EXHIBIT 10.1

 

 

 

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CREDIT AGREEMENT

dated as of June 29, 2011,

among

TEAM HEALTH HOLDINGS, INC.,

as Holdings,

TEAM HEALTH, INC.,

as the Borrower,

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent, Swing Line Lender and L/C Issuer,

and

The LENDERS Party Hereto

 

 

J.P. MORGAN SECURITIES LLC,

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

BARCLAYS CAPITAL,

CITIGROUP GLOBAL MARKETS INC.

and

GOLDMAN SACHS LENDING PARTNERS LLC,

as Joint Bookrunners,

and

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

as Syndication Agent

 

 

 

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Table of Contents

 

          Page   ARTICLE I    DEFINITIONS AND ACCOUNTING TERMS   

SECTION 1.01.

   Defined Terms      1    SECTION 1.02.   

Other Interpretive Provisions

     40    SECTION 1.03.    Accounting Terms      41    SECTION 1.04.   
Rounding      41    SECTION 1.05.    References to Agreements, Laws, Etc.     
41    SECTION 1.06.    Times of Day      41    SECTION 1.07.    Timing of
Payment of Performance      42    ARTICLE II    THE COMMITMENTS AND CREDIT
EXTENSIONS    SECTION 2.01.    The Loans      42    SECTION 2.02.   

Borrowings, Conversions and Continuations of Loans

     42    SECTION 2.03.    Letters of Credit      44    SECTION 2.04.    Swing
Line Loans      52    SECTION 2.05.    Prepayments      54    SECTION 2.06.   
Termination or Reduction of Commitments      58    SECTION 2.07.    Repayment of
Loans      58    SECTION 2.08.    Interest      59    SECTION 2.09.    Fees     
60    SECTION 2.10.    Computation of Interest and Fees      61    SECTION 2.11.
   Evidence of Indebtedness      61    SECTION 2.12.    Payments Generally     
62    SECTION 2.13.    Sharing of Payments      64    SECTION 2.14.   
Incremental Credit Extensions      64    SECTION 2.15.    Loan Modification
Offers      66    SECTION 2.16.    Defaulting Lenders      67    ARTICLE III   
TAXES, INCREASED COSTS PROTECTION AND ILLEGALITY    SECTION 3.01.    Taxes     
68    SECTION 3.02.    Illegality      71    SECTION 3.03.    Inability to
Determine Rates      71    SECTION 3.04.   

Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurocurrency
Rate Loans

     71   

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SECTION 3.05.   

Funding Losses

     73    SECTION 3.06.   

Matters Applicable to All Requests for Compensation

     73    SECTION 3.07.   

Replacement of Lenders under Certain Circumstances

     74    SECTION 3.08.   

Survival

     75    ARTICLE IV    CONDITIONS PRECEDENT TO CREDIT EXTENSIONS    SECTION
4.01.   

Conditions of Initial Credit Extension

     76    SECTION 4.02.   

Conditions to All Credit Extensions

     77    ARTICLE V    REPRESENTATIONS AND WARRANTIES    SECTION 5.01.   

Existence, Qualification and Power; Compliance with Laws

     78    SECTION 5.02.   

Authorization; No Contravention

     78    SECTION 5.03.   

Governmental Authorization; Other Consents

     79    SECTION 5.04.   

Binding Effect

     79    SECTION 5.05.   

Financial Statements; No Material Adverse Effect

     79    SECTION 5.06.   

Litigation

     80    SECTION 5.07.   

No Default

     80    SECTION 5.08.   

Ownership of Property; Liens

     80    SECTION 5.09.   

Environmental Compliance

     80    SECTION 5.10.   

Taxes

     81    SECTION 5.11.   

ERISA Compliance

     81    SECTION 5.12.   

Subsidiaries; Equity Interests

     82    SECTION 5.13.   

Margin Regulations; Investment Company Act

     82    SECTION 5.14.   

Disclosure

     82    SECTION 5.15.   

Intellectual Property; Licenses, Etc.

     83    SECTION 5.16.   

Solvency

     83    SECTION 5.17.   

Subordination of Junior Financing

     83    SECTION 5.18.   

Labor Matters

     83    SECTION 5.19.   

Reimbursement from Third Party Payors

     83    SECTION 5.20.   

Certain Prohibited Actions

     83    SECTION 5.21.   

Related Professional Corporations

     84    ARTICLE VI    AFFIRMATIVE COVENANTS    SECTION 6.01.   

Financial Statements

     84    SECTION 6.02.   

Certificates; Other Information

     85    SECTION 6.03.   

Notices

     87    SECTION 6.04.   

Payment of Obligations

     87    SECTION 6.05.   

Preservation of Existence, Etc.

     87   

 

ii

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SECTION 6.06.   

Maintenance of Properties

     88    SECTION 6.07.   

Maintenance of Insurance

     88    SECTION 6.08.   

Compliance with Laws

     88    SECTION 6.09.   

Books and Records

     89    SECTION 6.10.   

Inspection Rights

     89    SECTION 6.11.   

Covenant to Guarantee Obligations and Give Security

     89    SECTION 6.12.   

Compliance with Environmental Laws

     91    SECTION 6.13.   

Further Assurances and Post-Closing Conditions

     91    SECTION 6.14.   

Designation of Subsidiaries

     93    ARTICLE VII    NEGATIVE COVENANTS    SECTION 7.01.   

Liens

     93    SECTION 7.02.   

Investments

     96    SECTION 7.03.   

Indebtedness

     100    SECTION 7.04.   

Fundamental Changes

     102    SECTION 7.05.   

Dispositions

     103    SECTION 7.06.   

Restricted Payments

     105    SECTION 7.07.   

Change in Nature of Business

     107    SECTION 7.08.   

Transactions with Affiliates

     107    SECTION 7.09.   

Restrictive Agreements

     108    SECTION 7.10.   

Use of Proceeds

     109    SECTION 7.11.   

Financial Covenant

     109    SECTION 7.12.   

Accounting Changes

     109    SECTION 7.13.   

Prepayments, Etc. of Indebtedness

     109    SECTION 7.14.   

Equity Interests of the Borrower and Restricted Subsidiaries

     110    SECTION 7.15.   

Holding Companies

     110    SECTION 7.16.   

[Intentionally Omitted]

     110    SECTION 7.17.   

Insurance Subsidiary

     110    SECTION 7.18.   

Related Professional Corporations

     110    ARTICLE VIII    EVENTS OF DEFAULT AND REMEDIES    SECTION 8.01.   

Events of Default

     111    SECTION 8.02.   

Remedies Upon Event of Default

     113    SECTION 8.03.   

Exclusion of Immaterial Subsidiaries

     114    SECTION 8.04.   

Application of Funds

     114    SECTION 8.05.   

Borrower’s Right to Cure

     115   

 

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ARTICLE IX    ADMINISTRATIVE AGENT AND OTHER AGENTS    SECTION 9.01.   

Appointment and Authorization of Agents

     115    SECTION 9.02.   

Delegation of Duties

     116    SECTION 9.03.   

Liability of Agents

     117    SECTION 9.04.   

Reliance by Agents

     117    SECTION 9.05.   

Notice of Default

     117    SECTION 9.06.   

Credit Decision; Disclosure of Information by Agents

     118    SECTION 9.07.   

Indemnification of Agents

     118    SECTION 9.08.   

Agents in their Individual Capacities

     119    SECTION 9.09.   

Successor Agents

     119    SECTION 9.10.   

Administrative Agent May File Proofs of Claim

     120    SECTION 9.11.   

Collateral and Guaranty Matters

     121    SECTION 9.12.   

Other Agents; Arrangers and Managers

     121    SECTION 9.13.   

Appointment of Supplemental Administrative Agents

     122    ARTICLE X    MISCELLANEOUS    SECTION 10.01.   

Amendments, Etc.

     123    SECTION 10.02.   

Notices and Other Communications; Facsimile Copies

     124    SECTION 10.03.   

No Waiver; Cumulative Remedies

     126    SECTION 10.04.   

Attorney Costs, Expenses and Taxes

     126    SECTION 10.05.   

Indemnification by the Borrower

     126    SECTION 10.06.   

Payments Set Aside

     127    SECTION 10.07.   

Successors and Assigns

     128    SECTION 10.08.   

Confidentiality

     134    SECTION 10.09.   

Setoff

     135    SECTION 10.10.   

Interest Rate Limitation

     135    SECTION 10.11.   

Counterparts

     136    SECTION 10.12.   

Integration

     136    SECTION 10.13.   

Survival of Representations and Warranties

     136    SECTION 10.14.   

Severability

     136    SECTION 10.15.   

Tax Forms

     136    SECTION 10.16.   

Governing Law

     139    SECTION 10.17.   

Waiver of Right to Trial by Jury

     139    SECTION 10.18.   

Binding Effect

     139    SECTION 10.19.   

Lender Action

     140    SECTION 10.20.   

USA PATRIOT Act

     140    SECTION 10.21.   

No Fiduciary Relationship

     140   

 

iv

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SCHEDULES

  

I

   Guarantors

1.01A

   Certain Security Interests and Guarantees

1.01B

   Mortgaged Properties

1.01C

   Immaterial Subsidiaries

1.01D

   Related Professional Corporations

2.01

   Commitments

5.09

   Environmental Matters

5.10

   Taxes

5.11

   ERISA Compliance

5.12

   Subsidiaries and Other Equity Investments

6.13(a)(ii)

   Certain Post-Closing Obligations

7.01(b)

   Existing Liens

7.02(f)

   Existing Investments

7.03(b)

   Existing Indebtedness

7.05(l)

   Dispositions

7.08

   Transactions with Affiliates

7.09

   Existing Restrictions

EXHIBITS

  

Form of

  

A

   Committed Loan Notice

B

   Swing Line Loan Notice

C-1

   Tranche A Term Note

C-2

   Tranche B Term Note

C-3

   Revolving Credit Note

D

   Compliance Certificate

E

   Assignment and Assumption

F

   Guaranty

G

   Security Agreement

H

   Mortgage

I

   [Intentionally Omitted]

J

   Intellectual Property Security Agreement

K

   Auction Procedures

L

   Affiliated Lender Assignment Assumption

 

v

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CREDIT AGREEMENT

This CREDIT AGREEMENT (“Agreement”) is entered into as of June 29, 2011, among
TEAM HEALTH, INC., a Tennessee corporation (the “Borrower”), TEAM HEALTH
HOLDINGS, INC., a Delaware corporation (“Holdings”), JPMORGAN CHASE BANK, N.A.,
as Administrative Agent, Swing Line Lender and L/C Issuer, each lender from time
to time party hereto (collectively, the “Lenders” and individually, a “Lender”)
and MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as Syndication Agent.

PRELIMINARY STATEMENT

The Borrower has requested that upon the satisfaction in full of the conditions
precedent set forth in Article IV below, the Lenders extend credit to the
Borrower in the form of (i) Term Loans in an initial aggregate principal amount
of $400,000,000 and (ii) a Revolving Credit Facility in an initial aggregate
principal amount of $175,000,000. The Revolving Credit Facility may include one
or more Swing Line Loans and one or more Letters of Credit from time to time.

The proceeds of the Term Loans made on the Closing Date will be used to finance
the Debt Prepayment and the Transaction Expenses. The proceeds of any Revolving
Credit Loans made after the Closing Date will be used for working capital and
other general corporate purposes of the Borrower and its Subsidiaries,
including, after the Closing Date, the financing of Permitted Acquisitions.
Swing Line Loans and Letters of Credit will be used for general corporate
purposes of the Borrower and its Subsidiaries, with Letters of Credit issued
under the Existing Credit Agreement being deemed issued under the Revolving
Credit Facility.

The applicable Lenders have indicated their willingness to lend, and the L/C
Issuers have indicated their willingness to issue Letters of Credit, in each
case, on the terms and subject to the conditions set forth herein.

In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

ARTICLE I

Definitions and Accounting Terms

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

“Accepting Lender” has the meaning given to such term in Section 2.15.

“Acquired EBITDA” means, with respect to any Acquired Entity or Business for any
period, the amount for such period of Consolidated EBITDA of such Acquired
Entity or Business (determined as if references to the Borrower and the
Restricted Subsidiaries in the definition of Consolidated EBITDA were references
to such Acquired Entity or Business and its Subsidiaries (except to the extent
such Subsidiaries will not constitute Restricted Subsidiaries

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immediately after giving effect to such acquisition)), all as determined on a
consolidated basis for such Acquired Entity or Business.

“Acquired Entity or Business” has the meaning set forth in the definition of the
term “Consolidated EBITDA”.

“Act” has the meaning set forth in Section 10.20.

“Additional Lender” has the meaning set forth in Section 2.14(a).

“Adjusted LIBOR” means the London interbank offered rate (as set forth on
Reuters Screen LIBOR 01 or, if such Screen is unavailable, as reasonably
determined by the Administrative Agent) and will at all times include statutory
reserves; provided that, when used in reference to the Tranche B Term Facility,
“Adjusted LIBOR” shall be deemed to be not less than 1.00% per annum.

“Administrative Agent” means JPMorgan Chase Bank, in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.

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

“Affected Class” has the meaning given to such term in Section 2.15.

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

“Agent-Related Persons” means the Agents, together with their respective
Affiliates, and the officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates.

“Agents” means, collectively, the Administrative Agent, the Syndication Agent,
the Co-Documentation Agents, the Senior Managing Agents and the Supplemental
Administrative Agents (if any).

“Aggregate Commitments” means the Commitments of all the Lenders.

“Aggregate Credit Exposures” means, at any time, the sum of (a) the unused
portion of each Revolving Credit Commitment then in effect, (b) the unused
portion of each Term Commitment then in effect and (c) the Total Outstandings at
such time.

“Agreement” means this Credit Agreement.

 

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“Annual Premiums” means the annual premium set forth in the insurance policy
issued by an Insurance Subsidiary to Holdings or any of its Subsidiaries,
including as the same may be amended, supplemented or otherwise modified from
time to time.

“Applicable Rate” means a percentage per annum equal to:

(a) with respect to Tranche A Term Loans, (i) until the first Business Day
immediately following the date a Compliance Certificate is delivered pursuant to
Section 6.02(b) in respect of the first full fiscal quarter commencing on or
after the Closing Date pursuant to Section 6.01, (x) for Eurocurrency Rate
Loans, 2.25% and (y) for Base Rate Loans, 1.25%, and (ii) thereafter, the
following percentages per annum, based on the First Lien Net Leverage Ratio for
the twelve-month period ended as of the most recent date for which financial
statements are required to be delivered to the Administrative Agent pursuant to
Section 6.01(b):

 

Pricing
Level

   First Lien Net
Leverage Ratio   Eurocurrency Rate   Base Rate

1

   > 3.25x   2.75%   1.75%

2

   > 2.50x but £ 3.25x   2.50%   1.50%

3

   > 1.75x but £ 2.50x   2.25%   1.25%

4

   > 1.00x but £ 1.75x   2.00%   1.00%

5

   £ 1.00x   1.75%   0.75%

(b) with respect to Tranche B Term Loans, (x) that are Eurocurrency Rate Loans,
2.75% and (y) that are Base Rate Loans, 1.75%.

(c) with respect to Revolving Credit Loans, unused Revolving Credit Commitments
and Letter of Credit fees, (i) until the first Business Day immediately
following the date a Compliance Certificate is delivered pursuant to
Section 6.02(b) in respect of the first full fiscal quarter commencing on or
after the Closing Date pursuant to Section 6.01, (A) for Eurocurrency Rate
Loans, 2.25%, (B) for Base Rate Loans, 1.25%, (C) for Letter of Credit fees,
2.25% and (D) for fees on unused commitments, 0.45% and (ii) thereafter, the
following percentages per annum, based upon the First Lien Net Leverage Ratio
for the twelve-month period ended as of the most recent date for which financial
statements are required to be delivered to the Administrative Agent pursuant to
Section 6.01(b):

 

Pricing
Level

   First Lien Net
Leverage Ratio   Eurocurrency Rate and
Letter of Credit Fees   Base Rate   Commitment
Fee
Rate

1

   > 3.25x   2.75%   1.75%   0.50%

2

   > 2.50x but £ 3.25x   2.50%   1.50%   0.50%

3

   > 1.75x but £ 2.50x   2.25%   1.25%   0.45%

4

   > 1.00x but £ 1.75x   2.00%   1.00%   0.40%

5

   £ 1.00x   1.75%   0.75%   0.35%

 

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Any increase or decrease in the Applicable Rate resulting from a change in the
First Lien Net Leverage Ratio shall become effective as of the first Business
Day immediately following the date a Compliance Certificate is delivered
pursuant to Section 6.02(b); provided that at the option of the Administrative
Agent or the Required Lenders, the Pricing Level that is one Pricing Level
higher than the Pricing Level theretofore in effect shall apply as of the first
Business Day after the date on which a Compliance Certificate was required to
have been delivered but was not delivered, and shall continue to so apply to and
including the date on which such Compliance Certificate is so delivered (and
thereafter the Pricing Level otherwise determined in accordance with this
definition shall apply).

“Approved Bank” has the meaning specified in clause (c) of the definition of
“Cash Equivalents”.

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

“Arranger” means J.P. Morgan Securities LLC, in its capacity as Lead Arranger
under this Agreement.

“Assignees” has the meaning specified in Section 10.07(b).

“Assignment and Assumption” means an Assignment and Assumption substantially in
the form of Exhibit E.

“Attorney Costs” means and includes all reasonable fees, expenses and
disbursements of any law firm or other external legal counsel.

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

“Auction” shall mean an auction pursuant to which a Purchasing Borrower Party
offers to purchase Term Loans pursuant to the Auction Procedures.

“Auction Manager” shall mean (a) the Administrative Agent or (b) any other
financial institution or advisor employed by the Borrower (whether or not an
Affiliate of the Administrative Agent) to act as an arranger in connection with
any Auction; provided that the Borrower shall not designate the Administrative
Agent as the Auction Manager without the written consent of the Administrative
Agent (it being understood that the Administrative Agent shall be under no
obligation to agree to act as the Auction Manager).

 

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“Auction Procedures” shall mean the procedures set forth in Exhibit K.

“Auction Purchase Offer” shall mean an offer by a Purchasing Borrower Party to
purchase Term Loans pursuant to an auction process conducted in accordance with
the Auction Procedures and otherwise in accordance with Section 10.07(k).

“Audited Financial Statements” means the audited consolidated balance sheets of
Holdings and its Subsidiaries as of each of December 31, 2010 and 2009, and the
related audited consolidated statements of income, stockholders’ equity and cash
flows for (i) Holdings (formerly known as Team Health Holdings, L.L.C.) and its
Subsidiaries for the fiscal years ended December 31, 2010, 2009 and 2008.

“Auto-Renewal Letter of Credit” has the meaning specified in
Section 2.03(b)(iii).

“Base Rate” means for any day a fluctuating rate per annum equal to the highest
of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect
for such day as publicly announced from time to time by JPMorgan Chase Bank as
its “prime rate”, and (c) the Adjusted LIBOR for a one-month interest period on
any day plus 1.00%. The “prime rate” is a rate set by JPMorgan Chase Bank based
upon various factors including JPMorgan Chase Bank costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by JPMorgan Chase Bank shall take effect
at the opening of business on the day specified in the public announcement of
such change.

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

“Borrower” has the meaning set forth in the introductory paragraph to this
Agreement.

“Borrowing” means a Revolving Credit Borrowing, a Swing Line Borrowing, or a
Term Borrowing, as the context may require.

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, New York City and if such day relates to any interest rate settings
as to a Eurocurrency Rate Loan, any fundings, disbursements, settlements or
payments in respect of any such Eurocurrency Rate Loan, or any other dealings to
be carried out pursuant to this Agreement in respect of any such Eurocurrency
Rate Loan, means any such day on which dealings in deposits in U.S. dollars are
conducted by and between banks in the London interbank eurodollar market.

“Capitalized Leases” means all leases that have been or should be, in accordance
with GAAP, recorded as capitalized leases; provided that for all purposes
hereunder the amount of obligations under any Capitalized Lease shall be the
amount thereof accounted for as a liability in accordance with GAAP.

“Cash Collateral” has the meaning specified in Section 2.03(g).

 

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“Cash Collateral Account” means a blocked account at JPMorgan Chase Bank (or
another commercial bank selected in compliance with Section 9.09) in the name of
the Administrative Agent and under the sole dominion and control of the
Administrative Agent, and otherwise established in a manner satisfactory to the
Administrative Agent.

“Cash Collateralize” has the meaning specified in Section 2.03(g).

“Cash Equivalents” means any of the following types of Investments, to the
extent owned by the Borrower or any Restricted Subsidiary:

(a) U.S. dollars, Euros or, in the case of any Foreign Subsidiary, such local
currencies held by it from time to time in the ordinary course of business;

(b) readily marketable obligations issued or directly and fully guaranteed or
insured by the government or any agency or instrumentality of (i) the United
States or (ii) any member nation of the European Union, having average
maturities of not more than 12 months from the date of acquisition thereof;
provided that the full faith and credit of the United States or a member nation
of the European Union is pledged in support thereof;

(c) time deposits with, or insured certificates of deposit or bankers’
acceptances of, any commercial bank that (i) is a Lender or (ii) (A) is
organized under the Laws of the United States, any state thereof, the District
of Columbia or any member nation of the Organization for Economic Cooperation
and Development or is the principal banking Subsidiary of a bank holding company
organized under the Laws of the United States, any state thereof, the District
of Columbia or any member nation of the Organization for Economic Cooperation
and Development, and is a member of the Federal Reserve System, and (B) has
combined capital and surplus of at least $250,000,000 (any such bank in the
foregoing clauses (i) or (ii) being an “Approved Bank”), in each case with
average maturities of not more than 12 months from the date of acquisition
thereof;

(d) commercial paper and variable or fixed rate notes issued by an Approved Bank
(or by the parent company thereof) or any variable or fixed rate note issued by,
or guaranteed by, a corporation rated A-2 (or the equivalent thereof) or better
by S&P or P-2 (or the equivalent thereof) or better by Moody’s, in each case at
the time of such Investment and with average maturities of not more than 12
months from the date of acquisition thereof;

(e) repurchase agreements entered into by any Person with a bank or trust
company (including any of the Lenders) or recognized securities dealer, in each
case, having capital and surplus in excess of $250,000,000 for direct
obligations issued by or fully guaranteed or insured by the government or any
agency or instrumentality of (i) the United States or (ii) any member nation of
the European Union, in which such Person shall have a perfected first priority
security interest (subject to no other Liens) and having, on the date of
purchase thereof, a fair market value of at least 100% of the amount of the
repurchase obligations;

 

6

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(f) securities with average maturities of 12 months or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government having an
investment grade rating from either S&P or Moody’s (or the equivalent thereof)
at the time of such Investment;

(g) Investments with average maturities of 12 months or less from the date of
acquisition in money market funds rated AAA (or the equivalent thereof) or
better by S&P or Aaa3 (or the equivalent thereof) or better by Moody’s in each
case at the time of such Investment;

(h) instruments equivalent to those referred to in clauses (a) through (g) above
denominated in Euros or any other foreign currency comparable in credit quality
and tenor to those referred to above and customarily used by corporations for
cash management purposes in any jurisdiction outside the United States to the
extent reasonably required in connection with any business conducted by any
Restricted Subsidiary organized in such jurisdiction;

(i) Investments, classified in accordance with GAAP as current assets of the
Borrower or any Restricted Subsidiary, in money market investment programs which
are registered under the Investment Company Act of 1940 or which are
administered by financial institutions having capital of at least $250,000,000,
and, in either case, the portfolios of which are limited such that substantially
all of such investments are of the character, quality and maturity described in
clauses (a) through (h) of this definition;

(j) in the case of Investments made by any Insurance Subsidiary, such
Investments with average maturities of 12 months or less from the date of
acquisition in issuers rated BBB- (or the equivalent thereof) or better by S&P
or Baa3 (or the equivalent thereof) or better by Moody’s, in each case at the
time of such Investment; and

(k) in the case of any Insurance Subsidiary, any Investment with a maturity of
more than 12 months that would constitute Cash Equivalents of the kind described
in any of clauses (a) through (j) of this definition if the maturity of such
Investment was 12 months or less; provided that the effective maturity of such
Investment does not exceed 15 years.

“Cash Management Obligations” means obligations owed by Holdings, the Borrower
or any Restricted Subsidiary to any Lender or any Affiliate of a Lender in
respect of any overdraft and related liabilities arising from treasury,
depository and cash management services or in connection with any automated
clearing house transfers of funds or purchasing card.

“Casualty Event” means any event that gives rise to the receipt by Holdings, the
Borrower or any Restricted Subsidiary of any insurance proceeds or condemnation
awards, in each case in respect of any equipment, fixed assets or real property
(including any improvements thereon) to replace or repair such equipment, fixed
assets or real property.

 

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“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as subsequently amended.

“CERCLIS” means the Comprehensive Environmental Response, Compensation and
Liability Information System maintained by the U.S. Environmental Protection
Agency.

“Change in Law” means the occurrence, after the date of this Agreement (or with
respect to any Lender or Participant, if later, the date on which such Lender
becomes a Lender or acquires a participation hereunder, as applicable), of any
of the following: (a) the adoption of any rule, regulation, treaty or other law,
(b) any change in any rule, regulation, treaty or other law or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority; provided
that, notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, rules, guidelines or
directives thereunder or issued in connection therewith and (ii) all requests,
rules, guidelines or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States regulatory authorities, in each case
pursuant to Basel III, shall in each case be deemed to be a “Change in Law”,
regardless of the date enacted, adopted or issued.

“Change of Control” means:

(a) for any reason whatsoever, (A) any “person” or “group” (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee
benefit plan of such person and its Subsidiaries, and any person or entity
acting in its capacity as trustee, agent or other fiduciary or administrator of
any such plan), excluding the Permitted Holders, shall become the “beneficial
owner” (as defined in Rules 13(d)-3 and 13(d)-5 under such Act), directly or
indirectly, of more than the greater of (x) thirty-five percent (35%) of the
shares outstanding of Holdings and (y) the percentage of the then outstanding
voting stock of Holdings owned, directly or indirectly, beneficially by the
Permitted Holders, or (B) the board of directors of Holdings shall fail to
consist of a majority of Continuing Directors; or

(b) any “Change of Control” (or any comparable term) in any document pertaining
to any Junior Financing with an aggregate outstanding principal amount in excess
of the Threshold Amount.

“Class” (a) when used with respect to Lenders, refers to whether such Lenders
have a Loan or Commitment with respect to a particular Class of Loans or
Commitments, (b) when used with respect to Commitments, refers to whether such
Commitments are Revolving Credit Commitments, Tranche A Term Commitments,
Tranche B Term Commitments, Incremental Revolving Credit Loans, Incremental
Tranche A Term Loans, Incremental Tranche B Term Loans, Other Revolving
Commitments, Other Trance A Term Commitments and Other Tranche B Term
Commitments and (c) when used with respect to Loans or a Borrowing, refers to
whether such Loans, or the Loans comprising such Borrowing, are Revolving Credit
Loans, Tranche A Term Loans, terms loans made pursuant to Incremental Tranche A
Term Loans, terms

 

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loans made pursuant to Incremental Tranche B Term Loans, Incremental Revolving
Credit Loans, Other Revolving Loans, Other Tranche A Term Loans and Other
Tranche B Term Loans.

“Closing Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 4.01.

“Code” means the U.S. Internal Revenue Code of 1986, as amended, and rules and
regulations related thereto.

“Co-Documentation Agents” means Barclays Capital, the investment banking
division of Barclays Bank PLC, Citigroup Global Markets Inc. and Goldman Sachs
Lending Partners LLC.

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

“Collateral Agent” means JPMorgan Chase Bank, in its capacity as collateral
agent under any of the Loan Documents, or any successor administrative agent.

“Collateral and Guarantee Requirement” means, at any time, the requirement that:

(a) the Administrative Agent shall have received each Collateral Document
required to be delivered pursuant to Section 4.01(a)(iii) on the Closing Date or
pursuant to Section 6.11 at such time, duly executed by each Loan Party thereto;

(b) all Obligations shall have been unconditionally guaranteed (the
“Guarantees”) by Holdings, Direct Holdco and each Restricted Subsidiary that is
a wholly owned Domestic Subsidiary and not an Excluded Subsidiary (each, a
“Guarantor”);

(c) the Obligations and the Guarantees shall have been secured by a
first-priority security interest in (i) all the Equity Interests of the Borrower
and (ii) all Equity Interests of each wholly owned Restricted Subsidiary
directly owned by the Borrower or any Guarantor; provided that pledges of Equity
Interests of each Foreign Subsidiary shall be limited to 65% of the issued and
outstanding Equity Interests of such Foreign Subsidiary at any time;

(d) except to the extent otherwise permitted hereunder or under any Collateral
Document, the Obligations and the Guarantees shall have been secured by a
security interest in, and mortgages on, substantially all tangible and
intangible assets of Holdings, the Borrower and each other Guarantor (including
accounts, inventory, accounts receivable, equipment, investment property,
contract rights, intellectual property, other general intangibles, owned real
property, cash and proceeds of the foregoing), in each case, with the priority
required by the Collateral Documents; provided that security interests in real
property shall be limited to the Mortgaged Properties; provided further that
there shall not be any control agreements relating to the Borrower’s and the
Guarantors’ security accounts or deposit accounts;

(e) none of the Collateral shall be subject to any Liens other than Liens
permitted by Section 7.01; and

 

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(f) the Collateral Agent shall have received (i) counterparts of a Mortgage or
Collateral Assignment, as applicable, with respect to each owned property
described on Schedule 1.01B hereto or required to be delivered pursuant to
Section 6.11 (the “Mortgaged Properties”) duly executed and delivered by the
record owner of such property, (ii) a policy or policies of title insurance
issued by a nationally recognized title insurance company insuring the Lien of
each such Mortgage as a valid Lien on the property described therein, free of
any other Liens except as expressly permitted by Section 7.01, together with
such endorsements, coinsurance and reinsurance as the Administrative Agent may
reasonably request, and (iii) such existing surveys, existing abstracts,
existing appraisals, legal opinions and other documents as the Administrative
Agent may reasonably request with respect to any such Mortgaged Property.

The foregoing definition shall not require the creation or perfection of pledges
of or security interests in, or the obtaining of title insurance or surveys with
respect to, particular assets if and for so long as, in the reasonable judgment
of the Administrative Agent (confirmed in writing by notice to the Borrower),
the cost of creating or perfecting such pledges or security interests in such
assets or obtaining title insurance or surveys in respect of such assets shall
be excessive in view of the benefits to be obtained by the Lenders therefrom.
The Administrative Agent may grant extensions of time for the perfection of
security interests in or the obtaining of title insurance with respect to
particular assets (including extensions beyond the Closing Date for the
perfection of security interests in the assets of the Loan Parties on such date)
where it reasonably determines, in consultation with the Borrower, that
perfection cannot be accomplished without undue effort or expense by the time or
times at which it would otherwise be required by this Agreement or the
Collateral Documents.

Notwithstanding the foregoing provisions of this definition or anything in this
Agreement or any other Loan Document to the contrary, Liens required to be
granted from time to time pursuant to the Collateral and Guarantee Requirement
shall be subject to exceptions and limitations set forth in the Collateral
Documents as in effect on the Closing Date and, to the extent appropriate in the
applicable jurisdiction, as agreed between the Administrative Agent and the
Borrower.

“Collateral Documents” means, collectively, the Security Agreement, the
Intellectual Property Security Agreement, the Mortgages, each of the mortgages,
collateral assignments, Security Agreement Supplements, security agreements,
pledge agreements or other similar agreements delivered to the Administrative
Agent and the Lenders pursuant to Section 6.11 or Section 6.13, the Guaranty and
each of the other agreements, instruments or documents that creates or purports
to create a Lien or Guarantee in favor of the Administrative Agent for the
benefit of the Secured Parties.

“Commitment” means a Term Commitment, a Revolving Credit Commitment, an Other
Revolving Commitment, an Other Tranche A Term Commitment or an Other Tranche B
Term Loan Commitment, as the context may require.

“Committed Loan Notice” means a notice of (a) a Term Borrowing, (b) a Revolving
Credit Borrowing, (c) a conversion of Loans from one Type to the other, or (d) a
continuation of Eurocurrency Rate Loans, pursuant to Section 2.02(a), which, if
in writing, shall be substantially in the form of Exhibit A.

 

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“Compensation Period” has the meaning specified in Section 2.12(c)(ii).

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

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

(a) without duplication and to the extent already deducted (and not added back)
in arriving at such Consolidated Net Income, the sum of the following amounts
for such period:

(i) total interest expense and, to the extent not reflected in such total
interest expense, any losses on hedging obligations or other derivative
instruments entered into for the purpose of hedging interest rate risk, net of
interest income and gains on such hedging obligations, and costs of surety bonds
in connection with financing activities,

(ii) provision for taxes based on income, profits or capital of the Borrower and
the Restricted Subsidiaries, including state, franchise and similar taxes and
foreign withholding taxes paid or accrued during such period,

(iii) depreciation and amortization,

(iv) Non-Cash Charges,

(v) extraordinary losses and unusual or non-recurring charges, severance,
relocation costs,

(vi) restructuring charges or restructuring reserves (including restructuring
costs related to acquisitions after the date hereof and to closure/consolidation
of facilities),

(vii) any deductions attributable to minority interests (excluding dividends and
other distributions paid in cash to the holders of such minority interests),

(viii) the amount of management, monitoring, consulting and advisory fees and
related expenses paid to the Sponsor,

(ix) any costs or expenses incurred by the Borrower or a Restricted Subsidiary
pursuant to any management equity plan or stock option plan or any other
management or employee benefit plan or agreement or any stock subscription or
shareholder agreement, to the extent that such costs or expenses are funded with
cash proceeds contributed to the capital of the Borrower or net cash proceeds of
an issuance of Equity Interests of the Borrower (other than Disqualified Equity
Interests),

(x) professional liability insurance expense,

(xi) the amount of net cost savings projected by the Borrower in good faith to
be realized as a result of specified actions taken during such period
(calculated on a pro forma basis as though such cost savings had been realized
on the first day of such

 

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period), net of the amount of actual benefits realized during such period from
such actions, provided that (A) such cost savings are reasonably identifiable
and factually supportable, (B) such actions are taken within 12 months after the
Closing Date, (C) no cost savings shall be added pursuant to this clause (xi) to
the extent duplicative of any expenses or charges relating to such cost savings
that are included in clause (vi) above with respect to such period and (D) the
aggregate amount of cost savings added pursuant to this clause (xi) shall not
exceed $10,000,000 for any period consisting of four consecutive quarters, and

(xii) compensation expense attributable to positive investment income during
such period with respect to funded deferred compensation account balances, less

(b) without duplication and to the extent included in arriving at such
Consolidated Net Income, the sum of the following amounts for such period:

(i) extraordinary gains and unusual or non-recurring income or gains,

(ii) non-cash gains (excluding any non-cash gain to the extent it represents the
reversal of an accrual or reserve for a potential cash item that reduced
Consolidated EBITDA in any prior period),

(iii) gains on asset sales (other than asset sales in the ordinary course of
business),

(iv) any net after-tax income from the early extinguishment of Indebtedness or
hedging obligations or other derivative instruments,

(v) all income from investments recorded using the equity method to the extent
that the declaration or payment of dividends or other distributions in cash by
the relevant entity is not at the time permitted by Law or any agreement or
instrument applicable to the relevant entity,

(vi) the reduction in compensation expense attributable to investment loss
during such period with respect to funded deferred compensation account
balances, and

(vii) (A) claims paid by the Borrower or any Insurance Subsidiary,
administrative expenses paid to any Insurance Subsidiary and external
professional liability insurance premiums, fronting fees, related taxes, related
broker commissions and related claims management fees (net of physician
contributions) and (B) the amount of the increase incurred in such period of
required cash collateral or other security in favor of a fronting medical
malpractice insurance carrier,

in each case, as determined on a consolidated basis for the Borrower and the
Restricted Subsidiaries in accordance with GAAP; provided that, to the extent
included in Consolidated Net Income,

(i) there shall be excluded in determining Consolidated EBITDA for any period
any adjustments resulting from the application of Statement of Financial
Accounting Standards No. 133, and

 

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(ii) there shall be included in determining Consolidated EBITDA for any period,
without duplication, (A) the Acquired EBITDA of any Person, property, business
or asset acquired by the Borrower or any Restricted Subsidiary during such
period (but not the Acquired EBITDA of any related Person, property, business or
assets to the extent not so acquired), to the extent not subsequently sold,
transferred or otherwise disposed of by the Borrower or such Restricted
Subsidiary (each such Person, property, business or asset acquired and not
subsequently so disposed of, an “Acquired Entity or Business”), based on the
actual Acquired EBITDA of such Acquired Entity or Business for such period
(including the portion thereof occurring prior to such acquisition), (B) for the
purposes of the definition of the term “Permitted Acquisition” and Section 7.11,
an adjustment in respect of each Acquired Entity or Business equal to the amount
of the Pro Forma Adjustment with respect to such Acquired Entity or Business for
such period (including the portion thereof occurring prior to such acquisition)
as specified in a certificate executed by a Responsible Officer of the Borrower
and delivered to the Lenders and the Administrative Agent and (C) for purposes
of determining the Total Leverage Ratio, First Lien Leverage Ratio or First Lien
Net Leverage Ratio only, there shall be excluded in determining Consolidated
EBITDA for any period the Disposed EBITDA of any Person, property, business or
asset sold, transferred or otherwise disposed of, closed or classified as
discontinued operations by the Borrower or any Restricted Subsidiary during such
period (each such Person, property, business or asset so sold or disposed of, a
“Sold Entity or Business”), based on the actual Disposed EBITDA of such Sold
Entity or Business for such period (including the portion thereof occurring
prior to such sale, transfer or disposition).

In addition, Consolidated EBITDA shall be calculated without giving effect to
(a) any gain or loss recognized in determining Consolidated Net Income for such
period in respect of post-retirement benefits as a result of the application of
Statement of Financial Accounting Standards No. 106 and (b) any gain or loss
recognized in determining Consolidated Net Income for such period resulting from
the payment of earn-out obligations permitted under Section 7.02. For the
purpose of the definition of Consolidated EBITDA, “Non-Cash Charges” means
(a) losses on asset sales, disposals or abandonments, (b) any impairment charge
or asset write-off related to intangible assets, long-lived assets, and
investments in debt and equity securities pursuant to GAAP, (c) all losses from
investments recorded using the equity method, (d) stock-based awards
compensation expense, and (e) other non-cash charges (provided that if any
non-cash charges referred to in this clause (e) represent an accrual or reserve
for potential cash items in any future period, the cash payment in respect
thereof in such future period shall be subtracted from Consolidated EBITDA to
such extent, and excluding amortization of a prepaid cash item that was paid in
a prior period), in each case excluding any non-cash charge in respect of an
item that was included in Consolidated Net Income in a prior period.

“Consolidated Net Income” means, for any period, the net income (loss) of
Holdings, the Borrower and the Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, excluding, without
duplication, (a) extraordinary items for such period, (b) the cumulative effect
of a change in accounting principles during such period to the extent included
in Consolidated Net Income, (c) in the case of any period that includes a period
ending prior to or during the fiscal year ending December 31, 2011, Transaction
Expenses, (d) any fees and expenses incurred during such period, or any

 

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amortization thereof for such period, in connection with any acquisition,
investment, asset disposition, issuance or repayment of debt, issuance of equity
securities, refinancing transaction or amendment or other modification of any
debt instrument (in each case, including any such transaction consummated prior
to the Closing Date and any such transaction undertaken but not completed) and
any charges or non-recurring merger costs incurred during such period as a
result of any such transaction, (e) any income (loss) for such period
attributable to the early extinguishment of Indebtedness and (f) accruals and
reserves that are established within twelve months after the Closing Date that
are so required to be established as a result of the Transaction in accordance
with GAAP. There shall be excluded from Consolidated Net Income for any period
the purchase accounting effects of adjustments to property and equipment, other
intangible assets, deferred revenue and debt line items required or permitted by
GAAP and related authoritative pronouncements (including the effects of such
adjustments pushed down to Holdings, the Borrower and the Restricted
Subsidiaries), as a result of any acquisition consummated prior to the Closing
Date, any Permitted Acquisitions, or the amortization or write-off of any
amounts thereof.

“Consolidated Total Debt” means, as of any date of determination, the aggregate
principal amount of Indebtedness of Holdings, the Borrower and the Restricted
Subsidiaries outstanding on such date, determined on a consolidated basis in
accordance with GAAP (but excluding the effects of any discounting of
Indebtedness resulting from the application of purchase accounting in connection
with any Permitted Acquisition), consisting of Indebtedness for borrowed money,
obligations in respect of Capitalized Leases, Disqualified Equity Interests,
debt obligations evidenced by promissory notes or similar instruments, minus
(b) the aggregate amount of cash and Cash Equivalents of Holdings, the Borrower
and the Loan Parties (in each case, free and clear of all Liens, other than
nonconsensual Liens permitted by Section 7.01 and excluding the aggregate amount
of Net Cash Proceeds received by Holdings and/or the Borrower pursuant to
Section 8.05 during the preceding four fiscal quarters that has not been used to
permanently repay Indebtedness) included in the consolidated balance sheet of
Holdings, the Borrower and the Restricted Subsidiaries in accordance with GAAP
and all obligations to pay the deferred purchase price of property or services
(other than (i) trade accounts payable in the ordinary course of business and
(ii) any earn-out obligation until (A) such obligation becomes a liability on
the consolidated balance sheet of Holdings, the Borrower and the Restricted
Subsidiaries in accordance with GAAP and (B) such obligation is earned by and
payable to the applicable seller under the terms and conditions of the
underlying agreement with such seller).

“Consolidated Working Capital” means, at any date, the excess of (a) the sum of
all amounts (other than cash and Cash Equivalents) that would, in conformity
with GAAP, be set forth opposite the caption “total current assets” (or any like
caption) on a consolidated balance sheet of Holdings, the Borrower and the
Restricted Subsidiaries at such date over (b) the sum of all amounts that would,
in conformity with GAAP, be set forth opposite the caption “total current
liabilities” (or any like caption) on a consolidated balance sheet of Holdings,
the Borrower and the Restricted Subsidiaries on such date, including deferred
revenue but excluding, without duplication, (i) the current portion of any
Funded Debt, (ii) all Indebtedness consisting of Loans and L/C Obligations to
the extent otherwise included therein, (iii) the current portion of interest and
(iv) the current portion of current and deferred income taxes.

 

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“Continuing Directors” means the directors of Holdings on the Closing Date, and
each other director, if such other directors’ nomination for election to the
board of directors of Holdings is recommended by a majority of the then
Continuing Directors or such other director receives the vote of the Permitted
Holders in his or her election by the stockholders of Holdings.

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

“Control” has the meaning specified in the definition of “Affiliate.”

“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C
Credit Extension.

“Debt Issuance” means the issuance by any Person and its Subsidiaries of any
Indebtedness for borrowed money.

“Debt Prepayment” means the prepayment by the Borrower on the Closing Date of
any Indebtedness outstanding under the Existing Credit Agreement.

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

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

“Default Rate” means an interest rate equal to (a) the Base Rate plus (b) the
Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2.0% per annum;
provided that with respect to a Eurocurrency Rate Loan, the Default Rate shall
be an interest rate equal to the interest rate (including any Applicable Rate)
otherwise applicable to such Loan plus 2.0% per annum, in each case, to the
fullest extent permitted by applicable Laws.

“Defaulting Lender” means any Lender that (a) has failed to fund any portion of
the Term Loans, Revolving Credit Loans, participations in L/C Obligations or
participations in Swing Line Loans required to be funded by it hereunder within
one (1) Business Day of the date required to be funded by it hereunder, unless
the subject of a good faith dispute or subsequently cured, (b) has otherwise
failed to pay over to the Administrative Agent or any other Lender any other
amount required to be paid by it hereunder within two (2) Business Days of the
date when due, unless the subject of a good faith dispute, (c) has notified the
Borrower or the Administrative Agent that it does not intend to comply with its
funding obligations or has made a public statement or provided any written
notification to any Person to that effect with respect to its funding
obligations hereunder or under other agreements generally in which it commits to
extend credit, unless the subject of a good faith dispute, (d) has failed,
within three Business Days after request by the Administrative Agent (whether
acting on its own behalf or at the

 

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reasonable request of the Borrower (it being understood that the Administrative
Agent shall comply with any such reasonable request)), to confirm in a manner
satisfactory to the Administrative Agent and the Borrower that it will comply
with its funding obligations, unless the subject of a good faith dispute
(provided that such Lender shall cease to be a Defaulting Lender pursuant to
this clause (d) upon receipt of such confirmation by the Administrative Agent
and the Borrower), or (e) has, or has a direct or indirect parent company that
has, (i) become the subject of a proceeding under any Debtor Relief Law,
(ii) had a receiver, conservator, trustee, administrator, assignee for the
benefit of creditors or similar Person charged with reorganization or
liquidation of its business or a custodian appointed for it, or (iii) taken any
action in furtherance of, or indicated its consent to, approval of or
acquiescence in any such proceeding or appointment; provided that a Lender shall
not be a Defaulting Lender solely by virtue of the ownership or acquisition of
any equity interest in that Lender or any direct or indirect parent company
thereof by a Governmental Authority.

“Defaulting Lender Fronting Exposure” means, at any time there is a Defaulting
Lender, with respect to an L/C Issuer, such Defaulting Lender’s Pro Rata Share
of the outstanding Letter of Credit obligations other than Letter of Credit
obligations as to which such Defaulting Lender’s participation obligation has
been reallocated to other Lenders or Cash Collateralized in accordance with the
terms hereof.

“Designated Non-Cash Consideration” means the fair market value of non-cash
consideration received by the Borrower or a Restricted Subsidiary in connection
with a Disposition pursuant to Section 7.05(k) that is designated as Designated
Non-Cash Consideration pursuant to a certificate of a Responsible Officer,
setting forth the basis of such valuation (which amount will be reduced by the
fair market value of the portion of the non-cash consideration converted to cash
within 180 days following the consummation of the applicable Disposition).

“Designated Obligations” means all obligations of the Borrower with respect to
(a) principal of and interest on the Loans, (b) Unreimbursed Amounts and
interest thereon and (c) accrued and unpaid fees under the Loan Documents.

“Direct Holdco” means Team Finance LLC, a Delaware limited liability company and
the direct parent of the Borrower.

“Direct Holdco Guaranty” means the Direct Holdco Guaranty made by Direct Holdco
in favor of the Administrative Agent on behalf of the Secured Parties,
substantially in the form of Exhibit F.

“Disposed EBITDA” means, with respect to any Sold Entity or Business for any
period, the amount for such period of Consolidated EBITDA of such Sold Entity or
Business (determined as if references to Holdings, the Borrower and the
Restricted Subsidiaries in the definition of Consolidated EBITDA were references
to such Sold Entity or Business and its Subsidiaries), all as determined on a
consolidated basis for such Sold Entity or Business.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction and any sale or
issuance of Equity Interests) of any property by any Person, including any sale,
assignment, transfer or other

 

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disposal, with or without recourse, of any notes or accounts receivable or any
rights and claims associated therewith; provided that “Disposition” and
“Dispose” shall not be deemed to include any issuance by Holdings of any of its
Equity Interests to another Person.

“Disqualified Equity Interests” means any Equity Interest which, by its terms
(or by the terms of any security or other Equity Interests into which it is
convertible or for which it is exchangeable), or upon the happening of any event
or condition (a) matures or is mandatorily redeemable (other than solely for
Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise
(except as a result of a change of control or asset sale so long as any rights
of the holders thereof upon the occurrence of a change of control or asset sale
event shall be subject to the prior repayment in full of the Loans and all other
Obligations that are accrued and payable and the termination of the
Commitments), (b) is redeemable at the option of the holder thereof (other than
solely for Qualified Equity Interests), in whole or in part, (c) provides for
the scheduled payments of dividends in cash, or (d) is or becomes convertible
into or exchangeable for Indebtedness or any other Equity Interests that would
constitute Disqualified Equity Interests, in each case, prior to the date that
is ninety-one (91) days after the later of (x) the Maturity Date of the Tranche
B Term Loans and (y) if such Equity Interests are issued after the Borrower has
obtained Incremental Term Loans or while any commitments to make Incremental
Term Loans remain in effect, the maturity date of such Incremental Term Loans.

“Domestic Subsidiary” means any Subsidiary that is organized under the Laws of
the United States, any state thereof or the District of Columbia.

“Eligible Assignee” means any Assignee permitted by and consented to in
accordance with Section 10.07(b).

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

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities) directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials,
(c) exposure to any Hazardous Materials, (d) the release or threatened release
of any Hazardous Materials into the environment or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.

“Environmental Permit” means any permit, approval, identification number,
license or other authorization required under any Environmental Law.

 

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“Equity Interests” means, with respect to any Person, all of the shares,
interests, rights, participations or other equivalents (however designated) of
capital stock of (or other ownership or profit interests or units in) such
Person and all of the warrants, options or other rights for the purchase,
acquisition or exchange from such Person of any of the foregoing (including
through convertible securities).

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

“ERISA Affiliate” means any trade or business (whether or not incorporated) that
is under common control with any Loan Party within the meaning of Section 414 of
the Code or Section 4001 of ERISA.

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
failure by any Pension Plan to meet the minimum funding standards within the
meaning of Section 412 of the Code or Section 302 of ERISA applicable to such
Pension Plan, in each case, whether or not waived; (c) the filing pursuant to
Section 412(c) of the Code or Section 302(c) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Pension Plan; (d) a
withdrawal by any Loan Party or any ERISA Affiliate from a Pension Plan subject
to Section 4063 of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of
operations that is treated as such a withdrawal under Section 4062(e) of ERISA;
(e) the receipt by any Loan Party or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA or in “endangered” or “critical” status
(within the meaning of Section 432 of the Code or Section 305 of ERISA); (f) the
occurrence of a non-exempt “prohibited transaction” with respect to which a Loan
Party or any ERISA Affiliate is a “disqualified person” (within the meaning of
Section 4975 of the Code) or with respect to which a Loan Party or any ERISA
Affiliate could otherwise be liable; (g) a determination that any Pension Plan
is, or is expected to be, in “at-risk” status (within the meaning of
Section 303(i)(4) of ERISA or Section 430(i)(4) of the Code); (h) the filing of
a notice of intent to terminate, the treatment of a Plan amendment as a
termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;
(i) an event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (j) the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon any Loan Party or any ERISA Affiliate.

“Eurocurrency Rate” means, for any Interest Period with respect to any
Eurocurrency Rate Loan, Adjusted LIBOR at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period, as the rate
for U.S. dollar deposits with a maturity comparable to such Interest Period.

“Eurocurrency Rate Loan” means a Loan that bears interest at a rate based on the
Eurocurrency Rate.

“Event of Default” has the meaning specified in Section 8.01.

 

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“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Excluded Subsidiary” means (a) any Subsidiary that is not a wholly owned
Subsidiary for so long as such Subsidiary is not wholly owned, (b) any Insurance
Subsidiary, (c) any Immaterial Subsidiary, (d) any Subsidiary that is prohibited
by applicable Law from guaranteeing the Obligations, and (e) any other
Subsidiary with respect to which, in the reasonable judgment of the
Administrative Agent (confirmed in writing by notice to the Borrower), the cost
or other consequences (including any adverse tax consequences) of providing a
Guarantee shall be excessive in view of the benefits to be obtained by the
Lenders therefrom.

“Existing Credit Agreement” means the Credit Agreement dated as of November 23,
2005, by and among Direct Holdco, Holdings, the lenders party thereto, and
JPMorgan Chase Bank, as administrative agent, as amended from time to time.

“Facility” means the Tranche A Term Facility, the Tranche B Term Facility, the
Revolving Credit Facility, the Swing Line Sublimit or the Letter of Credit
Sublimit, as the context may require.

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

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate (rounded upward,
if necessary, to a whole multiple of 1/100 of 1%) charged to JPMorgan Chase Bank
on such day on such transactions as determined by the Administrative Agent.

“First Lien Leverage Ratio” means, with respect to any Test Period, the ratio of
(a) Consolidated Total Debt (without giving effect to clause (b) of the
definition thereof) that is secured by a first lien on the Collateral as of the
last day of such Test Period to (b) Consolidated EBITDA as of the last day of
such Test Period

“First Lien Net Leverage Ratio” means, with respect to any Test Period, the
ratio of (a) Consolidated Total Debt that is secured by a first lien on the
Collateral as of the last day of such Test Period to (b) Consolidated EBITDA as
of the last day of such Test Period.

“Foreign Lender” has the meaning specified in Section 10.15(a)(i).

“Foreign Subsidiary” means any direct or indirect Restricted Subsidiary of
Holdings or the Borrower, as applicable, which is not a Domestic Subsidiary.

 

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

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

“Funded Debt” means all Indebtedness of the Borrower and the Restricted
Subsidiaries for borrowed money that matures more than one year from the date of
its creation or matures within one year from such date that is renewable or
extendable, at the option of such Person, to a date more than one year from such
date or arises under a revolving credit or similar agreement that obligates the
lender or lenders to extend credit during a period of more than one year from
such date, including Indebtedness in respect of the Loans.

“GAAP” means generally accepted accounting principles in the United States of
America, as in effect from time to time; provided, however, that if the Borrower
notifies the Administrative Agent that the Borrower requests an amendment to any
provision hereof to eliminate the effect of any change occurring after the
Closing Date in GAAP or in the application thereof on the operation of such
provision (or if the Administrative Agent notifies the Borrower that the
Required Lenders request an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change in
GAAP or in the application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government, including
Governmental Programs.

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

“Granting Lender” has the meaning specified in Section 10.07(h).

“Guarantee” means, as to any Person, without duplication, (a) any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other monetary obligation payable or
performable by another Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other monetary obligation, (ii) to purchase or
lease property, securities or services for the purpose of assuring the obligee
in respect of such Indebtedness or other monetary obligation of the payment or
performance of such Indebtedness or other monetary obligation, (iii) to maintain
working capital, equity capital or any other financial statement condition or
liquidity or level of income or cash flow of the primary obligor

 

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so as to enable the primary obligor to pay such Indebtedness or other monetary
obligation, or (iv) entered into for the purpose of assuring in any other manner
the obligee in respect of such Indebtedness or other monetary obligation of the
payment or performance thereof or to protect such obligee against loss in
respect thereof (in whole or in part), or (b) any Lien on any assets of such
Person securing any Indebtedness or other monetary obligation of any other
Person, whether or not such Indebtedness or other monetary obligation is assumed
by such Person (or any right, contingent or otherwise, of any holder of such
Indebtedness to obtain any such Lien); provided that the term “Guarantee” shall
not include endorsements for collection or deposit, in either case in the
ordinary course of business, or customary and reasonable indemnity obligations
in effect on the Closing Date or entered into in connection with any acquisition
or disposition of assets permitted under this Agreement (other than such
obligations with respect to Indebtedness). The amount of any Guarantee shall be
deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good
faith. The term “Guarantee” as a verb has a corresponding meaning.

“Guarantors” has the meaning set forth in the definition of “Collateral and
Guarantee Requirement”.

“Guaranty” means, collectively, the Holdings Guaranty, the Direct Holdco
Guaranty and the Subsidiary Guaranty.

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

“Hedge Bank” means any Person that is a Lender or an Affiliate of a Lender at
the time it enters into a Secured Hedge Agreement, in its capacity as a party
thereto.

“Holdings” has the meaning set forth in the introductory paragraph to this
Agreement.

“Holdings Guaranty” means the Holdings Guaranty made by Holdings in favor of the
Administrative Agent on behalf of the Secured Parties, substantially in the form
of Exhibit F.

“Honor Date” has the meaning specified in Section 2.03(c)(i).

“Immaterial Subsidiary” means such Subsidiary of the Borrower that (a) for the
most recent fiscal quarter for which financial statements of the Borrower have
been delivered to the Administrative Agent pursuant to Section 6.01(b), had less
than $100,000 of revenues and (b) as of the end of such fiscal quarter, had less
than $500,000 of assets, in each case as shown on the consolidated financial
statements of the Borrower for such fiscal quarter; provided that, as of the
Closing Date, each entity listed as an “Immaterial Subsidiary” on Schedule 1.01C
shall be an Immaterial Subsidiary.

 

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“Incremental Amendment” has the meaning set forth in Section 2.14.

“Incremental Facility Closing Date” has the meaning set forth in Section 2.14.

“Incremental Revolving Credit Loans” has the meaning set forth in Section 2.14.

“Incremental Revolving Facilities” shall have the meaning set forth in
Section 2.14.

“Incremental Tranche A Term Loans” has the meaning set forth in Section 2.14.

“Incremental Tranche B Term Loans” has the meaning set forth in Section 2.14.

“Incremental Term Loans” has the meaning set forth in Section 2.14.

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

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

(b) the maximum amount (after giving effect to any prior drawings or reductions
which may have been reimbursed) of all letters of credit (including standby and
commercial), bankers’ acceptances, bank guaranties, surety bonds, performance
bonds and similar instruments issued or created by or for the account of such
Person;

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

(d) all obligations of such Person to pay the deferred purchase price of
property or services (other than (i) trade accounts payable in the ordinary
course of business that are due within six months of the incurrence thereof and
(ii) earn-out obligations in an aggregate amount not in excess of $100,000,000
at any time outstanding incurred in connection with any acquisition permitted
under this Agreement);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements and mortgage,
industrial revenue bond, industrial development bond and similar financings),
whether or not such indebtedness shall have been assumed by such Person or is
limited in recourse;

(f) all Attributable Indebtedness;

(g) all obligations of such Person in respect of Disqualified Equity Interests;
and

 

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

For all purposes hereof, the Indebtedness of any Person shall (A) include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, except to the extent such Person’s
liability for such Indebtedness is otherwise limited and only to the extent such
Indebtedness would be included in the calculation of Consolidated Total Debt and
(B) in the case of Holdings and its Subsidiaries, exclude all intercompany
Indebtedness having a term not exceeding 364 days (inclusive of any roll-over or
extensions of terms) and made in the ordinary of business consistent with past
practice. The amount of any net obligation under any Swap Contract on any date
shall be deemed to be the Swap Termination Value thereof as of such date. The
amount of Indebtedness of any Person for purposes of clause (e) shall be deemed
to be equal to the lesser of (i) the aggregate unpaid amount of such
Indebtedness and (ii) the fair market value of the property encumbered thereby
as determined by such Person in good faith.

“Indemnified Liabilities” has the meaning set forth in Section 10.05.

“Indemnitees” has the meaning set forth in Section 10.05.

“Information” has the meaning specified in Section 10.08.

“Insurance Subsidiary” means any Subsidiary of the Borrower engaged solely in
the medical malpractice insurance business, workers compensation and such other
insurance business as may be approved by the Administrative Agent, for the
underwriting of insurance policies for the Borrower and its Subsidiaries and
each Related Professional Corporation and each of such Loan Party’s or Related
Professional Corporation’s respective employees, officers, directors or
contractors who provides professional medical services to patients; provided
that in the event that less than 100% of the Equity Interests of such Insurance
Subsidiary is pledged to the Administrative Agent, such Insurance Subsidiary
shall be wholly owned by a special purpose domestic wholly owned Subsidiary of
the Borrower organized solely to hold such Equity Interests.

“Intellectual Property Security Agreement” means the Intellectual Property
Security Agreement, substantially in the form attached as Exhibit J.

“Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan,
the last day of each Interest Period applicable to such Loan and the Maturity
Date of the Facility under which such Loan was made; provided that if any
Interest Period for a Eurocurrency Rate Loan exceeds three months, the
respective dates that fall every three months after the beginning of such
Interest Period shall also be Interest Payment Dates; and (b) as to any Base
Rate Loan (including a Swing Line Loan), the last Business Day of each March,
June, September and December and the Maturity Date of the Facility under which
such Loan was made.

“Interest Period” means, as to each Eurocurrency Rate Loan, the period
commencing on the date such Eurocurrency Rate Loan is disbursed or converted to
or continued as a Eurocurrency Rate Loan and ending on the date one, two, three
or six months thereafter, or to the extent available by each Lender of such
Eurocurrency Rate Loan, nine or twelve months or

 

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less than one month thereafter, as selected by the Borrower in its Committed
Loan Notice; provided that:

(a) any Interest Period that would otherwise end on a day that is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case such Interest Period shall
end on the next preceding Business Day;

(b) any Interest Period that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last Business Day of
the calendar month at the end of such Interest Period; and

(c) no Interest Period shall extend beyond the applicable Maturity Date of the
Facility under which such Loan was made.

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of Equity Interests or debt or other securities of another Person,
(b) a loan, advance or capital contribution to, Guarantee or assumption of
Indebtedness of, or purchase or other acquisition of any other debt or equity
participation or interest in, another Person, including any partnership or joint
venture interest in such other Person (excluding, in the case of Holdings and
its Subsidiaries, intercompany loans, advances, or Indebtedness having a term
not exceeding 364 days (inclusive of any roll-over or extensions of terms) and
made in the ordinary course of business consistent with past practice) or
(c) the purchase or other acquisition (in one transaction or a series of
transactions) of all or substantially all of the property and assets or business
of another Person or assets constituting a business unit, line of business or
division of such Person. For purposes of covenant compliance, the amount of any
Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.

“IP Rights” has the meaning set forth in Section 5.15.

“JPMorgan Chase Bank” means JPMorgan Chase Bank, N.A. and its successors.

“Joint Bookrunners” means J.P. Morgan Securities LLC, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Barclays Capital, the investment banking division
of Barclays Bank PLC, Citigroup Global Markets Inc. and Goldman Sachs Lending
Partners LLC.

“Junior Financing” has the meaning specified in Section 7.13.

“Junior Financing Documentation” means any documentation governing any Junior
Financing.

“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof,

 

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and all applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

“L/C Advance” means, with respect to each Revolving Credit Lender, such Lender’s
funding of its participation in any L/C Borrowing in accordance with its Pro
Rata Share.

“L/C Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Revolving Credit Borrowing.

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the renewal or increase of
the amount thereof.

“L/C Issuer” means JPMorgan Chase Bank and any other Lender that becomes an L/C
Issuer in accordance with Section 2.03(k) or 10.07(j), in each case, in its
capacity as an issuer of Letters of Credit hereunder, or any successor issuer of
Letters of Credit hereunder.

“L/C Obligations” means, as at any date of determination, the aggregate undrawn
amount of all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings.

“Lender” has the meaning specified in the introductory paragraph to this
Agreement and, as the context requires, includes any L/C Issuers and the Swing
Line Lender, and their respective successors and assigns as permitted hereunder,
each of which is referred to herein as a “Lender”.

“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.

“Letter of Credit” means any letter of credit issued hereunder. A Letter of
Credit may be a commercial letter of credit or a standby letter of credit.

“Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the relevant L/C Issuer.

“Letter of Credit Expiration Date” means the earlier of (a) twelve (12) months
after the date of issuance of such Letter of Credit and (b) the day that is five
(5) Business Days prior to the scheduled Maturity Date then in effect for the
Revolving Credit Facility (or, if such day is not a Business Day, the next
preceding Business Day).

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, any easement, right of way or other

 

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encumbrance on title to real property, and any Capitalized Lease having
substantially the same economic effect as any of the foregoing).

“Loan” means an extension of credit by a Lender to the Borrower under Article 2
in the form of a Tranche A Term Loan, a Tranche B Term Loan, a Revolving Credit
Loan or a Swing Line Loan.

“Loan Documents” means, collectively, (i) this Agreement, (ii) the Notes,
(iii) the Guaranty, (iv) the Collateral Documents and (v) each Letter of Credit
Application.

“Loan Modification Agreement” means a Loan Modification Agreement, in form and
substance reasonably satisfactory to the Administrative Agent, among Holdings,
the Borrower, the Administrative Agent and one or more Accepting Lenders,
effecting one or more Permitted Amendments and such other amendments hereto and
to the other Loan Documents as are contemplated by Section 2.15.

“Loan Modification Offer” has the meaning given to such term in Section 2.15.

“Loan Parties” means, collectively, the Borrower and each Guarantor.

“Management Stockholders” means the members of management of the Borrower or its
Subsidiaries who are investors in Holdings or any direct or indirect parent
thereof.

“Management/Services Agreement” means a management/services agreement
substantially in the form provided to the Administrative Agent prior to the date
hereof.

“Master Agreement” has the meaning specified in the definition of “Swap
Contract.”

“Material Adverse Effect” means (a) a material adverse effect on the business,
operations, assets, liabilities (actual or contingent) or financial condition of
Holdings, the Borrower and their Subsidiaries, taken as a whole, (b) a material
adverse effect on the ability of the Borrower or the Loan Parties (taken as a
whole) to perform their respective payment obligations under any Loan Document
to which the Borrower or any of the Loan Parties is a party or (c) a material
adverse effect on the rights and remedies of the Lenders under any Loan
Document.

“Maturity Date” means (a) with respect to the Revolving Credit Facility,
June 29, 2016 (or with respect to a Revolving Credit Lender that has extended
the maturity date of its Revolving Credit Commitment pursuant to Section 2.15,
the extended maturity date set forth in the Loan Modification Agreement),
(b) with respect to the Tranche A Term Facility, June 29, 2016 (or with respect
to a Tranche A Term Lender that has extended the maturity date of its Tranche A
Term Loans pursuant to Section 2.15, the extended maturity date set forth in the
Loan Modification Agreement), and (c) with respect to the Tranche B Term
Facility, June 29, 2018 (or with respect to a Tranche B Term Lender that has
extended the maturity date of its Tranche B Term Loans pursuant to Section 2.15,
the extended maturity date set forth in the Loan Modification Agreement).

 

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“Maximum Rate” has the meaning specified in Section 10.10.

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

“MNPI” means material information concerning Holdings, the Borrower and the
other Subsidiaries and their securities that has not been disseminated in a
manner making it available to investors generally, within the meaning of
Regulation FD under the Securities Act and the Exchange Act.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

“Mortgage” means, collectively, the deeds of trust, trust deeds, hypothecs and
mortgages made by the Loan Parties in favor or for the benefit of the
Administrative Agent on behalf of the Lenders substantially in the form of
Exhibit H (with such changes as may be customary to account for local Law
matters), and any other mortgages executed and delivered pursuant to
Section 6.11.

“Mortgage Policies” has the meaning specified in Section 6.13(b)(ii).

“Mortgaged Properties” has the meaning specified in paragraph (g) of the
definition of Collateral and Guarantee Requirement.

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

“Net Cash Proceeds” means:

(a) with respect to the Disposition of any asset by Holdings, the Borrower or
any Restricted Subsidiary or any Casualty Event, the excess, if any, of (i) the
sum of cash and Cash Equivalents received in connection with such Disposition or
Casualty Event (including any cash or Cash Equivalents received by way of
deferred payment pursuant to, or by monetization of, a note receivable or
otherwise, but only as and when so received and, with respect to any Casualty
Event, any insurance proceeds or condemnation awards in respect of such Casualty
Event actually received by or paid to or for the account of Holdings, the
Borrower or any Restricted Subsidiary) over (ii) the sum of (A) the principal
amount, premium or penalty, if any, interest and other amounts on any
Indebtedness that is secured by the asset subject to such Disposition or
Casualty Event and that is required to be repaid (and is timely repaid) in
connection with such Disposition or Casualty Event (other than Indebtedness
under the Loan Documents), (B) the out-of-pocket expenses (including attorneys’
fees, investment banking fees, survey costs, title insurance premiums, and
related search and recording charges, transfer taxes, deed or mortgage recording
taxes, other customary expenses and brokerage, consultant and other customary
fees) actually incurred by Holdings, the Borrower or such Restricted Subsidiary
in connection with such Disposition or Casualty Event, (C) taxes paid or

 

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reasonably estimated to be actually payable in connection therewith, and (D) any
reserve for adjustment in respect of (x) the sale price of such asset or assets
established in accordance with GAAP and (y) any liabilities associated with such
asset or assets and retained by Holdings, the Borrower or any Restricted
Subsidiary after such sale or other disposition thereof, including pension and
other post-employment benefit liabilities and liabilities related to
environmental matters or against any indemnification obligations associated with
such transaction and it being understood that “Net Cash Proceeds” shall include
any cash or Cash Equivalents (i) received upon the Disposition of any non-cash
consideration received by Holdings, the Borrower or any Restricted Subsidiary in
any such Disposition and (ii) upon the reversal (without the satisfaction of any
applicable liabilities in cash in a corresponding amount) of any reserve
described in clause (D) of the preceding sentence or, if such liabilities have
not been satisfied in cash and such reserve is not reversed within three hundred
and sixty-five (365) days after such Disposition or Casualty Event, the amount
of such reserve; provided that (x) no net cash proceeds calculated in accordance
with the foregoing realized in a single transaction or series of related
transactions shall constitute Net Cash Proceeds unless such net cash proceeds
shall exceed $2,500,000 and (y) no such net cash proceeds shall constitute Net
Cash Proceeds under this clause (a) in any fiscal year until the aggregate
amount of all such net cash proceeds in such fiscal year shall exceed
$10,000,000 (and thereafter only net cash proceeds in excess of such amount
shall constitute Net Cash Proceeds under this clause (a)); and

(b) with respect to the incurrence or issuance of any Indebtedness by Holdings,
the Borrower or any Restricted Subsidiary or any Permitted Equity Issuance, the
excess, if any, of (i) the sum of the cash received in connection with such
incurrence or issuance over (ii) the investment banking fees, underwriting
discounts, commissions, costs and other out-of-pocket expenses and other
customary expenses, incurred by Holdings, the Borrower or such Restricted
Subsidiary in connection with such incurrence or issuance.

“Non-Cash Charges” has the meaning set forth in the definition of the term
“Consolidated EBITDA”.

“Non-Consenting Lenders” has the meaning specified in Section 3.07(d).

“Nonrenewal Notice Date” has the meaning specified in Section 2.03(b)(iii).

“Note” means a Term Note or a Revolving Credit Note, as the context may require.

“Notice of Intent to Cure” has the meaning specified in Section 6.02(b).

“Not Otherwise Applied” means, with reference to any amount of Net Cash Proceeds
of any transaction or event, that such amount (a) was not required to be applied
to prepay the Loans pursuant to Section 2.05(b), and (b) was not previously
applied in determining the permissibility of a transaction under the Loan
Documents where such permissibility was (or may have been or concurrently will
be) contingent on receipt of such amount or utilization of

 

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such amount for a specified purpose. The Borrower shall promptly notify the
Administrative Agent of any application of such amount as contemplated by
(b) above.

“NPL” means the National Priorities List under CERCLA.

“Obligations” means all (x) advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party and its Subsidiaries arising under any
Loan Document or otherwise with respect to any Loan or Letter of Credit, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against any
Loan Party or Subsidiary of any proceeding under any Debtor Relief Laws naming
such Person as the debtor in such proceeding, regardless of whether such
interest and fees are allowed claims in such proceeding, (y) obligations of any
Loan Party and its Subsidiaries arising under any Secured Hedge Agreement and
(z) Cash Management Obligations. Without limiting the generality of the
foregoing, the Obligations of the Loan Parties under the Loan Documents (and of
their Subsidiaries to the extent they have obligations under the Loan Documents)
include (a) the obligation (including guarantee obligations) to pay principal,
interest, Letter of Credit commissions, reimbursement obligations, charges,
expenses, fees, Attorney Costs, indemnities and other amounts payable by any
Loan Party or its Subsidiaries under any Loan Document and (b) the obligation of
any Loan Party or any of its Subsidiaries to reimburse any amount in respect of
any of the foregoing that any Lender, in its sole discretion, may elect to pay
or advance on behalf of such Loan Party or such Subsidiary.

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

“Other Revolving Commitments” means one or more Classes of revolving credit
commitments hereunder or extended Revolving Credit Commitments that result from
a Loan Modification Agreement.

“Other Revolving Loans” means the Revolving Credit Loans made pursuant to any
Other Revolving Commitment.

“Other Taxes” has the meaning specified in Section 3.01(b).

“Other Tranche A Term Commitments” means one or more Classes of Tranche A term
loan commitments hereunder that result from a Loan Modification Agreement.

“Other Tranche A Term Loans” means one or more Classes of Tranche A term loans
that result from a Loan Modification Agreement.

 

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“Other Tranche B Term Commitments” means one or more Classes of Tranche B term
loan commitments hereunder that result from a Loan Modification Agreement.

“Other Tranche B Term Loans” means one or more Classes of Tranche B term loans
that result from a Loan Modification Agreement.

“Outstanding Amount” means (a) with respect to the Tranche A Term Loans, Tranche
B Term Loans, Revolving Credit Loans and Swing Line Loans on any date, the
aggregate principal amount thereof after giving effect to any borrowings and
prepayments or repayments of Tranche A Term Loans, Tranche B Term Loans,
Revolving Credit Loans (including any refinancing of outstanding unpaid drawings
under Letters of Credit or L/C Credit Extensions as a Revolving Credit
Borrowing) and Swing Line Loans, as the case may be, occurring on such date; and
(b) with respect to any L/C Obligations on any date, the aggregate principal
amount thereof on such date after giving effect to any L/C Credit Extension
occurring on such date and any other changes thereto as of such date, including
as a result of any reimbursements of outstanding unpaid drawings under any
Letters of Credit (including any refinancing of outstanding unpaid drawings
under Letters of Credit or L/C Credit Extensions as a Revolving Credit
Borrowing) or any reductions in the maximum amount available for drawing under
Letters of Credit taking effect on such date.

“Participant” has the meaning specified in Section 10.07(e).

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

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA
and is sponsored or maintained by any Loan Party or any ERISA Affiliate or to
which any Loan Party or any ERISA Affiliate contributes or has an obligation to
contribute, or in the case of a multiple employer or other plan described in
Section 4064(a) of ERISA, has made contributions at any time during the
immediately preceding five (5) plan years.

“Permitted Acquisition” has the meaning specified in Section 7.02(i).

“Permitted Amendment” means an amendment to this Agreement and the other Loan
Documents, effected in connection with a Loan Modification Offer pursuant to
Section 2.15, providing for an extension of the Maturity Date applicable to the
Loans and/or Commitments of the Accepting Lenders and, in connection therewith,
(a) any changes in the interest rates with respect to the Loans and/or
Commitments of the Accepting Lenders, (b) any changes in the fees payable to, or
the inclusion of new fees to be payable to, the Accepting Lenders and/or
(c) such other modifications to this Agreement and the other Loan Documents as
may be specified therein.

“Permitted Equity Issuance” means any sale or issuance of any Qualified Equity
Interests of Holdings to the extent permitted hereunder.

 

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“Permitted Holders” means each of (i) the Sponsor and (ii) the Management
Stockholders; provided that if the Management Stockholders own beneficially or
of record more than ten percent (10%) of the outstanding voting stock of
Holdings in the aggregate, the Management Stockholders shall be treated as
Permitted Holders of only ten percent (10%) of the outstanding voting stock of
Holdings at such time.

“Permitted Refinancing” means, with respect to any Person, any modification,
refinancing, refunding, renewal or extension of any Indebtedness of such Person;
provided that (a) the principal amount (or accreted value, if applicable)
thereof does not exceed the principal amount (or accreted value, if applicable)
of the Indebtedness so modified, refinanced, refunded, renewed or extended
except by an amount equal to unpaid accrued interest and premium thereon plus
other reasonable amounts paid, and fees and expenses reasonably incurred, in
connection with such modification, refinancing, refunding, renewal or extension
and by an amount equal to any existing commitments unutilized thereunder,
(b) other than with respect to a Permitted Refinancing in respect of
Indebtedness permitted pursuant to Section 7.03(e), such modification,
refinancing, refunding, renewal or extension has a final maturity date equal to
or later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being modified, refinanced, refunded, renewed or extended,
(c) other than with respect to a Permitted Refinancing in respect of
Indebtedness permitted pursuant to Section 7.03(e), at the time thereof, no
Event of Default shall have occurred and be continuing, (d) to the extent such
Indebtedness being modified, refinanced, refunded, renewed or extended is
subordinated in right of payment to the Obligations, such modification,
refinancing, refunding, renewal or extension is subordinated in right of payment
to the Obligations on terms at least as favorable to the Lenders as those
contained in the documentation governing the Indebtedness being modified,
refinanced, refunded, renewed or extended; (e) the terms and conditions
(including, if applicable, as to collateral but excluding as to subordination,
interest rate and redemption premium) of any such modified, refinanced,
refunded, renewed or extended Indebtedness, taken as a whole, are not materially
less favorable to the Loan Parties or the Lenders than the terms and conditions
of the Indebtedness being modified, refinanced, refunded, renewed or extended;
and (f) such modification, refinancing, refunding, renewal or extension shall
not be incurred by any obligor that was not an obligor with respect to the
Indebtedness being modified, refinanced, refunded, renewed or extended.

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

“Plan” means any “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA) established by any Loan Party or, with respect to any
such plan that is subject to Section 412 of the Code or Title IV of ERISA, any
ERISA Affiliate.

“Pledged Debt” has the meaning specified in the Security Agreement.

“Pledged Equity” has the meaning specified in the Security Agreement.

