10.7.  Indemnification.  The L/C Issuer and each Lender shall, ratably
in accordance with its Revolving Credit Commitment or Term Loan Commitment
(whether or not such Commitments have been terminated), indemnify the
Administrative Agent (to the extent not reimbursed by the Credit Parties)
against any cost, expense (including counsel fees and disbursements), claim,
demand, action, loss or liability (except such as result from the Administrative
Agent’s gross negligence or willful misconduct) that the Administrative Agent
may suffer or incur in connection with the Loan Documents or any action taken or
omitted by the Administrative Agent under this Agreement or any other Loan
Document.  The agreements in this Section 10.7 shall survive the termination of
this Agreement and payment of the Notes and all other amounts payable hereunder.

 

Section 10.8.  Credit Decision.  L/C Issuer and each Lender acknowledges that
neither the Administrative Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates has made any representation or warranty
to it and that no act by the Administrative Agent hereinafter taken, including
any review of the affairs of the Borrower or any other Credit Party, shall be
deemed to constitute any representation or warranty by the Administrative Agent
to L/C Issuer or any Lender.  L/C Issuer and each Lender acknowledges that it
has, independently and without reliance upon the Administrative Agent, L/C
Issuer or any other Lender, and based on such documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement and to make the Extensions of Credit hereunder.  L/C Issuer and
each Lender also acknowledges that it will, independently and without reliance
upon the Administrative Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in connection with its taking or not taking any action
under the Loan Documents.  Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or responsibility to
provide L/C Issuer or any Lender with any credit or other information concerning
the business, operations, property, condition (financial or otherwise),
prospects or creditworthiness of the Borrower or any other Credit Party which
may come into the possession

 

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of the Administrative Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates.

 

Section 10.9.  Successor Administrative Agent.  The Administrative Agent may
resign at any time by giving thirty (30) days’ prior written notice thereof to
the Lenders and the Borrower.  Upon any such resignation, the Required Lenders
shall have the right to appoint a successor Administrative Agent which, absent
the occurrence and continuance of a Default, must be acceptable to the Borrower
(such acceptance not to be unreasonably withheld or delayed).  If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within thirty (30) days after the retiring
Administrative Agent gives notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be an institution organized or licensed under
the laws of the United States of America or of any State thereof.  Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder.  After any retiring Administrative
Agent’s resignation hereunder as Administrative Agent, the provisions of this
Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent.

 

Section 10.10.  Reliance by Administrative Agent.  The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
Note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it in good faith to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including, without limitation,
counsel to the Borrower), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes unless (a) a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent and (b) the Administrative Agent shall have received the
written agreement of such assignee to be bound hereby as fully and to the same
extent as if such assignee were an original Lender party hereto, in each case in
form satisfactory to the Administrative Agent.  The Administrative Agent shall
be fully justified in failing or refusing to take any action under this
Agreement unless it shall first receive such advice or concurrence of the
Lenders, the Required Lenders, the Required Term Lenders, or the Required
Revolving Lenders, as it deems appropriate or it shall first be indemnified to
its satisfaction by the L/C Issuer and Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action.  The Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, under any of the Loan Documents in
accordance with a request of the Lenders, the Required Lenders, the Required
Term Lenders, or the Required Revolving Lenders, as may be required under this
Agreement, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Notes.

 

Section 10.11.  Notice of Default.  The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default

 

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hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default”.  In the event
that the Administrative Agent receives such a notice, the Administrative Agent
shall give prompt notice thereof to the L/C Issuer and the Lenders.  The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Lenders, the Required
Lenders, the Required Term Lenders, or the Required Revolving Lenders, as
appropriate; provided, that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the L/C Issuer and Lenders except to the extent that this Agreement
expressly requires that such action be taken, or not taken, only with the
consent or upon the authorization of the Lenders, the Required Lenders, the
Required Term Lenders, or the Required Revolving Lenders, or all of the Lenders,
as the case may be.

 

ARTICLE XI.

MISCELLANEOUS

 

Section 11.1.  Survival.  All agreements, representations and warranties made
herein shall survive the execution and delivery of this Agreement and the other
Loan Documents.  The provisions of Article IX and the indemnities contained in
this Agreement and the other Loan Documents shall survive the termination of
this Agreement.

