Exhibit 10.1

 

EXECUTION VERSION

 

 

 

FIRST LIEN NOTE PURCHASE AGREEMENT

 

dated as of June 29, 2017

 

among

 

BIOSCRIP, INC.,

as Issuer,

 

THE PURCHASERS FROM TIME TO TIME PARTY HERETO,

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Collateral Agent

 

 

 

 

 

 

Table of Contents

 

    Page       ARTICLE I DEFINITIONS; CONSTRUCTION 1 Section 1.1 Definitions 1
Section 1.2 Classifications of Notes and Issuances 38 Section 1.3 Accounting
Terms and Determination 38 Section 1.4 Terms Generally 39       ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENTS 39 Section 2.1 General Description of
Facilities 39 Section 2.2 Commitments 39 Section 2.3 Purchase of Notes 39
Section 2.4 Interest Elections 40 Section 2.5 Termination of Commitments 40
Section 2.6 Repayment of Notes 40 Section 2.7 Evidence of Indebtedness 40
Section 2.8 Optional Prepayments; Prepayment Premium 41 Section 2.9 Mandatory
Prepayments 41 Section 2.10 Interest on Notes 42 Section 2.11 Fees 43 Section
2.12 Computation of Interest and Fees 43 Section 2.13 Inability to Determine
Interest Rates 43 Section 2.14 Illegality 43 Section 2.15 Increased Costs 44
Section 2.16 Funding Indemnity 45 Section 2.17 Taxes 45 Section 2.18 Payments
Generally; Pro Rata Treatment; Sharing of Set-offs 47 Section 2.19 Mitigation of
Obligations 48 Section 2.20 Replacement of Purchasers 49 Section 2.21 Defaulting
Purchasers 49 Section 2.22 Legend 49 Section 2.23 Transfer and Exchange of Notes
50 Section 2.24 Replacement of Notes 50 Section 2.25 Representations of
Purchasers 50 Section 2.26 Prepayment Premium 51       ARTICLE III CONDITIONS
PRECEDENT TO PURCHASE OF NOTES 51 Section 3.1 Conditions to Effectiveness 51
Section 3.2 Delivery of Documents 55       ARTICLE IV REPRESENTATIONS AND
WARRANTIES 55 Section 4.1 Existence; Power 55 Section 4.2 Organizational Power;
Authorization 55 Section 4.3 Governmental Approvals; No Conflicts 55 Section 4.4
Financial Statements; Material Adverse Effect 56 Section 4.5 Litigation and
Environmental Matters 56 Section 4.6 Compliance with Laws and Agreements 56
Section 4.7 Investment Company Act 56 Section 4.8 Taxes 57 Section 4.9 Margin
Regulations 57

 

-i-

 

 

Table of Contents

(continued)

 

    Page       Section 4.10 ERISA 57 Section 4.11 Ownership of Property;
Insurance 58 Section 4.12 Disclosure 58 Section 4.13 Labor Relations 59 Section
4.14 Subsidiaries 59 Section 4.15 Solvency 59 Section 4.16 Deposit and
Disbursement Accounts 59 Section 4.17 Collateral Documents 59 Section 4.18
Material Agreements 60 Section 4.19 Sanctions; Anti-Terrorism and
Anti-Corruption Laws 60 Section 4.20 Compliance with Healthcare Laws 62 Section
4.21 HIPAA/HITECH Compliance 64 Section 4.22 Reimbursement 65 Section 4.23 Fraud
and Abuse 65 Section 4.24 EEA Financial Institutions; Other Regulations 65
Section 4.25 Offer of Notes; Private Offering 66 Section 4.26 Designation as
Credit Facilities 66       ARTICLE V AFFIRMATIVE COVENANTS 66 Section 5.1
Financial Statements and Other Information 66 Section 5.2 Notices of Material
Events 68 Section 5.3 Existence; Conduct of Business 70 Section 5.4 Compliance
with Laws 70 Section 5.5 Payment of Obligations 70 Section 5.6 Books and Records
70 Section 5.7 Visitation and Inspection 71 Section 5.8 Maintenance of
Properties; Insurance; Credit Ratings 71 Section 5.9 Use of Proceeds; Margin
Regulations 71 Section 5.10 Casualty and Condemnation 72 Section 5.11 Cash
Management 72 Section 5.12 Additional Subsidiaries and Collateral 73 Section
5.13 Additional Real Estate; Leased Locations 74 Section 5.14 Further Assurances
74 Section 5.15 Healthcare Matters 74 Section 5.16 Post-Closing Covenants 75
Section 5.17 Second Lien Credit Enhancements 75 Section 5.18 Second Lien Note
Documents 75 Section 5.19 Corporate Compliance and Quality Management Program 76
      ARTICLE VI FINANCIAL COVENANT 76     ARTICLE VII NEGATIVE COVENANTS 76
Section 7.1 Indebtedness and Disqualified Capital Stock 76 Section 7.2 Liens 79
Section 7.3 Fundamental Changes 80 Section 7.4 Investments, Loans 80 Section 7.5
Restricted Payments 82 Section 7.6 Sale of Assets 82

 

-ii-

 

Table of Contents

(continued)

 

    Page       Section 7.7 Transactions with Affiliates 83 Section 7.8
Restrictive Agreements 84 Section 7.9 Sale and Leaseback Transactions 84 Section
7.10 Hedging Transactions 84 Section 7.11 Amendment to Material Documents 84
Section 7.12 Accounting Changes 84 Section 7.13 Compliance with Anti-Terrorism
and Anti-Corruption Laws and Sanctions 85 Section 7.14 Health Care Matters 85
Section 7.15 ERISA 85 Section 7.16 Payments in Respect of Senior Notes 85
Section 7.17 Anti-Layering 85 Section 7.18 Second Lien Obligations 85      
ARTICLE VIII EVENTS OF DEFAULT 86 Section 8.1 Events of Default 86 Section 8.2
Application of Proceeds from Collateral 89       ARTICLE IX THE COLLATERAL AGENT
90 Section 9.1 Appointment of the Collateral Agent 90 Section 9.2 Nature of
Duties of the Collateral Agent 91 Section 9.3 Lack of Reliance on the Collateral
Agent 91 Section 9.4 Certain Rights of the Collateral Agent 91 Section 9.5
Reliance by the Collateral Agent 92 Section 9.6 The Collateral Agent in its
Individual Capacity 92 Section 9.7 No Filing Obligation 92 Section 9.8 Successor
Collateral Agent 92 Section 9.9 The Collateral Agent May File Proofs of Claim 93
Section 9.10 Authorization to Execute Other Note Documents 94 Section 9.11
Collateral and Guaranty Matters 94 Section 9.12 Right to Realize on Collateral
and Enforce Guarantee 94 Section 9.13 Secured Bank Product Obligations and
Hedging Obligations 95 Section 9.14 ABDC INTERCREDITOR AGREEMENT 95 Section 9.15
FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT 95       ARTICLE X MISCELLANEOUS
96 Section 10.1 Notices 96 Section 10.2 Waiver; Amendments 97 Section 10.3
Expenses; Indemnification 99 Section 10.4 Successors and Assigns 100 Section
10.5 Governing Law; Jurisdiction; Consent to Service of Process 103 Section 10.6
WAIVER OF JURY TRIAL 104 Section 10.7 Right of Set-off 104 Section 10.8
Counterparts; Integration 104 Section 10.9 Survival 105 Section 10.10
Severability 105 Section 10.11 Confidentiality 105 Section 10.12 Interest Rate
Limitation 106

 

-iii-

 

 

Table of Contents

(continued)

 

    Page       Section 10.13 Waiver of Effect of Corporate Seal 106 Section
10.14 Patriot Act 106 Section 10.15 No Advisory or Fiduciary Responsibility 107
Section 10.16 First Lien/Second Lien Intercreditor Agreement 107 Section 10.17
Captions 107 Section 10.18 Acknowledgement and Consent to Bail-In of EEA
Financial Institutions 108 Section 10.19 Force Majeure 108

 

-iv-

 

 

Table of Contents

 

Schedules

 

Schedule I - Commitment Amounts Schedule II - Competitors Schedule 4.11(a) -
Real Estate Schedule 4.11(c) - Insurance Schedule 4.14 - Subsidiaries Schedule
4.16 - Permitted Third Party Banks; Deposit and Disbursement Accounts Schedule
4.18 - Material Agreements Schedule 4.20(a) - Healthcare Matters Schedule
4.20(g) - Health Care Audits Schedule 4.22(a) - Company Reimbursement Approval
Compliance Schedule 5.16 - Post-Closing Covenants Schedule 7.1 - Existing
Indebtedness Schedule 7.2 - Existing Liens Schedule 7.4 - Existing Investments
Schedule 7.7 - Existing Transactions with Affiliates

 

Exhibits

 

Exhibit A - Form of Assignment and Assumption Exhibit B - Form of Note Exhibit
2.4 - Form of Notice of Conversion/Continuation Exhibit 3.1(b)(ii) - Form of
Secretary’s Certificate Exhibit 3.1(b)(v) - Form of Closing Date Certificate
Exhibit 5.1(c) - Form of Compliance Certificate

 

-v-

 

 

FIRST LIEN NOTE PURCHASE AGREEMENT

 

THIS FIRST LIEN NOTE PURCHASE AGREEMENT (this “Agreement”) is made and entered
into as of June 29, 2017, by and among BIOSCRIP, INC., a Delaware corporation
(the “Issuer”), the several financial institutions and purchasers from time to
time party hereto (the “Purchasers”), and Wells Fargo Bank, National
Association, in its capacity as collateral agent for itself and the Purchasers
(the “Collateral Agent”).

 

WITNESSETH:

 

WHEREAS, the Issuer has agreed to issue, and the Purchasers have severally (and
not jointly) agreed to purchase from the Issuer, notes in the aggregate
principal amount of $200,000,000 upon and subject to the terms and conditions
set forth in this Agreement;

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the Issuer, the Purchasers and the Collateral Agent agree as follows:

 

ARTICLE I 

 

DEFINITIONS; CONSTRUCTION

 

Section 1.1          Definitions.   In addition to the other terms defined
herein, the following terms used herein shall have the meanings herein specified
(to be equally applicable to both the singular and plural forms of the terms
defined):

 

“ABDC” shall mean AmerisourceBergen Drug Corporation, a Delaware corporation.

 

“ABDC Obligations” shall mean all obligations of the Note Parties or any of
their Subsidiaries owing to ABDC under the ABDC Prime Vendor Agreement and any
other agreement, instrument, certificate or other document pursuant to which any
Note Party or any Subsidiary of a Note Party grants (or purports to grant) in
favor of ABDC a security interest in or a Lien on any property of such Note
Party or such Subsidiary now or at any time hereafter to secure such
obligations.

 

“ABDC Intercreditor Agreement” shall mean that certain Intercreditor Agreement
dated as of the Closing Date by and between the Collateral Agent, the Second
Lien Collateral Agent and ABDC, as amended, restated, supplemented or otherwise
modified from time to time in accordance therewith and herewith.

 

“ABDC Lien” shall mean (a) initially, the Lien of ABDC on the Inventory and
Accounts of the Issuer and its Subsidiaries and the products and proceeds
thereof, as described more particularly and defined in the definition of “Second
Priority Collateral” (as defined in the ABDC Intercreditor Agreement) and, in
all events, subject to the provisions of the ABDC Intercreditor Agreement and
(b) following the Issuer’s compliance with Section 6 of Schedule 5.16, the Lien
of ABDC on the Inventory acquired from ABDC pursuant to the ABDC Intercreditor
Agreement and, in all events, subject to the provisions of the ABDC
Intercreditor Agreement.

 

“ABDC Prime Vendor Agreement” shall mean that certain Prime Vendor Agreement
dated as of July 1, 2009 by and among the Issuer and ABDC, as amended by that
certain First Amendment dated as of March 25, 2010, that certain Second
Amendment dated as of June 1, 2010, that certain Third Amendment dated as of
August 1, 2010, that certain Fourth Amendment dated as of May 1, 2011, that
certain Fifth Amendment dated as of January 1, 2012, that certain Sixth
Amendment dated as of September 1, 2012, that certain Seventh Amendment dated as
of December 1, 2012, and that certain Eighth Amendment dated as of April 1,
2013, and as the same may be further amended, restated, supplemented, waived,
extended, refinanced, replaced or otherwise modified from time to time in a
manner not prohibited by the ABDC Intercreditor Agreement.

 

 

 

 

“Account Control Agreement” shall mean any agreement by and among a Note Party,
the Collateral Agent and a depositary bank or securities intermediary at which
such Note Party maintains a Controlled Account, that, in each case, complies
with all Requirements of Law and is otherwise in form and substance reasonably
satisfactory to the Collateral Agent and the Required Purchasers.

 

“Accreditation” shall mean, collectively, all accreditations, approvals or other
rights issued by any health care accrediting agency including the Joint
Commission, Accreditation Commission for Health Care, National Quality Forum,
Community Health Accreditation Program and URAC.

 

“Acquisition” shall mean (a) any Investment by the Issuer or any of its
Subsidiaries in any other Person organized in the United States (with
substantially all of the assets of such Person and its Subsidiaries located in
the United States), pursuant to which such Person shall become a Subsidiary of
the Issuer or any of its Subsidiaries or shall be merged with the Issuer or any
of its Subsidiaries or (b) any acquisition by the Issuer or any of its
Subsidiaries of the assets of any Person (other than a Subsidiary of the Issuer)
that constitute all or substantially all of the assets of such Person or a
division or business unit of such Person, whether through purchase, merger or
other business combination or transaction (and substantially all of such assets,
division or business unit are located in the United States). With respect to a
determination of the amount of an Acquisition, such amount shall include all
consideration (including the maximum amount of any earn-out or other deferred or
contingent consideration and any Permitted Seller Financing in respect thereof)
set forth in the applicable agreements governing such Acquisition as well as the
principal amount of any Indebtedness assumed by any Note Party in connection
therewith.

 

“Affiliate” shall mean, as to any Person, any other Person that directly, or
indirectly through one or more intermediaries, Controls, is Controlled by, or is
under common Control with, such Person; provided that the Purchasers shall be
deemed not to be Affiliates of any Note Party. For the purposes of this
definition, “Control” shall mean the power, directly or indirectly, to direct or
cause the direction of the management and policies of a Person, whether through
the ability to exercise voting power, by contract or otherwise. For purposes of
Section 7.7, “Control” shall also include the power, directly or indirectly, to
vote 10% or more of the securities having ordinary voting power for the election
of directors (or persons performing similar functions) of a Person. The terms
“Controlled by” and “under common Control with” have the meanings correlative
thereto.

 

“Anti-Corruption Law” shall mean any requirement of law related to bribery or
anti-corruption, including the United States Foreign Corrupt Practices Act of
1977, as now and hereafter in effect, or any successor statute.

 

“Anti-Terrorism Law” shall mean any requirement of law related to money
laundering or financing terrorism, including the Patriot Act, The Currency and
Foreign Transactions Reporting Act (also known as the “Bank Secrecy Act”, 31
U.S.C. §§5311-5330 and 12 U.S.C. §§1818(s), 1820(b) and 1951-1959), Trading With
the Enemy Act (50 U.S.C. §1 et seq., as amended), Executive Order 13224
(effective September 24, 2001) and each of the foreign assets control
regulations of the United States Treasury Department (31 C.F.R., Subtitle B,
Chapter V, as amended), in each case, as now and hereafter in effect, or any
successor statutes.

 

“Applicable Funding Office” shall mean, with respect to any Purchaser, the
office or offices of such Purchaser specified as its “Funding Office” beneath
its name on the applicable signature page hereto, or such other office or
offices of such Purchaser as it may from time to time notify the Issuer and the
Collateral Agent.

 

 2 

 

 

“Applicable Margin” shall mean, as of any date, with respect to all Notes
outstanding on such date, 6.00% per annum with respect to Base Rate Notes and
7.00% per annum with respect to Eurodollar Notes.

 

“Applicable Premium” shall mean the greater of (I) 4.0% of the principal amount
of the Notes being prepaid or repaid, as applicable, and (II) the excess of (A)
the present value of all remaining required interest payments to the second
anniversary of the Closing Date (using the LIBOR Rate that is determined for a
one-month Interest Period commencing on the date of such prepayment and assuming
such LIBOR Rate remains the same for the entire period from the date of such
prepayment to the second anniversary of the Closing Date) and principal payments
due on the principal amount of the Notes being prepaid or repaid, as applicable,
plus the Prepayment Premium provided for pursuant to clause (b) of the
definition of Prepayment Premium on such principal amount being prepaid or
repaid, as applicable, in each case assuming a prepayment date of the second
anniversary of the Closing Date, computed using a discount rate equal to the
Treasury Rate plus 50 basis points over (B) the principal amount of the Notes
being prepaid or repaid, as applicable. For purposes of this definition,
“Treasury Rate” means the rate per annum equal to the yield to maturity at the
time of computation of the United States of America Treasury securities with a
constant maturity most nearly equal to the period from such date of prepayment
or repayment, as applicable, to the second anniversary of the Closing Date;
provided, however, that if the period from such date of prepayment or repayment,
as applicable, to the second anniversary of the Closing Date is not equal to the
constant maturity of a United States of America Treasury security for which a
weekly average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States of America Treasury securities for which such
yields are given, except that if the period from such date of prepayment or
repayment, as applicable, to the second anniversary of the Closing Date is less
than one year, the weekly average yield on actually traded United States of
America Treasury securities adjusted to a constant maturity of one year shall be
used.

 

“Approved Fund” shall mean any Person (other than a natural Person) that is (or
will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business and that is administered or managed by (i) a Purchaser, (ii) an
Affiliate of a Purchaser or (iii) an entity or an Affiliate of an entity that
administers or manages a Purchaser.

 

“Assignment and Assumption” shall mean an assignment and assumption entered into
by a Purchaser and an assignee (with the consent of any party whose consent is
required by Section 10.4(b)), substantially in the form of Exhibit A attached
hereto or any other form approved by the Required Purchasers.

 

“Available Amount” shall mean, at any time (the “Reference Date”) an amount, not
less than zero, equal to the sum of (a) the cumulative portion of Excess Cash
Flow for the period commencing on the Closing Date and ending on the Reference
Date which has not been and is not required to be used to prepay the Obligations
pursuant to Section 2.9(c) minus (b) the aggregate amount of any cash dividends,
distributions, and share repurchases made by the Issuer pursuant to Section
7.5(g) after the Closing Date and prior to the Reference Date.

 

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

 

 3 

 

 

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

 

“Bank Product Obligations” shall mean, collectively, all monetary obligations
and other liabilities of any Note Party to any Bank Product Provider arising
with respect to any Bank Products.

 

“Bank Product Provider” shall mean any Person that, at the time it provides any
Bank Product to any Note Party, (i) is a Purchaser or an Affiliate of a
Purchaser and (ii) has provided prior written notice to the Collateral Agent
which has been acknowledged by the Issuer of (x) the existence of such Bank
Product, (y) the maximum dollar amount of obligations arising thereunder (the
“Bank Product Amount”) and (z) the methodology to be used by such parties in
determining the obligations under such Bank Product from time to time. In no
event shall any Bank Product Provider acting in such capacity be deemed a
Purchaser for purposes hereof to the extent of and as to Bank Products except
that each reference to the term “Purchaser” in Article IX and Section 10.3(b)
shall be deemed to include such Bank Product Provider and in no event shall the
approval of any such person in its capacity as Bank Product Provider be required
in connection with the release or termination of any security interest or Lien
of the Collateral Agent. The Bank Product Amount may be changed from time to
time upon written notice to the Collateral Agent by the applicable Bank Product
Provider. No Bank Product Amount may be established at any time that a Default
or Event of Default exists.

 

“Bank Products” shall mean any of the following services provided to any Note
Party by any Bank Product Provider: (a) any treasury or other cash management
services, including deposit accounts, automated clearing house (ACH) origination
and other funds transfer, depository (including cash vault and check deposit),
zero balance accounts and sweeps, return items processing, controlled
disbursement accounts, positive pay, lockboxes and lockbox accounts, account
reconciliation and information reporting, payables outsourcing, payroll
processing, trade finance services, investment accounts and securities accounts,
and (b) card services, including credit cards (including purchasing cards and
commercial cards), prepaid cards, including payroll, stored value and gift
cards, merchant services processing, and debit card services.

 

“Base Rate” shall mean, for any day, a floating rate per annum equal to the
greater of (x) the higher of (i) the per annum rate publicly quoted from time to
time by The Wall Street Journal as the “Prime Rate” in the United States (or, if
The Wall Street Journal ceases quoting a base rate of the type described, either
(a) the per annum rate quoted as the base rate on such corporate loans in a
different national publication as selected by the Required Purchasers or (b) the
highest per annum rate of interest published by the Federal Reserve Board in
Federal Reserve statistical release H.15 (519) entitled “Selected Interest
Rates” as the Bank prime loan rate or its equivalent), and (ii) the Federal
Funds Rate plus fifty (50) basis points per annum; provided that if the Federal
Funds Rate is less than zero on such day, it shall be deemed to be zero
hereunder, and (y) the sum of the LIBOR Rate calculated for each such day based
on an Interest Period of one (1) month determined two (2) Business Days prior to
the first day of such proposed Interest Period (not to be less than 1.00%) plus
1.00% per annum. Each change in any interest rate based upon the Base Rate shall
take effect at the time of such change in the Base Rate.

 

“Beneficial Owner” shall mean, with respect to any amount paid hereunder or
under any other Note Document, the Person that is the beneficial owner, for U.S.
federal income tax purposes, of such payment.

 

“BioScrip Facilities” shall mean any facility owned, leased or operated by the
Issuer or any of its Subsidiaries.

 

 4 

 

 

“Business Day” shall mean any day other than (i) a Saturday, Sunday or other day
on which commercial banks in New York, New York are authorized or required by
law to close and (ii) if such day relates to an Issuance of, a payment or
prepayment of principal or interest on, a conversion of or into, or an Interest
Period for, a Eurodollar Note or a notice with respect to any of the foregoing,
any day on which banks are not open for dealings in Dollar deposits in the
London interbank market.

 

“Capital Expenditures” shall mean, for any period, without duplication, (i) the
additions to property, plant and equipment and other capital expenditures of the
Issuer and its Subsidiaries that are (or would be) set forth on a consolidated
statement of cash flows of the Issuer for such period prepared in accordance
with GAAP and (ii) Capital Lease Obligations incurred by the Issuer and its
Subsidiaries during such period.

 

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

 

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

 

“Cash Equivalents” shall mean (i) direct obligations issued by, or
unconditionally guaranteed by, the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (ii)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of one year or less from the date of acquisition
issued by any commercial bank organized under the laws of the United States or
any state thereof having combined capital and surplus of not less than
$500,000,000; (iii) commercial paper of an issuer rated at least A-1 by S&P or
P-1 by Moody’s, or carrying an equivalent rating by a nationally recognized
rating agency if both of the two named rating agencies cease publishing ratings
of commercial paper issuers generally, and maturing within one year from the
date of acquisition; (iv) fully collateralized repurchase obligations of any
commercial bank satisfying the requirements of clause (ii) of this definition,
having a term of not more than thirty days with respect to securities issued or
fully guaranteed or insured by the United States government; (v) marketable
securities with maturities of one year 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, the securities of which state, commonwealth,
territory, political subdivision or taxing authority (as the case may be) are
rated at least A-1 by S&P or P-1 by Moody’s; (vi) securities with maturities of
one year or less from the date of acquisition backed by standby letters of
credit issued by any Purchaser or any commercial bank satisfying the
requirements of clause (ii) of this definition; (vii) shares of money market
mutual or similar funds which invest exclusively in assets satisfying the
requirements of any of clauses (i) through (vi) of this definition; and (viii)
other short-term investments utilized by Foreign Subsidiaries in accordance with
the normal investment practices for cash management in investments of a type
analogous to the foregoing.

 

“CFC Subsidiary” shall mean any Subsidiary of the Issuer that is organized under
the laws of the United States or any state or district thereof and substantially
all of the assets of which consist (directly, or indirectly through one or more
disregarded entities) of Capital Stock of one or more Subsidiaries of the Issuer
organized under the laws of a jurisdiction other than the United States or any
state or district thereof.

 

 5 

 

 

“Change in Control” shall mean the occurrence of one or more of the following
events: (i) the acquisition of ownership, directly or indirectly, beneficially
or of record, by any Person or “group” (within the meaning of the Exchange Act
and the rules of the Securities and Exchange Commission thereunder as in effect
on the date hereof, but excluding any employee benefit plan of such person or
its subsidiaries, or any person or entity acting in its capacity as trustee,
agent or other fiduciary or administrator of such plan) of 35% or more of the
outstanding shares of the voting equity interests (with equivalent economic
interests) of the Issuer; (ii) during any period of 24 consecutive months, a
majority of the members of the Governing Body of the Issuer cease to be composed
of individuals who are Continuing Directors; (iii) the acquisition by contract
or otherwise by any Person or two or more Persons acting in concert, or the
entering into of a contract or arrangement by any Person or two or more Persons
acting in concert that, upon consummation thereof, will result in its or their
acquisition of the power to exercise, directly or indirectly, beneficially or of
record, a controlling influence over the management or policies of the Issuer,
or control over 35% or more of the outstanding shares of the voting equity
interests (with equivalent economic interests) of the Issuer, (iv) the Issuer
shall cease to directly or indirectly own, free and clear of all Liens (except
those created under the Collateral Documents, the Second Lien Collateral
Documents and non-consensual Liens that arise by operation of law), 100% of the
outstanding Capital Stock of each of its Subsidiaries (whether acquired or
formed before or after the Closing Date), and all voting rights and economic
interests with respect thereto, other than pursuant to a transaction that is not
prohibited hereunder, or (v) the occurrence of a “Change in Control” (or any
comparable term) under, and as defined in, any document or agreement evidencing
any Material Indebtedness.

 

“Change in Law” shall mean (i) the adoption of any applicable law, rule or
regulation after the date of this Agreement, (ii) any change in any applicable
law, rule or regulation, or any change in the interpretation, implementation or
application thereof, by any Governmental Authority after the date of this
Agreement, or (iii) compliance by any Purchaser (or its Applicable Funding
Office) (or, for purposes of Section 2.15(b), by the Parent Company of such
Purchaser, if applicable) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued after
the date of this Agreement; provided that for purposes of this Agreement, (x)
the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines or directives in connection therewith and (y) all requests,
rules, guidelines or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities, in
each case pursuant to Basel III, shall in each case be deemed to be a “Change in
Law”, regardless of the date enacted, adopted or issued.

 

“Closing Date” shall mean the date on which the conditions precedent set forth
in Section 3.1 have been satisfied or waived in accordance with Section 10.2 and
the Notes are issued by the Issuer and purchased by the Purchasers.

 

“CMS” shall mean the Centers for Medicare and Medicaid Services, formerly known
as the Health Care Financing Administration or HCFA, and any successor thereto.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended and in effect
from time to time, any successor statute, and the regulations promulgated and
rulings issued thereunder.

 

“Collateral” shall mean all “Collateral” as defined in any Collateral Document
and shall include the Mortgaged Properties, but shall exclude any Excluded
Property.

 

 6 

 

 

“Collateral Access Agreement” shall mean each landlord waiver or bailee
agreement granted to, and in form and substance reasonably acceptable to, the
Collateral Agent and the Required Purchasers.

 

“Collateral Agent” shall have the meaning set forth in the introductory
paragraph hereof.

 

“Collateral Documents” shall mean, collectively, the Guaranty and Security
Agreement, any Real Estate Documents, the Account Control Agreements, the
Government Receivables Account Agreements, the Information and Collateral
Disclosure Certificate, all Copyright Security Agreements, all Patent Security
Agreements, all Trademark Security Agreements, all Collateral Access Agreements,
all assignments of key man life insurance policies and all other instruments and
agreements now or hereafter securing or perfecting the Liens securing the whole
or any part of the Obligations or any Guarantee thereof, all UCC financing
statements, fixture filings and stock powers, and all other documents,
instruments, agreements and certificates executed and delivered by any Note
Party to the Collateral Agent and the Purchasers in connection with the
foregoing.

 

“Commitment” shall mean, with respect to each Purchaser, the obligation of such
Purchaser to purchase a Note hereunder on the Closing Date, in an aggregate
principal amount not exceeding the amount set forth with respect to such
Purchaser on Schedule I. The aggregate principal amount of all Purchasers’
Commitments as of the Closing Date is $200,000,000.

 

“Commitment Letter” shall mean that certain Commitment Letter, dated as of June
7, 2017, among Ares Management LLC (on behalf of one or more of its affiliated
funds or accounts), each of the accounts listed on the signature pages thereto
that is managed by Western Asset Management Company, J.P. Morgan Securities LLC
and Goldman Sachs & Co. LLC and agreed and accepted by the Issuer.

 

“Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.

 

“Company Accreditation” shall have the meaning set forth in Section 4.20(c).

 

“Company Reimbursement Approval” shall have the meaning set forth in Section
4.22(a).

 

“Company Regulatory Filings” shall have the meaning set forth in Section
4.20(e).

 

“Competitor” shall mean each bona fide operating competitor directly engaged in
the Issuer’s line of business and set forth on Schedule II.

 

“Compliance Certificate” shall mean a certificate from a Responsible Officer of
the Issuer in substantially the form of, and containing the certifications set
forth in, the certificate attached hereto as Exhibit 5.1(c).

 

“Consolidated Covenant Testing Net Leverage Ratio” shall mean, as of any date,
the ratio of (i) Consolidated Total Net Debt (other than any Consolidated Junior
Indebtedness, any Subordinated Debt and any unsecured Indebtedness, in each
case, not prohibited hereunder but, notwithstanding the foregoing, including all
Permitted Seller Financing) as of such date to (ii) Consolidated EBITDA for the
four consecutive Fiscal Quarters ending on (A) with respect to calculations of
the Consolidated Covenant Testing Net Leverage Ratio required by Article VI,
such date and (B) with respect to all other calculations of the Consolidated
Covenant Testing Net Leverage Ratio, the last day of the most recent Fiscal
Quarter prior to such date for which financial statements have been delivered
(or were required to be delivered) pursuant to Section 5.1(a) or 5.1(b), as
applicable. The Consolidated Covenant Testing Net Leverage Ratio shall be
calculated on a Pro Forma Basis.

 

 7 

 

 

“Consolidated EBITDA” shall mean, for the Issuer and its Subsidiaries for any
period, an amount equal to the sum of (i) Consolidated Net Income for such
period plus (ii) to the extent deducted in determining Consolidated Net Income
for such period, and in each case without duplication and as determined in
accordance with GAAP, (a) Consolidated Interest Expense, (b) income tax expense
(including any franchise taxes imposed in lieu of income taxes and taxes based
on profit or capital) determined on a consolidated basis, (c) depreciation and
amortization (including amortization of intangibles and goodwill) determined on
a consolidated basis, (d) fees, out of pocket costs and expenses incurred in
connection with dispositions, Investments, issuances of Indebtedness (including
the Second Lien Obligations) or Capital Stock and Capital Expenditures (whether
or not successfully consummated) to the extent not prohibited hereunder, (e)
extraordinary or non-recurring charges, (f) severance costs, retention bonuses
and other similar compensation payments made to employees of any Note Party, (g)
non-cash charges (including deferred compensation, stock option or employee
benefits-based and other equity-based compensation expenses, in each case, made
to employees, consultants and advisors of any Note Party), (h) transaction
expenses incurred in connection with this Agreement and the transactions
contemplated hereby, (i) restructuring charges, (j) integration and relocation
expenses determined and calculated in each case on a basis not inconsistent with
historical practice, (k) prepayment expense, including fees and premiums,
incurred in connection with the retirement of existing indebtedness of the
Issuer and its Subsidiaries, (l) fees and expenses paid to the Collateral Agent
and the Purchasers hereunder and to the Second Lien Collateral Agent and the
Second Lien Purchasers under the Second Lien Note Purchase Agreement (in each
case, to the extent not otherwise included in the calculation of Consolidated
Interest Expense), (m) transaction expenses and integration expenses incurred in
connection with the Acquisition of Home Infusion Solutions, LLC, (n) losses and
expenses from discontinued operations, divested joint ventures and other
divested Investments or incurred in connection with the disposal of discontinued
operations or the divestiture of joint ventures and other Investments, (o)
expenses incurred in connection with the settlement of any litigation or claim
involving any Note Party (so long as, with respect to each such litigation or
claim, such expenses exceed $100,000); provided, however, any such amount added
back pursuant to this clause (o) shall not exceed $6,300,000 in the aggregate
(including related legal fees not to exceed $500,000) over the term of this
Agreement and (p) the cumulative effect of a change in accounting principles;
provided that the aggregate amount that may be added to Consolidated Net Income
pursuant to clauses (d), (e), (f), (h), (i), (j), (k), (l), (m), (n) and (o)
above in any period of four consecutive Fiscal Quarters shall not exceed
$30,000,000; provided, further, that, commencing with the fifth full Fiscal
Quarter following the Closing Date, (I) the aggregate amount that may be added
to Consolidated Net Income pursuant to clauses (e), (f), (i), (j) and (m) above
in any period of four consecutive Fiscal Quarters shall not exceed $20,000,000
and (II) the aggregate amount that may be added to Consolidated Net Income
pursuant to clauses (d), (h), (k), (l), (n) and (o) above in any period of four
consecutive Fiscal Quarters shall not exceed $10,000,000.

 

“Consolidated Interest Expense” shall mean, for the Issuer and its Subsidiaries
for any period, determined on a consolidated basis in accordance with GAAP, the
sum of (i) total interest expense, (including, without limitation and without
duplication, (a) the interest component of any payments in respect of Capital
Lease Obligations, capitalized or expensed during such period (whether or not
actually paid during such period), (b) any premium or penalty payable in
connection with the payment of make-whole amounts or other prepayment premiums
payable in connection with any Indebtedness of the Issuer or any of its
Subsidiaries, (c) all commissions, discounts and other fees and charges owed in
respect of interest rates to the extent such net costs are allocable to such
period in accordance with GAAP, (d) any interest accrued during such period in
respect of Indebtedness of the Issuer or any Subsidiary that is required to be
capitalized rather than paid in cash, (e) interest paid or payable with respect
to discontinued operations and (f) the interest portion of any deferred payment
obligations) plus (ii) the net amount payable (or minus the net amount
receivable) with respect to Hedging Transactions during such period (whether or
not actually paid or received during such period).

 

 8 

 

 

“Consolidated Junior Indebtedness” shall mean, as of any date, the aggregate
stated principal amount of all Indebtedness of the Issuer and its Subsidiaries,
measured on a consolidated basis as of such date, secured by Liens that are
junior in priority to the Liens securing the Obligations (but excluding the
Second Lien Obligations).