“Post-Acquisition Period” means, with respect to any Permitted Acquisition, the
period beginning on the date such Permitted Acquisition is consummated and
ending on the last

 

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day of the sixth full consecutive fiscal quarter immediately following the date
on which such Permitted Acquisition is consummated.

“Pro Forma Adjustment” means, for any Test Period that includes all or any part
of a fiscal quarter included in any Post-Acquisition Period, with respect to the
Acquired EBITDA of the applicable Acquired Entity or Business or the
Consolidated EBITDA of the Borrower, the pro forma increase or decrease in such
Acquired EBITDA or such Consolidated EBITDA, as the case may be, projected by
the Borrower in good faith as a result of (a) actions taken during such
Post-Acquisition Period for the purposes of realizing reasonably identifiable
and factually supportable cost savings or (b) any additional costs incurred
during such Post-Acquisition Period, in each case in connection with the
combination of the operations of such Acquired Entity or Business with the
operations of the Borrower and the Restricted Subsidiaries; provided that, so
long as such actions are taken during such Post-Acquisition Period or such costs
are incurred during such Post-Acquisition Period, as applicable, it may be
assumed, for purposes of projecting such pro forma increase or decrease in such
Acquired EBITDA or such Consolidated EBITDA, as the case may be, that such cost
savings will be realizable during the entirety of such Test Period, or such
additional costs, as applicable, will be incurred during the entirety of such
Test Period; provided further that any such pro forma increase or decrease in
such Acquired EBITDA or such Consolidated EBITDA, as the case may be, shall be
without duplication for cost savings or additional costs already included in
such Acquired EBITDA or such Consolidated EBITDA, as the case may be, for such
Test Period.

“Pro Forma Basis”, “Pro Forma Compliance” and “Pro Forma Effect” mean, with
respect to compliance with any test or covenant hereunder, that (A) to the
extent applicable, the Pro Forma Adjustment shall have been made and (B) all
Specified Transactions and the following transactions in connection therewith
shall be deemed to have occurred as of the first day of the applicable period of
measurement in such test or covenant: (a) income statement items (whether
positive or negative) attributable to the property or Person subject to such
Specified Transaction, (i) in the case of a Disposition of all or substantially
all Equity Interests in any Subsidiary of the Borrower or any division, product
line, or facility used for operations of the Borrower or any of its
Subsidiaries, shall be excluded, and (ii) in the case of a Permitted Acquisition
or Investment described in the definition of “Specified Transaction”, shall be
included, (b) any retirement of Indebtedness, and (c) any Indebtedness incurred
or assumed by the Borrower or any of the Restricted Subsidiaries in connection
therewith and if such Indebtedness has a floating or formula rate, shall have an
implied rate of interest for the applicable period for purposes of this
definition determined by utilizing the rate which is or would be in effect with
respect to such Indebtedness as at the relevant date of determination; provided
that, without limiting the application of the Pro Forma Adjustment pursuant to
(A) above, the foregoing pro forma adjustments may be applied to any such test
or covenant solely to the extent that such adjustments are consistent with the
definition of Consolidated EBITDA and give effect to events (including operating
expense reductions) that are (i) (x) directly attributable to such transaction,
(y) expected to have a continuing impact on the Borrower and the Restricted
Subsidiaries and (z) factually supportable or (ii) otherwise consistent with the
definition of Pro Forma Adjustment.

“Pro Rata Share” means, with respect to each Lender at any time a fraction, the
numerator of which is the amount of the Commitments of such Lender under the
applicable

 

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Facility or Facilities at such time and the denominator of which is the amount
of the Aggregate Commitments under the applicable Facility or Facilities at such
time; provided that if such Commitments have been terminated, then the Pro Rata
Share of each Lender shall be determined based on the Pro Rata Share of such
Lender immediately prior to such termination and after giving effect to any
subsequent assignments made pursuant to the terms hereof and to any Lender’s
status as a Defaulting Lender at the time of determination; provided further
that, at any time any Revolving Credit Lender shall be a Defaulting Lender, “Pro
Rata Share” shall mean the percentage of the total Revolving Credit Commitments
(disregarding any such Defaulting Lender’s Revolving Credit Commitment)
represented by such Lender’s Revolving Commitment.

“Projections” shall have the meaning set forth in Section 6.01(c).

“Purchasing Borrower Party” shall mean any of Holdings, any Borrower or any
Subsidiary.

“Qualified Equity Interests” means any Equity Interests that are not
Disqualified Equity Interests.

“Reference Period” means, with respect to any date of determination, the period
commencing at the beginning of the fiscal quarter in which the Closing Date
occurs and ending on the last day of the most recent fiscal quarter or fiscal
year, as applicable, for which financial statements required to be delivered
pursuant to Section 6.01(a) or Section 6.01(b).

“Register” has the meaning set forth in Section 10.07(d).

“Related Professional Corporation” means each professional corporation with
respect to which (i) the Borrower has the right to designate or replace the sole
shareholder (or a majority of the shareholders, if applicable) pursuant to an
agreement between such professional corporation and the Borrower or any
Subsidiary Guarantor and (ii) the Borrower has the right to participate,
directly or indirectly, in the profits or losses of such professional
corporation in accordance with the applicable Management/Services Agreement
referred to below; provided that each such professional corporation is party to
a Management/Services Agreement with the Borrower or a Subsidiary Guarantor;
provided further that, as of the Closing Date, each entity listed as a “Related
Professional Corporation” on Schedule 1.01D shall be a Related Professional
Corporation.

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

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion
or continuation of Term Loans or Revolving Credit Loans, a Committed Loan
Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit
Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan
Notice.

“Required Lenders” means, as of any date of determination, Lenders having more
than 50% of the sum of the (a) Total Outstandings (with the aggregate principal
amount of each Lender’s risk participation and funded participation in L/C
Obligations and Swing Line

 

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Loans being deemed “held” by such Lender for purposes of this definition),
(b) aggregate unused Term Commitments, and (c) aggregate unused Revolving Credit
Commitments; provided that the unused Term Commitment and unused Revolving
Credit Commitment of, and the portion of the Total Outstandings held or deemed
held by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Lenders.

“Responsible Officer” means the chief executive officer, president, vice
president, chief financial officer, treasurer or assistant treasurer or other
similar officer of a Loan Party and, as to any document delivered on the Closing
Date, any secretary or assistant secretary of a Loan Party.

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

“Restricted Subsidiary” means any Subsidiary of Holdings or the Borrower, as
applicable, other than an Unrestricted Subsidiary.

“Revolving Commitment Increase” shall have the meaning set forth in
Section 2.14.

“Revolving Credit Borrowing” means a borrowing consisting of simultaneous
Revolving Credit Loans of the same Type and, in the case of Eurocurrency Rate
Loans, having the same Interest Period made by each of the Revolving Credit
Lenders pursuant to Section 2.01(d).

“Revolving Credit Commitment” means, as to each Revolving Credit Lender, its
obligation to (a) make Revolving Credit Loans to the Borrower pursuant to
Section 2.01(b), (b) purchase participations in L/C Obligations in respect of
Letters of Credit and (c) purchase participations in Swing Line Loans, in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth, and opposite such Lender’s name, on Schedule 2.01 under the caption
“Revolving Credit Commitment” or in the Assignment and Assumption pursuant to
which such Lender becomes a party hereto, as applicable, as such amount may be
adjusted from time to time in accordance with this Agreement. The aggregate
Revolving Credit Commitments of all Revolving Credit Lenders shall be
$175,000,000 on the Closing Date, as such amount may be adjusted from time to
time in accordance with the terms of this Agreement.

“Revolving Credit Exposure” means, as to each Revolving Credit Lender, the sum
of the outstanding principal amount of such Revolving Credit Lender’s Revolving
Credit Loans and its Pro Rata Share of the L/C Obligations and the Swing Line
Obligations at such time.

“Revolving Credit Facility” means, at any time, the aggregate principal amount
of the Revolving Credit Lenders’ Revolving Credit Commitments at such time.

 

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“Revolving Credit Lender” means, at any time, any Lender that has a Revolving
Credit Commitment at such time.

“Revolving Credit Loan” means a Loan made pursuant to Section 2.01(b), any
Incremental Revolving Credit Loans and Other Revolving Loans, as the context may
require.

“Revolving Credit Note” means a promissory note of the Borrower payable to any
Revolving Credit Lender or its registered assigns, in substantially the form of
Exhibit C-3 hereto, evidencing the aggregate Indebtedness of such Borrower to
such Revolving Credit Lender resulting from the Revolving Credit Loans made by
such Revolving Credit Lender.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., and any successor thereto.

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

“Secured Hedge Agreement” means any Swap Contract permitted under Article 7 that
is entered into by and between any Loan Party or any Restricted Subsidiary and
any Hedge Bank.

“Secured Obligations” has the meaning specified in the Security Agreement.

“Secured Parties” means, collectively, the Administrative Agent, the Lenders,
the Hedge Banks, any Supplemental Administrative Agent and each co-agent
appointed by the Administrative Agent from time to time pursuant to
Section 9.01(c).

“Securities Act” means the Securities Act of 1933, as amended.

“Security Agreement” means, collectively, the Security Agreement executed by the
Loan Parties, substantially in the form of Exhibit G, together with each other
security agreement supplement executed and delivered pursuant to Section 6.11.

“Security Agreement Supplement” has the meaning specified in the Security
Agreement.

“Senior Managing Agents” means Regions Bank, Fifth Third Bank, Sumitomo Mitsui
Banking Corporation, Compass Bank, Mizuho Corporate Bank, Ltd, Union Bank, N.A.
and Wells Fargo Bank, National Association.

“Sold Entity or Business” has the meaning set forth in the definition of the
term “Consolidated EBITDA”.

“Solvent” and “Solvency” mean, with respect to any Person on any date of
determination, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including contingent
liabilities, of such Person, (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such

 

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Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay such debts and liabilities as
they mature and (d) such Person is not engaged in business or a transaction, and
is not about to engage in business or a transaction, for which such Person’s
property would constitute an unreasonably small capital. The amount of
contingent liabilities at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.

“SPC” has the meaning specified in Section 10.07(h).

“Specified Transaction” means, with respect to any period, any Investment,
Disposition, incurrence or repayment of Indebtedness, Restricted Payment,
Subsidiary designation or Incremental Facility that by the terms of this
Agreement requires “Pro Forma Compliance” with a test or covenant hereunder or
requires such test or covenant to be calculated on a “Pro Forma Basis”.

“Sponsor” means The Blackstone Group and its Affiliates, but not including,
however, any portfolio companies of any of the foregoing.

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

“Subsidiary Guarantor” means, collectively, the Subsidiaries of Holdings that
are Guarantors.

“Subsidiary Guaranty” means, collectively, (a) the Subsidiary Guaranty made by
the Subsidiary Guarantors in favor of the Administrative Agent on behalf of the
Secured Parties, substantially in the form of Exhibit F and (b) each other
guaranty and guaranty supplement delivered pursuant to Section 6.11.

“Successor Company” has the meaning specified in Section 7.04(d).

“Supplemental Administrative Agent” has the meaning specified in Section 9.13
and “Supplemental Administrative Agents” shall have the corresponding meaning.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any

 

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combination of any of the foregoing (including any options to enter into any of
the foregoing), whether or not any such transaction is governed by or subject to
any master agreement, and (b) any and all transactions of any kind, and the
related confirmations, which are subject to the terms and conditions of, or
governed by, any form of master agreement published by the International Swaps
and Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement (any such master agreement, together
with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.

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

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to
Section 2.04.

“Swing Line Facility” means the revolving credit facility made available by the
Swing Line Lender pursuant to Section 2.04.

“Swing Line Lender” means JPMorgan Chase Bank, in its capacity as provider of
Swing Line Loans, or any successor swing line lender hereunder.

“Swing Line Loan” has the meaning specified in Section 2.04(a).

“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to
Section 2.04(b), which, if in writing, shall be substantially in the form of
Exhibit B.

“Swing Line Obligations” means, as at any date of determination, the aggregate
principal amount of all Swing Line Loans outstanding.

“Syndication Agent” means Merrill Lynch, Pierce, Fenner & Smith Incorporated, in
its capacity as syndication agent.

“Taxes” has the meaning specified in Section 3.01(a).

“Term Borrowing” means a borrowing consisting of simultaneous Term Loans of the
same Type.

“Term Commitment” means the Tranche A Term Commitments and the Tranche B Term
Commitments.

“Term Facilities” means the Tranche A Term Facility and the Tranche B Term
Facility.

 

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

“Term Loan” means the Tranche A Term Loans, the Tranche B Term Loans,
Incremental Tranche A Term Loans and Incremental Tranche B Term Loans.

“Term Note” means the Tranche A Term Note and the Tranche B Term Note.

“Test Period” means, for any determination under this Agreement, the four
consecutive fiscal quarters of the Borrower then last ended.

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

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

“Threshold Amount” means $25,000,000.

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

“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all
L/C Obligations.

“Tranche A Term Commitment” means, as to each Tranche A Term Lender, its
obligation to make a Tranche A Term Loan to the Borrower pursuant to
Section 2.01(a) in an aggregate principal amount not to exceed the amount set
forth opposite such Lender’s name on Schedule 2.01(a) under the caption “Tranche
A Term Commitment” or in the Assignment and Assumption pursuant to which such
Tranche A Term Lender becomes a party hereto, as applicable, as such amount may
be reduced pursuant to Section 2.06. The initial aggregate amount of the Tranche
A Term Commitments is $150,000,000.

“Tranche B Term Commitment” means, as to each Tranche B Term Lender, its
obligation to make a Tranche B Term Loan to the Borrower pursuant to
Section 2.01(a) in an aggregate principal amount not to exceed the amount set
forth opposite such Lender’s name on Schedule 2.01(a) under the caption “Tranche
B Term Commitment” or in the Assignment and Assumption pursuant to which such
Tranche B Term Lender becomes a party hereto, as applicable, as such amount may
be reduced pursuant to Section 2.06. The initial aggregate amount of the Tranche
B Term Commitments is $250,000,000.

“Tranche A Term Facility” means, at any time, the aggregate principal amount of
the Term Lenders’ Tranche A Term Commitments at such time.

 

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“Tranche B Term Facility” means, at any time, the aggregate principal amount of
the Term Lenders’ Tranche B Term Commitments at such time.

“Tranche A Term Lender” means, at any time, any Lender that has a Tranche A Term
Commitment or a Tranche A Term Loan at such time.

“Tranche B Term Lender” means, at any time, any Lender that has a Tranche B Term
Commitment or a Tranche B Term Loan at such time.

“Tranche A Term Loan” means a Loan under the Tranche A Term Facility pursuant to
Section 2.01(a), Other Tranche A Term Loans and Incremental Tranche A Term
Loans.

“Tranche B Term Loan” means a Loan under the Tranche B Term Facility pursuant to
Section 2.01(a), Other Tranche B Term Loans and Incremental Tranche B Term
Loans.

“Tranche A Term Note” a promissory note of the Borrower payable to any Tranche A
Term Lender or its registered assigns, in substantially the form of Exhibit C-1
hereto, evidencing the aggregate Indebtedness of the Borrower to such Tranche A
Term Lender resulting from the Tranche A Term Loans made by such Tranche A Term
Lender.

“Tranche B Term Note” a promissory note of the Borrower payable to any Tranche B
Term Lender or its registered assigns, in substantially the form of Exhibit C-2
hereto, evidencing the aggregate Indebtedness of the Borrower to such Tranche B
Term Lender resulting from the Tranche B Term Loans made by such Tranche B Term
Lender.

“Transaction” means, collectively, (a) the funding of the Term Loans and (if
any) Revolving Loans on the Closing Date, (b) the Debt Prepayment, (c) the
consummation of any other transactions in connection with the foregoing and
(d) the payment of the fees and expenses incurred in connection with any of the
foregoing.

“Transaction Expenses” means any fees or expenses incurred or paid by Holdings,
the Borrower or any Restricted Subsidiary in connection with the Transaction,
this Agreement and the other Loan Documents and the transactions contemplated
hereby and thereby.

“Type” means, with respect to a Loan, its character as a Base Rate Loan or a
Eurocurrency Rate Loan.

“Unaudited Financial Statements” has the meaning set forth in Section 4.01(f).

“Uniform Commercial Code” means the Uniform Commercial Code as the same may from
time to time be in effect in the State of New York or the Uniform Commercial
Code (or similar code or statute) of another jurisdiction, to the extent it may
be required to apply to any item or items of Collateral.

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

 

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“Unreimbursed Amount” has the meaning set forth in Section 2.03(c)(i).

“Unrestricted Subsidiary” means any Subsidiary of Holdings or the Borrower, as
applicable, designated by the board of directors of Holdings as an Unrestricted
Subsidiary pursuant to Section 6.14 subsequent to the date hereof.

“U.S. Lender” has the meaning specified in Section 10.15(b).

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

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

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

“Withholding Agent” means any Loan Party and the Administrative Agent.

SECTION 1.02. Other Interpretive Provisions. With reference to this Agreement
and each other Loan Document, unless otherwise specified herein or in such other
Loan Document:

(a) (i) The meanings of defined terms are equally applicable to the singular and
plural forms of the defined terms.

(ii) Derivatives of defined terms have correlative meanings.

(b) (i) The words “herein,” “hereto,” “hereof” and “hereunder” and words of
similar import when used in any Loan Document shall refer to such Loan Document
as a whole and not to any particular provision thereof.

(ii) Article, Section, Exhibit and Schedule references are to the Loan Document
in which such reference appears.

(iii) The term “including” is by way of example and not limitation.

(iv) The term “documents” includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.

 

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(c) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means “to and
including.”

(d) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

SECTION 1.03. Accounting Terms. (a) All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP, applied in a manner consistent with that used in
preparing the Audited Financial Statements, except as otherwise specifically
prescribed herein; provided, however, that the determination of whether any
lease is or should be a Capitalized Lease for purposes of this Agreement shall
be made in accordance with GAAP as in effect on the Closing Date.
Notwithstanding any other provision contained herein, all terms of an accounting
or financial nature used herein shall be construed, and all computations of
amounts and ratios referred to herein shall be made, without giving effect to
any election under Financial Accounting Standards Codification No. 825—Financial
Instruments (or any successor thereto (including pursuant to the Accounting
Standards Codification)) to value any Indebtedness of Holdings, the Borrower or
any Subsidiary at “fair value” as defined therein.

(b) Notwithstanding anything to the contrary herein, for purposes of determining
compliance with any test or covenant contained in this Agreement with respect to
any period during which any Specified Transaction occurs, the Total Leverage
Ratio, First Lien Leverage Ratio and First Lien Net Leverage Ratio shall be
calculated with respect to such period and such Specified Transaction on a Pro
Forma Basis.

SECTION 1.04. Rounding. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement (or required to be satisfied in order for a
specific action to be permitted under this Agreement) shall be calculated by
dividing the appropriate component by the other component, carrying the result
to one place more than the number of places by which such ratio is expressed
herein and rounding the result up or down to the nearest number (with a
rounding-up if there is no nearest number).

SECTION 1.05. References to Agreements, Laws, Etc. Unless otherwise expressly
provided herein, (a) references to Organization Documents, agreements (including
the Loan Documents) and other contractual instruments shall be deemed to include
all subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are permitted by
any Loan Document; and (b) references to any Law shall include all statutory and
regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.

SECTION 1.06. Times of Day. Unless otherwise specified, all references herein to
times of day shall be references to Eastern time (daylight or standard, as
applicable).

 

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SECTION 1.07. Timing of Payment of Performance. When the payment of any
obligation or the performance of any covenant, duty or obligation is stated to
be due or performance required on a day which is not a Business Day, the date of
such payment (other than as described in the definition of Interest Period) or
performance shall extend to the immediately succeeding Business Day.

ARTICLE II

The Commitments and Credit Extensions

SECTION 2.01. The Loans. (a) The Term Borrowings. Subject to the terms and
conditions set forth herein, each Tranche A Term Lender and Tranche B Term
Lender severally agrees to make to the Borrower a single loan denominated in
U.S. dollars in a principal amount equal to such Term Lender’s Tranche A Term
Commitment or Tranche B Term Commitment, as the case may be, on the Closing
Date. Amounts borrowed under this Section 2.01(a) and repaid or prepaid may not
be reborrowed. Term Loans may be Base Rate Loans or Eurocurrency Rate Loans, as
further provided herein.

(b) The Revolving Credit Borrowings. Subject to the terms and conditions set
forth herein each Revolving Credit Lender severally agrees to make loans
denominated in U.S. dollars to the Borrower as elected by the Borrower pursuant
to Section 2.02 (each such loan, a “Revolving Credit Loan”) from time to time,
on any Business Day until the Maturity Date, in an aggregate principal amount
not to exceed at any time outstanding the amount of such Lender’s Revolving
Credit Commitment; provided that after giving effect to any Revolving Credit
Borrowing, the aggregate outstanding principal amount at such time of the
Revolving Credit Loans of any Lender, plus such Lender’s Pro Rata Share of the
outstanding principal amount at such time of all L/C Obligations, plus such
Lender’s Pro Rata Share of the outstanding principal amount at such time of all
Swing Line Loans shall not exceed such Lender’s Revolving Credit Commitment.
Within the limits of each Lender’s Revolving Credit Commitment, and subject to
the other terms and conditions hereof, the Borrower may borrow under this
Section 2.01(b), prepay under Section 2.05, and reborrow under this
Section 2.01(b). Revolving Credit Loans may be Base Rate Loans or Eurocurrency
Rate Loans, as further provided herein.

SECTION 2.02. Borrowings, Conversions and Continuations of Loans. (a) Each Term
Borrowing, each Revolving Credit Borrowing, each conversion of Term Loans or
Revolving Credit Loans from one Type to the other, and each continuation of
Eurocurrency Rate Loans shall be made upon the Borrower’s irrevocable notice to
the Administrative Agent, which may be given by telephone. Each such notice must
be received by the Administrative Agent not later than 12:30 p.m. (New York City
time) (i) three (3) Business Days prior to the requested date of any Borrowing
or continuation of Eurocurrency Rate Loans or any conversion of Base Rate Loans
to Eurocurrency Rate Loans, and (ii) one (1) Business Day before the requested
date of any Borrowing of Base Rate Loans. Each telephonic notice by the Borrower
pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the
Administrative Agent of a written Committed Loan Notice, appropriately completed
and signed by a Responsible Officer of the Borrower. Each Borrowing of,
conversion to or continuation of Eurocurrency Rate Loans shall be in a principal
amount of $5,000,000 or a whole multiple of $500,000 in excess thereof. Except
as provided in Sections 2.03(c) and 2.04(c), each Borrowing of or conversion to
Base

 

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Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of
$100,000 in excess thereof. Each Committed Loan Notice (whether telephonic or
written) shall specify (i) whether the Borrower is requesting a Term Borrowing,
a Revolving Credit Borrowing, a conversion of Term Loans or Revolving Credit
Loans from one Type to the other, or a continuation of Eurocurrency Rate Loans,
(ii) the requested date of the Borrowing, conversion or continuation, as the
case may be (which shall be a Business Day), (iii) the principal amount of Loans
to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or
to which existing Term Loans or Revolving Credit Loans are to be converted, and
(v) if applicable, the duration of the Interest Period with respect thereto. If
the Borrower fails to specify a Type of Loan in a Committed Loan Notice or fails
to give a timely notice requesting a conversion or continuation, then the
applicable Term Loans or Revolving Credit Loans shall be made as, or converted
to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be
effective as of the last day of the Interest Period then in effect with respect
to the applicable Eurocurrency Rate Loans. If the Borrower requests a Borrowing
of, conversion to, or continuation of Eurocurrency Rate Loans in any such
Committed Loan Notice, but fails to specify an Interest Period, it will be
deemed to have specified an Interest Period of one (1) month.

(b) Following receipt of a Committed Loan Notice, the Administrative Agent shall
promptly notify each Lender of the amount of its Pro Rata Share of the
applicable Class of Loans, and if no timely notice of a conversion or
continuation is provided by the Borrower, the Administrative Agent shall notify
each Lender of the details of any automatic conversion to Base Rate Loans or
continuation described in Section 2.02(a). In the case of each Borrowing, each
Revolving Credit Lender or Term Lender, as the case may be, shall make the
amount of its Loan available to the Administrative Agent in immediately
available funds to the account of the Administrative Agent most-recently
designated by it for such purpose by notice to the Revolving Credit Lenders or
Term Lenders, as the case may be, not later than 1:00 p.m., on the Business Day
specified in the applicable Committed Loan Notice. Upon satisfaction of the
applicable conditions set forth in Section 4.02 (and, if such Borrowing is the
initial Credit Extension, Section 4.01), the Administrative Agent shall make all
funds so received available to the Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrower on the
books of JPMorgan Chase Bank with the amount of such funds or (ii) wire transfer
of such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative Agent by the Borrower; provided
that if, on the date the Committed Loan Notice with respect to such Borrowing is
given by the Borrower, there are Swing Line Loans or L/C Borrowings outstanding,
then the proceeds of such Borrowing shall be applied by the Borrower, first, to
the payment in full of any such L/C Borrowings, second, to the payment in full
of any such Swing Line Loans, and third, to the Borrower as provided above.

(c) Except as otherwise provided herein, a Eurocurrency Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Eurocurrency Rate Loan unless the Borrower pays the amount due, if any, under
Section 3.05 in connection therewith. During the existence of an Event of
Default, the Administrative Agent or the Required Lenders may require that no
Loans may be converted to or continued as Eurocurrency Rate Loans.

 

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(d) The Administrative Agent shall promptly notify the Borrower and the Lenders
of the interest rate applicable to any Interest Period for Eurocurrency Rate
Loans upon determination of such interest rate. The determination of the
Eurocurrency Rate by the Administrative Agent shall be conclusive in the absence
of manifest error. At any time that Base Rate Loans are outstanding, the
Administrative Agent shall notify the Borrower and the Lenders of any change in
the JPMorgan Chase Bank prime rate used in determining the Base Rate promptly
following the public announcement of such change.

(e) After giving effect to all Term Borrowings, all Revolving Credit Borrowings,
all conversions of Term Loans or Revolving Credit Loans from one Type to the
other, and all continuations of Term Loans or Revolving Credit Loans as the same
Type, there shall not be more than twenty (20) Interest Periods in effect.

(f) The failure of any Lender to make the Loan to be made by it as part of any
Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Loan on the date of such Borrowing, but, other than as
expressly provided herein with respect to a Defaulting Lender, no Lender shall
be responsible for the failure of any other Lender to make the Loan to be made
by such other Lender on the date of any Borrowing.

SECTION 2.03. Letters of Credit. (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) each L/C Issuer
agrees, in reliance upon the agreements of the other Revolving Credit Lenders
set forth in this Section 2.03, (1) from time to time on any Business Day during
the period from the Closing Date until the Letter of Credit Expiration Date, to
issue Letters of Credit for the account of the Borrower (provided, that any
Letter of Credit may be for the benefit of any Subsidiary of the Borrower) and
to amend or renew Letters of Credit previously issued by it, in accordance with
Section 2.03(b), and (2) to honor drafts under the Letters of Credit and (B) the
Revolving Credit Lenders severally agree to participate in Letters of Credit
issued pursuant to this Section 2.03; provided that no L/C Issuer shall be
obligated to make any L/C Credit Extension with respect to any Letter of Credit,
and no Lender shall be obligated to participate in any Letter of Credit, if as
of the date of such L/C Credit Extension, (x) the Revolving Credit Exposure of
any Lender would exceed such Lender’s Revolving Credit Commitment, (y) the
outstanding principal amount of the L/C Obligations at such time would exceed
$50,000,000 or (z) any Revolving Credit Lender is at that time a Defaulting
Lender, if after giving effect to Section 2.16, any Defaulting Lender Fronting
Exposure remains outstanding, unless such L/C Issuer has entered into
arrangements, including the delivery of cash collateral, reasonably satisfactory
to such L/C Issuer with the Borrower or such Lender to eliminate such L/C
Issuer’s Defaulting Lender Fronting Exposure arising from either the Letter of
Credit then proposed to be issued or such Letter of Credit and all other LC
Obligations as to which such L/C Issuer has Defaulting Lender Fronting Exposure.
Within the foregoing limits, and subject to the terms and conditions hereof, the
Borrower’s ability to obtain Letters of Credit shall be fully revolving, and
accordingly the Borrower may, during the foregoing period, obtain Letters of
Credit to replace Letters of Credit that have expired or that have been drawn
upon and reimbursed.

(ii) An L/C Issuer shall be under no obligation to issue any Letter of Credit
if:

 

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(A) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain such L/C Issuer from issuing
such Letter of Credit, or any Law applicable to such L/C Issuer or any directive
(whether or not having the force of law) from any Governmental Authority with
jurisdiction over such L/C Issuer shall prohibit, or direct that such L/C Issuer
refrain from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon such L/C Issuer with respect to such
Letter of Credit any restriction, reserve or capital requirement (for which such
L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing
Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or
expense which was not applicable on the Closing Date (for which such L/C Issuer
is not otherwise compensated hereunder);

(B) subject to Section 2.03(b)(iii), the expiry date of such requested Letter of
Credit would occur more than twelve months after the date of issuance or last
renewal, unless the Required Lenders have approved such expiry date;

(C) the expiry date of such requested Letter of Credit would occur after the
Letter of Credit Expiration Date, unless all the Revolving Credit Lenders have
approved such expiry date;

(D) the issuance of such Letter of Credit would violate any Laws binding upon
such L/C Issuer; or

(E) such Letter of Credit is in an initial amount less than $100,000.

(iii) An L/C Issuer shall be under no obligation to amend any Letter of Credit
if (A) such L/C Issuer would have no obligation at such time to issue such
Letter of Credit in its amended form under the terms hereof, or (B) the
beneficiary of such Letter of Credit does not accept the proposed amendment to
such Letter of Credit.

(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Renewal
Letters of Credit. (i) Each Letter of Credit shall be issued or amended, as the
case may be, upon the request of the Borrower delivered to an L/C Issuer (with a
copy to the Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of the Borrower.
Such Letter of Credit Application must be received by the relevant L/C Issuer
and the Administrative Agent not later than 12:30 p.m. at least two (2) Business
Days prior to the proposed issuance date or date of amendment, as the case may
be; or, in each case, such later date and time as the relevant L/C Issuer may
agree in a particular instance in its sole discretion. In the case of a request
for an initial issuance of a Letter of Credit, such Letter of Credit Application
shall specify in form and detail reasonably satisfactory to the relevant L/C
Issuer: (a) the proposed issuance date of the requested Letter of Credit (which
shall be a Business Day); (b) the amount thereof; (c) the expiry date thereof;
(d) the name and address of the beneficiary thereof; (e) the documents to be
presented by such beneficiary in case of any drawing thereunder; (f) the full
text of the Letter of Credit and any certificate, if any, to be presented by
such beneficiary in case of any drawing thereunder; and (g) such other matters
as the relevant L/C Issuer may reasonably request. In the case of a request for
an amendment of

 

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any outstanding Letter of Credit, such Letter of Credit Application shall
specify in form and detail reasonably satisfactory to the relevant L/C Issuer
(1) the Letter of Credit to be amended; (2) the proposed date of amendment
thereof (which shall be a Business Day); (3) the nature of the proposed
amendment; and (4) such other matters as the relevant L/C Issuer may reasonably
request.

(ii) Promptly after receipt of any Letter of Credit Application, the relevant
L/C Issuer will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has received a copy of such Letter of
Credit Application from the Borrower and, if not, such L/C Issuer will provide
the Administrative Agent with a copy thereof. Upon receipt by the relevant L/C
Issuer of confirmation from the Administrative Agent that the requested issuance
or amendment is permitted in accordance with the terms hereof, then, subject to
the terms and conditions hereof, such L/C Issuer shall, on the requested date,
issue a Letter of Credit for the account of the Borrower or enter into the
applicable amendment, as the case may be. Immediately upon the issuance of each
Letter of Credit, each Revolving Credit Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the relevant L/C Issuer
a risk participation in such Letter of Credit in an amount equal to the product
of such Lender’s Pro Rata Share times the amount of such Letter of Credit.

(iii) If the Borrower so requests in any applicable Letter of Credit
Application, the relevant L/C Issuer shall agree to issue a Letter of Credit
that has automatic renewal provisions (each, an “Auto-Renewal Letter of
Credit”); provided that any such Auto-Renewal Letter of Credit must permit the
relevant L/C Issuer to prevent any such renewal at least once in each twelve
month period (commencing with the date of issuance of such Letter of Credit) by
giving prior notice to the beneficiary thereof not later than a day (the
“Nonrenewal Notice Date”) in each such twelve month period to be agreed upon at
the time such Letter of Credit is issued. Unless otherwise directed by the
relevant L/C Issuer, the Borrower shall not be required to make a specific
request to the relevant L/C Issuer for any such renewal. Once an Auto-Renewal
Letter of Credit has been issued, the Lenders shall be deemed to have authorized
(but may not require) the relevant L/C Issuer to permit the renewal of such
Letter of Credit at any time to an expiry date not later than the Letter of
Credit Expiration Date (without giving effect to clause (a) of the definition of
“Letter of Credit Expiration Date”); provided that the relevant L/C Issuer shall
not permit any such renewal if (A) the relevant L/C Issuer has determined that
it would have no obligation at such time to issue such Letter of Credit in its
renewed form under the terms hereof (by reason of the provisions of
Section 2.03(a)(ii) or otherwise), or (B) it has received notice (which may be
by telephone or in writing) on or before the day that is five (5) Business Days
before the Nonrenewal Notice Date from the Administrative Agent or the Borrower
that one or more of the applicable conditions specified in Section 4.02 is not
then satisfied.

(iv) Promptly after its delivery of any Letter of Credit or any amendment to a
Letter of Credit to an advising bank with respect thereto or to the beneficiary
thereof, the relevant L/C Issuer will also deliver to the Borrower and the
Administrative Agent a true and complete copy of such Letter of Credit or
amendment.

 

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(c) Drawings and Reimbursements; Funding of Participations. (i) Upon receipt
from the beneficiary of any Letter of Credit of any notice of a drawing under
such Letter of Credit, the relevant L/C Issuer shall notify promptly the
Borrower and the Administrative Agent thereof. Not later than 11:00 a.m. on the
Business Day immediately following any payment by an L/C Issuer under a Letter
of Credit (each such date, an “Honor Date”), the Borrower shall reimburse such
L/C Issuer through the Administrative Agent in an amount equal to the amount of
such drawing. If the Borrower fails to so reimburse such L/C Issuer by such
time, the Administrative Agent shall promptly notify each Revolving Credit
Lender of the Honor Date, the amount of the unreimbursed drawing (the
“Unreimbursed Amount”), and the amount of such Revolving Credit Lender’s Pro
Rata Share thereof. In such event, the Borrower shall request a Revolving Credit
Borrowing of Base Rate Loans in accordance with Section 2.02 to be disbursed on
the Honor Date in an amount equal to the Unreimbursed Amount, without regard to
the minimum and multiples specified in Section 2.02 for the principal amount of
Base Rate Loans but subject to the amount of the unutilized portion of the
Revolving Credit Commitments of the Revolving Credit Lenders and the conditions
set forth in Section 4.02 (other than the delivery of a Committed Loan Notice).
Any notice given by an L/C Issuer or the Administrative Agent pursuant to this
Section 2.03(c)(i) may be given by telephone if immediately confirmed in
writing; provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.

(ii) Each Revolving Credit Lender shall upon any notice pursuant to
Section 2.03(c)(i) make funds available to the Administrative Agent for the
account of the relevant L/C Issuer, in U.S. dollars, to the account of the
Administrative Agent most-recently designated by it for such purpose by notice
to the Revolving Credit Lenders in an amount equal to its Pro Rata Share of the
Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in
such notice by the Administrative Agent. The Administrative Agent shall remit
the funds so received to the relevant L/C Issuer.

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Revolving Credit Borrowing of Base Rate Loans because the conditions set forth
in Section 4.02 cannot be satisfied or for any other reason, the Borrower shall
be deemed to have incurred from the relevant L/C Issuer an L/C Borrowing in the
amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing
shall be due and payable on demand (together with interest) and shall bear
interest at the Default Rate. In such event, each Revolving Credit Lender’s
payment to the Administrative Agent for the account of the relevant L/C Issuer
pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its
participation in such L/C Borrowing and shall constitute an L/C Advance from
such Lender in satisfaction of its participation obligation under this
Section 2.03.

(iv) Until each Revolving Credit Lender funds its Revolving Credit Loan or L/C
Advance pursuant to this Section 2.03(c) to reimburse the relevant L/C Issuer
for any amount drawn under any Letter of Credit, interest in respect of such
Lender’s Pro Rata Share of such amount shall be solely for the account of the
relevant L/C Issuer.

(v) Each Revolving Credit Lender’s obligation to make Revolving Credit Loans or
L/C Advances to reimburse an L/C Issuer for amounts drawn under Letters of
Credit,

 

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as contemplated by this Section 2.03(c), shall be absolute and unconditional and
shall not be affected by any circumstance, including (A) any setoff,
counterclaim, recoupment, defense or other right which such Lender may have
against the relevant L/C Issuer, the Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided that each Revolving Credit Lender’s obligation to make Revolving Credit
Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in
Section 4.02 (other than delivery by the Borrower of a Committed Loan Notice ).
No such making of an L/C Advance shall relieve or otherwise impair the
obligation of the Borrower to reimburse the relevant L/C Issuer for the amount
of any payment made by such L/C Issuer under any Letter of Credit, together with
interest as provided herein.

(vi) If any Revolving Credit Lender fails to make available to the
Administrative Agent for the account of the relevant L/C Issuer any amount
required to be paid by such Lender pursuant to the foregoing provisions of this
Section 2.03(c) by the time specified in Section 2.03(c)(ii), such L/C Issuer
shall be entitled to recover from such Lender (acting through the Administrative
Agent), on demand, such amount with interest thereon for the period from the
date such payment is required to the date on which such payment is immediately
available to such L/C Issuer at a rate per annum equal to the Federal Funds Rate
from time to time in effect. A certificate of the relevant L/C Issuer submitted
to any Revolving Credit Lender (through the Administrative Agent) with respect
to any amounts owing under this Section 2.03(c)(vi) shall be conclusive absent
manifest error.

(d) Repayment of Participations. (i) If, at any time after an L/C Issuer has
made a payment under any Letter of Credit and has received from any Revolving
Credit Lender such Lender’s L/C Advance in respect of such payment in accordance
with Section 2.03(c), the Administrative Agent receives for the account of such
L/C Issuer any payment in respect of the related Unreimbursed Amount or interest
thereon (whether directly from the Borrower or otherwise, including proceeds of
Cash Collateral applied thereto by the Administrative Agent), the Administrative
Agent will distribute to such Lender its Pro Rata Share thereof (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Lender’s L/C Advance was outstanding).

(ii) If any payment received by the Administrative Agent for the account of an
L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any
of the circumstances described in Section 10.06 (including pursuant to any
settlement entered into by such L/C Issuer in its discretion), each Revolving
Credit Lender shall pay to the Administrative Agent for the account of such L/C
Issuer its Pro Rata Share thereof on demand of the Administrative Agent, plus
interest thereon from the date of such demand to the date such amount is
returned by such Lender, at a rate per annum equal to the Federal Funds Rate
from time to time in effect.

(e) Obligations Absolute. The obligation of the Borrower to reimburse the
relevant L/C Issuer for each drawing under each Letter of Credit issued by it
and to repay each L/C Borrowing shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:

 

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(i) any lack of validity or enforceability of such Letter of Credit, this
Agreement, or any other agreement or instrument relating thereto;

(ii) the existence of any claim, counterclaim, setoff, defense or other right
that any Loan Party may have at any time against any beneficiary or any
transferee of such Letter of Credit (or any Person for whom any such beneficiary
or any such transferee may be acting), the relevant L/C Issuer or any other
Person, whether in connection with this Agreement, the transactions contemplated
hereby or by such Letter of Credit or any agreement or instrument relating
thereto, or any unrelated transaction;

(iii) any draft, demand, certificate or other document presented under such
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;
or any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under such Letter of Credit;

(iv) any payment by the relevant L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; or any payment made by the relevant L/C Issuer
under such Letter of Credit to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any beneficiary
or any transferee of such Letter of Credit, including any arising in connection
with any proceeding under any Debtor Relief Law;

(v) any exchange, release or nonperfection of any Collateral, or any release or
amendment or waiver of or consent to departure from the Guaranty or any other
guarantee, for all or any of the Obligations any Loan Party in respect of such
Letter of Credit; or

(vi) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, any Loan Party;

provided that the foregoing shall not excuse any L/C Issuer from liability to
the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are waived by the Borrower to the extent
permitted by applicable Law) suffered by the Borrower that are caused by such
L/C Issuer’s gross negligence or willful misconduct when determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof.

(f) Role of L/C Issuers. Each Lender and the Borrower agree that, in paying any
drawing under a Letter of Credit, the relevant L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuers,
any Agent-Related Person nor any of the respective correspondents, participants
or assignees of any L/C Issuer shall be liable to any Lender for (i) any action
taken or omitted in

 

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connection herewith at the request or with the approval of the Lenders or the
Required Lenders, as applicable; (ii) any action taken or omitted in the absence
of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit or Letter of Credit Application. The Borrower hereby
assumes all risks of the acts or omissions of any beneficiary or transferee with
respect to its use of any Letter of Credit; provided that this assumption is not
intended to, and shall not, preclude the Borrower’s pursuing such rights and
remedies as it may have against the beneficiary or transferee at law or under
any other agreement. None of the L/C Issuers, any Agent-Related Person, nor any
of the respective correspondents, participants or assignees of any L/C Issuer,
shall be liable or responsible for any of the matters described in clauses (i)
through (vi) of Section 2.03(e); provided that anything in such clauses to the
contrary notwithstanding, the Borrower may have a claim against an L/C Issuer,
and such L/C Issuer may be liable to the Borrower, to the extent, but only to
the extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Borrower which the Borrower proves were caused by such L/C
Issuer’s willful misconduct or gross negligence or such L/C Issuer’s willful or
grossly negligent failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing, each L/C Issuer may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary,
and no L/C Issuer shall be responsible for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.

(g) Cash Collateral. If (i) any Event of Default occurs and is continuing and
the Administrative Agent or the Required Lenders, as applicable, require the
Borrower to Cash Collateralize the L/C Obligations pursuant to Section 8.02(c)
or (ii) an Event of Default set forth under Section 8.01(f) occurs and is
continuing, then the Borrower shall Cash Collateralize the then Outstanding
Amount of all L/C Obligations plus interest and fees due thereon (in an amount
equal to such Outstanding Amount, interest and fees determined as of the date of
such Event of Default), and shall do so not later than 2:00 P.M., New York City
time, on (x) in the case of the immediately preceding clause (i), (1) the
Business Day that the Borrower receives notice thereof, if such notice is
received on such day prior to 12:00 Noon, New York City time, or (2) if clause
(1) above does not apply, the Business Day immediately following the day that
the Borrower receives such notice and (y) in the case of the immediately
preceding clause (ii), the Business Day on which an Event of Default set forth
under Section 8.01(f) occurs or, if such day is not a Business Day, the Business
Day immediately succeeding such day. At any time that there shall exist a
Defaulting Lender, if any Defaulting Lender Fronting Exposure remains
outstanding (after giving effect to Section 2.16), then promptly upon the
request of the Administrative Agent, the L/C Issuer or the Swingline Lender, the
Borrower shall deliver to the Administrative Agent Cash Collateral in an amount
sufficient to cover such Defaulting Lender Fronting Exposure (after giving
effect to any cash collateral provided by the Defaulting Lender). For purposes
hereof, “Cash Collateralize” means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the relevant L/C Issuer and the
Lenders, as collateral for the L/C Obligations, cash or deposit account balances
(“Cash Collateral”) pursuant to documentation in form and substance reasonably
satisfactory to the Administrative Agent and the relevant L/C Issuer (which
documents are hereby consented to by the Lenders). The Borrower hereby grants

 

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to the Administrative Agent, for the benefit of the L/C Issuers and the Lenders,
a security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the foregoing. Cash Collateral shall be maintained in
blocked accounts at JPMorgan Chase Bank and may be invested in readily available
Cash Equivalents. If at any time the Administrative Agent determines that any
funds held as Cash Collateral are subject to any right or claim of any Person
other than the Administrative Agent (on behalf of the Secured Parties) or that
the total amount of such funds is less than the aggregate Outstanding Amount of
all L/C Obligations, the Borrower will, forthwith upon demand by the
Administrative Agent, pay to the Administrative Agent, as additional funds to be
deposited and held in the deposit accounts at JPMorgan Chase Bank as aforesaid,
an amount equal to the excess of (a) such aggregate Outstanding Amount plus
interest and fees over (b) the total amount of funds, if any, then held as Cash
Collateral that the Administrative Agent reasonably determines to be free and
clear of any such right and claim. Upon the drawing of any Letter of Credit for
which funds are on deposit as Cash Collateral, such funds shall be applied, to
the extent permitted under applicable Law, to reimburse the relevant L/C Issuer.
To the extent any Event of Default has been cured or waived or after the
termination of Defaulting Lender status, as applicable, the amount of cash
collateral shall be refunded to the Borrower.

(h) Letter of Credit Fees. The Borrower shall pay to the Administrative Agent
for the account of each Revolving Credit Lender (other than any Defaulting
Lender) in accordance with its Pro Rata Share a Letter of Credit fee for each
Letter of Credit issued pursuant to this Agreement equal to the Applicable Rate
times the daily maximum amount then available to be drawn under such Letter of
Credit (whether or not such maximum amount is then in effect under such Letter
of Credit if such maximum amount increases periodically pursuant to the terms of
such Letter of Credit). Such letter of credit fees shall be computed on a
quarterly basis in arrears. Such letter of credit fees shall be due and payable
in U.S. dollars on the third Business Day after the end of each March, June,
September and December, commencing with the first such date to occur after the
issuance of such Letter of Credit, on the Letter of Credit Expiration Date and
thereafter on demand. If there is any change in the Applicable Rate during any
quarter, the daily maximum amount of each Letter of Credit shall be computed and
multiplied by the Applicable Rate separately for each period during such quarter
that such Applicable Rate was in effect.

(i) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuers.
The Borrower shall pay directly to each L/C Issuer for its own account a
fronting fee with respect to each Letter of Credit issued by it equal to
0.125% per annum of the daily maximum amount then available to be drawn under
such Letter of Credit (whether or not such maximum amount is then in effect
under such Letter of Credit if such maximum amount increases periodically
pursuant to the terms of such Letter of Credit). Such fronting fees shall be
computed on a quarterly basis in arrears. Such fronting fees shall be due and
payable on the third Business Day after the end of each March, June, September
and December, commencing with the first such date to occur after the issuance of
such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on
demand. In addition, the Borrower shall pay directly to each L/C Issuer for its
own account the customary issuance, presentation, amendment and other processing
fees, and other standard costs and charges, of such L/C Issuer relating to
letters of credit as from time to time in effect. Such customary fees and
standard costs and charges are due and payable within ten (10) Business Days of
demand and are nonrefundable.

 

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(j) Conflict with Letter of Credit Application. Notwithstanding anything else to
the contrary in this Agreement, in the event of any conflict between the terms
hereof and the terms of any Letter of Credit Application, the terms hereof shall
control.

(k) Addition of an L/C Issuer. A Revolving Credit Lender may become an
additional L/C Issuer hereunder pursuant to a written agreement among the
Borrower, the Administrative Agent and such Revolving Credit Lender. The
Administrative Agent shall notify the Revolving Credit Lenders of any such
additional L/C Issuer.

SECTION 2.04. Swing Line Loans. (a) The Swing Line. Subject to the terms and
conditions set forth herein, the Swing Line Lender agrees to make loans (each
such loan, a “Swing Line Loan”) to the Borrower from time to time on any
Business Day (other than the Closing Date) until the Maturity Date with respect
to the Revolving Credit Facility in an aggregate amount not to exceed at any
time outstanding $20,000,000, notwithstanding the fact that such Swing Line
Loans, when aggregated with the Pro Rata Share of the outstanding principal
amount of Revolving Credit Loans and L/C Obligations of the Lender acting as
Swing Line Lender, may exceed the amount of such Lender’s Revolving Credit
Commitment; provided that, after giving effect to any Swing Line Loan, the
aggregate outstanding principal amount of the Revolving Credit Loans of any
Lender, plus such Lender’s Pro Rata Share of the outstanding principal amount of
all L/C Obligations at such time, plus such Lender’s Pro Rata Share of the
outstanding principal amount of all Swing Line Loans at such time shall not
exceed such Lender’s Revolving Credit Commitment then in effect; provided
further that, the Borrower shall not use the proceeds of any Swing Line Loan to
refinance any outstanding Swing Line Loan. Within the foregoing limits, and
subject to the other terms and conditions hereof, the Borrower may borrow under
this Section 2.04, prepay under Section 2.05, and reborrow under this
Section 2.04. Each Swing Line Loan shall be a Base Rate Loan. Immediately upon
the making of a Swing Line Loan, each Revolving Credit Lender shall be deemed
to, and hereby irrevocably and unconditionally agrees to, purchase from the
Swing Line Lender a risk participation in such Swing Line Loan in an amount
equal to the product of such Lender’s Pro Rata Share times the amount of such
Swing Line Loan.

(b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the
Borrower’s irrevocable notice to the Swing Line Lender and the Administrative
Agent, which may be given by telephone. Each such notice must be received by the
Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the
requested borrowing date, and shall specify (i) the amount to be borrowed, which
shall be a whole multiple of $100,000 and a minimum of $100,000, and (ii) the
requested borrowing date, which shall be a Business Day. Each such telephonic
notice must be confirmed promptly by delivery to the Swing Line Lender and the
Administrative Agent of a written Swing Line Loan Notice, appropriately
completed and signed by a Responsible Officer of the Borrower. Promptly after
receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the
Swing Line Lender will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has also received such Swing Line Loan
Notice and, if not, the Swing Line Lender will notify the Administrative Agent
(by telephone or in writing) of the contents thereof. Unless the Swing Line
Lender has received notice (by telephone or in writing) from the Administrative
Agent (including at the request of any Revolving Credit Lender) prior to 2:00
p.m. on the date of the proposed Swing Line Borrowing (A) directing the Swing
Line Lender not to make such Swing

 

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Line Loan as a result of the limitations set forth in the first proviso to the
first sentence of Section 2.04(a), or (B) that one or more of the applicable
conditions specified in Section 4.02 is not then satisfied, then, subject to the
terms and conditions hereof, the Swing Line Lender will, not later than 3:00
p.m. on the borrowing date specified in such Swing Line Loan Notice, make the
amount of its Swing Line Loan available to the Borrower.

(c) Refinancing of Swing Line Loans. (i) The Swing Line Lender at any time in
its sole and absolute discretion may request, on behalf of the Borrower (which
hereby irrevocably authorizes the Swing Line Lender to so request on its
behalf), that each Revolving Credit Lender make a Base Rate Loan in an amount
equal to such Lender’s Pro Rata Share of the amount of Swing Line Loans then
outstanding. Such request shall be made in writing (which written request shall
be deemed to be a Committed Loan Notice for purposes hereof) and in accordance
with the requirements of Section 2.02, without regard to the minimum, multiples
and time of day requirements specified therein for the principal amount of Base
Rate Loans, but subject to the unutilized portion of the aggregate Revolving
Credit Commitments and the conditions set forth in Section 4.02. The Swing Line
Lender shall furnish the Borrower with a copy of such notice promptly after
delivering such notice to the Administrative Agent. Each Revolving Credit Lender
shall make an amount equal to its Pro Rata Share of the amount specified in such
notice available to the Administrative Agent in immediately available funds for
the account of the Swing Line Lender to the account of the Administrative Agent
most-recently designated by it for such purpose by notice to the Revolving
Credit Lenders not later than 1:00 p.m. on the day specified in such notice. The
Administrative Agent shall remit the funds so received to the Swing Line Lender.

(ii) If for any reason any Swing Line Loan cannot be refinanced by such a
Revolving Credit Borrowing in accordance with Section 2.04(c)(i), the request
for Base Rate Loans submitted by the Swing Line Lender as set forth herein shall
be deemed to be a request by the Swing Line Lender that each of the Revolving
Credit Lenders fund its risk participation in the relevant Swing Line Loan and
each Revolving Credit Lender’s payment to the Administrative Agent for the
account of the Swing Line Lender pursuant to Section 2.04(c)(i) shall be deemed
payment in respect of such participation.

(iii) If any Revolving Credit Lender fails to make available to the
Administrative Agent for the account of the Swing Line Lender any amount
required to be paid by such Lender pursuant to the foregoing provisions of this
Section 2.04(c) by the time specified in Section 2.04(c)(i), the Swing Line
Lender shall be entitled to recover from such Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the Swing Line Lender at a rate per annum equal to
the Federal Funds Rate from time to time in effect. A certificate of the Swing
Line Lender submitted to any Lender (through the Administrative Agent) with
respect to any amounts owing under this clause (iii) shall be conclusive absent
manifest error.

(iv) Each Revolving Credit Lender’s obligation to make Revolving Credit Loans or
to purchase and fund risk participations in Swing Line Loans pursuant to this
Section 2.04(c) shall be absolute and unconditional and shall not be affected by
any circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right

 

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which such Lender may have against the Swing Line Lender, the Borrower or any
other Person for any reason whatsoever, (B) the occurrence or continuance of a
Default, or (C) any other occurrence, event or condition, whether or not similar
to any of the foregoing; provided that each Revolving Credit Lender’s obligation
to make Revolving Credit Loans (but not each Revolving Credit Lender’s
obligation to purchase and fund risk participations in Swing Line Loans)
pursuant to this Section 2.04(c) is subject to the conditions set forth in
Section 4.02. No such funding of risk participations shall relieve or otherwise
impair the obligation of the Borrower to repay Swing Line Loans, together with
interest as provided herein.

(d) Repayment of Participations. (i) At any time after any Revolving Credit
Lender has purchased and funded a risk participation in a Swing Line Loan, if
the Swing Line Lender receives any payment on account of such Swing Line Loan,
the Swing Line Lender will distribute to such Lender its Pro Rata Share of such
payment (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Lender’s risk participation was funded).

(ii) If any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line
Lender under any of the circumstances described in Section 10.06 (including
pursuant to any settlement entered into by the Swing Line Lender in its
discretion), each Revolving Credit Lender shall pay to the Swing Line Lender its
Pro Rata Share thereof on demand of the Administrative Agent, plus interest
thereon from the date of such demand to the date such amount is returned, at a
rate per annum equal to the Federal Funds Rate. The Administrative Agent will
make such demand upon the request of the Swing Line Lender.

(e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be
responsible for invoicing the Borrower for interest on the Swing Line Loans.
Until each Revolving Credit Lender funds its Base Rate Loan or risk
participation pursuant to this Section 2.04 to refinance such Lender’s Pro Rata
Share of any Swing Line Loan, interest in respect of such Pro Rata Share shall
be solely for the account of the Swing Line Lender.

(f) Payments Directly to Swing Line Lender. The Borrower shall make all payments
of principal and interest in respect of the Swing Line Loans directly to the
Swing Line Lender.

SECTION 2.05. Prepayments. (a) Optional. (i) The Borrower may, upon notice to
the Administrative Agent, at any time or from time to time voluntarily prepay
Term Loans and Revolving Credit Loans in whole or in part without premium or
penalty; provided that (1) such notice must be received by the Administrative
Agent not later than 12:30 p.m. (New York City time) (A) three (3) Business Days
prior to any date of prepayment of Eurocurrency Rate Loans and (B) one
(1) Business Day prior to any date of prepayment of Base Rate Loans; (2) any
prepayment of Eurocurrency Rate Loans shall be in a principal amount of
$5,000,000 or a whole multiple of $500,000 in excess thereof; and (3) any
prepayment of Base Rate Loans shall be in a principal amount of $1,000,000 or a
whole multiple of $500,000 in excess thereof or, in each case, if less, the
entire principal amount thereof then outstanding. Each such notice

 

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shall specify the date and amount of such prepayment and the Class(es) and
Type(s) of Loans to be prepaid. The Administrative Agent will promptly notify
each Revolving Credit Lender or Term Lender, as the case may be, of its receipt
of each such notice, and of the amount of such Lender’s Pro Rata Share of such
prepayment. If such notice is given by the Borrower, the Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein. Any prepayment of a Eurocurrency Rate
Loan shall be accompanied by all accrued interest thereon, together with any
additional amounts required pursuant to Section 3.05. Each prepayment of the
Loans pursuant to this Section 2.05(a) shall be paid to the applicable Class of
Revolving Credit Lenders or applicable Class of Term Lenders, as the case may
be, in accordance with their respective Pro Rata Shares.

(ii) The Borrower may, upon notice to the Swing Line Lender (with a copy to the
Administrative Agent), at any time or from time to time, voluntarily prepay
Swing Line Loans in whole or in part without premium or penalty; provided that
(1) such notice must be received by the Swing Line Lender and the Administrative
Agent not later than 1:00 p.m. on the date of the prepayment, and (2) any such
prepayment shall be in a minimum principal amount of $100,000 or a whole
multiple of $100,000 in excess thereof or, if less, the entire principal amount
thereof then outstanding. Each such notice shall specify the date and amount of
such prepayment. The Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein.

(iii) Notwithstanding anything to the contrary contained in this Agreement, the
Borrower may rescind any notice of prepayment under Section 2.05(a)(i) or
2.05(a)(ii) if such prepayment would have resulted from a refinancing of all of
the Facilities, which refinancing shall not be consummated or shall otherwise be
delayed.

(b) Mandatory.

(i) (A)If (x) Holdings, the Borrower or any Restricted Subsidiary Disposes of
any property or assets (other than any Disposition of any property or assets
permitted by Section 7.05(a), (b), (c), (d) (to the extent constituting a
Disposition by any Restricted Subsidiary to a Loan Party), (e), (f), (g), (h),
(i) or (j)) or (y) any Casualty Event occurs, which in the aggregate results in
the realization or receipt by Holdings, the Borrower or such Restricted
Subsidiary of Net Cash Proceeds, the Borrower shall cause to be prepaid on or
prior to the date which is ten (10) Business Days after the date of the
realization or receipt of such Net Cash Proceeds an aggregate principal amount
of Term Loans in an amount equal to 100% of all Net Cash Proceeds received;
provided that no such prepayment shall be required pursuant to this
Section 2.05(b)(i)(A) with respect to such portion of such Net Cash Proceeds
that the Borrower shall have, on or prior to such date, given written notice to
the Administrative Agent of its intent to reinvest in accordance with
Section 2.05(b)(i)(B) (which notice may only be provided if no Event of Default
has occurred and is then continuing);

(B) With respect to any Net Cash Proceeds realized or received with respect to
any Disposition (other than any Disposition specifically excluded from the
application of Section 2.05(b)(i)(A)) or any Casualty Event, at the option of

 

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the Borrower the Borrower may reinvest all or any portion of such Net Cash
Proceeds in assets useful for its business within (x) fifteen (15) months
following receipt of such Net Cash Proceeds or (y) if the Borrower enters into a
legally binding commitment to reinvest such Net Cash Proceeds within fifteen
(15) months following receipt thereof, within one hundred and eighty (180) days
of the date of such legally binding commitment; provided that (i) so long as an
Event of Default shall have occurred and be continuing, the Borrower shall not
be permitted to make any such reinvestments (other than pursuant to a legally
binding commitment that the Borrower entered into at a time when no Event of
Default is continuing) and (ii) if any Net Cash Proceeds are no longer intended
to be or cannot be so reinvested at any time after delivery of a notice of
reinvestment election, an amount equal to any such Net Cash Proceeds shall be
applied within five (5) Business Days after the Borrower reasonably determines
that such Net Cash Proceeds are no longer intended to be or cannot be so
reinvested to the prepayment of the Term Loans as set forth in this
Section 2.05.

(ii) If Holdings, the Borrower or any Restricted Subsidiary incurs or issues any
Indebtedness not expressly permitted to be incurred or issued pursuant to
Section 7.03, the Borrower shall cause to be prepaid an aggregate principal
amount of Term Loans in an amount equal to 100% of all Net Cash Proceeds
received therefrom on or prior to the date which is five (5) Business Days after
the receipt of such Net Cash Proceeds.

(iii) If for any reason the aggregate Revolving Credit Exposures at any time
exceeds the aggregate Revolving Credit Commitments then in effect, the Borrower
shall promptly prepay or cause to be promptly prepaid Revolving Credit Loans and
Swing Line Loans and/or Cash Collateralize the L/C Obligations in an aggregate
amount equal to such excess; provided that the Borrower shall not be required to
Cash Collateralize the L/C Obligations pursuant to this Section 2.05(b)(iii)
unless after the prepayment in full of the Revolving Credit Loans and Swing Line
Loans such aggregate Outstanding Amount exceeds the aggregate Revolving Credit
Commitments then in effect.

(iv) Each prepayment of Term Loans pursuant to this Section 2.05(b) shall be
applied in direct order of maturity to repayments thereof required pursuant to
Section 2.07(a); and each such prepayment shall be paid to the Lenders in
accordance with their respective Pro Rata Shares, subject to the proviso to this
clause (iv) and clause (v) of this Section 2.05(b); provided that the Borrower
shall determine the allocations of any prepayments pursuant to this
Section 2.05(b) as between Tranche A Term Loans and Tranche B Term Loans.

(v) The Borrower shall notify the Administrative Agent in writing of any
mandatory prepayment of Term Loans required to be made pursuant to clauses
(i) through (ii) of this Section 2.05(b) at least three (3) Business Days prior
to the date of such prepayment. Each such notice shall specify the date of such
prepayment and provide a reasonably detailed calculation of the amount of such
prepayment. The Administrative Agent will promptly notify each Term Lender of
the contents of the Borrower’s prepayment notice and of such Term Lender’s Pro
Rata Share of the prepayment.

 

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(vi) Funding Losses, Etc. All prepayments under this Section 2.05 shall be made
together with, in the case of any such prepayment of a Eurocurrency Rate Loan on
a date other than the last day of an Interest Period therefor, any amounts owing
in respect of such Eurocurrency Rate Loan pursuant to Section 3.05.
Notwithstanding any of the other provisions of Section 2.05(b), so long as no
Event of Default shall have occurred and be continuing, if any prepayment of
Eurocurrency Rate Loans is required to be made under this Section 2.05(b) other
than on the last day of the Interest Period therefor, the Borrower may, in its
sole discretion, deposit the amount of any such prepayment otherwise required to
be made thereunder into a Cash Collateral Account until the last day of such
Interest Period, at which time the Administrative Agent shall be authorized
(without any further action by or notice to or from the Borrower or any other
Loan Party) to apply such amount to the prepayment of such Loans in accordance
with this Section 2.05(b). Upon the occurrence and during the continuance of any
Event of Default, the Administrative Agent shall also be authorized (without any
further action by or notice to or from the Borrower or any other Loan Party) to
apply such amount to the prepayment of the outstanding Loans in accordance with
this Section 2.05(b).

(c) (i) All prepayments of Tranche B Term Loans effected on or prior to the
first anniversary of the Closing Date, in each case with the proceeds of a
substantially concurrent issuance of loans under any secured credit facilities
pursuant to this Agreement or otherwise (excluding a refinancing of all the
Facilities outstanding under this Agreement in connection with another
transaction not permitted by this Agreement, including a Change of Control (as
determined prior to giving effect to any amendment or waiver of this Agreement
being adopted in connection with such transaction), provided that the primary
purpose of such transaction is not to refinance Indebtedness hereunder at an
Applicable Rate or similar interest rate spread more favorable to the Borrower),
shall be accompanied by a prepayment fee equal to 1.00% of the aggregate amount
of such prepayments if the Yield applicable to such new loans is or, upon the
satisfaction of certain conditions, would be less than the Yield applicable to
the Tranche B Term Loans as of the date hereof.

(ii) In the event that on or prior to the first anniversary of the Closing Date,
a Lender must assign its Tranche B Term Loans pursuant to Section 3.07 as a
result of its failure to consent to any amendment, waiver, discharge or
termination that would have the effect (whether immediately or upon the
satisfaction of any condition) of reducing the Yield on such Tranche B Term
Loans, the Borrower shall pay to such Lender a premium in respect of such
assignment equal to 1.00% of the aggregate principal amount of the Tranche B
Term Loans so assigned by such Lender;

For purposes of this Section 2.05(c), “Yield” shall mean, with respect to any
Indebtedness on any date, an effective interest cost or weighted average yield
(as determined by the Administrative Agent consistent with generally accepted
financial practice and, in any event, including upfront or similar fees or
original issue discount (with original issue discount being equated to interest
based on an assumed four-year average life to maturity of such Indebtedness),
and, if the lowest possible Eurocurrency Rate applicable to such Indebtedness is
greater than 1.00% or the lowest possible Base Rate applicable to such
Indebtedness is greater than 2.00%, the difference between such “floor” and
1.00%, in the case of Eurocurrency Rate Tranche B Loans, or 2.00%, in the case
of Base Rate Tranche B Loans, shall be equated to interest rate

 

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margin for purposes of this Section 2.05(c), but excluding any arrangement or
commitment fees in connection therewith) that is less than the interest rate for
or weighted average yield (as determined by the Administrative Agent on the same
basis) of the Tranche B Term Loans.

SECTION 2.06. Termination or Reduction of Commitments. (a) Optional. The
Borrower may, upon written notice to the Administrative Agent, terminate the
unused Commitments of any Class, or from time to time permanently reduce the
unused Commitments of any Class; provided that (i) any such notice shall be
received by the Administrative Agent three (3) Business Days prior to the date
of termination or reduction and (ii) any such partial reduction shall be in an
aggregate amount of $1,000,000 or any whole multiple of $500,000 in excess
thereof. Notwithstanding the foregoing, the Borrower may rescind or postpone any
notice of termination of the Commitments if such termination would have resulted
from a refinancing of all of the Facilities, which refinancing shall not be
consummated or otherwise shall be delayed.

(b) Mandatory. The Term Commitment of each Term Lender shall be automatically
and permanently reduced to $0 upon the making of such Term Lender’s Term Loans
pursuant to Section 2.01(a).

(c) Application of Commitment Reductions; Payment of Fees. The Administrative
Agent will promptly notify the Lenders of any termination or reduction of unused
Commitments of any Class under this Section 2.06. Upon any reduction of unused
Commitments of any Class, the Commitment of each Lender of such Class shall be
reduced by such Lender’s Pro Rata Share of the amount by which such Commitments
are reduced (other than the termination of the Commitment of any Lender as
provided in Section 3.07). All commitment fees accrued until the effective date
of any termination of the Aggregate Commitments shall be paid on the effective
date of such termination.

SECTION 2.07. Repayment of Loans. (a) Tranche A Term Loans. The Borrower shall
repay to the Administrative Agent for the ratable account of the Tranche A Term
Lenders in consecutive quarterly installments as follows (which installments
shall be reduced as a result of the application of prepayments in accordance
with the order of priority set forth in Section 2.05):

 

DATE

   TRANCHE A TERM
LOAN PRINCIPAL
AMORTIZATION
PAYMENT  

SEPTEMBER 30, 2011

   $ 1,875,000   

DECEMBER 31, 2011

   $ 1,875,000   

MARCH 31, 2012

   $ 1,875,000   

JUNE 30, 2012

   $ 1,875,000   

SEPTEMBER 30, 2012

   $ 1,875,000   

DECEMBER 31, 2012

   $ 1,875,000   

MARCH 31, 2013

   $ 1,875,000   

JUNE 30, 2013

   $ 1,875,000   

SEPTEMBER 30, 2013

   $ 2,812,500   

 

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DATE

   TRANCHE A TERM
LOAN PRINCIPAL
AMORTIZATION
PAYMENT  

DECEMBER 31, 2013

   $ 2,812,500   

MARCH 31, 2014

   $ 2,812,500   

JUNE 30, 2014

   $ 2,812,500   

SEPTEMBER 30, 2014

   $ 3,750,000   

DECEMBER 31, 2014

   $ 3,750,000   

MARCH 31, 2015

   $ 3,750,000   

JUNE 30, 2015

   $ 3,750,000   

SEPTEMBER 30, 2015

   $ 3,750,000   

DECEMBER 31, 2015

   $ 3,750,000   

MARCH 31, 2016

   $ 3,750,000   

MATURITY DATE FOR TERM A FACILITY

   $ 97,500,000   

provided, however, that the final principal repayment installment of the Tranche
A Term Loans shall be repaid on the Maturity Date for the Tranche A Term
Facility and in any event shall be in an amount equal to the aggregate principal
amount of all Tranche A Term Loans outstanding on such date.

(b) Tranche B Term Loans. The Borrower shall repay to the Administrative Agent
for the ratable account of the Tranche B Term Lenders (i) on the last Business
Day of each March, June, September and December, commencing on September 30,
2011, an aggregate principal amount equal to 0.25% of the aggregate principal
amount of all Tranche B Term Loans outstanding on the Closing Date (which
payments shall be reduced as a result of the application of prepayments in
accordance with the order of priority set forth in Section 2.05) and (ii) on the
Maturity Date for the Tranche B Term Loans, the aggregate principal amount of
all Tranche B Term Loans outstanding on such date.

(c) Revolving Credit Loans. The Borrower shall repay to the Administrative Agent
for the ratable account of the Revolving Credit Lenders on the Maturity Date for
the Revolving Credit Facility the aggregate principal amount of all Revolving
Credit Loans outstanding on such date.

(d) Swing Line Loans. The Borrower shall repay its Swing Line Loans on the
earlier to occur of (i) the date five (5) Business Days after such Loan is made
and (ii) the Maturity Date for the Revolving Credit Facility.

SECTION 2.08. Interest. (a) Subject to the provisions of Section 2.08(b),
(i) each Eurocurrency Rate Loan shall bear interest on the outstanding principal
amount thereof for each Interest Period at a rate per annum equal to the
Eurocurrency Rate for such Interest Period plus the Applicable Rate, (ii) each
Base Rate Loan shall bear interest on the outstanding principal amount thereof
from the applicable borrowing date at a rate per annum equal to the Base Rate
plus the Applicable Rate and (iii) each Swing Line Loan shall bear interest on
the outstanding

 

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principal amount thereof from the applicable borrowing date at a rate per annum
equal to the Base Rate plus the Applicable Rate for Revolving Credit Loans.

(b) The Borrower shall pay interest on past due amounts hereunder at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws. Accrued and unpaid interest on
past due amounts (including interest on past due interest) shall be due and
payable upon demand; provided that no amount shall be payable pursuant to this
Section 2.08(b) to a Defaulting Lender so long as such Lender shall be a
Defaulting Lender; provided, further, that no amounts shall accrue pursuant to
this Section 2.08(b) on any overdue amount, reimbursement obligation in respect
of any L/C Advance or other amount payable to a Defaulting Lender so long as
such Lender shall be a Defaulting Lender.

(c) Interest on each Loan shall be due and payable in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified
herein. Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.

SECTION 2.09. Fees. In addition to certain fees described in Sections 2.03(h)
and (i):

(a) Commitment Fee. The Borrower shall pay to the Administrative Agent for the
account of each Revolving Credit Lender in accordance with its Pro Rata Share, a
commitment fee equal to the Applicable Rate with respect to commitment fees
times the actual daily amount by which the aggregate Revolving Credit Commitment
exceeds the sum of (A) Outstanding Amount of Revolving Credit Loans and (B) the
Outstanding Amount of L/C Obligations; provided that any commitment fee accrued
with respect to any of the Commitments of a Defaulting Lender during the period
prior to the time such Lender became a Defaulting Lender and unpaid at such time
shall not be payable by the Borrower so long as such Lender shall be a
Defaulting Lender except to the extent that such commitment fee shall otherwise
have been due and payable by the Borrower prior to such time; and provided
further that no commitment fee shall accrue on any of the Commitments of a
Defaulting Lender so long as such Lender shall be a Defaulting Lender. The
commitment fee shall accrue at all times from the date hereof until the Maturity
Date for the Revolving Credit Facility, including at any time during which one
or more of the conditions in Article 4 is not met, and shall be due and payable
quarterly in arrears on the third Business Day after the end of each March,
June, September and December, commencing with the first such date to occur after
the Closing Date, and on the Maturity Date for the Revolving Credit Facility.
The commitment fee shall be calculated quarterly in arrears, and if there is any
change in the Applicable Rate during any quarter, the actual daily amount shall
be computed and multiplied by the Applicable Rate separately for each period
during such quarter that such Applicable Rate was in effect.

(b) Other Fees. The Borrower shall pay to the Agents such fees as shall have
been separately agreed upon in writing in the amounts and at the times so
specified. Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever (except as expressly agreed between the Borrower and
the applicable Agent).

 

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SECTION 2.10. Computation of Interest and Fees. All computations of interest for
Base Rate Loans when the Base Rate is determined by JPMorgan Chase Bank’s “prime
rate” shall be made on the basis of a year of three hundred and sixty-five
(365) days (or three hundred and sixty-six (366) days in a leap year) and actual
days elapsed. All other computations of fees and interest shall be made on the
basis of a three hundred and sixty (360) day year and actual days elapsed.
Interest shall accrue on each Loan for the day on which the Loan is made, and
shall not accrue on a Loan, or any portion thereof, for the day on which the
Loan or such portion is paid; provided that any Loan that is repaid on the same
day on which it is made shall, subject to Section 2.12(a), bear interest for one
(1) day. Each determination by the Administrative Agent of an interest rate or
fee hereunder shall be conclusive and binding for all purposes, absent manifest
error.

SECTION 2.11. Evidence of Indebtedness. (a) The Credit Extensions made by each
Lender shall be evidenced by one or more accounts or records maintained by such
Lender and evidenced by one or more entries in the Register maintained by the
Administrative Agent pursuant to Section 10.07(d), acting solely for purposes of
Treasury Regulation Section 5f.103-1(c), as a non-fiduciary agent for the
Borrower, in each case in the ordinary course of business. The accounts or
records maintained by the Administrative Agent and each Lender shall be prima
facie evidence absent manifest error of the amount of the Credit Extensions made
by the Lenders to the Borrower and the interest and payments thereon. Any
failure to so record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Borrower hereunder to pay any amount
owing with respect to the Obligations. In the event of any conflict between the
accounts and records maintained by any Lender and the accounts and records of
the Administrative Agent in respect of such matters, the accounts and records of
the Administrative Agent shall control in the absence of manifest error. Upon
the request of any Lender made through the Administrative Agent, the Borrower
shall execute and deliver to such Lender (through the Administrative Agent) a
Note payable to such Lender, which shall evidence such Lender’s Loans in
addition to such accounts or records. Each Lender may attach schedules to its
Note and endorse thereon the date, Type (if applicable), amount and maturity of
its Loans and payments with respect thereto.

(b) In addition to the accounts and records referred to in Section 2.11(a), each
Lender and the Administrative Agent shall maintain in accordance with its usual
practice accounts or records and, in the case of the Administrative Agent,
entries in the Register, evidencing the purchases and sales by such Lender of
participations in Letters of Credit and Swing Line Loans. In the event of any
conflict between the accounts and records maintained by the Administrative Agent
and the accounts and records of any Lender in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of
manifest error.

(c) Entries made in good faith by the Administrative Agent in the Register
pursuant to Sections 2.11(a) and (b), and by each Lender in its account or
accounts pursuant to Sections 2.11(a) and (b), shall be prima facie evidence of
the amount of principal and interest due and payable or to become due and
payable from the Borrower to, in the case of the Register, each Lender and, in
the case of such account or accounts, such Lender, under this Agreement and the
other Loan Documents, absent manifest error; provided that the failure of the
Administrative Agent or such Lender to make an entry, or any finding that an
entry is incorrect, in the Register

 

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or such account or accounts shall not limit or otherwise affect the obligations
of the Borrower under this Agreement and the other Loan Documents.

SECTION 2.12. Payments Generally. (a) All payments to be made by the Borrower
shall be made without condition or deduction for any counterclaim, defense,
recoupment or setoff. Except as otherwise expressly provided herein, all
payments by the Borrower hereunder shall be made to the Administrative Agent,
for the account of the respective Lenders to which such payment is owed, to the
account of the Administrative Agent most-recently designated by it for such
purpose by notice to the Borrower in U.S. dollars and in immediately available
funds not later than 2:00 p.m. on the date specified herein. The Administrative
Agent will promptly distribute to each Lender its Pro Rata Share (or other
applicable share as provided herein) of such payment in like funds as received
by wire transfer to such Lender’s Lending Office. All payments received by the
Administrative Agent after 2:00 p.m. shall in each case be deemed received on
the next succeeding Business Day and any applicable interest or fee shall
continue to accrue.

(b) If any payment to be made by the Borrower shall come due on a day other than
a Business Day, payment shall be made on the next following Business Day, and
such extension of time shall be reflected in computing interest or fees, as the
case may be; provided that, if such extension would cause payment of interest on
or principal of Eurocurrency Rate Loans to be made in the next succeeding
calendar month, such payment shall be made on the immediately preceding Business
Day.