 

Section 11.2.  No Waivers; Remedies Cumulative.  No failure or delay by the
Administrative Agent, the L/C Issuer or any Lender in exercising any right,
power or privilege under any Loan Document shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.  The
rights and remedies herein and therein provided shall be cumulative and not
exclusive of any rights or remedies provided by law, by other agreement or
otherwise.

 

Section 11.3.  Notices.  All notices, requests and other communications to any
party hereunder shall be in writing (including prepaid overnight courier,
facsimile transmission or similar writing) and shall be given to such party at
its address or facsimile number set forth in this Section or on the signature
pages hereof (or, in the case of any such Lender who becomes a Lender after the
date hereof, in a notice delivered to the Borrower and the Administrative Agent
by the assignee Lender forthwith upon such assignment) or at such other address
or facsimile number as such party may hereafter specify in writing for the
purpose by notice to the Administrative Agent and the Borrower.  Each such
notice, request or other communication shall be effective (a) if given by
facsimile, when transmitted to the facsimile number specified in this
Section and confirmation of receipt is received by the sender, (b) if given by
mail, upon the earlier of actual receipt and five (5) Business Days after
deposit in the United States Mail, registered or certified mail, return receipt
requested, properly addressed and with proper postage prepaid, (c) one (1)
Business Day after deposit with a reputable overnight courier properly addressed
and with all charges prepaid or (d) when received, if by any other means.

 

Notices shall be addressed as follows:

 

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If to the Borrower:

 

Medical Staffing Network, Inc.

 

 

901 Yamato Road, Suite 110

 

 

Boca Raton, Florida 33431

 

 

Attention:  Robert J. Adamson

 

 

Facsimile No: (561) 322-1202

 

 

Telephone No. (561) 322-1302

 

 

 

With a copy to:

 

Steel Hector & Davis LLP

 

 

1900 Phillips Point West

 

 

777 South Flagler Drive

 

 

West Palm Beach, FL 33401-6198

 

 

Attention: Kim Hines, Esq.

 

 

Facsimile No.: (561) 655-1509

 

 

Telephone No.: (561) 650-7297

 

 

 

If to Administrative Agent, L/C Issuer or GE Capital:

 

 

 

 

 

General Electric Capital Corporation

 

 

500 West Monroe, 29th Floor

 

 

Chicago, Illinois 60661

 

 

Attention:  Medical Staffing Network, Inc.
Account Manager

 

 

Facsimile No: (312) 441-7598

 

 

Telephone No.: (312) 441-7196

 

 

 

With a copy to:

 

General Electric Capital Corporation

 

 

2 Bethesda Metro Center

 

 

Suite 600

 

 

Bethesda, Maryland 20814

 

 

Attention:  Legal Department

 

 

Facsimile No: (301) 664-9866

 

 

Telephone No.: (301) 664-9804

 

If to a Lender:  To the address set forth on the signature page hereto or in the
applicable Assignment Agreement.

 

Section 11.4.  Severability.  In case any provision of or obligation under this
Agreement or any other Loan Document shall be invalid, illegal or unenforceable
in any applicable jurisdiction, the validity, legality and enforceability of the
remaining provisions or obligations, or of such provision or obligation in any
other jurisdiction, shall not in any way be affected or impaired thereby.

 

Section 11.5.  Amendments and Waivers.  Any provision of this Agreement or any
other Loan Document may be amended or waived only if such amendment or waiver is
in writing and is signed by: (x) in the case of this Agreement, the Borrower and
the Required Lenders or (y) in the case of any other Loan Document, the Borrower
and the Administrative

 

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Agent (with the consent of the Required Lenders); provided, that no such
amendment or waiver shall, unless signed by:

 

(a)                                         all the Lenders:

 

(i)                                           increase the aggregate Revolving
Credit Commitments or the Term Loans hereunder,

 

(ii)                                      change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Loans and
Reimbursement Obligations which shall be required for the Lenders or any of them
to take any action under this Section or any other provision of this Agreement,

 

(iii)                                 release all or substantially all of the
Collateral, or release all or substantially all of the Guarantors, or

 

(iv)                                    amend this Section 11.5 or the
definition of “Required Lenders,” “Required Revolving Lenders” or “Required Term
Lenders,”

 

(b)                                        all the Lenders affected thereby:

 

(i)                                           increase or decrease any
Commitment of any Lender (except for a ratable decrease in the Commitments of
all Lenders) or subject any Lender to any additional obligation,

 

(ii)                                      reduce the principal of or rate of
interest on any Obligation or the amount of any Fees payable hereunder,

 

(iii)                                 postpone the date fixed for any (A)
payment of (1) principal of any Loan or Reimbursement Obligation pursuant to
Section 2.8 or otherwise waive, excuse or reduce the amount of any scheduled
payment, (2) interest on any Loan or Reimbursement Obligation or (3) any fees
hereunder, or (B) termination of any Commitment,

 

(iv)                                    amend, modify or waive the order of
payment provisions set forth in Section 8.3 or the payment allocation provisions
of Section 2.8, or

 

(v)                                         change any provision of any Loan
Document in a manner that by its terms adversely affects the rights of the
holders of the Loans or Commitments of any one Class disproportionately than any
other Class,

 

(c)                                        the Required Revolving Lenders:

 

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(i)                                           amend, modify or waive the
definition of Borrowing Base or any component thereof or any reserve requirement
or any other requirement imposed pursuant to Section 2.1(e),

 

(ii)                                      amend, modify or waive any Borrowing
Base or Collateral reporting requirement or Collateral covenant affecting the
Revolving Credit Collateral,

 

(iii)                                 to amend, modify or waive any provision of
Section 3.2 or any requirement relating to the issuance or cash
collateralization of the L/Cs, or

 

(iv)                                    to release any Revolving Credit
Collateral (except to the extent contemplated by the Loan Documents),

 

(d)                                        the Required Term Lenders:

 

(i)                                           to release any Term Loan
Collateral (except to the extent contemplated by the Loan Documents),

 

provided that, if the rights or duties of the Administrative Agent, the
Swingline Lender or the L/C Issuer are affected by any amendment, modification
or waiver, by the Administrative Agent, Swingline Lender or L/C Issuer, as
applicable.

 

Section 11.6.  Successors and Assigns; Registration.  (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 (including any transferee of
any Note or other Obligation), except that the Borrower may not assign or
otherwise transfer any of its rights under this Agreement without the prior
written consent of all Lenders.  Notwithstanding the foregoing, in the absence
of an Event of Default, each Lender covenants for the benefit of the Borrower
that it will not assign Loans, Obligations or the Commitments (or any
combination thereof) except with the prior written consent of the Borrower and
the Administrative Agent (which consent shall not be unreasonably withheld or
delayed), provided, that each Lender retains the unrestricted right to transfer,
sell or assign any or all of its interest and obligations in the Loans and the
Commitments without respect to this sentence in the following cases: (i) to any
Lender or any Affiliate of any Lender; (ii) to any Person to the extent required
to comply with any order, directive or request from any Governmental Authority;
(iii) to any Person in connection with the sale by any Lender of all or any
substantial portion of such Lender’s corporate finance or healthcare capital
portfolio; or (iv) to a Qualified Assignee.  Any assignment made pursuant to
this Section 11.6 shall be made pursuant to an Assignment Agreement
substantially in the form of Exhibit R (each such agreement referred to herein
as an “Assignment Agreement”).

 

(b)                                        Any assignment shall be for an equal
percentage of such assignor Lender’s Loans and its Commitment, and any such
assignee Lender shall, upon its registration in the Note Register referred to
below, become a “Lender” for all purposes hereunder.  If such assignment is a
partial assignment, such assignment shall be in an amount at least equal to
$5,000,000 for Revolving Loans and $1,000,000 for Term Loans and, after giving
effect to any such partial assignment, a Lender assigning Revolving Loans shall
have retained Revolving Loan

 

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Commitments in an amount at least equal to $5,000,000 and a Lender assigning
Term Loans shall have retained Term Loan Commitments in an amount at least equal
to $1,000,000.  The Administrative Agent shall receive a fee of $5,000 in
connection with any such assignment (including, without limitation, an
assignment to an existing Lender).  Upon any such assignment, the assignor
Lender shall be released from its Commitments to the extent assigned to and
assumed by the assignee Lender.