 

“Consolidated Net Income” shall mean, for the Issuer and its Subsidiaries for
any period, the net income (or loss) of the Issuer and its Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP, but excluding
therefrom (to the extent otherwise included therein) (i) any extraordinary gains
or losses, (ii) any gains or losses attributable to write-ups or write-downs of
assets (including any reappraisal or revaluation of assets (including
intangibles, goodwill and deferring financing costs)), or the sale of assets
(other than the sale of assets in the ordinary course of business), (iii) any
interest of the Issuer or any Subsidiary of the Issuer in the unremitted or
undistributed earnings of any Person in which the Issuer or any Subsidiary of
the Issuer has an equity interest but that is not a Subsidiary, (iv) any income
(or loss) of any Person accrued prior to the date it becomes a Subsidiary or is
merged into or consolidated with the Issuer or any Subsidiary or the date that
such Person’s assets are acquired by the Issuer or any Subsidiary, (v) any
income (or loss) for such period attributable to the early extinguishment of
Indebtedness, (vi) any interest of the Issuer or any Subsidiary of the Issuer in
the unremitted or undistributed earnings of any Subsidiary of the Issuer or
another Subsidiary of the Issuer to the extent that such remittance or
distribution of earnings is prohibited by the organizational documents of such
Subsidiary, contractual restrictions applicable to such Subsidiary, or by
applicable Requirements of Law, and (vii) any unrealized income (or loss) in
respect of Hedging Obligations.

 

“Consolidated Total Assets” shall mean, as of any date, the total assets of the
Issuer and its Subsidiaries set forth on the consolidated balance sheet of the
Issuer and its Subsidiaries as of the end of the most recently ended Fiscal
Quarter for which financial statements have been delivered (or were required to
be delivered) pursuant to Section 5.1(a) or 5.1(b), as applicable, determined on
a consolidated basis in conformity with GAAP.

 

“Consolidated Total Debt” shall mean, as of any date, the aggregate stated
principal amount of all Indebtedness of the Issuer and its Subsidiaries measured
on a consolidated basis as of such date, but excluding (i) Indebtedness of the
type described in clause (xi) of the definition thereof, (ii) Indebtedness of
the type described in Section 7.1(a)(xii), (iii) the portion of any earn-out or
other deferred or contingent purchase consideration that is based upon the
achievement of future financial or operational criteria and that has not yet
been earned in accordance with the terms of the applicable agreements, and (iv)
Indebtedness of the type described in clause (vi) of the definition thereof
(except to the extent of any unreimbursed drawings thereunder).

 

“Consolidated Total Net Debt” shall mean, as of any date, the sum of (i)
Consolidated Total Debt minus (ii) the aggregate amount of cash and Cash
Equivalents held by the Note Parties with respect to which the Collateral Agent
has a first-priority perfected lien securing the Obligations included in the
consolidated balance sheet of the Note Parties as of such date (other than (a)
Restricted Cash and (b) for purposes of calculating the Consolidated Total Net
Leverage Ratio or the Consolidated Covenant Testing Net Leverage Ratio, as
applicable, the aggregate principal amount of any Indebtedness incurred on the
date on which such ratio is calculated).

 

 9 

 

 

“Consolidated Total Net Leverage Ratio” shall mean, as of any date, the ratio of
(i) Consolidated Total Net Debt as of such date to (ii) Consolidated EBITDA for
the four consecutive Fiscal Quarters ending on the last day of the most recent
Fiscal Quarter prior to such date for which financial statements have been
delivered (or were required to be delivered) pursuant to Section 5.1(a) or
5.1(b), as applicable. The Consolidated Total Net Leverage Ratio shall be
calculated on a Pro Forma Basis.

 

“Continuing Director” shall mean, with respect to any period, any individuals
(A) who were members of the Governing Body of the Issuer on the first day of
such period, (B) whose election or nomination to that Governing Body was
approved by individuals referred to in clause (A) above constituting at the time
of such election or nomination at least a majority of that Governing Body, or
(C) whose election or nomination to that Governing Body was approved by
individuals referred to in clauses (A) and (B) above constituting at the time of
such election or nomination at least a majority of that Governing Body.

 

“Contractual Obligation” of any Person shall mean any provision of any security
issued by such Person or of any agreement, instrument or undertaking under which
such Person is obligated or by which it or any of the property in which it has
an interest is bound.

 

“Controlled Account” shall have the meaning set forth in Section 5.11.

 

“Copyright” shall have the meaning assigned to such term in the Guaranty and
Security Agreement.

 

“Copyright Security Agreement” shall mean any Copyright Security Agreement
executed by a Note Party owning registered Copyrights or applications for
Copyrights in favor of the Collateral Agent for the benefit of the Secured
Parties, both on the Closing Date and thereafter.

 

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

 

“Default” shall mean any condition or event that, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.

 

“Default Interest” shall have the meaning set forth in Section 2.10(c).

 

“Defaulting Purchaser” shall mean, subject to Section 2.21, any Purchaser that
(a) has failed to (i) purchase its Notes within two (2) Business Days of the
date such Notes were required to be purchased hereunder unless such Purchaser
notifies the Issuer and each other Purchaser in writing that such failure is the
result of such Purchaser’s good faith determination that one or more conditions
precedent to purchase (each of which conditions precedent, together with any
applicable default, shall be specifically identified in such writing) has not
been satisfied, or (ii) pay to the Collateral Agent or any other Purchaser any
other amount required to be paid by it hereunder within two (2) Business Days of
the date when due, (b) has notified the Issuer in writing that it does not
intend to comply with its purchase obligations hereunder, or has made a public
statement to that effect (unless such writing or public statement relates to
such Purchaser’s obligation to purchase a Note hereunder and states that such
position is based on such Purchaser’s good faith determination that a condition
precedent to purchase (which condition precedent, together with any applicable
default, shall be specifically identified in such writing or public statement)
cannot be satisfied), (c) has failed, within three (3) Business Days after
written request by the Issuer, to confirm in writing to the Issuer that it will
comply with its prospective purchase obligations hereunder (provided that such
Purchaser shall cease to be a Defaulting Purchaser pursuant to this clause (c)
upon receipt of such written confirmation by the Issuer), or (d) 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 appointed for it a receiver,
custodian, conservator, trustee, administrator, assignee for the benefit of
creditors or similar Person charged with reorganization or liquidation of its
business or assets, including the Federal Deposit Insurance Corporation or any
other state or federal regulatory authority acting in such a capacity or (iii)
become the subject of a Bail-in Action; provided that a Purchaser shall not be a
Defaulting Purchaser solely by virtue of the ownership or acquisition of any
equity interest in that Purchaser or any direct or indirect Parent Company
thereof by a Governmental Authority so long as such ownership interest does not
result in or provide such Purchaser with immunity from the jurisdiction of
courts within the United States or from the enforcement of judgments or writs of
attachment on its assets or permit such Purchaser (or such Governmental
Authority) to reject, repudiate, disavow or disaffirm any contracts or
agreements made with such Purchaser.

 

 10 

 

 

“Disqualified Capital Stock” shall mean, with respect to any Person, any Capital
Stock that by its terms (or by the terms of any other Capital Stock into which
it is convertible or exchangeable) or otherwise (i) matures (other than as a
result of a voluntary redemption or repurchase by the issuer of such Capital
Stock) or is subject to mandatory redemption or repurchase (other than solely
for Capital Stock that is not Disqualified Capital Stock) pursuant to a sinking
fund obligation or otherwise (except as a result of a change of control or asset
sale so long as any rights of the holder thereof upon the occurrence of a change
of control or asset sale event shall be subject to the prior payment in full in
cash of the Obligations (other than any Obligations which expressly survive
termination, Hedging Obligations owed by any Note Party to any Purchaser-Related
Hedge Provider, Bank Product Obligations and indemnities and other contingent
obligations not then due and payable and as to which no claim has been made) and
termination of the Commitments); or (ii) is convertible into or exchangeable or
exercisable for Indebtedness or any Disqualified Capital Stock at the option of
the holder thereof; or (iii) may be required to be redeemed or repurchased at
the option of the holder thereof (other than solely for Capital Stock that is
not Disqualified Capital Stock), in whole or in part, in each case specified in
(i), (ii) or (iii) above on or prior to the date that is ninety one days after
the Maturity Date; or (d) provides for scheduled payments of dividends to be
made in cash.

 

“Disqualified Institution” shall mean (a) any Disqualified Purchaser and (b) any
Competitor.

 

“Disqualified Purchaser” shall mean each institutional investor, bank or other
financial institution previously identified in writing to the Purchasers and the
Collateral Agent and set forth in that certain letter agreement dated as of the
date hereof delivered by the Issuer to the Purchasers and the Collateral Agent
(the “Disqualified Purchaser Letter”), and each Person known to the applicable
Purchaser seeking to sell all or a portion of the Note(s) held by it to be an
Affiliate thereof and any Person that is readily identifiable as an affiliate
thereof on the basis of its name; provided that in no event shall any bona fide
(A) debt fund, (B) investment vehicle, (C) regulated bank entity or (D)
non-regulated lending entity, in each case, that is primarily engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of business (each, a “Bona Fide
Lending Affiliate”) be a Disqualified Purchaser, unless such Bona Fide Lending
Affiliate is identified in the Disqualified Purchaser Letter.

 

“Dollar(s)” and the sign “$” shall mean lawful money of the United States.

 

“Domestic Subsidiary” shall mean each Subsidiary of the Issuer that is organized
under the laws of the United States or any state or district thereof and which
is not a CFC Subsidiary.

 

 11 

 

 

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

 

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

 

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

 

“Effective Yield” means, as to any Indebtedness, the effective yield on such
Indebtedness in the reasonable determination of the Required Purchasers in
consultation with the Issuer and consistent with generally accepted financial
practices, taking into account the applicable interest rate margins, any
interest rate floors or similar devices and all fees, including upfront or
similar fees or original issue discount (converted to yield assuming a four-year
average life to maturity and without any present value discount) payable
generally to lenders or other institutions providing such Indebtedness, but
excluding any arrangement, structuring, ticking or other similar fees payable in
connection therewith that are not generally shared with the relevant lenders or
other institutions providing such Indebtedness and, if applicable, consent fees
for an amendment paid generally to consenting lenders or other institutions
providing such Indebtedness.

 

“Environmental Indemnity” shall mean each environmental indemnity made by each
Note Party with respect to Real Estate required to be pledged as Collateral in
favor of the Collateral Agent for the benefit of the Secured Parties, in each
case in form and substance reasonably satisfactory to the Collateral Agent and
the Required Purchasers.

 

“Environmental Laws” shall mean all applicable laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, binding notices or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority relating in any way to the environment, preservation or reclamation of
natural resources, the management, Release or threatened Release of any
Hazardous Material or to health and safety matters.

 

“Environmental Liability” shall mean any liability, contingent or otherwise
(including any liability for damages, costs of environmental investigation and
remediation, costs of administrative oversight, fines, natural resource damages,
penalties or indemnities), of the Issuer or any of its Subsidiaries directly or
indirectly resulting from or based upon (i) any actual or alleged violation of
any Environmental Law, (ii) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (iii) any actual or
alleged exposure to any Hazardous Materials, (iv) the Release or threatened
Release of any Hazardous Materials or (v) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended and in effect from time to time, and any successor statute and the
regulations promulgated and rulings issued thereunder.

 

“ERISA Affiliate” shall mean any person that for purposes of Title IV of ERISA
or Section 412 of the Code would be deemed at any relevant time to be a “single
employer” or otherwise aggregated with the Issuer or any of its Subsidiaries
under Section 414(b) or (c) (or, as relevant, Section 414(m) or (o)) of the Code
or Section 4001 of ERISA.

 

 12 

 

 

“ERISA Event” shall mean (i) the occurrence of any “reportable event” as defined
in Section 4043 of ERISA with respect to a Plan (other than an event as to which
the PBGC has waived the requirement of Section 4043(a) of ERISA that it be
notified of such event); (ii) any failure to make a required contribution to any
Plan that would result in the imposition of a lien or other encumbrance or the
provision of security under Section 430 of the Code or Section 303(k) or 4068 of
ERISA, or the arising of such a lien or encumbrance; (iii) there being or
arising any “unpaid minimum required contribution” or “accumulated funding
deficiency” (as defined or otherwise set forth in Section 4971 of the Code or
Part 3 of Subtitle B of Title 1 of ERISA), whether or not waived; (iv) any
filing of any request for or receipt of a minimum funding waiver under Section
412 of the Code or Section 302 of ERISA with respect to any Plan or
Multiemployer Plan; (v) any incurrence by the Issuer, any of its Subsidiaries or
any of their respective ERISA Affiliates of any liability under Title IV of
ERISA with respect to any Plan or Multiemployer Plan (other than for premiums
due and not delinquent under Section 4007 of ERISA); (vi) any institution of
proceedings, or the occurrence of an event or condition which would reasonably
be expected to constitute grounds for the institution of proceedings, by the
PBGC, under Section 4042 of ERISA for the termination of, or the appointment of
a trustee to administer, any Plan; (vii) any incurrence by the Issuer, any of
its Subsidiaries or any of their respective ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Multiemployer
Plan, or the receipt by the Issuer, any of its Subsidiaries or any of their
respective ERISA Affiliates of any notice that a Multiemployer Plan is in
endangered or critical status under Section 305 of ERISA; (viii) any receipt by
the Issuer, any of its Subsidiaries or any of their respective ERISA Affiliates
of any notice, or any receipt by any Multiemployer Plan from the Issuer, any of
its Subsidiaries or any of their respective ERISA Affiliates of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA; (ix) the occurrence of a non-exempt
prohibited transaction within the meaning of Section 406 of ERISA or Section
4975 of the Code with respect to any Plan such that material liability would be
incurred by the Issuer or any of its Subsidiaries; (x) any filing of a notice of
intent to terminate any Plan if such termination would require material
additional contributions in order to be considered a standard termination within
the meaning of Section 4041(b) of ERISA; (xi) any filing under Section 4041(c)
of ERISA of a notice of intent to terminate any Plan; or (xii) the termination
of any Plan under Section 4041(c) of ERISA.

 

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

 

“Eurodollar”, when used in reference to any Note or Issuance, refers to whether
such Note, or the Notes issued pursuant to such Issuance, bears interest at a
rate determined by reference to the LIBOR Rate.

 

“Event of Default” shall have the meaning set forth in Section 8.1.

 

“Excess Cash Flow” shall mean, for the Issuer and its consolidated Subsidiaries
for any Fiscal Year:

 

(a)         Consolidated EBITDA for such Fiscal Year,

 

minus

 

(b)          the sum of the following, without duplication:

 

(i)        the aggregate amount of all regularly scheduled principal payments of
Indebtedness (including the Notes and the principal component of any Capital
Lease Obligations) made during such Fiscal Year (excluding payments in respect
of any revolving credit facility unless there is an equivalent permanent
reduction in commitments thereunder);

 

 13 

 

 

(ii)       the aggregate amount of all mandatory prepayments or repurchases of
Indebtedness for borrowed money (including the Notes and the Second Lien Notes)
(other than in connection with any permitted refinancing) made during such
Fiscal Year (excluding payments in respect of any revolving credit facility
unless there is an equivalent permanent reduction in commitments thereunder)
other than any mandatory prepayment required pursuant to Section 2.9(c) and
Section 2.9(c) of the Second Lien Note Purchase Agreement;

 

(iii)      the aggregate amount of all voluntary prepayments of Indebtedness for
borrowed money (other than the Obligations and the Second Lien Obligations) made
during such Fiscal Year (excluding payments in respect of any revolving credit
facility unless there is an equivalent permanent reduction in commitments
thereunder);

 

(iv)     Consolidated Interest Expense paid in cash for such Fiscal Year;

 

(v)      income taxes (including franchise taxes imposed in lieu of income
taxes) paid in cash with respect to such Fiscal Year;

 

(vi)    the aggregate amount paid in cash during such Fiscal Year on account of
Capital Expenditures, Investments, and Restricted Payments, in each case, to the
extent not prohibited hereunder (including the amount of all related fees, costs
and expenses incurred in connection therewith) and excluding the portion of any
such Capital Expenditure, Investments, or Restricted Payments that is financed
with funds that do not constitute Internally Generated Cash; provided that, with
respect to any Capital Expenditures and other Investments described in this
clause (vi), the Issuer may include in the calculation of Excess Cash Flow for
any Fiscal Year the aggregate amount of expenditures that the Issuer or any of
its Subsidiaries becomes legally obligated to make during such Fiscal Year
pursuant to a binding contract, committed purchase order or other binding
agreement but that are not actually made in cash during such Fiscal Year so long
as (x) such expenditures are actually made in cash during the following Fiscal
Year, (y) the Issuer includes in the certificate required to be delivered
pursuant to Section 2.9(c) a description of such expenditures and a
certification that such expenditures will be made during the following Fiscal
Year, and (z) if such expenditures are included in the calculation of Excess
Cash Flow for any Fiscal Year, they may not be included in the calculation of
Excess Cash Flow for the following Fiscal Year;

 

(vii)     any increase in the Working Capital during such period (measured as
the excess of such Working Capital at the end of such period over such Working
Capital at the beginning of such period);

 

(viii)    all other items added back to Consolidated EBITDA pursuant to (and
subject to the limitations in) the definition of Consolidated EBITDA to the
extent paid in cash during such Fiscal Year;

 

plus

 

(c)         without duplication, any decrease in the Working Capital during such
period (measured as the excess of such Working Capital at the beginning of such
period over such Working Capital at the end thereof).

 

 14 

 

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended and in
effect from time to time.

 

“Excluded Account” shall mean (a) deposit accounts specifically and exclusively
used for payroll, payroll taxes and other employee wage and benefit payments to
or for the benefit of any Note Party’s employees, (b) any other zero balance
account or disbursement only account, (c) deposit accounts specifically and
exclusively used for escrowing funds and holding funds in trust, (d) Government
Receivables Accounts, (e) any deposit account specifically and exclusively used
to hold cash collateral for letters of credit permitted pursuant to Section
7.1(a)(xix), and (f) any other deposit account, securities account or
commodities account, including local or petty cash accounts, which (i)
individually does not have an average daily balance for a period in excess of
three (3) Business Days of more than $1,000,000 in cash or investment property
on deposit therein or (ii) collectively with all such other accounts described
in this clause (f), does not have an aggregate balance at any time of more than
$3,000,000 in cash or investment property on deposit therein.

 

“Excluded Property” shall have has the meaning specified in the Guaranty and
Security Agreement.

 

“Excluded Swap Obligation” shall mean, with respect to any Guarantor, any Swap
Obligation if, and to the extent that, all or a portion of the Guarantee of such
Guarantor of, or the grant by such Guarantor of a security interest to secure,
such Swap Obligation (or any Guarantee thereof) is or becomes illegal or
unlawful under the Commodity Exchange Act or any rule, regulation or order of
the Commodity Futures Trading Commission (or the application or official
interpretation of any thereof) by virtue of such Guarantor’s failure for any
reason to constitute an “eligible contract participant” as defined in the
Commodity Exchange Act at the time the Guarantee of such Guarantor or the grant
of such security interest becomes effective with respect to such Swap
Obligation; provided that, for the avoidance of doubt, in determining whether
any Guarantor is an “eligible contract participant” under the Commodity Exchange
Act, the keepwell agreement set forth in Section 10.19 of the Guaranty and
Security Agreement shall be taken into account. If a Swap Obligation arises
under a master agreement governing more than one swap, such exclusion shall
apply only to the portion of such Swap Obligation that is attributable to swaps
for which such Guarantee or security interest is or becomes illegal. For
purposes of this definition, the term “Swap Obligations” shall mean any
obligation to pay or perform under any agreement, contract or transaction that
constitutes a “swap” within the meaning of section 1a(47) of the Commodity
Exchange Act.

 

“Excluded Taxes” shall mean, with respect to any payment to be made by or on
account of any obligation of the Issuer hereunder, (a) income or franchise Taxes
that are (i) imposed on (or measured by) the Recipient’s (or Beneficial Owner’s)
net income by the United States, or by the jurisdiction under the laws of which
such Recipient (or Beneficial Owner) is organized or in which its principal
office is located or, in the case of any Purchaser, in which its Applicable
Funding Office is located or (ii) Other Connection Taxes, (b) any branch profits
Taxes imposed by the United States or any similar Taxes that are imposed by any
other jurisdiction in which such Recipient (or Beneficial Owner) is located, (c)
in the case of a Purchaser, any U.S. federal withholding Taxes that are imposed
on amounts payable to any Recipient (or Beneficial Owner) at the time such
Recipient (or Beneficial Owner) becomes a Recipient (or Beneficial Owner) under
this Agreement or designates a new funding office, except in each case to the
extent that amounts with respect to such Taxes were payable either (i) to such
Recipient’s (or Beneficial Owner’s) assignor immediately before such Recipient
(or Beneficial Owner) became a Recipient (or Beneficial Owner) under this
Agreement, or (ii) to such Recipient (or Beneficial Owner) immediately before it
designated a new funding office, (d) any Taxes that are attributable to a
Recipient’s (or Beneficial Owner’s) failure to comply with Section 2.17(f), or
(e) any Taxes imposed under FATCA.

 

 15 

 

 

“Existing Credit Agreement” shall mean that certain Credit Agreement dated as of
July 31, 2013, by and among the Issuer, the lenders from time to time party
thereto and SunTrust Bank, as administrative agent, issuing bank and swingline
lender, as amended, restated, supplemented, or otherwise modified from time to
time prior to the Closing Date.

 

“Existing Priming Credit Agreement” shall mean that certain Priming Credit
Agreement dated as of January 6, 2017, by and among the Issuer, the lenders from
time to time party thereto and SunTrust Bank, as administrative agent, as
amended, restated, supplemented, or otherwise modified from time to time prior
to the Closing Date.

 

“Exjade Settlement” shall mean the Issuer’s payment of an amount equal to
$15,000,000, together with applicable interest thereon (plus any amounts arising
out of the Issuer’s obligation to reimburse certain parties for their out of
pocket expenses) to settle certain allegations relating to the prescription drug
known as Exjade as described in the Issuer’s Form 8-K filed with the SEC on or
about December 16, 2013.

 

“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of
this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or
future regulations with respect thereto or official administrative
interpretations thereof, any agreements entered into pursuant to Section
1471(b)(1) of the Code and any intergovernmental agreements (or related
legislation or official administrative rules or practices) implementing the
foregoing.

 

“FDA” shall mean the United Stated Food & Drug Administration.

 

“Federal Funds Rate” shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the next 1/100 of 1%) equal to the weighted average of
the rates on overnight Federal funds transactions with member banks of the
Federal Reserve System arranged by Federal funds brokers, as published by the
Federal Reserve Bank of New York on the next succeeding Business Day or, if such
rate is not so published for any Business Day, the Federal Funds Rate for such
day shall be the average (rounded upwards, if necessary, to the next 1/100 of
1%) of the quotations for such day on such transactions received by the Required
Purchasers from three Federal funds brokers of recognized standing selected by
the Required Purchasers.

 

“Federal/State Healthcare Program Account Debtor” shall mean any account debtor
which is (a) the United States of America acting under the Medicaid or Medicare
program established pursuant to the Social Security Act, the Tricare/CHAMPUS
Program or any other Federally sponsored health care program other than the
health care programs for which Federal government employees are beneficiaries,
(b) any state or the District of Columbia acting pursuant to a health plan
adopted pursuant to a State Medicaid program or (c) any agent, carrier,
administrator or intermediary for any of the foregoing.

 

“Fee Letters” shall mean, collectively, (a) that certain closing payment letter
dated as of June 7, 2017 (the “Ares Closing Payment Letter”), executed by Ares
Management LLC, on behalf of one or more of its affiliated funds or accounts,
and accepted by the Issuer and (b) that certain fee letter dated June 19, 2017
between the Collateral Agent and the Issuer.

 

“First Lien/Second Lien Intercreditor Agreement” shall mean that certain
Intercreditor Agreement, dated as of the Closing Date, between the Collateral
Agent and the Second Lien Collateral Agent, and acknowledged by the Note
Parties, as the same may be amended, supplemented, waived or otherwise modified
from time to time in accordance with the terms hereof and thereof.

 

 16 

 

 

“Fiscal Quarter” shall mean any fiscal quarter of the Issuer.

 

“Fiscal Year” shall mean any fiscal year of the Issuer.

 

“Flood Insurance Laws” shall mean, collectively, (i) the National Flood
Insurance Act of 1968 as now or hereafter in effect or any successor statute
thereto, (ii) the Flood Disaster Protection Act of 1973 as now or hereafter in
effect or any successor statute thereto, (iii) the National Flood Insurance
Reform Act of 1994 as now or hereafter in effect or any successor statute
thereto, (iv) the Flood Insurance Reform Act of 2004 as now or hereafter in
effect of any successor statute thereto, in each case, together with all
statutory and regulatory provisions consolidating, amending, replacing,
supplementing, implementing or interpreting any of the foregoing, as amended or
modified from time to time.

 

“Food and Drug Laws” shall mean any applicable laws, rules, regulations,
ordinances and administrative manuals, orders, guidelines, guidances and
requirements issued by any Governmental Authority relating to the compounding,
development, design, premarket clearance, approval, collection, manufacture,
processing, holding, storing, testing, labeling, packaging, repackaging,
packing, transporting, shipping, importing, exporting, marketing, advertising,
promotion, sale, installation, servicing, and distribution of food, drugs,
biological products, cosmetics and/or medical devices including components and
accessories including, without limitation, the Federal Food Drug, and Cosmetic
Act, 21 U.S.C. § 321 et seq., and all analogous federal, state, local,
municipal, foreign, multinational, foreign regional, and foreign national laws,
rules, orders, binding agreements, regulations, statutes, directives, standards,
ordinances, codes or requirements of any Governmental Authority.

 

“Foreign Person” shall mean any Person that is not a U.S. Person.

 

“Foreign Subsidiary” shall mean each Subsidiary of the Issuer other than a
Domestic Subsidiary.

 

“GAAP” shall mean generally accepted accounting principles in the United States
applied on a consistent basis and subject to the terms of Section 1.3.

 

“Governing Body” shall mean the board of directors, board of managers, board of
representatives, board of advisors or similar governing or advisory body of any
Person.

 

“Governmental Authority” shall mean the government of the United States, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government, including,
without limitation, CMS and FDA.

 

“Governmental Payors” shall mean Medicare, Medicaid, CHAMPUS, CHAMPVA, TRICARE,
Veteran’s Administration or any other Governmental Authority or quasi-public
agency providing funding for healthcare services.

 

“Governmental Payor Arrangements” shall mean arrangements, plans or programs
with Governmental Payors for payment or reimbursement in connection with health
care services, products or supplies.

 

“Government Receivables Account” shall have the meaning set forth in Section
5.11(e).

 

 17 

 

 

“Government Receivables Account Agreement” shall have the meaning set forth in
Section 5.11(e).

 

“Guarantee” of or by any Person (the “guarantor”) shall mean any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly and
including any obligation, direct or indirect, of the guarantor (i) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (ii) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (iii) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (iv) as an account party in respect of any
letter of credit or letter of guaranty issued in support of such Indebtedness or
obligation; provided that the term “Guarantee” shall not include endorsements
for collection or deposit in the ordinary course of business. The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
principal amount of the primary obligation in respect of which such Guarantee is
made or, if not so stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith. The term “Guarantee”
used as a verb has a corresponding meaning.

 

“Guarantor” shall mean each of the Subsidiary Note Parties.

 

“Guaranty and Security Agreement” shall mean the First Lien Guaranty and
Security Agreement, dated as of the date hereof, made by the Note Parties in
favor of the Collateral Agent for the benefit of the Secured Parties.

 

“Hazardous Materials” shall mean all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other 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.

 

“Health Care Audits” shall have the meaning set forth in Section 4.20(g).

 

“Healthcare Laws” shall mean, collectively, any and all federal state or local
laws, rules, regulations, ordinances and administrative manuals, orders,
guidelines, guidances and requirements issued by any Governmental Authority
under or in connection with Medicare, Medicaid or any Government Payor program
or any law governing the licensure of or regulating healthcare providers,
professionals, facilities or payors or otherwise governing or regulating the
provision of, or payment for, medical services, including without limitation,
(i) all federal and state fraud and abuse laws, including but not limited to the
federal Anti-Kickback Statute (42 U.S.C. (§1320a-7b(b)), the Stark Law, the
civil False Claims Act (31 U.S.C. §3729 et seq.), Section 1320a-7 and 1320a-7a
of Title 42 of the United States Code and the regulations promulgated pursuant
to such statues; (ii) the Health Insurance Portability and Accountability Act of
1996 (Pub. L. No. 104-191) and the regulations promulgated thereunder, (iii)
HIPAA and the HITECH Act, (iv) Medicare; (v) Medicaid; (vi) the Controlled
Substances Act (21 U.S.C. § 801, et seq.) and all applicable requirements,
regulations and guidances issued thereunder by the Drug Enforcement
Administration (“DEA”); (vii) Food and Drug Laws, (viii) state pharmacy laws;
(ix) the Clinical Laboratory Improvement Act (42 U.S.C. § 263a, et seq.), (x)
the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (P.L.
108-173, 117 Stat. 2066), (xi) all applicable professional standards regulating
healthcare providers, healthcare professionals, healthcare facilities or
healthcare payors, each of (i) through (x) as may be amended from time to time.

 

 18 

 

 

“Healthcare Material Adverse Effect” shall mean (a) any Material Adverse Effect
or (b) any event, act, condition or occurrence of whatever nature (including any
adverse determination in any litigation, arbitration, or governmental
investigation or proceeding), whether singularly or in conjunction with any
other event or events, act or acts, condition or conditions, occurrence or
occurrences whether or not related, that (i) has resulted, or is reasonably
likely to result, in the suspension or termination of the ability to operate of
one or more BioScrip Facilities, unless (x) the patients serviced by all such
BioScrip Facilities that are subject to such suspension or termination can be
moved to, or serviced by, other BioScrip Facilities that are not subject to
suspension or termination at a cost to the Issuer and its Subsidiaries of not
more than $2,500,000 in the aggregate and (y) there is no reasonably anticipated
payor contract disruption that is reasonably likely to result in the loss of
more than $2,500,000 in gross revenues as a result of such movement of patients
to, or such servicing of patients by, other BioScrip Facilities, (ii) has
resulted, or is reasonably likely to result, in the inability of the Issuer and
its Subsidiaries to deliver services to more than 5.0% of the patients of the
Issuer and its Subsidiaries, (iii) has resulted, or is reasonably likely to
result, in remediation costs to the Issuer and its Subsidiaries in excess of
$2,500,000 or (iv) results in or is reasonably likely to result in the loss of
more than $2,500,000 in gross revenues by the Issuer and its Subsidiaries.

 

“Hedging Obligations” of any Person shall mean any and all monetary obligations
of such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired under (i) any and all Hedging
Transactions, (ii) any and all cancellations, buy backs, reversals, terminations
or assignments of any Hedging Transactions and (iii) any and all renewals,
extensions and modifications of any Hedging Transactions and any and all
substitutions for any Hedging Transactions.

 

“Hedge Termination Value” shall mean, in respect of any one or more Hedging
Transactions, after taking into account the effect of any netting agreement
relating to such Hedging Transactions, (a) for any date on or after the date
such Hedging Transactions 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 Hedging Transactions, as determined based upon
one or more mid-market or other readily available quotations provided by any
recognized dealer in such Hedging Transactions (which may include a Purchaser or
any Affiliate of a Purchaser).

 

“Hedging Transaction” of any Person shall mean (a) any transaction (including an
agreement with respect to any such transaction) now existing or hereafter
entered into by such Person that is a rate swap transaction, swap option, basis
swap, forward rate transaction, commodity swap, commodity option, equity or
equity index swap or option, bond option, interest rate option, foreign exchange
transaction, cap transaction, floor transaction, collar transaction, currency
swap transaction, cross-currency rate swap transaction, currency option, spot
transaction, credit protection transaction, credit swap, credit default swap,
credit default option, total return swap, credit spread transaction, repurchase
transaction, reverse repurchase transaction, buy/sell-back transaction,
securities lending transaction, or any other similar transaction (including any
option with respect to any of these transactions) or any combination thereof,
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.

 

 19 

 

 

“HIPAA” shall mean the Health Insurance Portability and Accountability Act of
1996, Pub. L. 104 191, Aug. 21, 1996, 110 Stat. 1936, and regulations
promulgated pursuant thereto regarding privacy, security and transmission of
health information (including the Standards for Privacy of Individually
Identifiable Health Information, the Security Standards for the Protection of
Electronic Protected Health Information and the Standards for Electronic
Transactions and Code Sets promulgated thereunder), all as amended from time to
time, and any successor statute and regulations.

 

“HIPAA/HITECH Compliance Plan” shall have the meaning set forth in Section 4.21.

 

“HIPAA/HITECH Compliant” shall have the meaning set forth in Section 4.21.

 

“HITECH Act” shall mean the Health Information Technology for Economic and
Clinical Health Act provisions of the American Reinvestment and Recovery Act of
2009, and regulations promulgated pursuant thereto, all as amended from time to
time, and any successor statute and regulations.

 

“Indebtedness” of any Person shall mean, without duplication, (i) all
obligations of such Person for borrowed money (including, without limitation,
the Second Lien Obligations), (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all obligations of
such Person in respect of the deferred purchase price of property or services
(other than current liabilities, accrued expense obligations and trade payables
incurred in the ordinary course of business; provided that any such obligation
that is secured by a Lien (including the ABDC Obligations) shall constitute
Indebtedness), (iv) all obligations of such Person under any conditional sale or
other title retention agreement(s) relating to property acquired by such Person,
(v) all Capital Lease Obligations of such Person, (vi) all obligations,
contingent or otherwise, of such Person in respect of letters of credit,
acceptances or similar extensions of credit, (vii) all Guarantees of such Person
of the type of Indebtedness described in clauses (i) through (vi) above, (viii)
all Indebtedness of a third party secured by any Lien on property owned by such
Person, whether or not such Indebtedness has been assumed by such Person (but
limited to the lesser of the fair market value of such property and the
outstanding principal amount of such Indebtedness), (ix) all obligations of such
Person, contingent or otherwise, to purchase, redeem, retire or otherwise
acquire for value any Disqualified Capital Stock of such Person, (x) all
Off-Balance Sheet Liabilities and (xi) obligations of such Person under any
Hedging Obligations (valued at the lesser of the Hedging Termination Value and
the Net Mark-to-Market Exposure thereof). The Indebtedness of any Person shall
include the Indebtedness of any partnership or joint venture in which such
Person is a general partner or a joint venturer, except to the extent that the
terms of such Indebtedness provide that such Person is not liable therefor. The
Indebtedness of any Person shall exclude purchase price holdbacks in respect of
a portion of the purchase price of an asset to satisfy warranty or other
unperformed obligations of the respective seller.

 

“Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on
or with respect to any payment made by or on account of any obligation of any
Note Party under any Note Document and (b) to the extent not otherwise described
in clause (a), Other Taxes.

 

“Information and Collateral Disclosure Certificate” shall have the meaning
assigned to such term in the Guaranty and Security Agreement.

 

“Intellectual Property Rights” shall have the meaning assigned to such term in
the Guaranty and Security Agreement.

 

“Interest Period” shall mean with respect to any Eurodollar Note, a period of
one month; provided that:

 

 20 

 

 

(i)           the initial Interest Period for such Note shall commence on the
date of Issuance of such Note (including the date of any conversion from a Note
of another Type), and each Interest Period occurring thereafter in respect of
such Note shall commence on the day on which the next preceding Interest Period
expires;

 

(ii)          if any Interest Period would otherwise end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day, unless such Business Day falls in another calendar month, in which
case such Interest Period would end on the next preceding Business Day;

 

(iii)          any Interest Period which 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 such calendar month;

 

(iv)         each principal installment of the Notes shall have an Interest
Period ending on each installment payment date and the remaining principal
balance (if any) of the Notes shall have an Interest Period determined as set
forth above; and

 

(v)          no Interest Period may extend beyond the Maturity Date.