(c) Unless the Borrower or any Lender has notified the Administrative Agent,
prior to the date any payment is required to be made by it to the Administrative
Agent hereunder, that the Borrower or such Lender, as the case may be, will not
make such payment, the Administrative Agent may assume that the Borrower or such
Lender, as the case may be, has timely made such payment and may (but shall not
be so required to), in reliance thereon, make available a corresponding amount
to the Person entitled thereto. If and to the extent that such payment was not
in fact made to the Administrative Agent in immediately available funds, then:

(i) if the Borrower failed to make such payment, each Lender shall forthwith on
demand repay to the Administrative Agent the portion of such assumed payment
that was made available to such Lender in immediately available funds, together
with interest thereon in respect of each day from and including the date such
amount was made available by the Administrative Agent to such Lender to the date
such amount is repaid to the Administrative Agent in immediately available funds
at the Federal Funds Rate from time to time in effect; and

(ii) if any Lender failed to make such payment, such Lender shall forthwith on
demand pay to the Administrative Agent the amount thereof in immediately
available funds, together with interest thereon for the period from the date
such amount was made available by the Administrative Agent to the Borrower to
the date such amount is recovered by the Administrative Agent (the “Compensation
Period”) at a rate per annum equal to the Federal Funds Rate from time to time
in effect. When such Lender makes payment to the Administrative Agent (together
with all accrued interest thereon), then such payment amount (excluding the
amount of any interest which may have

 

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accrued and been paid in respect of such late payment) shall constitute such
Lender’s Loan included in the applicable Borrowing. If such Lender does not pay
such amount forthwith upon the Administrative Agent’s demand therefor, the
Administrative Agent may make a demand therefor upon the Borrower, and the
Borrower shall pay such amount to the Administrative Agent, together with
interest thereon for the Compensation Period at a rate per annum equal to the
rate of interest applicable to the applicable Borrowing. Nothing herein shall be
deemed to relieve any Lender from its obligation to fulfill its Commitment or to
prejudice any rights which the Administrative Agent or the Borrower may have
against any Lender as a result of any default by such Lender hereunder.

A notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under this Section 2.12(c) shall be conclusive, absent
manifest error.

(d) If any Lender makes available to the Administrative Agent funds for any Loan
to be made by such Lender as provided in the foregoing provisions of this
Article 2, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions to the applicable Credit Extension
set forth in Article 4 are not satisfied or waived in accordance with the terms
hereof, the Administrative Agent shall return such funds to such Lender, without
interest.

(e) The obligations of the Lenders hereunder to make Loans and to fund
participations in Letters of Credit and Swing Line Loans are several and not
joint. The failure of any Lender to make any Loan or to fund any such
participation on any date required hereunder shall not relieve any other Lender
of its corresponding obligation to do so on such date, and, other than as
expressly prescribed herein with respect to a Defaulting Lender, no Lender shall
be responsible for the failure of any other Lender to so make its Loan or
purchase its participation.

(f) Nothing herein shall be deemed to obligate any Lender to obtain the funds
for any Loan in any particular place or manner or to constitute a representation
by any Lender that it has obtained or will obtain the funds for any Loan in any
particular place or manner.

(g) Whenever any payment received by the Administrative Agent under this
Agreement or any of the other Loan Documents is insufficient to pay in full all
amounts due and payable to the Administrative Agent and the Lenders under or in
respect of this Agreement and the other Loan Documents on any date, such payment
shall be distributed by the Administrative Agent and applied by the
Administrative Agent and the Lenders in the order of priority set forth in
Section 8.04. If the Administrative Agent receives funds for application to the
Obligations of the Loan Parties under or in respect of the Loan Documents under
circumstances for which the Loan Documents do not specify the manner in which
such funds are to be applied, the Administrative Agent may, but shall not be
obligated to, elect to distribute such funds to each of the Lenders in
accordance with such Lender’s Pro Rata Share of the sum of (a) the Outstanding
Amount of all Loans outstanding at such time and (b) the Outstanding Amount of
all L/C Obligations outstanding at such time, in repayment or prepayment of such
of the outstanding Loans or other Obligations then owing to such Lender.

 

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SECTION 2.13. Sharing of Payments. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by it, or
the participations in L/C Obligations and Swing Line Loans held by it, any
payment (whether voluntary, involuntary, through the exercise of any right of
setoff, or otherwise) in excess of its ratable share (or other share
contemplated hereunder) thereof, such Lender shall immediately (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Lenders such
participations in the Loans made by them and/or such subparticipations in the
participations in L/C Obligations or Swing Line Loans held by them, as the case
may be, as shall be necessary to cause such purchasing Lender to share the
excess payment in respect of such Loans or such participations, as the case may
be, pro rata with each of them; provided that (i) if all or any portion of such
excess payment is thereafter recovered from the purchasing Lender under any of
the circumstances described in Section 10.06 (including pursuant to any
settlement entered into by the purchasing Lender in its discretion), such
purchase shall to that extent be rescinded and each other Lender shall repay to
the purchasing Lender the purchase price paid therefor, together with an amount
equal to such paying Lender’s ratable share (according to the proportion of
(x) the amount of such paying Lender’s required repayment to (y) the total
amount so recovered from the purchasing Lender) of any interest or other amount
paid or payable by the purchasing Lender in respect of the total amount so
recovered, without further interest thereon and (ii) the provisions of this
paragraph shall not be construed to apply to any payment made by the Borrower
pursuant to and in accordance with the express terms of this Agreement or any
payment obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or L/C Obligations to any assignee or
participant, other than to the Borrower or any Subsidiary or other Affiliate
thereof, excluding assignments to or purchases by a Purchasing Borrower Party in
accordance with Section 10.07(k) (as to which the provisions of this paragraph
shall apply). The Borrower agrees that any Lender so purchasing a participation
from another Lender may, to the fullest extent permitted by applicable Law,
exercise all its rights of payment (including the right of setoff, but subject
to Section 10.09) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.
The Administrative Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under this
Section 2.13 and will in each case notify the Lenders following any such
purchases or repayments. Each Lender that purchases a participation pursuant to
this Section 2.13 shall from and after such purchase have the right to give all
notices, requests, demands, directions and other communications under this
Agreement with respect to the portion of the Obligations purchased to the same
extent as though the purchasing Lender were the original owner of the
Obligations purchased.

SECTION 2.14. Incremental Credit Extensions. The Borrower may at any time or
from time to time after the Closing Date, by notice to the Administrative Agent
(whereupon the Administrative Agent shall promptly deliver a copy to each of the
Lenders), request one or more additional tranches of Tranche A Term Loans (the
“Incremental Tranche A Term Loans”), Tranche B Term Loans (the “Incremental
Tranche B Term Loans” and, together with the Incremental Tranche A Term Loans,
the “Incremental Term Loans”) or revolving credit commitments (the “Incremental
Revolving Credit Loans”) or increases in the aggregate amount of the Revolving
Credit Commitments (each such increase a “Revolving Commitment Increase”;
together with the Incremental Revolving Credit Loans, the “Incremental Revolving
Facilities”) under the Facilities (each, an “Incremental Facility”), provided
that (i) both at the time of any such request and upon the effectiveness of any
Incremental Amendment referred to

 

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below, no Default or Event of Default shall exist and at the time that any such
Incremental Term Loan is made or Incremental Revolving Facility becomes
effective (and after giving effect thereto) no Default or Event of Default shall
exist and (ii) the Borrower shall be in compliance with the covenant set forth
in Section 7.11 determined on a Pro Forma Basis as of the date of such
Incremental Facility and the last day of the most recent Test Period. The
aggregate amount of the Incremental Facilities shall not exceed the greater of
(i) $150,000,000 and (ii) an amount such that, after giving pro forma effect to
the Incremental Facility, the First Lien Leverage Ratio shall not exceed
3.75:1.00 (which, solely for purposes of determining the First Lien Leverage
Ratio pursuant to this clause (ii), any Indebtedness incurred or proposed to be
incurred under such Incremental Facility shall be deemed to be first-lien
Indebtedness). The Incremental Facilities (a) shall rank pari passu or junior in
right of payment and of security with the Revolving Credit Loans and the Term
Loans, (b) (x) in the case of a Revolving Commitment Increase, shall mature on
the Maturity Date of the Revolving Credit Facility and (y) shall not mature
earlier than the Maturity Date of (1) the Tranche A Term Facility, in the case
of Incremental Tranche A Term Loans, and (2) the Tranche B Term Facility, in the
case of Incremental Tranche B Term Loans, (c) shall have a Weighted Average Life
to Maturity no shorter than the Weighted Average Life to Maturity of (1) the
Tranche A Term Facility, in the case of Incremental Tranche A Term Loans, and
(2) the Tranche B Term Facility, in the case of Incremental Tranche B Term
Loans, (d) except as set forth above, shall be treated substantially the same as
(and in any event, no more favorably than) (1) the Revolving Credit Facility, in
the case of Incremental Revolving Credit Loans, (2) the Tranche A Term Loans, in
the case of Incremental Tranche A Term Loans and (3) the Tranche B Term Loans,
in the case of Incremental Tranche B Term Loans (in each case, other than with
respect to pricing, amortization and maturity), and (e) will accrue interest at
rates determined by the Borrower and the lenders providing such Incremental
Facility, which rates may be higher or lower than the rates applicable to
(1) the Revolving Credit Facility, in the case of Incremental Revolving Credit
Loans, (2) the Tranche A Term Loans, in the case of Incremental Tranche A Term
Loans and (3) the Tranche B Term Loans, in the case of Incremental Tranche B
Term Loans; provided that with respect to any Incremental Term Loans incurred
after the Closing Date and until the second anniversary after the Closing
Date, if the sum of the Applicable Rate (which, for such purposes only, shall be
deemed to include all upfront or similar fees or original issue discount payable
to all Lenders providing such Incremental Term Loans (with such upfront or
similar fees or original issue discount being equated to interest based on an
assumed four-year life to maturity) but excluding customary arrangement or
commitment fees paid to the arrangers thereof) and any “LIBOR floor” (such sum,
the “Incremental Rate”) applicable to such Indebtedness relating to the
Incremental Term Loans (1) exceeds, in the case of Incremental Tranche A Term
Loans, the sum of the Applicable Rate and Adjusted LIBOR (such sum, the “Tranche
A Rate”) relating to the Tranche A Term Loans by more than 0.50%, the Applicable
Rate relating to the Tranche A Term Loans shall be adjusted such that the
Tranche A Rate is equal to the Incremental Rate relating to the applicable
Incremental Tranche A Term Loans minus 0.50%, and (2) exceeds, in the case of
Incremental Tranche B Term Loans, the sum of the Applicable Rate and Adjusted
LIBOR (such sum, the “Tranche B Rate”) relating to the Tranche B Term Loans by
more than 0.50%, the Applicable Rate relating to the Tranche B Term Loans shall
be adjusted such that the Tranche B Rate is equal to the Incremental Rate
relating to the applicable Incremental Tranche B Term Loans minus 0.50%. Each
notice from the Borrower pursuant to this Section shall set forth the requested
amount and proposed terms of the relevant Incremental Term Loans or Incremental

 

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Revolving Facility. Incremental Term Loans and Incremental Revolving Facilities
may be provided by any existing Lender (and each existing Tranche A Term Lender
will have the right, but not an obligation, to provide a portion of any
Incremental Tranche A Term Loan, each existing Tranche B Term Lender will have
the right, but not an obligation, to provide a portion of any Incremental
Tranche B Term Loan, and each existing Revolving Credit Lender will have the
right, but not an obligation, to provide a portion of any Incremental Revolving
Facility, in each case, on terms permitted in this Section 2.14 and otherwise on
terms reasonably acceptable to the Administrative Agent) or by any other bank or
other financial institution (any such other bank or other financial institution
being called an “Additional Lender”), provided that the Administrative Agent
shall have consented (not to be unreasonably withheld) to such Lender’s or
Additional Lender’s making such Incremental Term Loans and Incremental Revolving
Facility if such consent would be required under Section 10.07(b) for an
assignment of Loans to such Lender or Additional Lender. Commitments in respect
of Incremental Term Loans and Incremental Revolving Facilities shall become
Commitments under this Agreement pursuant to an amendment (an “Incremental
Amendment”) to this Agreement and, as appropriate, the other Loan Documents,
executed by Holdings, the Borrower, each Lender agreeing to provide such
Commitment, if any, each Additional Lender, if any, and the Administrative
Agent. The Incremental Amendment may, without the consent of any other Lenders,
effect such amendments to this Agreement and the other Loan Documents as may be
necessary or appropriate, in the reasonable opinion of the Administrative Agent
and the Borrower, to effect the provisions of this Section. The effectiveness of
any Incremental Amendment shall be subject to the satisfaction on the date
thereof (each, an “Incremental Facility Closing Date”) of each of the conditions
set forth in Section 4.02 (it being understood that all references to “the date
of such Credit Extension” or similar language in such Section 4.02 shall be
deemed to refer to the effective date of such Incremental Amendment) and such
other conditions as the parties thereto shall agree. The Borrower will use the
proceeds of the Incremental Term Loans and the Incremental Revolving Facilities
for any purpose not prohibited by this Agreement. No Lender shall be obligated
to provide any Incremental Term Loans or Incremental Revolving Facilities unless
it so agrees.

SECTION 2.15. Loan Modification Offers. (a) The Borrower may on one or more
occasions, by written notice to the Administrative Agent, make one or more
offers (each, a “Loan Modification Offer”) to all the Lenders of one or more
Classes (each Class subject to such a Loan Modification Offer, an “Affected
Class”) to make one or more Permitted Amendments pursuant to procedures
reasonably specified by the Administrative Agent and reasonably acceptable to
the Borrower. Such notice shall set forth (i) the terms and conditions of the
requested Permitted Amendment and (ii) the date on which such Permitted
Amendment is requested to become effective (which shall not be less than 10
Business Days nor more than 30 Business Days after the date of such notice,
unless otherwise agreed to by the Administrative Agent). Permitted Amendments
shall become effective only with respect to the Loans and Commitments of the
Lenders of the Affected Class that accept the applicable Loan Modification Offer
(such Lenders, the “Accepting Lenders”) and, in the case of any Accepting
Lender, only with respect to such Lender’s Loans and Commitments of such
Affected Class as to which such Lender’s acceptance has been made.

(b) A Permitted Amendment shall be effected pursuant to a Loan Modification
Agreement executed and delivered by Holdings, each applicable Borrower, each
applicable

 

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Accepting Lender and the Administrative Agent; provided that no Permitted
Amendment shall become effective unless Holdings and each applicable Borrower
shall have delivered to the Administrative Agent such customary legal opinions,
board resolutions, secretary’s certificates, officer’s certificates and other
similar documents as shall reasonably be requested by the Administrative Agent
in connection therewith. The Administrative Agent shall promptly notify each
Lender as to the effectiveness of each Loan Modification Agreement. Each Loan
Modification Agreement may, without the consent of any Lender other than the
applicable Accepting Lenders, effect such amendments to this Agreement and the
other Loan Documents as may be necessary or appropriate, in the opinion of the
Administrative Agent, to give effect to the provisions of this Section,
including any amendments necessary to treat the applicable Loans and/or
Commitments of the Accepting Lenders as a new “Class” or “Series” of loans
and/or commitments hereunder; provided that, in the case of any Loan
Modification Offer relating to Revolving Credit Commitments or Revolving Credit
Loans, except as otherwise agreed to by each Issuing Bank and the Swingline
Lender, the allocation of the participation exposure with respect to any
then-existing or subsequently issued or made Letter of Credit or Swingline Loan
as between the commitments of such new “Class” and the remaining Revolving
Credit Commitments shall be made on a ratable basis as between the commitments
of such new “Class” and the remaining Revolving Credit Commitments.

(b) This Section 2.15 shall supersede any provisions in Section 2.13 or
Section 10.01 to the contrary.

SECTION 2.16. Defaulting Lenders. (a) Notwithstanding anything to the contrary
contained in this Agreement, if any Lender becomes a Defaulting Lender, then,
until such time as that Lender is no longer a Defaulting Lender, to the extent
permitted by applicable law any payment of principal, interest, fees or other
amounts received by the Administrative Agent for the account of that Defaulting
Lender (whether voluntary or mandatory, at maturity, pursuant to Article 8 or
otherwise, and including any amounts made available to the Administrative Agent
by that Defaulting Lender pursuant to Section 10.09), shall be applied at such
time or times as may be determined by the Administrative Agent as follows:
first, to the payment of any amounts owing by that Defaulting Lender to the
Administrative Agent hereunder; second, in the case of a Revolving Credit
Lender, to the payment on a pro rata basis of any amounts owing by that
Defaulting Lender to each L/C Issuer and the Swingline Lender hereunder; third,
as the Borrower may request (so long as no Default or Event of Default exists),
to the funding of any Loan in respect of which that Defaulting Lender has failed
to fund its portion thereof as required by this Agreement, as determined by the
Administrative Agent; fourth, in the case of a Revolving Credit Lender, if so
determined by the Administrative Agent and the Borrower, to be held in a
non-interest bearing deposit account and released in order to satisfy
obligations of that Defaulting Lender to fund Loans under this Agreement; fifth,
to the payment of any amounts owing to the Lenders, each L/C Issuer or the
Swingline Lender as a result of any judgment of a court of competent
jurisdiction obtained by any Lender, any L/C Issuer or the Swingline Lender
against that Defaulting Lender as a result of that Defaulting Lender’s breach of
its obligations under this Agreement; sixth, so long as no Default or Event of
Default exists, to the payment of any amounts owing to the Borrower as a result
of any judgment of a court of competent jurisdiction obtained by the Borrower
against that Defaulting Lender as a result of that Defaulting Lender’s breach of
its obligations under this Agreement; and seventh, to that Defaulting Lender or
as otherwise directed by a court of competent jurisdiction; provided

 

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that if such payment is a payment of the principal amount of any Loans or LC
Advances and such Lender is a Defaulting Lender under clause (a) of the
definition thereof, such payment shall be applied solely to pay the relevant
Loans of, and LC Advances owed to, the relevant non-Defaulting Lenders on a pro
rata basis prior to being applied pursuant to Section 2.03(g). Any payments,
prepayments or other amounts paid or payable to a Defaulting Lender that are
applied (or held) to pay amounts owed by a Defaulting Lender or to post cash
collateral pursuant to Section 2.03(g) shall be deemed paid to and redirected by
that Defaulting Lender, and each Lender irrevocably consents hereto.

(b) During any period in which there is a Defaulting Lender, for purposes of
computing the amount of the obligation of each non-Defaulting Lender to acquire,
refinance or fund participations in Swingline Loans and Letters of Credit
pursuant to Sections 2.03 and 2.04, the “Pro Rata Share” of each non-Defaulting
Lender shall be computed without giving effect to the Revolving Credit
Commitment of that Defaulting Lender; provided that the aggregate obligation of
each non-Defaulting Lender to acquire, refinance or fund participations in
Swingline Loans and Letters of Credit shall not exceed the amount, if any, by
which (1) the Revolving Credit Commitment of that non-Defaulting Lender exceeds
(2) the aggregate principal amount of the Revolving Credit Loans of that Lender.

(c) If the Borrower, the Administrative Agent, Swingline Lender and each L/C
Issuer agree in writing in their sole discretion that a Defaulting Lender should
no longer be deemed to be a Defaulting Lender, the Administrative Agent will so
notify the parties hereto, whereupon as of the effective date specified in such
notice and subject to any conditions set forth therein (which may include
arrangements with respect to any Cash Collateral), such Lender will, to the
extent applicable, purchase that portion of outstanding Loans of the other
Lenders or take such other actions as the Administrative Agent may determine to
be necessary to cause the Loans and funded and unfunded participations in
Letters of Credit and Swingline Loans to be held on a pro rata basis by the
Lenders in accordance with their Applicable Percentages (without giving effect
to Section 2.16(b)), whereupon that Lender will cease to be a Defaulting Lender;
provided that no adjustments will be made retroactively with respect to fees
accrued or payments made by or on behalf of the Borrower while that Lender was a
Defaulting Lender; and provided, further, that except to the extent otherwise
expressly agreed by the affected parties, no change hereunder from Defaulting
Lender to Lender will constitute a waiver or release of any claim of any party
hereunder arising from that Lender’s having been a Defaulting Lender.

ARTICLE III

Taxes, Increased Costs Protection and Illegality

SECTION 3.01. Taxes. (a) Except as provided in this Section 3.01, any and all
payments by the Borrower (the term Borrower under Article 3 being deemed to
include any Subsidiary for whose account a Letter of Credit is issued) to or for
the account of any Agent or any Lender under any Loan Document shall be made
free and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities (including additions to tax, penalties and
interest) with respect thereto, excluding, in the case of each Agent and each
Lender, taxes imposed on or measured by its net income or overall gross income
(including branch profits),

 

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and franchise (and similar) taxes imposed on it in lieu of net income taxes, by
the jurisdiction (or any political subdivision thereof) under the Laws of which
such Agent or such Lender, as the case may be, is organized or maintains a
Lending Office, and all liabilities (including additions to tax, penalties and
interest) with respect thereto (all such non-excluded taxes, duties, levies,
imposts, deductions, assessments, fees, withholdings or similar charges, and
liabilities being hereinafter referred to as “Taxes”). If the Borrower shall be
required by any Laws to deduct any Taxes or Other Taxes from or in respect of
any sum payable under any Loan Document to any Agent or any Lender, (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 3.01), each of such Agent and such Lender receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions, (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable Laws, and (iv) within thirty (30) days after the date
of such payment (or, if receipts or evidence are not available within thirty
(30) days, as soon as possible thereafter), the Borrower shall furnish to such
Agent or Lender (as the case may be) the original or a certified copy of a
receipt evidencing payment thereof to the extent such a receipt is issued
therefor, or other written proof of payment thereof that is reasonably
satisfactory to the Administrative Agent. If the Borrower fails to pay any Taxes
or Other Taxes when due to the appropriate taxing authority or fails to remit to
any Agent or any Lender the required receipts or other required documentary
evidence, the Borrower shall indemnify such Agent and such Lender for any
incremental taxes, interest or penalties that may become payable by such Agent
or such Lender arising out of such failure.

(b) In addition, the Borrower agrees to pay any and all present or future stamp,
court or documentary taxes and any other excise, property, intangible or
mortgage recording taxes or charges or similar levies which arise from any
payment made under any Loan Document or from the execution, delivery,
performance, enforcement or registration of, or otherwise with respect to, any
Loan Document (herein referred to as “Other Taxes”).

(c) The Borrower agrees to indemnify each Agent and each Lender for (i) the full
amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed or
asserted by any jurisdiction on amounts payable under this Section 3.01) paid by
such Agent and such Lender and (ii) any liability (including additions to tax,
penalties, interest and expenses) arising therefrom or with respect thereto, in
each case whether or not such Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority; provided such Agent
or Lender, as the case may be, provides the Borrower with a written statement
thereof setting forth in reasonable detail the basis and calculation of such
amounts. Payment under this Section 3.01(c) shall be made within thirty
(30) days after the date such Lender or such Agent makes a demand therefor.

(d) The Borrower shall not be required pursuant to this Section 3.01 to pay any
additional amount to, or to indemnify, any Lender or Agent, as the case may be,
to the extent that such Lender or such Agent becomes subject to Taxes subsequent
to the Closing Date (or, if later, the date such Lender or Agent becomes a party
to this Agreement) as a result of a change in the place of organization of such
Lender or Agent or a change in the lending office of such Lender, except to the
extent that any such change is requested or required in writing by the Borrower
(and provided that nothing in this clause (d) shall be construed as relieving
the Borrower from

 

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any obligation to make such payments or indemnification in the event of a change
in lending office or place of organization that precedes a Change in Law to the
extent such Taxes result from a Change in Law).

(e) Notwithstanding anything else herein to the contrary, if a Lender or an
Agent is subject to withholding tax imposed by any jurisdiction (i) at a rate in
excess of zero percent as a result of any law in effect at the time such Lender
or such Agent, as the case may be, first becomes a party to this Agreement, or
(ii) as a result of FATCA, withholding tax imposed by such jurisdiction at such
rate or as a result of FATCA shall be considered excluded from Taxes unless and
until, in the case of clause (i) above, such Lender or Agent, as the case may
be, provides the appropriate forms certifying that a lesser rate applies,
whereupon withholding tax at such lesser rate only shall be considered excluded
from Taxes for periods governed by such forms; provided that, if at the date of
the Assignment and Acceptance pursuant to which a Lender becomes a party to this
Agreement, the Lender assignor was entitled to payments under clause (a) of this
Section 3.01 in respect of withholding tax with respect to interest paid at such
date, then, to such extent, the term Taxes shall include (in addition to
incremental withholding taxes that may be imposed in the future or other amounts
otherwise includable in Taxes) withholding tax, if any, applicable with respect
to the Lender assignee on such date.

(f) If any Lender or Agent determines, in its reasonable discretion, that it has
received a refund in respect of any Taxes or Other Taxes as to which
indemnification or additional amounts have been paid to it by the Borrower
pursuant to this Section 3.01, it shall promptly remit such refund (but only to
the extent of indemnity payments made, or additional amounts paid, by the
Borrower under this Section 3.01 with respect to the Taxes or Other Taxes giving
rise to such refund plus any interest included in such refund by the relevant
taxing authority attributable thereto) to the Borrower, net of all out-of-pocket
expenses of the Lender or Agent, as the case may be and without interest (other
than any interest paid by the relevant taxing authority with respect to such
refund); provided that the Borrower, upon the request of the Lender or Agent, as
the case may be, agrees promptly to return such refund to such party in the
event such party is required to repay such refund to the relevant taxing
authority. Such Lender or Agent, as the case may be, shall, at the Borrower’s
request, provide the Borrower with a copy of any notice of assessment or other
evidence of the requirement to repay such refund received from the relevant
taxing authority (provided that such Lender or Agent may delete any information
therein that such Lender or Agent deems confidential). Nothing herein contained
shall interfere with the right of a Lender or Agent to arrange its tax affairs
in whatever manner it thinks fit nor oblige any Lender or Agent to claim any tax
refund or to make available its tax returns or disclose any information relating
to its tax affairs or any computations in respect thereof or require any Lender
or Agent to do anything that would prejudice its ability to benefit from any
other refunds, credits, reliefs, remissions or repayments to which it may be
entitled.

(g) Each Lender agrees that, upon the occurrence of any event giving rise to the
operation of Section 3.01(a) or (c) with respect to such Lender it will, if
requested by the Borrower, use commercially reasonable efforts (subject to such
Lender’s overall internal policies of general application and legal and
regulatory restrictions) to designate another Lending Office for any Loan or
Letter of Credit affected by such event; provided that such efforts are made on
terms that, in the sole judgment of such Lender, cause such Lender and its
Lending Office(s) to suffer no economic, legal or regulatory disadvantage, and
provided further that nothing in this

 

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Section 3.01(g) shall affect or postpone any of the Obligations of the Borrower
or the rights of such Lender pursuant to Section 3.01(a) or (c).

SECTION 3.02. Illegality. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurocurrency Rate Loans, or to determine or charge interest rates based upon the
Eurocurrency Rate, then, on notice thereof by such Lender to the Borrower
through the Administrative Agent, any obligation of such Lender to make or
continue Eurocurrency Rate Loans or to convert Base Rate Loans to Eurocurrency
Rate Loans shall be suspended until such Lender notifies the Administrative
Agent and the Borrower that the circumstances giving rise to such determination
no longer exist. Upon receipt of such notice, the Borrower shall upon demand
from such Lender (with a copy to the Administrative Agent), prepay or, if
applicable, convert all Eurocurrency Rate Loans of such Lender to Base Rate
Loans, either on the last day of the Interest Period therefor, if such Lender
may lawfully continue to maintain such Eurocurrency Rate Loans to such day, or
promptly, if such Lender may not lawfully continue to maintain such Eurocurrency
Rate Loans. Upon any such prepayment or conversion, the Borrower shall also pay
accrued interest on the amount so prepaid or converted and all amounts due, if
any, in connection with such prepayment or conversion under Section 3.05. Each
Lender agrees to designate a different Lending Office if such designation will
avoid the need for such notice and will not, in the good faith judgment of such
Lender, otherwise be materially disadvantageous to such Lender.

SECTION 3.03. Inability to Determine Rates. If the Required Lenders determine
that for any reason adequate and reasonable means do not exist for determining
the Eurocurrency Rate for any requested Interest Period with respect to a
proposed Eurocurrency Rate Loan, or that the Eurocurrency Rate for any requested
Interest Period with respect to a proposed Eurocurrency Rate Loan does not
adequately and fairly reflect the cost to such Lenders of funding such Loan, or
that U.S. dollar deposits are not being offered to banks in the London interbank
eurodollar market for the applicable amount and the Interest Period of such
Eurocurrency Rate Loan, the Administrative Agent will promptly so notify the
Borrower and each Lender. Thereafter, the obligation of the Lenders to make or
maintain Eurocurrency Rate Loans shall be suspended until the Administrative
Agent (upon the instruction of the Required Lenders) revokes such notice. Upon
receipt of such notice, the Borrower may revoke any pending request for a
Borrowing of, conversion to or continuation of Eurocurrency Rate Loans or,
failing that, will be deemed to have converted such request into a request for a
Borrowing of Base Rate Loans in the amount specified therein.

SECTION 3.04. Increased Cost and Reduced Return; Capital Adequacy; Reserves on
Eurocurrency Rate Loans. (a) If any Lender determines that as a result of a
Change in Law or any change in the interpretation of any Law, in each case after
the date hereof, or such Lender’s compliance therewith, there shall be any
increase in the cost to such Lender of agreeing to make or making, funding or
maintaining Eurocurrency Rate Loans or (as the case may be) issuing or
participating in Letters of Credit, or a reduction in the amount received or
receivable by such Lender in connection with any of the foregoing (excluding for
purposes of this Section 3.04(a) any such increased costs or reduction in amount
resulting from (i) Taxes or Other Taxes (as to which Section 3.01 shall govern),
(ii) changes in the basis of taxation of overall net income or overall gross
income (including branch profits), and franchise (and similar) taxes

 

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imposed in lieu of net income taxes, by the United States or any foreign
jurisdiction or any political subdivision of either thereof under the Laws of
which such Lender is organized or maintains a Lending Office and (iii) reserve
requirements contemplated by Section 3.04(c)), then from time to time within
fifteen (15) days after demand by such Lender setting forth in reasonable detail
such increased costs (with a copy of such demand to the Administrative Agent
given in accordance with Section 3.06), the Borrower shall pay to such Lender
such additional amounts as will compensate such Lender for such increased cost
or reduction; provided that to the extent any such costs or reductions are
incurred by any Lender as a result of any requests, rules, guidelines or
directives enacted or promulgated under the Dodd-Frank Wall Street Reform and
Consumer Protection Act after the Closing Date, then such Lender shall be
compensated pursuant to this Section 3.04(a) only to the extent such Lender is
imposing such charges on similarly situated borrowers under other syndicated
credit facilities that such Lender is a lender under.

(b) If any Lender determines that a Change in Law, the introduction of any Law
regarding capital adequacy or any change in the interpretation thereof, in each
case after the date hereof, or compliance by such Lender (or its Lending Office)
therewith, has the effect of reducing the rate of return on the capital of such
Lender or any corporation controlling such Lender as a consequence of such
Lender’s obligations hereunder (taking into consideration its policies with
respect to capital adequacy and such Lender’s desired return on capital), then
from time to time upon demand of such Lender setting forth in reasonable detail
the charge and the calculation of such reduced rate of return (with a copy of
such demand to the Administrative Agent given in accordance with Section 3.06),
the Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such reduction within fifteen (15) days after receipt of such
demand.

(c) The Borrower shall pay to each Lender, (i) as long as such Lender shall be
required to maintain reserves with respect to liabilities or assets consisting
of or including Eurocurrency funds or deposits, additional interest on the
unpaid principal amount of each Eurocurrency Rate Loan equal to the actual costs
of such reserves allocated to such Loan by such Lender (as determined by such
Lender in good faith, which determination shall be conclusive in the absence of
manifest error), and (ii) as long as such Lender shall be required to comply
with any reserve ratio requirement or analogous requirement of any other central
banking or financial regulatory authority imposed in respect of the maintenance
of the Commitments or the funding of the Eurocurrency Rate Loans, such
additional costs (expressed as a percentage per annum and rounded upwards, if
necessary, to the nearest five decimal places) equal to the actual costs
allocated to such Commitment or Loan by such Lender (as determined by such
Lender in good faith, which determination shall be conclusive absent manifest
error) which in each case shall be due and payable on each date on which
interest is payable on such Loan, provided the Borrower shall have received at
least fifteen (15) days’ prior notice (with a copy to the Administrative Agent)
of such additional interest or cost from such Lender. If a Lender fails to give
notice fifteen (15) days prior to the relevant Interest Payment Date, such
additional interest or cost shall be due and payable fifteen (15) days from
receipt of such notice.

(d) Failure or delay on the part of any Lender to demand compensation pursuant
to this Section 3.04 shall not constitute a waiver of such Lender’s right to
demand such compensation.

 

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(e) If any Lender requests compensation under this Section 3.04, then such
Lender will, if requested by the Borrower, use commercially reasonable efforts
to designate another Lending Office for any Loan or Letter of Credit affected by
such event; provided that such efforts are made on terms that, in the reasonable
judgment of such Lender, cause such Lender and its Lending Office(s) to suffer
no material economic, legal or regulatory disadvantage, and provided further
that nothing in this Section 3.04(e) shall affect or postpone any of the
Obligations of the Borrower or the rights of such Lender pursuant to
Section 3.04(a), (b), (c) or (d).

SECTION 3.05. Funding Losses. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:

(a) any conversion, payment or prepayment of any Eurocurrency Rate Loan on a day
other than the last day of the Interest Period for such Loan; or

(b) any failure by the Borrower (for a reason other than the failure of such
Lender to make a Loan) to prepay, borrow, continue or convert any Eurocurrency
Rate Loan on the date or in the amount notified by such Borrower;

including any loss or expense arising from the liquidation or reemployment of
funds obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained.

For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurocurrency
Rate Loan made by it at the Eurocurrency Rate for such Loan by a matching
deposit or other borrowing in the London interbank eurodollar market for a
comparable amount and for a comparable period, whether or not such Eurocurrency
Rate Loan was in fact so funded.

SECTION 3.06. Matters Applicable to All Requests for Compensation. (a) Any Agent
or any Lender claiming compensation under this Article 3 shall deliver a
certificate to the Borrower setting forth the additional amount or amounts to be
paid to it hereunder which shall be conclusive in the absence of manifest error.
In determining such amount, such Agent or such Lender may use any reasonable
averaging and attribution methods.

(b) With respect to any Lender’s claim for compensation under Section 3.01, 3.02
or 3.04, the Borrower shall not be required to compensate such Lender for any
amount incurred more than one hundred and eighty (180) days prior to the date
that such Lender notifies the Borrower of the event that gives rise to such
claim; provided that, if the circumstance giving rise to such claim is
retroactive, then such 180-day period referred to above shall be extended to
include the period of retroactive effect thereof. If any Lender requests
compensation by the Borrower under Section 3.04, the Borrower may, by notice to
such Lender (with a copy to the Administrative Agent), suspend the obligation of
such Lender to make or continue from one Interest Period to another Eurocurrency
Rate Loans, or to convert Base Rate Loans into Eurocurrency Rate Loans, until
the event or condition giving rise to such request ceases to be in

 

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effect (in which case the provisions of Section 3.06(c) shall be applicable);
provided that such suspension shall not affect the right of such Lender to
receive the compensation so requested.

(c) If the obligation of any Lender to make or continue from one Interest Period
to another any Eurocurrency Rate Loan, or to convert Base Rate Loans into
Eurocurrency Rate Loans shall be suspended pursuant to Section 3.02, 3.03 or
3.06(b) hereof, such Lender’s Eurocurrency Rate Loans shall be automatically
converted into Base Rate Loans on the last day(s) of the then current Interest
Period(s) for such Eurocurrency Rate Loans (or, in the case of an immediate
conversion required by Section 3.02, on such earlier date as required by Law)
and, unless and until such Lender gives notice as provided below that the
circumstances specified in Section 3.02, 3.03 or 3.04 hereof that gave rise to
such conversion no longer exist:

(i) to the extent that such Lender’s Eurocurrency Rate Loans have been so
converted, all payments and prepayments of principal that would otherwise be
applied to such Lender’s Eurocurrency Rate Loans shall be applied instead to its
Base Rate Loans; and

(ii) all Loans that would otherwise be made or continued from one Interest
Period to another by such Lender as Eurocurrency Rate Loans shall be made or
continued instead as Base Rate Loans, and all Base Rate Loans of such Lender
that would otherwise be converted into Eurocurrency Rate Loans shall remain as
Base Rate Loans.

(d) If any Lender gives notice to the Borrower (with a copy to the Agent) that
the circumstances specified in Section 3.02, 3.03 or 3.04 hereof that gave rise
to the conversion of such Lender’s Eurocurrency Rate Loans pursuant to this
Section 3.06 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurocurrency Rate Loans made by
other Lenders are outstanding, such Lender’s Base Rate Loans shall be
automatically converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Eurocurrency Rate Loans, to the extent necessary
so that, after giving effect thereto, all Loans held by the Lenders holding
Eurocurrency Rate Loans and by such Lender are held pro rata (as to principal
amounts, interest rate basis, and Interest Periods) in accordance with their
respective Commitments.

SECTION 3.07. Replacement of Lenders under Certain Circumstances. (a) If at any
time (i) the Borrower becomes obligated to pay additional amounts or indemnity
payments described in Section 3.01 or 3.04 as a result of any condition
described in such Sections or any Lender ceases to make Eurocurrency Rate Loans
as a result of any condition described in Section 3.02 or Section 3.04 (as a
result of the operation of Section 3.06), (ii) any Lender becomes a Defaulting
Lender or (iii) any Lender becomes a Non-Consenting Lender, then the Borrower
may, on ten (10) Business Days’ prior written notice to the Administrative Agent
and such Lender, replace such Lender by causing such Lender to (and such Lender
shall be obligated to) assign pursuant to Section 10.07(b) (with the assignment
fee to be paid by the Borrower in such instance) all of its rights and
obligations under this Agreement to one or more Eligible Assignees; provided
that neither the Administrative Agent nor any Lender shall have any obligation
to the Borrower to find a replacement Lender or other such Person; and provided
further that (A) in the case of any such assignment resulting from a claim for
compensation under Section 3.04 or payments required to be made pursuant to
Section 3.01, such assignment

 

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will result in a reduction in such compensation or payments and (B) in the case
of any such assignment resulting from a Lender becoming a Non-Consenting Lender,
the applicable Eligible Assignees shall have agreed to the applicable departure,
waiver or amendment of the Loan Documents.

(b) Any Lender being replaced pursuant to Section 3.07(a) above shall
(i) execute and deliver an Assignment and Assumption with respect to such
Lender’s Commitment and outstanding Loans and participations in L/C Obligations
and Swing Line Loans, and (ii) deliver any Notes evidencing such Loans to the
Borrower or Administrative Agent. Pursuant to such Assignment and Assumption,
(A) the assignee Lender shall acquire all or a portion, as the case may be, of
the assigning Lender’s Commitment and outstanding Loans and participations in
L/C Obligations and Swing Line Loans, (B) all obligations of the Borrower owing
to the assigning Lender relating to the Loans and participations so assigned
shall be paid in full by the assignee Lender to such assigning Lender
concurrently with such assignment and assumption and (C) upon such payment and,
if so requested by the assignee Lender, delivery to the assignee Lender of the
appropriate Note or Notes executed by the Borrower, the assignee Lender shall
become a Lender hereunder and the assigning Lender shall cease to constitute a
Lender hereunder with respect to such assigned Loans, Commitments and
participations, except with respect to indemnification provisions under this
Agreement, which shall survive as to such assigning Lender.

(c) Notwithstanding anything to the contrary contained above, any Lender that
acts as an L/C Issuer may not be replaced hereunder at any time that it has any
Letter of Credit outstanding hereunder unless arrangements reasonably
satisfactory to such L/C Issuer (including the furnishing of a back-up standby
letter of credit in form and substance, and issued by an issuer reasonably
satisfactory to such L/C Issuer or the depositing of cash collateral into a cash
collateral account in amounts and pursuant to arrangements reasonably
satisfactory to such L/C Issuer) have been made with respect to each such
outstanding Letter of Credit and the Lender that acts as the Administrative
Agent may not be replaced hereunder except in accordance with the terms of
Section 9.09.

(d) In the event that (i) the Borrower or the Administrative Agent has requested
that the Lenders consent to a departure or waiver of any provisions of the Loan
Documents or agree to any amendment thereto, (ii) the consent, waiver or
amendment in question requires the agreement of all affected Lenders in
accordance with the terms of Section 10.01 or all the Lenders with respect to a
certain Class of the Loans and (iii) the Required Lenders or Lenders holding
more than 50% of any Class of Commitments, as applicable, have agreed to such
consent, waiver or amendment, then any Lender who does not agree to such
consent, waiver or amendment shall be deemed a “Non-Consenting Lender”.

SECTION 3.08. Survival. All of the Borrower’s obligations under this Article 3
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.

 

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ARTICLE IV

Conditions Precedent to Credit Extensions

SECTION 4.01. Conditions of Initial Credit Extension. The obligation of each
Lender to make its initial Credit Extension hereunder is subject to satisfaction
of the following conditions precedent:

(a) The Administrative Agent’s receipt of the following, each of which shall be
originals or facsimiles (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the signing Loan
Party, each in form and substance reasonably satisfactory to the Administrative
Agent and its legal counsel:

(i) executed counterparts of this Agreement and each Guaranty;

(ii) a Note executed by the Borrower in favor of each Lender that has requested
a Note at least two Business Days in advance of the Closing Date;

(iii) except as contemplated by Section 6.13(a)(ii), each Collateral Document
set forth on Schedule 1.01A, duly executed by each Loan Party thereto, together
with:

(A) certificates, if any, representing the Pledged Equity referred to therein
accompanied by undated stock powers executed in blank and instruments evidencing
the Pledged Debt indorsed in blank; and

(B) evidence that all other actions, recordings and filings that the
Administrative Agent may deem reasonably necessary to satisfy the Collateral and
Guarantee Requirement shall have been taken, completed or otherwise provided for
in a manner reasonably satisfactory to the Administrative Agent;

(iv) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may reasonably require evidencing the identity, authority
and capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Agreement and the other Loan
Documents to which such Loan Party is a party or is to be a party on the Closing
Date;

(v) opinion from Simpson Thacher & Bartlett LLP, New York counsel to the Loan
Parties in form and substance reasonably satisfactory to the Administrative
Agent;

(vi) opinions of local counsel for the Loan Parties in Tennessee, New Jersey and
Florida in form and substance reasonably satisfactory to the Administrative
Agent;

(vii) a certificate attesting to the Solvency of the Loan Parties (taken as a
whole) after giving effect to the Transaction, from the Chief Financial Officer
of the Borrower;

(viii) evidence that all insurance (including title insurance) required to be
maintained pursuant to the Loan Documents has been obtained and is in effect and
that

 

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the Administrative Agent has been named as loss payee under each insurance
policy as to which the Administrative Agent shall have requested to be so named;
and

(ix) a Committed Loan Notice or Letter of Credit Application, as applicable,
relating to the initial Credit Extensions.

(b) All fees and expenses required to be paid hereunder and invoiced at least
three Business Days prior to the Closing Date shall have been paid in full in
cash or offset against the proceeds of the Facilities.

(c) Prior to or simultaneously with the initial Credit Extensions, the Borrower
shall have terminated the Existing Credit Agreement; provided that Letters of
Credit issued under the Existing Credit Agreement shall be deemed issued
hereunder.

(d) The Arrangers and the Lenders shall have received (i) the Audited Financial
Statements and the audit report for such financial statements (which shall not
be subject to any qualification) and (ii) unaudited consolidated balance sheets
and related statements of income, stockholders’ equity and cash flows of
Holdings and its Subsidiaries for each subsequent fiscal quarter ended at least
forty-five (45) days before the Closing Date (the “Unaudited Financial
Statements”), which financial statements in each case shall be prepared in
accordance with GAAP.

(e) Holdings, the Borrower and each of the Guarantors shall have provided the
documentation and other information reasonably requested in writing prior to the
Closing Date by the Administrative Agent or the Joint Bookrunners in connection
with applicable “know your customer” and anti-money-laundering rules and
regulations, including, without limitation, the PATRIOT Act, in each case at
least five (5) days prior to the Closing Date.

(f) Each of the Term Loans and the Revolving Credit Facility shall have been
rated by each of Standard & Poor’s and Moody’s.

SECTION 4.02. Conditions to All Credit Extensions. The obligation of each Lender
to honor any Request for Credit Extension (other than a Committed Loan Notice
requesting only a conversion of Loans to the other Type, or a continuation of
Eurocurrency Rate Loans) is subject to the following conditions precedent:

(a) The representations and warranties of the Borrower and each other Loan Party
contained in Article 5 or any other Loan Document shall be true and correct in
all material respects on and as of the date of such Credit Extension; provided
that, to the extent that such representations and warranties specifically refer
to an earlier date, they shall be true and correct in all material respects as
of such earlier date; provided, further that, any representation and warranty
that is qualified as to “materiality,” “Material Adverse Effect” or similar
language shall be true and correct in all respects on such respective dates.

(b) No Default shall exist, or would result from such proposed Credit Extension
or from the application of the proceeds therefrom.

 

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(c) The Administrative Agent and, if applicable, the relevant L/C Issuer or the
Swing Line Lender shall have received a Request for Credit Extension in
accordance with the requirements hereof.

Each Request for Credit Extension (other than a Committed Loan Notice requesting
only a conversion of Loans to the other Type or a continuation of Eurocurrency
Rate Loans) submitted by the Borrower shall be deemed to be a representation and
warranty that the conditions specified in Sections 4.02(a) and (b) have been
satisfied on and as of the date of the applicable Credit Extension.

ARTICLE V

Representations and Warranties

The Borrower represents and warrants to the Agents and the Lenders that:

SECTION 5.01. Existence, Qualification and Power; Compliance with Laws. (a) Each
Loan Party and each of its Subsidiaries (i) is a Person duly organized or
formed, validly existing and in good standing under the Laws of the jurisdiction
of its incorporation or organization, (ii) has all requisite power and authority
to (A) own or lease its assets and carry on its business and (B) execute,
deliver and perform its obligations under the Loan Documents to which it is a
party and (iii) is duly qualified and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification except, in the case of
clause (iii), to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect.

(b) Each Loan Party, each of its Subsidiaries and each Related Professional
Corporation (i) is in compliance with all Laws, orders, writs, injunctions and
orders and (ii) has all requisite governmental licenses, authorizations,
consents and approvals to operate its business as currently conducted; except in
each case referred to in clause (i) or (ii) to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect.

SECTION 5.02. Authorization; No Contravention. The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is a
party are within such Loan Party’s corporate or other powers, have been duly
authorized by all necessary corporate or other organizational action, and do not
and will not (a) contravene the terms of any of such Person’s Organization
Documents, (b) conflict with or result in any breach or contravention of, or the
creation of any Lien under (other than as permitted by Section 7.01), or require
any payment to be made under (i) any Contractual Obligation to which such Person
or any Related Professional Corporation is a party or affecting such Person or
the properties of such Person or any of its Subsidiaries or (ii) any material
order, injunction, writ or decree of any Governmental Authority or any arbitral
award to which such Person or its property is subject or (c) violate any
material Law; except with respect to any conflict, breach, contravention or
payment (but not creation of Liens) referred to in clause (b)(i), to the extent
that such conflict, breach, contravention or payment could not reasonably be
expected to have a Material Adverse Effect.

 

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SECTION 5.03. Governmental Authorization; Other Consents. (a) No material
approval, consent, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other Person is necessary or
required in connection with (i) the execution, delivery or performance by, or
enforcement against, any Loan Party of this Agreement or any other Loan
Document, (ii) the grant by any Loan Party of the Liens granted by it pursuant
to the Collateral Documents, (iii) the perfection or maintenance of the Liens
created under the Collateral Documents (including the priority thereof) or
(iv) the exercise by the Administrative Agent or any Lender of its rights under
the Loan Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents, except for (A) filings necessary to perfect the Liens on
the Collateral granted by the Loan Parties in favor of the Secured Parties,
(B) the approvals, consents, exemptions, authorizations, actions, notices and
filings which have been duly obtained, taken, given or made and are in full
force and effect and (C) those approvals, consents, exemptions, authorizations
or other actions, notices or filings, the failure of which to obtain or make
could not reasonably be expected to have a Material Adverse Effect.

(b) Each Related Professional Corporation and each of the Borrower’s, each of
its Subsidiaries’ and each Related Professional Corporation’s employees,
officers, directors, and contractors providing professional medical services to
patients is, and has at all times been, while serving in such capacity (i) duly
licensed and certified (as and where required) by each regulatory body having
jurisdiction over services rendered by such Person, and (ii) eligible (as and
where required) to participate in Government Programs, except to the extent that
such failure to be licensed, certified or eligible, as the case may be, could
not reasonably be expected to have a Material Adverse Effect, either
individually or in the aggregate.

SECTION 5.04. Binding Effect. This Agreement and each other Loan Document has
been duly executed and delivered by each Loan Party that is party hereto or
thereto. This Agreement and each other Loan Document constitutes, a legal, valid
and binding obligation of such Loan Party, enforceable against each Loan Party
that is party hereto or thereto in accordance with its terms, subject to Debtor
Relief Laws and general principles of equity (whether considered in a proceeding
in equity or law) and an implied covenant of good faith and fair dealing.

SECTION 5.05. Financial Statements; No Material Adverse Effect. (a) The Audited
Financial Statements and the Unaudited Financial Statements fairly present in
all material respects the financial condition of Holdings and its Subsidiaries
as of the dates thereof and their results of operations for the period covered
thereby in accordance with GAAP consistently applied throughout the periods
covered thereby, except as otherwise expressly noted therein. During the period
from December 31, 2010 to and including the Closing Date, there has been (i) no
sale, transfer or other disposition by Holdings or any of its Subsidiaries of
any material part of the business or property of Holdings or any of its
Subsidiaries, taken as a whole and (ii) no purchase or other acquisition by
Holdings or any of its Subsidiaries of any business or property (including any
Equity Interests of any other Person) material in relation to the consolidated
financial condition of the Holdings and its Subsidiaries, taken as a whole, in
each case, which is not reflected in the foregoing financial statements or in
the notes thereto.

 

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(b) Since December 31, 2010, there has been no event or circumstance, either
individually or in the aggregate, that has had or could reasonably be expected
to have a Material Adverse Effect.

(c) The forecasts of consolidated balance sheets, income statements and cash
flow statements of Holdings and its Subsidiaries for each fiscal year ending
after the Closing Date through 2015, copies of which have been furnished to the
Administrative Agent prior to the Closing Date in a form reasonably satisfactory
to it, have been prepared in good faith on the basis of the assumptions stated
therein, which assumptions were believed to be reasonable at the time of
preparation of such forecasts, it being understood that actual results may vary
from such forecasts and that such variations may be material.

SECTION 5.06. Litigation. There are no actions, suits, proceedings, claims,
investigations or disputes pending or, to the knowledge of the Borrower,
threatened in writing or contemplated, at Law, in equity, in arbitration or
before any Governmental Authority or Third Party Payor, by or against the
Borrower, any of its Subsidiaries or any Related Professional Corporation or
against any of their properties or revenues that either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

SECTION 5.07. No Default. Neither the Borrower nor any Subsidiary is in default
under or with respect to, or a party to, any Contractual Obligation that could,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

SECTION 5.08. Ownership of Property; Liens. Each Loan Party and each of its
Subsidiaries has good record and marketable title in fee simple to, or valid
leasehold interests in, or easements or other limited property interests in, all
real property necessary in the ordinary conduct of its business, free and clear
of all Liens except for minor defects in title that do not materially interfere
with its ability to conduct its business or to utilize such assets for their
intended purposes and Liens permitted by Section 7.01 and except where the
failure to have such title could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

SECTION 5.09. Environmental Compliance. (a) There are no claims, actions, suits,
or proceedings alleging potential liability or responsibility for violation of,
or otherwise relating to, any Environmental Law that could, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

(b) Except as specifically disclosed in Schedule 5.09(b) or except as could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, (i) neither the Loan Party nor any of its Subsidiaries has
failed to comply with any Environmental Law or to obtain or comply with any
permit, license or approval required under any Environmental Law; (ii) none of
the properties currently or formerly owned, leased or operated by any Loan Party
or any of its Subsidiaries is listed or proposed for listing on the NPL or on
the CERCLIS or any analogous foreign, state or local list or is adjacent to any
such property; (iii) there are no and never have been any underground or
aboveground storage tanks or any surface impoundments, septic tanks, pits, sumps
or lagoons in which Hazardous Materials are being or have been treated, stored
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operated by any Loan Party or any of its Subsidiaries or, to its knowledge, on
any property formerly owned or operated by any Loan Party or any of its
Subsidiaries; (iv) there is no asbestos or asbestos-containing material on any
property currently owned or operated by any Loan Party or any of its
Subsidiaries; and (v) Hazardous Materials have not been released, discharged or
disposed of by any Person on any property currently or formerly owned, leased or
operated by any Loan Party or any of its Subsidiaries and Hazardous Materials
have not otherwise been released, discharged or disposed of by any of the Loan
Parties and their Subsidiaries at any other location.

(c) The properties owned, leased or operated by the Borrower and the
Subsidiaries do not contain any Hazardous Materials in amounts or concentrations
which (i) constitute, or constituted a violation of, (ii) require remedial
action under, or (iii) could give rise to liability under, Environmental Laws,
which violations, remedial actions and liabilities, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.

(d) Except as specifically disclosed in Schedule 5.09(d), neither the Borrower
nor any of its Subsidiaries is undertaking, and has not completed, either
individually or together with other potentially responsible parties, any
investigation or assessment or remedial or response action relating to any
actual or threatened release, discharge or disposal of Hazardous Materials at
any site, location or operation, either voluntarily or pursuant to the order of
any Governmental Authority or the requirements of any Environmental Law except
for such investigation or assessment or remedial or response action that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

(e) All Hazardous Materials generated, used, treated, handled or stored at, or
transported to or from, any property currently or formerly owned or operated by
any Loan Party or any of its Subsidiaries have been disposed of in a manner not
reasonably expected to result, individually or in the aggregate, in a Material
Adverse Effect.

(f) Except as would not reasonably be expected to result, individually or in the
aggregate, in a Material Adverse Effect, none of the Loan Parties and their
Subsidiaries has contractually assumed or has otherwise become subject to, or
knows of any basis for, any Environmental Liability.

SECTION 5.10. Taxes. Except as set forth in Schedule 5.10 and except as could
not, either individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect, the Borrower and its Subsidiaries have filed all
Federal and state and other tax returns and reports required to be filed, and
have paid all Federal and state and other taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those (a) which are not overdue by more
than thirty (30) days or (b) which are being contested in good faith by
appropriate proceedings diligently conducted and for which adequate reserves
have been provided in accordance with GAAP.

SECTION 5.11. ERISA Compliance. (a) Except as set forth in Schedule 5.11(a) or
as could not, either individually or in the aggregate, reasonably be expected to
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Material Adverse Effect, each Plan is in compliance with the applicable
provisions of ERISA, the Code and other Federal or state Laws.

(b) (i) No ERISA Event has occurred during the five year period prior to the
date on which this representation is made or deemed made with respect to any
Pension Plan; (ii) neither any Loan Party nor any ERISA Affiliate has incurred,
or reasonably expects to incur, any liability under Title IV of ERISA with
respect to any Pension Plan (other than premiums due and not delinquent under
Section 4007 of ERISA); (iii) neither any Loan Party nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Sections 4201 or 4243 of ERISA with respect to a
Multiemployer Plan; and (iv) neither any Loan Party nor any ERISA Affiliate has
engaged in a transaction that could be subject to Sections 4069 or 4212(c) of
ERISA, except, with respect to each of the foregoing clauses of this
Section 5.11(b), as could not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect.

SECTION 5.12. Subsidiaries; Equity Interests. As of the Closing Date, neither
Holdings nor any other Loan Party has any Subsidiaries other than those
specifically disclosed in Schedule 5.12, and all of the outstanding Equity
Interests in material Subsidiaries have been validly issued, are fully paid and
nonassessable and all Equity Interests owned by Holdings or any other Loan Party
are owned free and clear of all Liens except (i) those created under the
Collateral Documents and (ii) any nonconsensual Lien that is permitted under
Section 7.01. As of the Closing Date, Schedule 5.12 (a) sets forth the name and
jurisdiction of each Subsidiary, (b) sets forth the ownership interest of
Holdings, the Borrower and any other Subsidiary in each Subsidiary, including
the percentage of such ownership and (c) identifies each Subsidiary the Equity
Interests of which are required to be pledged on the Closing Date pursuant to
the Collateral and Guarantee Requirement.

SECTION 5.13. Margin Regulations; Investment Company Act. (a) The Borrower is
not engaged nor will it engage, principally or as one of its important
activities, in the business of purchasing or carrying margin stock (within the
meaning of Regulation U issued by the FRB), or extending credit for the purpose
of purchasing or carrying margin stock, and no proceeds of any Borrowings or
drawings under any Letter of Credit will be used for any purpose that violates
Regulation U.

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

SECTION 5.14. Disclosure. No report, financial statement, certificate or other
written information furnished by or on behalf of any Loan Party to any Agent or
any Lender in connection with the transactions contemplated hereby and the
negotiation of this Agreement or delivered hereunder or under any other Loan
Document (as modified or supplemented by other information so furnished) when
taken as a whole contains any material misstatement of fact or omits to state
any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not materially misleading; provided
that, with respect to projected financial information and pro forma financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions

 

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believed to be reasonable at the time of preparation; it being understood that
such projections may vary from actual results and that such variances may be
material; provided further that with respect to information furnished on behalf
of the Borrower or any Subsidiary by a third party (other than the Sponsor),
this representation is made to the best of the Borrower’s knowledge after due
inquiry.

SECTION 5.15. Intellectual Property; Licenses, Etc. Each of the Loan Parties and
their Subsidiaries own, license or possess the right to use, all of the
trademarks, service marks, trade names, domain names, copyrights, patents,
patent rights, licenses, technology, software, know-how database rights, design
rights and other intellectual property rights (collectively, “IP Rights”) that
are reasonably necessary for the operation of the businesses of the Loan Parties
and their Subsidiaries, taken as a whole, as currently conducted, and, without
conflict with the rights of any Person, except to the extent such conflicts,
either individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect. No IP Rights, advertising, product, process,
method, substance, part or other material used by any Loan Party or any
Subsidiary in the operation of their respective businesses as currently
conducted infringes upon any rights held by any Person except for such
infringements, individually or in the aggregate, which could not reasonably be
expected to have a Material Adverse Effect.

SECTION 5.16. Solvency. On the Closing Date after giving effect to the
Transaction, the Loan Parties, on a consolidated basis, are Solvent.

SECTION 5.17. Subordination of Junior Financing. The Obligations are “Senior
Debt,” “Senior Indebtedness,” “Guarantor Senior Debt” or “Senior Secured
Financing” (or any comparable term) under, and as defined in, any Junior
Financing Documentation.

SECTION 5.18. Labor Matters. Except as, in the aggregate, could not reasonably
be expected to have a Material Adverse Effect: (a) there are no strikes or other
labor disputes against any of Holdings, the Borrower or its Subsidiaries pending
or, to the knowledge of Holdings or the Borrower, threatened; (b) hours worked
by and payment made to employees of each of Holdings, the Borrower or its
Subsidiaries have not been in violation of the Fair Labor Standards Act or any
other applicable Laws dealing with such matters; and (c) all payments due from
any of Holdings, the Borrower or its Subsidiaries on account of employee health
and welfare insurance have been paid or accrued as a liability on the books of
the relevant party.

SECTION 5.19. Reimbursement from Third Party Payors. All billings by the
Borrower, each Subsidiary and each Related Professional Corporation pursuant to
any Third Party Payor Arrangements have been made in compliance with such Third
Party Payor Arrangements, except where failure to comply, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

SECTION 5.20. Certain Prohibited Actions. None of the Borrower, any Subsidiary
or any Related Professional Corporation, nor any of their respective partners,
members, stockholders, officers or directors, acting on behalf of the Borrower,
any Subsidiary or any Related Professional Corporation, has engaged on behalf of
the Borrower, any Subsidiary or any Related Professional Corporation in any
activities that are prohibited under the Health Insurance Portability and
Accountability Act of 1996 set forth at 45 C.F.R. §§ 160.101 et seq.

 

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and 164.102 et seq., 42 U.S.C. § 1320a-7, 42 U.S.C. § 1320a-7a, 42 U.S.C.
§ 1320a-7b, 42 U.S.C. § 1395nn, 31 U.S.C. § 3729 et seq., or the regulations
promulgated thereunder, or related Law, or under any similar state law or
regulation except for such activities that, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.21. Related Professional Corporations. Neither the Borrower nor any
Guarantor is party to any management/services agreement with any Related
Professional Corporation that is different in any material respect from the form
of management/services agreement previously provided to the Administrative
Agent.

ARTICLE VI

Affirmative Covenants

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder which is accrued and payable shall remain unpaid or
unsatisfied, or any Letter of Credit shall remain outstanding, each of Holdings
and the Borrower shall, and shall (except in the case of the covenants set forth
in Sections 6.01, 6.02 and 6.03) cause each Restricted Subsidiary to:

SECTION 6.01. Financial Statements. Deliver to the Administrative Agent for
prompt further distribution to each Lender:

(a) as soon as available, but in any event within ninety (90) days after the end
of each fiscal year of Holdings beginning with the 2011 fiscal year, a
consolidated balance sheet of Holdings and its Subsidiaries as at the end of
such fiscal year, and the related consolidated statements of income or
operations, stockholders’ equity and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all in reasonable detail and prepared in accordance with GAAP, audited and
accompanied by a report and opinion of Ernst & Young LLP or any other
independent registered public accounting firm of nationally recognized standing,
which report and opinion shall be prepared in accordance with generally accepted
auditing standards and shall not be subject to any “going concern” or like
qualification or exception or any qualification or exception as to the scope of
such audit;

(b) as soon as available, but in any event within forty-five (45) days after the
end of each of the first three (3) fiscal quarters of each fiscal year of
Holdings, a consolidated balance sheet of Holdings and its Subsidiaries as at
the end of such fiscal quarter, and the related (i) consolidated statements of
income or operations for such fiscal quarter and for the portion of the fiscal
year then ended and (ii) consolidated statements of cash flows for the portion
of the fiscal year then ended, setting forth in each case in comparative form
the figures for the corresponding fiscal quarter of the previous fiscal year and
the corresponding portion of the previous fiscal year, all in reasonable detail
and certified by a Responsible Officer of Holdings as fairly presenting in all
material respects the financial condition, results of operations, stockholders’
equity and cash flows of Holdings and its Subsidiaries in accordance with GAAP,
subject only to normal year-end audit adjustments and the absence of footnotes;

 

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(c) as soon as available, and in any event no later than ninety (90) days after
the end of each fiscal year of Holdings, a detailed consolidated budget for the
following fiscal year (including a projected consolidated balance sheet of
Holdings and its Subsidiaries as of the end of the following fiscal year, the
related consolidated statements of projected cash flow and projected income and
a summary of the material underlying assumptions applicable thereto)
(collectively, the “Projections”); and

(d) simultaneously with the delivery of each set of consolidated financial
statements referred to in Sections 6.01(a) and 6.01(b) above, the related
consolidating financial statements reflecting the adjustments necessary to
eliminate the accounts of Unrestricted Subsidiaries (if any) from such
consolidated financial statements.

Notwithstanding the foregoing, the obligations in paragraphs (a) and (b) of this
Section 6.01 may be satisfied with respect to financial information of Holdings
and the Restricted Subsidiaries by furnishing (A) the applicable financial
statements of any direct or indirect parent of Holdings or (B) Holdings’ (or any
direct or indirect parent thereof), as applicable, Form 10-K or 10-Q, as
applicable, filed with the SEC; provided that, with respect to each of clauses
(A) and (B), (i) to the extent such information relates to a parent of Holdings,
such information is accompanied by consolidating information that explains in
reasonable detail the differences between the information relating to such
parent, on the one hand, and the information relating to Holdings, the Borrower
and the Restricted Subsidiaries on a standalone basis, on the other hand and
(ii) to the extent such information is in lieu of information required to be
provided under Section 6.01(a), such materials are accompanied by a report and
opinion of Ernst & Young LLP or any other independent registered public
accounting firm of nationally recognized standing, which report and opinion
shall be prepared in accordance with generally accepted auditing standards and
shall not be subject to any “going concern” or like qualification or exception
or any qualification or exception as to the scope of such audit.

SECTION 6.02. Certificates; Other Information. Deliver to the Administrative
Agent for prompt further distribution to each Lender:

(a) no later than five (5) days after the delivery of the financial statements
referred to in Section 6.01(a), a letter or certificate of its independent
registered public accounting firm certifying such financial statements and
stating that in making the examination necessary therefor no knowledge was
obtained of any Event of Default under Section 7.11 or, if any such Event of
Default shall exist, stating the nature and status of such event;

(b) no later than five (5) days after the delivery of the financial statements
referred to in Section 6.01(a) and (b), a duly completed Compliance Certificate
signed by a Responsible Officer of Holdings and, if such Compliance Certificate
demonstrates an Event of Default of the covenant under Section 7.11, Holdings
may deliver, together with such Compliance Certificate, notice of its intent to
cure (a “Notice of Intent to Cure”) such Event of Default pursuant to
Section 8.05; provided that the delivery of a Notice of Intent to Cure shall in
no way affect or alter the occurrence, existence or continuation of any such
Event of Default or the rights, benefits, powers and remedies of the
Administrative Agent and the Lenders under any Loan Document;

 

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(c) promptly after the same are publicly available, copies of all annual,
regular, periodic and special reports and registration statements which Holdings
or the Borrower files with the SEC or with any Governmental Authority that may
be substituted therefor (other than amendments to any registration statement (to
the extent such registration statement, in the form it became effective, is
delivered), exhibits to any registration statement and, if applicable, any
registration statement on Form S-8) and in any case not otherwise required to be
delivered to the Administrative Agent pursuant hereto;

(d) promptly after the furnishing thereof, copies of any material requests or
material notices received by any Loan Party (other than in the ordinary course
of business) or material statements or material reports furnished to any holder
of debt securities of any Loan Party or of any of its Subsidiaries pursuant to
the terms of any Junior Financing Documentation in a principal amount greater
than the Threshold Amount and not otherwise required to be furnished to the
Lenders pursuant to any other clause of this Section 6.02;

(e) together with the delivery of each Compliance Certificate pursuant to
Section 6.02(b) with respect to the financial statements delivered pursuant to
Section 6.01(a), (i) a report setting forth the information required by
Section 3.03(c) of the Security Agreement or confirming that there has been no
change in such information since the Closing Date or the date of the last such
report; provided, however, that the Borrower shall notify the Administrative
Agent, promptly after obtaining knowledge thereof, of any change in the
information required by Section 3.03(c) of the Security Agreement, (ii) a
description of each event, condition or circumstance during the last fiscal year
covered by such Compliance Certificate requiring a mandatory prepayment under
Section 2.05(b) and (iii) a list of each Subsidiary that identifies each
Subsidiary as a Restricted or an Unrestricted Subsidiary as of the date of
delivery of such Compliance Certificate;

(f) together with the delivery of each Compliance Certificate pursuant to
Section 6.02(b), (i) a report identifying any changes to the list of Immaterial
Subsidiaries set forth on Schedule 1.01C hereto as of the date of delivery of
such Compliance Certificate or (ii) a report certifying that, as of the date of
delivery of such Compliance Certificate, there has been no change to Schedule
1.01C hereto since the Closing Date or the date of the most recently delivered
Compliance Certificate; and

(g) promptly, such additional information regarding the business, legal,
financial or corporate affairs of any Loan Party or any Subsidiary, or
compliance with the terms of the Loan Documents, as the Administrative Agent or
any Lender through the Administrative Agent may from time to time reasonably
request.

Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(c) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which
Holdings posts such documents, or provides a link thereto on the Borrower’s
website on the Internet at http://www.teamhealth.com; or (ii) on which such
documents are posted on Holdings’ behalf on IntraLinks/IntraAgency or another
relevant

 

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website, if any, to which each Lender and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided that: (i) upon written request by the
Administrative Agent, Holdings shall deliver paper copies of such documents to
the Administrative Agent for further distribution to each Lender until a written
request to cease delivering paper copies is given by the Administrative Agent
and (ii) Holdings shall notify (which may be by facsimile or electronic mail)
the Administrative Agent of the posting of any such documents and provide to the
Administrative Agent by electronic mail electronic versions (i.e., soft copies)
of such documents. Notwithstanding anything contained herein, in every instance
the Borrower shall be required to provide paper copies of the Compliance
Certificates required by Section 6.02(b) to the Administrative Agent. Each
Lender shall be solely responsible for timely accessing posted documents or
requesting delivery of paper copies of such documents from the Administrative
Agent and maintaining its copies of such documents.

SECTION 6.03. Notices. Promptly after obtaining knowledge thereof, notify the
Administrative Agent:

(a) of the occurrence of any Default; and

(b) of any matter that has resulted or could reasonably be expected to result in
a Material Adverse Effect, including arising out of or resulting from (i) breach
or non-performance of, or any default or event of default under, a Contractual
Obligation of any Loan Party, any Subsidiary or any Related Professional
Corporation, (ii) any dispute, litigation, investigation, proceeding or
suspension between any Loan Party, any Subsidiary or any Related Professional
Corporation and any Governmental Authority, (iii) the commencement of, or any
material development in, any litigation or proceeding affecting any Loan Party
or any Subsidiary, including pursuant to any applicable Environmental Laws or
the assertion or occurrence of any noncompliance by any Loan Party or as any of
its Subsidiaries with, or liability under, any Environmental Law or
Environmental Permit, (iv) the occurrence of any ERISA Event, or (v) the
adoption of any Law, or any change in Law (including in any administration or
interpretation thereof by any Governmental Authority).

Each notice pursuant to this Section shall be accompanied by a written statement
of a Responsible Officer of the Borrower (x) that such notice is being delivered
pursuant to Section 6.03(a) or (b) (as applicable) and (y) setting forth details
of the occurrence referred to therein and stating what action the Borrower has
taken and proposes to take with respect thereto.

SECTION 6.04. Payment of Obligations. Pay, discharge or otherwise satisfy as the
same shall become due and payable, all its obligations and liabilities in
respect of taxes, assessments and governmental charges or levies imposed upon it
or upon its income or profits or in respect of its property, except, in each
case, to the extent the failure to pay or discharge the same could not
reasonably be expected to have a Material Adverse Effect.

SECTION 6.05. Preservation of Existence, Etc. (a) Preserve, renew and maintain
in full force and effect its legal existence under the Laws of the jurisdiction
of its organization except in a transaction permitted by Section 7.04 or 7.05
and (b) take all reasonable action to

 

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maintain all rights, privileges (including its good standing), permits, licenses
and franchises necessary or desirable in the normal conduct of its business,
except (i) to the extent that failure to do so could not reasonably be expected
to have a Material Adverse Effect or (ii) pursuant to a transaction permitted by
Section 7.04 or 7.05.

SECTION 6.06. Maintenance of Properties. Except if the failure to do so could
not reasonably be expected to have a Material Adverse Effect, (a) maintain,
preserve and protect all of its material properties and equipment necessary in
the operation of its business in good working order, repair and condition,
ordinary wear and tear excepted and casualty or condemnation excepted, and
(b) make all necessary renewals, replacements, modifications, improvements,
upgrades, extensions and additions thereof or thereto in accordance with prudent
industry practice.

SECTION 6.07. Maintenance of Insurance. (a) Maintain insurance with responsible
and reputable insurance companies (including any Insurance Subsidiary, solely as
it relates to medical malpractice insurance, workers compensation and such other
insurance as may be approved by the Administrative Agent) or associations in
such amounts and covering such risks as is usually carried by companies engaged
in similar businesses and owning similar properties in the same general areas in
which the Borrower or such Subsidiary operates.

(b) Maintain or require the maintenance of medical malpractice insurance with a
responsible insurance company (including any Insurance Subsidiary) for or by and
covering each Related Professional Corporation and each of such Loan Party’s or
Related Professional Corporation’s respective employees, officers, directors or
contractors who provides professional medical services to patients, and naming
the relevant Loan Party as an additional insured. Such insurance shall cover
such casualties, risks and contingencies, shall be of the type and in amounts,
and may be subject to deductibles as are customarily maintained by Persons
employed or serving in the same or a similar capacity.

(c) Cause any Insurance Subsidiary to conduct its insurance business in
compliance with all applicable insurance laws, rules, regulations and orders and
using sound actuarial principles. The insurance premiums and other expenses
charged by any Insurance Subsidiary to the Borrower, its Subsidiaries and the
Related Professional Corporations shall be reasonable and customary and
reasonably satisfactory to the Administrative Agent. The Borrower will provide
the Administrative Agent (A) copies of any outside actuarial reports prepared
with respect to any projection, valuation or appraisal of any Insurance
Subsidiary (in form and substance and scope consistent with past practices and
including with respect to the Borrower) promptly after receipt thereof and
(B) once each year promptly after receipt thereof, an actuarial opinion with
respect to any Insurance Subsidiary (in form and substance and scope consistent
with past practices and including with respect to the Borrower) from (x) Aon
Corporation or (y) an actuarial firm reasonably satisfactory to the
Administrative Agent.

SECTION 6.08. Compliance with Laws. Comply and use its best efforts to cause the
Related Professional Corporations to comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except if the failure to comply
therewith could not reasonably be expected to have a Material Adverse Effect.

 

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SECTION 6.09. Books and Records. Maintain proper books of record and account, in
which entries that are full, true and correct in all material respects and are
in conformity with GAAP consistently applied shall be made of all material
financial transactions and matters involving the assets and business of the
Borrower or such Subsidiary, as the case may be.

SECTION 6.10. Inspection Rights. Permit representatives and independent
contractors of the Administrative Agent and each Lender to visit and inspect any
of its properties, to examine its corporate, financial and operating records,
and make copies thereof or abstracts therefrom, and to discuss its affairs,
finances and accounts with its directors, officers, and independent public
accountants, all at the reasonable expense of the Borrower and at such
reasonable times during normal business hours and as often as may be reasonably
desired, upon reasonable advance notice to the Borrower; provided that,
excluding any such visits and inspections during the continuation of an Event of
Default, only the Administrative Agent on behalf of the Lenders may exercise
rights of the Administrative Agent and the Lenders under this Section 6.10 and
the Administrative Agent shall not exercise such rights more often than two
(2) times during any calendar year absent the existence of an Event of Default
and only one (1) such time shall be at the Borrower’s expense; provided further
that when an Event of Default exists, the Administrative Agent or any Lender (or
any of their respective representatives or independent contractors) may do any
of the foregoing at the expense of the Borrower at any time during normal
business hours and upon reasonable advance notice. The Administrative Agent and
the Lenders shall give the Borrower the opportunity to participate in any
discussions with the Borrower’s independent public accountants.