 

(c)                                        Upon any assignment of any Note(s),
the assigning Lender shall surrender its Note(s) to the Borrower for exchange or
registration of transfer, and the Borrower will promptly execute and deliver in
exchange therefor a new Note or Note(s) of the same tenor and registered in the
name of the assignor Lender (if less than all of such Lender’s Notes are
assigned) and the name of the assignee Lender.

 

(d)                                        Each Lender may sell participations
in all or any part of the Loans, its Notes, its Commitments or its L/C
Exposure.  Any participation by a Lender shall be made with the understanding
that all amounts payable by the Borrower hereunder shall be determined as if
that Lender had not sold such participation, and that the holder of any such
participation shall not be entitled to require such Lender to take or omit to
take any action hereunder.  Neither the Borrower nor any other Credit Party
shall have any obligation or duty to any participant.  Neither the
Administrative Agent, L/C Issuer nor any Lender (other than the Lender selling a
participation) shall have any duty to any participant and may continue to deal
solely with the Lender selling a participation as if no such sale had occurred. 
No Lender shall, as between the Borrower and that Lender, or Administrative
Agent and/or L/C Issuer and that Lender, be relieved of any of its obligations
hereunder as a result of any participation in all or any part of the Loans, its
Note, its Commitments or other Obligations.

 

(e)                                        The Administrative Agent shall
maintain a register (the “Note Register”) of the Lenders and all assignee
Lenders that are the holders of all the Notes and other Obligations issued
pursuant to this Agreement.  Upon five (5) Business Days’ prior written notice
to the Administrative Agent will allow any Lender to inspect and copy such list
at the Administrative Agent’s principal place of business during normal business
hours.  Prior to the due presentment for registration of transfer of any Note or
other Obligation, the Administrative Agent may deem and treat the Person in
whose name a Note or Other Obligation is registered as the absolute owner of
such Note or Obligation for the purpose of receiving payment of principal of and
premium and interest on such Note or Obligation and for all other purposes
whatsoever, and the Administrative Agent shall not be affected by notice to the
contrary.

 

(f)                                          Each Lender (including any assignee
Lender at the time of such assignment) represents that it (i) is acquiring its
Note(s) or Obligations solely for investment purposes and not with a view
toward, or for sale in connection with, any distribution thereof, (ii) has
received and reviewed such information as it deems necessary to evaluate the
merits and risks of its investment in such Note(s) or Obligations, (iii) is an
“accredited investor” within the meaning of Rule 501(a) under the Securities Act
and (iv) has such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of its investment in the
Note(s) or Obligations, including a complete loss of its investment.

 

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(g)                                        Each Lender understands that the
Notes or Obligations are being offered only in a transaction not involving any
public offering within the meaning of the Securities Act, and that, if in the
future such Lender decides to resell, pledge or otherwise transfer the Notes or
Obligations, the Notes or Obligations may be resold, pledged or transferred only
(i) to a Person who such Lender reasonably believes is a qualified institutional
buyer that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that such resale, pledge or transfer
is being made in reliance on Rule 144A under the Securities Act or (ii) 
pursuant to an exemption from registration under the Securities Act.

 

(h)                                        Each Lender understands that the
Notes will, unless otherwise agreed by the Borrower and the holder thereof, bear
a legend to the following effect:

 

THIS SECURITY IS NOT BEING REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”).  THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
AGREES FOR THE BENEFIT OF THE ISSUER THAT THIS SECURITY MAY BE RESOLD, PLEDGED
OR OTHERWISE TRANSFERRED, ONLY (1) TO THE BORROWER, (2) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING
OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER THAT IS AWARE THAT THE RESALE, PLEDGE
OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.

 

(i)                                           If any Note becomes mutilated and
is surrendered by the Lender with respect thereto to the Borrower, or if any
Lender claims that any of its Notes have been lost, destroyed or wrongfully
taken, the Borrower shall execute and deliver to such Lender a replacement
Note(s), upon the affidavit of such Lender attesting to such loss, destruction
or wrongful taking with respect to such Note(s) and such lost, destroyed,
mutilated, surrendered or wrongfully taken Note(s) shall be deemed to be
canceled for all purposes hereof.  Such affidavit shall be accepted as
satisfactory evidence of the loss, wrongful taking or destruction thereof and no
indemnity shall be required as a condition of the execution and delivery of a
replacement Note.  Any costs and expenses of the Borrower in replacing any Note
shall be for the account of such Lender.