 

“Internally Generated Cash” shall mean internally generated cash of the Issuer
and its Subsidiaries (and shall exclude, for the avoidance of doubt, the
proceeds of any disposition of assets, sale of equity, capital contribution or
incurrence of Indebtedness).

 

“Investments” shall have the meaning set forth in Section 7.4.

 

“IRS” shall mean the Internal Revenue Service of the United States.

 

“Issuance” shall mean an issuance hereunder consisting of Notes to be issued by
or for the benefit of the Issuer to any Purchasers pursuant to Article II.

 

“Issuer” shall have the meaning set forth in the introductory paragraph hereof.

 

“LIBOR Rate” shall mean for each Interest Period, a rate of interest determined
by the Required Purchasers (which determination shall be conclusive in the
absence of manifest error) equal to the greater of:

 

(i)         one percent (1.00%) per annum, and

 

(ii)         (a)         the rate per annum appearing on Bloomberg L.P.’s
service (the “Service”) (or on any successor to or substitute for the Service)
for ICE LIBOR USD interest rates as of 11:00 a.m. (London, England time) two
Business Days prior to the commencement of the requested Interest Period, for a
term and in an amount comparable to the Interest Period and the amount of the
Eurodollar Note requested (whether as an initial Eurodollar Note or as a
continuation of a Eurodollar Note or as a conversion of a Base Rate Note to a
Eurodollar Note) by the Issuer in accordance with this Agreement. If the Service
shall no longer report ICE LIBOR USD interest rates, or such interest rates
cease to exist, the Required Purchasers shall be permitted to select an
alternate service that quotes, or alternate interest rates that reasonably
approximate, the rates of interest per annum at which deposits of Dollars in
immediately available funds are offered by major financial institutions
reasonably satisfactory to the Required Purchasers in the London interbank
market as of 11:00 a.m. (London, England time) two (2) Business Days prior to
the commencement of the requested Interest Period; divided by

 

 21 

 

 

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

 

such rate to be adjusted to the nearest one sixteenth of one percent (1/16th of
1%) or, if there is not a nearest one sixteenth of one percent (1/16th of 1%),
to the next highest one sixteenth of one percent (1/16th of 1%).

 

“Licenses” shall mean any and all licenses (including professional licenses),
approvals, certificates of need, accreditations, certifications, permits,
franchises, rights to conduct business (by a Governmental Authority or
otherwise), Orders and any other governmental authorizations.

 

“Lien” shall mean any mortgage, pledge, security interest, lien (statutory or
otherwise), charge, encumbrance, hypothecation, assignment, deposit arrangement,
or other arrangement having the practical effect of any of the foregoing
(including any conditional sale or other title retention agreement and any
capital lease having the same economic effect as any of the foregoing).

 

“Limitation” shall mean a revocation, suspension, termination, impairment,
probation, limitation, non-renewal, forfeiture, restriction, declaration of
ineligibility, loss of status as a participating provider, or the loss of any
other rights under any Governmental Payor Arrangement, Third Party Payor
Arrangement, Company Accreditation or License.

 

“Material Adverse Effect” shall mean any event, act, condition or occurrence of
whatever nature (including any adverse determination in any litigation,
arbitration, or governmental investigation or proceeding), whether singularly or
in conjunction with any other event or events, act or acts, condition or
conditions, occurrence or occurrences whether or not related, that results in a
material adverse change in, or a material adverse effect on, (i) the business,
condition (financial or otherwise), operations, liabilities (contingent or
otherwise), or properties of the Issuer and its Subsidiaries on a consolidated
basis and taken as a whole, (ii) the ability of the Note Parties to perform any
of their respective obligations under the Note Documents, or (iii) the rights
and remedies of the Collateral Agent or the Purchasers under any of the Note
Documents (other than solely as a result of any action or inaction on the part
of the Collateral Agent or any Purchaser).

 

“Material Agreements” shall mean all agreements, documents, contracts,
indentures and instruments with respect to which a default, breach or
termination thereof would reasonably be expected to result in a Material Adverse
Effect.

 

“Material Indebtedness” shall mean (i) any Indebtedness (other than the Notes)
of the Issuer or any of its Subsidiaries individually or in an aggregate
committed or outstanding principal amount exceeding $12,500,000, (ii) the Second
Lien Obligations and (iii) the Senior Notes or any Permitted Refinancing
Indebtedness.

 

 22 

 

 

“Material Permitted Seller Financing” shall mean any Permitted Seller Financing
individually or in an aggregate committed or outstanding principal amount
exceeding $10,000,000.

 

“Maturity Date” shall mean, with respect to the Notes, the earlier of: (i)
August 15, 2020 or, if all of the Senior Notes shall have been refinanced in
full with the proceeds of Permitted Refinancing Indebtedness prior to August 15,
2020, June 30, 2022; and (ii) the date on which the principal amount of all
outstanding Notes has been declared or automatically has become due and payable
(whether by acceleration or otherwise).

 

“Medicaid” shall mean, collectively, the healthcare assistance program
established by Title XIX of the Social Security Act (42 U.S.C., Chapter 7,
subchapter XIX, §§1396 et seq.) and all laws, rules, regulations, manuals,
orders, guidelines or requirements (whether or not having the force of law)
pertaining to such program, in each case as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Medicare” shall mean, collectively, the health insurance program for the aged
and disabled established by Title XVIII of the Social Security Act (42 U.S.C.,
Chapter 7, subchapter XVIII, §§1395 et seq.) and all laws, rules, regulations,
manuals, orders or guidelines (whether or not having the force of law)
pertaining to such program, in each case as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Moody’s” shall mean Moody’s Investors Service, Inc.

 

“Mortgaged Property” shall mean, individually or collectively, any Real Estate
that is subject to a Mortgage.

 

“Mortgage” shall mean each mortgage, deed of trust, deed to secure debt or other
real estate security documents delivered by any Note Party to the Collateral
Agent from time to time, all in form and substance reasonably satisfactory to
the Collateral Agent and the Required Purchasers.

 

“Multiemployer Plan” shall mean any “multiemployer plan” as defined in Section
4001(a)(3) of ERISA, which is contributed to by (or to which there is or may be
an obligation to contribute of) the Issuer, any of its Subsidiaries, or an ERISA
Affiliate, and each such plan for the look-back period during which the Issuer,
any of its Subsidiaries, or an ERISA Affiliate continues to be subject to
liability, including contingent liability, for the plan under Title IV of ERISA.

 

“Net Cash Proceeds” shall mean cash proceeds (including proceeds of any
insurance policy) received by any Note Party, net of (i) customary, reasonable
and documented (in summary form) fees and commissions paid or payable in
connection therewith, including reasonable and documented (in summary form)
attorneys’ fees, accountants’ fees, broker’s fees and investment banking fees,
(ii) other reasonable, documented (in summary form) and customary fees and
expenses paid or payable in connection therewith to the extend paid or payable
to a Person that is not an Affiliate of the Issuer, (iii) Taxes (including
transfer and similar taxes) paid or reasonably estimated to be payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), to the extent properly
attributable to such Prepayment Event, (iv) with respect to Net Cash Proceeds
received as a result of a Prepayment Event under Section 2.9(a), (a) amounts
required to be applied to the repayment of Indebtedness secured by a Lien not
prohibited hereunder on any asset which is the subject of such Prepayment Event
and prepayment penalties required to be paid under the terms governing such
Indebtedness, (b) reserves required to be established in accordance with GAAP or
any applicable documentation governing any such Prepayment Event, including
escrow amounts, indemnification obligations, purchase price adjustments and
other similar retained liabilities, and (c) amounts required to be paid to any
party having superior rights to such proceeds pursuant to clause (ii) of the
definition of Requirements of Law and (v) with respect to Net Cash Proceeds
received as a result of a Prepayment Event under Section 2.9(b), underwriting
discounts and other customary debt incurrence costs.

 

 23 

 

 

“Net Mark-to-Market Exposure” of any Person shall mean, as of any date of
determination with respect to any Hedging Obligation, the excess (if any) of all
unrealized losses over all unrealized profits of such Person arising from such
Hedging Obligation. “Unrealized losses” shall mean the fair market value of the
cost to such Person of replacing the Hedging Transaction giving rise to such
Hedging Obligation as of the date of determination (assuming such Hedging
Transaction were to be terminated as of that date), and “unrealized profits”
shall mean the fair market value of the gain to such Person of replacing such
Hedging Transaction as of the date of determination (assuming such Hedging
Transaction were to be terminated as of that date).

 

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

 

“Non-U.S. Plan” shall mean any plan, fund (including, without limitation, any
superannuation fund) or other similar program established, contributed to
(regardless of whether through direct contributions or through employee
withholding) or maintained outside the United States by the Issuer or one or
more of its Subsidiaries primarily for the benefit of employees of the Issuer or
such Subsidiaries residing outside the United States, which plan, fund or other
similar program provides, or results in, retirement income, a deferral of income
in contemplation of retirement, or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.

 

“Note” and “Notes” shall have the meaning set forth in Section 2.2.

 

“Note Documents” shall mean, collectively, this Agreement, the Collateral
Documents, the First Lien/Second Lien Intercreditor Agreement, the ABDC
Intercreditor Agreement, any other intercreditor agreement or subordination
agreement entered into with the Collateral Agent or any Purchaser in connection
with the Obligations, the Fee Letters, all Notices of Conversion/Continuation,
all Compliance Certificates, the Notes, and any and all other instruments,
agreements, documents and writings executed by or in favor of the Collateral
Agent or any Purchaser in connection with any of the foregoing. Not in
limitation of the foregoing, for purposes of the First Lien/Second Lien
Intercreditor Agreement, the ABDC Intercreditor Agreement and any other
intercreditor agreement or subordination agreement entered into with the
Collateral Agent or any Purchaser in connection with the Obligations, the term
“Note Documents” shall include all instruments, agreements, documents and
writing executed by or in favor of the Collateral Agent or any Purchaser in
connection with (a) Bank Product Obligations and (b) Hedging Obligations owed by
any Note Party to any Purchaser-Related Hedge Provider.

 

“Note Parties” shall mean the Issuer and the Subsidiary Note Parties.

 

“Notice of Conversion/Continuation” shall have the meaning set forth in Section
2.4(b).

 

“Obligations” shall mean (a) all amounts owing by the Note Parties to the
Collateral Agent or any Purchaser pursuant to or in connection with this
Agreement or any other Note Document or otherwise with respect to any Note
including, without limitation, all principal, interest (including any interest
accruing after the filing of any petition in bankruptcy or the commencement of
any insolvency, reorganization or like proceeding relating to the Issuer,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding), reimbursement obligations, fees, expenses, indemnification and
reimbursement payments, costs and expenses (including all fees and expenses of
counsel to the Collateral Agent and any Purchaser payable by the Note Parties
pursuant to this Agreement or any other Note Document), whether direct or
indirect, absolute or contingent, liquidated or unliquidated, now existing or
hereafter arising hereunder or thereunder, (b) all Hedging Obligations owed by
any Note Party to any Purchaser-Related Hedge Provider, and (c) all Bank Product
Obligations, together with all renewals, extensions, modifications or
refinancings of any of the foregoing; provided, however, that with respect to
any Guarantor, the Obligations shall not include any of such Guarantor’s
Excluded Swap Obligations.

 

 24 

 

 

“OFAC” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets
Control.

 

“Off-Balance Sheet Liabilities” of any Person shall mean (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability of such Person under any sale
and leaseback transactions that do not create a liability on the balance sheet
of such Person, (iii) any Synthetic Lease Obligation or (iv) any obligation
arising with respect to any other transaction which is the functional equivalent
of or takes the place of borrowing but which does not constitute a liability on
the balance sheet of such Person.

 

“Order” means any order, award, decision, injunction, judgment, ruling, decree,
charge, writ, subpoena or verdict entered, issued, made or rendered by any
Governmental Authority or arbitrator.

 

“OSHA” shall mean the Occupational Safety and Health Act of 1970, as amended
from time to time, and any successor statute.

 

“Other Connection Taxes” shall mean, with respect to any Recipient, Taxes
imposed as a result of a present or former connection between such Recipient and
the jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Note Document, or sold or assigned an interest in any Note or Note Document).

 

“Other Taxes” shall mean any and all present or future stamp, court or
documentary, intangible, recording, filing or similar Taxes that arise from any
payment made hereunder or under any other Note Document or from the execution,
delivery, performance or enforcement or registration of, from the receipt or
perfection of a security interest under, or otherwise with respect to, this
Agreement or any other Note Document, except any such Taxes imposed with respect
to an assignment (other than an assignment described in Section 2.20),
participation or other transfer.

 

“Parent Company” shall mean, with respect to a Purchaser, the “bank holding
company” as defined in Regulation Y, if any, of such Purchaser, and/or any
Person owning, beneficially or of record, directly or indirectly, a majority of
the shares of such Purchaser.

 

“Participant” shall have the meaning set forth in Section 10.4(d).

 

“Participant Register” shall have the meaning set forth in Section 10.4(d).

 

“Patent” shall have the meaning assigned to such term in the Guaranty and
Security Agreement.

 

“Patent Security Agreement” shall mean any Patent Security Agreement executed by
a Note Party owning Patents in favor of the Collateral Agent for the benefit of
the Secured Parties, both on the Closing Date and thereafter.

 

 25 

 

 

“Patriot Act” shall mean the USA PATRIOT Improvement and Reauthorization Act of
2005 (Pub. L. 109-177 (signed into law March 9, 2006)), as amended and in effect
from time to time.

 

“PBGC” shall mean the U.S. Pension Benefit Guaranty Corporation, as referred to
and defined in ERISA and any successor entity performing similar functions.

 

“Permitted Acquisition” shall mean any Acquisition of a Target, in each
instance, to the extent that each of the following conditions shall have been
satisfied:

 

(i)         no Default or Event of Default shall then exist or would exist after
giving effect thereto;

 

(ii)        such Acquisition shall not be hostile and shall have been approved
by the Governing Body and, to the extent applicable, stockholders or other
equityholders of the Target;

 

(iii)          (x) if Consolidated EBITDA for the period of four Fiscal Quarters
ended on the last day of the most recent Fiscal Quarter prior to the date of
such Acquisition for which financial statements have been (or were required to
be) delivered hereunder is less than $50,000,000, (A) not less than 75% of the
consideration for such Acquisition shall be paid for with Internally Generated
Cash, the proceeds of capital contributions and/or the proceeds of equity
issuances and (B) not more than 25% of the consideration for such Acquisition
may be paid for with a combination of Permitted Seller Financing, earn-outs or
other deferred or contingent purchase consideration (provided that, for the
avoidance of doubt, for purposes of this clause (iii)(x), the maximum amount of
all earn-outs and other deferred or contingent purchase consideration shall be
deemed fully earned and payable on the date of the consummation of such
Acquisition and shall be included in the determination of the consideration for
such Acquisition) and/or the proceeds of Second Lien Delayed Draw Notes, and (y)
if Consolidated EBITDA for the period of four Fiscal Quarters ended on the last
day of the most recent Fiscal Quarter prior to the date of such Acquisition for
which financial statements have been (or were required to be) delivered
hereunder is greater than or equal to $50,000,000, (A) not less than 50% of the
consideration for such Acquisition shall be paid for with Internally Generated
Cash, the proceeds of capital contributions and/or the proceeds of equity
issuances and (B) not more than 50% of the consideration for such Acquisition
may be paid for with a combination of Permitted Seller Financing, earn-outs or
other deferred or contingent purchase consideration (provided that, for the
avoidance of doubt, for purposes of this clause (iii)(y), the maximum amount of
all earn-outs and other deferred or contingent purchase consideration shall be
deemed fully earned and payable on the date of the consummation of such
Acquisition and shall be included in the determination of the consideration for
such Acquisition) and/or the proceeds of Second Lien Delayed Draw Notes;

 

(iv)       the Issuer shall be in pro forma compliance with the covenant set
forth in Article VI after giving effect to such Acquisition, calculated as of
the last day of the most recent Fiscal Quarter for which financial statements
have been (or were required to be) delivered hereunder and for the period of
four Fiscal Quarters ending on such date, as evidenced by a certificate of a
Responsible Officer of the Issuer delivered to the Collateral Agent and the
Purchasers not less than two (2) days prior to the consummation of such
Acquisition;

 

(v)        the Person acquiring such Target (if such acquisition is of the type
described in clause (b) of the definition of Acquisition) or the Target (if such
acquisition is of the type described in clause (a) of the definition of
Acquisition), as applicable, shall be organized in any state of the United
States or in Washington, D.C.;

 

 26 

 

 

(vi)        the Person acquiring such Target (if such Acquisition is of the type
described in clause (b) of the definition of Acquisition) or the Target (if such
Acquisition is of the type described in clause (a) of the definition of
Acquisition), as applicable, and each of its Subsidiaries shall be become a
Subsidiary Note Party in accordance with the provisions of Section 5.12;

 

(vii)       the Target shall be engaged solely in the business of home infusion
services (i.e., the preparation, delivery, administration and clinical
monitoring of pharmaceutical treatments that are administered to a patient via
intravenous, subcutaneous, intramuscular, intraspinal and enteral methods) or a
line of business reasonably related, ancillary or incidental thereto;

 

(viii)       the consideration for such Acquisition shall be paid for solely
with Internally Generated Cash, the proceeds of capital contributions, the
proceeds of equity issuances, the proceeds of the Second Lien Delayed Draw
Notes, Permitted Seller Financing or earn-outs or other deferred or contingent
purchase consideration;

 

(ix)         after giving effect to such Acquisition, the amount available to be
funded pursuant to the Second Lien Delayed Draw Notes plus cash and Cash
Equivalents (other than Restricted Cash) of the Issuer and its Subsidiaries is
not less than $20,000,000;

 

(x)         such Acquisition shall not result in the formation of any Specified
Strategic Joint Venture; and

 

(xi)         the Issuer shall have (A) notified the Collateral Agent and the
Purchasers of such proposed Acquisition at least fifteen (15) days (or such
shorter period as the Required Purchasers may reasonably agree) prior to the
consummation thereof, (B) furnished to the Collateral Agent and the Purchasers
at least ten (10) days (or such shorter period as the Required Purchasers may
reasonably agree) prior to the consummation thereof (1) an executed term sheet
and/or letter of intent (setting forth in reasonable detail the terms and
conditions of such Acquisition) and, at the request of the Required Purchasers,
such other information and documents that the Required Purchasers may reasonably
request, including, without limitation, all regulatory and third-party approvals
required under the terms of the Acquisition documents, (2) a description of the
proposed Acquisition and a due diligence report (to the extent available) and
(3) for any Acquisition with total consideration in excess of $50,000,000 (for
the avoidance of doubt, for purposes of this clause (3), such total
consideration shall include any Permitted Seller Financing and the maximum
amount of all earn-outs and other deferred or contingent purchase consideration,
which shall be deemed fully earned and payable on the date of the consummation
of such Acquisition) (or to the extent otherwise reasonably available to the
Issuer in connection with such Acquisition), a quality of earnings report of
such Target by a nationally recognized independent accounting firm or such other
accounting firm reasonably satisfactory to the Required Purchasers, (C)
furnished to the Collateral Agent and the Purchasers at least five (5) days (or
such shorter period as the Required Purchasers may reasonably agree) prior to
the consummation thereof (1) drafts of the respective material agreements,
documents or instruments pursuant to which such Acquisition is to be consummated
(including, without limitation, any related management, non-compete, employment,
option or other material agreements), any schedules to such agreements,
documents or instruments, all other material ancillary agreements, instruments
and documents to be executed or delivered in connection therewith, and copies of
environmental assessments and (2) pro forma financial statements of the Issuer
and its Subsidiaries after giving effect to the consummation of such Acquisition
and (D) furnished to the Collateral Agent and the Purchasers no later than the
date of consummation of such Acquisition executed counterparts of the respective
material agreements, documents or instruments pursuant to which such Acquisition
is to be consummated (including, without limitation, any related management,
non-compete, employment, option or other material agreements), any schedules to
such agreements, documents or instruments, all other material ancillary
agreements, instruments and documents to be executed or delivered in connection
therewith, and copies of environmental assessments.

 

 27 

 

 

“Permitted Business” shall mean owning, operating, managing and maintaining
infusion services, home health care, hospice services, respiratory care
services, pharmacy benefit management services, durable medical equipment
services, or other healthcare services, in each case, together with any other
businesses as are reasonably related, ancillary or incidental thereto.

 

“Permitted Encumbrances” shall mean:

 

(i)          Liens imposed by law for taxes, fees, assessments or other
governmental charges which are not yet due or which are being contested in good
faith by appropriate proceedings diligently conducted and with respect to which
adequate reserves are being maintained in accordance with GAAP;

 

(ii)        statutory Liens of landlords, carriers, warehousemen, mechanics,
materialmen and other Liens imposed by law in the ordinary course of business
for amounts not yet delinquent for more than sixty (60) days or which are being
contested in good faith by appropriate proceedings diligently conducted and with
respect to which adequate reserves are being maintained in accordance with GAAP;

 

(iii)        pledges and deposits made in the ordinary course of business in
compliance with workers’ compensation, unemployment insurance and other social
security laws or regulations;

 

(iv)       deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature or to secure liability to insurance carriers, in
each case in the ordinary course of business;

 

(v)         judgment and attachment liens not giving rise to an Event of Default
or Liens created by or existing from any litigation or legal proceeding that are
currently being contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves are being maintained in
accordance with GAAP;

 

(vi)       customary rights of set-off, revocation, refund or chargeback under
deposit agreements or under the Uniform Commercial Code or common law of banks
or other financial institutions where the Issuer or any of its Subsidiaries
maintains deposits (other than deposits intended as cash collateral) in the
ordinary course of business;

 

(vii)       easements, zoning restrictions, rights-of-way, minor defects in
title, and similar encumbrances on Real Estate imposed by law or arising in the
ordinary course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or materially
interfere with the ordinary conduct of business of the Issuer and its
Subsidiaries taken as a whole;

 

(viii)       Liens in favor of collecting banks arising by operation of law
under Section 4-210 of the UCC or, with respect to collecting banks located in
the State of New York, under Section 4-208 of the UCC, or securing reimbursement
obligations in respect of documentary letters of credit or bankers’ acceptances
in the ordinary course of business;

 

 28 

 

 

(ix)        Liens arising out of consignment or similar arrangements for the
sale of goods entered into by the Issuer or any of its Subsidiaries in the
ordinary course of business;

 

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

 

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

 

(xii)      leases, subleases, non-exclusive licenses or non-exclusive
sublicences on the property covered thereby, in each case, in the ordinary
course of business which do not (i) materially interfere with the business of
the Issuer and its Subsidiaries, taken as a whole, or (ii) secure any
Indebtedness;

 

(xiii)       any interest of title of a lessor under any lease entered into by
the Issuer or any of its Subsidiaries in the ordinary course of business as a
tenant and covering only the assets so leased; and

 

(xiv)       Liens evidenced by precautionary UCC financing statements relating
to operating leases, bailments and consignments of personal property;

 

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

 

“Permitted Refinancing Indebtedness” shall mean any Indebtedness issued in
exchange for, or the Net Cash Proceeds of which are used to extend, refinance,
renew, replace, defease or refund, the Senior Notes (or previous refinancings
thereof constituting Permitted Refinancing Indebtedness (“Refinanced Senior
Notes Indebtedness”)); provided that (a) the principal amount of such Permitted
Refinancing Indebtedness does not exceed the principal amount of the Senior
Notes (or Refinanced Senior Notes Indebtedness) being refinanced plus unpaid
accrued interest, fees and premiums thereon plus fees and expenses incurred in
connection with such refinancing, (b)(i) the cash portion of the non-default
interest rate with respect to such Permitted Refinancing Indebtedness does not
exceed 10.0% per annum and (ii) the aggregate non-default Effective Yield with
respect to such Permitted Refinancing Indebtedness does not exceed 15.0% per
annum (which, for purposes of this clause (b)(ii), shall be calculated exclusive
of any original issue discount or other upfront payments in an amount not in
excess of 2.0% of the aggregate principal amount of such Permitted Refinancing
Indebtedness (the “Permitted Refinancing Indebtedness OID Cap”) payable in
connection therewith and inclusive of any original issue discount or other
upfront payments in excess of the Permitted Refinancing Indebtedness OID Cap
payable in connection therewith, but otherwise in accordance with the definition
of “Effective Yield”), (c) the final maturity date of such Permitted Refinancing
Indebtedness is on or after six months after June 30, 2022, (d) such Permitted
Refinancing Indebtedness is unsecured and is junior or pari passu in payment
priority with the Obligations and the Second Lien Obligations, (e) no Permitted
Refinancing Indebtedness shall have obligors that are not obligated with respect
to the Senior Notes, the Obligations or the Second Lien Obligations, (f) the
documentation governing such Permitted Refinancing Indebtedness shall not
include any amortization or mandatory redemption, repurchase or repayment
provisions (other than customary provisions relating to change of control and
asset sale redemption offers) and (g) the Weighted Average Life to Maturity of
such Permitted Refinancing Indebtedness is greater than or equal to the greater
of (x) the Weighted Average Life to Maturity of the Senior Notes (or any
Refinanced Senior Notes Indebtedness) and (y) the Weighted Average Life to
Maturity of the Notes.

 

 29 

 

 

“Permitted Seller Financing” shall mean, with respect to any Permitted
Acquisition, subordinated unsecured Indebtedness provided by the seller of the
applicable Target; provided that:

 

(i)         the obligations in respect of such Indebtedness are subordinated in
right of payment to the Obligations and the Second Lien Obligations on terms
acceptable to the Required Purchasers and the Required Purchasers (as defined in
the Second Lien Note Purchase Agreement);

 

(ii)        the obligations in respect of such Indebtedness shall be unsecured;

 

(iii)       there shall be no obligors (including guarantors) in respect of such
Indebtedness other than (x) in the case of an Acquisition of the type described
in clause (b) of the definition of Acquisition, the Person acquiring the assets
of the applicable Target, (y) in the case of an Acquisition of the type
described in clause (a) of the definition of Acquisition, the applicable Target
(and for the avoidance of doubt, no subsidiaries of the applicable Target shall
be obligors) and (z) in each case, any parent company of the Person acquiring
such asset or Target, which parent company (A) is a newly-formed holding company
that holds no material assets, and has no material liabilities, other than
equity interests in the Person acquiring such assets or Target and (B) complies
with the provisions of Section 5.12 of this Agreement;

 

(iv)       the documentation governing such Indebtedness shall not include any
(x) representations and warranties (other than basic corporate representations
and warranties and representations and warranties concerning the enforceability
of the agreements governing the such financing), covenants (other than customary
affirmative (e.g., corporate existence, insurance and compliance with laws) and
reporting covenants), which in no event shall be more restrictive than the
representations and warranties and covenants contained in the Note Documents, or
(y) indemnities;

 

(v)       the documentation governing such Indebtedness shall not require any
amortization or mandatory prepayments; and

 

(vi)       (w) the interest rate with respect to such Indebtedness, exclusive of
any default interest rate margin (which shall be customary and in any event
shall not exceed 2.0% per annum), shall not exceed 10.0% per annum, (x) there
shall be no original issue discount (except to the extent of original issue
discount issued in respect of an accreting obligation, which original issue
discount shall not result in, together with any other interest (other than
default interest) payable in respect of such Indebtedness, an interest rate in
excess of that permitted pursuant to clause (w) above) or other upfront payments
in connection with such Indebtedness, (y) interest payments shall be made no
more frequently than quarterly and (z) no cash interest payments shall be
permitted at any time that any Default or Event of Default is continuing.

 

“Permitted Third Party Bank” shall mean any bank or other financial institution
with whom any Note Party maintains (i) a Controlled Account and with whom an
Account Control Agreement has been executed or (ii) a Government Receivables
Account and with whom a Government Receivables Account Agreement has been
executed. As of the Closing Date, each of the banks and other financial
institutions that are identified on Schedule 4.16 as an institution at which a
Controlled Account or a Government Receivables Account is maintained by any Note
Party shall be deemed to be a Permitted Third Party Bank.

 

 30 

 

 

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

 

“Plan” shall mean any “employee pension benefit plan” as defined in Section 3 of
ERISA (other than a Multiemployer Plan) maintained or contributed to by (or to
which there is or may be an obligation to contribute of) the Issuer, any of its
Subsidiaries, or an ERISA Affiliate, and each such plan for the look-back period
during which the Issuer, any of its Subsidiaries, or an ERISA Affiliate
continues to be subject to liability, including contingent liability, for the
plan under Title IV of ERISA.

 

“Prepayment Event” shall mean any sale, lease, assignment, transfer or other
disposition by the Issuer or any of its Subsidiaries of any assets or property
pursuant to Section 7.6(e) or Section 7.6(f).

 

“Prepayment Premium” shall mean, with respect to any optional prepayment of the
Notes pursuant to Section 2.8(a), any mandatory prepayment of the Notes pursuant
to Section 2.9(a) or (b) or any repayment of the Notes following the
acceleration thereof pursuant to Section 8.1: (a) at any time prior to the
second anniversary of the Closing Date, an amount equal to the Applicable
Premium with respect to the principal amount of the Notes so prepaid or repaid;
(b) at any time on or after the second anniversary of the Closing Date and prior
to the third anniversary of the Closing Date, an amount equal to 4.0% of the
principal amount of the Notes so prepaid or repaid; (c) at any time on or after
the third anniversary of the Closing Date and prior to the fourth anniversary of
the Closing Date, an amount equal to 2.0% of the principal amount of the Notes
so prepaid or repaid; and (d) at any time on or after the fourth anniversary of
the Closing Date, an amount equal to 0.0% of the principal amount of the Notes
so prepaid or repaid; provided that no Prepayment Premium shall be required to
be paid with respect to any optional prepayment of the Notes pursuant to Section
2.8(a) from Internally Generated Cash; provided, further, that the foregoing
proviso shall (x) apply only to the prepayment of up to $50 million in aggregate
principal amount of the Notes over the term of this Agreement and (y) for the
avoidance of doubt, not apply in connection with the acceleration of the
Obligations pursuant to Section 8.1.

 

“Profit Plan” shall mean, for any calendar year, an annual operating plan for
the Issuer and its Subsidiaries, on a consolidated basis, setting forth (i) a
statement of all material assumptions on which such annual operating plan is
based, (ii) quarterly balance sheets, income statements and statements of cash
flows for such calendar year, (iii) sales, gross profits, operating expenses,
operating profit, cash flow projections, all prepared on the same basis and in
similar detail as that on which operating results are reported (and in the case
of cash flow projections, representing management’s good faith estimates of
future financial performance based on historical performance), and including
plans for Capital Expenditures and facilities.

 

“Pro Forma Basis” shall mean (a) with respect to any Person, business, property
or asset sold, transferred or otherwise disposed of, the exclusion from
“Consolidated EBITDA” of the EBITDA (calculated in a manner substantially
consistent with the definition of “Consolidated EBITDA” and giving effect to any
adjustments made in accordance with such definition) for such Person, business,
property or asset so disposed of during such period as if such disposition had
been consummated on the first day of the applicable period and (b) with respect
to any Target acquired in a Permitted Acquisition, the addition to “Consolidated
EBITDA” of the EBITDA (calculated in a manner substantially consistent with the
definition of “Consolidated EBITDA” but without giving effect to any adjustments
made in accordance with such definition and, for the avoidance of doubt, not
including any synergies or other cost savings) of such Target so acquired during
such period as if such acquisition had been consummated on the first day of the
applicable period, in each case, in accordance with GAAP.

 

 31 

 

 

“Pro Rata Share” shall mean with respect to any Commitment or Note of any
Purchaser at any time, a percentage, the numerator of which shall be such
Purchaser’s Commitment (or if such Commitment has been terminated or expired or
the Notes have been declared to be due and payable, such Purchaser’s Notes), and
the denominator of which shall be the sum of all Commitments of all Purchasers
(or if such Commitments have been terminated or expired or the Notes have been
declared to be due and payable, all Notes of all Purchasers).

 

“Purchaser-Related Hedge Provider” means any Person that, at the time it enters
into a Hedging Transaction with any Note Party, (i) is a Purchaser or an
Affiliate of a Purchaser and (ii) has provided prior written notice to the
Collateral Agent which has been acknowledged by the Issuer of (x) the existence
of such Hedging Transaction and (y) the methodology to be used by such parties
in determining the obligations under such Hedging Transaction from time to time.
In no event shall any Purchaser-Related Hedge Provider acting in such capacity
be deemed a Purchaser for purposes hereof to the extent of and as to Hedging
Obligations except that each reference to the term “Purchaser” in Article IX and
Section 10.3(b) shall be deemed to include such Purchaser-Related Hedge
Provider. In no event shall the approval of any such Person in its capacity as
Purchaser-Related Hedge Provider be required in connection with the release or
termination of any security interest or Lien of the Collateral Agent.

 

“Purchasers” shall have the meaning set forth in the introductory paragraph
hereof and shall include each Purchaser that joins this Agreement pursuant to
Section 10.4 and each Replacement Purchaser that joins this Agreement pursuant
to Section 2.20.

 

“Real Estate” shall have the meaning set forth in Section 4.11(a).

 

“Real Estate Documents” shall mean, collectively, with respect to any Real
Estate, (i) a Mortgage duly executed by each applicable Note Party, together
with (A) title insurance policies in amounts reasonably satisfactory to the
Required Purchasers (but not to exceed 100% of the fair market value of such
Real Estate in any jurisdiction that imposes a material mortgage recording tax
or 110% otherwise), current as-built ALTA/ACSM Land Title surveys certified to
the Collateral Agent, zoning letters, building permits and certificates of
occupancy, in each case relating to such Real Estate and reasonably satisfactory
in form and substance to the Required Purchasers, (B) (x) “Life of Loan” Federal
Emergency Management Agency Standard Flood Hazard determinations, (y) notices,
in the form required under the Flood Insurance Laws, about special flood hazard
area status and flood disaster assistance duly executed by each Note Party, and
(z) if any improved real property encumbered by any Mortgage is located in a
special flood hazard area, a policy of flood insurance that (1) covers such
improved real property, (2) is written in an amount not less than the
outstanding principal amount of the Indebtedness secured by such Mortgage
reasonably allocable to such real property or the maximum limit of coverage made
available with respect to the particular type of property under the Flood
Insurance Laws, whichever is less, and (3) is otherwise on terms satisfactory to
the Collateral Agent and the Required Purchasers and, (C) evidence that
counterparts of such Mortgages have been recorded in all places to the extent
necessary or desirable, in the reasonable judgment of the Required Purchasers,
to create a valid and enforceable first priority Lien (subject to Permitted
Encumbrances and Specified Permitted Liens) on such Real Estate in favor of the
Collateral Agent for the benefit of the Secured Parties (or in favor of such
other trustee as may be required or desired under local law), (D) an opinion of
counsel in each state in which such Real Estate is located in form and substance
and from counsel reasonably satisfactory to the Required Purchasers, (E) a duly
executed Environmental Indemnity with respect thereto, and (F) such other
reports, documents, instruments and agreements as the Required Purchasers shall
reasonably request, each in form and substance reasonably satisfactory to
Required Purchasers.