SECTION 6.11. Covenant to Guarantee Obligations and Give Security. At the
Borrower’s expense, take all action necessary or reasonably requested by the
Administrative Agent to ensure that the Collateral and Guarantee Requirement
continues to be satisfied, including:

(a) upon the formation or acquisition of any new direct or indirect wholly owned
Domestic Subsidiary (other than an Unrestricted Subsidiary or an Excluded
Subsidiary) by any Loan Party or the designation in accordance with Section 6.14
of any existing direct or indirect wholly owned Domestic Subsidiary as a
Restricted Subsidiary:

(i) within thirty (30) days after such formation, acquisition or designation or
such longer period as the Administrative Agent may agree in its discretion:

(A) cause each such Restricted Subsidiary that is required to become a Guarantor
under the Collateral and Guarantee Requirement to furnish to the Administrative
Agent a description of the real properties owned by such Restricted Subsidiary
that have a book value in excess of $1,000,000;

(B) cause (x) each such Restricted Subsidiary that is required to become a
Guarantor pursuant to the Collateral and Guarantee Requirement to duly execute
and deliver to the Administrative Agent or the Collateral Agent (as appropriate)
Mortgages, Security Agreement Supplements,

 

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Intellectual Property Security Agreements and other security agreements and
documents (including, with respect to Mortgages, the documents listed in
Section 6.13(b)), as reasonably requested by and in form and substance
reasonably satisfactory to the Administrative Agent (consistent with the
Mortgages, Security Agreement, Intellectual Property Security Agreements and
other security agreements in effect on the Closing Date), in each case granting
Liens required by the Collateral and Guarantee Requirement and (y) each direct
or indirect parent of each such Restricted Subsidiary that is required to be a
Guarantor pursuant to the Collateral and Guarantee Requirement to duly execute
and deliver to the Administrative Agent such Security Agreement Supplements and
other security agreements as reasonably requested by and in form and substance
reasonably satisfactory to the Administrative Agent (consistent with the
Security Agreements in effect on the Closing Date), in each case granting Liens
required by the Collateral and Guarantee Requirement;

(C) (x) cause each such Restricted Subsidiary that is required to become a
Guarantor pursuant to the Collateral and Guarantee Requirement to deliver any
and all certificates representing Equity Interests (to the extent certificated)
that are required to be pledged pursuant to the Collateral and Guarantee
Requirement, accompanied by undated stock powers or other appropriate
instruments of transfer executed in blank and instruments evidencing the
intercompany Indebtedness held by such Restricted Subsidiary and required to be
pledged pursuant to the Collateral Documents, indorsed in blank to the
Collateral Agent and (y) cause each direct or indirect parent of such Restricted
Subsidiary that is required to be a Guarantor pursuant to the Collateral and
Guarantee Requirement to deliver any and all certificates representing the
outstanding Equity Interests (to the extent certificated) of such Restricted
Subsidiary that are required to be pledged pursuant to the Collateral and
Guarantee Requirement, accompanied by undated stock powers or other appropriate
instruments of transfer executed in blank and instruments evidencing the
intercompany Indebtedness issued by such Restricted Subsidiary and required to
be pledged in accordance with the Collateral Documents, indorsed in blank to the
Collateral Agent;

(D) take and cause such Restricted Subsidiary that is required to become a
Guarantor pursuant to the Collateral and Guarantee Requirement and each direct
or indirect parent of such Restricted Subsidiary to take whatever action
(including the recording of Mortgages, the filing of Uniform Commercial Code
financing statements and delivery of stock and membership interest certificates)
may be necessary in the reasonable opinion of the Administrative Agent to vest
in the Administrative Agent (or in any representative of the Administrative
Agent designated by it) valid Liens required by the Collateral and Guarantee
Requirement, enforceable against all third parties in accordance with their
terms, subject to Debtor Relief Laws and general principles of equity (whether

 

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considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing,

(ii) within thirty (30) days after the request therefor by the Administrative
Agent, deliver to the Administrative Agent a signed copy of an opinion,
addressed to the Administrative Agent and the other Secured Parties, of counsel
for the Loan Parties reasonably acceptable to the Administrative Agent as to
such matters set forth in this Section 6.11(a) as the Administrative Agent may
reasonably request, and

(iii) as promptly as practicable after the request therefor by the
Administrative Agent, deliver to the Administrative Agent with respect to each
parcel of real property that is owned by such Restricted Subsidiary and has a
book value in excess of $1,000,000 any existing title reports, surveys or
environmental assessment reports.

For purposes of this Section 6.11, references to a “Restricted Subsidiary that
is required to become a Guarantor under the Guarantee and Collateral Agreement
Requirement” shall be deemed to include any non-wholly owned Restricted
Subsidiary that is a Domestic Subsidiary acquired pursuant to Section 7.01(i).

(b) after the Closing Date, as soon as practicable after (x) the acquisition of
any material personal property by any Loan Party or (y) the acquisition of any
owned real property by any Loan Party with a book value in excess of $1,000,000,
and such personal property or owned real property shall not already be subject
to a perfected Lien pursuant to the Collateral and Guarantee Requirement, the
Borrower shall give notice thereof to the Administrative Agent and within 30
days thereafter (or such later date as the Administrative Agent may agree in its
discretion) shall cause such assets to be subjected to a Lien to the extent
required by the Collateral and Guarantee Requirement and will take, or cause the
relevant Loan Party to take, such actions as shall be necessary or reasonably
requested by the Administrative Agent to grant and perfect or record such Lien,
including, as applicable, the actions referred to in Section 6.13(b) with
respect to real property.

SECTION 6.12. Compliance with Environmental Laws. Except, in each case, to the
extent that the failure to do so could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, comply, and take
all reasonable actions to cause all lessees and other Persons operating or
occupying its properties to comply, with all applicable Environmental Laws and
Environmental Permits; obtain and renew all Environmental Permits necessary for
its operations and properties; and, in each case to the extent required by
Environmental Laws, conduct any investigation, study, sampling and testing, and
undertake any cleanup, removal, remedial or other action necessary to remove and
clean up all Hazardous Materials from any of its properties, in accordance with
the requirements of all Environmental Laws.

SECTION 6.13. Further Assurances and Post-Closing Conditions. (a) (i) Promptly
upon reasonable request by the Administrative Agent (x) correct any material

 

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defect or error that may be discovered in the execution, acknowledgment, filing
or recordation of any Collateral Document or other document or instrument
relating to any Collateral, and (y) do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register any and all such further
acts, deeds, certificates, assurances and other instruments as the
Administrative Agent may reasonably request from time to time in order to carry
out more effectively the purposes of the Collateral Documents; and (ii) as
promptly as practicable, and in any event within the time periods after the
Closing Date specified in Schedule 6.13(a)(ii) or such later date as the
Administrative Agent agrees in its discretion, the Borrower and each other Loan
Party shall deliver the documents or take the actions specified on Schedule
6.13(a)(ii) that would have been required to be delivered or taken on the
Closing Date but for the exception set forth in Section 4.01(a)(iii), in each
case except to the extent otherwise agreed by the Administrative Agent pursuant
to its authority as set forth in the definition of the term “Collateral and
Guarantee Requirement”.

(b) In the case of any real property referred to in Section 6.11(b), provide the
Administrative Agent with Mortgages with respect to such owned real property
within thirty (30) days of the acquisition of such real property (or such later
date as the Administrative Agent may agree in its discretion), together with:

(i) evidence that counterparts of the Mortgages have been duly executed,
acknowledged and delivered and are in form suitable for filing or recording in
all filing or recording offices that the Administrative Agent may deem
reasonably necessary or desirable in order to create a valid and subsisting
perfected Lien on the property and/or rights described therein in favor of the
Administrative Agent or the Collateral Agent (as appropriate) for the benefit of
the Secured Parties and that all filing and recording taxes and fees have been
paid or otherwise provided for in a manner reasonably satisfactory to the
Administrative Agent;

(ii) fully paid American Land Title Association Lender’s Extended Coverage title
insurance policies or the equivalent or other form available in each applicable
jurisdiction (the “Mortgage Policies”) in form and substance, with endorsements
and in amount, reasonably acceptable to the Administrative Agent (not to exceed
the value of the real properties covered thereby), issued, coinsured and
reinsured by title insurers reasonably acceptable to the Administrative Agent,
insuring the Mortgages to be valid subsisting Liens on the property described
therein, free and clear of all defects and encumbrances, subject to Liens
permitted by Section 7.01, and providing for such other affirmative insurance
(including endorsements for future advances under the Loan Documents) and such
coinsurance and direct access reinsurance as the Administrative Agent may
reasonably request;

(iii) opinions of local counsel for the Loan Parties in states in which the real
properties are located, with respect to the enforceability and perfection of the
Mortgages and any related fixture filings in form and substance reasonably
satisfactory to the Administrative Agent; and

 

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(iv) such other evidence that all other actions that the Administrative Agent
may reasonably deem necessary or desirable in order to create valid and
subsisting Liens on the property described in the Mortgages has been taken.

SECTION 6.14. Designation of Subsidiaries. The board of directors of Holdings
may at any time designate any Restricted Subsidiary as an Unrestricted
Subsidiary or any Unrestricted Subsidiary as a Restricted Subsidiary; provided
that (i) immediately before and after such designation, no Default shall have
occurred and be continuing, (ii) immediately after giving effect to such
designation, Holdings, the Borrower and the Restricted Subsidiaries shall be in
compliance, on a Pro Forma Basis, with the covenant set forth in Section 7.11
(and, as a condition precedent to the effectiveness of any such designation,
Holdings shall deliver to the Administrative Agent a certificate setting forth
in reasonable detail the calculations demonstrating such compliance), (iii) no
Subsidiary may be designated as an Unrestricted Subsidiary if it is a
“Restricted Subsidiary” for the purpose of any Junior Financing, as applicable,
and (iv) no Restricted Subsidiary may be designated as an Unrestricted
Subsidiary if it was previously designated an Unrestricted Subsidiary. The
designation of any Subsidiary as an Unrestricted Subsidiary shall constitute an
Investment by the Borrower therein at the date of designation in an amount equal
to the net book value of the Borrower’s (as applicable) investment therein. The
designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall
constitute the incurrence at the time of designation of any Indebtedness or
Liens of such Subsidiary existing at such time.

ARTICLE VII

Negative Covenants

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder which is accrued and payable shall remain unpaid or
unsatisfied, or any Letter of Credit shall remain outstanding, Holdings and the
Borrower shall not, nor shall they permit any of their Restricted Subsidiaries
to, directly or indirectly:

SECTION 7.01. Liens. Create, incur, assume or suffer to exist any Lien upon any
of its property, assets or revenues, whether now owned or hereafter acquired,
other than the following:

(a) Liens pursuant to any Loan Document;

(b) Liens existing on the date hereof and listed on Schedule 7.01(b) and any
modifications, replacements, renewals or extensions thereof; provided that
(i) the Lien does not extend to any additional property other than
(A) after-acquired property that is affixed or incorporated into the property
covered by such Lien, and (B) proceeds and products thereof, and (ii) the
renewal, extension or refinancing of the obligations secured or benefited by
such Liens is permitted by Section 7.03;

(c) Liens for taxes, assessments or governmental charges which are not overdue
for a period of more than ninety (90) days or which are being contested in good
faith and

 

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by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;

(d) statutory Liens of landlords, carriers, warehousemen, mechanics,
materialmen, repairmen, construction contractors or other like Liens arising in
the ordinary course of business which secure amounts not overdue for a period of
more than sixty (60) days or if more than sixty (60) days overdue, are unfiled
and no other action has been taken to enforce such Lien or which are being
contested in good faith and by appropriate proceedings diligently conducted, if
adequate reserves with respect thereto are maintained on the books of the
applicable Person in accordance with GAAP;

(e) (i) pledges or deposits in the ordinary course of business in connection
with workers’ compensation, unemployment insurance and other social security
legislation and (ii) pledges and deposits in the ordinary course of business
securing liability for reimbursement or indemnification obligations of
(including obligations in respect of letters of credit or bank guarantees for
the benefit of) insurance carriers providing property, casualty or liability
insurance to Holdings, the Borrower or any Restricted Subsidiary;

(f) deposits to secure the performance of bids, trade contracts, governmental
contracts and leases (other than Indebtedness for borrowed money), statutory
obligations, surety, stay, customs and appeal bonds, performance bonds and other
obligations of a like nature (including those to secure health, safety and
environmental obligations) incurred in the ordinary course of business;

(g) easements, rights-of-way, restrictions, encroachments, protrusions and other
similar encumbrances and minor title defects affecting real property which, in
the aggregate, do not in any case materially interfere with the ordinary conduct
of the business of the Borrower or any material Subsidiary;

(h) Liens securing judgments for the payment of money not constituting an Event
of Default under Section 8.01(h);

(i) Liens securing Indebtedness permitted under Section 7.03(e); provided that
(i) such Liens attach concurrently with or within two hundred and seventy
(270) days after the acquisition, repair, replacement, construction or
improvement (as applicable) of the property subject to such Liens, (ii) such
Liens do not at any time encumber any property (except for accessions to such
property) other than the property financed by such Indebtedness and the proceeds
and the products thereof and (iii) with respect to Capitalized Leases, such
Liens do not at any time extend to or cover any assets (except for accessions to
such assets) other than the assets subject to such Capitalized Leases; provided
that individual financings of equipment provided by one lender may be cross
collateralized to other financings of equipment provided by such lender;

(j) leases, licenses, subleases or sublicenses granted to others in the ordinary
course of business which do not (i) interfere in any material respect with the
business of the Borrower or any material Subsidiary or (ii) secure
any Indebtedness;

 

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

(l) Liens (i) of a collection bank arising under Section 4-210 of the Uniform
Commercial Code on items in the course of collection and (ii) in favor of a
banking institution arising as a matter of law encumbering deposits (including
the right of set-off) and which are within the general parameters customary in
the banking industry;

(m) Liens (i) on cash advances in favor of the seller of any property to be
acquired in an Investment permitted pursuant to Section 7.02(g), (i) or (n) to
be applied against the purchase price for such Investment, or (ii) consisting of
an agreement to Dispose of any property in a Disposition permitted under
Section 7.05, in each case, solely to the extent such Investment or Disposition,
as the case may be, would have been permitted on the date of the creation of
such Lien;

(n) Liens in favor of the Borrower or a Restricted Subsidiary securing
Indebtedness permitted under Section 7.03(d);

(o) Liens existing on property at the time of its acquisition or existing on the
property of any Person at the time such Person becomes a Restricted Subsidiary
(other than by designation as a Restricted Subsidiary pursuant to Section 6.14),
in each case after the date hereof (other than Liens on the Equity Interests of
any Person that becomes a Restricted Subsidiary) and the replacement, extension
or renewal of any Lien permitted by this clause (o) upon or in the same property
previously subject thereto in connection with a Permitted Refinancing of the
Indebtedness secured thereby; provided that (i) such Lien was not created in
contemplation of such acquisition or such Person becoming a Restricted
Subsidiary, (ii) such Lien does not extend to or cover any other assets or
property (other than the proceeds or products thereof and other than
after-acquired property subjected to a Lien securing Indebtedness and other
obligations incurred prior to such time and which Indebtedness and other
obligations are permitted hereunder that require, pursuant to their terms at
such time, a pledge of after-acquired property, it being understood that such
requirement shall not be permitted to apply to any property to which such
requirement would not have applied but for such acquisition), and (iii) the
Indebtedness secured thereby is permitted under Section 7.03(e), (g) or (j);

(p) any interest or title of a lessor under leases entered into by the Borrower
or any of the Restricted Subsidiaries in the ordinary course of business;

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

(r) Liens deemed to exist in connection with Investments in repurchase
agreements under Section 7.02;

 

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

(t) Liens that are contractual rights of set-off relating to the establishment
of depository relations with banks not given in connection with the issuance of
Indebtedness;

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

(v) ground leases in respect of real property on which facilities owned or
leased by the Borrower or any of its Subsidiaries are located;

(w) Liens arising from precautionary Uniform Commercial Code financing
statements regarding operating leases not constituting Indebtedness or
consignments;

(x) Liens on insurance policies and the proceeds thereof securing the financing
by any Loan Party of the premiums with respect thereto permitted under
Section 7.03(o);

(y) Liens incurred by an Insurance Subsidiary in favor of a fronting
professional liability insurance carrier to secure any Insurance Subsidiary’s
obligations to pay professional liability insurance claims and expenses on a
“claims reported” basis; and

(z) other Liens securing Indebtedness outstanding in an aggregate principal
amount not to exceed $25,000,000.

SECTION 7.02. Investments. Make or hold any Investments, except:

(a) Investments by the Borrower or a Restricted Subsidiary in assets that were
Cash Equivalents when such Investment was made;

(b) loans or advances to officers, directors, employees and independent
contractor physicians of Holdings, the Borrower and their respective Restricted
Subsidiaries (i) for reasonable and customary business-related travel,
entertainment, relocation and analogous ordinary business purposes, (ii) in
connection with such Person’s purchase of Equity Interests of Holdings (or any
direct or indirect parent of Holdings) (provided that the amount of such loans
and advances shall be contributed to the Borrower in cash as common equity),
(iii) in the case of independent contractor physicians, advances of salary in
the ordinary course of business and (iv) for purposes not described in the
foregoing clauses (i), (ii) and (iii), in an aggregate principal amount
outstanding not to exceed $5,000,000;

(c) Investments (i) by Holdings, the Borrower or any of their respective
Restricted Subsidiaries in any Loan Party (excluding any new Restricted
Subsidiary which becomes a Loan Party), (ii) by any Restricted Subsidiary that
is not a Loan Party in any other such Restricted Subsidiary that is also not a
Loan Party and (iii) by the Borrower or any other

 

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Loan Party in any Restricted Subsidiary that is not a Loan Party; provided that
the aggregate amount of such Investments shall not exceed $10,000,000 (net of
any return representing a return of capital in respect of any such Investment);

(d) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and Investments received in satisfaction or partial
satisfaction thereof from financially troubled account debtors and other credits
to suppliers in the ordinary course of business;

(e) Investments consisting of Liens, Indebtedness, fundamental changes,
Dispositions and Restricted Payments permitted under Sections 7.01, 7.03, 7.04,
7.05 and 7.06, respectively;

(f) Investments (i) existing or contemplated on the date hereof and set forth on
Schedule 7.02(f) and any modification, replacement, renewal, reinvestment or
extension thereof and (ii) Investments existing on the date hereof by the
Borrower or any Restricted Subsidiary in the Borrower or any other Restricted
Subsidiary and any modification, renewal or extension thereof;

(g) Investments in Swap Contracts permitted under Section 7.03;

(h) promissory notes and other noncash consideration received in connection with
Dispositions permitted by Section 7.05;

(i) the purchase or other acquisition of property and assets or businesses of
any Person or of assets constituting a business unit, a line of business or
division of such Person, or Equity Interests in a Person that, upon the
consummation thereof, will be a wholly owned Subsidiary of the Borrower
(including as a result of a merger or consolidation), or if not a wholly owned
Subsidiary of the Borrower, shall be a Guarantor and shall comply with the
requirements of Section 6.11 as if it were a wholly owned subsidiary, within the
times specified therein; provided that, with respect to each purchase or other
acquisition made pursuant to this Section 7.02(i) (each, a “Permitted
Acquisition”):

(A) other than with respect to acquisitions of entities organized under the laws
of, or property, assets or businesses located in, a jurisdiction other than the
United States, any state thereof or the District of Columbia for which the
aggregate amount of consideration paid in respect thereof (including earn-outs
and purchase price adjustments) shall not exceed $10,000,000 during the term of
this Agreement, substantially all property, assets and businesses acquired in
such purchase or other acquisition shall constitute Collateral and each
applicable Loan Party and any such newly created or acquired Subsidiary (and, to
the extent required under the Collateral and Guarantee Requirement, the
Subsidiaries of such created or acquired Subsidiary) shall be a Guarantor and
shall comply with the requirements of Section 6.11, within the times specified
therein;

 

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(B) the acquired property, assets, business or Person is in substantially the
same or a substantially similar line of business as the Borrower or a
Subsidiary;

(C) (1) immediately after giving Pro Forma Effect to any such purchase or other
acquisition, no Default shall have occurred and be continuing, (2) immediately
after giving Pro Forma Effect to any such purchase or other acquisition, the
Total Leverage Ratio is 5.50:1.00 or less and (3) immediately after giving
effect to such purchase or other acquisition, the Borrower and the Restricted
Subsidiaries shall be in Pro Forma Compliance with the covenant set forth in
Section 7.11, such compliance to be determined on the basis of the financial
information most recently delivered to the Administrative Agent and the Lenders
pursuant to Section 6.01(a) or (b) as though such purchase or other acquisition
had been consummated as of the first day of the fiscal period covered thereby
and evidenced by a certificate from the Chief Financial Officer of the Borrower
demonstrating such compliance calculation in reasonable detail; provided that
the Borrower shall not be required to deliver such certificate for any
individual acquisition the aggregate amount of consideration for which is less
than $10,000,000; and

(D) the Borrower shall have delivered to the Administrative Agent, on behalf of
the Lenders, no later than five (5) Business Days after the date on which any
such purchase or other acquisition is consummated, a certificate of a
Responsible Officer, in form and substance reasonably satisfactory to the
Administrative Agent, certifying that all of the requirements set forth in this
clause (i) have been satisfied or will be satisfied on or prior to the
consummation of such purchase or other acquisition;

(j) transfers of assets to Related Professional Corporations to the extent
required under the express contractual terms of applicable management contracts
in the ordinary course of business;

(k) Investments (including debt obligations and Equity Interests) received in
connection with the bankruptcy or reorganization of suppliers and customers or
in settlement of delinquent obligations of, or other disputes with, customers
and suppliers arising in the ordinary course of business or upon the foreclosure
with respect to any secured Investment or other transfer of title with respect
to any secured Investment;

(l) loans and advances to Holdings (or any direct or indirect parent thereof) in
lieu of, and not in excess of the amount of (after giving effect to any other
loans, advances or Restricted Payments in respect thereof), Restricted Payments
to the extent permitted to be made to Holdings (or such parent) in accordance
with Sections 7.06(g) or (h);

(m) so long as immediately after giving effect to any such Investment, no
Default has occurred and is continuing and the Borrower and the Restricted
Subsidiaries will be

 

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in Pro Forma Compliance with the covenant set forth in Section 7.11, other
Investments that do not exceed $150,000,000 in the aggregate, net of any return
representing return of capital in respect of any such investment and valued at
the time of the making thereof; provided that, such amount shall be increased by
the Net Cash Proceeds of Permitted Equity Issuances (other than Permitted Equity
Issuances made pursuant to Section 8.05) that are Not Otherwise Applied;

(n) advances of payroll payments to employees in the ordinary course
of business;

(o) Investments to the extent that payment for such Investments is made solely
with capital stock of Holdings;

(p) Investments of a Restricted Subsidiary acquired after the Closing Date or of
a corporation merged into the Borrower or merged or consolidated with a
Restricted Subsidiary in accordance with Section 7.04 after the Closing Date to
the extent that such Investments were not made in contemplation of or in
connection with such acquisition, merger or consolidation and were in existence
on the date of such acquisition, merger or consolidation;

(q) Guarantees by Holdings, the Borrower or any of their respective Restricted
Subsidiaries of leases (other than Capitalized Leases) or of other obligations
that do not constitute Indebtedness, in each case entered into in the ordinary
course of business;

(r) Investments made in any Insurance Subsidiary solely to the extent permitted
by Section 7.17;

(s) Investments in the form of loans by the Borrower or any of its or Holdings’
Restricted Subsidiaries to Related Professional Corporations in the ordinary
course of business; provided that such loans shall be evidenced by promissory
notes and such promissory notes shall be pledged to the Administrative Agent
pursuant to the Security Agreement;

(t) Investments made in connection with the funding of contributions under any
non-qualified retirement plan or similar employee compensation plan in an amount
not to exceed the amount of compensation expense recognized by Holdings and its
Subsidiaries in connection with such plans;

(u) (i) loans and advances made in connection with the formation and support of
new medical groups with which the Borrower or any of its Restricted Subsidiaries
has entered into (or is contemporaneously entering into) a Management/Services
Agreement and (ii) loans and advances made to new clients of one or more
Restricted Subsidiaries of the Borrower responsible for performing and
maintaining third party billing services in connection with the transfer of new
accounts; provided that the aggregate principal amount of such Investments set
forth in clauses (i) and (ii) shall not exceed $10,000,000 at any time
outstanding; and

(v) the Borrower and the Restricted Subsidiaries may hold Investments made in
accordance with the terms of this Section 7.02 to the extent such Investments
reflect an

 

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increase in value of Investments that would otherwise exceed the limitations of
this Section 7.02.

(w) Notwithstanding anything to the contrary in this Section 7.02, no Investment
in an Unrestricted Subsidiary that would otherwise be permitted under this
Section 7.02 shall be permitted hereunder to the extent that any portion of such
Investment is used to make any prepayments, redemptions, purchases, defeasances
or other payments in respect of Junior Financings.

SECTION 7.03. Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except:

(a) Indebtedness of Holdings, the Borrower and any of their respective
Subsidiaries under the Loan Documents;

(b) Indebtedness (i) outstanding on the date hereof and listed on
Schedule 7.03(b) and any Permitted Refinancing thereof and (ii) intercompany
Indebtedness outstanding on the date hereof;

(c) Guarantees by Holdings, the Borrower and their respective Restricted
Subsidiaries in respect of Indebtedness of the Borrower or any Restricted
Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any
Restricted Subsidiary of any Junior Financing shall be permitted unless such
Restricted Subsidiary shall have also provided a Guarantee of the Obligations
substantially on the terms set forth in the Subsidiary Guaranty and (B) if the
Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee
shall be subordinated to the Guarantee of the Obligations on terms at least as
favorable to the Lenders as those contained in the subordination of such
Indebtedness;

(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to the
Borrower or any other Restricted Subsidiary to the extent constituting an
Investment permitted by Section 7.02; provided that, all such Indebtedness of
any Loan Party owed to any Person that is not a Loan Party shall be subject to
the subordination terms set forth in Section 5.03 of the Security Agreement;

(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized
Leases) financing the acquisition, construction, repair, replacement or
improvement of fixed or capital assets; provided that such Indebtedness is
incurred concurrently with or within two hundred and seventy (270) days after
the applicable acquisition, construction, repair, replacement or improvement,
(ii) Attributable Indebtedness arising out of sale-leaseback transactions
permitted by Section 7.05(f) and (iii) any Permitted Refinancing of any
Indebtedness set forth in the immediately preceding clauses (i) and (ii);

(f) Indebtedness in respect of Swap Contracts designed to hedge against interest
rates or foreign exchange rates incurred in the ordinary course of business and
not for speculative purposes;

 

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(g) Indebtedness of Holdings, the Borrower and the Restricted Subsidiaries
assumed in connection with any Permitted Acquisition, together with any
Permitted Refinancing thereof, in an aggregate principal amount not to exceed
$50,000,000 at any time outstanding; provided that (i) such Indebtedness is not
incurred in contemplation of such Permitted Acquisition and (ii) both
immediately prior to and after giving effect to the assumption of such
Indebtedness and the incurrence of all Indebtedness resulting from any Permitted
Refinancing thereof, (A) no Default shall exist or result therefrom and (B) the
Borrower and the Restricted Subsidiaries will be in Pro Forma Compliance with
the covenant set forth in Section 7.11;

(h) [Intentionally Omitted];

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

(j) Indebtedness of any Loan Party to current or former officers, directors and
employees, their respective estates, spouses or former spouses to finance the
purchase or redemption of Equity Interests of Holdings permitted by Section 7.06
and any Permitted Refinancing thereof;

(k) Indebtedness incurred by Holdings, the Borrower or the Restricted
Subsidiaries in a Permitted Acquisition, any other Investment expressly
permitted hereunder or any Disposition constituting indemnification obligations
or obligations in respect of purchase price or other similar adjustments;

(l) Indebtedness consisting of obligations of Holdings, the Borrower or the
Restricted Subsidiaries under deferred compensation or other similar
arrangements incurred by such Person in connection with Permitted Acquisitions
or any other Investment expressly permitted hereunder;

(m) Cash Management Obligations and other Indebtedness in respect of netting
services, overdraft protections and similar arrangements in each case in
connection with deposit accounts;

(n) Indebtedness in an aggregate principal amount not to exceed $50,000,000 at
any time outstanding;

(o) Indebtedness of a Loan Party consisting of the financing of insurance
premiums in an amount not to exceed the lesser of $75,000,000 and the premiums
with respect to the applicable insurance policies;

(p) Indebtedness incurred by the Borrower or any of the Restricted Subsidiaries
in respect of letters of credit, bank guarantees or similar instruments issued
or created in the ordinary course of business, including in respect of workers
compensation claims, health, disability or other employee benefits or property,
casualty or liability insurance or self-insurance or other Indebtedness with
respect to reimbursement-type obligations regarding workers compensation claims;
provided that any reimbursement obligations in respect thereof are reimbursed
within 30 days following the incurrence thereof;

 

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(q) obligations in respect of performance, bid, appeal and surety bonds and
performance and completion guarantees and similar obligations provided by the
Borrower or any of the Restricted Subsidiaries or obligations in respect of
letters of credit, bank guarantees or similar instruments related thereto, in
each case in the ordinary course of business or consistent with past practice;

(r) Indebtedness supported by a Letter of Credit, in a principal amount not to
exceed the face amount of such Letter of Credit;

(s) [Intentionally Omitted];

(t) [Intentionally Omitted];

(u) unsecured Indebtedness so long as (1) immediately after giving Pro Forma
Effect to the incurrence of such Indebtedness, the Total Leverage Ratio shall be
5.50 to 1.00 or less and (2) immediately after giving effect to the incurrence
of such Indebtedness, the Borrower and the Restricted Subsidiaries shall be in
Pro Forma Compliance with the covenant set forth in Section 7.11; and

(v) all premiums (if any), interest (including post-petition interest), fees,
expenses, charges and additional or contingent interest on obligations described
in clauses (a) through (u) above.

SECTION 7.04. Fundamental Changes. Merge, dissolve, liquidate, consolidate with
or into another Person, or Dispose of (whether in one transaction or in a series
of transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except that:

(a) (i) any Restricted Subsidiary may merge with (A) the Borrower (including a
merger, the purpose of which is to reorganize the Borrower into a new
jurisdiction); provided that (x) the Borrower shall be the continuing or
surviving Person and (y) such merger does not result in the Borrower ceasing to
be organized under the Laws of the United States, any state thereof or the
District of Columbia, or (B) any one or more other Restricted Subsidiaries;
provided that when any Restricted Subsidiary that is a Loan Party is merging
with another Restricted Subsidiary, such Loan Party shall be the continuing or
surviving Person, and (ii) Direct Holdco and Health Finance Corporation may
merge with any other Loan Party (provided that if merged with the Borrower, the
Borrower shall be the continuing and surviving Person);

(b) (i) any Subsidiary that is not a Loan Party may merge or consolidate with or
into any other Subsidiary that is not a Loan Party and (ii) any Subsidiary of
Holdings (other than the Borrower) may liquidate or dissolve or change its legal
form if Holdings determines in good faith that such action is in the best
interests of Holdings and its Subsidiaries and is not materially disadvantageous
to the Lenders;

(c) any Restricted Subsidiary of Holdings (other than the Borrower) may Dispose
of all or substantially all of its assets (upon voluntary liquidation or
otherwise) to Holdings (in the case of Direct Holdco and Health Finance
Corporation), the Borrower or

 

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to another Restricted Subsidiary; provided that if the transferor in such a
transaction is a Guarantor, then (i) the transferee must be the Borrower or a
Guarantor or (ii) to the extent constituting an Investment, such Investment must
be a permitted Investment in or Indebtedness of a Restricted Subsidiary which is
not a Loan Party in accordance with Sections 7.02 and 7.03, respectively;

(d) so long as no Default exists or would result therefrom, the Borrower may
merge with any other Person; provided that (i) the Borrower shall be the
continuing or surviving entity or (ii) if the Person formed by or surviving any
such merger or consolidation is not the Borrower (any such Person, the
“Successor Company”), (A) the Successor Company shall be an entity organized or
existing under the laws of the United States, any state thereof or the District
of Columbia, (B) the Successor Company shall expressly assume all the
obligations of the Borrower under this Agreement and the other Loan Documents to
which the Borrower is a party pursuant to a supplement hereto or thereto in form
reasonably satisfactory to the Administrative Agent, (C) each Guarantor, unless
it is the other party to such merger or consolidation, shall have by a
supplement to the Guaranty confirmed that its Guarantee shall apply to the
Successor Company’s obligations under this Agreement, (D) each Guarantor, unless
it is the other party to such merger or consolidation, shall have by a
supplement to the Security Agreement confirmed that its obligations thereunder
shall apply to the Successor Company’s obligations under this Agreement,
(E) each mortgagor of a Mortgaged Property, unless it is the other party to such
merger or consolidation, shall have by an amendment to or restatement of the
applicable Mortgage confirmed that its obligations thereunder shall apply to the
Successor Company’s obligations under this Agreement, and (F) the Borrower shall
have delivered to the Administrative Agent a certificate of a Responsible
Officer and an opinion of counsel, each stating that such merger or
consolidation and such supplement to this Agreement or any Collateral Document
comply with this Agreement; provided, further, that if the foregoing are
satisfied, the Successor Company will succeed to, and be substituted for, the
Borrower under this Agreement;

(e) so long as no Default exists or would result therefrom, any Restricted
Subsidiary may merge with any other Person in order to effect an Investment
permitted pursuant to Section 7.02; provided that the continuing or surviving
Person shall be a Restricted Subsidiary, which together with each of its
Restricted Subsidiaries shall have complied with the requirements of
Section 6.11;

(f) [Intentionally Omitted]; and

(g) so long as no Default exists or would result therefrom, a merger,
dissolution, liquidation, consolidation or Disposition, the purpose of which is
to effect a Disposition permitted pursuant to Section 7.05.

SECTION 7.05. Dispositions. Make any Disposition or enter into any agreement to
make any Disposition, except:

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

 

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Dispositions of property no longer used or useful in the conduct of the business
of the Borrower and the Restricted Subsidiaries;

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

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

(d) Dispositions of property to the Borrower or to a Restricted Subsidiary;
provided that if the transferor of such property is a Guarantor or the Borrower
(i) the transferee thereof must either be the Borrower or a Guarantor or (ii) to
the extent such transaction constitutes an Investment, such transaction is
permitted under Section 7.02;

(e) Dispositions permitted by Sections 7.04 and 7.06 and Liens permitted by
Section 7.01;

(f) [Intentionally Omitted];

(g) Dispositions of Cash Equivalents;

(h) Dispositions of accounts receivable in connection with the collection or
compromise thereof;

(i) leases, subleases, licenses or sublicenses, in each case in the ordinary
course of business and which do not materially interfere with the business of
Holdings, the Borrower and the Restricted Subsidiaries;

(j) transfers of property subject to Casualty Events upon receipt of the Net
Cash Proceeds of such Casualty Event;

(k) Dispositions of property not otherwise permitted under this Section 7.05;
provided that (i) the aggregate book value of all property Disposed of in
reliance on this clause (k) shall not exceed 10% of the total assets of the
Borrower and the Restricted Subsidiaries on a consolidated basis (as shown on
the most recent balance sheet of the Borrower), and (ii) with respect to any
Disposition pursuant to this clause (k) for a purchase price in excess of
$2,500,000, the Borrower or a Restricted Subsidiary shall receive not less than
75% of such consideration in the form of cash or Cash Equivalents (in each case,
free and clear of all Liens at the time received, other than nonconsensual Liens
permitted by Section 7.01 and Liens permitted by Sections 7.01(r) and (t));
provided, however, that for the purposes of this clause (ii), (A) any
liabilities (as shown on the Borrower’s or such Restricted Subsidiary’s most
recent balance sheet provided hereunder or in the footnotes thereto) of the
Borrower or such Restricted Subsidiary, other than liabilities that are by their
terms subordinated to the payment in cash of the Obligations, that are assumed
by the transferee with respect to the applicable Disposition and for which the
Borrower and all of the Restricted Subsidiaries shall have been validly

 

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released by all applicable creditors in writing, (B) any securities received by
the Borrower or such Restricted Subsidiary from such transferee that are
converted by the Borrower or such Restricted Subsidiary into cash (to the extent
of the cash received) within 180 days following the closing of the applicable
Disposition and (C) any Designated Non-Cash Consideration received by the
Borrower or such Restricted Subsidiary in respect of such Disposition having an
aggregate fair market value, taken together with all other Designated Non-Cash
Consideration received pursuant to this clause (C) that is at that time
outstanding, not in excess of $20,000,000, with the fair market value of each
item of Designated Non-Cash Consideration being measured at the time received
and without giving effect to subsequent changes in value, shall be deemed to be
cash; provided, further, that the Net Cash Proceeds of any Disposition under
this Section 7.05(k) shall be subject to the terms of Section 2.05(b) hereof.

(l) Dispositions listed on Schedule 7.05(l); and

(m) Dispositions of Investments in joint ventures to the extent required by, or
made pursuant to customary buy/sell arrangements between, the joint venture
parties set forth in joint venture arrangements and similar binding
arrangements.

provided that any Disposition of any property pursuant to this Section 7.05
(except pursuant to Section 7.05(e) and except for Dispositions from a Loan
Party to another Loan Party), shall be for no less than the fair market value of
such property at the time of such Disposition. To the extent any Collateral is
Disposed of as expressly permitted by this Section 7.05 to any Person other than
Holdings, the Borrower or any Restricted Subsidiary, such Collateral shall be
sold free and clear of the Liens created by the Loan Documents, and the
Administrative Agent or the Collateral Agent, as applicable, shall be authorized
to take any actions deemed appropriate in order to effect the foregoing.

SECTION 7.06. Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, except:

(a) each Restricted Subsidiary may make Restricted Payments to the Borrower and
to other Restricted Subsidiaries (and, in the case of a Restricted Payment by a
non-wholly owned Restricted Subsidiary, to the Borrower and any other Restricted
Subsidiary and to each other owner of Equity Interests of such Restricted
Subsidiary based on their relative ownership interests of the relevant class of
Equity Interests);

(b) Holdings, the Borrower and each Restricted Subsidiary may declare and make
dividend payments or other distributions payable solely in the Equity Interests
(other than Disqualified Equity Interests not otherwise permitted by
Section 7.03) of such Person;

(c) Restricted Payments made on the Closing Date to consummate the Transaction;

(d) to the extent constituting Restricted Payments, Holdings, the Borrower and
their respective Restricted Subsidiaries may enter into and consummate
transactions expressly permitted by any provision of Section 7.04 or 7.08 other
than Section 7.08(e);

 

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(e) repurchases of Equity Interests in Holdings, the Borrower or any Restricted
Subsidiary deemed to occur upon exercise of stock options or warrants if such
Equity Interests represent a portion of the exercise price of such options or
warrants;

(f) Holdings may pay (or make Restricted Payments to allow any direct or
indirect parent thereof to pay) for the repurchase, retirement or other
acquisition or retirement for value of Equity Interests of Holdings (or of any
such parent of Holdings) by any future, present or former employee or director
of Holdings (or any direct or indirect parent of Holdings) or any of its
Subsidiaries pursuant to any employee or director equity plan, employee or
director stock option plan or any other employee or director benefit plan or any
agreement (including any stock subscription or shareholder agreement) with any
employee or director of Holdings or any of its Subsidiaries;

(g) the Borrower and its Restricted Subsidiaries may make Restricted Payments to
Holdings:

(i) the proceeds of which will be used to pay (or to make Restricted Payments to
allow any direct or indirect parent of Holdings to pay) the tax liability to
each relevant jurisdiction in respect of consolidated, combined, unitary or
affiliated returns for the relevant jurisdiction of Holdings (or such parent)
attributable to Holdings, the Borrower or their respective Subsidiaries
determined as if the Borrower and its Subsidiaries filed separately;

(ii) the proceeds of which shall be used by Holdings to pay (or to make
Restricted Payments to allow any direct or indirect parent of Holdings to pay)
its operating expenses incurred in the ordinary course of business and other
corporate overhead costs and expenses (including administrative, legal,
accounting and similar expenses provided by third parties), which are reasonable
and customary and incurred in the ordinary course of business, in an aggregate
amount not to exceed $2,000,000 in any fiscal year plus any reasonable and
customary indemnification claims made by directors or officers of Holdings (or
any parent thereof) attributable to the ownership or operations of the Borrower
and its Subsidiaries;

(iii) the proceeds of which shall be used by Holdings to pay franchise taxes and
other fees, taxes and expenses required to maintain its (or any of its direct or
indirect parents’) corporate existence;

(iv) the proceeds of which shall be used by Holdings to make Restricted Payments
permitted by Section 7.06(f);

(v) to finance any Investment permitted to be made pursuant to Section 7.02;
provided that (A) such Restricted Payment shall be made substantially
concurrently with the closing of such Investment and (B) Holdings shall,
immediately following the closing thereof, cause (1) all property acquired
(whether assets or Equity Interests) to be contributed to the Borrower or its
Restricted Subsidiaries or (2) the merger (to the extent permitted in
Section 7.04)

 

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of the Person formed or acquired into the Borrower or a Restricted Subsidiary in
order to consummate such Permitted Acquisition, in each case, in accordance with
the requirements of Section 6.11; and

(vi) the proceeds of which shall be used by Holdings to pay (or to make
Restricted Payments to allow any direct or indirect parent thereof to pay) fees
and expenses (other than to Affiliates) related to any unsuccessful equity or
debt offering permitted by this Agreement;

(h) in addition to the foregoing Restricted Payments and so long as no Default
shall have occurred and be continuing or would result therefrom, the Borrower
may make additional Restricted Payments to Holdings, the proceeds of which may
be utilized by Holdings to make additional Restricted Payments, in an aggregate
amount, together with the aggregate amount of (1) prepayments, redemptions,
purchases, defeasances and other payments in respect of Junior Financings made
pursuant to Section 7.13(a)(iv) and (2) loans and advances to Holdings made
pursuant to Section 7.02(m) in lieu of Restricted Payments permitted by this
clause (h), in an aggregate amount not to exceed (x) $75,000,000 and (y) which
amount shall be increased by an amount equal to 50% of cumulative Consolidated
Net Income for the Reference Period (or in the case such Consolidated Net Income
for such period is a deficit, minus 100% of such deficit (it being understood
that this clause (y) shall not reduce clause (x))); and

(i) repurchases and redemptions of Equity Interests in Holdings, the Borrower or
any Restricted Subsidiary in an amount not to exceed $15,000,000 in any calendar
year (with unused amounts in any calendar year being carried over to the two
immediately succeeding calendar years).

SECTION 7.07. Change in Nature of Business. Engage in any material line of
business substantially different from those lines of business conducted by the
Borrower and the Restricted Subsidiaries on the date hereof or any business
reasonably related or ancillary thereto; it being understood and acknowledged
that any Insurance Subsidiary shall be the only entity conducting insurance
business (and business reasonably related thereto) and that any Insurance
Subsidiary shall be engaged solely in the medical malpractice business, workers
compensation and such other insurance business as may be reasonably approved by
the Administrative Agent, for the underwriting of insurance policies for the
Borrower and its Subsidiaries and each Related Professional Corporation and each
of such Loan Party’s or Related Professional Corporation’s respective employees,
officers, directors or contractors who provides professional medical services to
patients.

SECTION 7.08. Transactions with Affiliates. Enter into any transaction of any
kind with any Affiliate of the Borrower, whether or not in the ordinary course
of business, other than (a) transactions among Loan Parties or any Restricted
Subsidiary (other than any Insurance Subsidiary) or any entity that becomes a
Restricted Subsidiary (other than any Insurance Subsidiary) as a result of such
transaction, (b) on terms substantially as favorable to Holdings, the Borrower
or such Restricted Subsidiary as would be obtainable by Holdings, the Borrower
or such Restricted Subsidiary at the time in a comparable arm’s-length
transaction with a Person other than an Affiliate, (c) the payment of fees and
expenses related to the Transaction, (d) equity

 

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issuances, repurchases, retirements or other acquisitions or retirements of
Equity Interests by Holdings permitted under Section 7.06, (e) loans and other
transactions by Holdings, the Borrower and their respective Restricted
Subsidiaries to the extent permitted under this Article 7, (f) employment and
severance arrangements between Holdings, the Borrower and their respective
Restricted Subsidiaries and their respective officers and employees in the
ordinary course of business, (g) payments by Holdings (and any direct or
indirect parent thereof), the Borrower and their respective Restricted
Subsidiaries pursuant to the tax sharing agreements among Holdings (and any such
parent thereof), the Borrower and their respective Restricted Subsidiaries on
customary terms to the extent attributable to the ownership or operation of the
Borrower and their respective Restricted Subsidiaries, (h) the payment of
customary fees and reasonable out of pocket costs to, and indemnities provided
on behalf of, directors, officers and employees of Holdings, the Borrower and
their respective Restricted Subsidiaries in the ordinary course of business to
the extent attributable to the ownership or operation of Holdings, the Borrower
and their respective Restricted Subsidiaries, (i) transactions pursuant to
permitted agreements in existence on the Closing Date and set forth on Schedule
7.08 or any amendment thereto to the extent such an amendment is not adverse to
the Lenders in any material respect, (j) dividends, redemptions and repurchases
permitted under Section 7.06, (k) customary payments by Holdings, the Borrower
and any Restricted Subsidiaries to the Sponsors made for any financial advisory,
financing, underwriting or placement services or in respect of other investment
banking activities (including in connection with acquisitions or divestitures),
which payments are approved by the majority of the members of the board of
directors or a majority of the disinterested members of the board of directors
of Holdings or the Borrower, in good faith, and (l) transactions pursuant to
management contracts with affiliated physicians entered into in the ordinary
course of business consistent with past practice.

SECTION 7.09. Restrictive Agreements. Enter into or permit to exist any
Contractual Obligation (other than this Agreement or any other Loan Document)
that limits the ability of (a) any Restricted Subsidiary that is not a Guarantor
to make Restricted Payments to the Borrower or any Guarantor or (b) the Borrower
or any Loan Party to create, incur, assume or suffer to exist Liens on property
of such Person for the benefit of the Lenders with respect to the Facilities and
the Obligations or under the Loan Documents; provided that the foregoing clauses
(a) and (b) shall not apply to Contractual Obligations which (i) (x) exist on
the date hereof and (to the extent not otherwise permitted by this Section 7.09)
are listed on Schedule 7.09 hereto and (y) to the extent Contractual Obligations
permitted by clause (x) are set forth in an agreement evidencing Indebtedness,
are set forth in any agreement evidencing any permitted renewal, extension or
refinancing of such Indebtedness so long as such renewal, extension or
refinancing does not expand the scope of such Contractual Obligation, (ii) are
binding on a Restricted Subsidiary at the time such Restricted Subsidiary first
becomes a Restricted Subsidiary, so long as such Contractual Obligations were
not entered into solely in contemplation of such Person becoming a Restricted
Subsidiary; provided further that this clause (ii) shall not apply to
Contractual Obligations that are binding on a Person that becomes a Restricted
Subsidiary pursuant to Section 6.14, (iii) represent Indebtedness of a
Restricted Subsidiary which is not a Loan Party which is permitted by
Section 7.03 only to the extent such Contractual Obligations apply to such
Restricted Subsidiary and its Subsidiaries, (iv) arise in connection with any
Disposition permitted by Section 7.05, (v) are customary provisions in joint
venture agreements and other similar agreements applicable to joint ventures
permitted under Section 7.02 and applicable solely to such joint venture entered
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business, (vi) are negative pledges and restrictions on Liens in favor of any
holder of Indebtedness permitted under Section 7.03 but solely to the extent any
negative pledge relates to the property financed by or the subject of such
Indebtedness (and excluding in any event any Indebtedness constituting any
Junior Financing), (vii) are customary restrictions on leases, subleases,
licenses or asset sale agreements otherwise permitted hereby so long as such
restrictions relate to the assets subject thereto, (viii) comprise restrictions
imposed by any agreement relating to secured Indebtedness permitted pursuant to
Section 7.03(e) to the extent that such restrictions apply only to the property
or assets securing such Indebtedness, (ix) are customary provisions restricting
subletting or assignment of any lease governing a leasehold interest of the
Borrower or any Restricted Subsidiary, (x) are customary provisions restricting
assignment of any agreement entered into in the ordinary course of business, and
(xi) are restrictions on cash or other deposits imposed by customers under
contracts entered into in the ordinary course of business.

SECTION 7.10. Use of Proceeds. Use the proceeds of any Credit Extension, whether
directly or indirectly, in a manner inconsistent with the uses set forth in the
preliminary statements to this Agreement.

SECTION 7.11. Financial Covenant. First Lien Net Leverage Ratio. Permit the
First Lien Net Leverage Ratio as of the last day of any Test Period to exceed
4.00:1.00.

SECTION 7.12. Accounting Changes. Make any change in fiscal year; provided,
however, that Holdings may, upon written notice to the Administrative Agent,
change its fiscal year to any other fiscal year reasonably acceptable to the
Administrative Agent, in which case, Holdings and the Administrative Agent will,
and are hereby authorized by the Lenders to, make any adjustments to this
Agreement that are necessary to reflect such change in fiscal year.

SECTION 7.13. Prepayments, Etc. of Indebtedness. (a) Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner (it being understood that payments of regularly scheduled interest shall
be permitted) any subordinated Indebtedness incurred under Section 7.03(g) or
(h) or any other Indebtedness that is required to be subordinated to the
Obligations pursuant to the terms of the Loan Documents (collectively, “Junior
Financing”) or make any payment in violation of any subordination terms of any
Junior Financing Documentation, except (i) the refinancing thereof with the Net
Cash Proceeds of any Indebtedness (to the extent such Indebtedness constitutes a
Permitted Refinancing and, if applicable, is permitted pursuant to
Section 7.03(g) or (h)), to the extent not required to prepay any Loans or
Facility pursuant to Section 2.05(b), or of any Indebtedness of Holdings,
(ii) the conversion of any Junior Financing to Equity Interests (other than
Disqualified Equity Interests) of Holdings or any of its direct or indirect
parents, (iii) the prepayment of Indebtedness of the Borrower or any Restricted
Subsidiary to the Borrower or any Restricted Subsidiary to the extent permitted
by the Collateral Documents and (iv) prepayments, redemptions, purchases,
defeasances and other payments in respect of Junior Financings prior to their
scheduled maturity in an aggregate amount, together with the aggregate amount of
(1) Restricted Payments made pursuant to Section 7.06(h) and (2) loans and
advances to Holdings made pursuant to Section 7.02(m), in an amount not to
exceed (x) $75,000,000 and (y) which amount shall be increased by an amount
equal to 50% of cumulative Consolidated Net Income for the Reference Period (or
in the case such Consolidated Net Income for such period is a

 

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deficit, minus 100% of such deficit (it being understood that this clause
(y) shall not reduce clause (x))).

(b) Amend, modify or change in any manner materially adverse to the interests of
the Lenders any term or condition of any Junior Financing Documentation without
the consent of the Arrangers.

SECTION 7.14. Equity Interests of the Borrower and Restricted Subsidiaries.
Permit any Domestic Subsidiary that is a Restricted Subsidiary to be a
non-wholly owned Subsidiary, except (i) as a result of or in connection with a
dissolution, merger, consolidation or Disposition of a Restricted Subsidiary
permitted by Section 7.04, 7.05 or an Investment in any Person permitted under
Section 7.02 or (ii) so long as such Restricted Subsidiary continues to be a
Guarantor and complies with the requirements of Section 6.11 as if it were a
wholly owned subsidiary.

SECTION 7.15. Holding Companies. (a) In the case of Holdings, conduct, transact
or otherwise engage in any business or operations other than those incidental to
(i) its ownership of the Equity Interests of Health Finance Corporation, Direct
Holdco and, if applicable, the Borrower, (ii) the maintenance of its legal
existence, (iii) the performance of the Loan Documents, (iv) any public offering
of its common stock or any other issuance of its Equity Interests not prohibited
by Article 7, and (v) any transaction that Holdings is permitted to enter into
or consummate under this Article 7.

(b) In the case of Direct Holdco, Holdings shall not permit Direct Holdco to
(i) incur any Indebtedness or obligations other than its Guarantee hereof,
(ii) own any material assets or other property, other than Indebtedness or other
obligations owing to the Direct Holdco by Holdings and the other Restricted
Subsidiaries, Cash Equivalents and the ownership of the Borrower’s Equity
Interests and (iii) conduct, transact or otherwise engage in any business or
operations other than those incidental to (w) treasury, cash management and
hedging, (x) the maintenance of its legal existence, (y) the performance of its
obligations pursuant to this Agreement and (z) any transaction that Direct
Holdco is permitted to enter into or consummate under this Article 7.

SECTION 7.16. [Intentionally Omitted].

SECTION 7.17. Insurance Subsidiary. (a) Permit an Insurance Subsidiary to enter
into any (or renew, extend or materially modify any existing) reinsurance or
stop-loss insurance arrangements except in the ordinary course of business with
reinsurers rated as least “A” by A.M. Best & Co. or reinsurers whose obligations
to such Insurance Subsidiary are secured by letters of credit or other
collateral reasonably acceptable to the Administrative Agent or (b) permit any
Investment in an Insurance Subsidiary, except for Investments in any calendar
year not in excess of 50% of the Annual Premiums for such calendar year.

SECTION 7.18. Related Professional Corporations. (a) Cause any Related
Professional Corporation to take any action that, if taken by Holdings, the
Borrower or any Restricted Subsidiary of the Borrower, would be prohibited
hereunder.

 

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(b) Amend or waive, or permit any Subsidiary Guarantor to amend or waive, any
provision of any Management/Services Agreement to which any Related Professional
Corporation is a party in a manner material and adverse to the Lenders, except
to the extent any such amendment or waiver is required by Law; provided that the
Borrower or such Subsidiary Guarantor shall notify the Administrative Agent of
such amendment or waiver required by Law promptly after obtaining knowledge
thereof.

ARTICLE VIII

Events of Default and Remedies

SECTION 8.01. Events of Default. Any of the following shall constitute an Event
of Default:

(a) Non-Payment. The Borrower or any other Loan Party fails to pay (i) when and
as required to be paid herein, any amount of principal of any Loan, or
(ii) within five (5) Business Days after the same becomes due, any interest on
any Loan or any other amount payable hereunder or with respect to any other Loan
Document; or

(b) Specific Covenants. The Borrower fails to perform or observe any term,
covenant or agreement contained in any of Sections 6.03(a) or 6.05(a) (solely
with respect to Holdings and the Borrower) or Article 7; provided that any Event
of Default under Section 7.11 is subject to cure as contemplated by
Section 8.05; or

(c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in Section 8.01(a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for thirty (30) days after notice thereof by the Administrative Agent
to the Borrower; or

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

(e) Cross-Default. Any Loan Party or any Restricted Subsidiary (A) fails to make
any payment beyond the applicable grace period with respect thereto, if any
(whether by scheduled maturity, required prepayment, acceleration, demand, or
otherwise), in respect of any Indebtedness (other than Indebtedness hereunder)
having an aggregate principal amount of not less than the Threshold Amount, or
(B) fails to observe or perform any other agreement or condition relating to any
such Indebtedness, or any other event occurs (other than, with respect to
Indebtedness consisting of Swap Contracts, termination events or equivalent
events pursuant to the terms of such Swap Contracts), the effect of which
default or other event is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such Indebtedness to become due or to be repurchased, prepaid, defeased or
redeemed (automatically or otherwise), or an offer to repurchase, prepay,
defease or redeem such Indebtedness to be

 

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made, prior to its stated maturity; provided that this clause (e)(B) shall not
apply to secured Indebtedness that becomes due as a result of the voluntary sale
or transfer of the property or assets securing such Indebtedness, if such sale
or transfer is permitted hereunder and under the documents providing for such
Indebtedness; or

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

(g) Inability to Pay Debts; Attachment. (i) Any Loan Party or any Restricted
Subsidiary becomes unable or admits in writing its inability or fails generally
to pay its debts in excess of the Threshold Amount as they become due, or
(ii) any writ or warrant of attachment or execution or similar process is issued
or levied against all or any material part of the property of the Loan Parties,
taken as a whole, and is not released, vacated or fully bonded within sixty
(60) days after its issue or levy; or

(h) Judgments. There is entered against any Loan Party or any Restricted
Subsidiary a final judgment or order for the payment of money in an aggregate
amount exceeding the Threshold Amount (to the extent not covered by independent
third-party insurance as to which the insurer has been notified of such judgment
or order and has not denied coverage) and such judgment or order shall not have
been satisfied, vacated, discharged or stayed or bonded pending an appeal for a
period of sixty (60) consecutive days; or

(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of any Loan Party under Title IV of ERISA in an aggregate amount
which could reasonably be expected to result in a Material Adverse Effect, or
(ii) any Loan Party or any ERISA Affiliate fails to pay when due, after the
expiration of any applicable grace period, any installment payment with respect
to its withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan in an aggregate amount which could reasonably be expected to result in a
Material Adverse Effect; or

(j) Invalidity of Loan Documents. Any material provision of any Loan Document,
at any time after its execution and delivery and for any reason other than as
expressly permitted hereunder or thereunder (including as a result of a
transaction permitted under Section 7.04 or 7.05) or as a result of acts or
omissions by the Administrative Agent or any Lender or the satisfaction in full
of all the Obligations, ceases to be in full force and effect; or any Loan Party
contests in writing the validity or enforceability of any provision of any Loan
Document; or any Loan Party denies in writing that it has any or further
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under any Loan Document (other than as a result of repayment in full of the
Obligations and termination of the Aggregate Commitments), or purports in
writing to revoke or rescind any Loan Document; or

(k) Change of Control. There occurs any Change of Control; or

(l) Collateral Documents. (i) Any Collateral Document after delivery thereof
pursuant to Section 4.01 or 6.11 shall for any reason (other than pursuant to
the terms thereof including as a result of a transaction permitted under
Section 7.04 or 7.05) cease to create a valid and perfected lien, with the
priority required by the Collateral Documents, (or other security purported to
be created on the applicable Collateral) on and security interest in any
material portion of the Collateral purported to be covered thereby, subject to
Liens permitted under Section 7.01, except to the extent that any such loss of
perfection or priority results from the failure of the Administrative Agent or
the Collateral Agent to maintain possession of certificates actually delivered
to it representing securities pledged under the Collateral Documents or to file
Uniform Commercial Code continuation statements and except as to Collateral
consisting of real property to the extent that such losses are covered by a
lender’s title insurance policy and such insurer has not denied coverage, or
(ii) any of the Equity Interests of the Borrower ceasing to be pledged pursuant
to the Security Agreement free of Liens other than Liens created by the Security
Agreement or any nonconsensual Liens arising solely by operation of Law; or

(m) Junior Financing Documentation. (i) Any of the Obligations of the Loan
Parties under the Loan Documents for any reason shall cease to be “Senior
Indebtedness” (or any comparable term) or “Senior Secured Financing” (or any
comparable term) under, and as defined in, any Junior Financing Documentation or
(ii) the subordination provisions set forth in any Junior Financing
Documentation shall, in whole or in part, cease to be effective or cease to be
legally valid, binding and enforceable against the holders of any Junior
Financing, if applicable.

SECTION 8.02. Remedies Upon Event of Default. If any Event of Default occurs and
is continuing, the Administrative Agent may and, at the request of the Required
Lenders, shall take any or all of the following actions:

(a) declare the commitment of each Lender to make Loans and any obligation of
the L/C Issuers to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;

(b) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower;

(c) require that the Borrower Cash Collateralize the L/C Obligations (in an
amount equal to the then Outstanding Amount thereof); and

(d) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable Law;

 

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(e) provided that upon the occurrence of an actual or deemed entry of an order
for relief with respect to the Borrower under the Bankruptcy Code of the United
States, the obligation of each Lender to make Loans and any obligation of the
L/C Issuers to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrower to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender.

SECTION 8.03. Exclusion of Immaterial Subsidiaries. Solely for the purpose of
determining whether a Default has occurred under clause (f) or (g) of
Section 8.01, any reference in any such clause to any Restricted Subsidiary or
Loan Party shall be deemed not to include any Restricted Subsidiary affected by
any event or circumstances referred to in any such clause that did not, as of
the last day of the most recent completed fiscal quarter of the Borrower, have
assets with a value in excess of 5% of the consolidated total assets of the
Borrower and the Restricted Subsidiaries and did not, as of the four quarter
period ending on the last day of such fiscal quarter, have revenues exceeding 5%
of the total revenues of the Borrower and the Restricted Subsidiaries (it being
agreed that all Restricted Subsidiaries affected by any event or circumstance
referred to in any such clause shall be considered together, as a single
consolidated Restricted Subsidiary, for purposes of determining whether the
condition specified above is satisfied).

SECTION 8.04. Application of Funds. After the exercise of remedies provided for
in Section 8.02 (or after the Loans have automatically become immediately due
and payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (other than principal and interest, but
including Attorney Costs payable under Section 10.04 and amounts payable under
Article 3) payable to the Administrative Agent in its capacity as such;

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including Attorney Costs payable under Section 10.05 and amounts
payable under Article 3), ratably among them in proportion to the amounts
described in this clause Second payable to them;

Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans and L/C Borrowings, ratably among the Lenders in
proportion to the respective amounts described in this clause Third payable to
them;

Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and L/C Borrowings, the termination value under Secured
Hedge Agreements and the Cash Management Obligations, ratably among the Lenders
in proportion to the respective amounts described in this clause Fourth held by
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Fifth, to the Administrative Agent for the account of the L/C Issuers, to Cash
Collateralize that portion of L/C Obligations comprised of the aggregate undrawn
amount of Letters of Credit;

Sixth, to the payment of all other Obligations of the Loan Parties (other than
the Obligations described in clauses First through Fifth) that are due and
payable to the Administrative Agent and the other Secured Parties on such date,
ratably based upon the respective aggregate amounts of all such Obligations
owing to the Administrative Agent and the other Secured Parties on such date;
and

Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Borrower or as otherwise required by Law.

Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above and, if no
Obligations remain outstanding, to the Borrower.

SECTION 8.05. Borrower’s Right to Cure. (a) Notwithstanding anything to the
contrary contained in Section 8.01, in the event of any Event of Default under
the covenant set forth in Section 7.11 and until the expiration of the tenth
(10th) day after the date on which financial statements are required to be
delivered with respect to the applicable fiscal quarter hereunder, Holdings may
engage in a Permitted Equity Issuance to any of the Equity Investors and apply
the amount of the Net Cash Proceeds thereof to increase Consolidated EBITDA with
respect to such applicable quarter; provided that such Net Cash Proceeds (i) are
actually received by the Borrower (including through capital contribution of
such Net Cash Proceeds by Holdings to the Borrower) no later than ten (10) days
after the date on which financial statements are required to be delivered with
respect to such fiscal quarter hereunder, (ii) are Not Otherwise Applied and
(iii) do not exceed the aggregate amount necessary to cure such Event of Default
under Section 7.11 for any applicable period. The parties hereby acknowledge
that this Section 8.05(a) may not be relied on for purposes of calculating any
financial ratios other than as applicable to Section 7.11 and shall not result
in any adjustment to any amounts other than the amount of the Consolidated
EBITDA referred to in the immediately preceding sentence.

(b) In each period of four fiscal quarters, there shall be at least two
(2) consecutive fiscal quarters in which no cure set forth in Section 8.05(a) is
made.

(c) During the term of this Agreement, a cure set forth in Section 8.05(a) shall
not be exercised more than five (5) times.

ARTICLE IX

Administrative Agent and Other Agents

SECTION 9.01. Appointment and Authorization of Agents. (a) Each Lender hereby
irrevocably appoints, designates and authorizes the Administrative Agent to take
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action on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary contained elsewhere herein or in any other Loan
Document, the Administrative Agent shall have no duties or responsibilities,
except those expressly set forth herein, nor shall the Administrative Agent have
or be deemed to have any fiduciary relationship with any Lender or participant,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent. Without limiting the
generality of the foregoing sentence, the use of the term “agent” herein and in
the other Loan Documents with reference to any Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable Law. Instead, such term is used merely as a matter of
market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.

(b) Each L/C Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith, and each
such L/C Issuer shall have all of the benefits and immunities (i) provided to
the Agents in this Article 9 with respect to any acts taken or omissions
suffered by such L/C Issuer in connection with Letters of Credit issued by it or
proposed to be issued by it and the applications and agreements for letters of
credit pertaining to such Letters of Credit as fully as if the term “Agent” as
used in this Article 9 and in the definition of “Agent-Related Person” included
such L/C Issuer with respect to such acts or omissions, and (ii) as additionally
provided herein with respect to such L/C Issuer.

(c) The Administrative Agent shall also act as the “collateral agent” under the
Loan Documents, and each of the Lenders (in its capacities as a Lender, Swing
Line Lender (if applicable), L/C Issuer (if applicable) and a potential Hedge
Bank) hereby irrevocably appoints and authorizes the Administrative Agent to act
as the agent of (and to hold any security interest created by the Collateral
Documents for and on behalf of or on trust for) such Lender for purposes of
acquiring, holding and enforcing any and all Liens on Collateral granted by any
of the Loan Parties to secure any of the Secured Obligations, together with such
powers and discretion as are reasonably incidental thereto. In this connection,
the Administrative Agent, as “collateral agent” (and any co-agents and
attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.02
for purposes of holding or enforcing any Lien on the Collateral (or any portion
thereof) granted under the Collateral Documents, or for exercising any rights
and remedies thereunder at the direction of the Administrative Agent), shall be
entitled to the benefits of all provisions of this Article 9 (including
Section 9.07, as though such co-agents and attorneys-in-fact were the
“collateral agent” under the Loan Documents) as if set forth in full herein with
respect thereto.

SECTION 9.02. Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document (including for
purposes of holding or enforcing any Lien on the Collateral (or any portion
thereof) granted under the Collateral Documents or of exercising any rights and
remedies thereunder) by or through agents, employees or attorneys-in-fact, and
shall be entitled to advice of counsel and other consultants or experts
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agent or
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absence of gross negligence or willful misconduct (as determined in the final
judgment of a court of competent jurisdiction).

SECTION 9.03. Liability of Agents. No Agent-Related Person shall (a) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct,
as determined by the final judgment of a court of competent jurisdiction, in
connection with its duties expressly set forth herein), or (b) be responsible in
any manner to any Lender or participant for any recital, statement,
representation or warranty made by any Loan Party or any officer thereof,
contained herein or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or the perfection or
priority of any Lien or security interest created or purported to be created
under the Collateral Documents, or for any failure of any Loan Party or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
or participant to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of any Loan
Party or any Affiliate thereof.

SECTION 9.04. Reliance by Agents. (a) Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, electronic mail message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to any Loan
Party), independent accountants and other experts selected by such Agent. Each
Agent shall be fully justified in failing or refusing to take any action under
any Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate and, if it so requests, it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Required
Lenders (or such greater number of Lenders as may be expressly required hereby
in any instance) and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders.

(b) For purposes of determining compliance with the conditions specified in
Section 4.01, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.

SECTION 9.05. Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default, except with respect
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defaults in the payment of principal, interest and fees required to be paid to
the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Agreement, describing such Default and stating that
such notice is a “notice of default.” The Administrative Agent will notify the
Lenders of its receipt of any such notice. The Administrative Agent shall take
such action with respect to any Event of Default as may be directed by the
Required Lenders in accordance with Article 8; provided that unless and until
the Administrative Agent has received any such direction, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Event of Default as it shall deem
advisable or in the best interest of the Lenders.

SECTION 9.06. Credit Decision; Disclosure of Information by Agents. Each Lender
acknowledges that no Agent-Related Person has made any representation or
warranty to it, and that no act by any Agent hereafter taken, including any
consent to and acceptance of any assignment or review of the affairs of any Loan
Party or any Affiliate thereof, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Lender as to any matter,
including whether Agent-Related Persons have disclosed material information in
their possession. Each Lender represents to each Agent that it has,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Loan Parties
and their respective Subsidiaries, and all applicable bank or other regulatory
Laws relating to the transactions contemplated hereby, and made its own decision
to enter into this Agreement and to extend credit to the Borrower and the other
Loan Parties hereunder. Each Lender also represents that it will, independently
and without reliance upon any Agent-Related Person and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and the other Loan Parties. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
any Agent herein, such Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of any of the Loan Parties or any of their respective
Affiliates which may come into the possession of any Agent-Related Person.

SECTION 9.07. Indemnification of Agents. Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand
each Agent-Related Person (to the extent not reimbursed by or on behalf of any
Loan Party and without limiting the obligation of any Loan Party to do so), pro
rata, and hold harmless each Agent-Related Person from and against any and all
Indemnified Liabilities incurred by it; provided, that no Lender shall be liable
for the payment to any Agent-Related Person of any portion of such Indemnified
Liabilities resulting from such Agent-Related Person’s own gross negligence or
willful misconduct, as determined by the final judgment of a court of competent
jurisdiction; provided, further, that no action taken in accordance with the
directions of the Required Lenders (or such other number or percentage of the
Lenders as shall be required by the Loan Documents) shall be deemed to
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Section 9.07. In the case of any investigation, litigation or proceeding giving
rise to any Indemnified Liabilities, this Section 9.07 applies whether any such
investigation, litigation or proceeding is brought by any Lender or any other
Person. Without limitation of the foregoing, each Lender shall reimburse the
Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Administrative
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Administrative
Agent is not reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section 9.07 shall survive termination of the Aggregate
Commitments, the payment of all other Obligations and the resignation of the
Administrative Agent.

SECTION 9.08. Agents in their Individual Capacities. JPMorgan Chase Bank and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire Equity Interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with each of
the Loan Parties and their respective Affiliates as though JPMorgan Chase Bank
were not the Administrative Agent or an L/C Issuer hereunder and without notice
to or consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, JPMorgan Chase Bank or its Affiliates may receive information
regarding any Loan Party or its Affiliates (including information that may be
subject to confidentiality obligations in favor of such Loan Party or such
Affiliate) and acknowledge that the Administrative Agent shall be under no
obligation to provide such information to them. With respect to its Loans,
JPMorgan Chase Bank shall have the same rights and powers under this Agreement
as any other Lender and may exercise such rights and powers as though it were
not the Administrative Agent or an L/C Issuer, and the terms “Lender” and
“Lenders” include JPMorgan Chase Bank in its individual capacity.

SECTION 9.09. Successor Agents. The Administrative Agent may resign as the
Administrative Agent upon thirty (30) days’ notice to the Lenders and the
Borrower. If the Administrative Agent becomes a Defaulting Lender and is not
performing its role hereunder as Administrative Agent, the Administrative Agent
may be removed as the Administrative Agent hereunder at the request of the
Borrower and the Required Lenders. If the Administrative Agent resigns or is
removed under this Agreement, the Required Lenders shall appoint from among the
Lenders a successor agent for the Lenders, which successor agent shall be
consented to by the Borrower at all times other than during the existence of an
Event of Default under Section 8.01(f) or (g) (which consent of the Borrower
shall not be unreasonably withheld or delayed). If no successor agent is
appointed prior to the effective date of the resignation or removal of the
Administrative Agent, the Administrative Agent may appoint, after consulting
with the Lenders and the Borrower, a successor agent from among the Lenders.
Upon the acceptance of its appointment as successor agent hereunder, the Person
acting as such successor agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and the term “Administrative Agent,”
shall mean such successor administrative agent and/or supplemental
administrative agent, as the case may be, and the retiring Administrative
Agent’s appointment, powers and duties as the Administrative Agent shall be
terminated. After the retiring Administrative Agent’s resignation or removal
hereunder as the Administrative Agent, the provisions of this Article 9 and
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actions taken or omitted to be taken by it while it was the Administrative Agent
under this Agreement. If no successor agent has accepted appointment as the
Administrative Agent by the date which is thirty (30) days following the
retiring Administrative Agent’s notice of resignation or removal, the retiring
Administrative Agent’s resignation or removal shall nevertheless thereupon
become effective and the Lenders shall perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. Upon the acceptance of any
appointment as the Administrative Agent hereunder by a successor and upon the
execution and filing or recording of such financing statements, or amendments
thereto, and such amendments or supplements to the Mortgages, and such other
instruments or notices, as may be necessary or desirable, or as the Required
Lenders may request, in order to (a) continue the perfection of the Liens
granted or purported to be granted by the Collateral Documents or (b) otherwise
ensure that the Collateral and Guarantee Requirement is satisfied, the
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges, and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under the Loan Documents. After the retiring
Administrative Agent’s resignation or removal hereunder as the Administrative
Agent, the provisions of this Article 9 shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as the Administrative Agent.

SECTION 9.10. Administrative Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Administrative Agent
and their respective agents and counsel and all other amounts due the Lenders
and the Administrative Agent under Sections 2.03(h) and (i), 2.09 and 10.04)
allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the Agents
and their respective agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 10.04.

 

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Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.

SECTION 9.11. Collateral and Guaranty Matters. The Lenders irrevocably agree:

(a) that any Lien on any property granted to or held by the Administrative Agent
or the Collateral Agent under any Loan Document shall be automatically released
(i) upon termination of the Aggregate Commitments and payment in full of all
Obligations (other than (x) obligations under Secured Hedge Agreements not yet
due and payable, (y) Cash Management Obligations not yet due and payable and
(z) contingent indemnification obligations not yet accrued and payable) and the
expiration or termination of all Letters of Credit, (ii) at the time the
property subject to such Lien is transferred or to be transferred as part of or
in connection with any transfer permitted hereunder or under any other Loan
Document to any Person other than Holdings, the Borrower or any of its Domestic
Subsidiaries that are Restricted Subsidiaries, (iii) subject to Section 10.01,
if the release of such Lien is approved, authorized or ratified in writing by
the Required Lenders, or (iv) if the property subject to such Lien is owned by a
Guarantor, upon release of such Guarantor from its obligations under its
Guaranty pursuant to clause (c) below;

(b) to release or subordinate any Lien on any property granted to or held by the
Administrative Agent or the Collateral Agent under any Loan Document to the
holder of any Lien on such property that is permitted by Section 7.01(i); and

(c) that any Guarantor shall be automatically released from its obligations
under the Guaranty if such Person ceases to be a Restricted Subsidiary as a
result of a transaction or designation permitted hereunder; provided that no
such release shall occur if such Guarantor continues to be a guarantor in
respect of any Junior Financing.

Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Guaranty pursuant to this
Section 9.11. In each case as specified in this Section 9.11, the Administrative
Agent will (and each Lender irrevocably authorizes the Administrative Agent to),
at the Borrower’s expense, execute and deliver to the applicable Loan Party such
documents as such Loan Party may reasonably request to evidence the release or
subordination of such item of Collateral from the assignment and security
interest granted under the Collateral Documents, or to evidence the release of
such Guarantor from its obligations under the Guaranty, in each case in
accordance with the terms of the Loan Documents and this Section 9.11.

SECTION 9.12. Other Agents; Arrangers and Managers. None of the Lenders or other
Persons identified on the facing page or signature pages of this Agreement as a
“co-syndication agent,” “joint bookrunner” or “arranger” shall have any right,
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liability, responsibility or duty under this Agreement other than those
applicable to all Lenders as such. Without limiting the foregoing, none of the
Lenders or other Persons so identified shall have or be deemed to have any
fiduciary relationship with any Lender. Each Lender acknowledges that it has not
relied, and will not rely, on any of the Lenders or other Persons so identified
in deciding to enter into this Agreement or in taking or not taking action
hereunder.

SECTION 9.13. Appointment of Supplemental Administrative Agents. (a) It is the
purpose of this Agreement and the other Loan Documents that there shall be no
violation of any Law of any jurisdiction denying or restricting the right of
banking corporations or associations to transact business as agent or trustee in
such jurisdiction. It is recognized that in case of litigation under this
Agreement or any of the other Loan Documents, and in particular in case of the
enforcement of any of the Loan Documents, or in case the Administrative Agent
deems that by reason of any present or future Law of any jurisdiction it may not
exercise any of the rights, powers or remedies granted herein or in any of the
other Loan Documents or take any other action which may be desirable or
necessary in connection therewith, the Administrative Agent is hereby authorized
to appoint an additional individual or institution selected by the
Administrative Agent in its sole discretion as a separate trustee, co-trustee,
administrative agent, collateral agent or administrative co-agent (any such
additional individual or institution being referred to herein individually as a
“Supplemental Administrative Agent” and collectively as “Supplemental
Administrative Agents”).

(b) In the event that the Administrative Agent appoints a Supplemental
Administrative Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to the
Administrative Agent with respect to such Collateral shall be exercisable by and
vest in such Supplemental Administrative Agent to the extent, and only to the
extent, necessary to enable such Supplemental Administrative Agent to exercise
such rights, powers and privileges with respect to such Collateral and to
perform such duties with respect to such Collateral, and every covenant and
obligation contained in the Loan Documents and necessary to the exercise or
performance thereof by such Supplemental Administrative Agent shall run to and
be enforceable by either the Administrative Agent or such Supplemental
Administrative Agent, and (ii) the provisions of this Article 9 and of Sections
10.04 and 10.05 that refer to the Administrative Agent shall inure to the
benefit of such Supplemental Administrative Agent and all references therein to
the Administrative Agent shall be deemed to be references to the Administrative
Agent and/or such Supplemental Administrative Agent, as the context may require.

(c) Should any instrument in writing from the Borrower, Holdings or any other
Loan Party be required by any Supplemental Administrative Agent so appointed by
the Administrative Agent for more fully and certainly vesting in and confirming
to him or it such rights, powers, privileges and duties, the Borrower or
Holdings, as applicable, shall, or shall cause such Loan Party to, execute,
acknowledge and deliver any and all such instruments promptly upon request by
the Administrative Agent. In case any Supplemental Administrative Agent, or a
successor thereto, shall die, become incapable of acting, resign or be removed,
all the rights, powers, privileges and duties of such Supplemental
Administrative Agent, to the extent permitted by Law, shall vest in and be
exercised by the Administrative Agent until the appointment of a new
Supplemental Administrative Agent.