 

Section 11.7.  Setoff and Sharing of Payments.   Upon the occurrence and during
the continuance of any Event of Default, 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 indebtedness any time owing by such Lender (or any of its Affiliates) to
or for the credit or the account of any Credit Party against any and all of the
Obligations held by such Lender, irrespective of whether such Lender shall have
made any demand under this Agreement or any Note or such Obligations and
although such Obligations may be unmatured.  Each Lender agrees promptly to
notify the Borrower and Administrative Agent after any such set-off and
application made by such Lender; provided, that the failure to give such notice
shall not affect

 

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the validity of such set-off and application.  The rights of each Lender under
this Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Lender may have.  If any Lender
(a “Benefited Lender”) shall at any time receive any payment of all or part of
the Loans or other Obligations or other amounts owing to it hereunder, or
interest thereon, or receive any Collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, or otherwise), in a greater proportion
than any such payment to or Collateral received by any other Lender, if any, in
respect of such other Lender’s Loans, Obligations or other amounts owing to it
hereunder, or interest thereon, such Benefited Lender shall purchase for cash
from the other Lender(s) a participating interest in such portion of each such
other Lender’s Loans and other Obligations owing to it, or shall provide such
other Lender(s) with the benefits of any such Collateral, or the proceeds
thereof, as shall be necessary to cause such Benefited Lender to share the
excess payment or benefits of such Collateral or proceeds ratably with each of
the Lenders; provided, that if all or any such purchase shall be rescinded, and
the purchase price and benefits are thereafter recovered from such Benefited
Lender, such purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest.  Each Credit
Party agrees that any Lender so purchasing a participation from any other Lender
pursuant to this Section 11.7 may, to the fullest extent permitted by law, and
notwithstanding the provisions of Section 11.6(d), exercise all of its rights of
payment (including the right of set-off) with respect to such participation as
fully as if such purchasing Lender were the direct creditor of such Credit Party
in the amount of such participation.

 

Section 11.8.  Collateral.  Each of the Lenders represents to the Administrative
Agent and each of the other Lenders that it in good faith is not relying upon
any Margin Stock as collateral in the extension or maintenance of the credit
provided for in this Agreement.

 

Section 11.9.  Headings.  Headings and captions used in the Loan Documents
(including all exhibits and schedules thereto) are included herein and therein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.

 

Section 11.10.  Governing Law; Submission To Jurisdiction.  THIS AGREEMENT AND
EACH NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK.  EACH OF THE BORROWER AND THE OTHER CREDIT
PARTIES PARTY HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY
NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.  EACH OF THE BORROWER AND THE OTHER CREDIT PARTIES PARTY
HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.  EACH OF THE
PARTIES HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE

 

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MANNER PROVIDED FOR NOTICES IN SECTION 11.3.  NOTHING IN THIS AGREEMENT WILL
AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW.

 

Section 11.11.  Notice of Breach by Agents or Lender.  The Credit Parties party
hereto agree to give the Administrative Agent and the Lenders notice of any
action or inaction by the Administrative Agent or any Lender or any agent or
attorney of the Administrative Agent or any Lender in connection with this
Agreement or any other Loan Document or the Obligations of the Credit Parties
under this Agreement or any other Loan Document that may be actionable against
the Administrative Agent or any Lender or any agent or attorney of the
Administrative Agent or any Lender or a defense to payment of any Obligations of
the Credit Parties under this Agreement or any other Loan Document for any
reason, including commission of a tort or violation of any contractual duty or
duty implied by law.  The Credit Parties party hereto agree, to the fullest
extent that they may lawfully do so, that unless such notice is given promptly
(and in any event within ten (10) Business Days after any Credit Party has
knowledge, or with the exercise of reasonable diligence could have had
knowledge, of any such action or inaction), no Credit Party shall assert, and
each Credit Party shall be deemed to have waived, any claim or defense arising
therefrom to the extent that the Administrative Agent or any Lender could have
mitigated such claim or defense after receipt of such notice.