 

“Recipient” shall mean, as applicable, (a) the Collateral Agent and (b) any
Purchaser.

 

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“Regulation D” shall mean Regulation D of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time, and any
successor regulations.

 

“Regulation T” shall mean Regulation T of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time, and any
successor regulations.

 

“Regulation U” shall mean Regulation U of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time, and any
successor regulations.

 

“Regulation X” shall mean Regulation X of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time, and any
successor regulations.

 

“Regulation Y” shall mean Regulation Y of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time, and any
successor regulations.

 

“Reimbursement Approvals” shall mean any and all certifications, provider or
supplier numbers, provider or supplier agreements (including Medicaid provider
or supplier numbers, Medicaid provider or supplier agreements, Medicare provider
or supplier numbers, and Medicare provider or supplier agreements),
participation agreements, Accreditations, and/or any other agreements with or
approvals by Medicaid, Medicare, CHAMPUS, CHAMPVA, TRICARE, Veteran’s
Administration and any other Governmental Authority or quasi-public agency, Blue
Cross/Blue Shield, any and all managed care plans and organizations, including
Medicare Advantage plans, Medicare Part D prescription drug plans, health
maintenance organizations and preferred provider organizations, private
commercial insurance companies, employee assistance programs and/or any other
governmental or third party arrangements, plans or programs for payment or
reimbursement in connection with health care services, products or supplies.

 

“Related Parties” shall mean, with respect to any specified Person, such
Person’s Affiliates and the respective managers, administrators, trustees,
partners, directors, officers, employees, agents, advisors, legal counsel,
consultants or other representatives of such Person and such Person’s
Affiliates.

 

“Release” shall mean any release, spill, emission, leaking, dumping, injection,
pouring, deposit, disposal, discharge, dispersal, leaching or migration into the
environment (including ambient air, surface water, groundwater, land surface or
subsurface strata) or within any building, structure, facility or fixture.

 

“Required Purchasers” shall mean, at any time, Purchasers holding more than 50%
of the aggregate outstanding principal amount of the Notes at such time;
provided that, to the extent there are two or more Purchasers that each hold at
least 5% of the aggregate outstanding principal amount of the Notes at any time,
Required Purchasers shall mean at least two Purchasers together holding more
than 50% of the outstanding principal amount of the Notes at such time;
provided, further, that, for purposes of the foregoing proviso, a Purchaser
together with all of such Purchaser’s Affiliates and Approved Funds shall be
deemed to constitute a single Purchaser; provided, further, that, to the extent
that any Purchaser is a Defaulting Purchaser, such Defaulting Purchaser and all
of the Notes held by such Defaulting Purchaser shall be excluded for purposes of
determining Required Purchasers.

 

“Requirement of Law” for any Person shall mean (i) the articles or certificate
of incorporation, bylaws, partnership certificate and agreement, or limited
liability company certificate of organization and agreement, as the case may be,
and other organizational and governing documents of such Person, and (ii) any
law, treaty, rule or regulation, or determination of a Governmental Authority,
including, without limitation any Healthcare Laws, in each case applicable to or
binding upon such Person or any of its property or to which such Person or any
of its property is subject.

 

 33 

 

 

“Responsible Officer” shall mean any of the president, the chief executive
officer, the chief operating officer, the chief financial officer, the general
counsel, the treasurer or a vice president of the Issuer or such other
representative of the Issuer as may be designated in writing by any one of the
foregoing with the consent of the Required Purchasers (such consent not to be
unreasonably withheld, conditioned or delayed). With respect to any Person that
is a limited liability company or a limited partnership, such Person’s managing
member, sole member, sole manager or general partner, as the case may be, shall
constitute a Responsible Officer.

 

“Responsible Officer of the Collateral Agent” shall mean an officer within
Corporate Trust Services who shall have direct responsibility for the
administration of this Agreement.

 

“Restricted Cash” shall mean, as of any date, all cash and Cash Equivalents held
by the Issuer and its Subsidiaries that are legally or contractually restricted
from being used to repay general obligations of the Issuer or any Subsidiary of
the Issuer (including the Obligations) (provided that the terms of this
Agreement, the other Note Documents and the Second Lien Note Documents shall not
be deemed to contractually restrict the use of cash and Cash Equivalents by the
Issuer and its Subsidiaries) or are otherwise subject to a Lien (except Liens
created under the Collateral Documents, the Second Lien Collateral Documents and
non-consensual Liens that arise by operation of law).

 

“Restricted Payment” shall mean, for any Person, (i) any dividend or
distribution on any class of its Capital Stock, or (ii) any payment on account
of, or the setting aside of assets for a sinking or other analogous fund for,
the purchase, redemption, retirement, defeasance or other acquisition of (a) any
shares of its Capital Stock, (b) any Subordinated Debt, (c) any options,
warrants or other rights to purchase such Capital Stock or such Indebtedness,
whether now or hereafter outstanding, or (d) any payment of management or
similar fees.

 

“Routine Payor Audit” shall mean any payor audit conducted by a Governmental
Authority or a Third Party Payor so long as the potential liability under such
payor audit does not exceed $200,000 for each such payor audit.

 

“S&P” shall mean Standard & Poor’s, a division of The McGraw-Hill Companies,
Inc.

 

“Sanctioned Country” shall mean, at any time, a country, territory or region
that is, or whose government is, the subject or target of any Sanctions.

 

“Sanctioned Person” shall mean, at any time, any Person with whom dealings are
restricted or prohibited under Sanctions, including (i) any Person listed in any
Sanctions-related list of designated Persons maintained by the United States
(including by OFAC, the U.S. Department of the Treasury, or the U.S. Department
of State), or by the United Nations Security Council, the European Union or any
EU member state, Her Majesty’s Treasury of the United Kingdom or any other
relevant sanctions authority, (ii) any Person located, operating, organized or
resident in a Sanctioned Country or (iii) any Person owned or controlled,
directly or indirectly, by any such Person described in clause (i) or (ii) of
this definition.

 

“Sanctions” shall mean sanctions or trade embargoes enacted, imposed,
administered or enforced from time to time by (i) the U.S. government, including
those administered by the U.S. Department of the Treasury’s Office of Foreign
Assets Control (“OFAC”), U.S. Department of State, or U.S. Department of
Commerce, (ii) the United Nations Security Council, the European Union or any of
its member states, Her Majesty’s Treasury of the United Kingdom, (iii) Canada
(or any provincial government) or (iv) any other relevant sanctions authority.

 

 34 

 

 

“Second Lien Collateral Agent” shall have the meaning assigned to the term
“Collateral Agent” in the Second Lien Note Purchase Agreement.

 

“Second Lien Collateral Documents” shall mean the “Collateral Documents” under
and as defined in the Second Lien Note Purchase Agreement.

 

“Second Lien Delayed Draw Notes” shall have the meaning assign to the term
“Delayed Draw Notes” in the Second Lien Note Purchase Agreement.

 

“Second Lien Note Documents” shall mean the Second Lien Note Purchase Agreement
and the other “Note Documents” as defined in the Second Lien Note Purchase
Agreement, in each case, as amended, restated and/or modified from time to time
in accordance with the terms thereof and of the First Lien/Second Lien
Intercreditor Agreement.

 

“Second Lien Note Purchase Agreement” shall mean that certain Second Lien Note
Purchase Agreement dated as of the Closing Date, by and among the Issuer, the
financial institutions party thereto from time to time and Wells Fargo Bank,
National Association, in its capacity as collateral agent thereunder, as the
same may be amended, restated, supplemented, waived, extended or otherwise
modified from time to time in accordance with the First Lien/Second Lien
Intercreditor Agreement.

 

“Second Lien Notes” shall have the meaning assigned to the term “Notes” in the
Second Lien Note Purchase Agreement.

 

“Second Lien Obligations” shall mean the “Obligations” under and as defined in
the Second Lien Note Purchase Agreement.

 

“Second Lien Purchasers” shall mean the “Purchasers” under and as defined in the
Second Lien Note Purchase Agreement.

 

“Secured Parties” shall mean the Collateral Agent, the Purchasers, the
Purchaser-Related Hedge Providers and the Bank Product Providers.

 

“Securities Act” shall mean the Securities Act of 1933, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time in
effect.

 

“Senior Notes” shall mean the unsecured 8.875% Senior Notes due 2021 issued by
the Issuer pursuant to the Senior Notes Indenture, as amended, restated,
supplemented, or otherwise modified from time to time in accordance with the
terms hereof and thereof.

 

“Senior Notes Indenture” shall mean that certain Indenture dated as of February
11, 2014, by and among the Issuer, the guarantors party thereto, and U.S. Bank
National Association, as trustee, as amended, restated, supplemented, or
otherwise modified from time to time in accordance with the terms hereof and
thereof.

 

 35 

 

 

“Solvent” shall mean, with respect to any Person on a particular date, that on
such date (a) the fair value of the property of such Person is greater than the
total amount of liabilities, including subordinated and contingent liabilities,
of such Person; (b) the present fair saleable 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 and liabilities, including subordinated and
contingent liabilities as they become absolute and matured; (c) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person’s ability to pay as such debts and liabilities mature; and
(d) such Person is not engaged in a business or transaction, and is not about to
engage in a business or transaction, for which such Person’s property would
constitute an unreasonably small capital. The amount of contingent liabilities
(such as litigation, guaranties and pension plan liabilities) at any time shall
be computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that would reasonably be expected to
become an actual or matured liability.

 

“Specified Permitted Liens” shall mean (a) nonconsensual Liens arising by
operation of law (including Permitted Encumbrances, but excluding Permitted
Encumbrances securing Indebtedness), (b) Liens permitted by Section 7.2(e),
Section 7.2(f) (except to the extent such Liens are required to be subordinated
to the Liens securing the Obligations pursuant to such Section 7.2(f)) and
Section 7.2(g), and (c) Liens on cash collateral for letters of credit permitted
pursuant to Section 7.1(a)(xix).

 

“Specified Strategic Joint Venture” shall mean any Subsidiary (other than a
Subsidiary formed for the purpose of holding assets of the Issuer and its
Subsidiaries constituting the Issuer’s and its Subsidiaries’ PBM line of
business) formed by the Issuer or any of its Subsidiaries with one or more third
parties for the purpose of engaging in any Permitted Business, including any
hospital joint venture or other joint venture providing pharmacy benefit
management services.

 

“Stark Law” shall mean Section 1877 of the Social Security Act, as codified at
42 U.S.C. Section 1395nn (Prohibition Against Certain Referrals), as the same
may be amended, modified or supplemented from time to time, and any successor
statute thereto, and any and all rules or regulations promulgated from time to
time thereunder.

 

“Subordinated Debt” shall mean any Indebtedness of the Issuer or any Subsidiary
that is by its terms subordinated in right of payment to the prior payment of
the Obligations and the Second Lien Obligations in a manner reasonably
acceptable to the Required Purchasers and the Required Purchasers (as defined in
the Second Lien Note Purchase Agreement).

 

“Subsidiary” shall mean, with respect to any Person (the “parent”) at any date,
any corporation, partnership, joint venture, limited liability company,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent’s consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, partnership, joint venture, limited liability
company, association or other entity (i) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held,
or (ii) that is, as of such date, otherwise controlled, by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent. Unless otherwise indicated, all references to “Subsidiary” hereunder
shall mean a Subsidiary of the Issuer.

 

“Subsidiary Note Party” shall mean any Subsidiary that executes or becomes a
party to the Guaranty and Security Agreement (other than any Specified Strategic
Joint Venture).

 

“Synthetic Lease” shall mean a lease transaction under which the parties intend
that (i) the lease will be treated as an “operating lease” by the lessee
pursuant to Accounting Standards Codification Sections 840-10 and 840-20, as
amended, and (ii) the lessee will be entitled to various tax and other benefits
ordinarily available to owners (as opposed to lessees) of like property.

 

 36 

 

 

“Synthetic Lease Obligations” shall mean, with respect to any Person, the sum of
(i) all remaining rental obligations of such Person as lessee under Synthetic
Leases which are attributable to principal and, without duplication, (ii) all
rental and purchase price payment obligations of such Person under such
Synthetic Leases assuming such Person exercises the option to purchase the lease
property at the end of the lease term.

 

“Target” shall mean any other Person or business unit or asset group of any
other Person acquired or proposed to be acquired in a Permitted Acquisition.

 

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

 

“Third Party Payors” shall mean Blue Cross, Blue Shield, any and all managed
care plans and organizations, including Medicare Advantage plans, Medicare Part
D prescription drug plans, health maintenance organizations and preferred
provider organizations, private commercial insurance companies, employee
assistance programs and/or any other third party arrangements, plans or
programs.

 

“Third Party Payor Arrangements” shall mean arrangements, plans or programs with
Third Party Payors for payment or reimbursement in connection with health care
services, products or supplies.

 

“Trademark” shall have the meaning assigned to such term in the Guaranty and
Security Agreement.

 

“Trademark Security Agreement” shall mean any Trademark Security Agreement
executed by a Note Party owning registered Trademarks or applications for
Trademarks in favor of the Collateral Agent for the benefit of the Secured
Parties, both on the Closing Date and thereafter.

 

“Triggering Event of Default” shall mean an Event of Default of the type
described in Section 8.1(a), 8.1(b), 8.1(g), or 8.1(h).

 

“Type”, when used in reference to a Note or an Issuance, refers to whether the
rate of interest on such Note, or on the Notes issued pursuant to such Issuance,
is determined by reference to the LIBOR Rate or the Base Rate.

 

“Unfunded Pension Liability” of any Plan shall mean the amount, if any, by which
the value of the accumulated plan benefits under the Plan, as determined
pursuant to Section 4001(a)(16) of ERISA, determined on a plan termination basis
in accordance with actuarial assumptions at such time consistent with those
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds the fair
market value of all Plan assets allocable to such liabilities under Title IV of
ERISA (excluding any accrued but unpaid contributions).

 

“Uniform Commercial Code” or “UCC” shall mean the Uniform Commercial Code as in
effect from time to time in the State of New York or any other state the laws of
which are required to be applied in connection with the creation or perfection
of security interests.

 

“United States” or “U.S.” shall mean the United States of America.

 

“U.S. Person” shall mean any Person that is a “United States person” as defined
in Section 7701(a)(30) of the Code.

 

 37 

 

 

“U.S. Tax Compliance Certificate” shall have the meaning set forth in Section
2.17(f)(ii).

 

“Weighted Average Life to Maturity” shall mean, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (x) 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 (y) 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.

 

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

 

“Withholding Agent” shall mean the Issuer or any other Note Party, as
applicable.

 

“Working Capital” shall mean, at any date, the sum of (a) all amounts (other
than cash and Cash Equivalents) at such date that, in accordance with GAAP,
would be classified as “current assets” on a consolidated balance sheet of the
Issuer and its consolidated Subsidiaries, minus (b) all amounts (other than the
current portion of long-term Indebtedness) at such date that, in accordance with
GAAP, would be classified as “current liabilities” on a consolidated balance
sheet of the Issuer and its consolidated Subsidiaries.

 

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

 

Section 1.2         Classifications of Notes and Issuances.   For purposes of
this Agreement, Notes may be classified and referred to by Type (e.g.
“Eurodollar Note” or “Base Rate Note”). Issuances also may be classified and
referred to by Type (e.g. “Eurodollar Issuance”).

 

Section 1.3         Accounting Terms and Determination.   Unless otherwise
defined or specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared, in
accordance with GAAP as in effect from time to time, applied on a basis
consistent with the most recent financial statements of the Issuer delivered
pursuant to Section 5.1(a) or Section 5.1(b) (subject to any statements made
pursuant to Section 5.1(c)(iv)), subject to normal year-end adjustments and the
absence of footnote disclosures in the case of interim financial statements;
provided that if the Issuer notifies the Purchasers that the Issuer wishes to
amend the definition or application of GAAP as used herein to eliminate the
effect of any change in GAAP on the operation of any provision of this Agreement
(or if the Required Purchasers notify the Issuer that the Required Purchasers
wish to make such amendment), then the Issuer’s compliance with the provisions
of this Agreement shall be determined on the basis of GAAP in effect immediately
before the relevant change in GAAP became effective, until either such notice is
withdrawn or this Agreement is amended in a manner satisfactory to the Issuer
and the Required Purchasers. 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 (a) any election under Accounting Standards
Codification Section 825-10 (or any other Financial Accounting Standard having a
similar result or effect) to value any Indebtedness or other liabilities of any
Note Party or any Subsidiary of any Note Party at “fair value”, as defined
therein or (b) any treatment of Indebtedness in respect of convertible debt
instruments under Accounting Standards Codification Section 470-20 (or any other
Accounting Standards Codification or Financial Accounting Standard having a
similar result or effect) to value any such Indebtedness in a reduced or
bifurcated manner as described therein, and such Indebtedness shall at all times
be valued at the full stated principal amount thereof. In addition, all
financial covenants contained herein shall be calculated without giving effect
to any election under Statement of Financial Accounting Standards 159 (or any
similar accounting principle) permitting a Person to value its financial
liabilities at the fair value thereof. In addition, notwithstanding anything in
this Agreement to the contrary, any change in GAAP occurring after the date
hereof that would require operating leases to be treated similarly to capital
leases shall not be given effect in the definition of Consolidated EBITDA or
Indebtedness or any related definitions or in the computation of any financial
ratio or requirement in any of the Note Documents.

 

 38 

 

 

Section 1.4           Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”. In
the computation of periods of time from a specified date to a later specified
date, the word “from” means “from and including” and the word “to” means “to but
excluding”. Unless the context requires otherwise (i) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as it was
originally executed or as it may from time to time be amended, restated,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (ii) any reference
herein to any Person shall be construed to include such Person’s successors and
permitted assigns, (iii) the words “hereof”, “herein” and “hereunder” and words
of similar import shall be construed to refer to this Agreement as a whole and
not to any particular provision hereof, (iv) all references to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles,
Sections, Exhibits and Schedules to this Agreement and (v) all references to a
specific time shall be construed to refer to the time in New York, New York,
unless otherwise indicated. The words “knowledge of the Issuer” or any like term
shall mean the actual knowledge of a Responsible Officer of the Issuer.

 

ARTICLE II

AMOUNT AND TERMS OF THE COMMITMENTS

 

Section 2.1           General Description of Facilities. Subject to and upon the
terms and conditions herein set forth, each Purchaser severally agrees to
purchase a Note from the Issuer on the Closing Date in an aggregate principal
amount not exceeding such Purchaser’s Commitment.

 

Section 2.2           Commitments. Subject to the terms and conditions set forth
herein, each Purchaser severally and not jointly agrees to purchase from the
Issuer, and the Issuer agrees to issue to each such Purchaser, on the Closing
Date, a note in the form attached hereto as Exhibit B (each a “Note” and,
collectively, the “Notes”) in the amount set forth opposite such Purchaser’s
name on Schedule I under the heading “Note Commitment Amount”. The Notes may be,
from time to time, Base Rate Notes or Eurodollar Notes or a combination thereof.
The execution and delivery of this Agreement by the Issuer and the satisfaction
or waiver by the Purchasers of all conditions precedent set forth in Section 3.1
shall be deemed to constitute the Issuer’s request to the Purchasers to purchase
the Notes on the Closing Date. Amounts which are repaid or prepaid on the Notes
may not be reborrowed.

 

Section 2.3           Purchase of Notes. No Purchaser shall be responsible for
any default by any other Purchaser in its obligations hereunder, and each
Purchaser shall be obligated to purchase a Note in an amount not to exceed the
amount of such Purchaser’s Commitment, regardless of the failure of any other
Purchaser to purchase a Note hereunder.

 

 39 

 

 

Section 2.4           Interest Elections.

 

(a)          Each Note initially shall be a Eurodollar Note. Thereafter, the
Issuer may elect to convert all (but not less than all) of the outstanding Notes
into a different Type or to continue such Notes, all as provided in this
Section.

 

(b)          To make an election pursuant to this Section, the Issuer shall give
the Purchasers written notice (or telephonic notice promptly confirmed in
writing), substantially in the form of Exhibit 2.4 attached hereto (a “Notice of
Conversion/Continuation”) (x) prior to 12:00 p.m. one (1) Business Day prior to
the requested date of a conversion into Base Rate Notes and (y) prior to 12:00
p.m. three (3) Business Days prior to a continuation of or conversion into
Eurodollar Notes. Each such Notice of Conversion/Continuation shall be
irrevocable and shall specify (i) the effective date of the election made
pursuant to such Notice of Conversion/Continuation, which shall be a Business
Day and (ii) whether the Notes are to be Base Rate Notes or Eurodollar Notes.

 

(c)          If, on the expiration of any Interest Period in respect of
Eurodollar Notes, the Issuer shall have failed to deliver a Notice of
Conversion/Continuation, then, unless the Notes are repaid as provided herein,
the Issuer shall be deemed to have elected to convert the Notes to Base Rate
Notes. The Notes may not be converted into, or continued as, Eurodollar Notes if
a Default or an Event of Default exists, unless each of the Purchasers shall
have otherwise consented in writing. No conversion of the Eurodollar Notes shall
be permitted except on the last day of the Interest Period in respect thereof.

 

Section 2.5           Termination of Commitments. The Commitments shall
terminate on the Closing Date upon the purchase and sale of the Notes pursuant
to Section 2.2.

 

Section 2.6           Repayment of Notes.

 

(a)          The Issuer unconditionally promises to pay to each Purchaser the
then unpaid principal amount of the Note held by such Purchaser on each
September 30, December 31, March 31 and June 30 of each Fiscal Year prior to the
Maturity Date, commencing on September 30, 2019, in equal consecutive quarterly
installments in an aggregate amount for each such quarterly installment equal to
six hundred twenty-five thousandths of one percent (0.625%) of the aggregate
principal amount of the Notes issued and sold on the Closing Date (as adjusted
to reflect prepayments of Notes in accordance with this Agreement); provided
that, to the extent not previously paid, the aggregate unpaid principal balance
of the Notes shall be due and payable on the Maturity Date.

 

Section 2.7           Evidence of Indebtedness.

 

(a)          Each Purchaser shall maintain in accordance with its usual practice
appropriate records evidencing the Indebtedness of the Issuer to such Purchaser
evidenced by each Note held by such Purchaser, including the amounts of
principal and interest payable thereon and paid to such Purchaser from time to
time under this Agreement. The entries made in such records shall be prima facie
evidence of the existence and amounts of the obligations of the Issuer therein
recorded; provided that the failure or delay of any Purchaser in maintaining or
making entries into any such record or any error therein shall not in any manner
affect the obligation of the Issuer to repay the Notes (both principal and
unpaid accrued interest) held by such Purchaser in accordance with the terms of
this Agreement.

 

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Section 2.8           Optional Prepayments; Prepayment Premium.

 

(a)          Subject to Section 2.8(b), the Issuer shall have the right at any
time and from time to time to prepay the Notes, in whole or in part, by giving
written notice (or telephonic notice promptly confirmed in writing) to the
Purchasers no later than (i) in the case of any prepayment of Eurodollar Notes,
11:00 a.m. not less than three (3) Business Days prior to the date of such
prepayment and (ii) in the case of any prepayment of Base Rate Notes, not less
than one (1) Business Day prior to the date of such prepayment. Each such notice
shall be irrevocable (provided that such notice (x) may be conditioned upon the
happening of an event, in which case, such notice may be revoked to the extent
that such event does not occur and (y) may be modified to extend the proposed
date of such prepayment specified therein) and shall specify the proposed date
of such prepayment and the principal amount of the Notes to be prepaid. If such
notice is given, the aggregate amount specified in such notice shall be due and
payable on the date designated in such notice, together with accrued interest to
such date on the principal amount so prepaid in accordance with Section 2.10(d);
provided that if a Eurodollar Note is prepaid on a date other than the last day
of an Interest Period applicable thereto, the Issuer shall also pay all amounts
required pursuant to Section 2.16. Each partial prepayment of the Notes shall be
in a minimum principal amount of $5,000,000 and in increments of $1,000,000 in
excess thereof. Each prepayment of the Notes shall be applied in accordance with
Section 2.9(d).

 

(b)          In the event that the Issuer prepays any Notes pursuant to clause
(a) above, the Issuer shall pay to each applicable Purchaser the applicable
Prepayment Premium with respect to the principal amount so prepaid.

 

Section 2.9           Mandatory Prepayments.

 

(a)          Promptly (but in any event within five (5) Business Days) upon
receipt by the Issuer or any of its Subsidiaries of Net Cash Proceeds in excess
of $1,000,000 in the aggregate during any Fiscal Year from any Prepayment Event,
the Issuer shall prepay the Obligations in an amount equal to such excess Net
Cash Proceeds; provided that no prepayment under this Section 2.9(a) shall be
required with respect to Net Cash Proceeds from any Prepayment Event so long as
no Default or Event of Default is in existence at the time of receipt of such
Net Cash Proceeds and, at the election of the Issuer, to the extent that such
proceeds are reinvested in the business of the Issuer or any of its Subsidiaries
within 365 days (or 366 days in a leap year) following receipt thereof or
committed to be reinvested pursuant to a binding contract prior to the
expiration of such 365 day (or 366 day in a leap year) period and actually
reinvested within 180 days after the date of such binding contract. Any such
prepayment shall be applied in accordance with clause (d) of this Section and
shall be subject to the payment of the Prepayment Premium pursuant to clause (e)
of this Section.

 

(b)          Promptly (but in any event within five (5) Business Days) upon
receipt by the Issuer or any of its Subsidiaries of Net Cash Proceeds from any
issuance of Indebtedness by the Issuer or any of its Subsidiaries (other than
any Indebtedness that is not prohibited to be issued or incurred hereunder), the
Issuer shall prepay the Obligations in an amount equal to all such Net Cash
Proceeds. Any such prepayment shall be applied in accordance with clause (d) of
this Section and shall be subject to the payment of the Prepayment Premium
pursuant to clause (e) of this Section.

 

(c)          Commencing with the Fiscal Year ending December 31, 2017, no later
than ten (10) days after the date on which the Issuer’s annual audited financial
statements for such Fiscal Year are required to be delivered pursuant to Section
5.1(a), (i) to the extent that the Consolidated Total Net Leverage Ratio as of
the last day of such Fiscal Year is greater than or equal to 3.50:1.00, the
Issuer shall prepay the Obligations in an amount equal to (x) 50% of Excess Cash
Flow for such Fiscal Year minus (y) the aggregate amount of all voluntary
prepayments of the Notes and Second Lien Notes made during such Fiscal Year, and
(ii) to the extent that the Consolidated Total Net Leverage Ratio as of the last
day of such Fiscal Year is less than 3.50:1.00, the Issuer shall prepay the
Obligations in an amount equal to 0% of Excess Cash Flow for such Fiscal Year.
Any such prepayment shall be applied in accordance with clause (d) of this
Section. Any such prepayment shall be accompanied by a certificate signed by a
Responsible Officer of the Issuer, certifying in reasonable detail the manner in
which Excess Cash Flow and the resulting prepayment were calculated, which
certificate shall be in form and substance reasonably satisfactory to the
Required Purchasers.

 

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(d)          Any prepayments made by the Issuer pursuant to clause (a), (b) or
(c) of this Section or pursuant to Section 2.8(a) shall be applied as follows:
to the outstanding principal balance of the Notes, until the same shall have
been paid in full, pro rata to the Purchasers based on their Pro Rata Shares of
the Notes, and applied first to the immediately succeeding eight (8) scheduled
installments of the Notes on a pro rata basis and thereafter to the remaining
scheduled installments of the Notes on a pro rata basis (including, without
limitation, the final payment due on the Maturity Date).

 

(e)          In connection with any prepayment made by the Issuer pursuant to
clause (a) or (b) of this Section, the Issuer shall pay the applicable
Prepayment Premium with respect to the principal amount so prepaid. In
connection with any prepayment made by the Issuer pursuant to clause (a), (b) or
(c) of this Section, the Issuer shall pay any amounts due under Section 2.16
with respect to the principal amount so prepaid.

 

Section 2.10         Interest on Notes.

 

(a)          The Issuer shall pay interest on (i) each Base Rate Note at the
Base Rate plus the Applicable Margin in effect from time to time (the “Base Rate
Interest Rate”) and (ii) each Eurodollar Note at the LIBOR Rate for the
applicable Interest Period in effect for such Note plus the Applicable Margin in
effect from time to time (the “Eurodollar Interest Rate).

 

(b)          Notwithstanding clause (a) of this Section, at the written request
of the Required Purchasers if a Triggering Event of Default has occurred and is
continuing, and automatically after acceleration of the Obligations or in
connection with any Event of Default of the type described in Section 8.1(g) or
8.1(h), the Issuer shall pay interest (“Default Interest”) (i) with respect to
all Eurodollar Notes, at a rate per annum equal to 200 basis points above the
otherwise applicable Eurodollar Interest Rate until the last day of such
Interest Period, and thereafter, at a rate per annum equal to 200 basis points
above the otherwise applicable Base Rate Interest Rate and (ii) with respect to
all Base Rate Notes, at a rate per annum equal to 200 basis points above the
otherwise applicable Base Rate Interest Rate, in each case, until such
Triggering Event of Default has been waived in writing or the Required
Purchasers have revoked the imposition of Default Interest (whichever occurs
first).

 

(c)          Interest on the outstanding principal amount of all Notes shall
accrue from and including the date such Notes are issued and sold to but
excluding the date of any repayment thereof. Interest on all outstanding Notes
shall be payable monthly in arrears on the last day of each month, commencing on
the last day of the first full month following the Closing Date, and on the
Maturity Date. Interest on any Eurodollar Note which is converted into a Note of
another Type or which is repaid or prepaid shall be payable on the date of such
conversion or on the date of any such repayment or prepayment (on the amount
repaid or prepaid) thereof. All Default Interest shall be payable on demand.

 

(d)          The Required Purchasers shall determine each interest rate
applicable to the Notes hereunder and shall promptly notify the Issuer and the
Purchasers of such rate in writing (or by telephone, promptly confirmed in
writing). Any such determination shall be conclusive and binding for all
purposes, absent manifest error.

 

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Section 2.11         Fees.

 

(a)          The Issuer shall pay to the Collateral Agent for its own account
fees in the amounts and at the times previously agreed upon in writing by the
Issuer and the Collateral Agent.

 

(b)          The Notes shall be issued with original issue discount equal to
1.00% of the original aggregate principal amount of the Notes.

 

(c)          The Issuer shall pay on the Closing Date to the parties specified
therein all amounts in the Ares Closing Payment Letter that are due and payable
on the Closing Date.

 

Section 2.12         Computation of Interest and Fees. Interest hereunder on
Base Rate Notes shall be computed on the basis of a year of 365 days (or 366
days in a leap year) and paid for the actual number of days elapsed (including
the first day but excluding the last day). All other interest and all fees
hereunder shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day). Each determination by the Required Purchasers of an interest rate or fee
hereunder shall be made in good faith and, except for manifest error, shall be
final, conclusive and binding for all purposes. The Required Purchasers shall,
at the request of the Issuer, deliver to the Issuer a statement showing the
quotations used by the Required Purchasers in determining any interest rate
hereunder.

 

Section 2.13         Inability to Determine Interest Rates. If, prior to the
commencement of any Interest Period for any Eurodollar Note:

 

(i)            Any Purchaser shall have determined (which determination shall be
conclusive and binding upon the Issuer) that, by reason of circumstances
affecting the relevant interbank market, adequate means do not exist for
ascertaining LIBOR for such Interest Period, or

 

(ii)           the LIBOR Rate does not adequately and fairly reflect the cost to
any Purchaser of purchasing or maintaining its Eurodollar Notes for such
Interest Period,

 

such Purchaser shall give written notice (or telephonic notice, promptly
confirmed in writing) to the Issuer and to each other Purchaser as soon as
practicable thereafter. Until such Purchaser shall notify the Issuer and each
other Purchaser that the circumstances giving rise to such notice no longer
exist, (i) the obligations of such Purchaser to continue or convert outstanding
Notes as or into Eurodollar Notes shall be suspended and (ii) all such affected
Note shall be converted into Base Rate Notes on the last day of the then current
Interest Period applicable thereto unless the Issuer prepays such Notes in
accordance with this Agreement.

 

Section 2.14         Illegality. If any Change in Law shall make it unlawful or
impossible for any Purchaser to purchase or maintain any Eurodollar Note and
such Purchaser shall so notify the Issuer, until such Purchaser notifies the
Issuer that the circumstances giving rise to such suspension no longer exist,
the obligation of such Purchaser to continue or convert outstanding Notes as or
into Eurodollar Notes shall be suspended. If the affected Eurodollar Note is
then outstanding, such Note shall be converted to a Base Rate Note either (i) on
the last day of the then current Interest Period applicable to such Eurodollar
Note if such Purchaser may lawfully continue to maintain such Note to such date
or (ii) immediately if such Purchaser shall determine that it may not lawfully
continue to maintain such Eurodollar Note to such date. Notwithstanding the
foregoing, the affected Purchaser shall, prior to giving such notice to the
Issuer, designate a different Applicable Funding Office if such designation
would avoid the need for giving such notice and if such designation would not
otherwise be disadvantageous to such Purchaser in the good faith exercise of its
discretion.

 

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Section 2.15         Increased Costs.

 

(a)            If any Change in Law shall:

 

(i)            impose, modify or deem applicable any reserve, special deposit or
similar requirement that is not otherwise included in the determination of the
LIBOR Rate hereunder against assets of, deposits with or for the account of, or
credit extended by, any Purchaser (except any such reserve requirement reflected
in the LIBOR Rate); or

 

(ii)          impose on any Purchaser or the eurodollar interbank market any
other condition affecting this Agreement or any Eurodollar Notes made by such
Purchaser;

 

and the result of any of the foregoing is to increase the cost to such Purchaser
of making, converting into, continuing or maintaining a Eurodollar Note or to
reduce the amount received or receivable by such Purchaser hereunder (whether of
principal, interest or any other amount),

 

then, from time to time, such Purchaser may provide the Issuer with written
notice and demand with respect to such increased costs or reduced amounts, and
within five (5) Business Days after receipt of such notice and demand the Issuer
shall pay to such Purchaser such additional amounts as will compensate such
Purchaser for any such increased costs incurred or reduction suffered.

 

(b)            If any Purchaser shall have determined that on or after the date
of this Agreement any Change in Law regarding capital or liquidity requirements
has or would have the effect of reducing the rate of return on such Purchaser’s
capital (or on the capital of the Parent Company of such Purchaser) as a
consequence of its obligations hereunder to a level below that which such
Purchaser or such Parent Company could have achieved but for such Change in Law
(taking into consideration such Purchaser’s policies or the policies of such
Parent Company with respect to capital adequacy and liquidity), then, from time
to time, such Purchaser may provide the Issuer with written notice and demand
with respect to such reduced amounts, and within five (5) Business Days after
receipt of such notice and demand the Issuer shall pay to such Purchaser such
additional amounts as will compensate such Purchaser or such Parent Company for
any such reduction suffered.