 

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ARTICLE X

Miscellaneous

SECTION 10.01. Amendments, Etc. Except as provided in Section 2.14 with respect
to any Incremental Amendment, Section 2.15 with respect to a Loan Modification
Agreement or as otherwise set forth in this Agreement, no amendment or waiver of
any provision of this Agreement or any other Loan Document, and no consent to
any departure by the Borrower or any other Loan Party therefrom, shall be
effective unless in writing signed by the Required Lenders and the Borrower or
the applicable Loan Party, as the case may be, and each such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided that, no such amendment, waiver or consent shall:

(a) extend or increase the Commitment of any Lender without the written consent
of each Lender directly affected thereby (it being understood that a waiver of
any condition precedent set forth in Section 4.02 or the waiver of any Default,
mandatory prepayment or mandatory reduction of the Commitments shall not
constitute an extension or increase of any Commitment of any Lender);

(b) postpone any date scheduled for, or reduce the amount of, any payment of
principal or interest under Section 2.07 or 2.08 without the written consent of
each Lender directly affected thereby, it being understood that the waiver of
(or amendment to the terms of) any mandatory prepayment of the Term Loans shall
not constitute a postponement of any date scheduled for the payment of principal
or interest;

(c) reduce the principal of, or the rate of interest specified herein on, any
Loan or L/C Borrowing, or (subject to clause (iii) of the second proviso to this
Section 10.01) any fees or other amounts payable hereunder or under any other
Loan Document without the written consent of each Lender directly affected
thereby, it being understood that any change to the definition of Total Leverage
Ratio, First Lien Net Leverage Ratio, First Lien Leverage Ratio or in the
component definitions thereof shall not constitute a reduction in the rate;
provided that, only the consent of the Required Lenders shall be necessary to
amend the definition of “Default Rate” or to waive any obligation of the
Borrower to pay interest at the Default Rate;

(d) change any provision of this Section 10.01, the definition of “Required
Lenders” or “Pro Rata Share” or Section 2.06(c), 8.04 or 2.13 without the
written consent of each Lender affected thereby;

(e) other than in a transaction permitted under Section 7.05, release all or
substantially all of the Collateral in any transaction or series of related
transactions, without the written consent of each Lender; or

(f) other than in connection with a transaction permitted under Section 7.04 or
7.05, release all or substantially all of the aggregate value of the Guarantees,
without the written consent of each Lender;

 

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and provided further that (i) no amendment, waiver or consent shall, unless in
writing and signed by each L/C Issuer in addition to the Lenders required above,
affect the rights or duties of an L/C Issuer under this Agreement or any Letter
of Credit Application relating to any Letter of Credit issued or to be issued by
it; (ii) no amendment, waiver or consent shall, unless in writing and signed by
the Swing Line Lender in addition to the Lenders required above, affect the
rights or duties of the Swing Line Lender under this Agreement; (iii) no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of, or any fees or other amounts payable to, the Administrative
Agent under this Agreement or any other Loan Document; (iv) Section 10.07(h) may
not be amended, waived or otherwise modified without the consent of each
Granting Lender all or any part of whose Loans are being funded by an SPC at the
time of such amendment, waiver or other modification; and (v) the consent of
Lenders holding more than 50% of any Class of Commitments shall be required with
respect to any amendment that by its terms adversely affects the rights of such
Class in respect of payments hereunder in a manner different than such amendment
affects other Classes. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Commitment of such Lender may not
be increased or extended without the consent of such Lender (it being understood
that any Commitments or Loans held or deemed held by any Defaulting Lender shall
be excluded for a vote of the Lenders hereunder requiring any consent of the
Lenders).

Notwithstanding the foregoing, this Agreement may be amended (or amended and
restated) with the written consent of the Required Lenders, the Administrative
Agent and the Borrower (a) to add one or more additional credit facilities to
this Agreement and to permit the extensions of credit from time to time
outstanding thereunder and the accrued interest and fees in respect thereof to
share ratably in the benefits of this Agreement and the other Loan Documents
with the Term Loans and the Revolving Credit Loans and the accrued interest and
fees in respect thereof and (b) to include appropriately the Lenders holding
such credit facilities in any determination of the Required Lenders.

Notwithstanding anything to the contrary herein the Administrative Agent may,
with the consent of the Borrower only, amend, modify or supplement this
Agreement or any of the other Loan Documents to cure any ambiguity, omission,
mistake, defect or inconsistency.

SECTION 10.02. Notices and Other Communications; Facsimile Copies. (a) General.
Except in the case of notices and other communications expressly permitted to be
given by telephone, all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy, as follows:

(i) if to Holdings or the Borrower, to it at 265 Brookview Centre Way, Suite
400, Knoxville, Tennessee 37934, Attention of President and/or Chief Financial
Officer (Fax No. (865) 539-8030);

(ii) if to the Administrative Agent, to JPMorgan Chase Bank, N.A., 1111 Fannin,
10th Floor, Houston, Texas 77002-6925, Attention of John Ngo (Fax No.:
(713) 427-6307) (email: john.ngo@jpmorgan.com), with a copy to JPMorgan Chase
Bank, N.A.,

 

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383 Madison Avenue, New York, New York 10179, Attention of Caitlin Robson (Fax
No. (212) 270-6637);

(iii) if to JPMorgan Chase Bank, N.A. in its capacity as an L/C Issuer, to
JPMorgan Chase Bank, N.A., 1111 Fannin, 10th Floor, Houston, Texas 77002-6925,
Attention of John Ngo (Fax No.: (713) 427-6307);

(iv) if to any other L/C Issuer, to it at its address (or fax number) set forth
in its Administrative Questionnaire;

(v) if to the Swing Line Lender, to JPMorgan Chase Bank, N.A., 1111 Fannin, 10th
Floor, Houston, Texas 77002-6925, Attention of John Ngo (Fax No.:
(713) 427-6307); and

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

Any party hereto may change its address or fax number for notices and other
communications hereunder by notice to the other parties hereto. Notices and
other communications to the Lenders and the L/C Issuer hereunder may also be
delivered or furnished by electronic communication (including e-mail and
Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent, provided that the foregoing shall not apply to notices to
any Lender or the L/C Issuer pursuant to Article II if such Lender or the L/C
Issuer, as applicable, has notified the Administrative Agent that it is
incapable of receiving notices under such Article by electronic communication.
The Administrative Agent or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it, provided that approval of such procedures
may be limited to particular notices or communications. All notices and other
communications given to any party hereto in accordance with the provisions of
this Agreement shall be deemed to have been given on the date of receipt. In no
event shall a voicemail message be effective as a notice, communication or
confirmation hereunder.

(b) Effectiveness of Facsimile Documents and Signatures. Loan Documents may be
transmitted and/or signed by facsimile or other electronic transmission. The
effectiveness of any such documents and signatures shall, subject to applicable
Law, have the same force and effect as manually signed originals and shall be
binding on all Loan Parties, the Agents and the Lenders.

(c) Reliance by Agents and Lenders. The Administrative Agent and the Lenders
shall be entitled to rely and act upon any notices (including telephonic
Committed Loan Notices and Swing Line Loan Notices) purportedly given by or on
behalf of the Borrower even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. The Borrower shall indemnify
each Agent-Related Person and each Lender from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrower in the absence of gross
negligence or willful misconduct. All telephonic notices to the Administrative

 

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Agent may be recorded by the Administrative Agent, and each of the parties
hereto hereby consents to such recording.

SECTION 10.03. No Waiver; Cumulative Remedies. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder or under any other Loan Document
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided, and provided under
each other Loan Document, are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by Law.

SECTION 10.04. Attorney Costs, Expenses and Taxes. The Borrower agrees (a) if
the Closing Date occurs, to pay or reimburse the Administrative Agent, the
Syndication Agent and the Arrangers for all reasonable out-of-pocket costs and
expenses incurred in connection with the preparation, negotiation, syndication
and execution of this Agreement and the other Loan Documents, and any amendment,
waiver, consent or other modification of the provisions hereof and thereof
(whether or not the transactions contemplated thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs of Cravath, Swaine & Moore LLP, and (b) to
pay or reimburse the Administrative Agent, the Syndication Agent, the Arrangers
and each Lender for all reasonable out-of-pocket costs and expenses incurred in
connection with the enforcement of any rights or remedies under this Agreement
or the other Loan Documents (including all such costs and expenses incurred
during any legal proceeding, including any proceeding under any Debtor Relief
Law, and including all Attorney Costs of counsel to the Administrative Agent).
The foregoing costs and expenses shall include all reasonable search, filing,
recording and title insurance charges and fees and taxes related thereto, and
other (reasonable, in the case of Section 10.04(a)) out-of-pocket expenses
incurred by any Agent. The agreements in this Section 10.04 shall survive the
termination of the Aggregate Commitments and repayment of all other Obligations.
All amounts due under this Section 10.04 shall be paid within ten (10) Business
Days of receipt by the Borrower of an invoice relating thereto setting forth
such expenses in reasonable detail. If any Loan Party fails to pay when due any
costs, expenses or other amounts payable by it hereunder or under any Loan
Document, such amount may be paid on behalf of such Loan Party by the
Administrative Agent in its sole discretion.

SECTION 10.05. Indemnification by the Borrower. Whether or not the transactions
contemplated hereby are consummated, the Borrower shall indemnify and hold
harmless each Agent-Related Person, each Lender and their respective Affiliates,
directors, officers, employees, counsel, agents, trustees, investment advisors,
partners and attorneys-in-fact (collectively the “Indemnitees”) from and against
any and all liabilities, obligations, losses, damages, penalties, claims,
demands, actions, judgments, suits, costs, expenses and disbursements (including
Attorney Costs) of any kind or nature whatsoever which may at any time be
imposed on, incurred by or asserted against any such Indemnitee in any way
relating to or arising out of or in connection with (a) the execution, delivery,
enforcement, performance or administration of any Loan Document or any other
agreement, letter or instrument delivered in connection with the transactions
contemplated thereby or the consummation of the transactions contemplated
thereby, (b) any Commitment, Loan or Letter of Credit or the use or proposed use

 

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of the proceeds therefrom (including any refusal by an L/C Issuer to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), or (c) any actual or alleged presence or release of Hazardous
Materials on or from any property currently or formerly owned or operated by the
Borrower, any Subsidiary or any other Loan Party, or any Environmental Liability
related in any way to the Borrower, any Subsidiary or any other Loan Party, or
(d) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory (including any investigation of, preparation for, or defense of any
pending or threatened claim, investigation, litigation or proceeding) and
regardless of whether any Indemnitee is a party thereto (all the foregoing,
collectively, the “Indemnified Liabilities”), in all cases, whether or not
caused by or arising, in whole or in part, out of the negligence of the
Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses or
disbursements resulted from (i) the gross negligence, willful misconduct or bad
faith of such Indemnitee or of any affiliate, director, officer, employee,
counsel, agent or attorney-in-fact of such Indemnitee or (ii) a material breach
of any Loan Document by such Indemnitee (other than any disputes against any
Agent in its capacity as such). No Indemnitee shall be liable for any damages
arising from the use by others of any information or other materials obtained
through IntraLinks or other similar information transmission systems in
connection with this Agreement, nor shall any Indemnitee or any Loan Party have
any liability for any special, punitive, indirect or consequential damages
relating to this Agreement or any other Loan Document or arising out of its
activities in connection herewith or therewith (whether before or after the
Closing Date). In the case of an investigation, litigation or other proceeding
to which the indemnity in this Section 10.05 applies, such indemnity shall be
effective whether or not such investigation, litigation or proceeding is brought
by any Loan Party, its directors, stockholders or creditors or an Indemnitee or
any other Person, whether or not any Indemnitee is otherwise a party thereto and
whether or not any of the transactions contemplated hereunder or under any of
the other Loan Documents is consummated. All amounts due under this
Section 10.05 shall be paid within ten (10) Business Days after demand therefor;
provided, however, that such Indemnitee shall promptly refund such amount to the
extent that there is a final judicial or arbitral determination that such
Indemnitee was not entitled to indemnification or contribution rights with
respect to such payment pursuant to the express terms of this Section 10.05. The
agreements in this Section 10.05 shall survive the resignation of the
Administrative Agent, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the
other Obligations.

SECTION 10.06. Payments Set Aside. To the extent that any payment by or on
behalf of the Borrower is made to any Agent or any Lender, or any Agent or any
Lender exercises its right of setoff, and such payment or the proceeds of such
setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by such Agent or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each Lender
severally agrees to pay to the Administrative Agent upon demand its applicable
share of any

 

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amount so recovered from or repaid by any Agent, plus interest thereon from the
date of such demand to the date such payment is made at a rate per annum equal
to the Federal Funds Rate from time to time in effect.

SECTION 10.07. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that neither Holdings
nor the Borrower may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender and no
Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee, (ii) by way of participation in
accordance with the provisions of Section 10.07(e), (iii) by way of pledge or
assignment of a security interest subject to the restrictions of
Section 10.07(g) or (iv) to an SPC in accordance with the provisions of
Section 10.07(h) (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in Section 10.07(e) and, to the extent expressly contemplated
hereby, the Indemnitees) any legal or equitable right, remedy or claim under or
by reason of this Agreement.

(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more assignees (other than Defaulting Lenders)
(“Assignees”) all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans (including
for purposes of this Section 10.07(b), participations in L/C Obligations and in
Swing Line Loans) at the time owing to it) with the prior written consent (such
consent not to be unreasonably withheld) of:

(A) the Borrower, provided that no consent of the Borrower shall be required for
an assignment during the primary syndication of the Tranche B Term Loans to
Persons identified by the Administrative Agent to the Borrower on or prior to
the Closing Date; provided, further, that no consent of the Borrower shall be
required (I) for an assignment to a Lender, an Affiliate of a Lender or an
Approved Fund, except that the consent of the Borrower shall be required for the
assignment of Revolving Credit Loans and Revolving Credit Commitments to any
Lender who is not then an existing Revolving Credit Lender, or (II) if an Event
of Default under Section 8.01(a), (f) or (g) has occurred and is continuing, for
an assignment to any Assignee;

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

(C) each L/C Issuer at the time of such assignment, provided that no consent of
the L/C Issuers shall be required for any assignment of a Term Loan or any
assignment to an Agent or an Affiliate of an Agent.

 

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

(A) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire remaining amount of the assigning Lender’s
Commitment or Loans of any Class, the amount of the Commitment or Loans of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 (in the case of the
Revolving Credit Facility), or $1,000,000 (in the case of a Term Loan) unless
each of the Borrower and the Administrative Agent otherwise consents, provided
that (1) no such consent of the Borrower shall be required if an Event of
Default under Section 8.01(a), (f) or (g) has occurred and is continuing and
(2) such amounts shall be aggregated in respect of each Lender and its
Affiliates or Approved Funds, if any;

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

(C) the Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.

This paragraph (b) shall not prohibit any Lender from assigning all or a portion
of its rights and obligations among separate Facilities on a non-pro rata basis.

(c) Subject to acceptance and recording thereof by the Administrative Agent
pursuant to Section 10.07(d), from and after the effective date specified in
each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05, 10.04 and 10.05
with respect to facts and circumstances occurring prior to the effective date of
such assignment). Upon request, and the surrender by the assigning Lender of its
Note, the Borrower (at its expense) shall execute and deliver a Note to the
assignee Lender. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this clause (c) shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with Section 10.07(e).

(d) The Administrative Agent, acting solely for this purpose as a non-fiduciary
agent of the Borrower, shall maintain a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitments of, and principal amounts (and related interest
amounts) of the Loans, L/C Obligations (specifying the Unreimbursed Amounts),
L/C Borrowings and amounts due under Section 2.03 owing to, each Lender pursuant
to the terms hereof from time to time (the

 

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“Register”). In addition, the Administrative Agent shall maintain on the
Register information regarding the designation, and revocation of designation,
of any Lender as a Defaulting Lender. The entries in the Register shall be
conclusive, absent manifest error, and the Borrower, the Agents and the Lenders
shall treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower, any Agent and any Lender, at any reasonable time and
from time to time upon reasonable prior notice.

(e) Any Lender may at any time, without the consent of, or notice to, the
Borrower or the Administrative Agent, sell participations to any Person (other
than a natural person and any Defaulting Lender) (each, a “Participant”) in all
or a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans (including such
Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to
it); provided that (i) such Lender’s obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Borrower,
the Agents and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and the other Loan Documents and to approve any
amendment, modification or waiver of any provision of this Agreement or the
other Loan Documents; provided that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to any
amendment, waiver or other modification described in the first proviso to
Section 10.01 that directly affects such Participant. Subject to
Section 10.07(f), the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to Section 10.07(c)
but shall not be entitled to recover greater amounts under such Sections than
the selling Lender would be entitled to recover. To the extent permitted by
applicable Law, each Participant also shall be entitled to the benefits of
Section 10.09 as though it were a Lender; provided that such Participant agrees
to be subject to Section 2.13 as though it were a Lender. Each Lender that sells
a participation shall, acting solely for this purpose as an agent of the
Borrower, maintain a register on which it enters the name and address of each
Participant and the principal amounts (and stated interest) of each
Participant’s interest in the Loans or other obligations under this Agreement
(the “Participant Register”); provided that no Lender shall have any obligation
to disclose all or any portion of the Participant Register to any Person
(including the identity of any Participant or any information relating to a
Participant’s interest in any Commitments, Loans, Letters of Credit or its other
obligations under any Loan Document) except to the extent that such disclosure
is necessary to establish that such Commitment, Loan, Letter of Credit or other
obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations. The entries in the Participant Register shall be
conclusive, absent manifest error, and such Lender shall treat each Person whose
name is recorded in the Participant Register as the owner of such participation
for all purposes of this Agreement (subject to the terms of this
Section 10.07(e)) notwithstanding notice to the contrary.

(f) A Participant shall not be entitled to receive any greater payment under
Section 3.01, 3.04 or 3.05 than the applicable Lender would have been entitled
to receive with

 

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respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written
consent. A Participant shall not be entitled to the benefits of Section 3.01
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to comply with
Section 10.15 as though it were a Lender.

(g) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement (including under its Note, if
any) to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

(h) Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle identified as
such in writing from time to time by the Granting Lender to the Administrative
Agent and the Borrower (an “SPC”) the option to provide all or any part of any
Loan that such Granting Lender would otherwise be obligated to make pursuant to
this Agreement; provided that (i) nothing herein shall constitute a commitment
by any SPC to fund any Loan, and (ii) if an SPC elects not to exercise such
option or otherwise fails to make all or any part of such Loan, the Granting
Lender shall be obligated to make such Loan pursuant to the terms hereof. Each
party hereto hereby agrees that (i) neither the grant to any SPC nor the
exercise by any SPC of such option shall increase the costs or expenses or
otherwise increase or change the obligations of the Borrower under this
Agreement (including its obligations under Section 3.01, 3.04 or 3.05), (ii) no
SPC shall be liable for any indemnity or similar payment obligation under this
Agreement for which a Lender would be liable, and (iii) the Granting Lender
shall for all purposes, including the approval of any amendment, waiver or other
modification of any provision of any Loan Document, remain the lender of record
hereunder. The making of a Loan by an SPC hereunder shall utilize the Commitment
of the Granting Lender to the same extent, and as if, such Loan were made by
such Granting Lender. Notwithstanding anything to the contrary contained herein,
any SPC may (i) with notice to, but without prior consent of the Borrower and
the Administrative Agent and with the payment of a processing fee of $3,500,
assign all or any portion of its right to receive payment with respect to any
Loan to the Granting Lender and (ii) disclose on a confidential basis any
non-public information relating to its funding of Loans to any rating agency,
commercial paper dealer or provider of any surety or Guarantee or credit or
liquidity enhancement to such SPC.

(i) Notwithstanding anything to the contrary contained herein, (1) any Lender
may in accordance with applicable Law create a security interest in all or any
portion of the Loans owing to it and the Note, if any, held by it and (2) any
Lender that is a Fund may create a security interest in all or any portion of
the Loans owing to it and the Note, if any, held by it to the trustee for
holders of obligations owed, or securities issued, by such Fund as security for
such obligations or securities; provided that unless and until such trustee
actually becomes a Lender in compliance with the other provisions of this
Section 10.07, (i) no such pledge shall release the pledging Lender from any of
its obligations under the Loan Documents and (ii) such trustee shall not be
entitled to exercise any of the rights of a Lender under the Loan Documents even
though

 

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such trustee may have acquired ownership rights with respect to the pledged
interest through foreclosure or otherwise.

(j) Notwithstanding anything to the contrary contained herein, any L/C Issuer or
the Swing Line Lender may, upon thirty (30) days’ notice to the Borrower and the
Lenders, resign as an L/C Issuer or the Swing Line Lender, respectively;
provided that on or prior to the expiration of such 30-day period with respect
to such resignation, the relevant L/C Issuer or the Swing Line Lender shall have
identified a successor L/C Issuer or Swing Line Lender reasonably acceptable to
the Borrower willing to accept its appointment as successor L/C Issuer or Swing
Line Lender, as applicable. In the event of any such resignation of an L/C
Issuer or the Swing Line Lender, the Borrower shall be entitled to appoint from
among the Lenders willing to accept such appointment a successor L/C Issuer or
Swing Line Lender hereunder; provided that no failure by the Borrower to appoint
any such successor shall affect the resignation of the relevant L/C Issuer or
the Swing Line Lender, as the case may be, except as expressly provided above.
If an L/C Issuer resigns as an L/C Issuer, it shall retain all the rights and
obligations of an L/C Issuer hereunder with respect to all Letters of Credit
outstanding as of the effective date of its resignation as an L/C Issuer and all
L/C Obligations with respect thereto (including the right to require the Lenders
to make Base Rate Loans or fund risk participations in Unreimbursed Amounts
pursuant to Section 2.03(c)). If the Swing Line Lender resigns as Swing Line
Lender, it shall retain all the rights of the Swing Line Lender provided for
hereunder with respect to Swing Line Loans made by it and outstanding as of the
effective date of such resignation, including the right to require the Lenders
to make Base Rate Loans or fund risk participations in outstanding Swing Line
Loans pursuant to Section 2.04(c).

(k) Purchasing Borrower Parties.

(i) Notwithstanding anything else to the contrary contained in this Agreement,
any Lender may assign all or a portion of its Term Loans to any Purchasing
Borrower Party in accordance with this Section 10.07(k) (which assignment will
not constitute a prepayment of Loans for any purposes of this Agreement and the
other Loan Documents); provided that:

(A) no Default or Event of Default has occurred or is continuing or would result
therefrom;

(B) each Auction Purchase Offer shall be conducted in accordance with the
procedures, terms and conditions set forth in this Section 10.07(k) and the
Auction Procedures;

(C) the assigning Lender and Purchasing Borrower Party purchasing such Lender’s
Term Loans, as applicable, shall execute and deliver to the Administrative Agent
an assignment agreement substantially in the form of Exhibit L hereto (an
“Affiliated Lender Assignment and Assumption”) in lieu of an Assignment and
Assumption;

 

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(D) for the avoidance of doubt, the Lenders shall not be permitted to assign
Revolving Credit Commitments or Revolving Credit Loans to any Purchasing
Borrower Party;

(E) to the extent permitted by applicable law and not giving rise to any adverse
tax consequence as reasonably determined by the Borrower, any Term Loans
assigned to any Purchasing Borrower Party shall be automatically and permanently
cancelled upon the effectiveness of such assignment and will thereafter no
longer be outstanding for any purpose hereunder (it being understood that any
gains or losses by any Purchasing Borrower Party upon purchase or acquisition
and cancellation of such Term Loans shall not be taken into account in the
calculation of Consolidated Net Income and Consolidated EBITDA); provided that,
if the cancellation of any such Term Loans is not permitted by applicable law or
gives rise to adverse tax consequences as reasonably determined by the Borrower,
then the Purchasing Borrower Party holding such Term Loans shall be subject to
paragraphs (ii) and (iii) of this Section 10.07(k);

(F) the Purchasing Borrower Party shall not have any MNPI with respect to
Holdings, any Borrower or any of the Guarantors that either (a) has not been
disclosed to the Lenders (other than Lenders that do not wish to receive MNPI
with respect to Holdings, the Borrower or any of the Guarantors) on or prior to
the date of any initiation of an Auction by such Purchasing Borrower Party or
(b) if not disclosed to the Lenders, could reasonably be expected to have a
material effect upon, or otherwise be material to, (x) a Lender’s decision to
participate in any such Auction or (y) the market price of the Term Loans; and

(G) no Purchasing Borrower Party may use the proceeds from Revolving Credit
Loans to purchase any Term Loans.

(ii) Notwithstanding anything to the contrary in this Agreement, no Purchasing
Borrower Party shall have any right to (A) attend (including by telephone) any
meeting or discussions (or portion thereof) among the Administrative Agent or
any Lender to which representatives of Holdings and its Subsidiaries are not
invited, (B) receive any information or material prepared by the Administrative
Agent or any Lender or any communication by or among the Administrative Agent
and/or one or more Lenders, except to the extent such information or materials
have been made available to Holdings, any Subsidiary or their respective
representatives (and in any case, other than the right to receive notices of
prepayments and other administrative notices in respect of its Loans required to
be delivered to Lenders pursuant to Article II) or (C) make or bring (or
participate in, other than as a passive participant in or recipient of its pro
rata benefits of) any claim, in its capacity as a Lender, against the
Administrative Agent with respect to any duties or obligations or alleged duties
or obligations of such agent under the Loan Documents, other than any claims
relating to such Lender’s rights hereunder.

(iii) Notwithstanding anything in Section 10.01 or the definition of the term
“Required Lenders” to the contrary, for purposes of determining whether the
Required

 

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Lenders or any other requisite class vote required by this Agreement (but not
for any matter requiring the vote of all or any affected Lenders) have
(i) consented (or not consented) to any amendment, modification, waiver, consent
or other action with respect to any of the terms of any Loan Document or any
departure by any Loan Party therefrom, (ii) otherwise acted on any matter
related to any Loan Document or (iii) directed or required the Administrative
Agent or any Lender to undertake any action (or refrain from taking any action)
with respect to or under any Loan Document, all Term Loans held by any
Purchasing Borrower Party shall be deemed to be not outstanding for all purposes
of calculating whether the Required Lenders, or the requisite vote of any class
of Lender, have taken any actions.

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

SECTION 10.08. Confidentiality. Each of the Agents and the Lenders agrees to
maintain the confidentiality of the Information, except that Information may be
disclosed (a) to its Affiliates and its and its Affiliates’ directors, officers,
employees, trustees, investment advisors, partners and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential); (b) to the extent requested by any Governmental Authority; (c) to
the extent required by applicable Laws or regulations or by any subpoena or
similar legal process; (d) to any other party to this Agreement; (e) subject to
an agreement containing provisions substantially the same or at least as
restrictive as those of this Section 10.08 (or as may otherwise be reasonably
acceptable to the Borrower), to any pledgee referred to in Section 10.07(g),
counterparty to a Swap Contract, Eligible Assignee of or Participant in, or any
prospective Eligible Assignee of or Participant in, any of its rights or
obligations under this Agreement; (f) with the written consent of the Borrower;
(g) to the extent such Information becomes publicly available other than as a
result of a breach of this Section 10.08; (h) to any Governmental Authority or
examiner (including the National Association of Insurance Commissioners or any
other similar organization) regulating any Lender; or (i) to any rating agency
when required by it (it being understood that, prior to any such disclosure,
such rating agency shall undertake to preserve the

 

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confidentiality of any Information relating to the Loan Parties received by it
from such Lender). In addition, the Agents and the Lenders may disclose the
existence of this Agreement and information about this Agreement to market data
collectors, similar service providers to the lending industry, and service
providers to the Agents and the Lenders in connection with the administration
and management of this Agreement, the other Loan Documents, the Commitments, and
the Credit Extensions. For the purposes of this Section 10.08, “Information”
means all information received from any Loan Party relating to any Loan Party or
its business, other than any such information that is publicly available to any
Agent or any Lender prior to disclosure by any Loan Party other than as a result
of a breach of this Section 10.08; provided that, in the case of information
received from a Loan Party after the date hereof, such information is clearly
identified at the time of delivery as confidential or (ii) is delivered pursuant
to Section 6.01, 6.02 or 6.03 hereof.

SECTION 10.09. Setoff. In addition to any rights and remedies of the Lenders
provided by Law, upon the occurrence and during the continuance of any Event of
Default, each Lender and its Affiliates is authorized at any time and from time
to time, without prior notice to the Borrower or any other Loan Party, any such
notice being waived by the Borrower (on its own behalf and on behalf of each
Loan Party and its Subsidiaries) to the fullest extent permitted by applicable
Law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held by, and other Indebtedness at any
time owing by, such Lender and its Affiliates to or for the credit or the
account of the respective Loan Parties and their Subsidiaries against any and
all Obligations owing to such Lender and its Affiliates hereunder or under any
other Loan Document, now or hereafter existing, irrespective of whether or not
such Agent or such Lender or Affiliate shall have made demand under this
Agreement or any other Loan Document and although such Obligations may be
contingent or unmatured. Each Lender agrees promptly to notify the Borrower and
the Administrative Agent after any such set off and application made by such
Lender; provided that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of the Administrative Agent
and each Lender under this Section 10.09 are in addition to other rights and
remedies (including other rights of setoff) that the Administrative Agent and
such Lender may have. Notwithstanding anything herein or in any other Loan
Document to the contrary, in no event shall the assets of any Foreign Subsidiary
that is not a Loan Party constitute collateral security for payment of the
Obligations of the Borrower or any Domestic Subsidiary, it being understood that
(a) the Equity Interests of any Foreign Subsidiary that is not a Loan Party do
not constitute such an asset and (b) the provisions hereof shall not limit,
reduce or otherwise diminish in any respect the Borrower’s obligations to make
any mandatory prepayment pursuant to Section 2.05(b)(ii).

SECTION 10.10. Interest Rate Limitation. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the “Maximum Rate”). If any Agent or any
Lender shall receive interest in an amount that exceeds the Maximum Rate, the
excess interest shall be applied to the principal of the Loans or, if it exceeds
such unpaid principal, refunded to the Borrower. In determining whether the
interest contracted for, charged, or received by an Agent or a Lender exceeds
the Maximum Rate, such Person may, to the extent permitted by applicable Law,
(a) characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or

 

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unequal parts the total amount of interest throughout the contemplated term of
the Obligations hereunder.

SECTION 10.11. Counterparts. This Agreement and each other Loan Document may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. Delivery
by facsimile (or other electronic transmission) of an executed counterpart of a
signature page to this Agreement and each other Loan Document shall be effective
as delivery of an original executed counterpart of this Agreement and such other
Loan Document. The Agents may also require that any such documents and
signatures delivered by facsimile or other electronic transmission be confirmed
by a manually signed original thereof; provided that the failure to request or
deliver the same shall not limit the effectiveness of any document or signature
delivered by facsimile or other electronic transmission.

SECTION 10.12. Integration. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and thereof and supersedes all prior agreements, written
or oral, on such subject matter. In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control; provided that the inclusion of
supplemental rights or remedies in favor of the Agents or the Lenders in any
other Loan Document shall not be deemed a conflict with this Agreement. Each
Loan Document was drafted with the joint participation of the respective parties
thereto and shall be construed neither against nor in favor of any party, but
rather in accordance with the fair meaning thereof.

SECTION 10.13. Survival of Representations and Warranties. All representations
and warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by each Agent
and each Lender, regardless of any investigation made by any Agent or any Lender
or on their behalf and notwithstanding that any Agent or any Lender may have had
notice or knowledge of any Default at the time of any Credit Extension, and
shall continue in full force and effect as long as any Loan or any other
Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit
shall remain outstanding.

SECTION 10.14. Severability. If any provision of this Agreement or the other
Loan Documents is held to be illegal, invalid or unenforceable, the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby. The
invalidity of a provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. Without limiting
the foregoing provisions of this Section 10.14, if and to the extent that the
enforceability of any provisions in this Agreement relating to Defaulting
Lenders shall be limited by Debtor Relief Laws, as determined in good faith by
the Administrative Agent, the relevant L/C Issuer or the Swingline Lender, as
applicable, then such provisions shall be deemed to be in effect only to the
extent not so limited.

SECTION 10.15. Tax Forms. (a) (i) Each Lender and Agent that is not a “United
States person” within the meaning of Section 7701(a)(30) of the Code (each, a
“Foreign

 

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Lender”) shall deliver to the Borrower and the Administrative Agent, on or prior
to the date which is ten (10) Business Days after the Closing Date (or upon
accepting an assignment of an interest herein), two duly signed, properly
completed copies of either IRS Form W-8BEN or any successor thereto (relating to
such Foreign Lender and entitling it to an exemption from, or reduction of,
United States withholding tax on all payments to be made to such Foreign Lender
by the Borrower or any other Loan Party pursuant to this Agreement or any other
Loan Document) or IRS Form W-8ECI or any successor thereto (relating to all
payments to be made to such Foreign Lender by the Borrower or any other Loan
Party pursuant to this Agreement or any other Loan Document) or such other
evidence reasonably satisfactory to the Borrower and the Administrative Agent
that such Foreign Lender is entitled to an exemption from, or reduction of,
United States withholding tax, including any exemption pursuant to
Section 871(h) or 881(c) of the Code, and in the case of a Foreign Lender
claiming such an exemption under Section 881(c) of the Code, a certificate that
establishes in writing to the Borrower and the Administrative Agent that such
Foreign Lender is not (i) a “bank” as defined in Section 881(c)(3)(A) of the
Code, (ii) a 10-percent stockholder within the meaning of Section 871(h)(3)(B)
of the Code, or (iii) a controlled foreign corporation related to the Borrower
with the meaning of Section 864(d) of the Code. Thereafter and from time to
time, each such Foreign Lender shall (A) promptly submit to the Borrower and the
Administrative Agent such additional duly completed and signed copies of one or
more of such forms or certificates (or such successor forms or certificates as
shall be adopted from time to time by the relevant United States taxing
authorities) as may then be available under then current United States Laws and
regulations to avoid, or such evidence as is reasonably satisfactory to the
Borrower and the Administrative Agent of any available exemption from, or
reduction of, United States withholding taxes in respect of all payments to be
made to such Foreign Lender by the Borrower or other Loan Party pursuant to this
Agreement, or any other Loan Document, in each case, (1) on or before the date
that any such form, certificate or other evidence expires or becomes obsolete,
(2) after the occurrence of any event requiring a change in the most recent
form, certificate or evidence previously delivered by it to the Borrower and the
Administrative Agent and (3) from time to time thereafter if reasonably
requested by the Borrower or the Administrative Agent, and (B) promptly notify
the Borrower and the Administrative Agent of any change in circumstances which
would modify or render invalid any claimed exemption or reduction.

(ii) Each Foreign Lender, to the extent it does not act or ceases to act for its
own account with respect to any portion of any sums paid or payable to such
Foreign Lender under any of the Loan Documents (for example, in the case of a
typical participation by such Foreign Lender), shall deliver to the Borrower and
the Administrative Agent on the date when such Foreign Lender ceases to act for
its own account with respect to any portion of any such sums paid or payable,
and at such other times as may be necessary in the determination of the Borrower
or the Administrative Agent (in either case, in the reasonable exercise of its
discretion), (A) two duly signed completed copies of the forms or statements
required to be provided by such Foreign Lender as set forth above, to establish
the portion of any such sums paid or payable with respect to which such Foreign
Lender acts for its own account that is not subject to United States withholding
tax, and (B) two duly signed completed copies of IRS Form W-8IMY (or any
successor thereto), together with any information such Foreign Lender chooses to
transmit with such form, and any other certificate or statement of exemption
required under the Code, to establish

 

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that such Foreign Lender is not acting for its own account with respect to a
portion of any such sums payable to such Foreign Lender.

(iii) The Borrower shall not be required to pay any additional amount or any
indemnity payment under Section 3.01 to (A) any Foreign Lender if such Foreign
Lender shall have failed to satisfy the provisions of Section 10.15(a) or (c),
or (B) any U.S. Lender if such U.S. Lender shall have failed to satisfy the
provisions of Section 10.15(b) or (c); provided that (i) if such Lender shall
have satisfied the requirement of Section 10.15(a) or (b), as applicable, on the
date such Lender became a Lender or ceased to act for its own account with
respect to any payment under any of the Loan Documents, nothing in
Section 10.15(a) or (b) shall relieve the Borrower of its obligation to pay any
amounts pursuant to Section 3.01 in the event that, as a result of any Change in
Law, such Lender is no longer properly entitled to deliver forms, certificates
or other evidence pursuant to such Sections 10.15(a) or (b) at a subsequent date
establishing the fact that such Lender or other Person for the account of which
such Lender receives any sums payable under any of the Loan Documents is not
subject to withholding or is subject to withholding at a reduced rate and
(ii) nothing in this Section 10.15(a) shall relieve the Borrower of its
obligation to pay any amounts pursuant to Section 3.01 in the event that the
requirements of 10.15(a)(ii) have not been satisfied if such Borrower is
entitled, under applicable Law, to rely on any applicable forms and statements
required to be provided under this Section 10.15 by the Foreign Lender that does
not act or has ceased to act for its own account under any of the Loan
Documents, including in the case of a typical participation.

(iv) The Administrative Agent may deduct and withhold any taxes required by any
Laws to be deducted and withheld from any payment under any of the
Loan Documents.

(b) Each Lender and Agent that is a “United States person” within the meaning of
Section 7701(a)(30) of the Code (each, a “U.S. Lender”) shall deliver to the
Administrative Agent and the Borrower two duly signed, properly completed copies
of IRS Form W-9 on or prior to the Closing Date (or on or prior to the date it
becomes a party to this Agreement), certifying that such U.S. Lender is entitled
to an exemption from United States backup withholding tax, or any successor
form. If such U.S. Lender fails to deliver such forms, then the Administrative
Agent may withhold from any payment to such U.S. Lender an amount equivalent to
the applicable backup withholding tax imposed by the Code.

(c) If a payment made to a U.S. Lender or a Foreign Lender under any Loan
Document would be subject to U.S. federal withholding tax imposed by FATCA if
such U.S. Lender or Foreign Lender were to fail to comply with the applicable
reporting requirements of FATCA (including those contained in Section 1471(b) or
1472(b) of the Code, as applicable), such U.S. Lender or Foreign Lender shall
deliver to the Withholding Agent, at the time or times prescribed by Law and at
such time or times reasonably requested by the Withholding Agent, such
documentation prescribed by applicable Law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by the Withholding Agent as may be necessary for the
Withholding Agent to comply with its obligations under FATCA, to determine that
such U.S. Lender or Foreign Lender has or has not

 

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complied with such U.S. Lender’s or Foreign Lender’s obligations under FATCA
and, as necessary, to determine the amount to deduct and withhold from such
payment. Solely for purposes of this Section 10.15(c), “FATCA” shall include any
amendments made to FATCA after the date of this Agreement.

SECTION 10.16. GOVERNING LAW. (a) THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.

(b) ANY LEGAL ACTION OR PROCEEDING ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR
ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED
THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, SHALL BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY OR OF
THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE BORROWER, HOLDINGS, EACH AGENT AND EACH LENDER
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE
JURISDICTION OF THOSE COURTS. THE BORROWER, HOLDINGS, EACH AGENT AND EACH LENDER
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.

SECTION 10.17. WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION 10.17 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT
OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

SECTION 10.18. Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrower and Holdings and the Administrative
Agent shall have been notified by each Lender, Swing Line Lender and L/C Issuer
that each such Lender, Swing Line Lender and L/C Issuer has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, each
Agent and each Lender and their respective successors and assigns, except that
the Borrower shall not have the right to assign its rights hereunder or any

 

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interest herein without the prior written consent of the Lenders except as
permitted by Section 7.04.

SECTION 10.19. Lender Action. Each Lender agrees that it shall not take or
institute any actions or proceedings, judicial or otherwise, for any right or
remedy against any Loan Party or any other obligor under any of the Loan
Documents or the Secured Hedge Agreements (including the exercise of any right
of setoff, rights on account of any banker’s lien or similar claim or other
rights of self-help), or institute any actions or proceedings, or otherwise
commence any remedial procedures, with respect to any Collateral or any other
property of any such Loan Party, without the prior written consent of the
Administrative Agent. The provision of this Section 10.19 are for the sole
benefit of the Lenders and shall not afford any right to, or constitute a
defense available to, any Loan Party.

SECTION 10.20. USA PATRIOT Act. Each Lender hereby notifies Holdings and the
Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required
to obtain, verify and record information that identifies each Loan Party, which
information includes the name and address of each Loan Party and other
information that will allow such Lender to identify each Loan Party in
accordance with the Act.

SECTION 10.21. No Fiduciary Relationship. Each of Holdings and the Borrower, on
behalf of itself and its subsidiaries, agrees that in connection with all
aspects of the transactions contemplated hereby and any communications in
connection therewith, Holdings, the Borrower, the other Subsidiaries and their
Affiliates, on the one hand, and the Administrative Agent, the Lenders, the L/C
Issuers and their Affiliates, on the other hand, will have a business
relationship that does not create, by implication or otherwise, any fiduciary
duty on the part of the Administrative Agent, the Lenders, the L/C Issuers or
their Affiliates, and no such duty will be deemed to have arisen in connection
with any such transactions or communications.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

TEAM HEALTH HOLDINGS, INC., by   /s/ David Jones   Name:   David Jones   Title:
  Executive Vice President and Chief Financial Officer

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

TEAM HEALTH, INC., by   /s/ David Jones   Name:   David Jones   Title:  
Executive Vice President and Chief Financial Officer

[Signature Page to Credit Agreement]

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

JPMORGAN CHASE BANK, N.A., as Administrative Agent, L/C Issuer and Swing Line
Lender by   /s/ Dawn Lee Lum   Name: Dawn Lee Lum   Title:   Executive Director

[Signature Page to Credit Agreement]

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

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as Syndication Agent, by  
/s/ Sam Baruch   Name: Sam Baruch   Title:   Director

[Signature Page to Credit Agreement]

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

SIGNATURE PAGE TO

THE CREDIT AGREEMENT

AMONG TEAM HEALTH HOLDINGS, INC.,

TEAM HEALTH, INC. AND

JPMORGAN CHASE BANK, N.A.,

AS ADMINISTRATIVE AGENT

 

Name of Institution: BANK OF AMERICA, N.A. by   /s/ Robert Milligan   Name:
Robert Milligan   Title: Vice President

 

Name of Institution: BARCLAYS BANK PLC

by

 

/s/ Ann Sutton

  Name: Ann Sutton   Title: Director

 

Name of Institution: Citibank, N.A.

by

 

/s/ Stuart Dickson

 

Name: Stuart Dickson

 

Title: Vice President

 

Name of Institution: GOLDMAN SACHS LENDING PARTNERS LLC,

By

 

/s/ Anna Ostrovsky

  Name: Anna Ostrovsky   Title: Authorized Signatory

 

Name of Institution: Regions Bank  

/s/ Gregory M. Ratliff

 

Name: Gregory M. Ratliff

 

Title: Senior Vice President

 

Name of Institution: Fifth Third Bank by  

/s/ William D. Priester

  Name: William D. Priester   Title: Senior Relationship Manager

 

Name of Institution: Sumitomo Mitsui Banking Corporation

by

 

/s/ Shuji Yabe

  Name: Shuji Yabe   Title: General Manager

 

Name of Institution: COMPASS BANK

By

 

/s/ Stephen H. Lee

  Name: Stephen H. Lee   Title: Senior Vice President

 

Name of Institution: Mizuho Corporate Bank, Ltd by  

/s/ James R. Fayen

  Name: James R. Fayen   Title: Deputy General Manager

 

Name of Institution: Union Bank, N.A. by  

/s/ Sarah Willett

  Name: Sarah Willett   Title: Vice President

 

Name of Instituton: Wells Fargo Bank, National Association by  

/s/ Andrea S Chen

  Name: Andrea S Chen   Title: Director

 

Name of Institution: Deutsche Bank Trust Company Americas by  

/s/ Erin Morrissey

  Name: Erin Morrissey   Title: Director

 

For any Lender requiring a second signature block:

by /s/ Scottye Lindsey

  Name: Scottye Lindsey   Title: Director

 

Name of Institution: Pinnacle National Bank by  

/s/ Natalie H. Readett

  Name: Natalie H. Readett   Title: Senior Vice President

 

First Hawaiian Bank by  

/s/ Dawn Hofmann

  Name: Dawn Hofmann   Title: Vice President

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

Schedule I

Guarantors

 

  1. Team Health Holdings, Inc.

  2. Team Finance LLC

  3. Health Finance Corporation

  4. Access Nurse PM, Inc.

  5. After Hours Pediatrics, Inc.

  6. American Clinical Resources, Inc.

  7. Anesthetix Holdings, LLC

  8. Anesthetix Management, LLC

  9. Anthem Associates, LLC

  10. Billing Management, LLC

  11. Clinic Management Services, Inc.

  12. Daniel & Yeager, Inc.

  13. D&Y Healthcare Connectors, LLC

  14. ECC Chattsworth Dalton MC, LLC

  15. ECC West Tennessee MC, LLC

  16. Emergency Coverage Corporation

  17. Emergency Management Midwest, Inc.

  18. Emergency Physician Associates, Inc.

  19. Emergency Professional Services, Inc.

  20. EPA of Woodbury, Inc.

  21. ER Physician Associates, Inc.

  22. FischerMangold Partnership

  23. Florida Hospital Medicine Services, Inc.

  24. Greenbrier Emergency Physicians, Inc.

  25. HCFS Health Care Financial Services, Inc.

  26. Health Care Alliance, Inc.

  27. Healthcare Revenue Recovery Group, LLC

  28. Herschel Fischer, Inc.

  29. Hospital Medicine Associates, LLC

  30. InPhyNet Contracting Services, Inc.

  31. InPhyNet South Broward, Inc.

  32. Karl G. Mangold, Inc.

  33. Keightley and Parsley, Inc.

  34. Kelly Medical Services Corporation

  35. Medical Management Resources, Inc.

  36. Medical Services, Inc.

  37. Northwest Emergency Physicians, Incorporated

  38. Northwest Hospital Medicine Physicians, Inc.

  39. Nurse on Demand, Inc.

  40. Paragon Contracting Services, Inc.

  41. Paragon Emergency Services, Inc.

  42. Psychiatrists Only, LLC

  43. Quantum Plus, Inc.

  44. Southeastern Emergency Physicians of Memphis, Inc.

  45. Southeastern Emergency Physicians, Inc.

  46. Southeastern Physician Associates, Inc.

  47. Southwest Florida Emergency Management, Inc.

  48. Spectrum Healthcare Resources of Delaware, Inc.

  49. Spectrum Healthcare Resources, Inc.

  50. Spectrum Healthcare Services, Inc.

  51. Spectrum Health International, Inc.

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

  52. Spectrum Primary Care, Inc.

  53. Team Anesthesia, Inc.

  54. Team Anesthesia Holdings, LLC

  55. Team Health Anesthesia Management Services, Inc.

  56. Team Health Financial Services, Inc.

  57. TeamHealth Patient Safety Organization, Inc.

  58. Team Radiology, Inc.

  59. The Emergency Associates for Medicine, Inc.

  60. THMS-St. Joseph MC, LLC

  61. THMS West Tennessee MC, LLC

  62. THSE-Marco Urgent Care, LLC

  63. THSE-South Florida MC, LLC

  64. THW Emergency Management of Houston, Inc.

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

Schedule 1.01A

Certain Security Interests and Guarantees

 

1. The Security Agreement

 

2. The Intellectual Property Security Agreement

 

3. The Guarantee Agreement

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

Schedule 1.01B

Mortgaged Properties

None.

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

Schedule 1.01C

Immaterial Subsidiaries

None.

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

Schedule 1.01D

Related Professional Corporations

 

  1) Access Nurse, P.C.

 

  2) ACS Emergency Physicians of SC, P.C.

 

  3) ACS Emergency Services of Mississippi, Professional Association

 

  4) ACS Primary Care Physicians of Arkansas, P.A.

 

  5) ACS Primary Care Physicians – Louisiana, a Professional Corporation

 

  6) ACS Primary Care Physicians – Midwest, S.C.

 

  7) ACS Primary Care Physicians – Southeast, P.C.

 

  8) ACS Primary Care Physicians – Southwest, P.A.

 

  9) Acute Care Specialists, Inc.

 

  10) Anesthesia & Pain Treatment of Lancaster, P.C.

 

  11) Anesthesix of Bradford, LLC

 

  12) Anesthesix of Findlay, LLC

 

  13) Anesthesix of Iowa, P.C.

 

  14) Anesthesix of Lexington, PLLC

 

  15) Atlantic Emergency Physician Associates, P.C.

 

  16) Atlantic Physician Services of Maryland, P.C.

 

  17) Atlantic Professional Services of New Jersey, P.A.

 

  18) Atlantic Professional Services of Rhode Island, Inc.

 

  19) Blue Lagoon Hospitalists, Inc.

 

  20) Boca Medical Specialists, Inc.

 

  21) Carolina Pain Specialists, PLLC

 

  22) Chase Dennis Emergency Medical Group, Inc.

 

  23) Cherokee Emergency Services, Inc.

 

  24) Community Anesthesia & Pain Treatment, LLC

 

  25) Community Health Medical Associates, Inc.

 

  26) D&Y Healthcare Connectors, LLC

 

  27) Dade Intensive Care Hospitalist, Inc.

 

  28) Dansville Anesthesia & Pain Treatment PLLC

 

  29) Dayton Anesthesia & Pain Services, LLC

 

  30) Eastside Hospitalist, Inc.

 

  31) ECC Hospitalist Services, P.C.

 

  32) ECC Physician Services, P.C.

 

  33) Emergency Care Services of Maryland, Inc.

 

  34) Emergency Care Services of New Jersey, P.A.

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

  35) Emergency Care Services of New York, P.C.

 

  36) Emergency Care Services of Pennsylvania, P.C.

 

  37) Emergency Coverage Services, P.C.

 

  38) Emergency Department Physicians Medical Group, Inc.

 

  39) Emergency Medicine of Florida, P.A.

 

  40) Emergency Physician Associates of Delaware, P.C.

 

  41) Emergency Physician Associates of Maryland, P.C.

 

  42) Emergency Physician Associates of New England, P.C.

 

  43) Emergency Physician Associates of New Jersey, P.A.

 

  44) Emergency Physician Associates of North Carolina, P.C.

 

  45) Emergency Physician Associates of North Jersey, P.C.

 

  46) Emergency Physician Associates of Pennsylvania, P.C.

 

  47) Emergency Physician Associates of South Jersey, P.C.

 

  48) Emergency Physician Services of New York, P.C.

 

  49) Emergency Physicians Southwest, P.C.

 

  50) Emergency Professionals of Illinois, S.C.

 

  51) Emergency Professionals of Indiana, P.C.

 

  52) Emergency Professionals of Ohio, Inc.

 

  53) Emergency Services of Oklahoma, P.C.

 

  54) Emergency Services of Zephyrhills, P.A.

 

  55) Fagan E.R. Medical Group, Inc.

 

  56) Fischer Mangold Emergency Services, P.C.

 

  57) Greenbrier Emergency Services, Inc.

 

  58) Grove City Anesthesia & Pain Management, PLLC

 

  59) Gulfport Anesthesia & Pain Treatment, PLLC

 

  60) Healthcare Resources Medical Associates, Inc.

 

  61) Hialeah Anesthesia Specialists, LLC

 

  62) Hospital Medicine Associates of Ohio, Professional Corporation

 

  63) Hospital Medicine Physicians of Rhode Island, P.C.

 

  64) Hospital Medicine Services of Ohio, Inc.

 

  65) Hospital Physician Services Southeast, Professional Corporation

 

  66) Hutcheson Anesthesia & Pain Treatment, PLLC

 

  67) Indiana Emergency Professionals, P.C.

 

  68) InPhyNet Primary Care Physicians-Midwest, S.C.

 

  69) InPhyNet Primary Care Physicians-Southeast Professional Corporation

 

  70) InPhyNet Primary Care Physicians–Southeast, PC- Acute Care Express

 

  71) InPhyNet Primary Care Physicians-Southwest, P.A.

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

  72) InphyNet Sedation Services, P.C.

 

  73) InterCare Medical Group, Inc.

 

  74) IPN Emergency Physicians of North Florida, P.A.

 

  75) Kansas Emergency Services, P.A.

 

  76) Lakeside Emergency Medical Group, Inc.

 

  77) Lawrence Anesthesia Services, LLC

 

  78) Lejeune Health Care Group, Inc.

 

  79) Lima Anesthesia & Pain Treatment, Professional Corporation

 

  80) Loris Anesthesia & Pain Treatment, PLLC

 

  81) LTC Hospitalists, Inc.

 

  82) Marlton Anesthesia & Pain Treatment LLC

 

  83) Memorial Hospitalist, Inc.

 

  84) Miami Beach Hospitalist, Inc.

 

  85) Mt. Diablo Emergency Physicians, a California General Partnership

 

  86) NJ Acute Care Specialists Professional Corporation

 

  87) North Broward Hospitalist, Inc.

 

  88) North Georgia Pain Specialists, LLC

 

  89) Northeast Florida Hospitalists, Inc.

 

  90) North Jersey Emergency Physicians, P.A.

 

  91) Northwest Emergency Physicians, a California Partnership

 

  92) Northwest Physician Associates, a Professional Corporation

 

  93) Northwest Pulmonology Physicians, P.C.

 

  94) NY Acute Care Specialists, P.C.

 

  95) Oklahoma Emergency Services, PC

 

  96) Pain Specialists of Wood County, LLC

 

  97) Palmetto Anesthesia Specialists, LLC

 

  98) Park Med, P.C.

 

  99) Park Med Ambulatory Care, P.C.

 

  100) Parrish Anesthesia Specialists, LLC

 

  101) PBG Team Anesthesia, P.A.

 

  102) Pediatric Emergency Physicians of St. Petersburg, P.A.

 

  103) Portland Anesthesia Specialists, LLC

 

  104) Quantum Emergency Physicians, P.A.

 

  105) Quantum Healthcare Medical Associates, Inc.

 

  106) Quantum Healthcare Medical Associates of Arizona, P.C.

 

  107) Quantum Hospital Medicine Services of Texas, P.A.

 

  108) Racine Anesthesia Services, LLC

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

  109) Saginaw Anesthesia Services, PLLC

 

  110) Smoky Mountain Emergency Services, Inc.

 

  111) Solano Gateway Medical Group, Inc.

 

  112) South Central Emergency Services, P.C.

 

  113) South Miami Hospitalist, Inc.

 

  114) Southeastern Emergency Services, P.C.

 

  115) Southeastern Emergency Services of Memphis, P.C.

 

  116) Southeastern Intensivist Services, P.C.

 

  117) Southeastern Medical Group, P.C.

 

  118) Southeastern Physician Services, P.C.

 

  119) Southern Solano Emergency Medical Group, Inc.

 

  120) Team Medical Services, P.C.

 

  121) Team Physicians, P.C.

 

  122) Team Physicians of Arizona, P.C.

 

  123) Team Physicians of California Medical Group, Inc.

 

  124) Team Physicians of Connecticut, P.C.

 

  125) Team Physicians of Ohio, Inc.

 

  126) Team Radiology Physicians, P.A. (f/k/a Team Physicians of Florida, P.A.)

 

  127) Turlock Anesthesia Medical Group, Inc.

 

  128) Urgent Care of Naples, P.A.

 

  129) Warrensburg Anesthesia & Pain Treatment, LLC

 

  130) West Boca Physicians Group, Inc.

 

  131) West Palm Beach Physician Group, Inc.

 

  132) Westside Hospitalist, Inc.

 

  133) Wood Anesthesia & Pain Treatment, LLC

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

Schedule 2.01

Commitments

 

Lender

   Revolving Credit
Commitment      Tranche A Term
Commitment      Tranche B Term
Commitment  

JPMorgan Chase Bank, N.A.

   $ 27,250,000.00       $ 4,000,000.00       $ 250,000,000.00   

Bank of America, N.A.

   $ 26,250,000.00         

Barclays Bank PLC

   $ 25,000,000.00         

Citibank, N.A.

   $ 21,500,000.00         

Goldman Sachs Lending Partners LLC

   $ 21,500,000.00         

Regions Bank

   $ 8,000,000.00       $ 24,500,000.00      

Fifth Third Bank

   $ 6,000,000.00       $ 18,000,000.00      

Sumitomo Mitsui Banking Corporation

   $ 6,000,000.00       $ 18,000,000.00      

Compass Bank

   $ 6,000,000.00       $ 18,000,000.00      

Mizuho Corporate Bank, Ltd.

   $ 6,000,000.00       $ 18,000,000.00      

Union Bank, N.A.

   $ 6,000,000.00       $ 18,000,000.00      

Wells Fargo Bank, National Association

   $ 6,000,000.00       $ 18,000,000.00      

Deutsche Bank Trust Company Americas

   $ 5,000,000.00         

Pinnacle National Bank

   $ 2,500,000.00       $ 7,500,000.00      

First Hawaiian Bank

   $ 2,000,000.00       $ 6,000,000.00                                 

TOTAL:

   $ 175,000,000.00       $ 150,000,000.00       $ 250,000,000.00               
              

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

Schedule 5.09

Environmental Matters

None.

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

Schedule 5.10

Taxes

None.

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

Schedule 5.11

ERISA Compliance

None.

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

Schedule 5.12

Subsidiaries and Other Equity Investments

 

Entity

   Jurisdiction of
Organization    Authorized
Shares   

Owner/Member

   Shares
Outstanding    Shares/%
Owned Team Finance LLC    DE    N/A    Team Health Holdings, Inc.    N/A    100%
Team Health, Inc.    TN    12,000,000    Team Finance LLC    100    100 Health
Finance Corporation    DE    1,000    Team Finance LLC    100    100 Team Health
Holdings, Inc.    DE    See Public
Filings    See Public Filings    See Public
Filings    See Public
Filings Access Nurse PM, Inc.    TN    2,000    Team Health, Inc.    100    100
After Hours Pediatrics, Inc.    FL    10,000    Team Health, Inc.    100    100
American Clinical Resources, Inc.    DE    1,000    Team Health, Inc.    1,000
   1,000 Anesthetix Holdings, LLC    DE    N/A    Team Anesthesia Holdings, LLC
   N/A    100% Anesthetix Management, LLC    DE    N/A    Anesthetix Holdings,
LLC    N/A    100% Anthem Associates, LLC    FL    N/A    Anesthetix Holdings,
LLC    N/A    100% Billing Management, LLC    DE    N/A    Anesthetix Holdings,
LLC    N/A    100% Clinic Management Services, Inc.    TN    2,000    Team
Health, Inc.    1,000    1,000 Daniel & Yeager, Inc.    AL    1,000    Team
Health, Inc.    1,000    1,000 D&Y Healthcare Connectors, LLC    AL    N/A   
Daniel & Yeager, Inc.    N/A    100% ECC Chattsworth Dalton MC, LLC    TN    N/A
   Emergency Coverage Corporation    N/A    100% ECC West Tennessee MC, LLC   
TN    N/A    Emergency Coverage Corporation    N/A    100% Emergency Coverage
Corporation    TN    1,000    Team Health, Inc.    20    20 Emergency Management
Midwest, Inc.    OK    1,000    Team Health, Inc.    1,000    1,000 Emergency
Physician Associates, Inc.    NJ    1,000    Team Health, Inc.    1,000    1,000
Emergency Professional Services, Inc.    OH    500    Team Health, Inc.    500
   500 EPA of Woodbury, Inc.    NJ    1,000    Emergency Physician Associates,
Inc.    1,000    1,000 ER Physician Associates, Inc.    TN    1,000    Team
Health, Inc.    100    100 FischerMangold, a California General Partnership   
CA    N/A    Herschel Fischer, Inc.    N/A    50%          Karl G. Mangold, Inc.
   N/A    50% Florida Hospital Medicine Services, Inc.    FL    10,000    Team
Health, Inc.    100    100 Greenbrier Emergency Physicians, Inc.    WV    1,000
   Team Health, Inc.    100    100 HCFS Health Care Financial Services, Inc.   
FL    1,000    Team Health, Inc.    1,000    1,000 Health Care Alliance, Inc.   
WV    5,000    Southeastern Emergency Physicians, Inc.    100    100 Healthcare
Revenue Recovery Group, LLC    FL    N/A    HCFS Health Care Financial Services,
Inc.    N/A    100%

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

Entity

   Jurisdiction of
Organization    Authorized
Shares   

Owner/Member

   Shares
Outstanding    Shares/%
Owned Herschel Fischer, Inc.    CA    10,000    Team Health, Inc.    1,000   
1,000 Hospital Medicine Associates, LLC    FL    N/A    InPhyNet Contracting
Services, Inc.    N/A    100% InPhyNet Contracting Services, Inc.    FL    1,000
   Team Health, Inc.    1,000    1,000 InPhyNet South Broward, Inc.    FL   
1,000    Team Health, Inc.    1,000    1,000 Karl G. Mangold, Inc.    CA   
10,000    Team Health, Inc.    1,000    1,000 Keightley and Parsley, Inc.    KY
   20,000    Southeastern Emergency Physicians, Inc.    48    48 Kelly Medical
Services Corporation    WV    50    Southeastern Emergency Physicians, Inc.   
10    10 Medical Management Resources, Inc.    FL    1,000    HCFS Health Care
Financial Services, Inc.    100    100 Medical Services, Inc.    WV    5,000   
Southeastern Emergency Physicians, Inc.    5,000    5,000 Northwest Emergency
Physicians, Incorporated    WA    50,000    Team Health, Inc.    1,000    1,000
Northwest Hospital Medicine Physicians, Inc.    WA    1,000    Team Health, Inc.
   100    100 Nurse on Demand, Inc.    TN    1,000    Team Health, Inc.    100
   100 Paragon Contracting Services, Inc.    FL    1,000    Team Health, Inc.   
1,000    1,000 Paragon Emergency Services, Inc.    FL    1,000    InPhyNet
Contracting Services, Inc.    100    100 Physicians Underwriting Group, Ltd.   
Cayman
Islands    900,000    Team Health, Inc.    120,000    120,000 Psychiatrists
Only, LLC    GA    N/A    Daniel & Yeager, Inc.    N/A    100% Quantum Plus,
Inc.    CA    10,000    Team Health, Inc.    1,000    1,000 Southeastern
Emergency Physicians of Memphis, Inc.    TN    2,000    Team Health, Inc.    150
   150 Southeastern Emergency Physicians, Inc.    TN    2,000    Team Health,
Inc.    300    300 Southeastern Physician Associates, Inc.    TN    1,000   
Team Health, Inc.    100    100 Southwest Florida Emergency Management, Inc.   
FL    1,000    Team Health, Inc.    1,000    1,000 Spectrum Healthcare Resources
of Delaware, Inc.    DE    1,000    Team Health, Inc.    1,000    1,000 Spectrum
Healthcare Resources, Inc.    DE    1,000    Team Health, Inc.    1,000    1,000
Spectrum Healthcare Services, Inc.    DE    12,700,000    Team Health, Inc.   
10,082,000    10,082,000 Spectrum Health International, Inc.    DE    1,000   
Team Health, Inc.    1,000    1,000 Spectrum Primary Care, Inc.    DE    1,000
   Team Health, Inc.    1,000    1,000 Team Anesthesia, Inc.    TN    2,000   
Team Health, Inc.    100    100 Team Anesthesia Holdings, LLC    DE    N/A   
Team Anesthesia, Inc.    N/A    100% Team Health Anesthesia Management Services,
Inc.    CA    2,000,000    Team Anesthesia, Inc.    784    784 Team Health
Financial Services, Inc.    TN    2,000    Team Health, Inc.    2,000    2,000
TeamHealth Patient Safety Organization, Inc.    TN    1,000    Team Health, Inc.
   100    100 Team Radiology, Inc.    NC    100,000    Team Health, Inc.    100
   100

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

Entity

   Jurisdiction of
Organization    Authorized
Shares   

Owner/Member

   Shares
Outstanding    Shares/%
Owned The Emergency Associates for Medicine, Inc.    FL    1,000    Team Health,
Inc.    1,000    1,000 THMS-St. Joseph MC, LLC    TN    N/A    Southeastern
Emergency Physicians of Memphis, Inc.    N/A    100% THMS-West Tennessee MC, LLC
   TN    N/A    Southeastern Emergency Physicians of Memphis, Inc.    N/A   
100% THSE-Marco Urgent Care, LLC    FL    N/A    Southwest Florida Emergency
Management, Inc.    N/A    100% THSE-South Florida MC, LLC    FL    N/A   
Inphynet Contracting Services, Inc.    N/A    100% THW Emergency Management of
Houston, Inc.    TX    1,000    Quantum Plus, Inc.    100    100

All Equity Interests listed above to be pledged, other than those of Team Health
Holdings, Inc.

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

Schedule 6.13(a)(ii)

Certain Post-Closing Obligations

Aircraft Mortgages

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

Schedule 7.01(b)

Existing Liens

 

1. All claims held by the United States Government or United States Internal
Revenue Service on the assets of any Grantor (as that term is defined in the
Security Agreement), relating to any closing agreement entered into under
Section 7121 of the Code between such Grantor and the Commissioner of Internal
Revenue with respect to the election under Section 953(d) of the Code made (or
to be made) by Physicians Underwriting Group, Ltd.

 

2. Lien with respect to certain assets of Keightley & Parsley, Inc. (f/k/a
Keightley & Parsley P.S.C.) made in favor of Branch Banking and Trust.

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

Schedule 7.02(f)

Existing Investments

 

Investments in Joint-Ventures

  

Mid-Ohio

   $ 1,291,042   

Kuhana-Spectrum JVs

   $ 1,276,731   

Other Investments

  

Kuhana Payroll Advance

   $ 2,002,168   

Kuhana Working Capital Fundings

   $ 1,307,803   

Loans/Advances

  

Physicians

   $ 1,309,589   

Employees

   $ 777,768   

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

Schedule 7.03(b)

Existing Indebtedness

 

1. Maximum contingent earn out payments under various asset and stock
acquisition agreements of approximately $25.3 million as of May 31, 2011:

 

Underwood

   $ 4,824,302 in 2011   

Psychiatrists Only

   $ 139,310 in 2011   

North River Emer. Phy.

   $ 325,000 in 2012   

Emergency Phy. Of Naples

   $ 3,375,000 in 2012   

Lewis Gale

   $ 1,280,000 in 2012   

Rhode Island Emer Phy.

   $ 390,000 in 2012   

Morningstar Emer. Phy.

   $ 15,000,000 in 2012            

Total:

   $ 25,333,612   

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

Schedule 7.05(l)

Dispositions

None.

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

Schedule 7.08

Transactions with Affiliates

 

1. The Borrower and its Subsidiaries have entered into management or similar
agreements with each other and with the Related Professional Corporations and
have entered into stock transfer restriction agreements with certain of the
stockholders of certain Related Professional Corporations. Some of the
stockholders, employees and independent contractors of these Related
Professional Corporations are officers of the Borrower and its Subsidiaries.

 

2. The Borrower leases office space from several partnerships that are partially
or entirely owned by certain employees of the Borrower. The leases were assumed
by the Borrower as part of the merger or purchase transactions. Total related
party lease costs were approximately $1.2 million in 2008, $1.1 million in 2009
and $0.5 million in 2010.

 

3. The Borrower has made loans to employees or physicians with outstanding
balances shown on Schedule 7.02(f) above.

 

4. In addition to the list set forth above, the Borrower periodically makes
payroll advances to independent contractors and employed physicians. Such
advances are typically repaid in the next pay cycle.

 

5. Senior Management Employment Agreements by and between the Borrower or
subsidiaries of the Borrower and each of:

Allen, Heidi S. – Senior Vice President and General Counsel

Askins, Dale C. – President, TeamHealth Mid-America

Behm, Jennifer – Executive Vice President, TeamHealth West

Blevins, Barbara – Chief Operating Officer, Hospital Based Services

Bristow, Kent – Senior Vice President, Operations

Brown, Susie – Chief Operating Officer, Daniel & Yeager

Carman, Joe – Chief Administrative Officer

Carvolth, Richard, M.D. – President, TeamHealth West

Dabbs, Randal – President, TeamHealth Midsouth

Dollison, Laura, D.O. – Senior Vice President, TeamHealth East

Fuller, Robert – Chief Financial Officer, Hospital Based Services

George, James, M.D. – President, TeamHealth East

Gleis, Paul – Chief Compliance Officer

Goltry, Thom – COO, TeamHealth Atlantic

Gottlieb, Steven – CEO, Anesthetix of TeamHealth

Grinbergs, David T. – President, Emergency Medicine

Gundersen, Jasen – CMO, Hospital Medicine

Harris, Mark – President, Northwest Emergency Physicians of TeamHealth

Hellmann, John – Executive Vice President, TeamHealth Midsouth

Herrmann, Harry – Chief Information Officer

Holtzclaw, Stephen – President, TeamHealth Southeast

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

Jones, David – Executive Vice President and Chief Financial Officer

Lane, Trudy – Vice President, TeamHealth East

LaSalle, Gar – Chief Medical Officer

Massingale, Lynn – Executive Chairman

Millsaps, Paula – National Vice President, Billing Operations

Ramani, Tushar – President, Anesthetix of TeamHealth

Reed, Mike – CEO, TeamHealth Hospital Medicine

Robert Frantz, M.D. – COO, TeamHealth Mid-America

Rogers, Oliver - President, Hospital Based Services

Roth, Greg – President and Chief Executive Officer

Rybak, James – M&A Vice President

Schwering, Jim – COO, NEP of TeamHealth

Staley, John R., M.D. – President, TeamHealth Atlantic

Tracy, George – President, Spectrum Healthcare Resources

Varvoutis, Ernest – Senior Vice President, Mergers and Acquisitions

Vetrano, Tony – Chief Financial Officer, HCFS

Wilbanks, Dan – Senior Vice President, Business Development and Marketing

 

6. Certain members of management own Team Health Holdings, Inc. shares.

 

7. Certain members of management own Team Health Holdings, Inc. stock options
and are parties to Nonqualified Stock Option Agreements with Team Health
Holdings, Inc.

 

8. The Borrower’s subsidiaries and related professional corporations have
entered into Billing Services Agreements with the Borrower’s subsidiary, HCFS
Health Care Financial Services, Inc.

 

9. Certain Indemnification Agreements are in place between the Borrower and its
executive management and board of directors members, and between the Borrower
and various nominee physician shareholders of the Borrower and its related
professional corporations.

 

10. Certain intercompany promissory notes between the Borrower and its
subsidiaries allowing the Borrower to re-capitalize certain of its subsidiaries
by making a contribution of certain assets in the form of promissory notes to
its subsidiary, Team Health Financial Services, Inc.

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

Schedule 7.09

Existing Restrictions

None.

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

EXHIBIT A

[FORM OF]

COMMITTED LOAN NOTICE

 

To: JPMorgan Chase Bank, N.A., as Administrative Agent

1111 Fannin, 10th Floor

Houston, TX 77002-6925

Attention: John Ngo

[•], 2011

Ladies and Gentlemen:

Reference is made to the Credit Agreement dated as of June 29, 2011 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Team Health Holdings, Inc., Team Health, Inc., (the
“Borrower”), JPMorgan Chase Bank, N.A., as Administrative Agent (in such
capacity, the “Administrative Agent”), Swing Line Lender and L/C Issuer, the
lenders from time to time party thereto (the “Lenders”) and any other agent
party thereto. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement.

The undersigned Borrower hereby requests (select one):

 

  ¨ A Borrowing of new Loans

 

  ¨ A conversion of Loans

 

  ¨ A continuation of Loans

to be made on the terms set forth below:

 

(A)    Class of Borrowing1                                                 (B)
   Date of Borrowing,
conversion or continuation          (which is a Business Day)   
                                             (C)    Principal amount   
                                             (D)    Currency   
                                             (E)    Type of Loan 2   
                                             (F)    Interest Period 3   
                                            

 

1 

Tranche A Term, Tranche B Term, or Revolving Credit

2 

Specify Eurocurrency Rate or Base Rate.

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

The above request has been made to the Administrative Agent by telephone at
(713) 750-2931.

 

3 

Applicable for Eurocurrency Borrowings/Loans only.

 

2

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

[The undersigned Borrower hereby represents and warrants to the Administrative
Agent and the Lenders that, on the date of this Committed Loan Notice and on the
date of the related Borrowing, the conditions to lending specified in paragraphs
(a) and (b) of Section 4.02 of the Credit Agreement have been satisfied.]4

 

TEAM HEALTH, INC.,     by         Name:   Title:

 

4 

Insert bracketed language if the Borrower is requesting a Borrowing of new
Loans.

 

3

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

EXHIBIT B

[FORM OF]

SWING LINE LOAN NOTICE

 

To: JPMorgan Chase Bank, N.A., as Swing Line Lender and Administrative Agent

1111 Fannin, 10th Floor

Houston, TX 77002-6925

Attention: John Ngo

[Date]

Ladies and Gentlemen:

Reference is made to the Credit Agreement dated as of June 29, 2011 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Team Health Holdings, Inc., Team Health, Inc., (the
“Borrower”), JPMorgan Chase Bank, N.A., as Administrative Agent (in such
capacity, the “Administrative Agent”), Swing Line Lender and L/C Issuer, the
lenders from time to time party thereto (the “Lenders”) and any other agent
party thereto. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement. The
undersigned Borrower hereby gives you notice pursuant to Section 2.04(b) of the
Credit Agreement that it requests a Swing Line Borrowing under the Credit
Agreement, and in that connection sets forth below the terms on which such Swing
Line Borrowing is requested to be made:

 

(A)    Principal Amount to be Borrowed1    _________________________    (B)   

Date of Borrowing

(which is a Business Day)

   _________________________   

The above request has been made to the Swing Line Lender and Administrative
Agent by telephone at (713) 750-2931.

The undersigned Borrower hereby represents and warrants to the Administrative
Agent and the Lenders that, on the date of this Swing Line Loan Notice and on
the date of the related Swing Line Borrowing, the conditions to lending
specified in paragraphs (a) and (b) of Section 4.02 of the Credit Agreement have
been satisfied.

 

TEAM HEALTH, INC.,     by         Name:   Title:

 

1 

Shall be a whole multiple of $100,000 and a minimum of $100,000.

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

EXHIBIT C-1

LENDER: [•]

PRINCIPAL AMOUNT: $[•]

[FORM OF] TRANCHE A TERM NOTE

New York, New York

[Date]

FOR VALUE RECEIVED, the undersigned, TEAM HEALTH, INC., a Delaware limited
liability company (the “Borrower”), hereby promises to pay to the Lender set
forth above (the “Lender”) or its registered assigns, in lawful money of the
United States of America in immediately available funds to the Administrative
Agent (such term, and each other capitalized term used but not defined herein,
having the meaning assigned to it in the Credit Agreement dated as of June 29,
2011 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among Team Health Holdings, Inc., Team
Health, Inc., (the “Borrower”), JPMorgan Chase Bank, N.A., as Administrative
Agent, Swing Line Lender and L/C Issuer, the lenders from time to time party
thereto and any other agent party thereto) (i) on the dates set forth in the
Credit Agreement, the principal amounts set forth in the Credit Agreement with
respect to all Tranche A Term Loans made by the Lender to the Borrower pursuant
to the Credit Agreement and (ii) on each Interest Payment Date, interest at the
rate or rates per annum as provided in the Credit Agreement on the unpaid
principal amount of all Tranche A Term Loans made by the Lender to the Borrower
pursuant to the Credit Agreement.

The Borrower promises to pay interest, on demand, on any overdue principal and,
to the extent permitted by law, overdue interest from their due dates at the
rate or rates provided in the Credit Agreement.

The Borrower hereby waives diligence, presentment, demand, protest and notice of
any kind whatsoever. The nonexercise by the holder hereof of any of its rights
hereunder in any particular instance shall not constitute a waiver thereof in
that or any subsequent instance.

All borrowings evidenced by this note and all payments and prepayments of the
principal hereof and interest hereon and the respective dates thereof shall be
endorsed by the holder hereof on the schedule attached hereto and made a part
hereof or on a continuation thereof which shall be attached hereto and made a
part hereof, or otherwise recorded by such holder in its internal records;
provided, however, that the failure of the holder hereof to make such a notation
or any error in such notation shall not affect the obligations of the Borrower
under this note.

This note is one of the Tranche A Term Notes referred to in the Credit Agreement
that, among other things, contains provisions for the acceleration of the
maturity hereof upon the happening of certain events, for optional and mandatory

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

prepayment of the principal hereof prior to the maturity hereof and for the
amendment or waiver of certain provisions of the Credit Agreement, all upon the
terms and conditions therein specified.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

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

TEAM HEALTH, INC.,     by         Name:   Title:

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

LOANS AND PAYMENTS

 

Date

   Amount of Loan    Maturity Date    Payments of
Principal/Interest    Principal
Balance of Note    Name of
Person Making
the Notation

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

EXHIBIT C-2

LENDER: [•]

PRINCIPAL AMOUNT: $[•]

[FORM OF] TRANCHE B TERM NOTE

New York, New York

[Date]

FOR VALUE RECEIVED, the undersigned, TEAM HEALTH, INC., a Delaware limited
liability company (the “Borrower”), hereby promises to pay to the Lender set
forth above (the “Lender”) or its registered assigns, in lawful money of the
United States of America in immediately available funds to the Administrative
Agent (such term, and each other capitalized term used but not defined herein,
having the meaning assigned to it in the Credit Agreement dated as of June 29,
2011 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among Team Health Holdings, Inc., Team
Health, Inc., (the “Borrower”), JPMorgan Chase Bank, N.A., as Administrative
Agent, Swing Line Lender and L/C Issuer, the lenders from time to time party
thereto and any other agent party thereto) (i) on the dates set forth in the
Credit Agreement, the principal amounts set forth in the Credit Agreement with
respect to all Tranche B Term Loans made by the Lender to the Borrower pursuant
to the Credit Agreement and (ii) on each Interest Payment Date, interest at the
rate or rates per annum as provided in the Credit Agreement on the unpaid
principal amount of all Tranche B Term Loans made by the Lender to the Borrower
pursuant to the Credit Agreement.