 

Section 11.12.  Waiver Of Jury Trial.  EACH OF THE CREDIT PARTIES PARTY HERETO,
ADMINISTRATIVE AGENT, L/C ISSUER AND LENDERS HEREBY IRREVOCABLY WAIVE ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY AND TO THE FULLEST
EXTENT PERMITTED BY LAW WAIVES ANY RIGHTS THAT IT MAY HAVE TO CLAIM OR RECEIVE
CONSEQUENTIAL OR SPECIAL DAMAGES IN CONNECTION WITH ANY LEGAL PROCEEDING ARISING
OUT OF OR RELATING TO THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
THEREBY.

 

Section 11.13.  Counterparts; Entire Agreement.  This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument. 
This Agreement shall become effective upon the execution of a counterpart hereof
by each of the parties hereto.  This Agreement and the other Loan Documents
(including any fee letters between Administrative and one or more of the Credit
Parties including the GE Capital Fee Letter) constitute the entire agreement and
understanding among the parties hereto and supersede any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof.

 

Section 11.14.  Confidentiality; Press Release. 
(a)                                                     Any confidential
information from time to time delivered to Administrative Agent and/or the
Lenders by the Borrower or any other Credit Party which is not in the public
domain shall be held by  such Agent or such Lender as confidential; provided,
that the Administrative Agent and each Lender may make disclosure of such
information (i) to its independent accountants and legal counsel (which Persons
shall be likewise bound by the provisions of this Section 11.14), (ii) pursuant
to statutory and regulatory requirements, (iii) pursuant to any mandatory court
order or subpoena or in connection with any

 

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legal process, (iv) pursuant to any written agreement hereafter made between the
Administrative Agent, any Lender and the Borrower or any other Credit Party to
which such information relates, which agreement permits such disclosure, (v) as
necessary in connection with the exercise of any remedy by Administrative Agent
or any Lender under the Loan Documents, (vi) consisting of general portfolio
information that does not identify any Credit Party, (vii) which was heretofore
been publicly disclosed or is otherwise available to such Agent and/or Lender on
a non-confidential basis from a source that is not, to its knowledge, subject to
a confidentiality agreement with any Credit Party, (viii) in connection with any
litigation to which Administrative Agent or any Lender or its Affiliates is a
party, or (ix) subject to an agreement containing provisions substantially the
same as those set forth in this Section 11.14, to any assignee of or participant
in, or prospective assignee of or participant in, any of the Obligations. 
Notwithstanding anything to the contrary set forth herein or in any other
agreement to which the parties hereto are parties or by which they are bound,
the obligations of confidentiality contained herein and therein, as they relate
to the transactions contemplated by the Credit Agreement and the other Loan
Documents (the “Transaction”), shall not apply to the federal tax structure or
federal tax treatment of the Transaction, and each party hereto (and any
employee, representative, agent of any party hereto) may disclose to any and all
persons, without limitation of any kind, the federal tax structure and federal
tax treatment of the Transaction.  The preceding sentence is intended to cause
the Transaction to be treated as not having been offered under conditions of
confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor
provision) of the Treasury Regulations promulgated under Section 6011 of the
Internal Revenue Code of 1986, as amended, and shall be construed in a manner
consistent with such purpose.  In addition, each party hereto acknowledges that
it has no proprietary or exclusive rights to the federal tax structure of the
Transaction or any federal tax matter or federal tax idea related to the
Transaction.

 

(b)                                        No Credit Party or Affiliate thereof
will in the future issue any press releases or other public disclosure using the
name of GE Capital or its Affiliates or any other Lender or its Affiliates or
referring to this Agreement or the other Loan Documents without at least two (2)
Business Days’ prior notice to GE Capital and without the prior written consent
of GE Capital unless (and only to the extent that) such Credit Party or
Affiliate is required to do so under law and then, in any event, such Credit
Party or Affiliate will consult with GE Capital before issuing such press
release or other public disclosure.  Each Credit Party consents to the
publication by Administrative Agent or any Lender of a tombstone or similar
advertising material relating to the financing transactions contemplated by this
Agreement. Administrative Agent reserves the right to provide to industry trade
organizations information necessary and customary for inclusion in league table
measurements.