 

(c)            A certificate of such Purchaser setting forth the amount or
amounts necessary to compensate such Purchaser or the Parent Company of such
Purchaser specified in clause (a) or (b) of this Section shall be delivered to
the Issuer and shall be conclusive, absent manifest error.

 

(d)            Failure or delay on the part of any Purchaser to demand
compensation pursuant to this Section shall not constitute a waiver of such
Purchaser’s right to demand such compensation; provided that the Issuer shall
not be required to compensate any Purchaser pursuant to this Section for any
increased costs incurred or reductions suffered more than one hundred eighty
(180) days prior to the date that such Purchaser notifies the Issuer of the
Change in Law giving rise to such increased costs or reductions, and of such
Purchaser’s intention to claim compensation therefor (except that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the one hundred eighty (180) day period referred to above shall be extended to
include the period of retroactive effect thereof).

 

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Section 2.16         Funding Indemnity. In the event of (a) the payment of any
principal of a Eurodollar Note other than on the last day of the Interest Period
applicable thereto (including as a result of an Event of Default), (b) the
conversion or continuation of a Eurodollar Note other than on the last day of
the Interest Period applicable thereto, or (c) the failure by the Issuer to
borrow, prepay, convert or continue any Eurodollar Note on the date specified in
any applicable notice (regardless of whether such notice is withdrawn or
revoked), then, in any such event, the Issuer shall compensate each Purchaser,
within five (5) Business Days after written demand from such Purchaser, for any
loss, cost or expense attributable to such event. In the case of a Eurodollar
Note, such loss, cost or expense shall be deemed to include an amount determined
by such Purchaser to be the excess, if any, of (A) the amount of interest that
would have accrued on the principal amount of such Eurodollar Note if such event
had not occurred at the LIBOR Rate applicable to such Eurodollar Note for the
period from the date of such event to the last day of the then current Interest
Period therefor (or, in the case of a failure to convert or continue, for the
period that would have been the Interest Period for such Eurodollar Note) over
(B) the amount of interest that would accrue on the principal amount of such
Eurodollar Note for the same period if the LIBOR Rate were set on the date such
Eurodollar Note was prepaid or converted or the date on which the Issuer failed
to convert or continue such Eurodollar Note. A certificate as to any additional
amount payable under this Section submitted to the Issuer by any Purchaser shall
be conclusive, absent manifest error.

 

Section 2.17         Taxes.

 

(a)          Any and all payments by or on account of any obligation of the
Issuer or any other Note Party hereunder or under any other Note Document shall
be made free and clear of and without deduction or withholding for any
Indemnified Taxes; provided that if any applicable law requires the deduction or
withholding of any Tax from any such payment, then the applicable Withholding
Agent shall make such deduction and timely pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law and, if such
Tax is an Indemnified Tax, then the sum payable by the Issuer or other Note
Party, as applicable, shall be increased as necessary so that after making all
required deductions and withholdings (including deductions and withholdings
applicable to additional sums payable under this Section 2.17) the applicable
Recipient shall receive an amount equal to the sum it would have received had no
such deductions or withholdings been made.

 

(b)          In addition, without limiting the provisions of clause (a) of this
Section, the Issuer shall timely pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

 

(c)          The Issuer shall indemnify each Recipient (and, with respect to
U.S. federal withholding taxes, if such Recipient is not the Beneficial Owner,
the Beneficial Owner), within ten (10) days after written demand therefor, for
the full amount of any Indemnified Taxes paid by such Recipient (or Beneficial
Owner) on or with respect to any payment by or on account of any obligation of
the Issuer or any other Note Party hereunder or under any other Note Document
(including Indemnified Taxes imposed or asserted on or attributable to amounts
payable under this Section) and any reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
Issuer by the applicable Recipient (for its own account or on behalf of one or
more Beneficial Owners) shall be conclusive, absent manifest error.

 

(d)          As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Issuer or any other Note Party to a Governmental Authority,
the Issuer or other Note Party, as applicable, shall deliver to the Purchasers
an original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to the Required
Purchasers.

 

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(e)          If any Recipient determines, in its sole discretion exercised in
good faith, that it has received a refund, or a credit in lieu of a refund, of
any Taxes or Other Taxes as to which it has been indemnified by the Issuer or
with respect to which the Issuer has paid additional amounts pursuant to this
Section 2.17, it shall pay to the Issuer an amount equal to such refund or
credit (but only to the extent of indemnity payments made, or additional amounts
paid, by the Issuer under this Section 2.17 with respect to the Taxes or Other
Taxes giving rise to such refund) net of all out-of-pocket expenses of such
Recipient and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund); provided that the Issuer,
upon the request of such Recipient, agrees to repay the amount paid over to the
Issuer (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to such Recipient in the event such Recipient is
required to repay such refund to such Governmental Authority. This Section
2.17(e) shall not be construed to require a Recipient to make available its tax
returns (or any other information relating to its taxes) to the Issuer or any
other Person.

 

(f)            Tax Forms.

 

(i)            Any Purchaser that is a U.S. Person shall deliver to the Issuer
and the Collateral Agent, on or prior to the date on which such Purchaser
becomes a Purchaser under this Agreement (and from time to time thereafter upon
the reasonable request of the Issuer), duly executed originals of IRS Form W-9
certifying, to the extent such Purchaser is legally entitled to do so, that such
Purchaser is exempt from U.S. federal backup withholding tax.

 

(ii)           Any Purchaser that is a Foreign Person and that is entitled to an
exemption from or reduction of withholding tax under the Code or any treaty to
which the United States is a party with respect to payments under this Agreement
shall deliver to the Issuer and the Collateral Agent, at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law or reasonably requested by the Issuer as will
permit such payments to be made without withholding or at a reduced rate of
withholding. Without limiting the generality of the foregoing, each Purchaser
that is a Foreign Person shall, to the extent it is legally entitled to do so,
(w) on or prior to the date such Purchaser becomes a Purchaser under this
Agreement, (x) on or prior to the date on which any such form or certification
expires or becomes obsolete, (y) after the occurrence of any event requiring a
change in the most recent form or certification previously delivered by it
pursuant to this clause, and (z) from time to time upon the reasonable request
by the Issuer, deliver to the Issuer and the Collateral Agent (in such number of
copies as shall be requested by the Issuer), whichever of the following is
applicable:

 

(A)         if such Purchaser is claiming eligibility for benefits of an income
tax treaty to which the United States is a party (x) with respect to payments of
interest under any Note Document, duly executed originals of IRS Form W-8BEN, or
IRS Form W-8BEN-E or any successor form thereto, establishing an exemption from,
or reduction of, U.S. federal withholding tax pursuant to the “interest” article
of such tax treaty, and (y) with respect to any other applicable payments under
any Note Document, duly executed originals of IRS Form W-8BEN, or IRS Form
W-8BEN-E, or any successor form thereto, establishing an exemption from, or
reduction of, U.S. federal withholding tax pursuant to the “business profits” or
“other income” article of such tax treaty;

 

(B)         duly executed originals of IRS Form W-8ECI, or any successor form
thereto, certifying that the payments received by such Purchaser are effectively
connected with such Purchaser’s conduct of a trade or business in the United
States;

 

(C)         if such Purchaser is claiming the benefits of the exemption for
portfolio interest under Section 871(h) or Section 881(c) of the Code, duly
executed originals of IRS Form W-8BEN, IRS Form W-8-BEN-E, or any successor form
thereto, together with a certificate (a “U.S. Tax Compliance Certificate”) upon
which such Purchaser certifies that (1) such Purchaser is not a bank for
purposes of Section 881(c)(3)(A) of the Code, or the obligation of the Issuer
hereunder is not, with respect to such Purchaser, a loan agreement entered into
in the ordinary course of its trade or business, within the meaning of that
Section, (2) such Purchaser is not a 10% shareholder of the Issuer within the
meaning of Section 871(h)(3) or Section 881(c)(3)(B) of the Code, (3) such
Purchaser is not a controlled foreign corporation that is related to the Issuer
within the meaning of Section 881(c)(3)(C) of the Code, and (4) the interest
payments in question are not effectively connected with a U.S. trade or business
conducted by such Purchaser; or

 

 46 

 

 

(D)         if such Purchaser is not the Beneficial Owner (for example, a
partnership or a participating Purchaser granting a typical participation), duly
executed originals of IRS Form W-8IMY, or any successor form thereto,
accompanied by IRS Form W-9, IRS Form W-8ECI, IRS Form W-8BEN, IRS Form
W-8BEN-E, a U.S. Tax Compliance Certificate, and/or other certification
documents from each Beneficial Owner, as applicable.

 

(iii)        Each Purchaser that is a Foreign Person shall, to the extent it is
legally entitled to do so, deliver to the Issuer and the Collateral Agent (in
such number of copies as shall be requested by the recipient) on or prior to the
date on which such Purchaser becomes a Purchaser under this Agreement (and from
time to time thereafter upon the reasonable request of the Issuer), executed
originals of any other form prescribed by applicable law as a basis for claiming
exemption from or a reduction in U.S. federal withholding tax, duly completed,
together with such supplementary documentation as may be prescribed by
applicable law to permit the Issuer to determine the withholding or deduction
required to be made.

 

(iv)        If a payment made to a Purchaser under any Note Document would be
subject to U.S. federal withholding tax imposed by FATCA if such Purchaser 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
Purchaser shall deliver to the Issuer and the Collateral Agent at the time or
times prescribed by law and at such time or times reasonably requested by the
Issuer 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 Issuer as may be necessary for the Issuer to comply
with its obligations under FATCA and to determine that such Purchaser has
complied with such Purchaser’s obligations under FATCA or to determine the
amount to deduct and withhold from such payment; provided that, solely for
purposes of this clause (E), “FATCA” shall include any amendments made to FATCA
after the date of this Agreement.

 

(v)         Each Purchaser agrees that if any form or certification it
previously delivered under this Section expires or becomes obsolete or
inaccurate in any respect, such Purchaser shall update such form or
certification; however, if such Purchaser is not legally entitled to provide an
updated form or certification, it shall promptly notify the Issuer and the
Collateral Agent of its inability to update such form or certification.

 

Section 2.18         Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.

 

(a)          The Issuer shall make each payment required to be made by it
hereunder (whether of principal, Prepayment Premium, premium interest or fees,
or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to
2:00 p.m. on the date when due, in immediately available funds, free and clear
of any defenses, rights of set-off, counterclaim, or withholding or deduction of
taxes. Any amounts received after such time on any date may, in the discretion
of the applicable Person entitled thereto, be deemed to have been received on
the next succeeding Business Day for purposes of calculating interest thereon.
All such payments owing to any Purchaser shall be made to such Purchaser on a
pro rata basis, and all such payments owing to the Collateral Agent shall be
made to the Collateral Agent, in each case, to such accounts as may be specified
by the applicable Person not less than five (5) days before the applicable
payment is due (provided that, if a Purchaser or the Collateral Agent shall not
have provided any such notice, such payment shall be made to the account most
recently identified by such Purchaser or the Collateral Agent), except that
payments pursuant to Sections 2.15, 2.16, 2.17 and 10.3 shall be made directly
to the Persons entitled thereto. If any payment hereunder shall be due on a day
that is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be made payable for the period of such extension. All
payments hereunder shall be made in Dollars.

 

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(b)          If at any time insufficient funds are received by and available to
the Purchasers and the Collateral Agent to pay fully all amounts of principal,
interest, Prepayment Premiums, premiums and fees then due hereunder, such funds
shall be applied as follows: first, to all amounts owed to the Collateral Agent
then due and payable pursuant to any of the Note Documents; second, to all
reimbursable expenses of the Purchasers then due and payable pursuant to any of
the Note Documents, pro rata to the Purchasers based on their respective pro
rata shares of such fees and expenses; third, to all accrued interest,
Prepayment Premiums, premiums and fees then due and payable hereunder, pro rata
to the Purchasers based on their respective pro rata shares of such interest,
Prepayment Premiums, premiums and fees; and fourth, to all principal of the
Notes then due and payable hereunder, pro rata to the parties entitled thereto
based on their respective pro rata shares of such principal.

 

(c)          If any Purchaser shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Notes that would result in such Purchaser receiving
payment of a greater proportion of the aggregate amount of its Notes, Prepayment
Premium, premium and accrued interest and fees thereon than the proportion
received by any other Purchaser with respect to its Notes, then the Purchaser
receiving such greater proportion shall purchase (for cash at face value)
participations in the Notes of other Purchasers to the extent necessary so that
the benefit of all such payments shall be shared by the Purchasers ratably in
accordance with the aggregate amount of principal of, Prepayment Premiums,
premiums, and accrued interest on their respective Notes; provided that (i) if
any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this clause shall not be construed to apply to any
payment made by the Issuer pursuant to and in accordance with the express terms
of this Agreement (including the application of funds arising from the existence
of a Defaulting Purchaser) or any payment obtained by a Purchaser as
consideration for the assignment of or sale of a participation in any of its
Notes to any assignee or participant, other than to the Issuer or any Subsidiary
or Affiliate thereof (as to which the provisions of this clause shall apply).
The Issuer consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Purchaser acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Issuer rights of set-off and counterclaim with respect to such participation as
fully as if such Purchaser were a direct creditor of the Issuer in the amount of
such participation.

 

Section 2.19         Mitigation of Obligations. If any Purchaser requests
compensation under Section 2.15, or if the Issuer is required to pay any
additional amount to any Purchaser or any Governmental Authority for the account
of any Purchaser pursuant to Section 2.17, then such Purchaser shall use
reasonable efforts to designate a different funding office for purchasing or
booking its Notes hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the reasonable judgment
of such Purchaser, such designation or assignment (i) would eliminate or reduce
amounts payable under Section 2.15 or Section 2.17, as the case may be, in the
future and (ii) would not subject such Purchaser to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Purchaser. The Issuer
hereby agrees to pay all reasonable and documented (in summary form) costs and
expenses incurred by any Purchaser in connection with such designation or
assignment.

 

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Section 2.20         Replacement of Purchasers. If (a) any Purchaser requests
compensation under Section 2.15, or if the Issuer is required to pay any
additional amount to any Purchaser or any Governmental Authority for the account
of any Purchaser pursuant to Section 2.17, (b) any Purchaser is a Defaulting
Purchaser, or (c) in connection with any proposed amendment, modification,
termination, waiver or consent with respect to any of the provisions hereof as
contemplated by Section 10.2(b), the consent of Required Purchasers shall have
been obtained but the consent of one or more of such other Purchasers (each a
“Non-Consenting Purchaser”) whose consent is required shall not have been
obtained, then the Issuer may, at its sole expense and effort, upon notice to
such Purchaser, require such Purchaser to assign and delegate, without recourse
(in accordance with and subject to the restrictions set forth in Section
10.4(b)), all of its interests, rights (other than its existing rights to
payments pursuant to Section 2.15 or 2.17, as applicable) and obligations under
this Agreement to an assignee that shall assume such obligations (which assignee
may be another Purchaser) (a “Replacement Purchaser”); provided that (i) such
Purchaser shall have received payment of an amount equal to the outstanding
principal amount of all Notes owed to it, accrued interest thereon, accrued
fees, the Prepayment Premium (other than in the case of a Non-Consenting
Purchaser) with respect to the aggregate principal amount of the Notes being
assigned (calculating such Prepayment Premium as if such Notes had been prepaid
on the date of such assignment) and all other amounts payable to it hereunder
from the assignee (in the case of such outstanding principal and accrued
interest) and from the Issuer (in the case of all other amounts), (ii) in the
case of a claim for compensation under Section 2.15 or payments required to be
made pursuant to Section 2.17, such assignment will result in a reduction in
such compensation or payments, (iii) such assignment does not conflict with
applicable law, and (iv) in the case of a Non-Consenting Purchaser, each
Replacement Purchaser shall consent, at the time of such assignment, to each
matter in respect of which such terminated Purchaser was a Non-Consenting
Purchaser. A Purchaser shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Purchaser or
otherwise, the circumstances entitling the Issuer to require such assignment and
delegation cease to apply.

 

Section 2.21         Defaulting Purchasers.

 

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

 

(i)          Such Defaulting Purchaser’s right to approve or disapprove any
amendment, waiver or consent with respect to this Agreement shall be restricted
as set forth in the definition of Required Purchasers and in Section 10.2.

 

(b)          Defaulting Purchaser Cure. If the Required Purchasers and the
Issuer agree in writing that a Purchaser is no longer a Defaulting Purchaser,
the Issuer will so notify the parties hereto, whereupon as of the effective date
specified in such notice and subject to any conditions set forth therein, that
Purchaser will cease to be a Defaulting Purchaser; provided that, except to the
extent otherwise expressly agreed by the affected parties, no change hereunder
from Defaulting Purchaser to Purchaser will constitute a waiver or release of
any claim of any party hereunder arising from that Purchaser’s having been a
Defaulting Purchaser.

 

Section 2.22         Legend. Each Note shall bear the following legend:

 

THIS NOTE WAS ISSUED IN A PRIVATE PLACEMENT, WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR THE SECURITIES LAWS OF ANY
STATE, AND MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS COVERING THE TRANSFER OR PURSUANT TO AN APPLICABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.

 

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Section 2.23         Transfer and Exchange of Notes. Upon surrender of any Note
to the Issuer at the address and to the attention of the designated officer, for
registration of transfer or exchange (and in the case of a surrender for
registration of transfer accompanied by a written instrument of transfer duly
executed by the registered Purchaser or such Purchaser’s attorney duly
authorized in writing and accompanied by the relevant name, address and other
information for notices of each transferee of such Note or part thereof)
pursuant to Section 10.4(b), within ten (10) Business Days thereafter, the
Issuer shall execute and deliver, at the Issuer’s expense (except as provided
below), one or more new Notes (as requested by the Purchaser) in exchange
therefor, in an aggregate principal amount equal to the unpaid principal amount
of the surrendered Note. Subject to Section 10.4, in the case of any assignment
of a Note, each such new Note shall be payable to such Person as such Purchaser
may request and shall be substantially in the form of Exhibit B. Each such new
Note shall be dated and bear interest from the date to which interest shall have
been paid on the surrendered Note or dated the date of the surrendered Note if
no interest shall have been paid thereon. The Issuer may require payment of a
sum sufficient to cover any stamp tax or governmental charge imposed in respect
of any such transfer of Notes. Each transferee, by its acceptance of a Note
registered in its name (or the name of its nominee) will be deemed to have made
the representations set forth in Section 2.25.

 

Section 2.24         Replacement of Notes. Upon receipt by the Issuer at the
address and to the attention of the designated officer of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of any Note, and

 

(a)          in the case of loss, theft or destruction, an indemnity reasonably
satisfactory to it (provided, that, if the Purchaser is, or is a nominee for, an
original purchaser or another Purchaser with a minimum net worth of at least
$100,000,000 or a “qualified institutional buyer” as defined in Rule 144A(a)(1)
under the Securities Act, such Person’s own unsecured agreement of indemnity
shall be deemed to be satisfactory), or

 

(b)          in the case of mutilation, upon surrender and cancellation thereof,

 

within ten (10) Business Days thereafter, the Issuer at its own expense shall
execute and deliver, in lieu thereof, a new Note in an aggregate principal
amount equal to the unpaid principal amount of the Note to be replaced, dated
and bearing interest from the date to which interest shall have been paid on
such lost, stolen, destroyed or mutilated Note or dated the date of such lost,
stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

 

Section 2.25         Representations of Purchasers. Each Purchaser, severally
and not jointly, hereby represents and warrants to the Issuer that, as of the
Closing Date and immediately following the closing of the transactions
contemplated under this Agreement, the following are true and correct: (a) such
Purchaser is not acquiring the Notes to be purchased by it hereunder with a view
to or for sale or resale in connection with any distribution thereof within the
meaning of the Securities Act, (b) such Purchaser (i) is an “accredited
investor” as defined in Rule 501 promulgated under the Securities Exchange Act
of 1934 as in effect as of the Closing Date, and (ii) has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of the prospective investment in the Notes being purchased
by it and (c) such Purchaser understands that the Notes have not been registered
under the Securities Act and may be resold only if registered pursuant to the
provisions of the Securities Act or if an exemption from registration is
available, except under circumstances where neither such registration nor such
an exemption is required by law, and that the Issuer is not required to register
the Notes. The purchase of the Notes by each Purchaser on the Closing Date shall
constitute its confirmation of the foregoing representations and warranties.
Each Purchaser understands that such Notes are being sold to it in a transaction
which is exempt from the registration requirements of the Securities Act, and
that, in making the representations and warranties contained in Section 4.25,
the Issuer is relying, to the extent applicable, upon the representations and
warranties made by the Purchasers herein.

 

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Section 2.26         Prepayment Premium. Payment of any Prepayment Premium
hereunder constitutes liquidated damages and not a penalty, and the actual
amount of damages to the Purchasers or profits lost by the Purchasers as a
result of the relevant prepayment or repayment would be impracticable and
extremely difficult to ascertain. Accordingly, the Prepayment Premium hereunder
is provided by mutual agreement of the Issuer and the Purchasers as a reasonable
estimation and calculation of such actual lost profits and other actual damages
of the Purchasers. Without limiting the generality of the foregoing, it is
understood and agreed that upon the occurrence of any optional prepayment of the
Notes pursuant to Section 2.8(a), any mandatory prepayment of the Notes pursuant
to Section 2.9(a) or (b) or repayment of the Notes following acceleration
pursuant to Section 8.1 (including an automatic acceleration under clause (g) or
(h) of Section 8.1, or to the extent the Notes otherwise become due and payable
prior to their maturity as provided in Section 8.1), except as expressly set
forth in the definition of “Prepayment Premium,” the Prepayment Premium (if any)
shall be due and payable as though any prepaid or repaid Notes were voluntarily
prepaid as of such date and shall constitute part of the Obligations secured by
the Collateral. The Prepayment Premium shall also be payable in the event the
Notes are satisfied or released by foreclosure (whether by power of judicial
proceeding or otherwise), deed in lieu of foreclosure or by any other means. THE
ISSUER HEREBY EXPRESSLY WAIVES (TO THE FULLEST EXTENT IT MAY LAWFULLY DO SO) THE
PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR OTHER LAW THAT PROHIBITS OR MAY
PROHIBIT THE COLLECTION OF THE FOREGOING PREPAYMENT PREMIUM IN CONNECTION WITH
ANY SUCH EVENT. The Issuer expressly agrees (to the fullest extent it may
lawfully do so) that with respect to the Prepayment Premium payable under the
terms of this Agreement: (i) the Prepayment Premium is reasonable and is the
product of an arm’s length transaction between sophisticated business parties,
ably represented by counsel; (ii) the Prepayment Premium shall be payable
notwithstanding the then prevailing market rates at the time payment is made;
(iii) there has been a course of conduct between the Purchasers and the Note
Parties giving specific consideration in this transaction for such agreement to
pay the Prepayment Premium; and (iv) the Note Parties shall be estopped
hereafter from claiming differently than as agreed to in this paragraph. The
Issuer expressly acknowledges that its agreement to pay the Prepayment Premium
as herein described is a material inducement to the Purchasers to provide the
Commitments and purchase the Notes.

 

ARTICLE III

CONDITIONS PRECEDENT TO PURCHASE OF NOTES

 

Section 3.1           Conditions to Effectiveness. The obligations of the
Purchasers to purchase the Notes shall not become effective until the date on
which each of the following conditions is satisfied (or waived in accordance
with Section 10.2):

 

(a)          The Collateral Agent and the Purchasers shall have received payment
of all fees, expenses and other amounts due and payable on or prior to the
Closing Date, to the extent invoiced in reasonable detail at least one (1)
Business Day prior to the Closing Date, including, without limitation,
reimbursement or payment of all reasonable and documented (in summary form)
costs and expenses of the Collateral Agent (including, but not limited to,
attorneys’ fees and costs), the Purchasers and their Affiliates, in each case,
required to be reimbursed or paid by the Issuer hereunder, under any other Note
Document, the Fee Letters, the Commitment Letter and any other agreement with
the Collateral Agent or the any Purchaser.

 

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(b)           The Collateral Agent and the Purchasers (or their respective
counsels) shall have received the following, each to be in form and substance
reasonably satisfactory to the Collateral Agent and the Purchasers:

 

(i)          a counterpart of this Agreement signed by or on behalf of each
party hereto;

 

(ii)         a certificate of the Secretary or Assistant Secretary (or other
comparable Responsible Officer) of each Note Party in substantially the form of
Exhibit 3.1(b)(ii), attaching and certifying copies of its bylaws, or
partnership agreement or limited liability company agreement, and of the
resolutions of its Governing Body, or comparable organizational documents and
authorizations, authorizing the execution, delivery and performance of the Note
Documents to which it is a party and certifying the name, title and true
signature of each officer of such Note Party executing the Note Documents to
which it is a party;

 

(iii)        certified copies of the articles or certificate of incorporation,
certificate of organization or limited partnership, or other registered
organizational documents of each Note Party, together with certificates of good
standing or existence, as may be available from the Secretary of State of (A)
the jurisdiction of organization of such Note Party and (B) each other
jurisdiction where such Note Party is required to be qualified to do business as
a foreign corporation where the failure to be so qualified would reasonably be
expected to have a Material Adverse Effect;

 

(iv)        a written opinion of Dechert LLP, counsel to the Note Parties, and,
if reasonably requested by the Required Purchasers, customary local counsel
opinions with respect to certain Note Parties each addressed to the Collateral
Agent and each of the Purchasers, and covering such matters relating to the Note
Parties, the Note Documents and the transactions contemplated therein as the
Collateral Agent or the Required Purchasers shall reasonably request;

 

(v)         a certificate in substantially the form of Exhibit 3.1(b)(v), dated
the Closing Date and signed by a Responsible Officer, certifying that after
giving effect to the purchase of the Notes, (x) since December 31, 2016, no
event, act, condition or occurrence of whatever nature (including any adverse
determination in any litigation, arbitration, or governmental investigation or
proceeding), whether singularly or in conjunction with any other event or
events, act or acts, condition or conditions, occurrence or occurrences whether
or not related, that has resulted in a Material Adverse Effect has occurred, (y)
at the time of and immediately after giving effect to the purchase and sale of
the Notes hereunder, the representations and warranties set forth in this
Agreement and the other Note Documents shall be true and correct in all material
respects (other than those representations and warranties (i) that are expressly
qualified by a Material Adverse Effect or other materiality, in which case such
representations and warranties shall be true and correct in all respects or (ii)
that expressly relate to an earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of such earlier
date), and (z) at the time of and immediately after giving effect to the
purchase and sale of the Notes hereunder, no Default or Event of Default shall
exist;

 

(vi)        a report setting forth the sources and uses of the proceeds of the
Notes;

 

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(vii)       the ABDC Intercreditor Agreement, duly executed and delivered by the
parties thereto;

 

(viii)      certified copies of all material consents, approvals,
authorizations, registrations, filings and orders required to be made or
obtained under any Requirement of Law, or by any material Contractual Obligation
of any Note Party, in connection with the execution, delivery, performance,
validity and enforceability of the Note Documents or any of the transactions
contemplated thereby, if any, and such consents, approvals, authorizations,
registrations, filings and orders shall be in full force and effect and all
applicable waiting periods shall have expired,;

 

(ix)         copies of (A) the financial statements described in Section 4.4(a)
and (B) the Issuer and its Subsidiaries’ statement of profit and loss for May
2017;

 

(x)          the Guaranty and Security Agreement, duly executed by the Issuer
and each of its Domestic Subsidiaries (but excluding any Specified Strategic
Joint Venture (in each case, if formed prior to the Closing Date)), together
with (A) UCC financing statements and other applicable documents under the laws
of all necessary or appropriate jurisdictions with respect to the perfection of
the Liens granted under the Guaranty and Security Agreement, as reasonably
requested by the Collateral Agent, acting at the direction of the Required
Purchasers, or the Required Purchasers in order to perfect such Liens, duly
authorized by the Note Parties, (B) copies of favorable UCC, tax, judgment and
fixture lien search reports in all necessary or appropriate jurisdictions and
under all legal and trade names of the Note Parties, as reasonably requested by
the Collateral Agent, acting at the direction of the Required Purchasers, or the
Required Purchasers, indicating that there are no prior Liens on any of the
Collateral other than Specified Permitted Liens and Liens to be released on the
Closing Date, (C) an Information and Collateral Disclosure Certificate, duly
completed and executed by the Note Parties, (D) as necessary, duly executed
Patent Security Agreements, Trademark Security Agreements and Copyright Security
Agreements, and (E) original certificates evidencing all issued and outstanding
shares of Capital Stock of all Subsidiaries owned directly by any Note Party
(or, in the case of any Foreign Subsidiary directly owned by a Note Party, not
more than 65% of the issued and outstanding voting Capital Stock of such Foreign
Subsidiary), in each case, to the extent certificated prior to the Closing Date,
and related stock or membership interest powers or other appropriate instruments
of transfer executed in blank;

 

(xi)         a summary, which may include a flow chart and summary of the Note
Parties’ and their Subsidiaries’ cash management system, setting forth in
reasonable detail the principal bank accounts of the Note Parties and their
Subsidiaries where any cash balances and proceeds of receivables are collected,
aggregated and/or maintained in the ordinary course of business, other than
Excluded Accounts;

 

(xii)        subject to Section 5.16 and the Issuer’s use of commercially
reasonable efforts, with respect to the chief executive office of the Issuer and
each additional leased property where books or records are stored or located, a
copy of the underlying lease, as applicable, and a Collateral Access Agreement
from the landlord of such leased property; provided that if such Note Party is
unable to deliver any such Collateral Access Agreement after using its
commercially reasonable efforts to do so, the Required Purchasers shall waive
the foregoing requirement in their reasonable discretion;

 

(xiii)       copies of duly executed payoff letters with respect to any existing
Indebtedness in respect of the Existing Credit Agreement and the other Loan
Documents (as defined in the Existing Credit Agreement) and the Existing Priming
Credit Agreement and the other Loan Documents (as defined in the Existing
Priming Credit Agreement), together with (A) UCC-3 or other appropriate
termination statements releasing all liens of the existing lenders upon any of
the personal property of the Issuer and its Subsidiaries and authorizations to
file such UCC-3s, (B) cancellations and releases releasing all liens of the
existing lenders upon any real property owned by the Issuer and its
Subsidiaries, and (C) any other releases, terminations or other documents
reasonably required by the Required Purchasers to evidence the payoff of such
Indebtedness;

 

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(xiv)      the First Lien/Second Lien Intercreditor Agreement, duly executed and
delivered by the parties thereto;

 

(xv)       (A) certificates of insurance describing the types and amounts of
insurance (property and liability) maintained by any of the Note Parties, in
each case naming the Collateral Agent as loss payee or additional insured, as
the case may be, and (B) subject to Section 5.16, a lender’s loss payable
endorsement (in the case of each of the foregoing clauses (A) and (B), other
than with respect to any director and officer indemnification policies, workers’
compensation policies and any policies that provide coverage for property that
does not constitute Collateral);

 

(xvi)      documentation and information required by regulatory authorities
under applicable “know your customer” and anti-money laundering laws at least
five (5) Business Days prior to the Closing Date to the extent that such
documentation and information was requested by the Collateral Agent or any
Purchaser at least ten (10) days prior to the Closing Date; and

 

(xvii)     a certificate, dated the Closing Date and signed by a Responsible
Officer of the Issuer on behalf of each Note Party, confirming that after giving
effect to the execution and delivery of the Note Documents, the incurrence on
the Closing Date of the Notes (and the use of proceeds thereof on the Closing
Date), and the other transactions contemplated herein to occur on the Closing
Date, the Issuer and its Subsidiaries on a consolidated basis are Solvent.

 

(c)            The Note Parties shall have used commercially reasonable efforts
to deliver Account Control Agreements and Government Receivables Account
Agreements, duly executed by each Permitted Third Party Bank and the applicable
Note Party to the Collateral Agent and the Purchasers; provided that, if such
Account Control Agreements and Government Receivables Account Agreements are not
delivered by the Closing Date, the applicable Note Party shall deliver such
Account Control Agreements and Government Receivables Account Agreements within
ninety (90) days following the Closing Date.

 

(d)            There shall be no Indebtedness for borrowed money of the Issuer
or any of its Subsidiaries to any Person, other than the Notes, the Second Lien
Notes, the Senior Notes and other Indebtedness reasonably satisfactory to the
Purchasers.

 

(e)            There shall not be any pending or threatened in writing
litigation, investigation or other proceedings or inquiry (private or
governmental) seeking to enjoin the transactions contemplated by this Agreement
and the other Note Documents.

 

(f)            The Issuer shall have received the cash proceeds of the purchase
of the Second Lien Notes.

 

(g)           (i) The Issuer shall have complied in all material respects with
and be in compliance in all material respects with all of the of terms and
conditions of the Commitment Letter and the Ares Closing Payment Letter and (b)
the representations and warranties of the Issuer set forth under the heading
“Evaluation Material” in the Commitment Letter shall be true and correct in all
material respects (other than those representations and warranties that are
expressly qualified by materiality, in which case such representations and
warranties shall be true and correct in all respects) as of the Closing Date.

 

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Without limiting the generality of the provisions of this Section, for purposes
of determining compliance with the conditions specified in this Section, each
Purchaser that has signed this Agreement shall be deemed to have consented to,
approved of, accepted or been satisfied with each document or other matter
required thereunder to be consented to, approved by or acceptable or
satisfactory to a Purchaser unless the Issuer shall have received notice from
such Purchaser prior to the proposed Closing Date specifying its objection
thereto.

 

Section 3.2           Delivery of Documents. All of the Note Documents,
certificates and other documents and papers referred to in this Article, unless
otherwise specified, shall be delivered to each of the Purchasers and shall be
in form and substance reasonably satisfactory in all respects to each of the
Purchasers.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

The Issuer represents and warrants to the Collateral Agent and each Purchaser as
follows:

 

Section 4.1           Existence; Power. The Issuer and each of its Subsidiaries
(i) is duly organized, validly existing and in good standing as a corporation,
partnership or limited liability company under the laws of the jurisdiction of
its organization, (ii) has all requisite power and authority to carry on its
business as now conducted, and (iii) is duly qualified to do business, and is in
good standing, in each jurisdiction where such qualification is required, except
where a failure to be so qualified would not reasonably be expected to result in
a Material Adverse Effect.

 

Section 4.2           Organizational Power; Authorization. The execution,
delivery and performance by each Note Party of the Note Documents to which it is
a party are within such Note Party’s organizational powers and have been duly
authorized by all necessary organizational and, if required, shareholder,
partner or member action. Each of this Agreement and the other Note Documents
has been duly executed and delivered by the Issuer and the other Note Parties
party thereto and constitutes valid and binding obligations of the Issuer or
such Note Party (as the case may be), enforceable against it in accordance with
their respective terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally and by general principles of equity.