The Borrower promises to pay interest, on demand, on any overdue principal and,
to the extent permitted by law, overdue interest from their due dates at the
rate or rates provided in the Credit Agreement.

The Borrower hereby waives diligence, presentment, demand, protest and notice of
any kind whatsoever. The nonexercise by the holder hereof of any of its rights
hereunder in any particular instance shall not constitute a waiver thereof in
that or any subsequent instance.

All borrowings evidenced by this note and all payments and prepayments of the
principal hereof and interest hereon and the respective dates thereof shall be
endorsed by the holder hereof on the schedule attached hereto and made a part
hereof or on a continuation thereof which shall be attached hereto and made a
part hereof, or otherwise recorded by such holder in its internal records;
provided, however, that the failure of the holder hereof to make such a notation
or any error in such notation shall not affect the obligations of the Borrower
under this note.

This note is one of the Tranche B Term Notes referred to in the Credit Agreement
that, among other things, contains provisions for the acceleration of the
maturity hereof upon the happening of certain events, for optional and mandatory

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

prepayment of the principal hereof prior to the maturity hereof and for the
amendment or waiver of certain provisions of the Credit Agreement, all upon the
terms and conditions therein specified.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

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

TEAM HEALTH, INC.,     by         Name:   Title:

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

LOANS AND PAYMENTS

 

Date

   Amount of Loan    Maturity Date    Payments of
Principal/Interest    Principal
Balance of Note    Name of
Person Making
the Notation

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

EXHIBIT C-3

LENDER: [•]

PRINCIPAL AMOUNT: $[•]

[FORM OF] REVOLVING CREDIT NOTE

New York, New York

[Date]

FOR VALUE RECEIVED, the undersigned, TEAM HEALTH, INC., a Delaware limited
liability company, (the “Borrower”), hereby promises to pay to the Lender set
forth above (the “Lender”) or its registered assigns, in lawful money of the
United States of America in immediately available funds to the Administrative
Agent (such term, and each other capitalized term used but not defined herein,
having the meaning assigned to it in the Credit Agreement dated as of June 29,
2011 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among Team Health Holdings, Inc., Team
Health, Inc., (the “Borrower”), JPMorgan Chase Bank, N.A., as Administrative
Agent, Swing Line Lender and L/C Issuer, the lenders from time to time party
thereto and any other agent party thereto) (i) on the dates set forth in the
Credit Agreement, the lesser of (A) the principal amount set forth above and
(B) the aggregate unpaid principal amount of all Revolving Credit Loans made by
the Lender to such Borrower pursuant to the Credit Agreement, and (ii) interest
from the date hereof on the principal amount from time to time outstanding on
each such Revolving Credit Loan at the rate or rates per annum and payable on
such dates as provided in the Credit Agreement.

The Borrower promises to pay interest, on demand, on any overdue principal and,
to the extent permitted by law, overdue interest from their due dates at a rate
or rates provided in the Credit Agreement.

The Borrower hereby waives diligence, presentment, demand, protest and notice of
any kind whatsoever. The nonexercise by the holder hereof of any of its rights
hereunder in any particular instance shall not constitute a waiver thereof in
that or any subsequent instance.

All borrowings evidenced by this note and all payments and prepayments of the
principal hereof and interest hereon and the respective dates thereof shall be
endorsed by the holder hereof on the schedule attached hereto and made a part
hereof or on a continuation thereof which shall be attached hereto and made a
part hereof, or otherwise recorded by such holder in its internal records;
provided, however, that the failure of the holder hereof to make such a notation
or any error in such notation shall not affect the obligations of the Borrowers
under this note.

This note is one of the Revolving Credit Notes referred to in the Credit
Agreement that, among other things, contains provisions for the acceleration of
the maturity hereof upon the happening of certain events, for optional and
mandatory prepayment of the principal hereof prior to the maturity hereof and
for the amendment or

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

waiver of certain provisions of the Credit Agreement, all upon the terms and
conditions therein specified.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

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

TEAM HEALTH, INC.,     by         Name:   Title:

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

LOANS AND PAYMENTS

 

Date

   Amount of Loan    Maturity Date    Payments of
Principal/Interest    Principal
Balance of Note    Name of
Person Making
the Notation

 

4

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

EXHIBIT D

[FORM OF]

COMPLIANCE CERTIFICATE

Reference is made to the Credit Agreement dated as of June 29, 2011 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Team Health Holdings, Inc., (“Holdings”), Team
Health, Inc., (the “Borrower”), JPMorgan Chase Bank, N.A., as Administrative
Agent (in such capacity, the “Administrative Agent”), Swing Line Lender and L/C
Issuer, the lenders from time to time party thereto and any other agent party
thereto. Capitalized terms used herein have the meanings attributed thereto in
the Credit Agreement unless otherwise defined herein. Pursuant to Section 6.02
of the Credit Agreement, the undersigned, in his/her capacity as a Responsible
Officer of Holdings, certifies as follows:

 

  1. [Attached hereto as Exhibit [A] is the audited consolidated balance sheet
of Holdings and its Subsidiaries as of December 31, 20[ ] and related
consolidated statements of income or operations, stockholders’ equity and cash
flows for the fiscal year then ended, setting forth in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail and
prepared in accordance with GAAP, audited and accompanied by a report and
opinion of [Ernst & Yount LLP], which report and opinion shall be prepared in
accordance with generally accepted auditing standards in the United States and
not subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit.]

 

  2. [Attached hereto as Exhibit [B] is the consolidated balance sheet of the
Borrower and its Subsidiaries as of [            ] and the related
(i) consolidated statements of income or operations for such fiscal quarter and
for the portion of the fiscal year then ended and (ii) consolidated statements
of cash flows for the portion of the fiscal year then ended, setting forth in
each case in comparative form the figures for the corresponding fiscal quarter
of the previous fiscal year and the corresponding portion of the previous fiscal
year, all in reasonable detail. These present fairly in all material respects
the financial condition, results of operations, stockholders’ equity and cash
flows of Holdings and its Subsidiaries in accordance with GAAP, subject only to
normal year-end audit adjustments and the absence of footnotes.]

 

  3. To my knowledge, except as otherwise disclosed to the Administrative Agent
in writing pursuant to the Credit Agreement, at no time during the period
between [            ] and [            ] (the “Certificate Period”) did a
Default or an Event of Default exist. [If unable to provide the foregoing
certification, fully describe the reasons therefor and circumstances thereof and
any action taken or proposed to be taken with respect thereto (including the
delivery of a “Notice of Intent to Cure” concurrently with delivery of this
Compliance Certificate) on Annex A attached hereto.]

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

  4. The following represent true and accurate calculations, as of the last day
of the Certificate Period, to be used to determine whether the Borrower is in
compliance with the covenant set forth in Section 7.11 of the Credit Agreement:

 

  First Lien Net Leverage Ratio.         Consolidated Total Debt        

that is secured by a

first lien on Collateral=

   [            ]      Consolidated EBITDA=    [            ]      Actual Ratio=
   [            ] to 1.0      Required Ratio=    [            ] to 1.0   

Supporting detail showing the calculation of Consolidated Total Debt that is
secured by a first lien on the Collateral is attached hereto as Schedule 1.
Supporting detail showing the calculation of Consolidated EBITDA is attached
hereto as Schedule 2. Supporting detail showing the calculation of Capitalized
Leases in accordance with GAAP then in effect and under the Credit Agreement is
attached hereto as Schedule 3.

IN WITNESS WHEREOF, the undersigned, in his/her capacity as a Responsible
Officer of Holdings, has executed this certificate for and on behalf of the
Borrower and has caused this certificate to be delivered this              day
of             .

 

TEAM HEALTH HOLDINGS, INC.,     By         Name:   Title:

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

EXHIBIT E

[FORM OF]

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between the
Assignor (as defined below) and the Assignee (as defined below). Capitalized
terms used in this Assignment and Assumption and not otherwise defined herein
have the meanings specified in the Credit Agreement dated as of June 29, 2011
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”), among Team Health Holdings, Inc., Team Health,
Inc., (the “Borrower”), JPMorgan Chase Bank, N.A., as Administrative Agent (in
such capacity, the “Administrative Agent”), Swing Line Lender and L/C Issuer,
the lenders from time to time party thereto (the “Lenders”) and any other agent
party thereto, receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below, (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the facility identified below
(including participations in any Letters of Credit or Swing Line Loans included
in such facility) and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including, but not limited to, contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as the “Assigned Interest”). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the
Assignor.

 

  1. Assignor (the “Assignor”):

 

  2. Assignee (the “Assignee”):

Assignee is an Affiliate of: [Name of Lender]

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

Assignee is an Approved Fund of: [Name of Lender]

 

  3. Borrower: TEAM HEALTH, INC.

 

  4. Administrative Agent: JPMORGAN CHASE BANK, N.A.

 

  5. Assigned Interest:

 

Facility

   Aggregate Amount  of
Commitment/Loans
of all Lenders      Amount of
Commitment/
Loans Assigned      Percentage
Assigned of
Commitment/
Loans  

Revolving Credit Facility

   $         $           %   

Tranche A Term Loans

   $         $           %   

Tranche B Term Loans

   $         $           %   

Effective Date:                     , 20[  ] [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR].

 

2

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

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

JPMORGAN CHASE BANK, N.A.,

as Assignor,

by       Name:   Title:

 

3

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

[NAME OF ASSIGNEE],

as Assignee,

by       Name:   Title:

 

4

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

[Consented to and]1 Accepted:

 

JPMORGAN CHASE BANK, N.A.

as Administrative Agent,

by       Name:   Title:

[Consented to:

 

JPMORGAN CHASE BANK, N.A., as L/C Issuer,

by       Name:   Title:2

 

1 

No consent of the Administrative Agent shall be required for an assignment
(i) of all or any portion of a Term Loan to a Lender, an Affiliate of a Lender
or an Approved Fund or (ii) to an Agent or an Affiliate of an Agent.

2 

No consent of any L/C Issuer shall be required for any assignment of a Term Loan
or any assignment to an Agent or an Affiliate of an Agent.

 

5

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

TEAM HEALTH, INC., by       Name:   Title:]3

 

3 

No consent of the Borrower shall be required for an assignment to a Lender
(provided, however, that the consent of the Borrower shall be required for the
assignment of Revolving Credit Loans and Revolving Credit Commitments to any
Lender who is not then an existing Revolving Credit Lender), an Affiliate of a
Lender, an Approved Fund or, if an Event of Default under Section 8.01(a),
(f) or (g) of the Credit Agreement has occurred and is continuing, any other
Assignee.

 

6

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

Annex 1

CREDIT AGREEMENT1

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement, (ii) the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, (iii) the financial
condition of Holdings, the Borrower, or any of their Subsidiaries or Affiliates
or any other Person obligated in respect of the Credit Agreement or (iv) the
performance or observance by Holdings, the Borrower, or any of their
Subsidiaries or Affiliates or any other Person of any of their obligations under
the Credit Agreement.

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 6.01 thereof, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on any Agent or any other Lender
and (v) if it is a Foreign Lender, attached to this Assignment and Assumption is
any documentation required to be delivered by it pursuant to Section 10.15 of
the Credit Agreement, duly completed and executed by the Assignee; and
(b) agrees that (i) it will, independently and

 

1 

Capitalized terms used in this Assignment and Assumption and not otherwise
defined herein have the meanings specified in the Credit Agreement dated as of
June 29, 2011 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among Team Health Holdings,
Inc., Team Health, Inc., (the “Borrower”), JPMorgan Chase Bank, N.A., as
Administrative Agent (in such capacity, the “Administrative Agent”), Swing Line
Lender and L/C Issuer, the lenders from time to time party thereto and any other
agent party thereto.

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

without reliance on the Assignor, any 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 taking or not taking action under
the Credit Agreement and (ii) it will perform in accordance with their terms all
of the obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender.

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

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

 

2

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

EXHIBIT F

 

 

 

[FORM OF]

GUARANTEE AGREEMENT

dated as of

[            ],

among

TEAM HEALTH HOLDINGS, INC.,

TEAM FINANCE LLC,

TEAM HEALTH, INC.,

THE SUBSIDIARIES OF TEAM HEALTH HOLDINGS, INC.

IDENTIFIED HEREIN

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

 

 

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

TABLE OF CONTENTS

 

ARTICLE I    Definitions   

SECTION 1.01. Credit Agreement

     1   

SECTION 1.02. Other Defined Terms

     1    ARTICLE II    Guarantee   

SECTION 2.01. Guarantee

     2   

SECTION 2.02. Guarantee of Payment

     2   

SECTION 2.03. No Limitations

     2   

SECTION 2.04. Reinstatement

     3   

SECTION 2.05. Agreement To Pay; Subrogation

     3   

SECTION 2.06. Information

     4    ARTICLE III    Indemnity, Subrogation and Subordination   

SECTION 3.01. Indemnity and Subrogation

     4   

SECTION 3.02. Contribution and Subrogation

     4   

SECTION 3.03. Subordination

     4    ARTICLE IV    Miscellaneous   

SECTION 4.01. Notices

     5   

SECTION 4.02. Waivers; Amendment

     5   

SECTION 4.03. Administrative Agent’s Fees and Expenses; Indemnification

     5   

SECTION 4.04. Successors and Assigns

     6   

SECTION 4.05. Survival of Agreement

     6   

SECTION 4.06. Counterparts; Effectiveness; Several Agreement

     6   

SECTION 4.07. Severability

     7   

SECTION 4.08. Right of Set-Off

     7   

SECTION 4.09. Governing Law; Jurisdiction; Consent to Service of Process

     7   

SECTION 4.10. WAIVER OF JURY TRIAL

     8   

SECTION 4.11. Headings

     8   

SECTION 4.12. Security Interest Absolute

     8   

SECTION 4.13. Termination or Release

     9   

SECTION 4.14. Additional Restricted Subsidiaries

     9   

 

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

Schedules

  

Schedule I

   Subsidiary Parties

Exhibits

  

Exhibit I

   Form of Guarantee Agreement Supplement

 

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

GUARANTEE AGREEMENT dated as of [            ] among TEAM HEALTH HOLDINGS, INC.
(“Holdings”), TEAM HEALTH, INC. (the “Borrower”), TEAM FINANCE LLC (“Direct
Holdco”), the Subsidiaries of Holdings identified herein and JPMORGAN CHASE
BANK, N.A., as Administrative Agent.

Reference is made to the Credit Agreement dated as of June 29, 2011 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Holdings, the Borrower, JPMorgan Chase Bank, N.A., as
Administrative Agent, Swing Line Lender and an L/C Issuer, each Lender from time
to time party thereto and any other agent party thereto. The Lenders have agreed
to extend credit to the Borrower subject to the terms and conditions set forth
in the Credit Agreement. The obligations of the Lenders to extend such credit
are conditioned upon, among other things, the execution and delivery of this
Agreement. Holdings, Direct Holdco and the Subsidiary Parties are affiliates of
the Borrower, will derive substantial benefits from the extension of credit to
the Borrower pursuant to the Credit Agreement and are willing to execute and
deliver this Agreement in order to induce the Lenders to extend such credit.
Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Credit Agreement. (a) Capitalized terms used in this Agreement and
not otherwise defined herein have the meanings specified in the Credit
Agreement.

(b) The rules of construction specified in Article I of the Credit Agreement
also apply to this Agreement.

SECTION 1.02. Other Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:

“Agreement” means this Guarantee Agreement.

“Claiming Party” has the meaning assigned to such term in Section 3.02.

“Contributing Party” has the meaning assigned to such term in Section 3.02.

“Credit Agreement” has the meaning assigned to such term in the preliminary
statement of this Agreement.

“Guarantee Agreement Supplement” means an instrument in the form of Exhibit I
hereto.

“Guarantor” means each of Holdings, Direct Holdco and each Subsidiary Party that
is a Domestic Subsidiary.

 

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

“Loan Agreement Obligations” means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party and its Subsidiaries
arising under any Loan Document or otherwise with respect to any Loan or Letter
of Credit, whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising
and including interest and fees that accrue after the commencement by or against
any Loan Party or Subsidiary of any proceeding under any Debtor Relief Laws
naming such Person as the debtor in such proceeding, regardless of whether such
interest and fees are allowed claims in such proceeding. Without limiting the
generality of the foregoing, the Obligations of the Loan Parties under the Loan
Documents (and of their Subsidiaries to the extent they have obligations under
the Loan Documents) include (a) the obligation (including guarantee obligations)
to pay principal, interest, Letter of Credit commissions, reimbursement
obligations, charges, expenses, fees, Attorney Costs, indemnities and other
amounts payable by any Loan Party or its Subsidiaries under any Loan Document
and (b) the obligation of any Loan Party or any of its Subsidiaries to reimburse
any amount in respect of any of the foregoing that any Lender, in its sole
discretion, may elect to pay or advance on behalf of such Loan Party or such
Subsidiary.

“Secured Parties” means, collectively, the Administrative Agent, the Lenders,
the Hedge Banks, the Supplemental Administrative Agent and each co-agent
appointed by the Administrative Agent from time to time pursuant to
Section 9.01(c) of the Credit Agreement.

“Subsidiary Parties” means (a) the Restricted Subsidiaries identified on
Schedule I and (b) each other Restricted Subsidiary that becomes a party to this
Agreement as a Subsidiary Party after the Closing Date.

ARTICLE II

Guarantee

SECTION 2.01. Guarantee. Each Guarantor unconditionally guarantees, jointly with
the other Guarantors and severally, as a primary obligor and not merely as a
surety, the due and punctual payment and performance of the Obligations. Each of
the Guarantors further agrees that the Obligations may be extended or renewed,
in whole or in part, without notice to or further assent from it, and that it
will remain bound upon its guarantee notwithstanding any extension or renewal of
any Obligation. Each of the Guarantors waives presentment to, demand of payment
from and protest to the Borrower or any other Loan Party of any of the
Obligations, and also waives notice of acceptance of its guarantee and notice of
protest for nonpayment.

SECTION 2.02. Guarantee of Payment. Each of the Guarantors further agrees that
its guarantee hereunder constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort be had by the
Administrative Agent or any other Secured Party to any security held for the
payment of the Obligations or to any balance of any deposit account or credit on
the books of the Administrative Agent or any other Secured Party in favor of the
Borrower or any other Person.

SECTION 2.03. No Limitations. (a) Except for termination of a Guarantor’s
obligations hereunder as expressly provided in Section 4.13, the obligations of
each Guarantor

 

2

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hereunder shall not be subject to any reduction, limitation, impairment or
termination for any reason, including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense or set-off,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Guarantor hereunder
shall not be discharged or impaired or otherwise affected by (i) the failure of
the Administrative Agent or any other Secured Party to assert any claim or
demand or to enforce any right or remedy under the provisions of any Loan
Document or otherwise; (ii) any rescission, waiver, amendment or modification
of, or any release from any of the terms or provisions of, any Loan Document or
any other agreement, including with respect to any other Guarantor under this
Agreement; (iii) the release of any security held by the Collateral Agent (as
defined in the Security Agreement) or any other Secured Party for the
Obligations; (iv) any default, failure or delay, wilful or otherwise, in the
performance of the Obligations; or (v) any other act or omission that may or
might in any manner or to any extent vary the risk of any Guarantor or otherwise
operate as a discharge of any Guarantor as a matter of law or equity (other than
the indefeasible payment in full in cash of all the Obligations). Each Guarantor
expressly authorizes the applicable Secured Parties to take and hold security
for the payment and performance of the Obligations, to exchange, waive or
release any or all such security (with or without consideration), to enforce or
apply such security and direct the order and manner of any sale thereof in their
sole discretion or to release or substitute any one or more other guarantors or
obligors upon or in respect of the Obligations, all without affecting the
obligations of any Guarantor hereunder.

(b) To the fullest extent permitted by applicable law, each Guarantor waives any
defense based on or arising out of any defense of the Borrower or any other Loan
Party or the unenforceability of the Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of the Borrower or any
other Loan Party, other than the indefeasible payment in full in cash of all the
Obligations. The Administrative Agent and the other Secured Parties may in
accordance with the terms of the Collateral Documents, at their election,
foreclose on any security held by one or more of them by one or more judicial or
nonjudicial sales, accept an assignment of any such security in lieu of
foreclosure, compromise or adjust any part of the Obligations, make any other
accommodation with the Borrower, or any other Loan Party or exercise any other
right or remedy available to them against the Borrower or any other Loan Party,
without affecting or impairing in any way the liability of any Guarantor
hereunder except to the extent the Obligations have been fully and indefeasibly
paid in full in cash. To the fullest extent permitted by applicable law, each
Guarantor waives any defense arising out of any such election even though such
election operates, pursuant to applicable law, to impair or to extinguish any
right of reimbursement or subrogation or other right or remedy of such Guarantor
against the Borrower or any other Loan Party, as the case may be, or any
security.

SECTION 2.04. Reinstatement. Each of the Guarantors agrees that its guarantee
hereunder shall continue to be effective or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any Obligation is rescinded or
must otherwise be restored by the Administrative Agent or any other Secured
Party upon the bankruptcy or reorganization of the Borrower, any other Loan
Party or otherwise.

SECTION 2.05. Agreement To Pay; Subrogation. In furtherance of the foregoing and
not in limitation of any other right that the Administrative Agent or any other

 

3

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Secured Party has at law or in equity against any Guarantor by virtue hereof,
upon the failure of the Borrower or any other Loan Party to pay any Obligation
when and as the same shall become due, whether at maturity, by acceleration,
after notice of prepayment or otherwise, each Guarantor hereby promises to and
will forthwith pay, or cause to be paid, to the Administrative Agent for
distribution to the applicable Secured Parties in cash the amount of such unpaid
Obligation. Upon payment by any Guarantor of any sums to the Administrative
Agent as provided above, all rights of such Guarantor against the Borrower or
any other Loan Party arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be
subject to Article III.

SECTION 2.06. Information. Each Guarantor assumes all responsibility for being
and keeping itself informed of the Borrower’s and each other Loan Party’s
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Obligations and the nature, scope and extent of the
risks that such Guarantor assumes and incurs hereunder, and agrees that none of
the Administrative Agent or the other Secured Parties will have any duty to
advise such Guarantor of information known to it or any of them regarding such
circumstances or risks.

ARTICLE III

Indemnity, Subrogation and Subordination

SECTION 3.01. Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 3.03), the Borrower agrees that in the event a payment of an
obligation shall be made by any Guarantor under this Agreement, the Borrower
shall indemnify such Guarantor for the full amount of such payment and such
Guarantor shall be subrogated to the rights of the Person to whom such payment
shall have been made to the extent of such payment.

SECTION 3.02. Contribution and Subrogation. Each Subsidiary Party (a
“Contributing Party”) agrees (subject to Section 3.03) that, in the event a
payment shall be made by any other Subsidiary Party hereunder in respect of any
Obligation and such other Subsidiary Party (the “Claiming Party”) shall not have
been fully indemnified by the Borrower as provided in Section 3.01, the
Contributing Party shall indemnify the Claiming Party in an amount equal to the
amount of such payment, in each case multiplied by a fraction of which the
numerator shall be the net worth of the Contributing Party on the date hereof
and the denominator shall be the aggregate net worth of all the Contributing
Parties together with the net worth of the Claiming Party on the date hereof
(or, in the case of any Guarantor becoming a party hereto pursuant to
Section 4.14, the date of the Guarantee Agreement Supplement hereto executed and
delivered by such Guarantor). Any Contributing Party making any payment to a
Claiming Party pursuant to this Section 3.02 shall be subrogated to the rights
of such Claiming Party to the extent of such payment.

SECTION 3.03. Subordination. (a) Notwithstanding any provision of this Agreement
to the contrary, all rights of the Guarantors under Sections 3.01 and 3.02 and
all other rights of indemnity, contribution or subrogation under applicable law
or otherwise shall be fully subordinated to the indefeasible payment in full in
cash of the Obligations. No failure on the part

 

4

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of the Borrower or any Guarantor to make the payments required by Sections 3.01
and 3.02 (or any other payments required under applicable law or otherwise)
shall in any respect limit the obligations and liabilities of any Guarantor with
respect to its obligations hereunder, and each Guarantor shall remain liable for
the full amount of the obligations of such Guarantor hereunder.

(b) Each Guarantor hereby agrees that upon the occurrence and during the
continuance of an Event of Default and after notice from the Collateral Agent
all Indebtedness owed by it to any Subsidiary shall be fully subordinated to the
indefeasible payment in full in cash of the Obligations.

ARTICLE IV

Miscellaneous

SECTION 4.01. Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as provided in
Section 10.02 of the Credit Agreement. All communications and notices hereunder
to any Subsidiary Party shall be given to it in care of the Borrower as provided
in Section 10.02 of the Credit Agreement.

SECTION 4.02. Waivers; Amendment. (a) No failure or delay by the Administrative
Agent, any L/C Issuer or any Lender in exercising any right or power hereunder
or under any other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the L/C Issuers and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section 4.02, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, any Lender or any L/C
Issuer may have had notice or knowledge of such Default at the time. No notice
or demand on any Loan Party in any case shall entitle any Loan Party to any
other or further notice or demand in similar or other circumstances.

(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Administrative Agent and the Loan Party or Loan Parties with respect to
which such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 10.01 of the Credit Agreement.

SECTION 4.03. Administrative Agent’s Fees and Expenses; Indemnification. (a) The
parties hereto agree that the Administrative Agent shall be entitled to
reimbursement of its expenses incurred hereunder as provided in Section 10.04 of
the Credit Agreement.

 

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(b) Without limitation of its indemnification obligations under the other Loan
Documents, the Borrower agrees to indemnify the Administrative Agent and the
other Indemnitees (as defined in Section 10.05 of the Credit Agreement) against,
and hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the reasonable fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of, the
execution, delivery or performance of this Agreement or any claim, litigation,
investigation or proceeding relating to any of the foregoing agreements or
instruments contemplated hereby, whether or not any Indemnitee is a party
thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of such Indemnitee or of any Affiliate, director, officer, employee,
counsel, agent or attorney-in-fact of such Indemnitee.

(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Collateral Documents. The provisions
of this Section 4.03 shall remain operative and in full force and effect
regardless of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document, or any investigation made by or on
behalf of the Administrative Agent or any other Secured Party. All amounts due
under this Section 4.03 shall be payable within 10 days of written demand
therefor.

SECTION 4.04. Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Guarantor or the Administrative Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.

SECTION 4.05. Survival of Agreement. All covenants, agreements, representations
and warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any Lender or on its
behalf and notwithstanding that the Administrative Agent, any L/C Issuer or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended under the Credit
Agreement, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under any Loan Document is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated.

SECTION 4.06. Counterparts; Effectiveness; Several Agreement. This Agreement may
be executed in counterparts, each of which shall constitute an original but all
of which when taken together shall constitute a single contract. Delivery of an
executed signature page to this Agreement by facsimile or other electronic
transmission shall be as effective as

 

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delivery of a manually signed counterpart of this Agreement. This Agreement
shall become effective as to any Loan Party when a counterpart hereof executed
on behalf of such Loan Party shall have been delivered to the Administrative
Agent and a counterpart hereof shall have been executed on behalf of the
Administrative Agent, and thereafter shall be binding upon such Loan Party and
the Administrative Agent and their respective permitted successors and assigns,
and shall inure to the benefit of such Loan Party, the Administrative Agent and
the other Secured Parties and their respective successors and assigns, except
that no Loan Party shall have the right to assign or transfer its rights or
obligations hereunder or any interest herein (and any such assignment or
transfer shall be void) except as expressly contemplated by this Agreement or
the Credit Agreement. This Agreement shall be construed as a separate agreement
with respect to each Loan Party and may be amended, modified, supplemented,
waived or released with respect to any Loan Party without the approval of any
other Loan Party and without affecting the obligations of any other Loan Party
hereunder.

SECTION 4.07. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or uneforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction. The
parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

SECTION 4.08. Right of Set-Off. In addition to any rights and remedies of the
Lenders provided by Law, upon the occurrence and during the continuance of any
Event of Default, each Lender and its Affiliates is authorized at any time and
from time to time, without prior notice to the Borrower or any other Loan Party,
any such notice being waived by the Borrower and each Loan Party to the fullest
extent permitted by applicable Law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other Indebtedness at any time owing by, such Lender and its Affiliates to
or for the credit or the account of the respective Loan Parties against any and
all obligations owing to such Lender and its Affiliates hereunder, now or
hereafter existing, irrespective of whether or not such Lender or Affiliate
shall have made demand under this Agreement and although such obligations may be
contingent or unmatured or denominated in a currency different from that of the
applicable deposit or Indebtedness. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such set off and application
made by such Lender; provided, that the failure to give such notice shall not
affect the validity of such setoff and application. The rights of each Lender
under this Section 4.08 are in addition to other rights and remedies (including
other rights of setoff) that such Lender may have.

SECTION 4.09. Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.

(b) Each of the Loan Parties hereby irrevocably and unconditionally submits, for
itself and its property, to the exclusive jurisdiction of the Supreme Court of
the State of New York sitting in New York City and of the United States District
Court for the Southern District of

 

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New York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or any other Loan Document, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or any other Loan
Document shall affect any right that the Administrative Agent, any L/C Issuer or
any Lender may otherwise have to bring any action or proceeding relating to this
Agreement or any other Loan Document against any Guarantor, or its properties in
the courts of any jurisdiction.

(c) Each of the Loan Parties hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (b) of this Section 4.09. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 4.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.

SECTION 4.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 4.10.

SECTION 4.11. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

SECTION 4.12. Security Interest Absolute. All rights of the Administrative Agent
hereunder and all obligations of each Guarantor hereunder shall be absolute and
unconditional irrespective of (a) any lack of validity or enforceability of the
Credit Agreement,

 

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any other Loan Document, any agreement with respect to any of the Obligations or
any other agreement or instrument relating to any of the foregoing, (b) any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Obligations, or any other amendment or waiver of or any consent to
any departure from the Credit Agreement, any other Loan Document or any other
agreement or instrument, (c) any release or amendment or waiver of or consent
under or departure from any guarantee guaranteeing all or any of the Obligations
or (d) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, any Guarantor in respect of the Obligations or
this Agreement.

SECTION 4.13. Termination or Release. (a) This Agreement and the Guarantees made
herein shall terminate with respect to all Obligations when all the outstanding
Loan Agreement Obligations have been indefeasibly paid in full and the Lenders
have no further commitment to lend under the Credit Agreement, the L/C
Obligations have been reduced to zero and the L/C Issuers have no further
obligations to issue Letters of Credit under the Credit Agreement.

(b) A Subsidiary Party shall automatically be released from its obligations
hereunder upon the consummation of any transaction permitted by the Credit
Agreement as a result of which such Subsidiary Party ceases to be a Subsidiary
of the Borrower; provided that the Required Lenders shall have consented to such
transaction (to the extent required by the Credit Agreement) and the terms of
such consent did not provide otherwise.

(c) In connection with any termination or release pursuant to paragraph (a), the
Administrative Agent shall execute and deliver to any Guarantor, at such
Guarantor’s expense, all documents that such Guarantor shall reasonably request
to evidence such termination or release. Any execution and delivery of documents
pursuant to this Section 4.13 shall be without recourse to or warranty by the
Administrative Agent.

SECTION 4.14. Additional Restricted Subsidiaries. Pursuant to Section 6.11 of
the Credit Agreement, certain Restricted Subsidiaries of the Loan Parties that
were not in existence or not Restricted Subsidiaries on the date of the Credit
Agreement are required to enter in this Agreement as Subsidiary Parties upon
becoming a Restricted Subsidiaries. Upon execution and delivery by the
Administrative Agent and a Restricted Subsidiary of a Guarantee Agreement
Supplement, such Restricted Subsidiary shall become a Subsidiary Party hereunder
with the same force and effect as if originally named as a Subsidiary Party
herein. The execution and delivery of any such instrument shall not require the
consent of any other Loan Party hereunder. The rights and obligations of each
Loan Party hereunder shall remain in full force and effect notwithstanding the
addition of any new Loan Party as a party to this Agreement.

 

9

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

 

TEAM HEALTH HOLDINGS, INC.,         by       Name:   David Jones   Title:  
Executive Vice President and CFO

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

TEAM HEALTH, INC.,         by       Name:   David Jones   Title:   Executive
Vice President and CFO

 

2

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TEAM FINANCE LLC,         by       Name:   David Jones   Title:   Executive Vice
President and CFO

 

3

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

HEALTH FINANCE CORPORATION,         by       Name:   David Jones   Title:  
Executive Vice President and CFO

 

4

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ACCESS NURSE PM, INC.

AFTER HOURS PEDIATRICS, INC.

AMERICAN CLINICAL RESOURCES, INC.

ANESTHETIX HOLDINGS, LLC

ANESTHETIX MANAGEMENT, LLC

ANTHEM ASSOCIATES, LLC

BILLING MANAGEMENT, LLC

CLINIC MANAGEMENT SERVICES, INC.

DANIEL & YEAGER, INC.

D&Y HEALTHCARE CONNECTORS, LLC

ECC CHATTSWORTH DALTON MC, LLC

ECC WEST TENNESSEE MC, LLC

EMERGENCY COVERAGE CORPORATION

EMERGENCY MANAGEMENT MIDWEST, INC.

EMERGENCY PHYSICIAN ASSOCIATES, INC.

EMERGENCY PROFESSIONAL SERVICES, INC.

EPA OF WOODBURY, INC.

ER PHYSICIAN ASSOCIATES, INC.

FLORIDA HOSPITAL MEDICINE SERVICES, INC.

GREENBRIER EMERGENCY PHYSICIANS, INC.

HCFS HEALTH CARE FINANCIAL SERVICES, INC.

HEALTH CARE ALLIANCE, INC.

HEALTHCARE REVENUE RECOVERY GROUP, LLC

HERSCHEL FISCHER, INC.

HOSPITAL MEDICINE ASSOCIATES, LLC

INPHYNET CONTRACTING SERVICES, INC.

INPHYNET SOUTH BROWARD, INC.

KARL G. MANGOLD, INC.

KEIGHTLEY AND PARSLEY, INC.

KELLY MEDICAL SERVICES CORPORATION

 

5

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MEDICAL MANAGEMENT RESOURCES, INC.

MEDICAL SERVICES, INC.

NORTHWEST EMERGENCY PHYSICIANS, INCORPORATED

NORTHWEST HOSPITAL MEDICINE PHYSICIANS, INC.

NURSE ON DEMAND, INC.

PARAGON CONTRACTING SERVICES, INC.

PARAGON EMERGENCY SERVICES, INC.

PSYCHIATRISTS ONLY, LLC

QUANTUM PLUS, INC.

SOUTHEASTERN EMERGENCY PHYSICIANS OF MEMPHIS, INC.

SOUTHEASTERN EMERGENCY PHYSICIANS, INC.

SOUTHEASTERN PHYSICIAN ASSOCIATES, INC.

SOUTHWEST FLORIDA EMERGENCY MANAGEMENT, INC.

SPECTRUM HEALTHCARE RESOURCES OF DELAWARE, INC.

SPECTRUM HEALTHCARE RESOURCES, INC.

SPECTRUM HEALTHCARE SERVICES, INC.

SPECTRUM HEALTH INTERNATIONAL, INC.

SPECTRUM PRIMARY CARE, INC.

TEAM ANESTHESIA, INC.

TEAM ANESTHESIA HOLDINGS, LLC

TEAM HEALTH ANESTHESIA MANAGEMENT SERVICES, INC.

TEAM HEALTH FINANCIAL SERVICES, INC.

TEAMHEALTH PATIENT SAFETY ORGANIZATION, INC.

TEAM RADIOLOGY, INC.

THE EMERGENCY ASSOCIATES FOR MEDICINE, INC.

THMS-ST. JOSEPH MC, LLC

THMS WEST TENNESSEE MC, LLC

THSE-MARCO URGENT CARE, LLC

THSE-SOUTH FLORIDA MC, LLC

 

6

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THW EMERGENCY MANAGEMENT OF HOUSTON, INC. By:     Name:   David Jones Title:  
Vice President and Treasurer

 

7

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FISCHERMANGOLD, A CALIFORNIA GENERAL PARTNERSHIP By:   Herschel Fischer, Inc.,
General Partner By:     Name:   David Jones Title:   Vice President and
Treasurer By:   Karl G. Mangold, Inc., General Partner By:     Name:   David
Jones Title:   Vice President and Treasurer

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

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent,

        by

      Name:     Title:  

[Signature Page to Guarantee Agreement]

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

Schedule I to

the Guarantee Agreement

SUBSIDIARY PARTIES

Entity Name

 

  1. Team Finance, LLC

  2. Health Finance Corporation

  3. Team Health, Inc.

  4. Access Nurse PM, Inc.

  5. After Hours Pediatrics, Inc.

  6. American Clinical Resources, Inc.

  7. Anesthetix Holdings, LLC

  8. Anesthetix Management, LLC

  9. Anthem Associates, LLC

  10. Billing Management, LLC

  11. Clinic Management Services, Inc.

  12. Daniel & Yeager, Inc.

  13. D&Y Healthcare Connectors, LLC

  14. ECC Chattsworth Dalton MC, LLC

  15. ECC West Tennessee MC, LLC

  16. Emergency Coverage Corporation

  17. Emergency Management Midwest, Inc.

  18. Emergency Physician Associates, Inc.

  19. Emergency Professional Services, Inc.

  20. EPA of Woodbury, Inc.

  21. ER Physician Associates, Inc.

  22. FischerMangold Partnership

  23. Florida Hospital Medicine Services, Inc.

  24. Greenbrier Emergency Physicians, Inc.

  25. HCFS Health Care Financial Services, Inc.

  26. Health Care Alliance, Inc.

  27. Healthcare Revenue Recovery Group, LLC

  28. Herschel Fischer, Inc.

  29. Hospital Medicine Associates, LLC

  30. InPhyNet Contracting Services, Inc.

  31. InPhyNet South Broward, Inc.

  32. Karl G. Mangold, Inc.

  33. Keightley and Parsley, Inc.

  34. Kelly Medical Services Corporation

  35. Medical Management Resources, Inc.

  36. Medical Services, Inc.

  37. Northwest Emergency Physicians, Incorporated

  38. Northwest Hospital Medicine Physicians, Inc.

  39. Nurse on Demand, Inc.

  40. Paragon Contracting Services, Inc.

  41. Paragon Emergency Services, Inc.

  42. Psychiatrists Only, LLC

  43. Quantum Plus, Inc.

  44. Southeastern Emergency Physicians of Memphis, Inc.

  45. Southeastern Emergency Physicians, Inc.

  46. Southeastern Physician Associates, Inc.

  47. Southwest Florida Emergency Management, Inc.

  48. Spectrum Healthcare Resources of Delaware, Inc.

  49. Spectrum Healthcare Resources, Inc.

  50. Spectrum Healthcare Services, Inc.

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  51. Spectrum Health International, Inc.

  52. Spectrum Primary Care, Inc.

  53. Team Anesthesia, Inc.

  54. Team Anesthesia Holdings, LLC

  55. Team Health Anesthesia Management Services, Inc.

  56. Team Health Financial Services, Inc.

  57. TeamHealth Patient Safety Organization, Inc.

  58. Team Radiology, Inc.

  59. The Emergency Associates for Medicine, Inc.

  60. THMS-St. Joseph MC, LLC

  61. THMS West Tennessee MC, LLC

  62. THSE-Marco Urgent Care, LLC

  63. THSE-South Florida MC, LLC

  64. THW Emergency Management of Houston, Inc.

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Exhibit I to the

Guarantee Agreement

SUPPLEMENT NO.         dated as of [•], to the Guarantee Agreement dated as of
[•], among TEAM HEALTH HOLDINGS, INC. (“Holdings”), TEAM HEALTH, INC. (the
“Borrower”), TEAM FINANCE LLC (“Direct Holdco”), the Subsidiaries of the
Borrower identified therein and JPMORGAN CHASE BANK, N.A., as Administrative
Agent.

A. Reference is made to the Credit Agreement dated as of June 29, 2011 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Holdings, the Borrower, JPMorgan Chase Bank, N.A., as
Administrative Agent, Swing Line Lender and an L/C Issuer, each Lender from time
to time party thereto and any other agent party thereto.

B. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement and the Guarantee
Agreement referred to therein.

C. The Guarantors have entered into the Guarantee Agreement in order to induce
the Lenders to make Loans and the L/C Issuers to issue Letters of Credit.
Section 4.14 of the Guarantee Agreement provides that additional Restricted
Subsidiaries of the Borrower may become Subsidiary Parties under the Guarantee
Agreement by execution and delivery of an instrument in the form of this
Supplement. The undersigned Restricted Subsidiary (the “New Subsidiary”) is
executing this Supplement in accordance with the requirements of the Credit
Agreement to become a Subsidiary Party under the Guarantee Agreement in order to
induce the Lenders to make additional Loans and the L/C Issuers to issue
additional Letters of Credit and as consideration for Loans previously made and
Letters of Credit previously issued.

Accordingly, the Administrative Agent and the New Subsidiary agree as follows:

SECTION 1. In accordance with Section 4.14 of the Guarantee Agreement, the New
Subsidiary by its signature below becomes a Subsidiary Party (and accordingly,
becomes a Guarantor) and Guarantor under the Guarantee Agreement with the same
force and effect as if originally named therein as a Subsidiary Party and the
New Subsidiary hereby (a) agrees to all the terms and provisions of the
Guarantee Agreement applicable to it as a Subsidiary Party and Guarantor
thereunder and (b) represents and warrants that the representations and
warranties made by it as a Guarantor thereunder are true and correct on and as
of the date hereof. Each reference to a “Guarantor” in the Security Agreement
shall be deemed to include the New Subsidiary. The Guarantee Agreement is hereby
incorporated herein by reference.

SECTION 2. The New Subsidiary represents and warrants to the Administrative
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.

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

SECTION 3. This Supplement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Supplement shall become effective when the Administrative Agent
shall have received a counterpart of this Supplement that bears the signature of
the New Subsidiary and the Administrative Agent has executed a counterpart
hereof. Delivery of an executed signature page to this Supplement by facsimile
or other electronic transmission shall be as effective as delivery of a manually
signed counterpart of this Supplement.

SECTION 4. Except as expressly supplemented hereby, the Guarantee Agreement
shall remain in full force and effect.

SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Guarantee Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

SECTION 7. All communications and notices hereunder shall be in writing and
given as provided in Section 4.01 of the Guarantee Agreement.

SECTION 8. The New Subsidiary agrees to reimburse the Administrative Agent for
its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Administrative Agent.

 

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IN WITNESS WHEREOF, the New Subsidiary and the Administrative Agent have duly
executed this Supplement to the Guarantee Agreement as of the day and year first
above written.

 

[NAME OF NEW SUBSIDIARY],         by       Name:     Title:  

 

3

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JPMORGAN CHASE BANK, N.A.,
as Administrative Agent         by       Name:     Title:  

 

4

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EXHIBIT G

 

 

 

[FORM OF]

SECURITY AGREEMENT

dated as of

[            ],

among

TEAM HEALTH HOLDINGS, INC.,

TEAM HEALTH, INC.,

THE SUBSIDIARIES OF TEAM HEALTH HOLDINGS, INC.

IDENTIFIED HEREIN

and

JPMORGAN CHASE BANK, N.A.,

as Collateral Agent

 

 

 

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TABLE OF CONTENTS    ARTICLE I    Definitions   

SECTION 1.01. Credit Agreement

     1   

SECTION 1.02. Other Defined Terms

     1    ARTICLE II    Pledge of Securities   

SECTION 2.01. Pledge

     3   

SECTION 2.02. Delivery of the Pledged Collateral

     4   

SECTION 2.03. Representations, Warranties and Covenants

     5   

SECTION 2.04. [Intentionally Omitted]

     6   

SECTION 2.05. Registration in Nominee Name; Denominations

     6   

SECTION 2.06. Voting Rights; Dividends and Interest

     6    ARTICLE III    Security Interests in Personal Property   

SECTION 3.01. Security Interest

     8   

SECTION 3.02. Representations and Warranties

     10   

SECTION 3.03. Covenants

     11   

SECTION 3.04. Other Actions

     13    ARTICLE IV    Remedies   

SECTION 4.01. Remedies Upon Default

     14   

SECTION 4.02. Application of Proceeds

     16    ARTICLE V    Indemnity, Subrogation and Subordination   

SECTION 5.01. Indemnity

     17   

SECTION 5.02. Contribution and Subrogation

     17   

SECTION 5.03. Subordination

     17   

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ARTICLE VI    Miscellaneous   

SECTION 6.01. Notices

     18   

SECTION 6.02. Waivers; Amendment

     18   

SECTION 6.03. Collateral Agent’s Fees and Expenses; Indemnification

     18   

SECTION 6.04. Successors and Assigns

     19   

SECTION 6.05. Survival of Agreement

     19   

SECTION 6.06. Counterparts; Effectiveness; Several Agreement

     19   

SECTION 6.07. Severability

     20   

SECTION 6.08. Right of Set-Off

     20   

SECTION 6.09. Governing Law; Jurisdiction; Consent to Service of Process

     20   

SECTION 6.10. WAIVER OF JURY TRIAL

     21   

SECTION 6.11. Headings

     21   

SECTION 6.12. Security Interest Absolute

     21   

SECTION 6.13. Termination or Release

     22   

SECTION 6.14. Additional Restricted Subsidiaries

     22   

SECTION 6.15. Collateral Agent Appointed Attorney-in-Fact

     22   

SECTION 6.16. General Authority of the Collateral Agent

     23   

SECTION 6.17. Physicians Underwriting Group, Ltd

     23   

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Schedules

 

Schedule I    Subsidiary Parties Schedule II    Pledged Equity; Pledged Debt

Exhibits

 

Exhibit I    Form of Security Agreement Supplement Exhibit II        Form of
Perfection Certificate

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SECURITY AGREEMENT dated as of [            ] among TEAM HEALTH HOLDINGS, INC.
(“Holdings”), TEAM HEALTH, INC. (the “Borrower”), the Subsidiaries of Holdings
identified herein and JPMORGAN CHASE BANK, N.A., as Collateral Agent for the
Secured Parties (as defined below).

Reference is made to the Credit Agreement dated as of June 29, 2011 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Holdings, the Borrower, JPMorgan Chase Bank, N.A., as
Administrative Agent, Swing Line Lender and an L/C Issuer, each Lender from time
to time party thereto and any other agent party thereto. The Lenders have agreed
to extend credit to the Borrower subject to the terms and conditions set forth
in the Credit Agreement. The obligations of the Lenders to extend such credit
are conditioned upon, among other things, the execution and delivery of this
Agreement. Holdings and the Subsidiary Parties are affiliates of the Borrower,
will derive substantial benefits from the extension of credit to the Borrower
pursuant to the Credit Agreement and are willing to execute and deliver this
Agreement in order to induce the Lenders to extend such credit. Accordingly, the
parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Credit Agreement. (a) Capitalized terms used in this Agreement and
not otherwise defined herein have the meanings specified in the Credit
Agreement. All terms defined in the New York UCC (as defined herein) and not
defined in this Agreement have the meanings specified therein; the term
“instrument” shall have the meaning specified in Article 9 of the New York UCC.

(b) The rules of construction specified in Article I of the Credit Agreement
also apply to this Agreement.

SECTION 1.02. Other Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:

“Account Debtor” means any Person who is or who may become obligated to any
Grantor under, with respect to or on account of an Account.

“Agreement” means this Security Agreement.

“Article 9 Collateral” has the meaning assigned to such term in Section 3.01(a).

“Claiming Party” has the meaning assigned to such term in Section 5.02.

“Collateral” means the Article 9 Collateral and the Pledged Collateral.

“Contributing Party” has the meaning assigned to such term in Section 5.02.

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

“Credit Agreement” has the meaning assigned to such term in the preliminary
statement of this Agreement.

“Excluded Securities” has the meaning assigned to such term in Section 2.01.

“General Intangibles” means all choses in action and causes of action and all
other intangible personal property of every kind and nature (other than Accounts
and other than any intellectual property and related assets subject to the
Intellectual Property Security Agreement) now owned or hereafter acquired by any
Grantor, as the case may be, including corporate or other business records,
indemnification claims, contract rights (including rights under leases, whether
entered into as lessor or lessee, Swap Contracts and other agreements),
goodwill, registrations, franchises, tax refund claims and any letter of credit,
guarantee, claim, security interest or other security held by or granted to any
Grantor, as the case may be, to secure payment by an Account Debtor of any of
the Accounts.

“Grantor” means each of Holdings, the Borrower and each Subsidiary Party that is
a Domestic Subsidiary.

“Gross Income” means “life insurance gross income” as defined in Section 803 of
the Code or “gross income” as defined in Section 832(b)(1) of the Code (with the
phrase “gross premiums written less return premiums and premiums paid for
reinsurance” substituted for the term “underwriting income” where the term
appears in Section 832(b)(1)(A)).

“Insurance Law” means the Insurance Law (2001 Revision) (as revised) of the
Cayman Islands or any successor statute or other applicable Laws.

“Loan Agreement Obligations” means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party and its Subsidiaries
arising under any Loan Document or otherwise with respect to any Loan or Letter
of Credit, whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising
and including interest and fees that accrue after the commencement by or against
any Loan Party or Subsidiary of any proceeding under any Debtor Relief Laws
naming such Person as the debtor in such proceeding, regardless of whether such
interest and fees are allowed claims in such proceeding. Without limiting the
generality of the foregoing, the Obligations of the Loan Parties under the Loan
Documents (and of their Subsidiaries to the extent they have obligations under
the Loan Documents) include (a) the obligation (including guarantee obligations)
to pay principal, interest, Letter of Credit commissions, reimbursement
obligations, charges, expenses, fees, Attorney Costs, indemnities and other
amounts payable by any Loan Party or its Subsidiaries under any Loan Document
and (b) the obligation of any Loan Party or any of its Subsidiaries to reimburse
any amount in respect of any of the foregoing that any Lender, in its sole
discretion, may elect to pay or advance on behalf of such Loan Party or such
Subsidiary.

“New York UCC” means the Uniform Commercial Code as from time to time in effect
in the State of New York.

“Perfection Certificate” means a certificate substantially in the form of
Exhibit II, completed and supplemented with the schedules and attachments
contemplated

 

2

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thereby, and duly executed by the chief financial officer and the chief legal
officer of the Borrower.

“Pledged Collateral” has the meaning assigned to such term in Section 2.01.

“Pledged Debt” has the meaning assigned to such term in Section 2.01.

“Pledged Equity” has the meaning assigned to such term in Section 2.01.

“Pledged Securities” means any promissory notes, stock certificates or other
securities now or hereafter included in the Pledged Collateral, including all
certificates, instruments or other documents representing or evidencing any
Pledged Collateral.

“PUG” means Physicians Underwriting Group, Ltd., a company organized under the
laws of the Cayman Islands.

“Secured Parties” means, collectively, the Administrative Agent, the Lenders,
the Hedge Banks, the Supplemental Administrative Agent and each co-agent
appointed by the Administrative Agent from time to time pursuant to
Section 9.01(c) of the Credit Agreement.

“Security Agreement Supplement” means an instrument in the form of Exhibit I
hereto.

“Security Interest” has the meaning assigned to such term in Section 3.01(a).

“Subsidiary Parties” means (a) the Restricted Subsidiaries identified on
Schedule I and (b) each other Restricted Subsidiary that becomes a party to this
Agreement as a Subsidiary Party after the Closing Date.

“Trademarks” means all of the following now owned or hereafter acquired by any
Grantor: (a) all trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, trade
dress, logos, other source or business identifiers, designs and general
intangibles of like nature, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all registration and recording
applications filed in connection therewith, including registrations and
registration applications in the United States Patent and Trademark Office or
any similar offices in any State of the United States or any other country or
any political subdivision thereof, and all extensions or renewals thereof,
including those listed on Schedule II, (b) all goodwill associated therewith or
symbolized thereby and (c) all other assets, rights and interests that uniquely
reflect or embody such goodwill.

ARTICLE II

Pledge of Securities

SECTION 2.01. Pledge. (a) As security for the payment or performance, as the
case may be, in full of the Obligations, including the Holdings Guaranty and the
Subsidiary Guaranty, each Grantor hereby assigns and pledges to the Collateral
Agent, its successors and

 

3

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assigns, for the benefit of the Secured Parties, and hereby grants to the
Collateral Agent, its successors and assigns, for the benefit of the Secured
Parties, a security interest in all of such Grantor’s right, title and interest
in, to and under (i) all Equity Interests held by it and listed on Schedule II
and any other Equity Interests obtained in the future by such Grantor and the
certificates (if any) representing all such Equity Interests (the “Pledged
Equity”); provided that the Pledged Equity shall not include (A) more than 65%
of the issued and outstanding Equity Interests of any Foreign Subsidiary (other
than with respect to the issued and outstanding Equity Interests of PUG, all of
which shall be pledged to the Collateral Agent hereunder, provided that such
pledge could not reasonably be expected to (a) cause the undistributed earnings
of PUG as determined for United States federal income tax purposes to be treated
as a deemed dividend to PUG’s United States parent or (b) cause any material
adverse tax consequences (in which case, with respect to clause (a) or clause
(b), the Pledged Equity shall not include more than 65% of the issued and
outstanding Equity Interests of PUG)), (B) Equity Interests of Unrestricted
Subsidiaries, (C) Equity Interests of any Subsidiary of a Foreign Subsidiary,
(D) Equity Interests of any Person that is not a direct or indirect, wholly
owned Subsidiary of the Borrower, unless otherwise permitted by the terms of
such Subsidiary’s organizational or joint venture documents and (E) Equity
Interests of any Subsidiary with respect to which the Administrative Agent has
confirmed in writing to the Borrower its determination that the costs or other
consequences (including adverse tax consequences) of providing a pledge of its
Equity Interests is excessive in view of the benefits to be obtained by the
Lenders (collectively, the “Excluded Securities”); (ii)(A) the debt securities
owned by it and listed opposite the name of such Grantor on Schedule II, (B) any
debt securities obtained in the future by such Grantor and (C) the promissory
notes and any other instruments evidencing such debt securities (the “Pledged
Debt”); (iii) all other property that may be delivered to and held by the
Collateral Agent pursuant to the terms of this Section 2.01(a); (iv) subject to
Section 2.06, all payments of principal or interest, dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of, in exchange for or upon the conversion of,
and all other Proceeds received in respect of, the securities referred to in
clauses (i) and (ii) above; (v) subject to Section 2.06, all rights and
privileges of such Grantor with respect to the securities and other property
referred to in clauses (i), (ii), (iii) and (iv) above; and (vi) all Proceeds of
any of the foregoing (the items referred to in clauses (i) through (vi) above
being collectively referred to as the “Pledged Collateral”).

TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Collateral Agent, its successors and assigns, for the benefit of the
applicable Secured Parties, forever; subject, however, to the terms, covenants
and conditions hereinafter set forth.

SECTION 2.02. Delivery of the Pledged Collateral. (a) Each Grantor agrees
promptly to deliver or cause to be delivered to the Collateral Agent, for the
benefit of the applicable Secured Parties, any and all Pledged Securities (other
than any uncertificated securities, but only for so long as such securities
remain uncertificated) to the extent such Pledged Securities, in the case of
promissory notes or other instruments evidencing Indebtedness, are required to
be delivered pursuant to paragraph (b) of this Section 2.02.

(b) Each Grantor will cause any Indebtedness for borrowed money having an
aggregate principal amount in excess of the Dollar Amount of $2,500,000 owed to
such Grantor

 

4

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by any Person to be evidenced by a duly executed promissory note that is pledged
and delivered to the Collateral Agent (other than such intercompany notes
referred to in Section 3.03(i)), for the benefit of the applicable Secured
Parties, pursuant to the terms hereof.

(c) Upon delivery to the Collateral Agent, (i) any Pledged Securities shall be
accompanied by stock powers duly executed in blank or other instruments of
transfer reasonably satisfactory to the Collateral Agent and by such other
instruments and documents as the Collateral Agent may reasonably request and
(ii) all other property comprising part of the Pledged Collateral shall be
accompanied by proper instruments of assignment duly executed by the applicable
Grantor and such other instruments or documents as the Collateral Agent may
reasonably request. Each delivery of Pledged Securities shall be accompanied by
a schedule describing the securities, which schedule shall be attached hereto as
Schedule II and made a part hereof; provided that failure to attach any such
schedule hereto shall not affect the validity of such pledge of such Pledged
Securities. Each schedule so delivered shall supplement any prior schedules so
delivered.

SECTION 2.03. Representations, Warranties and Covenants. Holdings and the
Borrower jointly and severally represent, warrant and covenant, as to themselves
and the other Grantors, to and with the Collateral Agent, for the benefit of the
Secured Parties, that:

(a) Schedule II correctly sets forth the percentage of the issued and
outstanding units of each class of the Equity Interests of the issuer thereof
represented by the Pledged Equity and includes all Equity Interests, debt
securities and promissory notes required to be pledged hereunder in order to
satisfy the Collateral and Guarantee Requirement;

(b) the Pledged Equity and Pledged Debt (solely with respect to Pledged Debt
issued by a Person other than Holdings or a subsidiary of Holdings, to the best
of Holdings’ and the Borrower’s knowledge) have been duly and validly authorized
and issued by the issuers thereof and (i) in the case of Pledged Equity, are
fully paid and nonassessable and (ii) in the case of Pledged Debt (solely with
respect to Pledged Debt issued by a Person other than Holdings or a subsidiary
of Holdings, to the best of Holdings’ and the Borrower’s knowledge), are legal,
valid and binding obligations of the issuers thereof;

(c) except for the security interests granted hereunder, each of the Grantors
(i) is and, subject to any transfers made in compliance with the Credit
Agreement, will continue to be the direct owner, beneficially and of record, of
the Pledged Securities indicated on Schedule II as owned by such Grantors,
(ii) holds the same free and clear of all Liens, other than (A) Liens created by
the Collateral Documents and (B) Liens expressly permitted pursuant to
Section 7.01 of the Credit Agreement, (iii) will make no assignment, pledge,
hypothecation or transfer of, or create or permit to exist any security interest
in or other Lien on, the Pledged Collateral, other than (A) Liens created by the
Collateral Documents and (B) Liens expressly permitted pursuant to Section 7.01
of the Credit Agreement, and (iv) will defend its title or interest thereto or
therein against any and all Liens (other than the Liens permitted pursuant to
this Section 2.03(c)), however, arising, of all Persons whomsoever;

(d) except for restrictions and limitations imposed by the Loan Documents or
securities laws generally and except as described in the Perfection Certificate,
and subject to, in

 

5

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respect of the exercise of the right to control, sell or otherwise require the
transfer of title of the Equity Interests in PUG, the prior written approval of
the Cayman Islands Monetary Authority or any successor or other applicable
Governmental Authority (as required by the Insurance Law), the Pledged
Collateral is and will continue to be freely transferable and assignable, and
none of the Pledged Collateral is or will be subject to any option, right of
first refusal, shareholders agreement, charter or by-law provisions or
contractual restriction of any nature that might prohibit, impair, delay or
otherwise affect in any manner material and adverse to the Secured Parties the
pledge of such Pledged Collateral hereunder, the sale or disposition thereof
pursuant hereto or the exercise by the Collateral Agent of rights and remedies
hereunder;

(e) each of the Grantors has the power and authority to pledge the Pledged
Collateral pledged by it hereunder in the manner hereby done or contemplated;

(f) no consent or approval of any Governmental Authority, any securities
exchange or any other Person was or is necessary to the validity of the pledge
effected hereby (other than such as have been obtained and are in full force and
effect);

(g) by virtue of the execution and delivery by the Grantors of this Agreement,
when any Pledged Securities are delivered to the Collateral Agent in accordance
with this Agreement, the Collateral Agent will obtain a legal, valid and
perfected lien upon and security interest in such Pledged Securities as security
for the payment and performance of the Obligations; and

(h) the pledge effected hereby is effective to vest in the Collateral Agent, for
the benefit of the Secured Parties, the rights of the Collateral Agent in the
Pledged Collateral as set forth herein.

SECTION 2.04. [Intentionally Omitted].

SECTION 2.05. Registration in Nominee Name; Denominations. If an Event of
Default shall occur and be continuing and the Collateral Agent shall give the
Borrower notice of its intent to exercise such rights, (a) the Collateral Agent,
on behalf of the Secured Parties, shall have the right (in its sole and absolute
discretion) to hold the Pledged Securities in its own name as pledgee, the name
of its nominee (as pledgee or as sub-agent) or the name of the applicable
Grantor, endorsed or assigned in blank or in favor of the Collateral Agent and
each Grantor will promptly give to the Collateral Agent copies of any notices or
other communications received by it with respect to Pledged Securities
registered in the name of such Grantor and (b) the Collateral Agent shall have
the right to exchange the certificates representing Pledged Securities for
certificates of smaller or larger denominations for any purpose consistent with
this Agreement.

SECTION 2.06. Voting Rights; Dividends and Interest. (a) Unless and until an
Event of Default shall have occurred and be continuing and the Collateral Agent
shall have notified the Borrower that the rights of the Grantors under this
Section 2.06 are being suspended:

(i) Each Grantor shall be entitled to exercise any and all voting and/or other
consensual rights and powers inuring to an owner of Pledged Securities or any
part thereof for any purpose consistent with the terms of this Agreement, the
Credit Agreement and the other Loan Documents; provided that such rights and
powers shall not

 

6

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be exercised in any manner that could materially and adversely affect the rights
inuring to a holder of any Pledged Securities or the rights and remedies of any
of the Collateral Agent or the other Secured Parties under this Agreement, the
Credit Agreement or any other Loan Document or the ability of the Secured
Parties to exercise the same.

(ii) The Collateral Agent shall execute and deliver to each Grantor, or cause to
be executed and delivered to such Grantor, all such proxies, powers of attorney
and other instruments as such Grantor may reasonably request for the purpose of
enabling such Grantor to exercise the voting and/or consensual rights and powers
it is entitled to exercise pursuant to subparagraph (i) above.

(iii) Each Grantor shall be entitled to receive and retain any and all
dividends, interest, principal and other distributions paid on or distributed in
respect of the Pledged Securities to the extent and only to the extent that such
dividends, interest, principal and other distributions are permitted by, and
otherwise paid or distributed in accordance with, the terms and conditions of
the Credit Agreement, the other Loan Documents and applicable Laws; provided
that any noncash dividends, interest, principal or other distributions that
would constitute Pledged Equity or Pledged Debt, whether resulting from a
subdivision, combination or reclassification of the outstanding Equity Interests
of the issuer of any Pledged Securities or received in exchange for Pledged
Securities or any part thereof, or in redemption thereof, or as a result of any
merger, consolidation, acquisition or other exchange of assets to which such
issuer may be a party or otherwise, shall be and become part of the Pledged
Collateral, and, if received by any Grantor, shall not be commingled by such
Grantor with any of its other funds or property but shall be held separate and
apart therefrom, shall be held in trust for the benefit of the Collateral Agent
and the applicable Secured Parties and shall be forthwith delivered to the
Collateral Agent in the same form as so received (with any necessary endorsement
reasonably requested by the Collateral Agent).

(b) Upon the occurrence and during the continuance of an Event of Default, after
the Collateral Agent shall have notified the Borrower of the suspension of the
rights of the Grantors under paragraph (a)(iii) of this Section 2.06, then all
rights of any Grantor to dividends, interest, principal or other distributions
that such Grantor is authorized to receive pursuant to paragraph (a)(iii) of
this Section 2.06 shall cease, and all such rights shall thereupon become vested
in the Collateral Agent, which shall have the sole and exclusive right and
authority to receive and retain such dividends, interest, principal or other
distributions. All dividends, interest, principal or other distributions
received by any Grantor contrary to the provisions of this Section 2.06 shall be
held in trust for the benefit of the Collateral Agent, shall be segregated from
other property or funds of such Grantor and shall be forthwith delivered to the
Collateral Agent upon demand in the same form as so received (with any necessary
endorsement reasonably requested by the Collateral Agent). Any and all money and
other property paid over to or received by the Collateral Agent pursuant to the
provisions of this paragraph (b) shall be retained by the Collateral Agent in an
account to be established by the Collateral Agent upon receipt of such money or
other property and shall be applied in accordance with the provisions of
Section 4.02. After all Events of Default have been cured or waived, the
Collateral Agent shall promptly repay to each Grantor (without interest) all
dividends, interest, principal or other

 

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distributions that such Grantor would otherwise be permitted to retain pursuant
to the terms of paragraph (a)(iii) of this Section 2.06 and that remain in such
account.

(c) Upon the occurrence and during the continuance of an Event of Default, after
the Collateral Agent shall have notified the Borrower of the suspension of the
rights of the Grantors under paragraph (a)(i) of this Section 2.06, then all
rights of any Grantor to exercise the voting and consensual rights and powers it
is entitled to exercise pursuant to paragraph (a)(i) of this Section 2.06, and
the obligations of the Collateral Agent under paragraph (a)(ii) of this
Section 2.06, shall cease, and all such rights shall thereupon become vested in
the Collateral Agent, which shall have the sole and exclusive right and
authority to exercise such voting and consensual rights and powers; provided
that, unless otherwise directed by the Required Lenders, the Collateral Agent
shall have the right from time to time following and during the continuance of
an Event of Default to permit the Grantors to exercise such rights. After all
Events of Default have been cured or waived, each Grantor shall have the
exclusive right to exercise the voting and/or consensual rights and powers that
such Grantor would otherwise be entitled to exercise pursuant to the terms of
paragraph (a)(i) above.

(d) Any notice given by the Collateral Agent to the Borrower suspending the
rights of the Grantors under paragraph (a) of this Section 2.06 (i) shall be
given in writing, (ii) may be given with respect to one or more of the Grantors
at the same or different times and (iii) may suspend the rights of the Grantors
under paragraph (a)(i) or paragraph (a)(iii) in part without suspending all such
rights (as specified by the Collateral Agent in its sole and absolute
discretion) and without waiving or otherwise affecting the Collateral Agent’s
rights to give additional notices from time to time suspending other rights so
long as an Event of Default has occurred and is continuing.

ARTICLE III

Security Interests in Personal Property

SECTION 3.01. Security Interest. (a) As security for the payment or performance,
as the case may be, in full of the Obligations, including the Holdings Guaranty
and the Subsidiary Guaranty, each Grantor hereby assigns and pledges to the
Collateral Agent, its successors and assigns, for the benefit of the Secured
Parties, and hereby grants to the Collateral Agent, its successors and assigns,
for the benefit of the Secured Parties, a security interest (the “Security
Interest”) in, all right, title or interest in or to any and all of the
following assets and properties now owned or at any time hereafter acquired by
such Grantor or in which such Grantor now has or at any time in the future may
acquire any right, title or interest (collectively, the “Article 9 Collateral”):

(i) all Accounts;

(ii) all Chattel Paper;

(iii) all Documents;

(iv) all Equipment;

 

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(v) all General Intangibles;

(vi) all Instruments;

(vii) all Inventory;

(viii) all Investment Property;

(ix) all Letter-of-credit Rights;

(x) all Commercial Tort Claims;

(xi) all books and records pertaining to the Article 9 Collateral; and

(xii) to the extent not otherwise included, all Proceeds and products of any and
all of the foregoing and all collateral security and guarantees given by any
Person with respect to any of the foregoing;

provided that notwithstanding anything to the contrary in this Agreement, this
Agreement shall not constitute a grant of a security interest in (A) any
Leasehold Interest, (B) motor vehicles and other assets subject to certificates
of title, except to the extent a security interest may be perfected by filing,
recording or registering a financing statement or analogous document in the
United States (or any political subdivision thereof) pursuant to the Uniform
Commercial Code, (C) any Equity Interests in any Subsidiary other than wholly
owned Restricted Subsidiaries, unless permitted by the terms of such
Subsidiary’s organizational or joint venture documents, (D) more than 65% of the
issued and outstanding Equity Interests of any Foreign Subsidiary, (E) any
Letter-of-credit Rights with a value, as reasonably determined by the Borrower,
equal to an amount less than $2,500,000, except to the extent a security
interest may be perfected by filing, recording or registering a financing
statement or analogous document in the United States (or any political
subdivision thereof) pursuant to the Uniform Commercial Code, (F) any Commercial
Tort Claims with a value, as reasonably determined by the Borrower, equal to an
amount less than $2,500,000, except to the extent a security interest may be
perfected by filing, recording or registering a financing statement or analogous
document in the United States (or any political subdivision thereof) pursuant to
the Uniform Commercial Code, (G) any asset with respect to which the
Administrative Agent and the Borrower reasonably agree that the costs or other
consequences (including adverse tax consequences) of providing a security
interest in is excessive in view of the benefits to be obtained by the Lenders,
(H) the Excluded Securities, (I) any lease, instrument, license or other
document or any property subject to a purchase money security interest or other
arrangement to the extent that the grant of a security interest therein would
(x) invalidate or constitute a violation of such lease, license or agreement or
purchase money arrangement or create a right of termination in favor of any
other party thereto (other than a Grantor or any Restricted Subsidiaries),
provided however, that the limitation set forth in clause (I) above shall not
affect, limit, restrict or impair the grant by a Grantor of a security interest
pursuant to this Agreement in any such Collateral to the extent that an
otherwise applicable prohibition or restriction on such grant is rendered
ineffective by any applicable law, including the UCC, (I) pledges and grants of
security interests prohibited by applicable law or (J) any Trademark
applications filed in the United States Patent and Trademark Office on the basis
of such Grantor’s “intent-to-use” such trademark solely to the extent that, and
solely during the

 

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period in which, granting a security interest in such Trademark application
prior to such filing would adversely affect the enforceability or validity or
result in the voiding thereof, unless and until acceptable evidence of use of
the Trademark has been filed with and accepted by the United States Patent and
Trademark Office pursuant to Section 1(c) or Section 1(d) of the Lanham Act (15
U.S.C. § 1051, et seq.), whereupon such trademark application will, without any
further action taken on the part of such Grantor or the Collateral Agent, be
deemed to constitute Collateral. Each Grantor shall, if requested to do so by
the Administrative Agent, use commercially reasonably efforts to obtain any such
required consent that is reasonably obtainable with respect to Collateral which
the Administrative Agent reasonably determines to be material.

(b) Each Grantor hereby irrevocably authorizes the Collateral Agent for the
benefit of the Secured Parties at any time and from time to time to file in any
relevant jurisdiction any initial financing statements (including fixture
filings) with respect to the Article 9 Collateral or any part thereof and
amendments thereto that (i) indicate the Collateral as all assets of such
Grantor or words of similar effect as being of an equal or lesser scope or with
greater detail, and (ii) contain the information required by Article 9 of the
Uniform Commercial Code or the analogous legislation of each applicable
jurisdiction for the filing of any financing statement or amendment, including
(A) whether such Grantor is an organization, the type of organization and any
organizational identification number issued to such Grantor and (B) in the case
of a financing statement filed as a fixture filing, a sufficient description of
the real property to which such Article 9 Collateral relates. Each Grantor
agrees to provide such information to the Collateral Agent promptly upon
request.

(c) The Security Interest is granted as security only and shall not subject the
Collateral Agent or any other Secured Party to, or in any way alter or modify,
any obligation or liability of any Grantor with respect to or arising out of the
Article 9 Collateral.

SECTION 3.02. Representations and Warranties. Holdings and the Borrower jointly
and severally represent and warrant, as to themselves and the other Grantors, to
the Collateral Agent and the Secured Parties that:

(a) Each Grantor has good and valid rights in and title to the Article 9
Collateral with respect to which it has purported to grant a Security Interest
hereunder and has full power and authority to grant to the Collateral Agent the
Security Interest in such Article 9 Collateral pursuant hereto and to execute,
deliver and perform its obligations in accordance with the terms of this
Agreement, without the consent or approval of any other Person other than any
consent or approval that has been obtained.

(b) The Perfection Certificate has been duly prepared, completed and executed
and the information set forth therein, including the exact legal name of each
Grantor, is correct and complete in all material aspects as of the Closing Date.
The Uniform Commercial Code financing statements (including fixture filings, as
applicable) or other appropriate filings, recordings or registrations prepared
by the Collateral Agent based upon the information provided to the Collateral
Agent in the Perfection Certificate for filing in each governmental, municipal
or other office specified in Schedule 2 to the Perfection Certificate (or
specified by notice from the applicable Borrower to the Collateral Agent after
the Closing Date in the case of filings,

 

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recordings or registrations required by Section 6.11 of the Credit Agreement),
are all the filings, recordings and registrations that are necessary to
establish a legal, valid and perfected security interest in favor of the
Collateral Agent (for the benefit of the Secured Parties) in respect of all
Article 9 Collateral in which the Security Interest may be perfected by filing,
recording or registration in the United States (or any political subdivision
thereof) and its territories and possessions, and no further or subsequent
filing, refiling, recording, rerecording, registration or reregistration is
necessary in any such jurisdiction, except as provided under applicable law with
respect to the filing of continuation statements.

(c) The Security Interest constitutes (i) a legal and valid security interest in
all the Article 9 Collateral securing the payment and performance of the
Obligations and (ii) subject to the filings described in Section 3.02(b), a
perfected security interest in all Article 9 Collateral in which a security
interest may be perfected by filing, recording or registering a financing
statement or analogous document in the United States (or any political
subdivision thereof) and its territories and possessions pursuant to the Uniform
Commercial Code. The Security Interest is and shall be prior to any other Lien
on any of the Article 9 Collateral, other than (i) any nonconsensual Lien that
is expressly permitted pursuant to Section 7.01 of the Credit Agreement and has
priority as a matter of law and (ii) Liens expressly permitted pursuant to
Section 7.01 of the Credit Agreement.

(d) The Article 9 Collateral is owned by the Grantors free and clear of any
Lien, except for Liens expressly permitted pursuant to Section 7.01 of the
Credit Agreement. None of the Grantors has filed or consented to the filing of
(i) any financing statement or analogous document under the Uniform Commercial
Code or any other applicable laws covering any Article 9 Collateral or (ii) any
assignment in which any Grantor assigns any Article 9 Collateral or any security
agreement or similar instrument covering any Article 9 Collateral with any
foreign governmental, municipal or other office, which financing statement or
analogous document, assignment, security agreement or similar instrument is
still in effect, except, in each case, for Liens expressly permitted pursuant to
Section 7.01 of the Credit Agreement.

(e) None of the Pledged Equity consisting of partnership or limited liability
company interests (i) is dealt in or traded on a securities exchange or
securities market, (ii) by its terms expressly provides that it is a security
governed by Article 8 of the UCC, (iii) is an investment company security,
(iv) is held in a securities account or (v) constitutes a “security” or a
“financial asset” as such terms are defined in Article 8 of the UCC.

SECTION 3.03. Covenants. (a) The Borrower agrees promptly to notify the
Collateral Agent in writing of any change (i) in corporate name of any Grantor,
(ii) in the identity or type of organization or corporate structure of any
Grantor, or (iii) in the jurisdiction of organization of any Grantor.

(b) Each Grantor shall, at its own expense, take any and all commercially
reasonable actions necessary to defend title to the Article 9 Collateral against
all Persons and to defend the Security Interest of the Collateral Agent in the
Article 9 Collateral and the priority thereof against any Lien not expressly
permitted pursuant to Section 7.01 of the Credit Agreement.

 

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(c) Each year, at the time of delivery of annual financial statements with
respect to the preceding fiscal year pursuant to Section 6.01 of the Credit
Agreement, the Borrower shall deliver to the Collateral Agent a certificate
executed by the chief financial officer and the chief legal officer of the
Borrower setting forth the information required pursuant to Schedules 1(a),
1(c), 1(e), 1(f) and 2(c) of the Perfection Certificate or confirming that there
has been no change in such information since the date of such certificate or the
date of the most recent certificate delivered pursuant to this Section 3.03(c).

(d) The Borrower agrees, on its own behalf and on behalf of each other Grantor,
at its own expense, to execute, acknowledge, deliver and cause to be duly filed
all such further instruments and documents and take all such actions as the
Collateral Agent may from time to time reasonably request to better assure,
preserve, protect and perfect the Security Interest and the rights and remedies
created hereby, including the payment of any fees and taxes required in
connection with the execution and delivery of this Agreement, the granting of
the Security Interest and the filing of any financing statements (including
fixture filings) or other documents in connection herewith or therewith. If any
amount payable under or in connection with any of the Article 9 Collateral that
is in excess of $2,500,000 shall be or become evidenced by any promissory note
or other instrument, such note or instrument shall be promptly pledged and
delivered to the Collateral Agent, for the benefit of the Secured Parties, duly
endorsed in a manner reasonably satisfactory to the Collateral Agent.

(e) At its option, the Collateral Agent may discharge past due taxes,
assessments, charges, fees, Liens, security interests or other encumbrances at
any time levied or placed on the Article 9 Collateral and not permitted pursuant
to Section 7.01 of the Credit Agreement, and may pay for the maintenance and
preservation of the Article 9 Collateral to the extent any Grantor fails to do
so as required by the Credit Agreement or this Agreement and within a reasonable
period of time after the Collateral Agent has requested that it do so, and each
Grantor jointly and severally agrees to reimburse the Collateral Agent within
10 days after demand for any payment made or any reasonable expense incurred by
the Collateral Agent pursuant to the foregoing authorization. Nothing in this
paragraph shall be interpreted as excusing any Grantor from the performance of,
or imposing any obligation on the Collateral Agent or any Secured Party to cure
or perform, any covenants or other promises of any Grantor with respect to
taxes, assessments, charges, fees, Liens, security interests or other
encumbrances and maintenance as set forth herein or in the other Loan Documents.