 

Section 11.15.  Reinstatement.  This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Credit Party for liquidation or reorganization, should any Credit Party
become insolvent or make an assignment for the benefit of any creditor or
creditors or should a receiver or trustee be appointed for all or any
significant part of any Credit Party’s assets or properties, and shall continue
to be effective or to be reinstated, as the case may be, if at any time payment
and performance of the Obligations, or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Obligations, whether as a “voidable preference,”
“fraudulent conveyance,” or otherwise, all as though such payment or

 

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performance had not been made.  In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.

 

Section 11.16.  Advice of Counsel.  Each of the parties represents to each other
party hereto that it has discussed this Agreement and the other Loan Documents
and, specifically, the provisions of Sections 9.2, 11.10 and 11.12, with its
counsel.

 

Section 11.17.  No Strict Construction.  The parties hereto have participated
jointly in the negotiation and drafting of this Agreement and the other Loan
Documents.  In the event any ambiguity or question of intent or interpretation
arises, this Agreement and the other Loan Documents shall be construed as if
drafted jointly by the parties hereto and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this Agreement.

 

Section 11.18.  Conflict of Terms.  Except as otherwise provided in this
Agreement or any of the other Loan Documents by specific reference to the
applicable provisions of this Agreement, if any provision contained in this
Agreement conflicts with any provision in any of the other Loan Documents, the
provision contained in this Agreement shall govern and control.

 

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be
duly executed by their respective authorized representatives on the date first
above written.

 

 

MEDICAL STAFFING NETWORK, INC.

 

 

 

 

 

 

 

By:

/s/ ROBERT ADAMSON

 

Name:

Robert Adamson

 

Title:

Chairman and CEO

 

 

 

Borrower Account Information:

 

 

 

 

Borrower Account Information:

 

Bank’s Name and Address:

 

Bank of America

 

Jacksonville, FL

 

Account#3662599422

 

ABA# 026009593 (for wire transfers)

 

ABA# 063100277 (for ACH transfers)

 

 

 

 

 

CREDIT PARTIES:

 

 

 

MEDICAL STAFFING NETWORK HOLDINGS, INC.

 

 

 

 

 

By:

/s/ ROBERT ADAMSON

 

Name:

Robert Adamson

 

Title:

Chairman of the Board

 

 

 

 

 

 

 

MEDICAL STAFFING HOLDINGS, LLC

 

By:

Medical Staffing Network Holdings, Inc., as its sole Member

 

 

 

 

By:

/s/ ROBERT ADAMSON

 

Name:

Robert Adamson

 

Title:

Chairman of the Board

 

 

 

 

 

 

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MSN-ILLINOIS HOLDINGS, INC.

 

 

 

 

By:

/s/ KEVIN LITTLE

 

Name:

Kevin Little

 

Title:

Director

 

 

 

 

 

 

 

MEDICAL STAFFING NETWORK OF ILLINOIS, LLC

 

 

 

 

By:

/s/ KEVIN LITTLE

 

Name:

Kevin Little

 

Title:

Manager

 

 

 

 

 

 

 

MEDICAL STAFFING NETWORK ASSETS, LLC

 

 

 

 

By:

/s/ KEVIN LITTLE

 

Name:

Kevin Little

 

Title:

Manager

 

 

 

 

 

 

 

AGENT AND LENDERS:

 

 

 

GENERAL ELECTRIC CAPITAL CORPORATION, as Lender and as Administrative Agent

 

 

Revolving Credit

By:

/s/ DON C. LEE

Commitment:  $45,000,000

 

 

Term Loan

Its Duly Authorized Signatory:

Commitment:  $17,000,000

Don C. Lee

 

 

 

 

 

 

 

 

 

 

Payment Account Information:

 

Deutsche Bank/Banker’s Trust

 

New York, NY

 

ABA# 021-001-033

 

Acct. Name:  HH Cash Flow Collections

 

Acct# 50-271-079

 

Ref:  Medical Staffing Network, Inc.

 

 

 

 

114

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LASALLE BANK NATIONAL
ASSOCIATION, as Lender

 

 

Revolving Loan

By:

/s/ KERRY WARD

 

Commitment:  $20,000,000

Name:

Kerry Ward

 

 

Title:

Vice President

 

 

 

 

 

 

 

Payment Account Information:

 

Chase Bank

 

New York, New York

 

Account Name: Special Situations Investing

 

Group, Inc.

 

Account#: 066906601

 

ABA#:021000021

 

Ref: Medical Staffing Network, Inc.

 

115

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