 

Section 4.3           Governmental Approvals; No Conflicts. The execution,
delivery and performance by each Note Party of the Note Documents to which it is
a party (a) do not require any consent or approval of, registration or filing
with, or any action by, any Governmental Authority or any Person with respect to
which the Issuer or any of its Subsidiaries has any Contractual Obligation,
except those as have been obtained or made and are in full force and effect and
except for filings necessary to perfect or maintain perfection of the Liens
created under the Note Documents, (b) will not violate any Requirement of Law
applicable to the Issuer or any of its Subsidiaries or any judgment, order or
ruling of any Governmental Authority, (c) will not violate or result in a
default under any material Contractual Obligation of the Issuer or any of its
Subsidiaries or any of its assets or give rise to a right thereunder to
accelerate the obligations of the Issuer or any of its Subsidiaries thereunder
(whether accomplished by a mandatory prepayment, a redemption, or otherwise) and
(d) will not result in the creation or imposition of any Lien on any asset of
the Issuer or any of its Subsidiaries, except Liens (if any) created under the
Note Documents.

 

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Section 4.4           Financial Statements; Material Adverse Effect.

 

(a)          The Issuer has furnished to each Purchaser (i) the audited
consolidated balance sheet of the Issuer and its Subsidiaries as of December 31,
2016, and the related audited consolidated statements of income, shareholders’
equity and cash flows for the Fiscal Year then ended, prepared by Ernst & Young
LLP and (ii) the unaudited consolidated balance sheet of the Issuer and its
Subsidiaries as of March 31, 2017, and the related unaudited consolidated
statements of income and cash flows for the Fiscal Quarter and year-to-date
period then ended, certified by a Responsible Officer. Such financial statements
fairly present in all material respects the consolidated financial condition of
the Issuer and its Subsidiaries as of such dates and the consolidated results of
operations for such periods in conformity with GAAP (as in effect at the time
such financial statements were prepared and subject to Section 1.3) consistently
applied (except as expressly noted therein), subject to year-end audit
adjustments and the absence of footnotes in the case of the statements referred
to in clause (ii). All Profit Plans delivered to the Purchasers after the
Closing Date pursuant to Section 5.1(e) have been prepared by the Issuer in good
faith based on assumptions believed by the Issuer to be reasonable at the time
made; provided that it is expressly understood and agreed that financial
projections (including all Profit Plans) are not to be viewed as facts, are
inherently uncertain and are not a guarantee of financial performance and actual
results may differ from financial projections and such differences may be
material.

 

(b)          Since December 31, 2016, there have been no changes with respect
to, or event affecting, the Issuer and its Subsidiaries which have had or would
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.

 

Section 4.5           Litigation and Environmental Matters.

 

(a)          No litigation, investigation or proceeding (including any
whistleblower action) of or before any arbitrators or Governmental Authorities
is pending against or, to the knowledge of the Issuer, threatened in writing
against the Issuer or any of its Subsidiaries (i) that would reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect or (ii) which in any manner draws into question the validity or
enforceability of this Agreement or any other Note Document.

 

(b)          Except as would not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect, neither the Issuer
nor any of its Subsidiaries (i) has failed to comply with any Environmental Law
or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) has become subject to any
Environmental Liability, (iii) has received notice of any claim with respect to
any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.

 

Section 4.6           Compliance with Laws and Agreements. Except for
non-compliance which would not reasonably be expected to result in a Material
Adverse Effect, the Issuer and each of its Subsidiaries is in compliance with
(a) all Requirements of Law and all judgments, decrees and orders of any
Governmental Authority and (b) all Material Agreements.

 

Section 4.7           Investment Company Act. Neither the Issuer nor any of its
Subsidiaries is (a) an “investment company” or is “controlled” by an “investment
company”, as such terms are defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended and in effect from time to time, or
(b) otherwise subject to any other regulatory scheme limiting its ability to
incur debt or requiring any approval or consent from, or registration or filing
with, any Governmental Authority in connection therewith.

 

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Section 4.8           Taxes. The Issuer and its Subsidiaries and each other
Person for whose taxes the Issuer or any of its Subsidiaries could become liable
have timely filed or caused to be filed all Federal income tax returns and all
other material tax returns that are required to be filed by them, and have paid
all taxes shown to be due and payable on such returns or on any assessments made
against it or its property and all other taxes, fees or other charges imposed on
it or any of its property by any Governmental Authority, except where the same
are currently being contested in good faith by appropriate proceedings and for
which the Issuer or such Subsidiary, as the case may be, has set aside on its
books adequate reserves in accordance with GAAP. The charges, accruals and
reserves on the books of the Issuer and its Subsidiaries in respect of such
taxes are adequate, and no tax liabilities that could be materially in excess of
the amount so provided are anticipated.

 

Section 4.9           Margin Regulations. None of the proceeds of any of the
Notes will be used, directly or indirectly, for “purchasing” or “carrying” any
“margin stock” within the respective meanings of each of such terms under
Regulation U or for any purpose that violates the provisions of Regulation T,
Regulation U or Regulation X. Neither the Issuer nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying “margin stock”.

 

Section 4.10         ERISA. Each Plan is in substantial compliance in form and
operation with its terms and with ERISA and the Code (including, without
limitation, the Code provisions compliance with which is necessary for any
intended favorable tax treatment) and all other applicable laws and regulations,
except as would not reasonably be expected to have a Material Adverse Effect.
Each Plan (and each related trust, if any) which is intended to be qualified
under Section 401(a) of the Code has received a favorable determination letter
from the Internal Revenue Service to the effect that it meets the requirements
of Sections 401(a) and 501(a) of the Code covering all applicable tax law
changes, or is comprised of a master or prototype plan that has received a
favorable opinion letter from the Internal Revenue Service, and nothing has
occurred since the date of such determination that would adversely affect such
determination (or, in the case of a Plan with no such determination, nothing has
occurred that would adversely affect the issuance of a favorable determination
letter or otherwise adversely affect such qualification), except as would not
reasonably be expected to have a Material Adverse Effect. No ERISA Event has
occurred that has had or would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect. There exists no
Unfunded Pension Liability with respect to any Plan and no Plan is in, or is
expected to be, in at risk status under Title IV of ERISA such that a Material
Adverse Effect would be expected in the foreseeable future to occur with respect
thereto. There are no actions, suits or claims pending against or involving a
Plan (other than routine claims for benefits) or, to the knowledge of the
Issuer, any of its Subsidiaries or any ERISA Affiliate, threatened, which would
reasonably be expected to be asserted successfully against any Plan and, if so
asserted successfully, would reasonably be expected either singly or in the
aggregate to have a Material Adverse Effect. The Issuer, each of its
Subsidiaries and each ERISA Affiliate have made all contributions to or under
each Plan and Multiemployer Plan required by law within the applicable time
limits prescribed thereby, by the terms of such Plan or Multiemployer Plan,
respectively, or by any contract or agreement requiring contributions to a Plan
or Multiemployer Plan, except as would not reasonably be expected to have a
Material Adverse Effect. Each Non-U.S. Plan has been maintained in compliance
with its terms and with the requirements of any and all applicable laws,
statutes, rules, regulations and orders and has been maintained, where required,
in good standing with applicable regulatory authorities, except as would not
reasonably be expected to result in liability to the Issuer or any of its
Subsidiaries. All contributions required to be made with respect to a Non-U.S.
Plan have been timely made. Neither the Issuer nor any of its Subsidiaries has
incurred any obligation in connection with the termination of, or withdrawal
from, any Non-U.S. Plan. The present value of the accrued benefit liabilities
(whether or not vested) under each Non-U.S. Plan, determined as of the end of
the Issuer’s most recently ended fiscal year on the basis of reasonable
actuarial assumptions, did not exceed the current value of the assets of such
Non-U.S. Plan allocable to such benefit liabilities.

 

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Section 4.11         Ownership of Property; Insurance.

 

(a)          As of the Closing Date, all interests in real property owned by the
Issuer or any of its Subsidiaries (collectively, and together with any
additional real estate acquired after the Closing Date, the “Real Estate”) or
leased by the Issuer or any of its Subsidiaries are listed on Schedule 4.11(a).
Each of the Issuer and its Subsidiaries has good title to, or valid leasehold
interests in, all Real Estate, leased real property and all other personal
property material to the operation of its business (except as sold or otherwise
disposed of in the ordinary course of business or in a transaction permitted
hereunder), in each case free and clear of Liens (other than Liens not
prohibited by Section 7.2). All leases that individually are material to the
business or operations of the Issuer and its Subsidiaries are valid and are in
full force. As of the Closing Date, all permits required to have been issued or
appropriate to enable the Real Estate or any leased real property to be lawfully
occupied and used for all of the purposes for which it is currently occupied and
used have been lawfully issued and are in full force and effect, except where
the failure to be so issued or in full force and effect would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(b)          The Intellectual Property Rights owned by the Issuer and its
Subsidiaries, together with the Intellectual Property Rights licensed to the
Issuer and its Subsidiaries under license agreements, constitute all of the
Intellectual Property Rights material to their respective businesses.

 

(c)          Set forth on Schedule 4.11(c) is a complete and accurate summary of
the insurance maintained by the Issuer and its Subsidiaries as of the Closing
Date. The Issuer and its Subsidiaries have insurance meeting the requirements of
Section  5.8, and such insurance policies are in full force and effect.

 

(d)          All assets of the Issuer and its Subsidiaries, whether owned,
leased, or managed, are in good repair, working order and condition, ordinary
wear and tear excepted, in accordance with the terms and conditions of any
applicable lease or license agreement, except where the failure to be in such
good repair, working order or condition would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

 

Section 4.12         Disclosure. Each of the written reports (including, without
limitation, all reports that the Issuer is required to file with the Securities
and Exchange Commission), financial statements, certificates or other
information (other than the Profit Plans, pro formas, budgets, other
forward-looking information (which shall be subject solely to the representation
set forth in the last sentence of Section 4.4(a)), information regarding third
parties and general economic or industry information) (but only to the Issuer’s
knowledge with respect to any information provided by another Person that is not
an Affiliate) furnished by or on behalf of the Issuer to the Collateral Agent or
any Purchaser in connection with the negotiation of this Agreement or any other
Note Document or delivered hereunder or thereunder (as modified or supplemented
by any other information so furnished), is or will be, when furnished and taken
as a whole, complete and correct in all material respects and does not or will
not, when furnished and taken as a whole, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein not materially misleading in light of the
circumstances under which such statements are made (as modified or supplemented
by any other information so furnished).

 

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Section 4.13         Labor Relations. There are no strikes, lockouts or other
material labor disputes or grievances against the Issuer or any of its
Subsidiaries, or, to the Issuer’s knowledge, threatened against or affecting the
Issuer or any of its Subsidiaries, and no significant unfair labor practice
charges or grievances are pending against the Issuer or any of its Subsidiaries,
or, to the Issuer’s knowledge, threatened against any of them before any
Governmental Authority. All payments due from the Issuer or any of its
Subsidiaries pursuant to the provisions of any collective bargaining agreement
have been paid or accrued as a liability on the books of the Issuer or any such
Subsidiary, except where the failure to do so would not reasonably be expected
to have a Material Adverse Effect.

 

Section 4.14         Subsidiaries. Schedule 4.14 sets forth the name of, the
ownership interest of the applicable Note Party in, the jurisdiction of
incorporation or organization of, and the organizational type of each Subsidiary
of the Issuer and the other Note Parties and identifies each Subsidiary that is
a Subsidiary Note Party, in each case as of the Closing Date. As of the Closing
Date, the Issuer has no Subsidiaries other than those specifically disclosed on
Schedule 4.14 and no Note Party owns any Capital Stock in any Person other than
those specifically disclosed on Schedule 4.14. All of the outstanding Capital
Stock in each of the Issuer’s Subsidiaries that is a corporation has been
validly issued, is fully paid and non-assessable, and all such Capital Stock
owned by any Note Party is owned by the record owners in the amounts specified
on Schedule 4.14 as of the Closing Date, free and clear of all Liens except
those created under the Collateral Documents, the Second Lien Collateral
Documents and nonconsensual Liens that arise by operation of law. None of the
Note Parties or any of their Subsidiaries has, as of the Closing Date, any
issued and outstanding Disqualified Capital Stock except as otherwise
specifically disclosed on Schedule 4.14.

 

Section 4.15         Solvency. After giving effect to the execution and delivery
of the Note Documents, the issuance and purchase of the Notes under this
Agreement and the consummation of all transactions contemplated by such Note
Documents, the Issuer and its Subsidiaries on a consolidated basis are Solvent.

 

Section 4.16         Deposit and Disbursement Accounts. Schedule 4.16 lists all
banks and other financial institutions at which any Note Party maintains deposit
accounts, lockbox accounts, disbursement accounts, investment accounts or other
similar accounts as of the Closing Date, and such Schedule correctly identifies
the name, address and telephone number of each financial institution, the name
in which the account is held, the type of the account, the complete account
number therefor, and whether such account is a Government Receivables Account.

 

Section 4.17         Collateral Documents.

 

(a)          The Guaranty and Security Agreement and each other Collateral
Document is effective to create in favor of the Collateral Agent, for the
ratable benefit of the Secured Parties, a legal, valid and enforceable security
interest in the Collateral described therein and proceeds thereof to the extent
such a security interest can be created by authentication of a written security
agreement under Articles 8 and 9 of the UCC. In the case of certificated Capital
Stock pledged pursuant to the Guaranty and Security Agreement, when certificates
representing such Capital Stock are delivered to the Collateral Agent, and in
the case of the other Collateral described in the Guaranty and Security
Agreement or any other Collateral Document (other than deposit accounts and
investment property) in which a Lien may be perfected by the filing of a
financing statement, when financing statements are filed in the appropriate
filing offices as specified in Article 9 of the UCC (which, as of the Closing
Date, for each of the Note Parties is the filing office set forth for each Note
Party on Schedule 3 to the Guaranty and Security Agreement), in each case, the
Collateral Agent, for the benefit of the Secured Parties, shall have a fully
perfected Lien on, and security interest in, all right, title and interest of
the Note Parties in such Collateral (including such Capital Stock) and the
proceeds thereof, as security for the Obligations, in each case prior and
superior in right to any other Person (except for Specified Permitted Liens). In
the case of Collateral that consists of deposit accounts (other than a
Government Receivables Account) or investment property, when an Account Control
Agreement is executed and delivered by all parties thereto with respect to such
deposit accounts or investment property, the Collateral Agent, for the benefit
of the Secured Parties, shall have a fully perfected Lien on, and security
interest in, all right, title and interest of the Note Parties in such
Collateral and the proceeds thereof, as security for the Obligations, prior and
superior to any other Person (except for Specified Permitted Liens) except as
provided under the applicable Account Control Agreement with respect to the
financial institution party thereto.

 

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(b)          When the filings in clause (a) of this Section are made and when,
if applicable, the Copyright Security Agreements are filed in the United States
Copyright Office, the Collateral Agent, for the benefit of the Secured Parties,
shall have a fully perfected Lien on, and security interest in, all right, title
and interest of the Note Parties in the Copyrights subject to such Copyright
Security Agreement, if any, in which a security interest may be perfected by
filing, recording or registering a security agreement, financing statement or
analogous document in the United States Copyright Office, as applicable, in each
case prior and superior in right to any other Person (except for Specified
Permitted Liens).

 

(c)          Each Mortgage, if any, is effective to create in favor of the
Collateral Agent for the ratable benefit of the Secured Parties a legal, valid
and enforceable Lien on all of such Note Party’s right, title and interest in
and to the Real Estate of such Note Party covered thereby and the proceeds
thereof, and when such Mortgage is filed in the real estate records where the
respective Mortgaged Property is located, such Mortgage shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
such Note Party in such Real Estate and the proceeds thereof, in each case prior
and superior in right to any other Person, other than with respect to Permitted
Encumbrances and Specified Permitted Liens.

 

Section 4.18         Material Agreements. As of the Closing Date, all Material
Agreements of the Issuer and its Subsidiaries are listed on Schedule 4.18, and
each such Material Agreement is in full force and effect. As of the Closing
Date, the Issuer has delivered to the Purchasers a true, complete and correct
copy of each Material Agreement (including all schedules, exhibits, amendments,
supplements, modifications, assignments and all other documents delivered
pursuant thereto or in connection therewith).

 

Section 4.19         Sanctions; Anti-Terrorism and Anti-Corruption Laws.

 

(a)          None of the Issuer nor any of its Affiliates or, to the Issuer’s
and its Subsidiaries’ knowledge, their respective officers, directors, brokers
or agents of such Person or Affiliate (i) has violated any Anti-Terrorism Laws
or Sanction, (ii) has engaged in any transaction, investment, undertaking or
activity that conceals the identity, source or destination of the proceeds from
any category of prohibited offenses designated by the Organization for Economic
Co-operation and Development’s Financial Action Task Force on Money Laundering,
(iii) is a Person whose name appears on the list of Specially Designated
Nationals and Blocked Persons published by OFAC (an “OFAC Listed Person”) or is
otherwise a Sanctioned Person, (iv) is an agent, department, or instrumentality
of, or is otherwise beneficially owned by, controlled by or acting on behalf of,
directly or indirectly, (A) any OFAC Listed Person or (B) any other Sanctioned
Person or Sanctioned Country, or (v) is otherwise blocked, the subject or target
of Sanctions or engaged in any activity in violation of Sanctions or
Anti-Terrorism Laws (each OFAC Listed Person, Sanctioned Person, Sanctioned
Country and each other Person, entity, organization and government of a country
described in clauses (iii), (iv) or (v), a “Blocked Person”). Neither the Issuer
nor any Controlled Affiliate thereof has been notified that its name appears or
may in the future appear on a list of Persons that engage in investment or other
commercial activities in Iran or any other Sanctioned Country. No part of the
proceeds from the Notes issued and purchased hereunder constitutes or will
constitute funds obtained on behalf of any Blocked Person or will otherwise be
used by the Issuer, directly or indirectly, or lent, contributed or otherwise
made available to any Person (x) in connection with any investment in, or any
transactions or dealings with, any Blocked Person, (y) to fund any activities or
business of or with any Sanctioned Person, or in any Sanctioned Country or (z)
otherwise in any manner that would result in a violation of Sanctions by any
Person (including any Person participating in the Notes, whether as underwriter,
advisor, investor or otherwise).

 

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(b)          Neither the Issuer nor any of its Affiliates or, to the Issuer’s
knowledge, their respective officers, directors, brokers or agents acting or
benefiting in any capacity in connection with the Notes (i) deals in or
otherwise engages, or has dealt or otherwise engaged, in any transaction related
to, any property or interests in property blocked pursuant to any Anti-Terrorism
Law or Sanction, (ii) engages in or conspires to, or engaged or conspired to,
engage in any transaction that evades or avoids, or has the purpose of evading
or avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Terrorism Law or Sanction, (iii) has been found in violation of, charged
with, or convicted under any Anti-Terrorism Law, (iv) to the Issuer’s knowledge
after making due inquiry, is under investigation by any Governmental Authority
for possible violation of Anti-Terrorism Laws or any Sanctions, (v) has been
assessed civil penalties under any Anti-Terrorism Laws or any Sanctions, or (vi)
has had any of its funds seized or forfeited in an action under any
Anti-Terrorism Laws. The Issuer has established policies, procedures and
controls which are designed (and otherwise comply with applicable law) to ensure
that each of the Issuer and each Controlled Affiliate thereof, and each of their
respective directors, officers, employees and agents, is and will continue to be
in compliance with all applicable current and future Anti-Terrorism Laws and
Sanctions.

 

(c)          None of the Issuer nor any of its Affiliates (i) has been charged
with, or convicted of bribery or any other anti-corruption related activity
under any applicable Anti-Corruption Laws, (ii) to the Issuer’s knowledge after
making due inquiry, is under investigation by any Governmental Authority for
possible violation of Anti-Corruption Laws, or (iii) has been assessed civil or
criminal penalties under any Anti-Corruption Laws. The Issuer and its
Subsidiaries will not use any part of the proceeds of the Notes, directly or
indirectly, for any payments to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the Anti-Corruption
Laws. The Issuer and, to the Issuer’s knowledge, its respective directors,
officers and employees and agents are in compliance with all Anti-Corruption
Laws, and the Issuer has established policies, procedures and controls which are
designed (and otherwise comply with applicable law) to ensure that the Issuer
and each Controlled Affiliate thereof, and each of their respective directors,
officers, employees and agents, is and will continue to be in compliance with
all applicable current and future Anti-Corruption Laws.

 

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Section 4.20         Compliance with Healthcare Laws.

 

(a)          The Issuer and each of its Subsidiaries is in compliance in all
respects with all Healthcare Laws, except for such non-compliance which would
not reasonably be expected to have a Healthcare Material Adverse Effect. The
Issuer and its Subsidiaries participate in and have not been excluded from the
Governmental Payor Arrangements listed on Schedule 4.20(a). A list of all of the
Issuer’s and its Subsidiaries’ existing (i) Medicare provider numbers and
Medicaid provider numbers, (ii) Medicare supplier numbers and Medicaid supplier
numbers, and (iii) all other Governmental Payor provider agreements and numbers,
excluding TRICARE and CHAMPUS, CHAMPVA and the Veteran’s Administration,
pertaining to the business of the Issuer or any of its Subsidiaries as of the
Closing Date or, if such contracts do not exist, other documentation evidencing
such participation as of the Closing Date are set forth on Schedule 4.20(a).
Each of the Issuer’s and its Subsidiaries’ existing Third Party Payor
Arrangements pursuant to which Issuer and its Subsidiaries received $500,000 or
more in payment in calendar year 2016 is set forth on Schedule 4.20(a). Each of
the Issuer and its Subsidiaries has entered into and maintains all Governmental
Payor Arrangements and Third Party Payor Arrangements as are necessary to
conduct its respective business as currently conducted. The Governmental Payor
Arrangements and Third Party Payor Arrangements to which the Issuer or a
Subsidiary is a party constitute valid and binding obligations of the Issuer or
such Subsidiary, enforceable against the Issuer or such Subsidiary in accordance
with their respective terms (except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally and by general principles of equity) and, to the
knowledge of the Issuer, are in full force and effect, except as would not,
either individually or in the aggregate, reasonably be expected to have a
Healthcare Material Adverse Effect or as disclosed on Schedule 4.20(a). To the
knowledge of the Issuer, neither the Issuer nor any of its Subsidiaries is in
default under any Governmental Payor Arrangement or Third Party Payor
Arrangement to which it is a party and, to the knowledge of the Issuer, the
other parties thereto are not in default thereunder, except as would not have a
Healthcare Material Adverse Effect. Each of the Issuer and its Subsidiaries (i)
duly holds, and is in good standing with respect to, such Licenses as are
necessary to own its respective assets and to conduct its respective business
(including without limitation such Licenses as are required under such
Healthcare Laws as are applicable thereto, and all Reimbursement Approvals),
except where the absence of such a License would not reasonably be expected to
have a Healthcare Material Adverse Effect and (ii) where applicable to its
business, has obtained and maintains Medicaid and Medicare provider and supplier
numbers. Schedule 4.20(a) sets forth all such healthcare Licenses held by each
of the Issuer and its Subsidiaries as of the Closing Date. There is no pending
or, to the knowledge of the Issuer, threatened material Limitation of any such
License, Medicaid provider or supplier number, or Medicare provider or supplier
number of the Issuer or any of its Subsidiaries, except for such Limitations as
would not reasonably be expected to have a Healthcare Material Adverse Effect.

 

(b)          For purposes of the Stark Law, to the extent that any services
provided by the Issuer or its Subsidiaries are designated health services (as
defined by the Stark Law), (i) none of such services involve, arise from, or
occur in connection with “referrals” as defined by Stark Law or as proscribed
thereunder absent the applicability or availability of a statutory or regulatory
exception to the referral prohibitions set forth thereunder, and (ii) none of
such services are provided by the Issuer or any of its Subsidiaries for the
benefit of any of the foregoing, absent the applicability or availability of a
statutory or regulatory exception to the referral prohibitions set forth
thereunder, in each case in the case of the immediately preceding clauses (i)
and (ii), except to the extent that such failures, violations or non-compliance
would not reasonably be expected to have a Healthcare Material Adverse Effect.

 

(c)          Except as would not reasonably be expected to have a Material
Adverse Effect, each of the Issuer and its Subsidiaries holds all Accreditations
necessary or required by applicable Requirements of Law for the operation of its
business (including accreditation by an appropriate organization necessary to
receive payment and compensation and to participate under Medicare and Medicaid)
(individually, a “Company Accreditation,” and collectively, the “Company
Accreditations”). There is no pending or, to the knowledge of the Issuer,
threatened Limitation of any such Company Accreditations, except as would not,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Except as would not, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, each of the
Issuer and its Subsidiaries is in compliance with the terms of the Company
Accreditations.

 

(d)          Each employee of the Issuer and each of its Subsidiaries duly holds
all Licenses (to the extent required) to provide professional services to
patients by each state or state agency or commission, or any other Governmental
Authority having jurisdiction over the provision of such services required to
enable such employee to provide the professional services necessary to enable
each of the Issuer and its Subsidiaries to operate its business as currently
operated and in connection with the duties performed by such employee, except as
would not reasonably be expected to have a Material Adverse Effect. There is no
pending or, to the knowledge of the Issuer, threatened Limitation of any such
required Licenses with respect to any employee of the Issuer and each of its
Subsidiaries, except where such Limitation would not, either individually or in
the aggregate, reasonably be expected to have a Healthcare Material Adverse
Effect. Except as would not, either individually or in the aggregate, reasonably
be expected to have a Healthcare Material Adverse Effect, each employee of the
Issuer and its Subsidiaries is in compliance with the terms of all such
Licenses.

 

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(e)          All reports, documents, schedules, statements, filings,
submissions, forms, registrations, notices, approvals and other documents
required to be filed, obtained, maintained or furnished pursuant to any
Governmental Payor Arrangement, Third Party Payor Arrangement, License, Company
Accreditation, and other applicable Healthcare Laws by the Issuer or any of its
Subsidiaries to any Governmental Authority (individually, “Company Regulatory
Filings” and collectively, “Company Regulatory Filings”) have been so filed,
obtained, maintained or furnished, and all such Company Regulatory Filings were
complete and correct on the date filed (or were corrected in or supplemented by
a subsequent filing), except where such failure would not reasonably be expected
to have a Healthcare Material Adverse Effect, and each of the Issuer and its
Subsidiaries has timely paid all amounts, Taxes, fees and assessments due and
payable in connection therewith, except where the failure to make such payments
on a timely basis would not reasonably be expected to have a Healthcare Material
Adverse Effect. The Issuer and each of its Subsidiaries has maintained all
records required to be maintained under all applicable Requirements of Law with
any Governmental Authorities (including all Governmental Payor Arrangements in
which it participates, as required by Healthcare Laws), except where the failure
to do so would not reasonably be expected to have a Healthcare Material Adverse
Effect.

 

(f)          Since December 31, 2016, none of the Issuer nor any of its
Subsidiaries, nor, to the knowledge of the Issuer, any employee or contractor of
the Issuer or any of its Subsidiaries has been, or to the knowledge of the
Issuer has been threatened to be, (i) excluded from any Governmental Payor
Arrangement pursuant to 42 U.S.C. § 1320a-7b and related regulations, (ii)
“suspended” or “debarred” from selling products to the U.S. government or its
agencies pursuant to the Federal Acquisition Regulation, relating to debarment
and suspension applicable to federal government agencies generally (42 C.F.R.
Subpart 9.4), or other applicable Requirements of Law, (iii) debarred,
disqualified, suspended or excluded from participation in Medicare, Medicaid or
any other governmental health care program or is listed on the General Services
Administration list of excluded parties, nor is any such debarment,
disqualification, suspension or exclusion, to the knowledge of a Note Party,
threatened or pending, or (iv) made a party to any other action by any
Governmental Authority that may prohibit it from selling products or providing
services to any Governmental Authority or other purchaser pursuant to any
Requirement of Law. Except for the payment of the amounts expressly provided for
in the Exjade Settlement, none of the Issuer nor any of its Subsidiaries nor, to
the knowledge of the Issuer, any employee or contractor of the Issuer or any of
its Subsidiaries is party to a corporate integrity agreement, consent order,
consent decree, permanent injunction or other settlement agreement with any
Governmental Authority or Third Party Payor or otherwise pursuant to any
Governmental Payor Arrangement, Third Party Payor Arrangement, License, or
Company Accreditation, including, without limitation, any additional corporate
integrity agreement, consent order, consent decree, permanent injunction or
other settlement agreement arising out of allegations involving the Issuer and
the prescription drug known as Exjade, which individually (or, together with any
related Settlements (other than the Exjade Settlement), in the aggregate) (i)
would reasonably be expected to have a Healthcare Material Adverse Effect or
(ii) requires the payment of money in an amount in excess of $12,500,000.

 

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(g)          Schedule 4.20(g) sets forth a list of all notices received since
December 31, 2016 of material noncompliance (including FDA 483 letters, FDA
correspondence, board of pharmacy inspection reports, and similar notices),
requests for material remedial action, investigations, return of overpayment or
imposition of fines (whether ultimately paid or otherwise resolved) by any
Governmental Authority or Third Party Payor or pursuant to any Governmental
Payor Arrangement, Third Party Payor Arrangement, License, or Company
Accreditation, but does not include Routine Payor Audits (the “Health Care
Audits”). Each of the Issuer and its Subsidiaries has prepared and submitted
timely all corrective action plans or responses required to be prepared and
submitted in response to any Health Care Audits and has implemented all of the
corrective actions described in such corrective action plans, except where the
failure to do so would not reasonably be expected to have a Healthcare Material
Adverse Effect. Neither the Issuer nor any of its Subsidiaries has any (A)
uncured deficiency that could lead to the imposition of a remedy, (B) existing
accrued and/or unpaid indebtedness or overpayment to any Governmental Authority
or Governmental Payor, including Medicare or Medicaid, or (C) existing accrued
and/or unpaid overpayment amounts owing under any finally resolved audit or
investigation by any Governmental Payor or Third Party Payor, excepting any of
the foregoing that would not reasonably be expected to have a Healthcare
Material Adverse Effect.

 

(h)          The execution and delivery of the Note Documents, and each of the
Issuer’s and its Subsidiaries’ performance thereunder (including the performance
of the pre- and post- closing notices and applications as provided in the Note
Documents) will not (i) result in the loss of or limitation of any License,
Company Accreditations or Company Reimbursement Approvals or (ii) reduce receipt
of the ongoing payments or reimbursements pursuant to the Company Reimbursement
Approvals that the Issuer or any of its Subsidiaries is receiving as of the date
hereof.

 

(i)          The Issuer and its Subsidiaries currently maintain a corporate
compliance program and quality management program reasonably designed to promote
compliance with applicable Healthcare Laws (except for noncompliance that would
not reasonably be expected to have a Healthcare Material Adverse Effect).

 

Section 4.21         HIPAA/HITECH Compliance. To the extent that and for so long
as the Issuer or any of its Subsidiaries is a “covered entity” within the
meaning of HIPAA and the HITECH Act, each of the Issuer and its Subsidiaries (a)
has undertaken or will promptly undertake all necessary compliance efforts
required by HIPAA and the HITECH Act; (b) has developed or will develop a
detailed plan for becoming HIPAA and HITECH Compliant (a “HIPAA/HITECH
Compliance Plan”); and (c) has implemented or will implement those provisions of
such HIPAA/HITECH Compliance Plan necessary to ensure that each of the Issuer
and its Subsidiaries is or becomes HIPAA and HITECH Compliant, except to the
extent in each case that such failures would not reasonably be expected to have
a Healthcare Material Adverse Effect. For purposes hereof, “HIPAA and HITECH
Compliant” shall mean that each of the Issuer and its Subsidiaries (i) is or
will be in compliance (except for non-compliance that would not reasonably be
expected to have a Healthcare Material Adverse Effect) with (A) each of the
applicable requirements of the so-called “Administrative Simplification”
provisions of HIPAA and (B) any or all requirements set forth in the HITECH Act,
including, but not limited to, any breach notification requirements, and (ii) is
not and would not reasonably be expected to become the subject of any civil or
criminal penalty, process, claim, action or proceeding, or any administrative or
other regulatory review, survey, process or proceeding (other than routine
surveys or reviews conducted by any Government Payor or other accreditation
entity) that would reasonably be expected to have a Healthcare Material Adverse
Effect.

 

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Section 4.22         Reimbursement.

 

(a)          Except as disclosed in Schedule 4.22(a), with respect to billings
by each of the Issuer and its Subsidiaries as of the Closing Date, each of the
Issuer and its Subsidiaries is in compliance with all Requirements of Law and
the written material reimbursement policies, rules and regulations of
Governmental Payors and Third Party Payors, including, without limitation,
adjustments under any capitation arrangement, fee schedule, discount formula or
cost-based reimbursement except the failure to comply with which would not
reasonably be expected to have a Healthcare Material Adverse Effect. Except as
would not be expected to have a Healthcare Material Adverse Effect, each of the
Issuer and its Subsidiaries holds all Reimbursement Approvals necessary for the
operation of its business as currently operated (individually, a “Company
Reimbursement Approval,” and collectively, the “Company Reimbursement
Approvals”). There is no pending or, to the knowledge of the Issuer, threatened
Limitation of any such Company Reimbursement Approvals, except as would not
reasonably be expected to have a Healthcare Material Adverse Effect or as
disclosed on Schedule 4.22(a). Except as would not reasonably be expected to
have a Healthcare Material Adverse Effect or as disclosed on Schedule 4.22(a),
each of the Issuer and its Subsidiaries is in compliance with the terms of the
Company Reimbursement Approvals.

 

(b)          Except as would not reasonably be expected to have a Healthcare
Material Adverse Effect, the accounts receivable of each of the Issuer and its
Subsidiaries have been properly adjusted in all material respects to reflect the
reimbursement policies under all applicable Requirements of Law and other
Governmental Payor Arrangements or Third Party Payor Arrangements, to which the
Issuer or any of its Subsidiaries is subject, and such accounts receivable do
not exceed amounts the Issuer or such Subsidiary is entitled to receive under
any capitation agreement, fee schedule, discount formula, cost-based
reimbursement or other adjustment or limitation to usual charges. There has been
no intentional overbilling or overcollection pursuant to any Governmental Payor
Arrangements or Third Party Payor Arrangement other than as created by routine
adjustments and disallowances made in the ordinary course of business by the
Governmental Payors and Third Party Payors with respect to such billings.

 

Section 4.23         Fraud and Abuse. Except as would not, individually or in
the aggregate, reasonably be expected to have a Healthcare Material Adverse
Effect, neither the Issuer nor any of its Subsidiaries has engaged in any
activities that (a) are prohibited under 42 U.S.C. §§ 1320a-7b, or the
regulations promulgated thereunder, or related Requirements of Law, or (b) are
prohibited by rules of professional conduct, or (c) are prohibited under any
statute or the regulations promulgated pursuant to such statutes, including,
without limitation, the following: (i) knowingly and willfully making or causing
to be made a false statement or misrepresentation of a material fact in any
application for any benefit or payment; (ii) knowingly and willfully making or
causing to be made any false statement or misrepresentation of a material fact
for use in determining rights to any benefit or payment; (iii) failure to
disclose knowledge by a claimant of the occurrence of any event affecting the
initial or continued right to any benefit or payment on its own behalf or on
behalf of another with intent to secure such benefit or payment fraudulently;
and (iv) knowingly and willfully soliciting or receiving any illegal
remuneration (including any kickback, bribe or rebate), directly or indirectly,
overtly or covertly, in cash or in kind or offering to pay or receive such
remuneration (x) in return for referring an individual to a Person for the
furnishing or arranging for the furnishing of any item or service for which
payment may be made in whole or in part by any Governmental Payor, or (y) in
return for purchasing, leasing, or ordering or arranging for or recommending
purchasing, leasing or ordering any good facility, service, or item for which
payment may be made in whole or in part by any Governmental Payor. Between
January 1, 2017 and the Closing Date, neither the Issuer nor any of its
Subsidiaries has received a subpoena issued by any Governmental Authority with
respect to a possible violation of Healthcare Laws by the Issuer or any of its
Subsidiaries (but excluding Routine Payor Audits).