(f) If at any time any Grantor shall take a security interest in any property of
an Account Debtor or any other Person the value of which is in excess of
$2,500,000 to secure payment and performance of an Account, such Grantor shall
promptly assign such security interest to the Collateral Agent for the benefit
of the applicable Secured Parties. Such assignment need not be filed of public
record unless necessary to continue the perfected status of the security
interest against creditors of and transferees from the Account Debtor or other
Person granting the security interest.

(g) Each Grantor (rather than the Collateral Agent or any Secured Party) shall
remain liable (as between itself and any relevant counterparty) to observe and
perform all the conditions and obligations to be observed and performed by it
under each contract, agreement or instrument relating to the Article 9
Collateral, all in accordance with the terms and conditions

 

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thereof, and each Grantor jointly and severally agrees to indemnify and hold
harmless the Collateral Agent and the Secured Parties from and against any and
all liability for such performance.

(h) The Grantors agree that so long as the principal of or any accrued interest
on any Loan or any fee or any other amount payable under any Loan Document is
outstanding and unpaid or any Letter of Credit is outstanding and so long as the
Commitments have not expired or terminated, the Grantors shall not elect to
treat any interest in any limited liability company or limited partnership
pledged hereunder as a “security” within the meaning of Article 8 of the New
York UCC or issue any certificate representing such interest, unless the Grantor
provides prior written notification to the Collateral Agent of such election and
immediately delivers any such certificate to the Collateral Agent pursuant to
the terms hereof.

(i) Notwithstanding any provision of this Agreement to the contrary, each of the
Grantors will make no assignment, pledge, hypothecation or transfer of, or
create or permit to exist any security interest in or other Lien on, any
intercompany note held by Team Health Financial Services, Inc., a Tennessee
corporation.

SECTION 3.04. Other Actions. In order to further insure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
the Security Interest, each Grantor agrees, in each case at such Grantor’s own
expense, to take the following actions with respect to the following Article 9
Collateral:

(a) Instruments. If any Grantor shall at any time hold or acquire any
Instruments constituting Collateral and evidencing an amount in excess of
$2,500,000, such Grantor shall forthwith endorse, assign and deliver the same to
the Collateral Agent for the benefit of the applicable Secured Parties,
accompanied by such instruments of transfer or assignment duly executed in blank
as the Collateral Agent may from time to time reasonably request.

(b) Investment Property. Except to the extent otherwise provided in Article II,
if any Grantor shall at any time hold or acquire any certificated securities,
such Grantor shall forthwith endorse, assign and deliver the same to the
Collateral Agent for the benefit of the applicable Secured Parties, accompanied
by such instruments of transfer or assignment duly executed in blank as the
Collateral Agent may from time to time reasonably request. If any securities now
or hereafter acquired by any Grantor are uncertificated and are issued to such
Grantor or its nominee directly by the issuer thereof, upon the Collateral
Agent’s request and during the continuance of an Event of Default such Grantor
shall promptly notify the Collateral Agent thereof and, at the Collateral
Agent’s reasonable request, pursuant to an agreement in form and substance
reasonably satisfactory to the Collateral Agent, either (i) cause the issuer to
agree to comply with instructions from the Collateral Agent as to such
securities, without further consent of any Grantor or such nominee, or
(ii) arrange for the Collateral Agent to become the registered owner of the
securities. If any securities, whether certificated or uncertificated, or other
investment property are held by any Grantor or its nominee through a securities
intermediary or commodity intermediary, upon the Collateral Agent’s request and
during the continuance of an Event of Default, such Grantor shall immediately
notify the Collateral Agent thereof and at the Collateral Agent’s request and
option, pursuant to an agreement in form and substance reasonably satisfactory
to the Collateral Agent shall either (i) cause such securities

 

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intermediary or (as the case may be) commodity intermediary to agree to comply
with entitlement orders or other instructions from the Collateral Agent to such
securities intermediary as to such security entitlements, or (as the case may
be) to apply any value distributed on account of any commodity contract as
directed by the Collateral Agent to such commodity intermediary, in each case
without further consent of any Grantor or such nominee, or (ii) in the case of
financial assets or other Investment Property held through a securities
intermediary, arrange for the Collateral Agent to become the entitlement holder
with respect to such Investment Property, with the Grantor being permitted, only
with the consent of the Collateral Agent, to exercise rights to withdraw or
otherwise deal with such Investment Property. The Collateral Agent agrees with
each of the Grantors that the Collateral Agent shall not give any such
entitlement orders or instructions or directions to any such issuer, securities
intermediary or commodity intermediary, and shall not withhold its consent to
the exercise of any withdrawal or dealing rights by any Grantor, unless an Event
of Default has occurred and is continuing. The provisions of this paragraph
shall not apply to any financial assets credited to a securities account for
which the Collateral Agent is the securities intermediary.

(c) Letter-of-credit Rights. If any Grantor is at any time a beneficiary under a
letter of credit with a value equal to or greater than $2,500,000, now or
hereafter issued in favor of such Grantor, such Grantor shall promptly notify
the Collateral Agent thereof and, at the request and option of the Collateral
Agent, such Grantor shall, pursuant to an agreement in form and substance
reasonably satisfactory to the Collateral Agent, either (i) arrange for the
issuer and any confirmer of such letter of credit to consent to an assignment to
the Collateral Agent of the proceeds of any drawing under the letter of credit
or (ii) arrange for the Collateral Agent to become the transferee beneficiary of
the letter of credit, with the Collateral Agent agreeing, in each case, that the
proceeds of any drawing under the letter of credit are to be applied as provided
in the Credit Agreement.

(d) Commercial Tort Claims. If any Grantor shall at any time hold or acquire a
commercial tort claim with a value equal to or greater than $2,500,000, the
Grantor shall promptly notify the Collateral Agent in a writing signed by such
Grantor of the brief details thereof and, at the Collateral Agent’s request,
grant to the Collateral Agent in such writing a security interest therein and in
the proceeds thereof, all upon the terms of this Agreement, with such writing to
be in form and substance satisfactory to the Collateral Agent.

ARTICLE IV

Remedies

SECTION 4.01. Remedies Upon Default. Upon the occurrence and during the
continuance of an Event of Default, it is agreed that the Collateral Agent shall
have the right to exercise any and all rights afforded to a secured party with
respect to the Obligations under the Uniform Commercial Code or other applicable
law and also may (i) require each Grantor to, and each Grantor agrees that it
will at its expense and upon request of the Collateral Agent forthwith, assemble
all or part of the Collateral as directed by the Collateral Agent and make it
available to the Collateral Agent at a place and time to be designated by the
Collateral Agent that is reasonably convenient to both parties; (ii) occupy any
premises owned or, to the extent lawful and permitted, leased by any of the
Grantors where the Collateral or any part thereof is

 

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assembled or located for a reasonable period in order to effectuate its rights
and remedies hereunder or under law, without obligation to such Grantor in
respect of such occupation; provided that the Collateral Agent shall provide the
applicable Grantor with notice thereof prior to or promptly after such
occupancy; (iii) exercise any and all rights and remedies of any of the Grantors
under or in connection with the Collateral, or otherwise in respect of the
Collateral; provided that the Collateral Agent shall provide the applicable
Grantor with notice thereof prior to or promptly after such exercise; and
(iv) subject to the mandatory requirements of applicable law and the notice
requirements described below, sell or otherwise dispose of all or any part of
the Collateral securing the Obligations at a public or private sale or at any
broker’s board or on any securities exchange, for cash, upon credit or for
future delivery as the Collateral Agent shall deem appropriate. The Collateral
Agent shall be authorized at any such sale of securities (if it deems it
advisable to do so) to restrict the prospective bidders or purchasers to Persons
who will represent and agree that they are purchasing the Collateral for their
own account for investment and not with a view to the distribution or sale
thereof, and upon consummation of any such sale the Collateral Agent shall have
the right to assign, transfer and deliver to the purchaser or purchasers thereof
the Collateral so sold. Each such purchaser at any sale of Collateral shall hold
the property sold absolutely, free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (to the extent permitted by law) all
rights of redemption, stay and appraisal which such Grantor now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted.

The Collateral Agent shall give the applicable Grantors 10 days’ written notice
(which each Grantor agrees is reasonable notice within the meaning of
Section 9-611 of the New York UCC or its equivalent in other jurisdictions) of
the Collateral Agent’s intention to make any sale of Collateral. Such notice, in
the case of a public sale, shall state the time and place for such sale and, in
the case of a sale at a broker’s board or on a securities exchange, shall state
the board or exchange at which such sale is to be made and the day on which the
Collateral, or portion thereof, will first be offered for sale at such board or
exchange. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Collateral Agent may
fix and state in the notice (if any) of such sale. At any such sale, the
Collateral, or portion thereof, to be sold may be sold in one lot as an entirety
or in separate parcels, as the Collateral Agent may (in its sole and absolute
discretion) determine. The Collateral Agent shall not be obligated to make any
sale of any Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of such Collateral shall have been given. The
Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for sale, and such sale may, without further notice,
be made at the time and place to which the same was so adjourned. In case any
sale of all or any part of the Collateral is made on credit or for future
delivery, the Collateral so sold may be retained by the Collateral Agent until
the sale price is paid by the purchaser or purchasers thereof, but the
Collateral Agent shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Collateral so sold and, in case
of any such failure, such Collateral may be sold again upon like notice. At any
public (or, to the extent permitted by law, private) sale made pursuant to this
Agreement, any Secured Party may bid for or purchase, free (to the extent
permitted by law) from any right of redemption, stay, valuation or appraisal on
the part of any Grantor (all said rights being also hereby waived and released
to the extent permitted by law), the Collateral or any part thereof offered for
sale and may make payment on account thereof by using any claim then due and

 

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payable to such Secured Party from any Grantor as a credit against the purchase
price, and such Secured Party may, upon compliance with the terms of sale, hold,
retain and dispose of such property without further accountability to any
Grantor therefor. For purposes hereof, a written agreement to purchase the
Collateral or any portion thereof shall be treated as a sale thereof; the
Collateral Agent shall be free to carry out such sale pursuant to such agreement
and no Grantor shall be entitled to the return of the Collateral or any portion
thereof subject thereto, notwithstanding the fact that after the Collateral
Agent shall have entered into such an agreement all Events of Default shall have
been remedied and the Obligations paid in full. As an alternative to exercising
the power of sale herein conferred upon it, the Collateral Agent may proceed by
a suit or suits at law or in equity to foreclose this Agreement and to sell the
Collateral or any portion thereof pursuant to a judgment or decree of a court or
courts having competent jurisdiction or pursuant to a proceeding by a
court-appointed receiver. Any sale pursuant to the provisions of this
Section 4.01 shall be deemed to conform to the commercially reasonable standards
as provided in Section 9-610(b) of the New York UCC or its equivalent in other
jurisdictions.

Each Grantor irrevocably makes, constitutes and appoints the Collateral Agent
(and all officers, employees or agents designated by the Collateral Agent) as
such Grantor’s true and lawful agent (and attorney-in-fact) during the
continuance of an Event of Default and after notice to the Borrower of its
intent to exercise such rights, for the purpose of (i) making, settling and
adjusting claims in respect of Article 9 Collateral under policies of insurance,
endorsing the name of such Grantor on any check, draft, instrument or other item
of payment for the proceeds of such policies if insurance, (ii) making all
determinations and decisions with respect thereto and (iii) obtaining or
maintaining the policies of insurance required by Section 6.07 of the Credit
Agreement or to pay any premium in whole or in part relating thereto. All sums
disbursed by the Collateral Agent in connection with this paragraph, including
reasonable attorneys’ fees, court costs, expenses and other charges relating
thereto, shall be payable, within 10 days of demand, by the Grantors to the
Collateral Agent and shall be additional Secured Obligations secured hereby.

The parties acknowledge and agree that the prior written consent of the Cayman
Islands Monetary Authority is required before the Equity Interests in PUG
pledged hereunder can be transferred to the Administrative Agent and the consent
of the Cayman Islands Monetary Authority may be required before any rights with
respect to the Equity Interests in PUG pledged under this Security Agreement may
be exercised.

SECTION 4.02. Application of Proceeds. The Collateral Agent shall apply the
proceeds of any collection or sale of Collateral, including any Collateral
consisting of cash, as follows:

FIRST, to the payment of all costs and expenses incurred by the Collateral Agent
in connection with such collection or sale or otherwise in connection with this
Agreement, any other Loan Document or any of the Obligations, including all
court costs and the fees and expenses of its agents and legal counsel, the
repayment of all advances made by the Collateral Agent hereunder or under any
other Loan Document on behalf of any Grantor and any other costs or expenses
incurred in connection with the exercise of any right or remedy hereunder or
under any other Loan Document;

 

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SECOND, to the payment in full of the Obligations (the amounts so applied to be
distributed among the Secured Parties pro rata in accordance with the amounts of
the Obligations owed to them on the date of any such distribution); and

THIRD, to the applicable Grantors, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct.

The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.

ARTICLE V

Indemnity, Subrogation and Subordination

SECTION 5.01. Indemnity. In addition to all such rights of indemnity and
subrogation as the Grantors may have under applicable law (but subject to
Section 5.03), the Borrower agrees that, in the event any assets of any Grantor
shall be sold pursuant to this Agreement or any other Collateral Document to
satisfy in whole or in part an obligation owed to any Secured Party, the
Borrower shall indemnify such Grantor in an amount equal to the greater of the
book value or the fair market value of the assets so sold.

SECTION 5.02. Contribution and Subrogation. Each Subsidiary Party (a
“Contributing Party”) agrees (subject to Section 5.03) that, in the event assets
of any other Subsidiary Party shall be sold pursuant to any Collateral Document
to satisfy any Secured Obligation owed to any Secured Party and such other
Subsidiary Party (the “Claiming Party”) shall not have been fully indemnified by
the relevant Borrower as provided in Section 5.01, the Contributing Party shall
indemnify the Claiming Party in an amount equal to the greater of the book value
or the fair market value of such assets, in each case multiplied by a fraction
of which the numerator shall be the net worth of the Contributing Party on the
date hereof and the denominator shall be the aggregate net worth of all the
Contributing Parties together with the net worth of the Claiming Party on the
date hereof (or, in the case of any Grantor becoming a party hereto pursuant to
Section 6.14, the date of the Security Agreement Supplement hereto executed and
delivered by such Grantor). Any Contributing Party making any payment to a
Claiming Party pursuant to this Section 5.02 shall be subrogated to the rights
of such Claiming Party to the extent of such payment.

SECTION 5.03. Subordination. (a) Notwithstanding any provision of this Agreement
to the contrary, all rights of the Grantors under Sections 5.01 and 5.02 and all
other rights of indemnity, contribution or subrogation under applicable law or
otherwise shall be fully subordinated to the indefeasible payment in full in
cash of the Obligations. No failure on the part of the Borrower or any Grantor
to make the payments required by Sections 5.01 and 5.02 (or any

 

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other payments required under applicable law or otherwise) shall in any respect
limit the obligations and liabilities of any Grantor with respect to its
obligations hereunder, and each Grantor shall remain liable for the full amount
of the obligations of such Grantor hereunder.

(b) Each Grantor hereby agrees that upon the occurrence and during the
continuance of an Event of Default and after notice from the Collateral Agent
all Indebtedness owed by it to any Subsidiary shall be fully subordinated to the
indefeasible payment in full in cash of the Obligations.

ARTICLE VI

Miscellaneous

SECTION 6.01. Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as provided in
Section 10.02 of the Credit Agreement. All communications and notices hereunder
to any Subsidiary Party shall be given to it in care of the Borrower as provided
in Section 10.02 of the Credit Agreement.

SECTION 6.02. Waivers; Amendment. (a) No failure or delay by the Collateral
Agent, any L/C Issuer or any Lender in exercising any right or power hereunder
or under any other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Collateral Agent, the L/C Issuers and the Lenders hereunder
and under the other Loan Documents are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision of
this Agreement or consent to any departure by any Loan Party therefrom shall in
any event be effective unless the same shall be permitted by paragraph (b) of
this Section 6.02, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan or issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether
the Collateral Agent, any Lender or any L/C Issuer may have had notice or
knowledge of such Default at the time. No notice or demand on any Loan Party in
any case shall entitle any Loan Party to any other or further notice or demand
in similar or other circumstances.

(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Collateral Agent and the Loan Party or Loan Parties with respect to which
such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 10.01 of the Credit Agreement.

SECTION 6.03. Collateral Agent’s Fees and Expenses; Indemnification. (a) The
parties hereto agree that the Collateral Agent shall be entitled to
reimbursement of its expenses incurred hereunder as provided in Section 10.04 of
the Credit Agreement.

 

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(b) Without limitation of its indemnification obligations under the other Loan
Documents, the Borrower agrees to indemnify the Collateral Agent and the other
Indemnitees (as defined in Section 10.05 of the Credit Agreement) against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the reasonable fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of, the
execution, delivery or performance of this Agreement or any claim, litigation,
investigation or proceeding relating to any of the foregoing agreement or
instrument contemplated hereby, or to the Collateral, whether or not any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses resulted from (i) the gross negligence, wilful
misconduct or bad faith of such Indemnitee or of any Affiliate, director,
officer, employee, counsel, agent or attorney-in-fact of such Indemnitee or
(ii) a material breach of this Agreement by such Indemnitee (other than any
dispute against any Agent in its capacity as such).

(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Collateral Documents. The provisions
of this Section 6.03 shall remain operative and in full force and effect
regardless of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document, or any investigation made by or on
behalf of the Collateral Agent or any other Secured Party. All amounts due under
this Section 6.03 shall be payable within 10 days of written demand therefor.

SECTION 6.04. Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Grantor or the Collateral Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.

SECTION 6.05. Survival of Agreement. All covenants, agreements, representations
and warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any Lender or on its
behalf and notwithstanding that the Collateral Agent, any L/C Issuer or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended under the Credit
Agreement, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under any Loan Document is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated.

SECTION 6.06. Counterparts; Effectiveness; Several Agreement. This Agreement may
be executed in counterparts, each of which shall constitute an original but all
of which when taken together shall constitute a single contract. Delivery of an
executed signature page to this Agreement by facsimile or other electronic
transmission shall be as effective as

 

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delivery of a manually signed counterpart of this Agreement. This Agreement
shall become effective as to any Loan Party when a counterpart hereof executed
on behalf of such Loan Party shall have been delivered to the Collateral Agent
and a counterpart hereof shall have been executed on behalf of the Collateral
Agent, and thereafter shall be binding upon such Loan Party and the Collateral
Agent and their respective permitted successors and assigns, and shall inure to
the benefit of such Loan Party, the Collateral Agent and the other Secured
Parties and their respective successors and assigns, except that no Loan Party
shall have the right to assign or transfer its rights or obligations hereunder
or any interest herein or in the Collateral (and any such assignment or transfer
shall be void) except as expressly contemplated by this Agreement or the Credit
Agreement. This Agreement shall be construed as a separate agreement with
respect to each Loan Party and may be amended, modified, supplemented, waived or
released with respect to any Loan Party without the approval of any other Loan
Party and without affecting the obligations of any other Loan Party hereunder.

SECTION 6.07. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction. The
parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

SECTION 6.08. Right of Setoff. In addition to any rights and remedies of the
Lenders provided by Law, upon the occurrence and during the continuance of any
Event of Default, each Lender and its Affiliates is authorized at any time and
from time to time, without prior notice to the Borrower or any other Loan Party,
any such notice being waived by the Borrower and each Loan Party to the fullest
extent permitted by applicable Law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other Indebtedness at any time owing by, such Lender and its Affiliates to
or for the credit or the account of the respective Loan Parties against any and
all obligations owing to such Lender and its Affiliates hereunder, now or
hereafter existing, irrespective of whether or not such Lender or Affiliate
shall have made demand under this Agreement and although such obligations may be
contingent or unmatured. The rights of each Lender under this Section 6.08 are
in addition to other rights and remedies (including other rights of setoff) that
such Lender may have.

SECTION 6.09. Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.

(b) Each of the Loan Parties hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York City and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that

 

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all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Loan Document shall affect any right that
the Collateral Agent, any L/C Issuer or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement or any other Loan Document
against any Grantor or its properties in the courts of any jurisdiction.

(c) Each of the Loan Parties hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (b) of this Section 6.09. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 6.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.

SECTION 6.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 6.10.

SECTION 6.11. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

SECTION 6.12. Security Interest Absolute. All rights of the Collateral Agent
hereunder, the Security Interest, the grant of a security interest in the
Pledged Collateral and all obligations of each Grantor hereunder shall be
absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Credit Agreement, any other Loan Document, any agreement
with respect to any of the Obligations or any other agreement or instrument
relating to any of the foregoing, (b) any change in the time, manner or place of
payment of, or in any other

 

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term of, all or any of the Obligations, or any other amendment or waiver of or
any consent to any departure from the Credit Agreement, any other Loan Document
or any other agreement or instrument, (c) any exchange, release or
non-perfection of any Lien on other collateral, or any release or amendment or
waiver of or consent under or departure from any guarantee, securing or
guaranteeing all or any of the Obligations or (d) any other circumstance that
might otherwise constitute a defense available to, or a discharge of, any
Grantor in respect of the Obligations or this Agreement.

SECTION 6.13. Termination or Release. (a) This Agreement, the Security Interest
and all other security interests granted hereby shall terminate when all the
outstanding Loan Agreement Obligations (other than unanticipated contingent
indemnification obligations) have been indefeasibly paid in full and the Lenders
have no further commitment to lend under the Credit Agreement, the
L/C Obligations have been reduced to zero and the L/C Issuers have no further
obligations to issue Letters of Credit under the Credit Agreement.

(b) A Subsidiary Party shall automatically be released from its obligations
hereunder and the Security Interest in the Collateral of such Subsidiary Party
shall be automatically released upon the consummation of any transaction
permitted by the Credit Agreement as a result of which such Subsidiary Party
ceases to be a Subsidiary of the Borrower; provided that the Required Lenders
shall have consented to such transaction (to the extent required by the Credit
Agreement) and the terms of such consent did not provide otherwise.

(c) Upon any sale or other transfer by any Grantor of any Collateral that is
permitted under the Credit Agreement, or upon the effectiveness of any written
consent to the release of the security interest granted hereby in any Collateral
pursuant to Section 10.01 of the Credit Agreement, the security interest in such
Collateral shall be automatically released.

(d) In connection with any termination or release pursuant to paragraph (a),
(b) or (c), the Collateral Agent shall execute and deliver to any Grantor, at
such Grantor’s expense, all documents that such Grantor shall reasonably request
to evidence such termination or release. Any execution and delivery of documents
pursuant to this Section 6.13 shall be without recourse to or warranty by the
Collateral Agent.

SECTION 6.14. Additional Restricted Subsidiaries. Pursuant to Section 6.11 of
the Credit Agreement, certain Restricted Subsidiaries of the Loan Parties that
were not in existence or not Restricted Subsidiaries on the date of the Credit
Agreement are required to enter in this Agreement as Subsidiary Parties upon
becoming Restricted Subsidiaries. Upon execution and delivery by the Collateral
Agent and a Restricted Subsidiary of a Security Agreement Supplement, such
Restricted Subsidiary shall become a Subsidiary Party hereunder with the same
force and effect as if originally named as a Subsidiary Party herein. The
execution and delivery of any such instrument shall not require the consent of
any other Loan Party hereunder. The rights and obligations of each Loan Party
hereunder shall remain in full force and effect notwithstanding the addition of
any new Loan Party as a party to this Agreement.

SECTION 6.15. Collateral Agent Appointed Attorney-in-Fact. Each Grantor hereby
appoints the Collateral Agent the attorney-in-fact of such Grantor for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing any

 

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instrument that the Collateral Agent may deem necessary or advisable to
accomplish the purposes hereof at any time after and during the continuance of
an Event of Default, which appointment is irrevocable and coupled with an
interest. Without limiting the generality of the foregoing, the Collateral Agent
shall have the right, upon the occurrence and during the continuance of an Event
of Default and notice by the Collateral Agent to the Borrower of its intent to
exercise such rights, with full power of substitution either in the Collateral
Agent’s name or in the name of such Grantor (a) to receive, endorse, assign
and/or deliver any and all notes, acceptances, checks, drafts, money orders or
other evidences of payment relating to the Collateral or any part thereof;
(b) to demand, collect, receive payment of, give receipt for and give discharges
and releases of all or any of the Collateral; (c) to sign the name of any
Grantor on any invoice or bill of lading relating to any of the Collateral;
(d) to send verifications of Accounts Receivable to any Account Debtor; (e) to
commence and prosecute any and all suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect or otherwise realize on
all or any of the Collateral or to enforce any rights in respect of any
Collateral; (f) to settle, compromise, compound, adjust or defend any actions,
suits or proceedings relating to all or any of the Collateral; (g) to notify, or
to require any Grantor to notify, Account Debtors to make payment directly to
the Collateral Agent; and (h) to use, sell, assign, transfer, pledge, make any
agreement with respect to or otherwise deal with all or any of the Collateral,
and to do all other acts and things necessary to carry out the purposes of this
Agreement, as fully and completely as though the Collateral Agent were the
absolute owner of the Collateral for all purposes; provided that nothing herein
contained shall be construed as requiring or obligating the Collateral Agent to
make any commitment or to make any inquiry as to the nature or sufficiency of
any payment received by the Collateral Agent, or to present or file any claim or
notice, or to take any action with respect to the Collateral or any part thereof
or the moneys due or to become due in respect thereof or any property covered
thereby. The Collateral Agent and the other Secured Parties shall be accountable
only for amounts actually received as a result of the exercise of the powers
granted to them herein, and neither they nor their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or wilful misconduct or
that of any of their Affiliates, directors, officers, employees, counsel, agents
or attorneys-in-fact.

SECTION 6.16. General Authority of the Collateral Agent. By acceptance of the
benefits of this Agreement and any other Collateral Documents, each Secured
Party (whether or not a signatory hereto) shall be deemed irrevocably (a) to
consent to the appointment of the Collateral Agent as its agent hereunder and
under such other Collateral Documents, (b) to confirm that the Collateral Agent
shall have the authority to act as the exclusive agent of such Secured Party for
the enforcement of any provisions of this Agreement and such other Collateral
Documents against any Grantor, the exercise of remedies hereunder or thereunder
and the giving or withholding of any consent or approval hereunder or thereunder
relating to any Collateral or any Grantor’s obligations with respect thereto,
(c) to agree that it shall not take any action to enforce any provisions of this
Agreement or any other Collateral Document against any Grantor, to exercise any
remedy hereunder or thereunder or to give any consents or approvals hereunder or
thereunder except as expressly provided in this Agreement or any other
Collateral Document and (d) to agree to be bound by the terms of this Agreement
and any other Collateral Documents.

SECTION 6.17. Physicians Underwriting Group, Ltd. Notwithstanding anything to
the contrary contained in this Agreement or in any other Loan Document, the
Administrative

 

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Agent, on behalf of each Secured Party, hereby agrees that any claim of the
United States Government or United States Internal Revenue Service on the assets
of any Grantor, relating to any closing agreement entered into under
Section 7121 of the Code between such Grantor and the Commissioner of Internal
Revenue with respect to the election under Section 953(d) of the Code made (or
to be made) by PUG, shall not be subordinated to any claim the Secured Parties
may have hereunder or under any Loan Document against such Grantor, provided
that the foregoing clause shall apply to no more than an amount of assets of
such Grantor with an adjusted basis equal to 10% of the Gross Income of PUG for
the applicable base year.

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

 

  TEAM HEALTH HOLDINGS, INC.,         by                Name:   David Jones     
Title:     Executive Vice President and CFO

 

25

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  TEAM HEALTH, INC.,         by                Name:   David Jones      Title:
    Executive Vice President and CFO

 

26

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  TEAM FINANCE LLC   By:             Name:   David Jones   Title:     Executive
Vice President and CFO

 

27

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  HEALTH FINANCE CORPORATION   By:             Name:   David Jones   Title:
    Executive Vice President and CFO

 

 

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ACCESS NURSE PM, INC.

AFTER HOURS PEDIATRICS, INC.

AMERICAN CLINICAL RESOURCES, INC.

ANESTHETIX HOLDINGS, LLC

ANESTHETIX MANAGEMENT, LLC

ANTHEM ASSOCIATES, LLC

BILLING MANAGEMENT, LLC

CLINIC MANAGEMENT SERVICES, INC.

DANIEL & YEAGER, INC.

D&Y HEALTHCARE CONNECTORS, LLC

ECC CHATTSWORTH DALTON MC, LLC

ECC WEST TENNESSEE MC, LLC

EMERGENCY COVERAGE CORPORATION

EMERGENCY MANAGEMENT MIDWEST, INC.

EMERGENCY PHYSICIAN ASSOCIATES, INC.

EMERGENCY PROFESSIONAL SERVICES, INC.

EPA OF WOODBURY, INC.

ER PHYSICIAN ASSOCIATES, INC.

FLORIDA HOSPITAL MEDICINE SERVICES, INC.

GREENBRIER EMERGENCY PHYSICIANS, INC.

HCFS HEALTH CARE FINANCIAL SERVICES, INC.

HEALTH CARE ALLIANCE, INC.

HEALTHCARE REVENUE RECOVERY GROUP, LLC

HERSCHEL FISCHER, INC.

HOSPITAL MEDICINE ASSOCIATES, LLC

INPHYNET CONTRACTING SERVICES, INC.

INPHYNET SOUTH BROWARD, INC.

KARL G. MANGOLD, INC.

KEIGHTLEY AND PARSLEY, INC.

KELLY MEDICAL SERVICES CORPORATION

MEDICAL MANAGEMENT RESOURCES, INC.

MEDICAL SERVICES, INC.

NORTHWEST EMERGENCY PHYSICIANS, INCORPORATED

NORTHWEST HOSPITAL MEDICINE PHYSICIANS, INC.

 

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NURSE ON DEMAND, INC.

PARAGON CONTRACTING SERVICES, INC.

PARAGON EMERGENCY SERVICES, INC.

PSYCHIATRISTS ONLY, LLC

QUANTUM PLUS, INC.

SOUTHEASTERN EMERGENCY PHYSICIANS OF MEMPHIS, INC.

SOUTHEASTERN EMERGENCY PHYSICIANS, INC.

SOUTHEASTERN PHYSICIAN ASSOCIATES, INC.

SOUTHWEST FLORIDA EMERGENCY MANAGEMENT, INC.

SPECTRUM HEALTHCARE RESOURCES OF DELAWARE, INC.

SPECTRUM HEALTHCARE RESOURCES, INC.

SPECTRUM HEALTHCARE SERVICES, INC.

SPECTRUM HEALTH INTERNATIONAL, INC.

SPECTRUM PRIMARY CARE, INC.

TEAM ANESTHESIA, INC.

TEAM ANESTHESIA HOLDINGS, LLC

TEAM HEALTH ANESTHESIA MANAGEMENT SERVICES, INC.

TEAM HEALTH FINANCIAL SERVICES, INC.

TEAMHEALTH PATIENT SAFETY ORGANIZATION, INC.

TEAM RADIOLOGY, INC.

THE EMERGENCY ASSOCIATES FOR MEDICINE, INC.

THMS-ST. JOSEPH MC, LLC

THMS WEST TENNESSEE MC, LLC

THSE-MARCO URGENT CARE, LLC

THSE-SOUTH FLORIDA MC, LLC

THW EMERGENCY MANAGEMENT OF HOUSTON, INC.

  By:             Name:   David Jones   Title:     Vice President and Treasurer

 

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  FISCHERMANGOLD, A CALIFORNIA GENERAL PARTNERSHIP   By:    Herschel Fischer,
Inc., General Partner   By:             Name:   David Jones   Title:     Vice
President and Treasurer   By:    Karl G. Mangold, Inc., General Partner   By:   
         Name:   David Jones   Title:     Vice President and Treasurer

 

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JPMORGAN CHASE BANK, N.A.,

as Collateral Agent,

        by                Name:      Title:

 

[Signature Page to Security Agreement]

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

Schedule I to

the Security Agreement

SUBSIDIARY PARTIES

Entity Name

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

Schedule II to

the Security Agreement

EQUITY INTERESTS

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

Exhibit I to the

Security Agreement

SUPPLEMENT NO.     dated as of [•], to the Security Agreement dated as of [•]
among TEAM HEALTH HOLDINGS, INC. (“Holdings”), TEAM HEALTH, INC. (the
“Borrower”), the Subsidiaries of Holdings identified therein and JPMORGAN CHASE
BANK, N.A., as Collateral Agent.

A. Reference is made to the Credit Agreement dated as of June 29, 2011 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among Holdings, the Borrower, JPMorgan Chase
Bank, N.A., as Administrative Agent, Swing Line Lender and an L/C Issuer, each
Lender from time to time party thereto and any other agent party thereto.

B. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement and the Security
Agreement referred to therein.

C. The Grantors have entered into the Security Agreement in order to induce the
Lenders to make Loans and the L/C Issuers to issue Letters of Credit.
Section 6.14 of the Security Agreement provides that additional Restricted
Subsidiaries of the Borrower may become Subsidiary Parties under the Security
Agreement by execution and delivery of an instrument in the form of this
Supplement. The undersigned Restricted Subsidiary (the “New Subsidiary”) is
executing this Supplement in accordance with the requirements of the Credit
Agreement to become a Subsidiary Party under the Security Agreement in order to
induce the Lenders to make additional Loans and the L/C Issuers to issue
additional Letters of Credit and as consideration for Loans previously made and
Letters of Credit previously issued.

Accordingly, the Collateral Agent and the New Subsidiary agree as follows:

SECTION 1. In accordance with Section 6.14 of the Collateral Agreement, the New
Subsidiary by its signature below becomes a Subsidiary Party (and accordingly,
becomes a Grantor) and Grantor under the Security Agreement with the same force
and effect as if originally named therein as a Subsidiary Party and the New
Subsidiary hereby (a) agrees to all the terms and provisions of the Security
Agreement applicable to it as a Subsidiary Party and Grantor thereunder and
(b) represents and warrants that the representations and warranties made by it
as a Grantor thereunder are true and correct on and as of the date hereof. In
furtherance of the foregoing, the New Subsidiary, as security for the payment
and performance in full of the Obligations, does hereby create and grant to the
Collateral Agent, its successors and assigns, for the benefit of the Secured
Parties, their successors and assigns, a security interest in and lien on all of
the New Subsidiary’s right, title and interest in and to the Collateral (as
defined in the Security Agreement) of the New Subsidiary. Each reference to a
“Grantor” in the Security Agreement shall be deemed to include the New
Subsidiary. The Security Agreement is hereby incorporated herein by reference.

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SECTION 2. The New Subsidiary represents and warrants to the Collateral Agent
and the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.

SECTION 3. This Supplement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Supplement shall become effective when the Collateral Agent shall
have received a counterpart of this Supplement that bears the signature of the
New Subsidiary and the Collateral Agent has executed a counterpart hereof.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.

SECTION 4. The New Subsidiary hereby represents and warrants that (a) set forth
on Schedule I attached hereto is a true and correct schedule of the location of
any and all Collateral of the New Subsidiary and (b) set forth under its
signature hereto is the true and correct legal name of the New Subsidiary, its
jurisdiction of formation and the location of its chief executive office.

SECTION 5. Except as expressly supplemented hereby, the Security Agreement shall
remain in full force and effect.

SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

SECTION 8. All communications and notices hereunder shall be in writing and
given as provided in Section 6.01 of the Security Agreement.

SECTION 9. The New Subsidiary agrees to reimburse the Collateral Agent for its
reasonable out-of-pocket expenses in connection with this Supplement, including
the reasonable fees, other charges and disbursements of counsel for the
Collateral Agent.

IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly
executed this Supplement to the Security Agreement as of the day and year first
above written.

 

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  [NAME OF NEW SUBSIDIARY],         by                Name:     

Title:

 

Legal Name:

Jurisdiction of Formation:

Location of Chief Executive office:

 

JPMORGAN CHASE BANK, N.A.,

as Collateral Agent

        by                Name:      Title:

 

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Schedule I

to the Supplement No      to the

Security Agreement

LOCATION OF COLLATERAL

 

Description

  

Location

 

EQUITY INTERESTS

 

Issuer

   Number of
Certificate    Registered
Owner    Number and
Class of
Equity Interests    Percentage
of Equity  Interests

 

DEBT SECURITIES

 

Issuer

   Principal
Amount    Date of Note    Maturity Date

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EXHIBIT H

 

 

 

[FORM OF]

MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT

AND FINANCING STATEMENT

From

[NAME OF MORTGAGOR]

To

JPMORGAN CHASE BANK, N.A.

 

 

Dated: [Date]

Premises: [City], [State]

                     County

 

 

 

 

 

 

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THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FINANCING
STATEMENT dated as of [            ] (this “Mortgage”), by [            ], a
[            ] corporation, having an office at [            ] (the
“Mortgagor”), to JPMORGAN CHASE BANK, N.A., a national banking association,
having an office at 383 Madison Avenue, New York, New York 10179 (the
“Mortgagee”) as Collateral Agent for the Secured Parties (as such terms are
defined below).

WITNESSETH THAT:

Reference is made to (i) the Credit Agreement dated as of June 29, 2011 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among Team Health Holdings, Inc. (“Holdings”),
Team Health, Inc. (the “Borrower”), JPMorgan Chase Bank, N.A., as Administrative
Agent (in such capacity, the “Administrative Agent”), Swing Line Lender and L/C
Issuer, the lenders from time to time party thereto (the “Lenders”) and any
other agent party thereto, (ii) the Guarantee Agreement dated as of June 29,
2011 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the “Guarantee Agreement”) among Holdings, Team Finance LLC, the
Borrower, the subsidiaries of Holdings identified therein and JPMorgan Chase
Bank, N.A. and (iii) the Security Agreement dated as of June 29, 2011 (as
amended, supplemented or otherwise modified from time to time, the “Security
Agreement”) among Holdings, the Borrower, the subsidiaries of Holdings
identified therein and JPMorgan Chase Bank, N.A. Capitalized terms used but not
defined herein have the meanings given to them in the Credit Agreement.

In the Credit Agreement, (i) the Lenders have agreed to make term loans (the
“Term Loans”) and revolving loans (the “Revolving Loans”) to the Borrower,
(ii) the Swingline Lender has agreed to make swingline loans (the “Swingline
Loans”, together with Term Loans and Revolving Loans, the “Loans”) to the
Borrower and (iii) the L/C Issuers have issued or agreed to issue from time to
time Letters of Credit for the account of the Borrower, in each case pursuant
to, upon the terms, and subject to the conditions specified in, the Credit
Agreement. Amounts paid in respect of Term Loans may not be reborrowed. Subject
to the terms of the Credit Agreement, the Borrower may borrow, prepay and
reborrow Revolving Loans. The Credit Agreement provides that the sum of the
principal amount of the Loans and the Letters of Credit from time to time
outstanding and secured hereby shall not exceed $725,000,000.

Mortgagor is a wholly owned Subsidiary of the Borrower and will derive
substantial benefit from the making of the Loans by the Lenders and the issuance
of the Letters of Credit by the L/C Issuers. In order to induce the Lenders to
make Loans and the L/C Issuers to issue Letters of Credit, the Mortgagor has
agreed to guarantee, among other things, the due and punctual payment and
performance of all of the obligations of the Borrower under the Credit Agreement
pursuant to the terms of the Security Agreement.

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The obligations of the Lenders to make Loans and of the L/C Issuers to issue
Letters of Credit are conditioned upon, among other things, the execution and
delivery by the Mortgagor of this Mortgage in the form hereof to secure the
Credit Agreement Obligations.

Pursuant to the requirements of the Credit Agreement, the Mortgagor is granting
this Mortgage to create a lien on and a security interest in the Mortgaged
Property (as hereinafter defined) to secure the performance and payment by the
Mortgagor of the Obligations. The Credit Agreement also requires the granting by
other Loan Parties of mortgages, deeds of trust and/or deeds to secure debt (the
“Other Mortgages”) that create liens on and security interests in certain real
and personal property other than the Mortgaged Property to secure the
performance of the Obligations.

Granting Clauses

NOW, THEREFORE, IN CONSIDERATION OF the foregoing and in order to secure the due
and punctual payment and performance of the Obligations for the benefit of the
Secured Parties (as defined in the Security Agreement), Mortgagor hereby grants,
conveys, mortgages, assigns and pledges to the Mortgagee, a mortgage lien on and
a security interest in all of Mortgagor’s right, title, and interest in and to,
all the following described property (the “Mortgaged Property”) whether now
owned or held or hereafter acquired:

(1) the land more particularly described on Exhibit A hereto (the “Land”),
together with all rights appurtenant thereto, including the easements over
certain other adjoining land granted by any easement agreements, covenant or
restrictive agreements and all air rights, mineral rights, water rights, oil and
gas rights and development rights, if any, relating thereto, and also together
with all of the other easements, rights, privileges, interests, hereditaments
and appurtenances thereunto belonging or in any way appertaining and all of the
estate, right, title, interest, claim or demand whatsoever of Mortgagor therein
and in the streets and ways adjacent thereto, either in law or in equity, in
possession or expectancy, now or hereafter acquired (the “Premises”);

(2) all buildings, improvements, structures, paving, parking areas, walkways and
landscaping now or hereafter erected or located upon the Land, and all fixtures
of every kind and type affixed to the Premises or attached to or forming part of
any structures, buildings or improvements and replacements thereof now or
hereafter erected or located upon the Land (the “Improvements”);

(3) subject to the terms of the Security Agreement, all apparatus, movable
appliances, building materials, equipment, fittings, furnishings, furniture,
machinery and other articles of tangible personal property of every kind and
nature, and replacements thereof, now or at any time hereafter placed upon or
used in any way in connection with the use, enjoyment, occupancy or operation of
the Improvements or the Premises, including all of Mortgagor’s books and records
relating thereto and including all pumps, tanks, goods, machinery, tools,
equipment, lifts (including fire sprinklers and alarm systems, fire prevention
or control systems, cleaning rigs, air conditioning, heating, boilers,
refrigerating, electronic monitoring, water, loading,

 

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unloading, lighting, power, sanitation, waste removal, entertainment,
communications, computers, recreational, window or structural, maintenance,
truck or car repair and all other equipment of every kind), restaurant, bar and
all other indoor or outdoor furniture (including tables, chairs, booths, serving
stands, planters, desks, sofas, racks, shelves, lockers and cabinets), bar
equipment, glasses, cutlery, uniforms, linens, memorabilia and other decorative
items, furnishings, appliances, supplies, inventory, rugs, carpets and other
floor coverings, draperies, drapery rods and brackets, awnings, venetian blinds,
partitions, chandeliers and other lighting fixtures, freezers, refrigerators,
walk-in coolers, signs (indoor and outdoor), computer systems, cash registers
and inventory control systems, and all other apparatus, equipment, furniture,
furnishings, and articles used in connection with the use or operation of the
Improvements or the Premises, it being understood that the enumeration of any
specific articles of property shall in no way result in or be held to exclude
any items of property not specifically mentioned (the property referred to in
this subparagraph (3), the “Personal Property”);

(4) subject to the terms of the Security Agreement, all general intangibles
owned by Mortgagor and relating to design, development, operation, management
and use of the Premises or the Improvements, all certificates of occupancy,
zoning variances, building, use or other permits, approvals, authorizations and
consents obtained from and all materials prepared for filing or filed with any
governmental agency in connection with the development, use, operation or
management of the Premises and Improvements, all construction, service,
engineering, consulting, leasing, architectural and other similar contracts
concerning the design, construction, management, operation, occupancy and/or use
of the Premises and Improvements, all architectural drawings, plans,
specifications, soil tests, feasibility studies, appraisals, environmental
studies, engineering reports and similar materials relating to any portion of or
all of the Premises and Improvements, and all payment and performance bonds or
warranties or guarantees relating to the Premises or the Improvements, all to
the extent assignable (the “Permits, Plans and Warranties”);

(5) all now or hereafter existing leases or licenses (under which Mortgagor is
landlord or licensor) and subleases (under which Mortgagor is sublandlord),
concession, management, mineral or other agreements of a similar kind that
permit the use or occupancy of the Premises or the Improvements for any purpose
in return for any payment, or the extraction or taking of any gas, oil, water or
other minerals from the Premises in return for payment of any fee, rent or
royalty (collectively, “Leases”), and all agreements or contracts for the sale
or other disposition of all or any part of the Premises or the Improvements, now
or hereafter entered into by Mortgagor, together with all charges, fees, income,
issues, profits, receipts, rents, revenues or royalties payable thereunder
(“Rents”);

(6) all real estate tax refunds and all proceeds of the conversion, voluntary or
involuntary, of any of the Mortgaged Property into cash or liquidated claims
(“Proceeds”), including Proceeds of insurance maintained by the Mortgagor and
condemnation awards, any awards that may become due by reason of the taking by
eminent domain or any transfer in lieu thereof of the whole or any part of the

 

4

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Premises or Improvements or any rights appurtenant thereto, and any awards for
change of grade of streets, together with any and all moneys now or hereafter on
deposit for the payment of real estate taxes, assessments or common area charges
levied against the Mortgaged Property, unearned premiums on policies of fire and
other insurance maintained by the Mortgagor covering any interest in the
Mortgaged Property or required by the Credit Agreement; and

(7) all extensions, improvements, betterments, renewals, substitutes and
replacements of and all additions and appurtenances to, the Land, the Premises,
the Improvements, the Personal Property, the Permits, Plans and Warranties and
the Leases, hereinafter acquired by or released to the Mortgagor or constructed,
assembled or placed by the Mortgagor on the Land, the Premises or the
Improvements, and all conversions of the security constituted thereby,
immediately upon such acquisition, release, construction, assembling, placement
or conversion, as the case may be, and in each such case, without any further
mortgage, deed of trust, conveyance, assignment or other act by the Mortgagor,
all of which shall become subject to the lien of this Mortgage as fully and
completely, and with the same effect, as though now owned by the Mortgagor and
specifically described herein.

provided that notwithstanding anything to the contrary in this Mortgage, this
Mortgage shall not constitute a grant of a security interest in any general
intangible, investment property or other such rights of a Mortgagor arising
under any contract, lease, instrument, license or other document if (but only to
the extent that) the grant of a security interest therein would (x) constitute a
violation of a valid and enforceable restriction in respect of such general
intangible, investment property or other such rights in favor of a third party
or under any law, regulation, permit, order or decree of any governmental
authority, unless and until all required consents shall have been obtained (for
the avoidance of doubt, the restrictions described herein are not negative
pledges or similar undertakings in favor of a lender or other financial
counterparty) or (y) expressly give any other party in respect of any such
contract, lease, instrument, license or other document, the right to terminate
its obligations thereunder, provided however, that the limitation set forth
above shall not affect, limit, restrict or impair the grant by Mortgagor of a
security interest pursuant to this Mortgage in any such Mortgaged Property to
the extent that an otherwise applicable prohibition or restriction on such grant
is rendered ineffective by any applicable law, including the UCC. Mortgagor
shall, if requested to do so by the Mortgagee, use commercially reasonably
efforts to obtain any such required consent that is reasonably obtainable with
respect to Mortgaged Property which the Mortgagee reasonably determines to be
material.

TO HAVE AND TO HOLD the Mortgaged Property unto the Mortgagee, its successors
and assigns, for the ratable benefit of the Secured Parties, forever, subject
only to permitted encumbrances pursuant to Section 7.01 of the Credit Agreement
(“Permitted Encumbrances”) and to satisfaction and release as provided in
Section 3.04 hereof.

 

5

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ARTICLE I

Representations, Warranties and Covenants of Mortgagor

Mortgagor agrees, covenants, represents and/or warrants as follows:

SECTION 1.01. Title, Mortgage Lien. (a) Mortgagor has good and marketable fee
simple title to the Mortgaged Property, subject only to Permitted Encumbrances.

(b) This Mortgage and the Uniform Commercial Code Financing Statements described
in Section 1.09, when duly recorded in the public records identified in the
Perfection Certificate (as defined in the Security Agreement) will create a
valid, perfected and enforceable lien upon and security interest in all of the
Mortgaged Property to the extent perfection can be obtained by filing uniform
commercial code financing statements.

(c) Mortgagor will forever warrant and defend its title to the Mortgaged
Property, the rights of Mortgagee therein under this Mortgage and the validity
and priority of the lien of this Mortgage thereon against the claims of all
persons and parties except those having rights under Permitted Encumbrances to
the extent of those rights.

SECTION 1.02. Credit Agreement. This Mortgage is given pursuant to the Credit
Agreement. Mortgagor expressly covenants and agrees to pay when due, and to
timely perform, and to cause the other Loan Parties to pay when due, and to
timely perform, the Obligations in accordance with the terms of the Loan
Documents.

SECTION 1.03. Maintenance of Mortgaged Property. Mortgagor will maintain the
Improvements and the Personal Property in the manner required by the Credit
Agreement.

SECTION 1.04. Insurance. If any portion of Improvements constituting part of the
Mortgaged Property is located in an area identified as a special flood hazard
area by Federal Emergency Management Agency or other applicable agency,
Mortgagor will purchase flood insurance in an amount reasonably satisfactory to
Mortgagee, but in no event less than the maximum limit of coverage available
under the National Flood Insurance Act of 1968, as amended.

SECTION 1.05. Casualty Condemnation/Eminent Domain. Mortgagor shall give
Mortgagee prompt written notice of any casualty or other damage to the Mortgaged
Property or any proceeding for the taking of the Mortgaged Property or any
portion thereof or interest therein under power of eminent domain or by
condemnation or any similar proceeding in accordance with, and to the extent
required by, the Credit Agreement. Any Net Cash Proceeds received by or on
behalf of the Mortgagor in respect of any such casualty, damage or taking shall
be applied in accordance with the Credit Agreement.

SECTION 1.06. Assignment of Leases and Rents. (a) Mortgagor hereby irrevocably
and absolutely grants, transfers and assigns all of its right, title and
interest in all Leases, together with any and all extensions and renewals
thereof for purposes of securing and discharging the performance by Mortgagor of
the Obligations. Mortgagor has not assigned

 

6

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or executed any assignment of, and will not assign or execute any assignment of,
any Leases or the Rents payable thereunder to anyone other than Mortgagee.

(b) All Leases shall be subordinate to the lien of this Mortgage. Mortgagor will
not enter into, modify or amend any Lease if such Lease, as entered into,
modified or amended, will not be subordinate to the lien of this Mortgage.

(c) Subject to Section 1.07(d), Mortgagor has assigned and transferred to
Mortgagee all of Mortgagor’s right, title and interest in and to the Rents now
or hereafter arising from each Lease heretofore or hereafter made or agreed to
by Mortgagor, it being intended that this assignment establish, subject to
Section 1.07(d), an absolute transfer and assignment of all Rents and all Leases
to Mortgagee and not merely to grant a security interest therein. Subject to
Section 1.07(d), Mortgagee may in Mortgagor’s name and stead (with or without
first taking possession of any of the Mortgaged Property personally or by
receiver as provided herein) operate the Mortgaged Property and rent, lease or
let all or any portion of any of the Mortgaged Property to any party or parties
at such rental and upon such terms as Mortgagee shall, in its sole discretion,
determine, and may collect and have the benefit of all of said Rents arising
from or accruing at any time thereafter or that may thereafter become due under
any Lease.

(d) So long as an Event of Default shall not have occurred and be continuing,
Mortgagee will not exercise any of its rights under Section 1.07(c), and
Mortgagor shall receive and collect the Rents accruing under any Lease; but
after the happening and during the continuance of any Event of Default,
Mortgagee may, at its option, receive and collect all Rents and enter upon the
Premises and Improvements through its officers, agents, employees or attorneys
for such purpose and for the operation and maintenance thereof. Mortgagor hereby
irrevocably authorizes and directs each tenant, if any, and each successor, if
any, to the interest of any tenant under any Lease, respectively, to rely upon
any notice of a claimed Event of Default sent by Mortgagee to any such tenant or
any of such tenant’s successors in interest, and thereafter to pay Rents to
Mortgagee without any obligation or right to inquire as to whether an Event of
Default actually exists and even if some notice to the contrary is received from
the Mortgagor, who shall have no right or claim against any such tenant or
successor in interest for any such Rents so paid to Mortgagee. Each tenant or
any of such tenant’s successors in interest from whom Mortgagee or any officer,
agent, attorney or employee of Mortgagee shall have collected any Rents, shall
be authorized to pay Rents to Mortgagor only after such tenant or any of their
successors in interest shall have received written notice from Mortgagee that
the Event of Default is no longer continuing, unless and until a further notice
of an Event of Default is given by Mortgagee to such tenant or any of its
successors in interest.

(e) Mortgagee will not become a mortgagee in possession so long as it does not
enter or take actual possession of the Mortgaged Property. In addition,
Mortgagee shall not be responsible or liable for performing any of the
obligations of the landlord under any Lease, for any waste by any tenant, or
others, for any dangerous or defective conditions of any of the Mortgaged
Property, for negligence in the management, upkeep, repair or control of any of
the Mortgaged Property or any other act or omission by any other person.

 

7

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(f) Mortgagor shall furnish to Mortgagee, within 30 days after a request by
Mortgagee to do so, a written statement containing the names of all tenants,
subtenants and concessionaires of the Premises or Improvements, the terms of any
Lease, the space occupied and the rentals and/or other amounts payable
thereunder.

SECTION 1.07. Security Agreement. This Mortgage is both a mortgage of real
property and a grant of a security interest in personal property, and shall
constitute and serve as a “Security Agreement” within the meaning of the uniform
commercial code as adopted in the state wherein the Premises are located
(“UCC”). Mortgagor has hereby granted unto Mortgagee a security interest in and
to all the Mortgaged Property described in this Mortgage that is not real
property, and simultaneously with the recording of this Mortgage, Mortgagor has
filed or will file UCC financing statements, and will file continuation
statements prior to the lapse thereof, at the appropriate offices in the
jurisdiction of formation of the Mortgagor to perfect the security interest
granted by this Mortgage in all the Mortgaged Property that is not real property
to the extent perfection can be obtained by the filing of UCC financing
statements. Mortgagor hereby appoints Mortgagee as its true and lawful
attorney-in-fact and agent, for Mortgagor and in its name, place and stead, in
any and all capacities, to execute any document and to file the same in the
appropriate offices (to the extent it may lawfully do so), and to perform each
and every act and thing reasonably requisite and necessary to be done to perfect
the security interest contemplated by the preceding sentence. Mortgagee shall
have all rights with respect to the part of the Mortgaged Property that is the
subject of a security interest afforded by the UCC in addition to, but not in
limitation of, the other rights afforded Mortgagee hereunder and under the
Guarantee and Security Agreement.

SECTION 1.08. Filing and Recording. Mortgagor will cause this Mortgage, the UCC
financing statements referred to in Section 1.07, any other security instrument
creating a security interest in or evidencing the lien hereof upon the Mortgaged
Property and each UCC continuation statement and instrument of further assurance
to be filed, registered or recorded and, if necessary, refiled, rerecorded and
reregistered, in such manner and in such places as may be required by any
present or future law in order to publish notice of and fully to perfect the
lien hereof upon, and the security interest of Mortgagee in, the Mortgaged
Property until this Mortgage is terminated and released in full in accordance
with Section 3.04. Mortgagor will pay all filing, registration and recording
fees, all Federal, state, county and municipal recording, documentary or
intangible taxes and other taxes, duties, imposts, assessments and charges, and
all reasonable expenses incidental to or arising out of or in connection with
the execution, delivery and recording of this Mortgage, UCC continuation
statements any mortgage supplemental hereto, any security instrument with
respect to the Personal Property, Permits, Plans and Warranties and Proceeds or
any instrument of further assurance.

SECTION 1.09. Further Assurances. Upon request by Mortgagee, Mortgagor will, at
the cost of Mortgagor and without expense to Mortgagee, do, execute, acknowledge
and deliver all such further acts, deeds, conveyances, mortgages, assignments,
notices of assignment, transfers and assurances as Mortgagee shall from time to
time reasonably require for the better assuring, conveying, assigning,
transferring and confirming unto Mortgagee the property and rights hereby
conveyed or assigned or intended now or hereafter so to be, or which Mortgagor
may be or may hereafter become bound to convey or assign to Mortgagee,

 

8

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or for carrying out the intention or facilitating the performance of the terms
of this Mortgage, or for filing, registering or recording this Mortgage, and on
demand, Mortgagor will also execute and deliver and hereby appoints Mortgagee as
its true and lawful attorney-in-fact and agent, for Mortgagor and in its name,
place and stead, in any and all capacities, to execute and file to the extent it
may lawfully do so, one or more financing statements, chattel mortgages or
comparable security instruments reasonably requested by Mortgagee to evidence
more effectively the lien hereof upon the Personal Property and to perform each
and every act and thing reasonably requested to be done to accomplish the same.

SECTION 1.10. Additions to Mortgaged Property. All right, title and interest of
Mortgagor in and to all extensions, improvements, betterments, renewals,
substitutes and replacements of, and all additions and appurtenances to, the
Mortgaged Property hereafter acquired by or released to Mortgagor or
constructed, assembled or placed by Mortgagor upon the Premises or the
Improvements, and all conversions of the security constituted thereby,
immediately upon such acquisition, release, construction, assembling, placement
or conversion, as the case may be, and in each such case without any further
mortgage, conveyance, assignment or other act by Mortgagor, shall become subject
to the lien and security interest of this Mortgage as fully and completely and
with the same effect as though now owned by Mortgagor and specifically described
in the grant of the Mortgaged Property above, but at any and all times Mortgagor
will execute and deliver to Mortgagee any and all such further assurances,
mortgages, conveyances or assignments thereof as Mortgagee may reasonably
require for the purpose of expressly and specifically subjecting the same to the
lien and security interest of this Mortgage.

SECTION 1.11. No Claims Against Mortgagee. Nothing contained in this Mortgage
shall constitute any consent or request by Mortgagee, express or implied, for
the performance of any labor or services or the furnishing of any materials or
other property in respect of the Mortgaged Property or any part thereof, nor as
giving Mortgagor any right, power or authority to contract for or permit the
performance of any labor or services or the furnishing of any materials or other
property in such fashion as would permit the making of any claim against
Mortgagee in respect thereof.

SECTION 1.12. Fixture Filing. (a) Certain portions of the Mortgaged Property are
or will become “fixtures” (as that term is defined in the UCC) on the Land, and
this Mortgage, upon being filed for record in the real estate records of the
county wherein such fixtures are situated, shall operate also as a financing
statement filed as a fixture filing in accordance with the applicable provisions
of said UCC upon such portions of the Mortgaged Property that are or become
fixtures.

(b) The real property to which the fixtures relate is described in Exhibit A
attached hereto. The record owner of the real property described in Exhibit A
attached hereto is Mortgagor. The name, type of organization and jurisdiction of
organization of the debtor for purposes of this financing statement are the
name, type of organization and jurisdiction of organization of the Mortgagor set
forth in the first paragraph of this Mortgage, and the name of the secured party
for purposes of this financing statement is the name of the Mortgagee set forth
in the first paragraph of this Mortgage. The mailing address of the
Mortgagor/debtor is the address of the Mortgagor set forth in the first
paragraph of this Mortgage. The mailing

 

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address of the Mortgagee/secured party from which information concerning the
security interest hereunder may be obtained is the address of the Mortgagee set
forth in the first paragraph of this Mortgage. Mortgagor’s organizational
identification number is [                    ].1

ARTICLE II

Defaults and Remedies

SECTION 2.01. Events of Default. Any Event of Default under the Credit Agreement
(as such term is defined therein) shall constitute an Event of Default under
this Mortgage.

SECTION 2.02. Demand for Payment. If an Event of Default shall occur and be
continuing, then, upon written demand of Mortgagee, Mortgagor will pay to
Mortgagee all amounts due hereunder and under the Credit Agreement, the
Guarantee Agreement and the Security Agreement and such further amount as shall
be sufficient to cover the costs and expenses of collection, including
reasonable attorneys’ fees, disbursements and expenses incurred by Mortgagee,
and Mortgagee shall be entitled and empowered to institute an action or
proceedings at law or in equity for the collection of the sums so due and
unpaid, to prosecute any such action or proceedings to judgment or final decree,
to enforce any such judgment or final decree against Mortgagor and to collect,
in any manner provided by law, all moneys adjudged or decreed to be payable.

SECTION 2.03. Rights To Take Possession, Operate and Apply Revenues. (a) If an
Event of Default shall occur and be continuing, Mortgagor shall, upon demand of
Mortgagee, forthwith surrender to Mortgagee actual possession of the Mortgaged
Property and, if and to the extent not prohibited by applicable law, Mortgagee
itself, or by such officers or agents as it may appoint, may then enter and take
possession of all the Mortgaged Property without the appointment of a receiver
or an application therefor, exclude Mortgagor and its agents and employees
wholly therefrom, and have access to the books, papers and accounts of
Mortgagor.

(b) If Mortgagor shall for any reason fail to surrender or deliver the Mortgaged
Property or any part thereof after such demand by Mortgagee, Mortgagee may to
the extent not prohibited by applicable law, obtain a judgment or decree
conferring upon Mortgagee the right to immediate possession or requiring
Mortgagor to deliver immediate possession of the Mortgaged Property to
Mortgagee, to the entry of which judgment or decree Mortgagor hereby
specifically consents. Mortgagor will pay to Mortgagee, upon demand, all
reasonable expenses of obtaining such judgment or decree, including reasonable
compensation to Mortgagee’s attorneys and agents; and all such expenses and
compensation shall, until paid, be secured by this Mortgage.

 

1 

Mortgagor’s organizational identification number must be inserted.

 

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(c) Upon every such entry or taking of possession, Mortgagee may, to the extent
not prohibited by applicable law, hold, store, use, operate, manage and control
the Mortgaged Property, conduct the business thereof and, from time to time,
(i) make all necessary and proper maintenance, repairs, renewals, replacements,
additions, betterments and improvements thereto and thereon, (ii) purchase or
otherwise acquire additional fixtures, personalty and other property,
(iii) insure or keep the Mortgaged Property insured, (iv) manage and operate the
Mortgaged Property and exercise all the rights and powers of Mortgagor to the
same extent as Mortgagor could in its own name or otherwise with respect to the
same, or (v) enter into any and all agreements with respect to the exercise by
others of any of the powers herein granted Mortgagee, all as may from time to
time be directed or determined by Mortgagee to be in its best interest and
Mortgagor hereby appoints Mortgagee as its true and lawful attorney-in-fact and
agent, for Mortgagor and in its name, place and stead, in any and all
capacities, to perform any of the foregoing acts. Mortgagee may collect and
receive all the Rents, issues, profits and revenues from the Mortgaged Property,
including those past due as well as those accruing thereafter, and, after
deducting (i) all expenses of taking, holding, managing and operating the
Mortgaged Property (including compensation for the services of all persons
employed for such purposes), (ii) the costs of all such maintenance, repairs,
renewals, replacements, additions, betterments, improvements, purchases and
acquisitions, (iii) the costs of insurance, (iv) such taxes, assessments and
other similar charges as Mortgagee may at its option pay, (v) other proper
charges upon the Mortgaged Property or any part thereof and (vi) the
compensation, expenses and disbursements of the attorneys and agents of
Mortgagee, Mortgagee shall apply the remainder of the moneys and proceeds so
received pursuant to Section 2.08.

(d) Whenever, before any sale of the Mortgaged Property under Section 2.06, all
Obligations that are then due shall have been paid and all Events of Default
fully cured, Mortgagee will surrender possession of the Mortgaged Property back
to Mortgagor, its successors or assigns. The same right of taking possession
shall, however, arise again if any subsequent Event of Default shall occur and
be continuing.

SECTION 2.04. Right To Cure Mortgagor’s Failure to Perform. Should Mortgagor
fail in the payment, performance or observance of any term, covenant or
condition required by this Mortgage or the Credit Agreement (with respect to the
Mortgaged Property), Mortgagee may with notice to Mortgagor pay, perform or
observe the same, and all payments made or costs or expenses incurred by
Mortgagee in connection therewith shall be secured hereby and shall be, within
10 days of demand repaid by Mortgagor to Mortgagee. Mortgagee shall be the judge
using reasonable discretion of the necessity for any such actions and of the
amounts to be paid. Mortgagee is hereby empowered to enter and to authorize
others to enter upon the Premises or the Improvements or any part thereof for
the purpose of performing or observing any such defaulted term, covenant or
condition without having any obligation to so perform or observe and without
thereby becoming liable to Mortgagor, to any person in possession holding under
Mortgagor or to any other person.

SECTION 2.05. Right to a Receiver. If an Event of Default shall occur and be
continuing, Mortgagee, upon application to a court of competent jurisdiction,
shall be entitled as a matter of right to the appointment of a receiver to take
possession of and to operate the Mortgaged Property and to collect and apply the
Rents. The receiver shall have all of the

 

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rights and powers permitted under the laws of the state wherein the Mortgaged
Property is located. Mortgagor shall pay to Mortgagee within 10 days of demand
all reasonable expenses, including receiver’s fees, reasonable attorney’s fees
and disbursements, costs and agent’s compensation incurred pursuant to the
provisions of this Section 2.05; and all such expenses shall be secured by this
Mortgage and shall be within 10 days of demand repaid by Mortgagor to Mortgagee.

SECTION 2.06. Foreclosure and Sale. (a) If an Event of Default shall occur and
be continuing, Mortgagee may, upon 10 Business Days notice to Mortgagor, elect
to sell the Mortgaged Property or any part of the Mortgaged Property by exercise
of the power of foreclosure or of sale granted to Mortgagee by applicable law or
this Mortgage. In such case, Mortgagee may commence a civil action to foreclose
this Mortgage, or it may proceed and sell the Mortgaged Property to satisfy any
Obligation. Mortgagee or an officer appointed by a judgment of foreclosure to
sell the Mortgaged Property, may sell all or such parts of the Mortgaged
Property as may be chosen by Mortgagee at the time and place of sale fixed by it
in a notice of sale, either as a whole or in separate lots, parcels or items as
Mortgagee shall deem expedient, and in such order as it may determine, at public
auction to the highest bidder. Mortgagee or an officer appointed by a judgment
of foreclosure to sell the Mortgaged Property may postpone any foreclosure or
other sale of all or any portion of the Mortgaged Property by public
announcement at such time and place of sale, and from time to time thereafter
may postpone such sale by public announcement or subsequently noticed sale.
Without further notice, Mortgagee or an officer appointed to sell the Mortgaged
Property may make such sale at the time fixed by the last postponement, or may,
in its discretion, give a new notice of sale. Any person, including Mortgagor or
Mortgagee or any designee or affiliate thereof, may purchase at such sale.

(b) The Mortgaged Property may be sold subject to unpaid taxes and Permitted
Encumbrances, and, after deducting all costs, fees and expenses of Mortgagee
(including costs of evidence of title in connection with the sale), Mortgagee or
an officer that makes any sale shall apply the proceeds of sale in the manner
set forth in Section 2.08.

(c) Any foreclosure or other sale of less than the whole of the Mortgaged
Property or any defective or irregular sale made hereunder shall not exhaust the
power of foreclosure or of sale provided for herein; and subsequent sales may be
made hereunder until the Obligations have been satisfied, or the entirety of the
Mortgaged Property has been sold.

(d) If an Event of Default shall occur and be continuing, Mortgagee may instead
of, or in addition to, exercising the rights described in Section 2.06(a) above
and either with or without entry or taking possession as herein permitted,
proceed by a suit or suits in law or in equity or by any other appropriate
proceeding or remedy (i) to specifically enforce payment of some or all of the
Obligations, or the performance of any term, covenant, condition or agreement of
this Mortgage or any other Loan Document or any other right, or (ii) to pursue
any other remedy available to Mortgagee, all as Mortgagee shall determine most
effectual for such purposes.

 

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SECTION 2.07. Other Remedies. (a) In case an Event of Default shall occur and be
continuing, Mortgagee may also exercise, to the extent not prohibited by law,
any or all of the remedies available to a secured party under the UCC.

(b) In connection with a sale of the Mortgaged Property or any Personal Property
and the application of the proceeds of sale as provided in Section 2.08, to the
extent permitted by law Mortgagee shall be entitled to enforce payment of and to
receive up to the principal amount of the Obligations, plus all other charges,
payments and costs due under this Mortgage, and to recover a deficiency judgment
for any portion of the aggregate principal amount of the Obligations remaining
unpaid, with interest.

SECTION 2.08. Application of Sale Proceeds and Rents. (a) After any foreclosure
sale of all or any of the Mortgaged Property, Mortgagee shall receive and apply
the proceeds of the sale together with any Rents that may have been collected
and any other sums that then may be held by Mortgagee under this Mortgage as
follows:

FIRST, to the payment of all costs and expenses incurred by the Mortgagee in
connection with such collection or sale or otherwise in connection with this
Mortgage or any of the Obligations, including all court costs and the fees and
expenses of its agents and legal counsel, the repayment of all advances made by
the Mortgagee hereunder or under any Mortgage on behalf of Mortgagor and any
other costs or expenses incurred in connection with the exercise of any right or
remedy hereunder or under any Mortgage;

SECOND, to the payment in full of the Obligations (the amounts so applied to be
distributed among the Secured Parties pro rata in accordance with the amounts of
the Obligations owed to them on the date of any such distribution);

THIRD, to the Mortgagor, their successors or assigns, or as a court of competent
jurisdiction may otherwise direct.

The Mortgagee shall have absolute discretion as to the time of application of
any such proceeds, moneys or balances in accordance with this Mortgage. Upon any
sale of Mortgaged Property by the Mortgagee (including pursuant to a power of
sale granted by statute or under a judicial proceeding), the receipt of the
Mortgagee or of the officer making the sale shall be a sufficient discharge to
the purchaser or purchasers of the Mortgaged Property so sold and such purchaser
or purchasers shall not be obligated to see to the application of any part of
the purchase money paid over to the Mortgagee or such officer or be answerable
in any way for the misapplication thereof.

(b) In making the determination and allocations required by this Section 2.08,
the Mortgagee may conclusively rely upon information supplied by the
Administrative Agent as to the amounts of unpaid principal and interest and
other amounts outstanding with respect to the Obligations, and the Mortgagee
shall have no liability to any of the Secured Parties for actions taken in
reliance on such information, provided that nothing in this sentence shall
prevent any Mortgagor from contesting any amounts claimed by any Secured Party
in any information so supplied. All distributions made by the Mortgagee pursuant
to this

 

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Section 2.08 shall be (subject to any decree of any court of competent
jurisdiction) final (absent manifest error), and the Mortgagee shall have no
duty to inquire as to the application by the Administrative Agent of any amounts
distributed to them.

SECTION 2.09. Mortgagor as Tenant Holding Over. If Mortgagor remains in
possession of any of the Mortgaged Property after any foreclosure sale by
Mortgagee, at Mortgagee’s election Mortgagor shall be deemed a tenant holding
over and shall forthwith surrender possession to the purchaser or purchasers at
such sale or be summarily dispossessed or evicted according to provisions of law
applicable to tenants holding over.

SECTION 2.10. Waiver of Appraisement, Valuation, Stay, Extension and Redemption
Laws. Mortgagor waives, to the extent not prohibited by law, (i) the benefit of
all laws now existing or that hereafter may be enacted (x) providing for any
appraisement or valuation of any portion of the Mortgaged Property and/or (y) in
any way extending the time for the enforcement or the collection of amounts due
under any of the Obligations or creating or extending a period of redemption
from any sale made in collecting said debt or any other amounts due Mortgagee,
(ii) any right to at any time insist upon, plead, claim or take the benefit or
advantage of any law now or hereafter in force providing for any homestead
exemption, stay, statute of limitations, extension or redemption, or sale of the
Mortgaged Property as separate tracts, units or estates or as a single parcel in
the event of foreclosure or notice of deficiency, and (iii) all rights of
redemption, valuation, appraisement, stay of execution, notice of election to
mature or declare due the whole of or each of the Obligations and marshaling in
the event of foreclosure of this Mortgage.

SECTION 2.11. Discontinuance of Proceedings. In case Mortgagee shall proceed to
enforce any right, power or remedy under this Mortgage by foreclosure, entry or
otherwise, and such proceedings shall be discontinued or abandoned for any
reason, or shall be determined adversely to Mortgagee, then and in every such
case Mortgagor and Mortgagee shall be restored to their former positions and
rights hereunder, and all rights, powers and remedies of Mortgagee shall
continue as if no such proceeding had been taken.

SECTION 2.12. Suits To Protect the Mortgaged Property. Mortgagee shall have
power (a) to institute and maintain suits and proceedings to prevent any
impairment of the Mortgaged Property by any acts that may be unlawful or in
violation of this Mortgage, (b) to preserve or protect its interest in the
Mortgaged Property and in the Rents arising therefrom and (c) to restrain the
enforcement of or compliance with any legislation or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid if
the enforcement of or compliance with such enactment, rule or order would impair
the security or be prejudicial to the interest of Mortgagee hereunder.

SECTION 2.13. Filing Proofs of Claim. In case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, adjustment, composition or other
proceedings affecting Mortgagor, Mortgagee shall, to the extent permitted by
law, be entitled to file such proofs of claim and other documents as may be
necessary or advisable in order to have the claims of Mortgagee allowed in such
proceedings for the Obligations secured by this Mortgage at the date of the
institution of such proceedings and for any interest accrued, late

 

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charges and additional interest or other amounts due or that may become due and
payable hereunder after such date.

SECTION 2.14. Possession by Mortgagee. Notwithstanding the appointment of any
receiver, liquidator or trustee of Mortgagor, any of its property or the
Mortgaged Property, Mortgagee shall be entitled, to the extent not prohibited by
law, to remain in possession and control of all parts of the Mortgaged Property
now or hereafter granted under this Mortgage to Mortgagee in accordance with the
terms hereof and applicable law.

SECTION 2.15. Waiver. (a) No delay or failure by Mortgagee to exercise any
right, power or remedy accruing upon any breach or Event of Default shall
exhaust or impair any such right, power or remedy or be construed to be a waiver
of any such breach or Event of Default or acquiescence therein; and every right,
power and remedy given by this Mortgage to Mortgagee may be exercised from time
to time and as often as may be deemed expedient by Mortgagee. No consent or
waiver by Mortgagee to or of any breach or Event of Default by Mortgagor in the
performance of the Obligations shall be deemed or construed to be a consent or
waiver to or of any other breach or Event of Default in the performance of the
same or of any other Obligations by Mortgagor hereunder. No failure on the part
of Mortgagee to complain of any act or failure to act or to declare an Event of
Default, irrespective of how long such failure continues, shall constitute a
waiver by Mortgagee of its rights hereunder or impair any rights, powers or
remedies consequent on any future Event of Default by Mortgagor.

(b) Even if Mortgagee (i) grants some forbearance or an extension of time for
the payment of any sums secured hereby, (ii) takes other or additional security
for the payment of any sums secured hereby, (iii) waives or does not exercise
some right granted herein or under the Loan Documents, (iv) releases a part of
the Mortgaged Property from this Mortgage, (v) agrees to change some of the
terms, covenants, conditions or agreements of any of the Loan Documents,
(vi) consents to the filing of a map, plat or replat affecting the Premises,
(vii) consents to the granting of an easement or other right affecting the
Premises or (viii) makes or consents to an agreement subordinating Mortgagee’s
lien on the Mortgaged Property hereunder; no such act or omission shall preclude
Mortgagee from exercising any other right, power or privilege herein granted or
intended to be granted in the event of any breach or Event of Default then made
or of any subsequent default; nor, except as otherwise expressly provided in an
instrument executed by Mortgagee, shall this Mortgage be altered thereby. In the
event of the sale or transfer by operation of law or otherwise of all or part of
the Mortgaged Property, Mortgagee is hereby authorized and empowered to deal
with any vendee or transferee with reference to the Mortgaged Property secured
hereby, or with reference to any of the terms, covenants, conditions or
agreements hereof, as fully and to the same extent as it might deal with the
original parties hereto and without in any way releasing or discharging any
liabilities, obligations or undertakings.

SECTION 2.16. Waiver of Trial by Jury. To the fullest extent permitted by
applicable law, Mortgagor and Mortgagee each hereby irrevocably and
unconditionally waive trial by jury in any action, claim, suit or proceeding
relating to this Mortgage and for any counterclaim brought therein.

 

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SECTION 2.17. Remedies Cumulative. No right, power or remedy conferred upon or
reserved to Mortgagee by this Mortgage is intended to be exclusive of any other
right, power or remedy, and each and every such right, power and remedy shall be
cumulative and concurrent and in addition to any other right, power and remedy
given hereunder or now or hereafter existing at law or in equity or by statute.

ARTICLE III

Miscellaneous

SECTION 3.01. Partial Invalidity. In the event any one or more of the provisions
contained in this Mortgage shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such validity, illegality or unenforceability
shall, at the option of Mortgagee, not affect any other provision of this
Mortgage, and this Mortgage shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein or therein.