 

Section 4.24         EEA Financial Institutions; Other Regulations. No Note
Party is an EEA Financial Institution.

 

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Section 4.25         Offer of Notes; Private Offering. Subject to the accuracy
of each Purchaser’s several (and not joint) representations and warranties set
forth in Section 2.25:

 

(a)          during the six-month period ending on the commencement of the offer
of the Notes and concurrently with the offering of the Notes, no Note Party, its
respective Rule 501 Affiliates or any person acting on its or any of their
behalf, directly or indirectly, offered the Notes or any part thereof or any
similar securities for issue or sale to, or solicited any offer to buy any of
the same from, any person other than the Purchasers and less than 15 other
Persons;

 

(b)          no form of general solicitation or general advertising was used by
any Note Party or any of their representatives in connection with the offer or
sale of the Notes to the Purchasers; and

 

(c)          no registration of the Notes pursuant to the provisions of the
Securities Act or the state securities “blue sky” laws will be required for the
offer, sale or issuance of the Notes by the Issuer to the Purchasers pursuant to
this Agreement and it has not taken and will not take any actions which would
bring the issuance and sale of the Notes within the provisions of Section 5 of
the Securities Act or the registration or qualification provisions of any such
Laws; and

 

(d)           the Notes are being offered and sold only to “accredited
investors” (as defined in Rule 501 under the Securities Act).

 

Section 4.26         Designation as Credit Facilities. As contemplated by the
definition of “Credit Facilities” contained in the Senior Notes Indenture, the
Notes, this Agreement, the Second Lien Notes and the Second Lien Note Purchase
Agreement each qualify, and each hereby is designated as, a “Credit Facility”
for purposes of the Senior Notes Indenture and shall be included in the
definition of “Credit Facilities” as so set forth in the Senior Notes Indenture.

 

ARTICLE V

AFFIRMATIVE COVENANTS

 

The Issuer covenants and agrees that so long as any Purchaser has a Commitment
hereunder or any Obligation remains unpaid or outstanding (other than Hedging
Obligations owed by any Note Party to any Purchaser-Related Hedge Provider, Bank
Product Obligations and indemnities and other contingent obligations not then
due and payable and as to which no claim has been made):

 

Section 5.1           Financial Statements and Other Information. The Issuer
will deliver to each Purchaser:

 

(a)          as soon as available and in any event within 90 days after the end
of each Fiscal Year of the Issuer, a copy of the annual audited report for such
Fiscal Year for the Issuer and its Subsidiaries, containing a consolidated
balance sheet of the Issuer and its Subsidiaries as of the end of such Fiscal
Year and the related consolidated statements of income, stockholders’ equity and
cash flows (together with all footnotes thereto) of the Issuer and its
Subsidiaries for such Fiscal Year, setting forth in each case in comparative
form the figures for the previous Fiscal Year, and reported on by independent
public accountants of nationally recognized standing (without a “going concern”
or like qualification, exception or explanation and without any qualification or
exception as to the scope of such audit (except any such qualification arising
as a result of the impending Maturity Date (as a result of clause (i) of such
definition) or “Maturity Date” (as defined in the Second Lien Note Purchase
Agreement) (as a result of clause (i) of such definition)) to the effect that
such financial statements present fairly in all material respects the financial
condition and the results of operations of the Issuer and its Subsidiaries for
such Fiscal Year on a consolidated basis in accordance with GAAP (as in effect
at the time such financial statements were prepared and subject to Section 1.3)
consistently applied (except as expressly noted therein) and that the
examination by such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted auditing
standards;

 

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(b)          as soon as available and in any event within 45 days after the end
of each Fiscal Quarter of the Issuer (other than the last Fiscal Quarter in each
Fiscal Year), an unaudited consolidated balance sheet of the Issuer and its
Subsidiaries as of the end of such Fiscal Quarter and the related unaudited
consolidated statements of income and cash flows of the Issuer and its
Subsidiaries for such Fiscal Quarter and the then elapsed portion of such Fiscal
Year, setting forth in each case in comparative form the figures for the
corresponding Fiscal Quarter and the corresponding portion of the Issuer’s
previous Fiscal Year and the corresponding figures for the Profit Plan for the
current Fiscal Year;

 

(c)          concurrently with the delivery of the financial statements referred
to in clauses (a) and (b) of this Section, a Compliance Certificate signed by an
appropriate Responsible Officer of the Issuer (i) certifying as to whether there
exists a Default or Event of Default on the date of such certificate and, if a
Default or an Event of Default then exists, specifying the details thereof and
the action, if any, which the Issuer has taken or proposes to take with respect
thereto, (ii) if applicable, setting forth in reasonable detail calculations
demonstrating compliance with the financial covenant set forth in Article VI,
(iii) specifying any change in the identity of the Subsidiaries as of the end of
such Fiscal Year or Fiscal Quarter from the Subsidiaries identified to the
Purchasers on the Closing Date or as of the most recent Fiscal Year or Fiscal
Quarter, as the case may be, and (iv) stating whether any change in GAAP or the
application thereof has occurred since the date of the most recently delivered
audited financial statements of the Issuer and its Subsidiaries, and, if any
change has occurred, specifying the effect of such change on the financial
statements accompanying such Compliance Certificate;

 

(d)          concurrently with the delivery of the financial statements referred
to in clause (a) above, a certificate of the accounting firm that reported on
such financial statements (which may be included in the opinion or other reports
delivered by such accounting firm pursuant to clause (a)) stating that, in
making the examination necessary to prepare such financial statements, no
knowledge was actually obtained of the occurrence and continuance of any Default
or Event of Default, except as specified in such certificate (it being
understood that no special or separate inquiry or review will have been made or
shall be required to be made with respect to the existence of any Default or
Event of Default and that such certificate shall be limited to the items that
independent certified public accountants are permitted to cover in such
certificates pursuant to their professional standards and customs of the
profession);

 

(e)          as soon as available and in any event within 90 days after the
commencement of any Fiscal Year, a Profit Plan for such Fiscal Year;

 

(f)          promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed with the
Securities and Exchange Commission, or any Governmental Authority succeeding to
any or all functions of said Commission, or with any national securities
exchange, or distributed by the Issuer to its shareholders generally, as the
case may be;

 

(g)          promptly following any request therefor, such other reports or
information including with respect to the results of operations, business
affairs and financial condition of the Issuer or any of its Subsidiaries as the
Collateral Agent or any Purchaser may reasonably request; and

 

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(h)          until Consolidated EBITDA for the period of four Fiscal Quarters
ending on the last day of the most recent Fiscal Quarter for which financial
statements have been (or were required to be) delivered hereunder exceeds
$45,000,000, deliver to each private-side Purchaser as soon as available and in
any event within 30 days after the end of each fiscal month of the Issuer, an
unaudited consolidated balance sheet of the Issuer and its Subsidiaries as of
the end of such fiscal month and the related unaudited consolidated statements
of income and cash flows of the Issuer and its Subsidiaries for such fiscal
month and the then elapsed portion of such Fiscal Year, setting forth in each
case in comparative form the corresponding figures for the Profit Plan for the
current Fiscal Year; provided the Purchasers acknowledge and agree that (x) the
financial statements described in this clause (h) are confidential and
constitute material non-public information of the Issuer and (y) no Purchaser
(including any private-side Purchaser) shall distribute or furnish a copy of all
or any portion of the financial statements described in this clause (h) to any
Purchaser that is not a private-side Purchaser other as expressly permitted
under Section 10.11(iv).

 

So long as the Issuer is required to file periodic reports under Section 13(a)
or Section 15(d) of the Exchange Act, the Issuer may satisfy its obligation to
deliver the financial statements referred to in clauses (a) and (b) above by
delivering the Issuer’s Form 10-K or 10-Q filed with the Securities and Exchange
Commission within the applicable time periods set forth in clauses (a) and (b),
as applicable.

 

Section 5.2           Notices of Material Events. The Issuer will furnish to the
Collateral Agent and each Purchaser prompt written notice of the following:

 

(a)          the occurrence of any Default or Event of Default;

 

(b)          the filing or commencement of, or any material development in, any
action, suit or proceeding by or before any arbitrator or Governmental Authority
against the Issuer or any of its Subsidiaries which would reasonably be expected
to result in a Material Adverse Effect;

 

(c)          the occurrence of any event or any other development by which the
Issuer or any of its Subsidiaries (i) fails to comply with any Environmental Law
or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) becomes subject to any Environmental
Liability, (iii) receives written notice of any claim with respect to any
Environmental Liability, or (iv) becomes aware of any basis for any
Environmental Liability, in each case which, either individually or in the
aggregate, would reasonably be expected to result in a Material Adverse Effect;

 

(d)          promptly and in any event within 15 days after (i) the Issuer or
any of its Subsidiaries knows or has reason to know that any ERISA Event that
(individually or together with all other ERISA Events) would reasonably be
expected to have a Material Adverse Effect has occurred, a certificate of the
chief financial officer of the Issuer describing such ERISA Event and the
action, if any, proposed to be taken with respect to such ERISA Event and a copy
of any notice filed with the PBGC or the IRS pertaining to such ERISA Event and
any notices received by the Issuer or such Subsidiary (or, if applicable, an
ERISA Affiliate) from the PBGC or any other governmental agency with respect
thereto and (ii) becoming aware that there has been a material increase in
Unfunded Pension Liabilities (not taking into account Plans with negative
Unfunded Pension Liabilities) or a Plan is, or is expected to be, in at risk
status under Title IV of ERISA since the date the representations hereunder are
given or deemed given, or from any prior notice, as applicable such that the
resulting Unfunded Pension Liabilities, if incurred, or the at risk status, as
applicable, would reasonably be expected to have a Material Adverse Effect, a
detailed written description thereof from the chief financial officer of the
Issuer;

 

(e)          the receipt by the Issuer or any of its Subsidiaries of any written
notice of an alleged default or event of default, with respect to the Second
Lien Note Purchase Agreement or any Material Indebtedness of the Issuer or any
of its Subsidiaries;

 

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(f)          upon receipt thereof, copies of all final audit reports and all
final management letters relating to the Issuer or any of its Subsidiaries
submitted by the Issuer’s primary accountants or primary auditors in connection
with each annual, interim or special audit of the books of the Issuer or any of
its Subsidiaries (provided that, in the event that the Issuer engages such
accountants or auditors to perform a specific review, test, valuation or other
analysis of all or any portion of the Issuer’s financial condition or financial
performance, the results of such engagement shall not be required to be
delivered to the Collateral Agent or the Purchasers to the extent that such
results are not otherwise required to be delivered pursuant to another provision
of this Agreement);

 

(g)          written notice of the receipt by the Issuer or any of its
Subsidiaries from any Governmental Authority or other Person of (1) any notice
asserting any failure by the Issuer or any of its Subsidiaries to be in
compliance with applicable Requirements of Law or that threatens the taking of
any action against the Issuer or any of its Subsidiaries or sets forth
circumstances in any such event where the failure or the taking of action would
reasonably be expected to have a Material Adverse Effect, (2) any notice of any
actual or threatened in writing Limitation with respect to any Governmental
Payor Arrangement, Third Party Payor Arrangement, License, or Company
Accreditation of the Issuer or any of its Subsidiaries, where such action would,
either individually or in the aggregate with other similar actions, reasonably
be expected to have a Material Adverse Effect, or (3) any subpoena, search
warrant, civil investigative demand, criminal action or threat of criminal
action, FDA warning letter, FDA 483 letter or other request or investigation by
a Governmental Authority with respect to a possible violation of Healthcare Laws
by the Issuer or any of its Subsidiaries (but excluding (A) state licensure and
Medicare certification and participation surveys by a Governmental Authority
with respect to a possible violation of Healthcare Laws, unless any deficiencies
are of a kind that do result or likely will result in the issuance of a notice
of suspension or termination of any License, payment, or provider or supplier
number or agreement, and (B) Routine Payor Audits);

 

(h)          if any Default or Event of Default is in existence, if requested by
any Purchaser, furnish to each Purchaser, to the maximum extent permitted by
applicable Requirements of Law, (i) copies of all Company Regulatory Filings,
(ii) copies of all Licenses, Company Accreditations and Company Reimbursement
Approvals, as the same may be renewed or amended; (iii) copies of all Health
Care Audits and correspondence related thereto and corrective action plans
prepared and submitted in response thereto, and (iv) a report of the status of
all recoupments, holdbacks, offsets, vendor holds, denials and appeals of
amounts owed pursuant to any Company Reimbursement Approvals, in each case
outside the ordinary course of business (and ordinary course of business shall
be deemed to exclude recoupments, holdbacks, offsets, denials and vendor holds
resulting from, related to or arising out of allegations of fraud or patterns of
practices of contracting, billing or claims submission inconsistent with
Requirements of Law), all subject to any limitations on disclosure included in
any Requirement of Law;

 

(i)          any default or material amendment under, or termination of, (i)
that certain Facility Participation Agreement effective as of June 1, 2009, with
United HealthCare Insurance Company, contracting on behalf of its Oxford Health
Plans (NJ), (ii) that certain Facility Participation Agreement effective as of
June 1, 2009, with United HealthCare Insurance Company, contracting on behalf of
itself and UnitedHealthcare of the Midwest, (iii) that certain Ancillary
Provider Participation Agreement effective as of June 1, 2009, with United
HealthCare Insurance Company, contracting on behalf of itself and
UnitedHealthcare of New York, or (iv) that certain Ancillary Provider
Participation Agreement effective as of June 1, 2009, with UnitedHealthcare of
New York, Inc.; and

 

(j)          any other development that results in, or would reasonably be
expected to result in, a Material Adverse Effect.

 

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The Issuer will furnish to the Collateral Agent and each Purchaser the
following:

 

(x)          promptly and in any event at least 30 days prior thereto, notice of
any change (i) in any Note Party’s legal name, (ii) in any Note Party’s chief
executive office, its principal place of business or any office in which it
maintains books or records, (iii) in any Note Party’s identity or legal
structure, (iv) in any Note Party’s federal taxpayer identification number or
organizational number or (v) in any Note Party’s jurisdiction of organization;
and

 

(y)          promptly upon request therefor, such other information and reports
relating to the past, present or anticipated future financial condition,
operations, plans, budgets and projections of the Issuer and each of its
Subsidiaries, as the Collateral Agent or any Purchaser at any time or from time
to time may reasonably request.

 

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

 

Section 5.3           Existence; Conduct of Business. The Issuer will, and will
cause each of its Subsidiaries to, do or cause to be done all things necessary
to preserve, renew and maintain in full force and effect its legal existence and
its respective material rights, licenses, permits, privileges, franchises,
Patents, Copyrights, Trademarks, trade names and all other Intellectual Property
Rights that are material for the conduct of its business, except where failure
to do so would not reasonably be expected to result in a Material Adverse
Effect; provided that nothing in this Section shall prohibit any transaction
that is expressly permitted hereunder.

 

Section 5.4           Compliance with Laws. The Issuer will, and will cause each
of its Subsidiaries to, comply with all laws, rules, regulations and
requirements of any Governmental Authority applicable to its business and
properties, including, without limitation, all Environmental Laws, ERISA and
OSHA, except where the failure to do so, either individually or in the
aggregate, would not reasonably be expected to result in a Material Adverse
Effect. The Issuer will, and will cause each of its Subsidiaries to, maintain in
effect policies, procedures and controls designed to ensure compliance by the
Issuer and its Subsidiaries, the Controlled Affiliates thereof and, to the
Issuer’s knowledge, their respective directors, officers, employees and agents
with Sanctions, Anti-Corruption Laws, and Anti-Terrorism Laws.

 

Section 5.5           Payment of Obligations. The Issuer will, and will cause
each of its Subsidiaries to, pay and discharge at or before maturity all of its
material obligations and liabilities (including, without limitation, all taxes,
assessments and other governmental charges, levies and all other claims that
could result in a statutory Lien) before the same shall become delinquent or in
default, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings, (b) the Issuer or such Subsidiary has set
aside on its books adequate reserves with respect thereto in accordance with
GAAP and (c) the failure to make payment pending such contest would not
reasonably be expected to result in a Material Adverse Effect.

 

Section 5.6           Books and Records. The Issuer will, and will cause each of
its Subsidiaries to, keep proper books of record and account in which full, true
and correct entries shall be made of all dealings and transactions in relation
to its business and activities to the extent necessary to prepare the
consolidated financial statements of the Issuer in conformity with GAAP (subject
to the terms of this Agreement with respect to such financial statements).

 

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Section 5.7           Visitation and Inspection. The Issuer will, and will cause
each of its Subsidiaries to, permit any representative of the Collateral Agent
or any Purchaser to visit and inspect its properties, to examine its books and
records and to make copies and take extracts therefrom, and to discuss its
affairs, finances and accounts with any of its officers and with its independent
certified public accountants (provided that the Issuer is provided reasonable
prior notice of any discussion with its auditors or accountants and is afforded
an opportunity to participate in such discussions), all at such reasonable times
and subject to reasonable prior notice to the Issuer or such Subsidiary;
provided that, so long as no Event of Default has occurred and is continuing,
visits and inspections under this Section 5.7 shall be limited to one time per
Fiscal Year for the Collateral Agent and all Purchasers. Any Related Party of
the Collateral Agent or any Purchaser that attends or participates in any such
visit or inspection shall, prior to such attendance or participation, expressly
agree to be subject to and bound by the confidentiality provisions of this
Agreement or shall otherwise be bound by professional ethics rules to maintain
such confidentiality.

 

Section 5.8           Maintenance of Properties; Insurance; Credit Ratings. The
Issuer will, and will cause each of its Subsidiaries to, (a) keep and maintain
all property material to the conduct of its business in good working order and
condition, ordinary wear and tear, casualty and condemnation excepted, (b)
maintain with financially sound and reputable insurance companies which are not
Affiliates of the Issuer (i) insurance with respect to its properties and
business, and the properties and business of its Subsidiaries, against loss or
damage of the kinds customarily insured against by companies in the same or
similar businesses operating in the same or similar locations (including, in any
event, flood insurance as described in the definition of Real Estate Documents)
and (ii) all insurance required to be maintained pursuant to the Collateral
Documents, and will, upon request of any Purchaser, furnish to each Purchaser at
reasonable intervals a certificate of a Responsible Officer setting forth the
nature and extent of all insurance maintained by the Issuer and its Subsidiaries
in accordance with this Section, (c) at all times shall cause the applicable
insurance provider to name the Collateral Agent as an additional insured on all
liability policies of the Issuer and its Subsidiaries and as a loss payee
(pursuant to a loss payee endorsement reasonably satisfactory to the Collateral
Agent) on all casualty and property insurance policies of the Issuer and its
Subsidiaries, in each case, other than any director and officer indemnification
policies, workers’ compensation policies and any policies that provide coverage
for property that does not constitute Collateral, and (d) use commercially
reasonable efforts at all times following the date that is 60 days after the
Closing Date (or such longer period as the Required Purchasers may reasonably
agree) to maintain ratings for the Notes issued hereunder and the corporate
family credit of the Issuer and its Subsidiaries by both S&P and Moody’s.

 

Section 5.9           Use of Proceeds; Margin Regulations.

 

(a)          The Issuer will use the proceeds of all Notes on the Closing Date
(together with the proceeds of the Second Lien Notes) (i) to refinance existing
Indebtedness of the Note Parties under the Existing Credit Agreement and the
Existing Priming Credit Agreement, (ii) to pay fees and expenses incurred in
connection with the execution and delivery of this Agreement and the other Note
Documents, the issuance and purchase of the Notes and the transactions
contemplated to occur in connection therewith and (iii) for working capital and
general corporate purposes of the Issuer and its Subsidiaries.

 

No part of the proceeds of any Note will be used, whether directly or
indirectly, for any purpose that would violate any rule or regulation of the
Board of Governors of the Federal Reserve System, including Regulation T,
Regulation U or Regulation X.

 

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Section 5.10         Casualty and Condemnation. The Issuer (a) will furnish to
the Collateral Agent and the Purchasers prompt written notice of any casualty or
other insured damage to any material portion of the Collateral or the
commencement of any action or proceeding by any Governmental Authority for the
taking of any material portion of the Collateral or any material interest
therein under power of eminent domain or by condemnation or similar proceeding
and (b) will ensure that the Net Cash Proceeds of any such Prepayment Event
(whether in the form of insurance proceeds, condemnation awards or otherwise)
are collected and applied in accordance with the applicable provisions of this
Agreement and the Collateral Documents.

 

Section 5.11         Cash Management. The Issuer shall, and shall cause each
Subsidiary Note Party to, maintain the cash management systems described below:

 

(a)          Maintain all cash management and treasury business with a Permitted
Third Party Bank, including, without limitation, all deposit accounts,
disbursement accounts, investment accounts and lockbox accounts, other than
Excluded Accounts (each such deposit account, disbursement account, investment
account and lockbox account, other than any Excluded Account, a “Controlled
Account”).

 

(b)          Each Controlled Account shall (i) be a cash collateral account,
with all cash, checks and other similar items of payment in such account
securing payment of the Obligations, and in which the Issuer and each of its
Subsidiaries shall have granted a first priority Lien (subject to non-consensual
Liens arising by operation of law) to the Collateral Agent, on behalf of the
Secured Parties, and (ii) be subject to an Account Control Agreement.

 

(c)          Subject to Section 5.11(e), deposit promptly, and in any event no
later than five (5) Business Days after the date of receipt thereof, all cash,
checks, drafts or other similar items of payment relating to or constituting
payments made in respect of any and all accounts and other Collateral into
Controlled Accounts, in each case except for cash, checks, drafts, other similar
payment items and Cash Equivalents the aggregate value of which does not exceed
$3,000,000 at any time.

 

(d)          At any time after the occurrence and during the continuance of an
Event of Default and at all times subject to the First Lien/Second Lien
Intercreditor Agreement, at the request of the Required Purchasers, the Issuer
will, and will cause each other Note Party to, cause all payments constituting
proceeds of accounts or other Collateral to be directed into lockbox accounts
under agreements in form and substance reasonably satisfactory to the Collateral
Agent and the Required Purchasers.

 

(e)          For each deposit account into which the Issuer or any Subsidiary
Note Party receives payments from Federal/State Health Care Program Account
Debtors (a “Government Receivables Account”), the Issuer or such Subsidiary Note
Party shall enter into an agreement (a “Government Receivables Account
Agreement”) with the Permitted Third Party Bank at which such Government
Receivables Account is located, in such form as may be reasonably approved by
the Collateral Agent and the Required Purchasers, which agreement shall provide
that all funds deposited into such Government Receivables Account shall be
transferred promptly (but in any event within one (1) Business Day of deposit)
to a Controlled Account of the Issuer or such Subsidiary Note Party. Neither the
Issuer nor any Subsidiary Note Party shall terminate or modify a Government
Receivables Account Agreement without the approval of the Required Purchasers,
which approval (or non-approval, as the case may be) shall be communicated to
the Issuer by the Purchasers within five (5) Business Days of any such request
for approval and which approval shall not be unreasonably withheld, conditioned
or delayed.

 

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Section 5.12         Additional Subsidiaries and Collateral.

 

(a)          In the event that, subsequent to the Closing Date, any Person (but
specifically excluding any Specified Strategic Joint Venture) becomes a Domestic
Subsidiary, whether pursuant to formation, acquisition or otherwise, (x) the
Issuer shall promptly notify the Collateral Agent and the Purchasers thereof and
(y) within 30 days (or such longer period as the Required Purchasers shall agree
in writing) after such Person becomes a Domestic Subsidiary, the Issuer shall
cause such Domestic Subsidiary (i) to become a new Guarantor and to grant Liens
in favor of the Collateral Agent in all of its personal property that is not
Excluded Property by executing and delivering to the Collateral Agent a
supplement to the Guaranty and Security Agreement in form and substance
reasonably satisfactory to the Collateral Agent and the Required Purchasers,
executing and delivering a Copyright Security Agreement, Patent Security
Agreement and Trademark Security Agreement, as applicable, and authorizing,
delivering and filing such UCC financing statements or similar instruments
necessary to perfect and maintain the Liens in favor of the Collateral Agent and
granted under any of the Note Documents, (ii) in accordance with Section 5.13,
to grant Liens in favor of the Collateral Agent in all fee ownership interests
in Real Estate having a fair market value in excess of $2,500,000 as of the date
such Person becomes a Domestic Subsidiary by executing and delivering to the
Collateral Agent such Real Estate Documents necessary to perfect and maintain
the Collateral Agent’s security interest, and (iii) to deliver all such other
customary and reasonable documentation (including, without limitation, certified
organizational documents, resolutions, lien searches, title insurance policies,
surveys, environmental reports and legal opinions) and to take all such other
actions as such Subsidiary would have been required to deliver and take pursuant
to Section 3.1 if such Subsidiary had been a Note Party on the Closing Date or
that such Subsidiary would be required to deliver pursuant to Section 5.13 with
respect to any Real Estate. In addition, within 30 days (or such longer period
as the Required Purchasers shall permit in writing in their sole discretion)
after the date any Person becomes a Domestic Subsidiary, the Issuer shall, or
shall cause the applicable Note Party to (i) pledge all of the Capital Stock of
such Domestic Subsidiary to the Collateral Agent as security for the Obligations
by executing and delivering a supplement to the Guaranty and Security Agreement
in form and substance reasonably satisfactory to the Collateral Agent and the
Required Purchasers, and (ii) deliver the original certificates evidencing such
pledged Capital Stock (to the extent that such Capital Stock is certificated) to
the Collateral Agent, together with appropriate powers executed in blank, in
each case, other than any such Capital Stock that constitutes Excluded Property.

 

(b)          In the event that, subsequent to the Closing Date, any Person
becomes a Foreign Subsidiary, whether pursuant to formation, acquisition or
otherwise, (i) the Issuer shall promptly notify the Collateral Agent and the
Purchasers thereof and (ii) to the extent such Foreign Subsidiary is owned
directly by any Note Party, within 60 days after such Person becomes a Foreign
Subsidiary (or such longer period as the Required Purchasers shall agree in
writing), the Issuer shall, or shall cause the applicable Note Party to, (A)
pledge not more than 65% of the issued and outstanding voting Capital Stock of
such Foreign Subsidiary to the Collateral Agent as security for the Obligations
pursuant to a pledge agreement in form and substance reasonably satisfactory to
the Collateral Agent and the Required Purchasers, (B) deliver the original
certificates evidencing such pledged Capital Stock (to the extent that such
Capital Stock or portion thereof is certificated) to the Collateral Agent,
together with appropriate powers executed in blank and (C) deliver all such
other customary and reasonable documentation (including, without limitation,
certified organizational documents, resolutions, lien searches and legal
opinions) and to take all such other actions as the Collateral Agent or the
Required Purchasers may reasonably request.

 

(c)          The Issuer agrees that, following the delivery of any Collateral
Documents required to be executed and delivered by this Section, the Collateral
Agent shall have a valid and enforceable, first priority perfected Lien (subject
to Specified Permitted Liens) on the property required to be pledged pursuant to
clauses (a) and (b) of this Section (to the extent that such Lien can be
perfected by execution, delivery and/or recording of the Collateral Documents or
by filing UCC financing statements, or by taking actual possession of such
Collateral), free and clear of all Liens other than Liens expressly permitted by
Section 7.2. All actions to be taken pursuant to this Section shall be at the
expense of the Issuer or the applicable Note Party, and shall be taken to the
reasonable satisfaction of the Collateral Agent and the Required Purchasers.

 

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Section 5.13         Additional Real Estate; Leased Locations.

 

(a)          If any Note Party proposes to acquire after the Closing Date a fee
ownership interest in Real Estate having a fair market value in excess of
$2,500,000 as of the date of the acquisition thereof, it shall within ninety
(90) days following such acquisition provide to the Collateral Agent and each
Purchaser the Real Estate Documents with respect to such Real Estate. If, at any
time, the fair market value of all Real Estate with respect to which the Note
Parties hold a fee ownership interest and have not delivered Real Estate
Documents is in excess of $5,000,000, the Note Parties shall within 90 days
provide to the Collateral Agent and each Purchaser Real Estate Documents with
respect to a sufficient portion of such Real Estate such that, after giving
effect to the delivery of such Real Estate Documents, the fair market value of
all Real Estate with respect to which the Note Parties hold a fee ownership
interest and have not delivered Real Estate Documents does not exceed
$5,000,000.

 

(b)          If any Note Party proposes to lease any real property that will
serve as such Note Party’s chief executive office or the location at which such
Note Party’s books or records will be stored or located, it shall provide to the
Collateral Agent and each Purchaser a copy of such lease and, within sixty (60)
days following the effectiveness of such lease, a Collateral Access Agreement
from the landlord of such leased property or the bailee with respect to any
warehouse or other location where such books, records or Collateral will be
stored or located; provided that if such Note Party is unable to deliver any
such Collateral Access Agreement after using its commercially reasonable efforts
to do so, the Required Purchasers shall waive the foregoing requirement in their
reasonable discretion.

 

Section 5.14         Further Assurances. The Issuer will, and will cause each
other Note Party to, execute any and all further documents, financing
statements, agreements and instruments, and take all such further actions
(including the filing and recording of financing statements, fixture filings,
Mortgages and other documents), which may be required under any applicable law,
or which the Collateral Agent or the Required Purchasers may reasonably request,
to effectuate the transactions contemplated by the Note Documents or to grant,
preserve, protect or perfect the Liens created by the Collateral Documents or
the validity or priority of any such Lien, all at the expense of the Note
Parties. The Issuer also agrees to provide to the Collateral Agent or any
Purchaser, from time to time upon request, evidence reasonably satisfactory to
the Collateral Agent or such Purchaser as to the perfection and priority of the
Liens created or intended to be created by the Collateral Documents.

 

Section 5.15         Healthcare Matters.

 

(a)          Without limiting the generality of any other covenant contained in
this Agreement, and except as would not reasonably be expected to have a
Material Adverse Effect, the Issuer will, and will cause each of its
Subsidiaries to (i) conduct its operations in compliance with all applicable
Healthcare Laws, (ii) maintain and comply with all Governmental Payor
Arrangements, Third Party Payor Arrangements, Licenses, Company Accreditations
and Company Reimbursement Approvals, (iii) timely file, or cause to be filed,
all Company Regulatory Filings in accordance with all Requirements of Law, (iv)
timely pay all amounts, Taxes, fees and assessments, if any, due and payable in
connection with Company Regulatory Filings, (v) timely submit and implement all
corrective action plans required to be prepared and submitted in response to any
Health Care Audits, (vi) timely refund all overpayments (other than those
appealed through the ordinary administrative processes of any applicable
Governmental Authority) determined to exist by any Governmental Authority under
any Healthcare Law or pursuant to any Governmental Payor Arrangement, (vii)
timely repay any overpayment amounts owing under any finally resolved audit or
investigation by any Third Party Payor, and (viii) process credit balances
received from Third Party Payors in a manner consistent with the Issuer’s
internal policies and applicable Requirements of Law. The Issuer will, and will
cause each of its Subsidiaries to, notify the Collateral Agent and each
Purchaser promptly after the Issuer or any of its Subsidiaries becomes aware of
any violation of Healthcare Laws by the Issuer or any of its Subsidiaries that
would reasonably be expected to have a Material Adverse Effect.

 

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(b)          Without limiting the foregoing, the Issuer will, and will cause
each of its Subsidiaries to, promptly furnish or cause to be furnished to the
Collateral Agent and each Purchaser (x) copies of all reports of
investigational/inspectional observations or reports issued to and received by
the Issuer or any of its Subsidiaries and issued by any Governmental Authority,
(y) copies of all correspondence as well as other documents received by the
Issuer or any of its Subsidiaries from any Governmental Authority relating to or
arising out of the conduct applicable to the business of Issuer or any of its
Subsidiaries that asserts past or ongoing material non-compliance with
applicable Healthcare Laws and (z) notice of any investigation or audit or
similar proceeding by any Governmental Authority, except in each case where the
failure to do so would not reasonably be expected to have a Material Adverse
Effect.

 

Notwithstanding anything to the contrary in any Note Document, neither the
Issuer nor any of its Subsidiaries shall be required to furnish to the
Collateral Agent or any Purchaser any protected health information or any
patient-related information, to the extent such disclosure to the Collateral
Agent or such Purchaser is prohibited by any Requirements of Law.

 

Section 5.16         Post-Closing Covenants. The Issuer will, and will cause
each of its Subsidiaries to, as applicable, not later than the dates specified
therefor on Schedule 5.16 (or such later dates as the Required Purchasers may
agree in writing in their sole discretion), satisfy each of the requirements set
forth on Schedule 5.16.

 

Section 5.17         Second Lien Credit Enhancements. If the Second Lien
Collateral Agent or any “Secured Party” under the Second Lien Note Documents, in
its capacity as such, receives any additional guaranty or additional collateral
agreement after the Closing Date, without limitation of any Event of Default
that may arise as a result thereof, the Issuer shall, substantially concurrently
with such receipt, use commercially reasonable efforts to cause the same to be
granted to the Collateral Agent, for its own benefit and the benefit of the
Secured Parties (subject to and without limitation of the terms of the First
Lien/Second Lien Intercreditor Agreement).

 

Section 5.18         Second Lien Note Documents. Notwithstanding anything in
this Agreement to the contrary, if any amendment or modification to the Second
Lien Note Documents amends or modifies any representation and warranty, covenant
(including any financial covenant), event of default or other term contained in
the Second Lien Note Documents (or any related definitions), in each case, in a
manner that is more restrictive upon the Note Parties or if any amendment or
modification to the Second Lien Note Purchase Agreement or other Second Lien
Note Document adds an additional representation and warranty, covenant or event
of default therein, the Issuer and the other Note Parties acknowledge and agree
that this Agreement or the other Note Documents, as the case may be, shall be
automatically amended or modified to effect similar amendments or modifications
with respect to this Agreement or such other Note Documents, without the need
for any further action or consent by the Issuer, the Note Parties, or any other
party. In furtherance of the foregoing, the Issuer and the other Note Parties
permit the Collateral Agent and the Purchasers to document each such similar
amendment or modification to this Agreement or such other Note Documents or
insert a corresponding new representation and warranty, covenant, event of
default or other provision in this Agreement or such other Note Documents
without any need for any further action or consent by the Issuer, the other Note
Parties or any other party.

 

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Section 5.19         Corporate Compliance and Quality Management Program. The
Issuer will, and will cause each of its Subsidiaries to, maintain a corporate
compliance and quality management program that is reasonably designed to ensure
compliance with applicable Healthcare Laws, except where the failure to do so
would not reasonably be expected to have a Material Adverse Effect. For the
avoidance of doubt, the corporate compliance and quality management program will
include policies and procedures relating to internal claims auditing and
auditing for compliance to Governmental Authority requirements for the operation
of a compounding pharmacy.