SECTION 3.02. Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as provided in
Section 10.02 of the Credit Agreement. All communications and notices hereunder
to any Subsidiary Party shall be given to it in care of Team Health, Inc. as
provided in Section 10.02 of the Credit Agreement.

SECTION 3.03. Successors and Assigns. All of the grants, covenants, terms,
provisions and conditions herein shall run with the Premises and the
Improvements and shall apply to, bind and inure to, the benefit of the permitted
successors and assigns of Mortgagor and the successors and assigns of Mortgagee.

SECTION 3.04. Satisfaction and Cancelation. (a) The conveyance to Mortgagee of
the Mortgaged Property as security created and consummated by this Mortgage
shall be null and void when all the Obligations have been indefeasibly paid in
full in accordance with the terms of the Loan Documents and the Lenders have no
further commitment to make Loans under the Credit Agreement, the L/C Obligations
have been reduced to zero and the L/C Issuers have no further obligations to
issue Letters of Credit under the Credit Agreement.

(b) Upon a sale or financing by Mortgagor of all or any portion of the Mortgaged
Property that is permitted by the Credit Agreement, the lien of this Mortgage
shall be automatically released from the applicable portion of the Mortgaged
Property. Mortgagor shall give the Mortgagee reasonable written notice of any
sale or financing of the Mortgaged Property prior to the closing of such sale or
financing.

(c) In connection with any termination or release pursuant to paragraph (a), the
Mortgage shall be marked “satisfied” by the Mortgagee, and this Mortgage shall
be canceled of record at the request and at the expense of the Mortgagor.
Mortgagee shall execute any documents reasonably requested by Mortgagor to
accomplish the foregoing or to accomplish any release contemplated by this
Section 3.04 and Mortgagor will pay all reasonable costs

 

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and expenses, including reasonable attorneys’ fees, disbursements and other
charges, incurred by Mortgagee in connection with the preparation and execution
of such documents.

SECTION 3.05. Definitions. As used in this Mortgage, the singular shall include
the plural as the context requires and the following words and phrases shall
have the following meanings: (a) “including” shall mean “including but not
limited to”; (b) “provisions” shall mean “provisions, terms, covenants and/or
conditions”; (c) “lien” shall mean “lien, charge, encumbrance, security
interest, mortgage or deed of trust”; (d) “obligation” shall mean “obligation,
duty, covenant and/or condition”; and (e) “any of the Mortgaged Property” shall
mean “the Mortgaged Property or any part thereof or interest therein”. Any act
that Mortgagee is permitted to perform hereunder may be performed at any time
and from time to time by Mortgagee or any person or entity designated by
Mortgagee. Any act that is prohibited to Mortgagor hereunder is also prohibited
to all lessees of any of the Mortgaged Property. Each appointment of Mortgagee
as attorney-in-fact for Mortgagor under the Mortgage is irrevocable, with power
of substitution and coupled with an interest. Subject to the applicable
provisions hereof, Mortgagee has the right to refuse to grant its consent,
approval or acceptance or to indicate its satisfaction, in its sole discretion,
whenever such consent, approval, acceptance or satisfaction is required
hereunder.

SECTION 3.06. Multisite Real Estate Transaction. Mortgagor acknowledges that
this Mortgage is one of a number of Other Mortgages and Collateral Documents
that secure the Obligations. Mortgagor agrees that the lien of this Mortgage
shall be absolute and unconditional and shall not in any manner be affected or
impaired by any acts or omissions whatsoever of Mortgagee, and without limiting
the generality of the foregoing, the lien hereof shall not be impaired by any
acceptance by the Mortgagee of any security for or guarantees of any of the
Obligations hereby secured, or by any failure, neglect or omission on the part
of Mortgagee to realize upon or protect any Obligation or indebtedness hereby
secured or any collateral security therefor including the Other Mortgages and
other Collateral Documents. The lien hereof shall not in any manner be impaired
or affected by any release (except as to the property released), sale, pledge,
surrender, compromise, settlement, renewal, extension, indulgence, alteration,
changing, modification or disposition of any of the Obligations secured or of
any of the collateral security therefor, including the Other Mortgages and other
Collateral Documents or of any guarantee thereof, and Mortgagee may at its
discretion foreclose, exercise any power of sale, or exercise any other remedy
available to it under any or all of the Other Mortgages and other Collateral
Documents without first exercising or enforcing any of its rights and remedies
hereunder. Such exercise of Mortgagee’s rights and remedies under any or all of
the Other Mortgages and other Collateral Documents shall not in any manner
impair the indebtedness hereby secured or the lien of this Mortgage and any
exercise of the rights or remedies of Mortgagee hereunder shall not impair the
lien of any of the Other Mortgages and other Collateral Documents or any of
Mortgagee’s rights and remedies thereunder. Mortgagor specifically consents and
agrees that Mortgagee may exercise its rights and remedies hereunder and under
the Other Mortgages and other Collateral Documents separately or concurrently
and in any order that it may deem appropriate and waives any rights of
subrogation.

SECTION 3.07. No Oral Modification. This Mortgage may not be changed or
terminated orally. Any agreement made by Mortgagor and Mortgagee after the date
of this

 

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Mortgage relating to this Mortgage shall be superior to the rights of the holder
of any intervening or subordinate Mortgage, lien or encumbrance.

ARTICLE IV

Particular Provisions

This Mortgage is subject to the following provisions relating to the particular
laws of the state wherein the Premises are located:

SECTION 4.01. Applicable Law; Certain Particular Provisions. This Mortgage shall
be governed by and construed in accordance with the internal law of the state
where the Mortgaged Property is located, except that Mortgagor expressly
acknowledges that by their terms, the Credit Agreement and other Loan Documents
(aside from those Other Mortgages to be recorded outside New York) shall be
governed by the internal law of the State of New York, without regard to
principles of conflict of law. Mortgagor and Mortgagee agree to submit to
jurisdiction and the laying of venue for any suit on this Mortgage in the state
where the Mortgaged Property is located. The terms and provisions set forth in
Appendix A attached hereto are hereby incorporated by reference as though fully
set forth herein. In the event of any conflict between the terms and provisions
contained in the body of this Mortgage and the terms and provisions set forth in
Appendix A, the terms and provisions set forth in Appendix A shall govern and
control.

SECTION 4.02. General Authority of the Mortgagee. By acceptance of the benefits
of this Mortgage, each Secured Party (whether or not a signatory hereto) shall
be deemed irrevocably (a) to consent to the appointment of the Mortgagee as its
agent hereunder, (b) to confirm that the Mortgagee shall have the authority to
act as the exclusive agent of such Secured Party for the enforcement of any
provisions of this Mortgage against Mortgagor, the exercise of remedies
hereunder or thereunder and the giving or withholding of any consent or approval
hereunder or thereunder relating to any Mortgaged Property or Mortgagor’s
obligations with respect thereto, (c) to agree that it shall not take any action
to enforce any provisions of this Mortgage against any Mortgagor, to exercise
any remedy hereunder or thereunder or to give any consents or approvals
hereunder or thereunder except as expressly provided in this Mortgage and (d) to
agree to be bound by the terms of this Mortgage.

(a) Limitation on Mortgagee’s Responsibilities. (a) The Mortgagee may execute
any of the powers granted under this Mortgage and perform any duty hereunder
either directly or by or through agents or attorneys-in-fact, and shall not be
responsible for the gross negligence or wilful misconduct of any agents or
attorneys-in-fact selected by it with reasonable care and without gross
negligence or wilful misconduct.

(b) The Mortgagee shall not be deemed to have actual, constructive, direct or
indirect notice or knowledge of the occurrence of any Event of Default unless
and until the Mortgagee shall have received a notice of Event of Default or a
notice from the Mortgagor or the Secured Parties to the Mortgagee in its
capacity as Mortgagee indicating that an Event of Default has occurred. The
Mortgagee shall have no obligation either prior to or after

 

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receiving such notice to inquire whether an Event of Default has, in fact,
occurred and shall be entitled to rely conclusively, and shall be fully
protected in so relying, on any notice so furnished to it.

 

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IN WITNESS WHEREOF, this Mortgage has been duly executed and delivered to
Mortgagee by Mortgagor and is effective as of the date first above written.

 

[NAME OF MORTGAGOR], a [            ]

corporation,

by:         Name:     Title:  

 

Attest: by:         Name:     Title:  

 

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[ADD LOCAL FORM OF ACKNOWLEDGMENT]

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

Exhibit A

to Mortgage

Description of the Land

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

Appendix A

to Mortgage

Local Law Provisions

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

EXHIBIT J

 

 

 

[FORM OF]

INTELLECTUAL PROPERTY SECURITY AGREEMENT

dated as of

[            ],

among

TEAM HEALTH HOLDINGS, INC.,

TEAM HEALTH, INC.,

THE SUBSIDIARIES OF TEAM HEALTH HOLDINGS, INC.

IDENTIFIED HEREIN

and

JPMORGAN CHASE BANK, N.A.,

as Collateral Agent

 

 

 

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TABLE OF CONTENTS

 

ARTICLE I    Definitions   

SECTION 1.01. Credit Agreement

     1   

SECTION 1.02. Other Defined Terms

     1    ARTICLE II    Security Interests   

SECTION 2.01. Security Interest

     4   

SECTION 2.02. Representations and Warranties

     5   

SECTION 2.03. Covenants

     6   

SECTION 2.04. As to Intellectual Property Collateral

     8    ARTICLE III    Remedies   

SECTION 3.01. Remedies Upon Default

     9   

SECTION 3.02. Application of Proceeds

     10   

SECTION 3.03. Grant of License to Use Intellectual Property

     11    ARTICLE IV    Indemnity, Subrogation and Subordination   

SECTION 4.01. Indemnity

     11   

SECTION 4.02. Contribution and Subrogation

     11   

SECTION 4.03. Subordination

     12    ARTICLE V    Miscellaneous   

SECTION 5.01. Notices

     12   

SECTION 5.02. Waivers; Amendment

     12   

SECTION 5.03. Collateral Agent’s Fees and Expenses; Indemnification

     13   

SECTION 5.04. Successors and Assigns

     13   

SECTION 5.05. Survival of Agreement

     13   

SECTION 5.06. Counterparts; Effectiveness; Several Agreement

     14   

SECTION 5.07. Severability

     14   

SECTION 5.08. Right of Set-Off

     14   

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SECTION 5.09. Governing Law; Jurisdiction; Consent to Service of Process

     15   

SECTION 5.10. WAIVER OF JURY TRIAL

     15   

SECTION 5.11. Headings

     16   

SECTION 5.12. Security Interest Absolute

     16   

SECTION 5.13. Termination or Release

     16   

SECTION 5.14. Additional Restricted Subsidiaries

     17   

SECTION 5.15. General Authority of the Collateral Agent

     17   

SECTION 5.16. Collateral Agent Appointed Attorney-in-Fact

     17   

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Schedules

 

Schedule I

   Subsidiary Parties

Schedule II

   Intellectual Property

Exhibits

 

Exhibit I

   Form of Supplement

Exhibit II

   Form of Perfection Certificate

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INTELLECTUAL PROPERTY SECURITY AGREEMENT dated as of [            ] among TEAM
HEALTH HOLDINGS, INC. (“Holdings”), TEAM HEALTH, INC. (the “Borrower”), the
Subsidiaries of Holdings identified herein and JPMORGAN CHASE BANK, N.A., as
Collateral Agent.

Reference is made to the Credit Agreement dated as of June 29, 2011 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Holdings, the Borrower, JPMorgan Chase Bank, N.A., as
Administrative Agent, Swing Line Lender and an L/C Issuer, each Lender from time
to time party thereto and any other agent party thereto. The Lenders have agreed
to extend credit to the Borrower subject to the terms and conditions set forth
in the Credit Agreement. The obligations of the Lenders to extend such credit
are conditioned upon, among other things, the execution and delivery of this
Agreement. Holdings and the Subsidiary Parties are affiliates of the Borrower,
will derive substantial benefits from the extension of credit to the Borrower
pursuant to the Credit Agreement and are willing to execute and deliver this
Agreement in order to induce the Lenders to extend such credit. Accordingly, the
parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Credit Agreement. (a) Capitalized terms used in this Agreement and
not otherwise defined herein have the meanings specified in the Credit
Agreement. All terms defined in the New York UCC (as defined herein) and not
defined in this Agreement have the meanings specified therein; the term
“instrument” shall have the meaning specified in Article 9 of the New York UCC.

(b) The rules of construction specified in Article I of the Credit Agreement
also apply to this Agreement.

SECTION 1.02. Other Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:

“Agreement” means this Intellectual Property Security Agreement.

“Claiming Party” has the meaning assigned to such term in Section 4.02.

“Collateral” has the meaning assigned to such term in Section 2.01.

“Contributing Party” has the meaning assigned to such term in Section 4.02.

“Copyright License” means any written agreement, now or hereafter in effect,
granting any right to any third party under any copyright now or hereafter owned
by any Grantor or that such Grantor otherwise has the right to license, or
granting any right to any Grantor under any copyright now or hereafter owned by
any third party, and all rights of such Grantor under any such agreement.

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“Copyrights” means all of the following now owned or hereafter acquired by any
Grantor: (a) all copyright rights in any work subject to the copyright laws of
the United States or any other country, whether as author, assignee, transferee
or otherwise, and (b) all registrations and applications for registration of any
such copyright in the United States or any other country, including
registrations, recordings, supplemental registrations and pending applications
for registration in the United States Copyright Office, including those listed
on Schedule II.

“Credit Agreement” has the meaning assigned to such term in the preliminary
statement of this Agreement.

“Grantor” means each of Holdings, the Borrower and each Subsidiary Party that is
a Domestic Subsidiary.

“Intellectual Property” means all intellectual and similar property of every
kind and nature now owned or hereafter acquired by any Grantor, including
inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets,
confidential or proprietary technical and business information, know-how,
show-how or other data or information, software and databases and all
embodiments or fixations thereof and related documentation, registrations and
franchises, and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the foregoing.

“Intellectual Property Collateral” means Collateral consisting of Intellectual
Property.

“Intellectual Property Security Agreement Supplement” means an instrument in the
form of Exhibit I hereto.

“License” means any Patent License, Trademark License, Copyright License or
other license or sublicense agreement with respect to Intellectual Property to
which any Grantor is a party, including those listed on Schedule II.

“Loan Agreement Obligations” means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party and its Subsidiaries
arising under any Loan Document or otherwise with respect to any Loan or Letter
of Credit, whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising
and including interest and fees that accrue after the commencement by or against
any Loan Party or Subsidiary of any proceeding under any Debtor Relief Laws
naming such Person as the debtor in such proceeding, regardless of whether such
interest and fees are allowed claims in such proceeding. Without limiting the
generality of the foregoing, the Obligations of the Loan Parties under the Loan
Documents (and of their Subsidiaries to the extent they have obligations under
the Loan Documents) include (a) the obligation (including guarantee obligations)
to pay principal, interest, Letter of Credit commissions, reimbursement
obligations, charges, expenses, fees, Attorney Costs, indemnities and other
amounts payable by any Loan Party or its Subsidiaries under any Loan Document
and (b) the obligation of any Loan Party or any of its Subsidiaries to reimburse
any amount in respect of any of the foregoing that any Lender, in its sole
discretion, may elect to pay or advance on behalf of such Loan Party or such
Subsidiary.

 

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“New York UCC” means the Uniform Commercial Code as from time to time in effect
in the State of New York.

“Patent License” means any written agreement, now or hereafter in effect,
granting to any third party any right to make, use or sell any invention on
which a patent, now or hereafter owned by any Grantor or that any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.

“Patents” means all of the following now owned or hereafter acquired by any
Grantor: (a) all letters patent of the United States or the equivalent thereof
in any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or the equivalent thereof
in any other country, including registrations, recordings and pending
applications in the United States Patent and Trademark Office or any similar
offices in any other country, including those listed on Schedule II, and (b) all
reissues, continuations, divisions, continuations-in-part, renewals or
extensions thereof, and the inventions disclosed or claimed therein, including
the right to make, use and/or sell the inventions disclosed or claimed therein.

“Perfection Certificate” means a certificate substantially in the form of
Exhibit II, completed and supplemented with the schedules and attachments
contemplated thereby, and duly executed by the chief financial officer and the
chief legal officer of the Borrower.

“Proceeds” has the meaning specified in Section 9-102 of the New York UCC.

“Security Interest” has the meaning assigned to such term in Section 2.01(a).

“Subsidiary Parties” means (a) the Subsidiaries identified on Schedule I and
(b) each other Subsidiary that becomes a party to this Agreement as a Subsidiary
Party after the Closing Date.

“Trademark License” means any written agreement, now or hereafter in effect,
granting to any third party any right to use any trademark now or hereafter
owned by any Grantor or that any Grantor otherwise has the right to license, or
granting to any Grantor any right to use any trademark now or hereafter owned by
any third party, and all rights of any Grantor under any such agreement.

“Trademarks” means all of the following now owned or hereafter acquired by any
Grantor: (a) all trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, trade
dress, logos, other source or business identifiers, designs and general
intangibles of like nature, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all registration and recording
applications filed in connection therewith, including registrations and
registration applications in the United States Patent and Trademark Office or
any similar offices in any State of the United States or any other country or
any political subdivision thereof, and all extensions or renewals thereof,
including those listed on Schedule II, (b) all goodwill associated therewith or

 

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symbolized thereby and (c) all other assets, rights and interests that uniquely
reflect or embody such goodwill.

ARTICLE II

Security Interests

SECTION 2.01. Security Interest. (a) As security for the payment or performance,
as the case may be, in full of the Obligations, including the Holdings Guaranty
and the Subsidiary Guaranty, each Grantor hereby assigns and pledges to the
Collateral Agent, its successors and assigns, for the benefit of the Secured
Parties, and hereby grants to the Collateral Agent, its successors and assigns,
for the benefit of the Secured Parties, a security interest (the “Security
Interest”) in, all right, title or interest in or to any and all of the
following assets and properties now owned or at any time hereafter acquired by
such Grantor or in which such Grantor now has or at any time in the future may
acquire any right, title or interest (collectively, the “Collateral”):

(i) all Copyrights;

(ii) all Patents;

(iii) all Trademarks;

(iv) all Licenses;

(v) all other Intellectual Property; and

(vi) all Proceeds and products of any and all of the foregoing and all
collateral security and guarantees given by any Person with respect to any of
the foregoing.

provided that notwithstanding anything to the contrary in this Agreement, this
Agreement shall not constitute a grant of a security interest in any Trademark
applications filed in the United States Patent and Trademark Office on the basis
of such Grantor’s “intent-to-use” such trademark solely to the extent that, and
solely during the period in which, granting a security interest in such
Trademark application prior to such filing would adversely affect the
enforceability or validity or result in the voiding thereof, unless and until
acceptable evidence of use of the Trademark has been filed with and accepted by
the United States Patent and Trademark Office pursuant to Section 1(c) or
Section 1(d) of the Lanham Act (15 U.S.C. § 1051, et seq.), whereupon such
trademark application will, without any further action taken on the part of such
Grantor or the Collateral Agent, be deemed to constitute Collateral.

(b) Each Grantor hereby irrevocably authorizes the Collateral Agent for the
benefit of the Secured Parties at any time and from time to time to file in any
relevant jurisdiction any initial financing statements with respect to the
Collateral or any part thereof and amendments thereto that contain the
information required by Article 9 of the Uniform Commercial Code or the
analogous legislation of each applicable jurisdiction for the filing of any
financing statement or amendment, including whether such Grantor is an
organization, the type

 

4

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of organization and any organizational identification number issued to such
Grantor. Each Grantor agrees to provide such information to the Collateral Agent
promptly upon request.

The Collateral Agent is further authorized to file with the United States Patent
and Trademark Office or United States Copyright Office (or any successor office
or any similar office in any other country) such documents as may be necessary
or advisable for the purpose of perfecting, confirming, continuing, enforcing or
protecting the Security Interest granted by each Grantor, without the signature
of any Grantor, and naming any Grantor or the Grantors as debtors and the
Collateral Agent as secured party.

(c) The Security Interest is granted as security only and shall not subject the
Collateral Agent or any other Secured Party to, or in any way alter or modify,
any obligation or liability of any Grantor with respect to or arising out of the
Collateral.

SECTION 2.02. Representations and Warranties. Holdings and the Borrower jointly
and severally represent and warrant, as to themselves and the other Grantors, to
the Collateral Agent and the Secured Parties that:

(a) Each Grantor has good and valid rights in and/or title to the Collateral
with respect to which it has purported to grant a Security Interest hereunder
and has full power and authority to grant to the Collateral Agent the Security
Interest in such Collateral pursuant hereto and to execute, deliver and perform
its obligations in accordance with the terms of this Agreement, without the
consent or approval of any other Person other than any consent or approval that
has been obtained.

(b) The Perfection Certificate has been duly prepared, completed and executed
and the information set forth therein, including the exact legal name of each
Grantor, is correct and complete in all material respects as of the Closing
Date. The Uniform Commercial Code financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations prepared by the Collateral Agent based upon the information
provided to the Collateral Agent in the Perfection Certificate for filing in
each governmental, municipal or other office specified in Schedule 2 to the
Perfection Certificate (or specified by notice from the Borrower to the
Collateral Agent after the Closing Date in the case of filings, recordings or
registrations required by Section 6.11 of the Credit Agreement), are all the
filings, recordings and registrations (other than filings required to be made in
the United States Patent and Trademark Office and the United States Copyright
Office in order to perfect the Security Interest in Collateral consisting of
United States Patents, Trademarks and Copyrights) that are necessary to
establish a legal, valid and perfected security interest in favor of the
Collateral Agent (for the benefit of the Secured Parties) in respect of all
Collateral in which the Security Interest may be perfected by filing, recording
or registration in the United States (or any political subdivision thereof) and
its territories and possessions, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the filing
of continuation statements. Each Grantor represents and warrants that a fully
executed agreement in the form hereof and containing a description of all
Collateral consisting of Intellectual Property with respect to United States
Patents and United States registered Trademarks (and Trademarks for which United
States registration applications are pending) and United States registered
Copyrights have

 

5

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been delivered to the Collateral Agent for recording by the United States Patent
and Trademark Office and the United States Copyright Office pursuant to
35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations
thereunder, as applicable, and otherwise as may be required pursuant to the laws
of any other necessary jurisdiction, to protect the validity of and to establish
a legal, valid and perfected security interest in favor of the Collateral Agent
(for the benefit of the Secured Parties) in respect of all Collateral consisting
of Patents, Trademarks and Copyrights in which a security interest may be
perfected by filing, recording or registration in the United States (or any
political subdivision thereof) and its territories and possessions, and no
further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary (other than such actions as are necessary to perfect
the Security Interest with respect to any Collateral consisting of Patents,
Trademarks and Copyrights (or registration or application for registration
thereof) acquired or developed after the date hereof).

(c) The Security Interest constitutes (i) a legal and valid security interest in
all the Collateral securing the payment and performance of the Obligations,
including the Holdings Guaranty and the Subsidiary Guaranty, (ii) subject to the
filings described in Section 2.02(b), a perfected security interest in all
Collateral in which a security interest may be perfected by filing, recording or
registering a financing statement or analogous document in the United States (or
any political subdivision thereof) and its territories and possessions pursuant
to the Uniform Commercial Code and (iii) a security interest that shall be
perfected in all Collateral in which a security interest may be perfected upon
the receipt and recording of this Agreement with the United States Patent and
Trademark Office and the United States Copyright Office, as applicable, within
the three-month period (commencing as of the date hereof) pursuant to 35 U.S.C.
§ 261 or 15 U.S.C. § 1060 or the one month period (commencing as of the date
hereof) pursuant to 17 U.S.C. § 205 and otherwise as may be required pursuant to
the laws of any other necessary jurisdiction. The Security Interest is and shall
be prior to any other Lien on any of the Collateral, other than (i) any
nonconsensual Lien that is expressly permitted pursuant to Section 7.01 of the
Credit Agreement and has priority as a matter of law and (ii) Liens expressly
permitted pursuant to Section 7.01 of the Credit Agreement.

(d) The Collateral is owned by the Grantors free and clear of any Lien, except
for Liens expressly permitted pursuant to Section 7.01 of the Credit Agreement.
None of the Grantors has filed or consented to the filing of (i) any financing
statement or analogous document under the Uniform Commercial Code or any other
applicable laws covering any Collateral, (ii) any assignment in which any
Grantor assigns any Collateral or any security agreement or similar instrument
covering any Collateral with the United States Patent and Trademark Office or
the United States Copyright Office or (iii) any assignment in which any Grantor
assigns any Collateral or any security agreement or similar instrument covering
any Collateral with any foreign governmental, municipal or other office, which
financing statement or analogous document, assignment, security agreement or
similar instrument is still in effect, except, in each case, for Liens expressly
permitted pursuant to Section 7.01 of the Credit Agreement.

SECTION 2.03. Covenants. (a) The Borrower agrees promptly to notify the
Collateral Agent in writing of any change (i) in corporate name of any Grantor,
(ii) in the identity or type of organization or corporate structure of any
Grantor, or (iii) in the jurisdiction of organization of any Grantor.

 

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(b) Each Grantor shall, at its own expense, take any and all commercially
reasonable actions necessary to defend title to the Collateral against all
Persons and to defend the Security Interest of the Collateral Agent in the
Collateral and the priority thereof against any Lien not expressly permitted
pursuant to Section 7.01 of the Credit Agreement.

(c) Each year, at the time of delivery of annual financial statements with
respect to the preceding fiscal year pursuant to Section 6.01 of the Credit
Agreement, the Borrower shall deliver to the Collateral Agent a certificate
executed by the chief financial officer and the chief legal officer of the
Borrower setting forth the information required pursuant to Schedules 1(a),
1(c), 1(e), 1(f) and 2(c) of the Perfection Certificate or confirming that there
has been no change in such information since the date of such certificate or the
date of the most recent certificate delivered pursuant to this Section 2.03(c).

(d) The Borrower agrees, on its own behalf and on behalf of each other Grantor,
at its own expense, to execute, acknowledge, deliver and cause to be duly filed
all such further instruments and documents and take all such actions as the
Collateral Agent may from time to time reasonably request to better assure,
preserve, protect and perfect the Security Interest and the rights and remedies
created hereby, including the payment of any fees and taxes required in
connection with the execution and delivery of this Agreement, the granting of
the Security Interest and the filing of any financing statements or other
documents in connection herewith or therewith. If any amount payable under or in
connection with any of the Collateral that is in excess of $2,500,000 shall be
or become evidenced by any promissory note or other instrument, such note or
instrument shall be promptly pledged and delivered to the Collateral Agent, for
the benefit of the Secured Parties, duly endorsed in a manner reasonably
satisfactory to the Collateral Agent.

Without limiting the generality of the foregoing, each Grantor hereby authorizes
the Collateral Agent, with prompt notice thereof to the Grantors, to supplement
this Agreement by supplementing Schedule II or adding additional schedules
hereto to specifically identify any asset or item that may constitute
Copyrights, Licenses, Patents or Trademarks; provided that any Grantor shall
have the right, exercisable within 10 days after it has been notified by the
Collateral Agent of the specific identification of such Collateral, to advise
the Collateral Agent in writing of any inaccuracy of the representations and
warranties made by such Grantor hereunder with respect to such Collateral. Each
Grantor agrees that it will use its best efforts to take such action as shall be
necessary in order that all representations and warranties hereunder shall be
true and correct with respect to such Collateral within 30 days after the date
it has been notified by the Collateral Agent of the specific identification of
such Collateral.

(e) At its option, the Collateral Agent may discharge past due taxes,
assessments, charges, fees, Liens, security interests or other encumbrances at
any time levied or placed on the Collateral and not permitted pursuant to
Section 7.01 of the Credit Agreement, and may pay for the maintenance and
preservation of the Collateral to the extent any Grantor fails to do so as
required by the Credit Agreement or this Agreement and within a reasonable
period of time after the Collateral Agent has requested that it do so, and each
Grantor jointly and severally agrees to reimburse the Collateral Agent within 10
days after demand for any payment made or any reasonable expense incurred by the
Collateral Agent pursuant to the foregoing authorization. Nothing in this
paragraph shall be interpreted as excusing any Grantor from the performance of,

 

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or imposing any obligation on the Collateral Agent or any Secured Party to cure
or perform, any covenants or other promises of any Grantor with respect to
taxes, assessments, charges, fees, Liens, security interests or other
encumbrances and maintenance as set forth herein or in the other Loan Documents.

(f) Each Grantor (rather than the Collateral Agent or any Secured Party) shall
remain liable (as between itself and any relevant counterparty) to observe and
perform all the conditions and obligations to be observed and performed by it
under each contract, agreement or instrument relating to the Collateral, all in
accordance with the terms and conditions thereof, and each Grantor jointly and
severally agrees to indemnify and hold harmless the Collateral Agent and the
Secured Parties from and against any and all liability for such performance.

SECTION 2.04. As to Intellectual Property Collateral. (a) Except to the extent
failure to act could not reasonably be expected to have a Material Adverse
Effect, with respect to registration or pending application of each item of its
Intellectual Property Collateral for which such Grantor has standing to do so,
each Grantor agrees to take, at its expense, all steps, including, without
limitation, in the U.S. Patent and Trademark Office, the U.S. Copyright Office
and any other governmental authority located in the United States, to
(i) maintain the validity and enforceability of any registered Intellectual
Property Collateral (or applications therefor) and maintain such Intellectual
Property Collateral in full force and effect, and (ii) pursue the registration
and maintenance of each Patent, Trademark, or Copyright registration or
application, now or hereafter included in such Intellectual Property Collateral
of such Grantor, including, without limitation, the payment of required fees and
taxes, the filing of responses to office actions issued by the U.S. Patent and
Trademark Office, the U.S. Copyright Office or other governmental authorities,
the filing of applications for renewal or extension, the filing of affidavits
under Sections 8 and 15 or the U.S. Trademark Act, the filing of divisional,
continuation, continuation-in-part, reissue and renewal applications or
extensions, the payment of maintenance fees and the participation in
interference, reexamination, opposition, cancellation, infringement and
misappropriation proceedings.

(b) Except as could not reasonably be expected to have a Material Adverse
Effect, no Grantor shall do or permit any act or knowingly omit to do any act
whereby any of its Intellectual Property Collateral may lapse, be terminated, or
become invalid or unenforceable or placed in the public domain (or in case of a
trade secret, lose its competitive value).

(c) Except where failure to do so could not reasonably be expected to have a
Material Adverse Effect, each Grantor shall take all steps to preserve and
protect each item of its Intellectual Property Collateral, including, without
limitation, maintaining the quality of any and all products or services used or
provided in connection with any of the Trademarks, consistent with the quality
of the products and services as of the date hereof, and taking all steps
necessary to ensure that all licensed users of any of the Trademarks abide by
the applicable license’s terms with respect to the standards of quality.

(d) Each Grantor agrees that, should it obtain an ownership or other interest in
any Intellectual Property Collateral after the Closing Date (“After-Acquired
Intellectual Property”) (i) the provisions of this Agreement shall automatically
apply thereto, and (ii) any such After-Acquired Intellectual Property and, in
the case of Trademarks, the goodwill

 

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symbolized thereby, shall automatically become part of the Intellectual Property
Collateral subject to the terms and conditions of this Agreement with respect
thereto.

(e) Once every fiscal quarter of the Borrower, with respect to issued or
registered Patents (or published applications therefor) or Trademarks (or
applications therefor), and once every month, with respect to registered
Copyrights, each Grantor shall sign and deliver to the Administrative Agent an
appropriate Intellectual Property Security Agreement with respect to all
applicable Intellectual Property owned or exclusively licensed by it as of the
last day of such period, to the extent that such Intellectual Property is not
covered by any previous Intellectual Property Security Agreement so signed and
delivered by it. In each case, it will promptly cooperate as reasonably
necessary to enable the Administrative Agent to make any necessary or reasonably
desirable recordations with the U.S. Copyright Office or the U.S. Patent and
Trademark Office, as appropriate.

(f) Notwithstanding the foregoing, nothing in this Agreement prevents any
Grantor from discontinuing the use or maintenance of any of its Intellectual
Property Collateral to the extent permitted by the Credit Agreement if such
Grantor determines in its reasonable business judgment that such discontinuance
is desirable in the conduct of its business.

ARTICLE III

Remedies

SECTION 3.01. Remedies Upon Default. Upon the occurrence and during the
continuance of an Event of Default, each Grantor agrees to deliver (to the
extent possible) each item of Collateral to the Collateral Agent on demand, and
it is agreed that the Collateral Agent shall have the right, at the same or
different times, with respect to any Collateral consisting of Intellectual
Property, on demand, to cause the Security Interest to become an assignment,
transfer and conveyance of any of or all such Collateral by the applicable
Grantors to the Collateral Agent. Without limiting the generality of the
foregoing, each Grantor agrees that the Collateral Agent shall have the right,
subject to the mandatory requirements of applicable law and the notice
requirements described below, to sell or otherwise dispose of all or any part of
the Collateral securing the Obligations at a public or private sale, for cash,
upon credit or for future delivery as the Collateral Agent shall deem
appropriate. Each such purchaser at any sale of Collateral shall hold the
property sold absolutely, free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (to the extent permitted by law) all
rights of redemption, stay and appraisal which such Grantor now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted.

The Collateral Agent shall give the applicable Grantors 10 days’ written notice
(which each Grantor agrees is reasonable notice within the meaning of
Section 9-611 of the New York UCC or its equivalent in other jurisdictions) of
the Collateral Agent’s intention to make any sale of Collateral. Such notice, in
the case of a public sale, shall state the time and place for such sale. Any
such public sale shall be held at such time or times within ordinary business
hours and at such place or places as the Collateral Agent may fix and state in
the notice (if any) of such sale. At any such sale, the Collateral, or portion
thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Collateral Agent may (in its sole and

 

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absolute discretion) determine. The Collateral Agent shall not be obligated to
make any sale of any Collateral if it shall determine not to do so, regardless
of the fact that notice of sale of such Collateral shall have been given. The
Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for sale, and such sale may, without further notice,
be made at the time and place to which the same was so adjourned. In case any
sale of all or any part of the Collateral is made on credit or for future
delivery, the Collateral so sold may be retained by the Collateral Agent until
the sale price is paid by the purchaser or purchasers thereof, but the
Collateral Agent shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Collateral so sold and, in case
of any such failure, such Collateral may be sold again upon like notice. At any
public (or, to the extent permitted by law, private) sale made pursuant to this
Agreement, any Secured Party may bid for or purchase, free (to the extent
permitted by law) from any right of redemption, stay, valuation or appraisal on
the part of any Grantor (all said rights being also hereby waived and released
to the extent permitted by law), the Collateral or any part thereof offered for
sale and may make payment on account thereof by using any claim then due and
payable to such Secured Party from any Grantor as a credit against the purchase
price, and such Secured Party may, upon compliance with the terms of sale, hold,
retain and dispose of such property without further accountability to any
Grantor therefor. For purposes hereof, a written agreement to purchase the
Collateral or any portion thereof shall be treated as a sale thereof; the
Collateral Agent shall be free to carry out such sale pursuant to such agreement
and no Grantor shall be entitled to the return of the Collateral or any portion
thereof subject thereto, notwithstanding the fact that after the Collateral
Agent shall have entered into such an agreement all Events of Default shall have
been remedied and the Obligations paid in full. As an alternative to exercising
the power of sale herein conferred upon it, the Collateral Agent may proceed by
a suit or suits at law or in equity to foreclose this Agreement and to sell the
Collateral or any portion thereof pursuant to a judgment or decree of a court or
courts having competent jurisdiction or pursuant to a proceeding by a
court-appointed receiver. Any sale pursuant to the provisions of this
Section 3.01 shall be deemed to conform to the commercially reasonable standards
as provided in Section 9-610(b) of the New York UCC or its equivalent in other
jurisdictions.

SECTION 3.02. Application of Proceeds. The Collateral Agent shall apply the
proceeds of any collection or sale of Collateral, including any Collateral
consisting of cash, as follows:

FIRST, to the payment of all costs and expenses incurred by the Collateral Agent
in connection with such collection or sale or otherwise in connection with this
Agreement, any other Loan Document or any of the Obligations, including all
court costs and the fees and expenses of its agents and legal counsel, the
repayment of all advances made by the Collateral Agent hereunder or under any
other Loan Document on behalf of any Grantor and any other costs or expenses
incurred in connection with the exercise of any right or remedy hereunder or
under any other Loan Document;

SECOND, to the payment in full of the Obligations (the amounts so applied to be
distributed among the Secured Parties pro rata in accordance with the amounts of
the Obligations owed to them on the date of any such distribution); and

 

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THIRD, to the applicable Grantors, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct.

The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.

SECTION 3.03. Grant of License to Use Intellectual Property. For the purpose of
enabling the Collateral Agent to exercise rights and remedies under this
Agreement at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, each Grantor shall, upon request by the
Collateral Agent at any time after and during the continuance of an Event of
Default, grant to the Collateral Agent an irrevocable, nonexclusive license
(exercisable without payment of royalty or other compensation to the Grantors)
to use, license or sublicense any of the Collateral consisting of Intellectual
Property now owned or hereafter acquired by such Grantor, and wherever the same
may be located, and including in such license reasonable access to all media in
which any of the licensed items may be recorded or stored and to all computer
software and programs used for the compilation or printout thereof. The use of
such license by the Collateral Agent may be exercised, at the option of the
Collateral Agent, during the continuation of an Event of Default; provided that
any license, sublicense or other transaction entered into by the Collateral
Agent in accordance herewith shall be binding upon the Grantors notwithstanding
any subsequent cure of an Event of Default.

ARTICLE IV

Indemnity, Subrogation and Subordination

SECTION 4.01. Indemnity. In addition to all such rights of indemnity and
subrogation as the Grantors may have under applicable law (but subject to
Section 4.03), the Borrower agrees that in the event any assets of any Grantor
shall be sold pursuant to this Agreement or any other Collateral Document to
satisfy in whole or in part an obligation owed to any Secured Party, the
Borrower shall indemnify such Grantor in an amount equal to the greater of the
book value or the fair market value of the assets so sold.

SECTION 4.02. Contribution and Subrogation. Each Subsidiary Party (a
“Contributing Party”) agrees (subject to Section 4.03) that, in the event assets
of any other Subsidiary Party shall be sold pursuant to any Collateral Document
to satisfy any Obligation owed to any Secured Party and such other Subsidiary
Party (the “Claiming Party”) shall not have been fully indemnified by the
Borrower as provided in Section 4.01, the Contributing Party shall indemnify the
Claiming Party in an amount equal to the greater of the book value or the fair
market value of such assets, in each case multiplied by a fraction of which the
numerator shall be the net worth of the Contributing Party on the date hereof
and the denominator shall be the aggregate net worth of all the Grantors on the
date hereof (or, in the case of any Grantor

 

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becoming a party hereto pursuant to Section 5.14, the date of the Intellectual
Property Security Agreement Supplement executed and delivered by such Grantor).
Any Contributing Party making any payment to a Claiming Party pursuant to this
Section 4.02 shall be subrogated to the rights of such Claiming Party to the
extent of such payment.

SECTION 4.03. Subordination. (a) Notwithstanding any provision of this Agreement
to the contrary, all rights of the Grantors under Sections 4.01 and 4.02 and all
other rights of indemnity, contribution or subrogation under applicable law or
otherwise shall be fully subordinated to the indefeasible payment in full in
cash of the Obligations. No failure on the part of any Borrower or any Grantor
to make the payments required by Sections 4.01 and 4.02 (or any other payments
required under applicable law or otherwise) shall in any respect limit the
obligations and liabilities of any Grantor with respect to its obligations
hereunder, and each Grantor shall remain liable for the full amount of the
obligations of such Grantor hereunder.

(b) Each Grantor hereby agrees that upon the occurrence and during the
continuance of an Event of Default and after notice from the Collateral Agent
all Indebtedness owed by it to any Subsidiary shall be fully subordinated to the
indefeasible payment in full in cash of the Obligations.

ARTICLE V

Miscellaneous

SECTION 5.01. Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as provided in
Section 10.02 of the Credit Agreement. All communications and notices hereunder
to any Subsidiary Party shall be given to it in care of the Borrower as provided
in Section 10.02 of the Credit Agreement.

SECTION 5.02. Waivers; Amendment. (a) No failure or delay by the Collateral
Agent, any L/C Issuer or any Lender in exercising any right or power hereunder
or under any other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Collateral Agent, the L/C Issuers and the Lenders hereunder
and under the other Loan Documents are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision of
this Agreement or consent to any departure by any Loan Party therefrom shall in
any event be effective unless the same shall be permitted by paragraph (b) of
this Section 5.02, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan or issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether
the Collateral Agent, any Lender or any L/C Issuer may have had notice or
knowledge of such Default at the time. No notice or demand on any Loan Party in
any case shall entitle any Loan Party to any other or further notice or demand
in similar or other circumstances.

 

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(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Collateral Agent and the Loan Party or Loan Parties with respect to which
such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 10.01 of the Credit Agreement.

SECTION 5.03. Collateral Agent’s Fees and Expenses; Indemnification. (a) The
parties hereto agree that the Collateral Agent shall be entitled to
reimbursement of its expenses incurred hereunder as provided in Section 10.04 of
the Credit Agreement.

(b) Without limitation of its indemnification obligations under the other Loan
Documents, the Borrower agrees to indemnify the Collateral Agent and the other
Indemnitees (as defined in Section 10.05 of the Credit Agreement) against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the reasonable fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of, the
execution, delivery or performance of this Agreement or any claim, litigation,
investigation or proceeding relating to any of the foregoing agreement or
instrument contemplated hereby, or to the Collateral, whether or not any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses resulted from (i) the gross negligence, wilful
misconduct or bad faith of such Indemnitee or of any Affiliate, director,
officer, employee, counsel, agent or attorney-in-fact of such Indemnitee or
(ii) a material breach of this Agreement by such Indemnitee (other than any
dispute against any Agent in its capacity as such).

(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Collateral Documents. The provisions
of this Section 5.03 shall remain operative and in full force and effect
regardless of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document, or any investigation made by or on
behalf of the Collateral Agent or any other Secured Party. All amounts due under
this Section 5.03 shall be payable within 10 days of written demand therefor.

SECTION 5.04. Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Grantor or the Collateral Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.

SECTION 5.05. Survival of Agreement. All covenants, agreements, representations
and warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any Lender or on its
behalf and notwithstanding that the Collateral Agent, any L/C Issuer or any

 

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Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended under the Credit
Agreement, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under any Loan Document is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated.

SECTION 5.06. Counterparts; Effectiveness; Several Agreement. This Agreement may
be executed in counterparts, each of which shall constitute an original but all
of which when taken together shall constitute a single contract. Delivery of an
executed signature page to this Agreement by facsimile or other electronic
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement. This Agreement shall become effective as to any Loan Party
when a counterpart hereof executed on behalf of such Loan Party shall have been
delivered to the Collateral Agent and a counterpart hereof shall have been
executed on behalf of the Collateral Agent, and thereafter shall be binding upon
such Loan Party and the Collateral Agent and their respective permitted
successors and assigns, and shall inure to the benefit of such Loan Party, the
Collateral Agent and the other Secured Parties and their respective successors
and assigns, except that no Loan Party shall have the right to assign or
transfer its rights or obligations hereunder or any interest herein or in the
Collateral (and any such assignment or transfer shall be void) except as
expressly contemplated by this Agreement or the Credit Agreement. This Agreement
shall be construed as a separate agreement with respect to each Loan Party and
may be amended, modified, supplemented, waived or released with respect to any
Loan Party without the approval of any other Loan Party and without affecting
the obligations of any other Loan Party hereunder.

SECTION 5.07. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction. The
parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

SECTION 5.08. Right of Set-Off. In addition to any rights and remedies of the
Lenders provided by Law, upon the occurrence and during the continuance of any
Event of Default, each Lender and its Affiliates is authorized at any time and
from time to time, without prior notice to the Borrower or any other Loan Party,
any such notice being waived by the Borrower and each Loan Party to the fullest
extent permitted by applicable Law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other Indebtedness at any time owing by, such Lender and its Affiliates to
or for the credit or the account of the respective Loan Parties against any and
all obligations owing to such Lender and its Affiliates hereunder, now or
hereafter existing, irrespective of whether or not such Lender or Affiliate
shall have made demand under this Agreement and although such obligations may be
contingent or unmatured or denominated in a currency different from that of the
applicable deposit or Indebtedness. Each Lender agrees promptly to notify the
Borrower and the Collateral Agent after any such set off and application made by
such Lender; provided, that the failure to give such notice shall not affect the
validity of such setoff and application. The rights

 

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of each Lender under this Section 5.08 are in addition to other rights and
remedies (including other rights of setoff) that such Lender may have.

SECTION 5.09. Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.

(b) Each of the Loan Parties hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Loan Document shall affect any right that
the Collateral Agent, any L/C Issuer or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement or any other Loan Document
against any Grantor or its properties in the courts of any jurisdiction.

(c) Each of the Loan Parties hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (b) of this Section 5.09. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 5.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.

SECTION 5.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY,

 

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AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.10.

SECTION 5.11. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

SECTION 5.12. Security Interest Absolute. All rights of the Collateral Agent
hereunder, the Security Interest, the grant of a security interest in the
Pledged Collateral and all obligations of each Grantor hereunder shall be
absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Credit Agreement, any other Loan Document, any agreement
with respect to any of the Obligations or any other agreement or instrument
relating to any of the foregoing, (b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement, any other Loan Document or any other agreement or instrument, (c) any
exchange, release or non-perfection of any Lien on other collateral, or any
release or amendment or waiver of or consent under or departure from any
guarantee, securing or guaranteeing all or any of the Obligations or (d) any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, any Grantor in respect of the Obligations or this Agreement.

SECTION 5.13. Termination or Release. (a) This Agreement, the Security Interest
and all other security interests granted hereby shall terminate when all the
outstanding Loan Agreement Obligations (other than unanticipated contingent
indemnification obligations) have been indefeasibly paid in full and the Lenders
have no further commitment to lend under the Credit Agreement, the L/C
Obligations have been reduced to zero and the L/C Issuers have no further
obligations to issue Letters of Credit under the Credit Agreement.

(b) A Subsidiary Party shall automatically be released from its obligations
hereunder and the Security Interest in the Collateral of such Subsidiary Party
shall be automatically released upon the consummation of any transaction
permitted by the Credit Agreement as a result of which such Subsidiary Party
ceases to be a Subsidiary of the Borrower; provided that the Required Lenders
shall have consented to such transaction (to the extent required by the Credit
Agreement) and the terms of such consent did not provide otherwise.

(c) Upon any sale or other transfer by any Grantor of any Collateral that is
permitted under the Credit Agreement, or upon the effectiveness of any written
consent to the release of the security interest granted hereby in any Collateral
pursuant to Section 10.01 of the Credit Agreement, the security interest in such
Collateral shall be automatically released.

(d) In connection with any termination or release pursuant to paragraph (a),
(b) or (c), the Collateral Agent shall execute and deliver to any Grantor, at
such Grantor’s expense, all documents that such Grantor shall reasonably request
to evidence such termination or release. Any execution and delivery of documents
pursuant to this Section 5.13 shall be without recourse to or warranty by the
Collateral Agent.

 

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SECTION 5.14. Additional Restricted Subsidiaries. Pursuant to Section 6.11 of
the Credit Agreement, certain Restricted Subsidiaries of the Loan Parties that
were not in existence or not Restricted Subsidiaries on the date of the Credit
Agreement are required to enter in this Agreement as Subsidiary Parties upon
becoming Restricted Subsidiaries. Upon execution and delivery by the Collateral
Agent and a Restricted Subsidiary of an Intellectual Property Security Agreement
Supplement, such Restricted Subsidiary shall become a Subsidiary Party hereunder
with the same force and effect as if originally named as a Subsidiary Party
herein. The execution and delivery of any such instrument shall not require the
consent of any other Loan Party hereunder. The rights and obligations of each
Loan Party hereunder shall remain in full force and effect notwithstanding the
addition of any new Loan Party as a party to this Agreement.

SECTION 5.15. General Authority of the Collateral Agent. By acceptance of the
benefits of this Agreement and any other Collateral Documents, each Secured
Party (whether or not a signatory hereto) shall be deemed irrevocably (a) to
consent to the appointment of the Collateral Agent as its agent hereunder and
under such other Collateral Documents, (b) to confirm that the Collateral Agent
shall have the authority to act as the exclusive agent of such Secured Party for
the enforcement of any provisions of this Agreement and such other Collateral
Documents against any Grantor, the exercise of remedies hereunder or thereunder
and the giving or withholding of any consent or approval hereunder or thereunder
relating to any Collateral or any Grantor’s obligations with respect thereto,
(c) to agree that it shall not take any action to enforce any provisions of this
Agreement or any other Collateral Document against any Grantor, to exercise any
remedy hereunder or thereunder or to give any consents or approvals hereunder or
thereunder except as expressly provided in this Agreement or any other
Collateral Document and (d) to agree to be bound by the terms of this Agreement
and any other Collateral Documents.

SECTION 5.16. Collateral Agent Appointed Attorney-in-Fact. Each Grantor hereby
appoints the Collateral Agent the attorney-in-fact of such Grantor for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing any instrument that the Collateral Agent may deem necessary or
advisable to accomplish the purposes hereof at any time after and during the
continuance of an Event of Default, which appointment is irrevocable and coupled
with an interest. Without limiting the generality of the foregoing, the
Collateral Agent shall have the right, upon the occurrence and during the
continuance of an Event of Default and notice by the Collateral Agent to the
Borrower of its intent to exercise such rights, with full power of substitution
either in the Collateral Agent’s name or in the name of such Grantor (a) to
receive, endorse, assign and/or deliver any and all notes, acceptances, checks,
drafts, money orders or other evidences of payment relating to the Collateral or
any part thereof; (b) to demand, collect, receive payment of, give receipt for
and give discharges and releases of all or any of the Collateral; (c) to
commence and prosecute any and all suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect or otherwise realize on
all or any of the Collateral or to enforce any rights in respect of any
Collateral; (d) to settle, compromise, compound, adjust or defend any actions,
suits or proceedings relating to all or any of the Collateral; and (e) to use,
sell, assign, transfer, pledge, make any agreement with respect to or otherwise
deal with all or any of the Collateral, and to do all other acts and things
necessary to carry out the purposes of this Agreement, as fully and completely
as though the Collateral Agent were the absolute owner of the Collateral for all
purposes; provided that nothing herein contained shall be construed as requiring
or obligating the

 

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Collateral Agent to make any commitment or to make any inquiry as to the nature
or sufficiency of any payment received by the Collateral Agent, or to present or
file any claim or notice, or to take any action with respect to the Collateral
or any part thereof or the moneys due or to become due in respect thereof or any
property covered thereby. The Collateral Agent and the other Secured Parties
shall be accountable only for amounts actually received as a result of the
exercise of the powers granted to them herein, and neither they nor their
officers, directors, employees or agents shall be responsible to any Grantor for
any act or failure to act hereunder, except for their own gross negligence or
wilful misconduct or that of any of their Affiliates, directors, officers,
employees, counsel, agents or attorneys-in-fact.

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

 

TEAM HEALTH HOLDINGS, INC., by       Name: David Jones   Title: Executive Vice
President and CFO

 

19

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TEAM HEALTH, INC., by       Name: David Jones   Title: Executive Vice President
and CFO

 

20

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TEAM FINANCE LLC By:     Name: David Jones Title:   Executive Vice President and
CFO

 

21

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HEALTH FINANCE CORPORATION By:     Name: David Jones Title:   Executive Vice
President and CFO

 

22

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ACCESS NURSE PM, INC.

AFTER HOURS PEDIATRICS, INC.

AMERICAN CLINICAL RESOURCES, INC.

ANESTHETIX HOLDINGS, LLC

ANESTHETIX MANAGEMENT, LLC

ANTHEM ASSOCIATES, LLC

BILLING MANAGEMENT, LLC

CLINIC MANAGEMENT SERVICES, INC.

DANIEL & YEAGER, INC.

D&Y HEALTHCARE CONNECTORS, LLC

ECC CHATTSWORTH DALTON MC, LLC

ECC WEST TENNESSEE MC, LLC

EMERGENCY COVERAGE CORPORATION

EMERGENCY MANAGEMENT MIDWEST, INC.

EMERGENCY PHYSICIAN ASSOCIATES, INC.

EMERGENCY PROFESSIONAL SERVICES, INC.

EPA OF WOODBURY, INC.

ER PHYSICIAN ASSOCIATES, INC.

FLORIDA HOSPITAL MEDICINE SERVICES, INC,

GREENBRIER EMERGENCY PHYSICIANS, INC.

HCFS HEALTH CARE FINANCIAL SERVICES, INC.

HEALTH CARE ALLIANCE, INC.

HEALTHCARE REVENUE RECOVERY GROUP, LLC

HERSCHEL FISCHER, INC.

HOSPITAL MEDICINE ASSOCIATES, LLC

INPHYNET CONTRACTING SERVICES, INC.

INPHYNET SOUTH BROWARD, INC.

KARL G. MANGOLD, INC.

KEIGHTLEY AND PARSLEY, INC.

KELLY MEDICAL SERVICES CORPORATION

MEDICAL MANAGEMENT RESOURCES, INC.

MEDICAL SERVICES, INC.

NORTHWEST EMERGENCY PHYSICIANS, INCORPORATED

NORTHWEST HOSPITAL MEDICINE PHYSICIANS, INC.

 

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NURSE ON DEMAND, INC.

PARAGON CONTRACTING SERVICES, INC.

PARAGON EMERGENCY SERVICES, INC.

PSYCHIATRISTS ONLY, LLC

QUANTUM PLUS, INC.

SOUTHEASTERN EMERGENCY PHYSICIANS OF MEMPHIS, INC.

SOUTHEASTERN EMERGENCY PHYSICIANS, INC.

SOUTHEASTERN PHYSICIAN ASSOCIATES, INC.

SOUTHWEST FLORIDA EMERGENCY MANAGEMENT, INC.

SPECTRUM HEALTHCARE RESOURCES OF DELAWARE, INC.

SPECTRUM HEALTHCARE RESOURCES, INC.

SPECTRUM HEALTHCARE SERVICES, INC.

SPECTRUM HEALTH INTERNATIONAL, INC.

SPECTRUM PRIMARY CARE, INC.

TEAM ANESTHESIA, INC.

TEAM ANESTHESIA HOLDINGS, LLC

TEAM HEALTH ANESTHESIA MANAGEMENT SERVICES, INC.

TEAM HEALTH FINANCIAL SERVICES, INC.

TEAMHEALTH PATIENT SAFETY ORGANIZATION, INC.

TEAM RADIOLOGY, INC.

THE EMERGENCY ASSOCIATES FOR MEDICINE, INC.

THMS-ST. JOSEPH MC, LLC

THMS WEST TENNESSEE MC, LLC

THSE-MARCO URGENT CARE, LLC

THSE-SOUTH FLORIDA MC, LLC

THW EMERGENCY MANAGEMENT OF HOUSTON, INC.

By:     Name: David Jones Title:   Vice President and Treasurer

 

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FISCHERMANGOLD, A CALIFORNIA GENERAL PARTNERSHIP By:       Herschel Fischer,
Inc., General Partner By:     Name: David Jones Title:   Vice President and
Treasurer

 

By:       Karl G. Mangold, Inc., General Partner By:     Name: David Jones
Title:   Vice President and Treasurer

 

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JPMORGAN CHASE BANK, N.A.,

as Collateral Agent,

by       Name:   Title:

[Signature Page to IP Security Agreement]

 

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Schedule I to the

Intellectual Property

Security Agreement

SUBSIDIARY PARTIES

SUBSIDIARY PARTIES

Entity Name

 

  1. Team Finance LLC

  2. Health Finance Corporation

  3. Team Health, Inc.

  4. Access Nurse PM, Inc.

  5. After Hours Pediatrics, Inc.

  6. American Clinical Resources, Inc.

  7. Anesthetix Holdings, LLC

  8. Anesthetix Management, LLC

  9. Anthem Associates, LLC

  10. Billing Management, LLC

  11. Clinic Management Services, Inc.

  12. Daniel & Yeager, Inc.

  13. D&Y Healthcare Connectors, LLC

  14. ECC Chattsworth Dalton MC, LLC

  15. ECC West Tennessee MC, LLC

  16. Emergency Coverage Corporation

  17. Emergency Management Midwest, Inc.

  18. Emergency Physician Associates, Inc.

  19. Emergency Professional Services, Inc.

  20. EPA of Woodbury, Inc.

  21. ER Physician Associates, Inc.

  22. FischerMangold Partnership

  23. Florida Hospital Medicine Services, Inc.

  24. Greenbrier Emergency Physicians, Inc.

  25. HCFS Health Care Financial Services, Inc.

  26. Health Care Alliance, Inc.

  27. Healthcare Revenue Recovery Group, LLC

  28. Herschel Fischer, Inc.

  29. Hospital Medicine Associates, LLC

  30. InPhyNet Contracting Services, Inc.

  31. InPhyNet South Broward, Inc.

  32. Karl G. Mangold, Inc.

  33. Keightley and Parsley, Inc.

  34. Kelly Medical Services Corporation

  35. Medical Management Resources, Inc.

  36. Medical Services, Inc.

  37. Northwest Emergency Physicians, Incorporated

  38. Northwest Hospital Medicine Physicians, Inc.

  39. Nurse on Demand, Inc.

  40. Paragon Contracting Services, Inc.

  41. Paragon Emergency Services, Inc.

  42. Psychiatrists Only, LLC

  43. Quantum Plus, Inc.

  44. Southeastern Emergency Physicians of Memphis, Inc.

  45. Southeastern Emergency Physicians, Inc.

  46. Southeastern Physician Associates, Inc.

 

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  47. Southwest Florida Emergency Management, Inc.

  48. Spectrum Healthcare Resources of Delaware, Inc.

  49. Spectrum Healthcare Resources, Inc.

  50. Spectrum Healthcare Services, Inc.

  51. Spectrum Health International, Inc.

  52. Spectrum Primary Care, Inc.

  53. Team Anesthesia, Inc.

  54. Team Anesthesia Holdings, LLC

  55. Team Health Anesthesia Management Services, Inc.

  56. Team Health Financial Services, Inc.

  57. TeamHealth Patient Safety Organization, Inc.

  58. Team Radiology, Inc.

  59. The Emergency Associates for Medicine, Inc.

  60. THMS-St. Joseph MC, LLC

  61. THMS West Tennessee MC, LLC

  62. THSE-Marco Urgent Care, LLC

  63. THSE-South Florida MC, LLC

  64. THW Emergency Management of Houston, Inc.

 

3

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Schedule II to the

Intellectual Property

Security Agreement

U.S. COPYRIGHTS

See Attached.

PATENTS

None.

TRADEMARK/TRADE NAMES

See Attached.

 

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Exhibit I to the

Intellectual Property

Security Agreement

SUPPLEMENT NO. __ dated as of [•], to the Intellectual Property Security
Agreement dated as of [            ] among TEAM HEALTH HOLDINGS, INC.
(“Holdings”), TEAM HEALTH, INC. (the “Borrower”), the Subsidiaries of Holdings
identified therein and JPMORGAN CHASE BANK, N.A., as Collateral Agent.

A. Reference is made to the Credit Agreement dated as of June 29, 2011 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among Holdings, the Borrower, JPMorgan Chase
Bank, N.A., as Administrative Agent, Swing Line Lender and an L/C Issuer, each
Lender from time to time party thereto and any other agent party thereto.

B. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement and the Intellectual
Property Security Agreement referred to therein.

C. The Grantors have entered into the Intellectual Property Security Agreement
in order to induce the Lenders to make Loans and the L/C Issuers to issue
Letters of Credit. Section 5.14 of the Intellectual Property Security Agreement
provides that additional Restricted Subsidiaries of the Borrower may become
Subsidiary Parties under the Intellectual Property Security Agreement by
execution and delivery of an instrument in the form of this Supplement. The
undersigned Restricted Subsidiary (the “New Subsidiary”) is executing this
Supplement in accordance with the requirements of the Credit Agreement to become
a Subsidiary Party under the Intellectual Property Security Agreement in order
to induce the Lenders to make additional Loans and the L/C Issuers to issue
additional Letters of Credit and as consideration for Loans previously made and
Letters of Credit previously issued.

Accordingly, the Collateral Agent and the New Subsidiary agree as follows:

SECTION 1. In accordance with Section 5.14 of the Intellectual Property Security
Agreement, the New Subsidiary by its signature below becomes a Subsidiary Party
(and accordingly, becomes a Grantor) and Grantor under the Intellectual Property
Security Agreement with the same force and effect as if originally named therein
as a Subsidiary Party and the New Subsidiary hereby (a) agrees to all the terms
and provisions of the Intellectual Property Security Agreement applicable to it
as a Subsidiary Party and Grantor thereunder and (b) represents and warrants
that the representations and warranties made by it as a Grantor thereunder are
true and correct on and as of the date hereof. In furtherance of the foregoing,
the New Subsidiary, as security for the payment and performance in full of the
Obligations, does hereby create and grant to the Collateral Agent, its
successors and assigns, for the benefit of the Secured Parties, their successors
and assigns, a security interest in and lien on all of the New Subsidiary’s
right, title and

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interest in and to the Collateral (as defined in the Intellectual Property
Security Agreement) of the New Subsidiary. Each reference to a “Grantor” in the
Intellectual Property Security Agreement shall be deemed to include the New
Subsidiary. The Intellectual Property Security Agreement is hereby incorporated
herein by reference.

SECTION 2. The New Subsidiary represents and warrants to the Collateral Agent
and the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.

SECTION 3. This Supplement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Supplement shall become effective when the Collateral Agent shall
have received a counterpart of this Supplement that bears the signature of the
New Subsidiary and the Collateral Agent has executed a counterpart hereof.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.

SECTION 4. The New Subsidiary hereby represents and warrants that (a) set forth
on Schedule I attached hereto is a true and correct schedule of any and all
Collateral of the New Subsidiary consisting of Intellectual Property and (b) set
forth under its signature hereto, is the true and correct legal name of the New
Subsidiary, its jurisdiction of formation and the location of its chief
executive office.

SECTION 5. Except as expressly supplemented hereby, the Intellectual Property
Security Agreement shall remain in full force and effect.

SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Intellectual Property Security Agreement shall not in any way
be affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
hereto shall endeavor in good-faith negotiations to replace the invalid, illegal
or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

SECTION 8. All communications and notices hereunder shall be in writing and
given as provided in Section 5.01 of the Intellectual Property Security
Agreement.

 

2

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SECTION 9. The New Subsidiary agrees to reimburse the Collateral Agent for its
reasonable out-of-pocket expenses in connection with this Supplement, including
the reasonable fees, other charges and disbursements of counsel for the
Collateral Agent.

IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly
executed this Supplement to the Intellectual Property Security Agreement as of
the day and year first above written.

 

[NAME OF NEW SUBSIDIARY], by       Name:   Title:    

Legal Name:

 

Jurisdiction of Formation:

 

Location of Chief Executive office:

 

JPMORGAN CHASE BANK, N.A.,

as Collateral Agent,

by       Name:   Title:

 

3

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Schedule I to the

Supplement No __ to

the Intellectual Property

Security Agreement

INTELLECTUAL PROPERTY

 

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EXHIBIT K

[Form of] Loan Auction Procedures

This Exhibit K is intended to summarize certain basic terms of the reverse Dutch
auction procedures pursuant to and in accordance with the terms and conditions
of Section 10.07(k) of the Credit Agreement, of which this Exhibit K is a part.
It is not intended to be a definitive statement of all of the terms and
conditions of a reverse Dutch auction, the definitive terms and conditions for
which shall be set forth in the applicable offering document. None of the
Administrative Agent, the Auction Manager or any of their respective Affiliates
makes any recommendation pursuant to any offering document as to whether or not
any Lender should sell its Term Loans to a Purchasing Borrower Party pursuant to
any offering documents, nor shall the decision by the Administrative Agent or
the Auction Manager (or any of their respective Affiliates) in its capacity as a
Lender to sell its Term Loans to a Purchasing Borrower Party be deemed to
constitute such a recommendation. Each Lender should make its own decision as to
whether to sell any of its Term Loans and as to the price to be sought for such
Term Loans. In addition, each Lender should consult its own attorney, business
advisor or tax advisor as to legal, business, tax and related matters concerning
each Auction Purchase Offer and the relevant offering documents. Capitalized
terms not otherwise defined in this Exhibit K have the meanings assigned to them
in the Credit Agreement.

Notice Procedures. In connection with each Auction Purchase Offer, a Purchasing
Borrower Party will provide notification to the Auction Manager (for
distribution to the Lenders) of the Class or Classes of Term Loans (as
determined by such Purchasing Borrower Party in its sole discretion) that will
be the subject of such Auction Purchase Offer (each, an “Auction Notice”). Each
Auction Notice shall contain (i) the maximum principal amount (calculated on the
face amount thereof) of each Class or Classes of Term Loans that the applicable
Purchasing Borrower Party offers to purchase in such Auction Purchase Offer (the
“Auction Amount”), which shall be no less than $10,000,000 (across all such
Classes); (ii) the range of discounts to par (the “Discount Range”), expressed
as a range of prices (in increments of $25) per $1,000, at which such Purchasing
Borrower Party would be willing to purchase Term Loans of each applicable Class
in such Auction Purchase Offer; and (iii) the date on which such Auction
Purchase Offer will conclude (which date shall not be less than three Business
Days following the distribution of the Auction Notice to the Lenders of the
applicable Class(es)), on which date Return Bids (as defined below) will be due
by 1:00 p.m., New York City time (as such date and time may be extended by the
Auction Manager, the “Expiration Time”). Such Expiration Time may be extended
for a period not exceeding three Business Days upon notice by the applicable
Purchasing Borrower Party to the Auction Manager received not less than 24 hours
before the original Expiration Time; provided that only two extensions per offer
shall be permitted. An Auction Purchase Offer shall be regarded as a “failed
Auction Purchase Offer” in the event that either (x) the applicable Purchasing
Borrower Party withdraws such Auction Purchase Offer in accordance with the
terms hereof or (y) the Expiration Time occurs with no Qualifying Bids (as
defined below) having been received. In the event of a failed Auction Purchase
Offer, no Purchasing Borrower Party shall be permitted to deliver a new Auction
Notice prior to the date occurring three Business Days after such withdrawal or
Expiration Time, as the case may be. Notwithstanding anything to the contrary
contained herein, the applicable Purchasing Borrower Party shall not initiate
any Auction Purchase Offer by delivering an Auction Notice to the

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Auction Manager until after the conclusion (whether successful or failed) of the
previous Auction Purchase Offer (if any), whether such conclusion occurs by
withdrawal of such previous Auction Purchase Offer or the occurrence of the
Expiration Time of such previous Auction Purchase Offer.

Reply Procedures. In connection with any Auction Purchase Offer, each Lender of
the applicable Class(es) wishing to participate in such Auction Purchase Offer
shall, prior to the Expiration Time, provide the Auction Manager with a notice
of participation, in the form included in the applicable offering document
(each, a “Return Bid”) which shall specify (i) a discount to par that must be
expressed as a price (in increments of $25) per $1,000 in principal amount of
Term Loans (the “Reply Price”) of the applicable Class(es) within the Discount
Range and (ii) the principal amount of Term Loans of the applicable Class(es),
in an amount not less than $1,000,000 or an integral multiple of $1,000 in
excess thereof, that such Lender offers for sale at its Reply Price (the “Reply
Amount”). A Lender may submit a Reply Amount that is less than the minimum
amount and incremental amount requirements described above only if the Reply
Amount comprises the entire amount of the Term Loans of the applicable Class(es)
held by such Lender. Lenders may only submit one Return Bid per Class per
Auction Purchase Offer, but each Return Bid may contain up to three component
bids, each of which may result in a separate Qualifying Bid and each of which
will not be contingent on any other component bid submitted by such Lender
resulting in a Qualifying Bid. In addition to the Return Bid, the participating
Lender must execute and deliver, to be held in escrow by the Auction Manager, an
Affiliated Lender Assignment and Assumption. No Purchasing Borrower Party will
purchase any Term Loans at a price that is outside of the applicable Discount
Range, nor will any Return Bids (including any component bids specified therein)
submitted at a price that is outside such applicable Discount Range be
considered in any calculation of the Applicable Threshold Price (as defined
below).

Acceptance Procedures. Based on the Reply Prices and Reply Amounts received by
the Auction Manager, the Auction Manager, in consultation with the applicable
Purchasing Borrower Party, will determine the applicable discounted price (the
“Applicable Discounted Price”) for the Auction, which will be (i) the lowest
Reply Price for which such Purchasing Borrower Party can complete the Auction
Purchase Offer at the Auction Amount or (ii) in the event that the aggregate
amount of the Reply Amounts relating to such Auction Notice is insufficient to
allow such Purchasing Borrower Party to purchase the entire Auction Amount, the
highest Reply Price that is within the Discounted Range so that such Purchasing
Borrower Party can complete the purchase at such aggregate amount of Reply
Amounts. Subject to the conditions contained in the Auction Notice, the
applicable Purchasing Borrower Party shall purchase the Term Loans (or the
respective portions thereof) from each Lender with a Reply Price that is equal
to or less than the Applicable Discounted Price (“Qualifying Bids”) at the
Applicable Discounted Price; provided that if the aggregate amount required to
pay the Qualifying Bids would exceed the Auction Amount for such Auction
Purchase Offer, such Purchasing Borrower Party shall pay such Qualifying Bids at
the Applicable Discounted Price ratably based on the respective principal
amounts of such Qualifying Bids (subject to rounding requirements specified by
the Auction Manager). Each participating Term Lender shall be given notice as to
whether its bid is a Qualifying Bid as soon as reasonably practicable but in no
case later than five Business Days from the date the Return Bid was due.

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Notification Procedures. The Auction Manager will calculate the Applicable
Discounted Price and will cause the Administrative Agent to post the Applicable
Discounted Price and proration factor onto an internet or intranet site
(including an IntraLinks, SyndTrak or other electronic workspace) in accordance
with the Auction Manager’s standard dissemination practices by 4:00 p.m., New
York City time, on the Business Day during which the Expiration Time occurs. The
Auction Manager will insert the principal amount of Term Loans of the applicable
Class(es) to be assigned and the applicable settlement date into each applicable
Auction Assignment and Assumption received in connection with a Qualifying Bid.
Upon the request of the submitting Lender, the Auction Manager will promptly
return any Auction Assignment and Assumption received in connection with a
Return Bid that is not a Qualifying Bid.

Additional Procedures. After delivery of an Auction Notice, the applicable
Purchasing Borrower Party may withdraw an Auction Purchase Offer only if no
Qualifying Bid has been received by the Auction Manager at the time of
withdrawal. Any Return Bid (including any component bid thereof) delivered to
the Auction Manager may not be withdrawn, modified, revoked, terminated or
cancelled by a Lender. However, an Auction Purchase Offer may become void if the
conditions to the purchase set forth in Section 10.07(k) of the Credit Agreement
are not met. The purchase price in respect of each Qualifying Bid for which
purchase by the applicable Purchasing Borrower Party is required in accordance
with the foregoing provisions shall be paid directly by such Purchasing Borrower
Party to the respective assigning Lender on a settlement date as determined
jointly by such Purchasing Borrower Party and the Auction Manager (which shall
be not later than ten Business Days after the date Return Bids are due). The
applicable Purchasing Borrower Party shall execute each applicable Affiliated
Lender Assignment and Assumption received in connection with a Qualifying Bid.
All questions as to the form of documents and eligibility of Term Loans that are
the subject of an Auction Purchase Offer will be determined by the Auction
Manager, in consultation with the applicable Purchasing Borrower Party, and
their determination will be final and binding so long as such determination is
not inconsistent with the terms of Section 10.07(k) of the Credit Agreement or
this Exhibit K. The Auction Manager’s interpretation of the terms and conditions
of the offering document, in consultation with the applicable Purchasing
Borrower Party, will be final and binding so long as such interpretation is not
inconsistent with the terms of Section 10.07(k) of the Credit Agreement or this
Exhibit K. None of the Administrative Agent, the Auction Manager or any of their
respective Affiliates assumes any responsibility for the accuracy or
completeness of the information concerning the applicable Purchasing Borrower
Party, the Loan Parties or any of their respective Affiliates (whether contained
in an offering document or otherwise) or for any failure to disclose events that
may have occurred and may affect the significance or accuracy of such
information. This Exhibit K shall not require any Purchasing Borrower Party to
initiate any Auction Purchase Offer.

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EXHIBIT L

[FORM OF]

AFFILIATED LENDER ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between the
Assignor (as defined below) and the Assignee (as defined below). Capitalized
terms used in this Assignment and Assumption and not otherwise defined herein
have the meanings specified in the Credit Agreement dated as of June 29, 2011
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”), among Team Health Holdings, Inc., Team Health,
Inc., (the “Borrower”), JPMorgan Chase Bank, N.A., as Administrative Agent (in
such capacity, the “Administrative Agent”), Swing Line Lender and L/C Issuer,
the lenders from time to time party thereto (the “Lenders”) and any other agent
party thereto, receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below, (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the facility identified below
(including participations in any Letters of Credit or Swing Line Loans included
in such facility) and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including, but not limited to, contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as the “Assigned Interest”). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the
Assignor.

 

  1. Assignor (the “Assignor”): [Name of ASSIGNOR]

 

  2. Assignee (the “Assignee”): [Name of ASSIGNEE]

 

  3. Borrower: TEAM HEALTH, INC.

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

  4. Administrative Agent: JPMORGAN CHASE BANK, N.A.

 

  5. Assigned Interest:

 

Facility

   Aggregate Amount of
Commitment/Loans
of all Lenders      Amount of
Commitment/
Loans  Assigned      Percentage
Assigned of
Commitment/
Loans  

Tranche A Term Loans

   $         $           %   

Tranche B Term Loans

   $         $           %   

Effective Date: _________________, 20[ ] [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR].

 

2

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The terms set forth in this Assignment and Assumption are hereby agreed to:

 

[NAME OF ASSIGNOR],

as Assignor,

by      

Name:

Title:

 

3

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

[NAME OF ASSIGNEE],

as Assignee,

by      

Name:

Title:

 

4

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Annex 1

CREDIT AGREEMENT1

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement, (ii) the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, (iii) the financial
condition of Holdings, the Borrower, or any of their Subsidiaries or Affiliates
or any other Person obligated in respect of the Credit Agreement or (iv) the
performance or observance by Holdings, the Borrower, or any of their
Subsidiaries or Affiliates or any other Person of any of their obligations under
the Credit Agreement.

1.2 Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement; (ii) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender;
(iii) it is a Purchasing Borrower Party (as defined in the Credit Agreement);
(iv) as of the date hereof the Assignee does not have any material non-public
information (“MNPI”) with respect to any Loan Party that either (A) has not been
disclosed to the Lenders or (B) if not disclosed to the Lenders, could
reasonably be expected to have a material effect upon, or otherwise be material
(1) to a Lender’s decision to assign its Term Loans to the Assignee or (2) to
the market price of the Term Loans; (v) from and after the Effective Date, it
shall be a party to the Credit Agreement, and (v) it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 6.01 thereof, and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase the
Assigned Interest on the basis of which it has made such analysis and

 

 

1 

Capitalized terms used in this Assignment and Assumption and not otherwise
defined herein have the meanings specified in the Credit Agreement dated as of
June 29, 2011 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among Team Health Holdings,
Inc., Team Health, Inc., (the “Borrower”), JPMorgan Chase Bank, N.A., as
Administrative Agent (in such capacity, the “Administrative Agent”), Swing Line
Lender and L/C Issuer, the lenders from time to time party thereto and any other
agent party thereto.

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decision independently and without reliance on any Agent or any other Lender;
and (b) agrees that (i) it will, independently and without reliance on the
Assignor, any 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 taking or not taking action under the Credit Agreement and
(ii) it will perform in accordance with their terms all of the obligations which
by the terms of the Loan Documents are required to be performed by it as a
Lender, including if it is a Foreign Lender, its obligations pursuant to
Section 10.15 of the Credit Agreement.

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

3. General Provisions.

3.1 In accordance with Section 10.07 of the Credit Agreement, upon execution,
delivery, acceptance and recording of this Assignment and Assumption, from and
after the Closing Date, (a) the Assignee shall be a party to the Credit
Agreement and (b) the Assignor shall, to the extent of the Assigned Interest
assigned pursuant to this Assignment and Assumption, be released from its
obligations under the Credit Agreement (and if this Assignment and Assumption
covers all of the Assignor’s rights and obligations under the Credit Agreement,
the Assignor shall cease to be a party to the Credit Agreement but shall
continue to be entitled to the benefits and subject to the obligations of
Sections 3.01, 3.04, 3.05, 10.04 and 10.05 of the Credit Agreement with respect
to facts and circumstances occurring prior to the effective date of such
assignment.

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

 

2