 

ARTICLE VI

FINANCIAL COVENANT

 

The Issuer covenants and agrees that so long as any Purchaser has a Commitment
hereunder or any Obligation remains unpaid or outstanding (other than Hedging
Obligations owed by any Note Party to any Purchaser-Related Hedge Provider, Bank
Product Obligations and indemnities and other contingent obligations not then
due and payable and as to which no claim has been made):

 

(a)          The Issuer shall not permit the Consolidated Covenant Testing Net
Leverage Ratio as of the last day of the most recently ended Fiscal Quarter for
which financial statements have been delivered (or were required to be
delivered) pursuant to Section 5.1(a) or 5.1(b), as applicable, for the period
of four (4) consecutive Fiscal Quarters ending on such date, to be greater than
the ratio set forth below opposite such Fiscal Quarter:

 

Fiscal Quarter Ending   Consolidated Covenant Testing Net Leverage Ratio      
September 30, 2017   9.00:1.00       December 31, 2017 and each Fiscal Quarter
thereafter   8.00:1.00

 

ARTICLE VII

NEGATIVE COVENANTS

 

The Issuer covenants and agrees that so long as any Purchaser has a Commitment
hereunder or any Obligation remains outstanding (other than Hedging Obligations
owed by any Note Party to any Purchaser-Related Hedge Provider, Bank Product
Obligations and indemnities and other contingent obligations not then due and
payable and as to which no claim has been made):

 

Section 7.1           Indebtedness and Disqualified Capital Stock.

 

(a)            The Issuer will not, and will not permit any of its Subsidiaries
to, create, incur, assume or suffer to exist any Indebtedness, except:

 

(i)          Indebtedness created pursuant to the Note Documents;

 

(ii)         Indebtedness of the Issuer and its Subsidiaries existing on the
Closing Date and set forth on Schedule 7.1 and extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof immediately prior to giving effect to such extension,
renewal or replacement (except in respect of costs and expenses in connection
therewith or any interest that is paid-in-kind and capitalized to the principal
amount thereof in connection with such extension, renewal or replacement) or
shorten the maturity or the Weighted Average Life to Maturity thereof;

 

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(iii)        Indebtedness of the Issuer or any of its Subsidiaries incurred to
finance the acquisition, construction or improvement of any fixed or capital
assets, including Capital Lease Obligations, and any Indebtedness assumed in
connection with the acquisition of any such assets or secured by a Lien on any
such assets prior to the acquisition thereof (provided that such Indebtedness is
incurred prior to or within 90 days after such acquisition or the completion of
such construction or improvements), and extensions, renewals or replacements of
any such Indebtedness that do not increase the outstanding principal amount
thereof immediately prior to giving effect to such extension, renewal or
replacement (except in respect of costs and expenses in connection therewith or
any interest that is paid-in-kind and capitalized to the principal amount
thereof in connection with such extension, renewal or replacement) or shorten
the maturity or the Weighted Average Life to Maturity thereof; provided, that
the aggregate principal amount of Indebtedness outstanding under this clause
(iii) at any time (including any of such Indebtedness which is set forth on
Schedule 7.1) does not exceed the greater of (A) $12,500,000 and (B) 1.50% of
Consolidated Total Assets;

 

(iv)        (A) intercompany Indebtedness between or among the Issuer and any
Subsidiary Note Party and (B) intercompany Indebtedness between or among the
Issuer and any Subsidiary that is not a Note Party permitted by Section 7.4(d);

 

(v)         (A) Guarantees by the Issuer of Indebtedness of any Subsidiary Note
Party and by any Subsidiary Note Party of Indebtedness of the Issuer or any
other Subsidiary Note Party and (B) Guarantees by the Issuer of Indebtedness of
any Subsidiary that is not a Note Party and by any Subsidiary of Indebtedness of
the Issuer or any other Subsidiary that is not a Note Party permitted by Section
7.4(d);

 

(vi)        Indebtedness in respect of performance, bid, surety, indemnity,
appeal bonds, completion guarantees and other obligations of like nature and
guarantees and/or obligations as an account party in respect of the face amount
of letters of credit in respect thereof, in each case securing obligations not
constituting Indebtedness for borrowed money (including workers’ compensation
claims, environmental remediation and other environmental matters and
obligations in connection with self-insurance or similar requirements) provided
in the ordinary course of business;

 

(vii)       Indebtedness arising from the endorsement of instruments in the
ordinary course of business;

 

(viii)      Indebtedness consisting of contingent liabilities in respect of any
indemnification, working capital adjustment, purchase price adjustment,
non-compete, consulting, deferred compensation, earn-out obligations, contingent
consideration, contributions, and similar obligations, incurred in connection
with any Investment permitted under Section 7.4 or any disposition permitted
under Section 7.6; provided that, with respect to any earn-out or other deferred
or contingent purchase consideration in respect of a Permitted Acquisition, (x)
such earn-out or other deferred or contingent purchase consideration shall be
subordinated in right of payment to the Obligations and the Second Lien
Obligations on terms acceptable to the Required Purchasers and the Required
Purchasers (as defined in the Second Lien Note Purchase Agreement), (y) such
earn-out or other deferred or contingent purchase consideration such shall be
unsecured and (z) there shall be no obligors (including guarantors) in respect
of such earn-out or other deferred or contingent purchase consideration other
than (I) in the case of an Acquisition of the type described in clause (b) of
the definition of Acquisition, the Person acquiring the assets of the applicable
Target, (II) in the case of an Acquisition of the type described in clause (a)
of the definition of Acquisition, the applicable Target (and for the avoidance
of doubt, no subsidiaries of the applicable Target shall be obligors) and (III)
in each case, any parent company of the Person acquiring such asset or Target,
which parent company is a newly-formed holding company that holds no material
assets, and has no material liabilities, other than equity interests in the
Person acquiring such assets or Target;

 

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(ix)         Indebtedness consisting of the financing of insurance premiums
required by this Agreement or otherwise incurred in the ordinary course of
business;

 

(x)          cash management obligations (including Bank Product Obligations)
and other Indebtedness in respect of netting services, automatic clearinghouse
arrangements, overdraft protections, employee credit card programs and other
cash management and similar arrangements, in each case, in the ordinary course
of business and any Guarantees thereof;

 

(xi)         Hedging Obligations not prohibited by Section 7.10;

 

(xii)        Indebtedness of the Issuer or any of its Subsidiaries owed to any
supplier or vendor of Inventory incurred to finance the acquisition of Inventory
from such supplier or vendor, including the ABDC Obligations; provided that,
immediately after giving effect to any incurrence of Indebtedness under this
clause (xii) on any date of determination, the aggregate principal amount of
Indebtedness outstanding under this clause (xii) does not exceed $20,000,000 for
any period of more than twenty (20) consecutive days after a Responsible Officer
of the Issuer becomes aware of such excess outstanding amount;

 

(xiii)       (A) unsecured Indebtedness evidenced by the Senior Notes
outstanding on the Closing Date and (B) Permitted Refinancing Indebtedness in
respect thereof;

 

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

 

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

 

(xvi)      Guarantees by the Issuer in the ordinary course of business of any
obligations of any Subsidiary Note Party under an operating lease to which such
Subsidiary Note Party is a party;

 

(xvii)     other unsecured Indebtedness (other than Indebtedness for borrowed
money); provided that the aggregate principal amount of Indebtedness outstanding
under this clause (xvii) at any time does not exceed the greater of (A)
$5,000,000 and (B) 1.00% of Consolidated Total Assets;

 

(xviii)    the Second Lien Obligations to the extent all such obligations
constitute “Second Lien Obligations” under the First Lien/Second Lien
Intercreditor Agreement;

 

(xix)       Indebtedness in respect of stand-by letters of credit; provided that
the aggregate principal amount of Indebtedness outstanding under this clause
(xix) shall not exceed $7,200,000; and

 

(xx)        Permitted Seller Financing in respect of any Permitted Acquisition.

 

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For purposes of determining compliance with this Section 7.1(a), in the event
that any item of Indebtedness meets the criteria of more than one of the
categories described in clauses (a)(i) through (a)(xvii), the Issuer and its
Subsidiaries shall be permitted to incur any such Indebtedness in any manner
that complies with this Section 7.1(a) and may rely at the time of incurrence
upon more than one of the categories described above; provided that the ABDC
Obligations shall be incurred and shall remain outstanding solely under clause
(a)(xii) above.

 

(b)          The Issuer will not, and will not permit any Subsidiary to, issue
or permit to exist any Disqualified Capital Stock of any such Person.

 

Section 7.2           Liens. The Issuer will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien on any of its
assets or property now owned or hereafter acquired, except:

 

(a)          Liens securing the Obligations; provided that no Liens may secure
Hedging Obligations or Bank Product Obligations without securing all other
Obligations on a basis at least pari passu with such Hedging Obligations or Bank
Product Obligations and subject to the priority of payments set forth in Section
2.18 and Section 8.2;

 

(b)          Liens created under any Second Lien Note Document and securing the
Second Lien Obligations permitted hereunder, so long as such Liens are securing
the Second Lien Obligations in accordance with, and are subject to, the terms of
the First Lien/Second Lien Intercreditor Agreement;

 

(c)          Permitted Encumbrances;

 

(d)          Liens on any property or asset of the Issuer or any of its
Subsidiaries existing on the date hereof and set forth on Schedule 7.2; provided
that such Liens shall not apply to any other property or asset of the Issuer or
any Subsidiary;

 

(e)          Liens securing Indebtedness incurred pursuant to Section
7.1(a)(iii); provided that (i) such Lien attaches to such asset concurrently or
within ninety (90) days after the acquisition or the completion of the
construction or improvements thereof, (ii) such Lien granted is limited to the
specific fixed assets acquired, constructed or improved and the proceeds thereof
and (iii) the aggregate principal amount of Indebtedness initially secured by
such Lien is not more than the acquisition cost of the specific fixed assets on
which such Lien is granted;

 

(f)          Liens (other than the ABDC Lien) securing Indebtedness incurred
pursuant to Section 7.1(a)(xii); provided that (i) such Lien granted is limited
to the specific Inventory acquired and (ii) the aggregate principal amount of
Indebtedness initially secured by such Lien is not more than the acquisition
cost of the Inventory on which such Lien is granted; provided, further, that if,
at any time after the Closing Date, the Issuer or any of its Subsidiaries grants
such a Lien to a supplier or vendor and the aggregate principal amount of
Indebtedness outstanding that is owed to such supplier or vendor and its
Affiliates is in excess of $10,000,000, the Issuer or such Subsidiary shall use
commercially reasonable efforts to enter into an intercreditor agreement (which
shall contain terms and conditions that are substantially consistent with, but
no less favorable to the Purchasers than, the ABDC Intercreditor Agreement)
pursuant to which the Lien securing such Indebtedness owed to such supplier or
vendor (and its affiliates) shall be subordinated to the Liens securing the
Obligations;

 

(g)          any Lien existing on any fixed assets prior to the acquisition
thereof by the Issuer or any of its Subsidiaries or existing on any fixed assets
of any Person that becomes a Subsidiary; provided that (i) such Lien was not
created in contemplation of or in connection with such acquisition or such
Person becoming a Subsidiary, (ii) such Lien does not apply to any other
property of the Issuer or any of its Subsidiaries, and (iii) such Lien secures
only those obligations which it secures on the date of such acquisition or the
date such Person becomes a Subsidiary;

 

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(h)          extensions, renewals, or replacements of any Lien referred to in
clauses (b) through (g) of this Section; provided that the principal amount of
the Indebtedness secured thereby is not increased (except in respect of costs
and expenses in connection therewith or any interest that is paid-in-kind and
capitalized to the principal amount thereof in connection with such extension,
renewal or replacement) and that any such extension, renewal or replacement is
limited to the assets originally encumbered thereby;

 

(i)          the ABDC Lien so long as such Liens are subordinated to the Liens
securing the Obligations pursuant to the terms of the ABDC Intercreditor
Agreement; and

 

(j)          Liens on cash collateral for letters of credit permitted pursuant
to Section 7.1(a)(xix); provided that the amount of such cash collateral shall
not exceed 105% of the face amount of such letters of credit.

 

Section 7.3           Fundamental Changes.

 

(a)          The Issuer will not, and will not permit any of its Subsidiaries
to, merge into or consolidate into any other Person, or permit any other Person
to merge into or consolidate with it, or sell, lease, transfer or otherwise
dispose of (in a single transaction or a series of transactions) all or
substantially all of its assets (in each case, whether now owned or hereafter
acquired) (except as permitted by Section 7.6) or all or substantially all of
the Capital Stock of any of its Subsidiaries (in each case, whether now owned or
hereafter acquired) or liquidate or dissolve; provided that if, at the time
thereof and immediately after giving effect thereto, no Event of Default shall
have occurred and be continuing, (i) the Issuer or any Subsidiary may merge with
a Person if the Issuer (or such Subsidiary if the Issuer is not a party to such
merger) is the surviving Person, (ii) any Subsidiary may merge into another
Subsidiary, provided that if any party to such merger is a Subsidiary Note
Party, the Subsidiary Note Party shall be the surviving Person, (iii) any
Subsidiary may sell, transfer, lease or otherwise dispose of all or
substantially all of its assets to the Issuer or to a Subsidiary Note Party, and
(iv) any Subsidiary may liquidate or dissolve if the Issuer determines in good
faith that such liquidation or dissolution is in the best interests of the
Issuer.

 

(b)          The Issuer will not, and will not permit any of its Subsidiaries
to, engage in any business other than a Permitted Business.

 

Section 7.4           Investments, Loans. The Issuer will not, and will not
permit any of its Subsidiaries to, purchase, hold or acquire (including pursuant
to any merger with any Person that was not a wholly owned Subsidiary prior to
such merger) any Capital Stock, evidence of Indebtedness or other securities
(including any option, warrant, or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, Guarantee any obligations
of, or make or permit to exist any investment or any other interest in, any
other Person, or make any Acquisition (all of the foregoing being collectively
called “Investments”), or purchase or otherwise acquire (in one transaction or a
series of transactions) any assets of any other Person that constitute a
business unit, or create or form any Subsidiary, except:

 

(a)          Investments existing on the date hereof and set forth on Schedule
7.4 (including Investments in Subsidiaries that are Note Parties);

 

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(b)          Investments in cash and Cash Equivalents;

 

(c)          Guarantees by the Issuer and its Subsidiaries constituting
Indebtedness permitted by Section 7.1;

 

(d)          Investments made by the Issuer in or to any Subsidiary and by any
Subsidiary to the Issuer or in or to another Subsidiary; provided, that (i) in
the case of any Investment in the form of Indebtedness owed by a Note Party to a
Subsidiary that is not a Note Party, such Indebtedness (and any related
Guarantee provided by any Note Party) shall be subordinated to the Obligations
on terms and pursuant to documentation in form and substance reasonably
satisfactory to the Required Purchasers and (ii) the aggregate principal amount
of all Investments made by a Note Party to a Subsidiary that is not a Note Party
shall not exceed the greater of (A) $10,000,000 and (B) 1.50% of Consolidated
Total Assets (net of cash actually received by the Issuer or any such Subsidiary
in respect of any such Investments and determined without regard to any
write-downs or write-offs of any investments, loans or advances in connection
therewith);

 

(e)          loans or advances to employees, officers or directors of the Issuer
or any of its Subsidiaries in the ordinary course of business for travel,
entertainment, relocation and related expenses; provided that the aggregate
amount of all such loans and advances shall not exceed $2,000,000 at any time
outstanding;

 

(f)          Hedging Transactions not prohibited by Section 7.10;

 

(g)          Investments received in satisfaction or partial satisfaction from
financially troubled debtors or in connection with the bankruptcy or
reorganization of suppliers or customers;

 

(h)          Investments consisting of deposits, expense prepayments, accounts
receivable arising, trade debt granted and other credits extended to suppliers,
distributors or marketers in the ordinary course of business;

 

(i)          Investments received as the non-cash portion of consideration
received for dispositions not prohibited by Section 7.6;

 

(j)          other Investments (other than Investments in any Subsidiary that is
not a Note Party) which do not exceed $8,000,000 in the aggregate over the term
of this Agreement; and

 

(k)          Permitted Acquisitions.

 

Notwithstanding the foregoing, in no event shall the Issuer or any of its
Subsidiaries make any investment in any Subsidiary formed for the purpose of
holding assets of the Issuer and its Subsidiaries constituting the Issuer’s and
its Subsidiaries’ PBM line of business.

 

For purposes of determining the amount of any Investment outstanding for
purposes of this Section 7.4, such amount shall be deemed to be the cost of such
Investment when made, purchased or acquired, net of any amount representing
return of (but not return on) such Investment and without regard to any
forgiveness of Indebtedness.

 

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Section 7.5           Restricted Payments. The Issuer will not, and will not
permit any of its Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, except:

 

(a)          dividends payable by the Issuer solely in interests of any class of
its common equity;

 

(b)          Restricted Payments made by any Subsidiary to the Issuer or to
another Subsidiary; provided that (i) if such Restricted Payment is made by a
Subsidiary that is not wholly owned by the Issuer or another wholly owned
Subsidiary of the Issuer, such Restricted Payment shall be made on at least a
pro rata basis with any other shareholders of such non-wholly owned Subsidiary
and (ii) other than any Restricted Payments consisting solely of required tax
payments arising by virtue of any Subsidiary Note Party being a pass-through
entity or being a member of a consolidated or other similar group for income tax
purposes, if such Restricted Payment is made by a Subsidiary Note Party to a
Subsidiary that is not a Note Party, no Default or Event of Default has occurred
and is continuing before and immediately after giving effect to such payment;

 

(c)          payments made by the Issuer under the ABDC Prime Vendor Agreement,
to the extent permitted by the ABDC Intercreditor Agreement;

 

(d)          scheduled payments of principal, interest and other amounts with
respect to Subordinated Debt to the extent permitted by the terms of such
Indebtedness and by the terms of any subordination agreement applicable thereto;

 

(e)          Restricted Payments in the form of a non-cash repurchase of Capital
Stock of the Issuer that is deemed to occur upon the exercise of stock options,
warrants or other convertible or exchangeable securities to the extent that such
Capital Stock represents a portion of the exercise price of those securities, in
each case, pursuant to any equity-based compensation or incentive plan of the
Issuer;

 

(f)          dividends made in cash in lieu of the issuance of fractional shares
of Capital Stock of the Issuer in connection with the exercise of warrants,
options or other securities convertible into, or exchangeable for, Capital Stock
of the Issuer pursuant to any equity-based compensation or incentive plan of the
Issuer; and

 

(g)          cash dividends, distributions, and share repurchases by the Issuer
in respect of the Issuer’s common Capital Stock so long as: (i) the aggregate
amount of such cash dividends, distributions, and share repurchases does not
exceed the Available Amount, (ii) after giving pro forma effect to such cash
dividend, distribution, or share repurchase, the Consolidated Total Net Leverage
Ratio is less than or equal to 2.50 to 1.00, calculated as of the last day of
the most recently ended Fiscal Quarter for which financial statements are
required to have been delivered pursuant to Section 5.1(b), and (iii) at the
time of such cash dividend, distribution, or share repurchase and after giving
effect thereto, no Default or Event of Default exists.

 

Section 7.6           Sale of Assets. The Issuer will not, and will not permit
any of its Subsidiaries to, convey, sell, lease, assign, transfer or otherwise
dispose of any of its assets, business or property or, in the case of any
Subsidiary, any shares of such Subsidiary’s Capital Stock, in each case whether
now owned or hereafter acquired, to any Person other than the Issuer or a
Subsidiary Note Party (or to qualify directors if required by applicable law),
except:

 

(a)          the sale or other disposition of damaged, scrap, obsolete or worn
out property disposed of in the ordinary course of business;

 

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(b)          the sale of inventory in the ordinary course of business;

 

(c)          the sale or other disposition of cash and Cash Equivalents in the
ordinary course of business;

 

(d)          the issuance of Capital Stock by any Subsidiary of the Issuer
issued to the Issuer or any Subsidiary Note Party so long as such issuance does
not result in a Change in Control;

 

(e)          the occurrence of any casualty event, condemnation, eminent domain
or other similar proceeding with respect to any assets or property of the Issuer
or any of its Subsidiaries (provided that the Net Cash Proceeds thereof are used
to prepay the Notes in accordance with Section 2.9(a)); and

 

(f)          any other sale or disposition of assets not otherwise described in
this Section 7.6 not to exceed $1,000,000 in the aggregate over the term of this
Agreement, so long as (i) at least 75% of the aggregate consideration received
in respect of such sale or disposition is received in cash or Cash Equivalents,
(ii) such sales and dispositions shall be for fair market value (provided that
the Net Cash Proceeds thereof are used to prepay the Notes in accordance with
Section 2.9(a)) and (iii) such sales and dispositions are made to a Person that
is not an Affiliate of the Issuer.

 

Section 7.7           Transactions with Affiliates. The Issuer will not, and
will not permit any of its Subsidiaries to, sell, lease or otherwise transfer
any property or assets to, or purchase, lease or otherwise acquire any property
or assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except:

 

(a)          in the ordinary course of business at prices and on terms and
conditions not less favorable to the Issuer or such Subsidiary than could be
obtained on an arm’s-length basis from unrelated third parties;

 

(b)          transactions (i) between or among the Issuer and any Subsidiary
Note Party not involving any other Affiliates (other than any other Subsidiary
Note Party) or (ii) between or among the Issuer or any Subsidiary Note Party and
any Subsidiary that is not a Note Party that are not otherwise prohibited by
this Agreement (in each case, subject to the terms and conditions therefor, if
any);

 

(c)          any Restricted Payment permitted by Section 7.5;

 

(d)          transactions in respect of compensation or employment, separation
and severance of officers, directors or employees and the establishment and
maintenance of benefit programs or arrangements with employees, officers or
directors, including vacation plans, health and life insurance plans, deferred
compensation plans and retirement or savings plans and similar plans or equity
incentive or equity option plans, in each case, in the ordinary course of
business; and

 

(e)          any transaction set forth on Schedule 7.7 as of the Closing Date.

 

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Section 7.8           Restrictive Agreements. The Issuer will not, and will not
permit any of its Subsidiaries to, directly or indirectly, enter into, incur or
permit to exist any agreement that prohibits, restricts or imposes any condition
upon (a) the ability of the Issuer or any of its Subsidiaries to create, incur
or permit any Lien upon any of its assets or properties, whether now owned or
hereafter acquired, or (b) the ability of any of its Subsidiaries to pay
dividends or other distributions with respect to its Capital Stock, to make or
repay loans or advances to the Issuer or any other Subsidiary thereof, to
Guarantee Indebtedness of the Issuer or any other Subsidiary thereof or to
transfer any of its property or assets to the Issuer or any other Subsidiary
thereof; provided that (i) the foregoing shall not apply to restrictions or
conditions imposed by law or by this Agreement, any other Note Document, the
Second Lien Note Purchase Agreement or any other Second Lien Note Documents,
(ii) the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary pending such sale,
provided such restrictions and conditions apply only to the Subsidiary that is
sold and such sale is permitted hereunder, (iii) clause (a) shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions and conditions
apply only to the property or assets securing such Indebtedness, (iv) clause (a)
shall not apply to customary provisions in leases, licenses, licensing
agreements and other contracts restricting the assignment thereof and (v) the
foregoing shall not apply to any restrictions and conditions imposed on any
Foreign Subsidiary by the terms of any Indebtedness of such Foreign Subsidiary
permitted to be incurred hereunder, and (vi) the foregoing shall not apply to
any Specified Strategic Joint Venture.

 

Section 7.9           Sale and Leaseback Transactions. The Issuer will not, and
will not permit any of its Subsidiaries to, enter into any arrangement, directly
or indirectly, whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereinafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property sold or
transferred.

 

Section 7.10         Hedging Transactions. The Issuer will not, and will not
permit any of its Subsidiaries to, enter into any Hedging Transaction, other
than Hedging Transactions entered into in the ordinary course of business to
hedge or mitigate risks to which the Issuer or any of its Subsidiaries is
exposed in the conduct of its business or the management of its liabilities.
Solely for the avoidance of doubt, the Issuer acknowledges that a Hedging
Transaction entered into for speculative purposes or of a speculative nature
(which shall be deemed to include any Hedging Transaction under which the Issuer
or any of its Subsidiaries is or may become obliged to make any payment (a) in
connection with the purchase by any third party of any Capital Stock or any
Indebtedness or (b) as a result of changes in the market value of any Capital
Stock or any Indebtedness) is not a Hedging Transaction entered into in the
ordinary course of business to hedge or mitigate risks.

 

Section 7.11         Amendment to Material Documents. The Issuer will not, and
will not permit any of its Subsidiaries to, amend, modify or waive any of its
rights under (a) its certificate of incorporation, bylaws or other
organizational documents in any manner that would reasonably be expected to be
materially adverse to the Purchasers (it being agreed that any such amendment or
modification effected in accordance with Section 5.2(x) or in order to
consummate a transaction permitted by Section 7.3 shall not be deemed to be
materially adverse to the Purchasers), (b) any Material Agreements (other than
to the extent expressly covered by clauses (c) and (d) below) in any manner that
would reasonably be expected to be adverse to the Purchasers in any material
respect, (c) any Second Lien Note Document, except as permitted by the First
Lien/Second Lien Intercreditor Agreement or (d) the Senior Notes Indenture or
the Senior Notes (or any documentation governing any Permitted Refinancing
Indebtedness) if, after giving effect to any such amendment, modification or
waiver, the Senior Notes Indenture and the Senior Notes (or such documentation
governing any Permitted Refinancing Indebtedness) as so amended, modified or
waived would not meet each of the requirements set forth in the proviso to the
definition of “Permitted Refinancing Indebtedness”.

 

Section 7.12         Accounting Changes. The Issuer will not, and will not
permit any of its Subsidiaries to, make any significant change in accounting
treatment or reporting practices, except as required by GAAP, or change the
Fiscal Year of the Issuer or of any of its Subsidiaries, except to change the
Fiscal Year of a Subsidiary to conform its Fiscal Year to that of the Issuer.

 

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Section 7.13         Compliance with Anti-Terrorism and Anti-Corruption Laws and
Sanctions. No Note Party shall, and no Note Party shall permit any of its
Affiliates to: (a) (i) violate any Anti-Terrorism Laws or Anti-Corruption Laws,
(ii) engage in any transaction, investment, undertaking or activity that
conceals the identity, source or destination of the proceeds from any category
of prohibited offenses designated by the Organization for Economic Co-operation
and Development’s Financial Action Task Force on Money Laundering, (iii) become
(including by virtue of being owned or controlled by a Blocked Person), own or
control a Blocked Person or any other Sanctioned Person or (iv) knowingly permit
any of their respective Affiliates to violate these laws or engage in these
actions; (b) use, directly or indirectly, the proceeds of the Notes, or lend,
contribute or otherwise make available such proceeds to any Person, (x) to fund
any activities or business of or with any Sanctioned Person or Sanctioned
Country, or (y) in any other manner that would result in a violation of
Sanctions or any Anti-Terrorism Laws or Anti-Corruption Laws by any Person
(including any Person participating in the Notes, whether as underwriter,
advisor, investor, or otherwise); or (c) (i) deal in, or otherwise engage in any
transaction related to, any property or interests in property blocked pursuant
to any Anti-Terrorism Law or Sanctions, or (ii) engage in or conspire to engage
in any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempt to violate, any of the prohibitions set forth in any
Anti-Terrorism Law or Sanctions or (iii) knowingly permit any of their
respective Affiliates to do any of the foregoing.

 

Section 7.14         Health Care Matters. Without limiting or being limited by
any other provision of any Note Document, and except as would not reasonably be
expected to have a Material Adverse Effect, the Issuer will not, and will not
permit any of its Subsidiaries to, (i) fail to maintain in effect all Licenses,
Company Accreditations and Company Reimbursement Approvals, or (ii) engage in
any activity that constitutes or, with the giving of notice, the passage of
time, or both, would (a) result in a violation of any License, Company
Accreditation or Company Reimbursement Approval or any Healthcare Laws, or (b)
cause the Issuer or any of its Subsidiaries not to be in compliance with any
Healthcare Laws.

 

Section 7.15         ERISA. No Note Party shall, or shall cause or permit any
ERISA Affiliate to, cause or permit to occur an ERISA Event to the extent such
ERISA Event would reasonably be expected to have a Material Adverse Effect.

 

Section 7.16         Payments in Respect of Senior Notes. Except for the
refinancing of the Senior Notes with the proceeds of Permitted Refinancing
Indebtedness, the Issuer will not, and will not permit any of its Subsidiaries
to, make any optional payment or optional prepayment of principal of, premium,
if any, interest, fees or other amounts on or with respect to, or any
redemption, purchase, retirement, defeasance, sinking fund or similar payment or
claim for rescission with respect to, the Senior Notes (or any Permitted
Refinancing Indebtedness).

 

Section 7.17         Anti-Layering. Notwithstanding anything herein to the
contrary, no Note Party shall, and no Note Party shall permit any of its
Subsidiaries to, create or incur any Indebtedness which is secured by a Lien on
the Collateral, which Lien is subordinated in right of priority to the Lien
securing the Second Lien Obligations, unless the Lien securing such Indebtedness
is also subordinated in right of priority in the same manner and to the same
extent, to the Lien securing the Obligations.

 

Section 7.18         Second Lien Obligations. No Note Party shall, and no Note
Party shall permit any Subsidiary or Affiliate of such Note Party to, hold any
Second Lien Obligations.

 

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ARTICLE VIII

EVENTS OF DEFAULT

 

Section 8.1           Events of Default. If any of the following events (each,
an “Event of Default”) shall occur:

 

(a)          the Issuer shall fail to pay any principal of any Note, when and as
the same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment or otherwise; or

 

(b)          the Issuer shall fail to pay any interest on any Note or any fee,
Prepayment Premium, premium or any other amount (other than an amount payable
under clause (a) of this Section or an amount related to a Bank Product
Obligation) payable under this Agreement or any other Note Document, when and as
the same shall become due and payable, and such failure shall continue
unremedied for a period of five (5) Business Days; or

 

(c)          any representation or warranty made or deemed made by or on behalf
of the Issuer or any of its Subsidiaries in or in connection with this Agreement
or any other Note Document (including the Schedules attached hereto and
thereto), or in any amendments or modifications hereof or waivers hereunder, or
in any certificate, report, financial statement or other document submitted to
the Collateral Agent or the Purchasers by any Note Party or any representative
of any Note Party pursuant to or in connection with this Agreement or any other
Note Document shall prove to be incorrect in any material respect (other than
any representation or warranty that is expressly qualified by a Material Adverse
Effect or other materiality, in which case such representation or warranty shall
prove to be incorrect in any respect) when made or deemed made; or

 

(d)          the Issuer shall fail to observe or perform any covenant or
agreement contained in (i) Section 5.1 and such failure shall remain unremedied
for five (5) days or (ii) Section 5.2, 5.3 (with respect to the Issuer’s legal
existence), 5.7, 5.9, 5.11, 5.16, Article VI or Article VII; or

 

(e)          (i) any Note Party shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those referred to in clauses
(a), (b) and (d) of this Section) or any other Note Document or related to any
Bank Product Obligation, and such failure shall remain unremedied for 30 days
after the earlier of (A) any Responsible Officer of the Issuer becomes aware of
such failure, or (B) written notice thereof shall have been given to the Issuer
by the Collateral Agent or any Purchaser or (ii) any “Event of Default” as
defined in any Note Document shall have occurred and be continuing; or

 

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(f)          (i) the Issuer or any of its Subsidiaries (whether as primary
obligor or as guarantor or other surety) shall fail to pay any principal of, or
premium or interest on, or any other amount owed under the ABDC Obligations, any
Material Indebtedness (other than any Hedging Obligations) or any Material
Permitted Seller Financing that is outstanding, in each case, when and as the
same shall become due and payable (whether at scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument evidencing or governing the ABDC Obligations, such Material
Indebtedness or such Material Permitted Seller Financing, as applicable; or any
other event shall occur or condition shall exist under any agreement or
instrument relating to the ABDC Obligations (including, without limitation, any
default under the ABDC Prime Vendor Agreement), any Material Indebtedness or any
Material Permitted Seller Financing and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the effect
of such event or condition is to accelerate, or permit the acceleration of, the
maturity of the ABDC Obligations, such Material Indebtedness or such Material
Permitted Seller Financing; or the ABDC Obligations, any Material Indebtedness
or any Material Permitted Seller Financing shall be declared to be due and
payable, or required to be prepaid or redeemed (other than by a regularly
scheduled required prepayment or redemption), purchased or defeased, or any
offer to prepay, redeem, purchase or defease the ABDC Obligations, such
Indebtedness or such Material Permitted Seller Financing shall be required to be
made, in each case prior to the stated maturity thereof or (ii) there occurs
under any Hedging Transaction an Early Termination Date (as defined in such
Hedging Transaction) resulting from (A) any event of default under such Hedging
Transaction as to which the Issuer or any of its Subsidiaries is the Defaulting
Party (as defined in such Hedging Transaction) and the Hedge Termination Value
owed by the Issuer or such Subsidiary as a result thereof is greater than
$12,500,000 or (B) any Termination Event (as so defined) under such Hedging
Transaction as to which the Issuer or any Subsidiary is an Affected Party (as so
defined) and the Hedge Termination Value owed by the Issuer or such Subsidiary
as a result thereof is greater than $12,500,000 and is not paid; or

 

(g)          the Issuer or any of its Subsidiaries shall (i) commence a
voluntary case or other proceeding or file any petition seeking liquidation,
reorganization or other relief under any federal, state or foreign bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a custodian, trustee, receiver, liquidator or other similar
official of it or any substantial part of its property, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (i) of this Section, (iii) apply for
or consent to the appointment of a custodian, trustee, receiver, liquidator or
other similar official for the Issuer or any such Subsidiary or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors, or (vi) take any action for the
purpose of effecting any of the foregoing; or

 

(h)          an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the Issuer or any of its Subsidiaries or its debts, or any
substantial part of its assets, under any federal, state or foreign bankruptcy,
insolvency or other similar law now or hereafter in effect or (ii) the
appointment of a custodian, trustee, receiver, liquidator or other similar
official for the Issuer or any of its Subsidiaries or for a substantial part of
its assets, and in any such case, such proceeding or petition shall remain
undismissed for a period of 60 days or an order or decree approving or ordering
any of the foregoing shall be entered; or

 

(i)          the Issuer or any of its Subsidiaries shall become unable to
generally pay, shall admit in writing its inability to generally pay, or shall
fail to pay, its debts as they become due; or

 

(j)          (i) an ERISA Event shall have occurred that, when taken together
with other ERISA Events that have occurred, would reasonably be expected to
result in liability to the Issuer and its Subsidiaries in an aggregate amount
exceeding $12,500,000, (ii) there is or arises an Unfunded Pension Liability
(not taking into account Plans with negative Unfunded Pension Liability) in an
aggregate amount exceeding $12,500,000, or (iii) there is or arises any
potential Withdrawal Liability in an aggregate amount exceeding $12,500,000; or

 

(k)          any final non-consensual judgment or order for the payment of money
(to the extent not covered by insurance as to which the insurer has been
notified of such judgment and has not denied coverage in writing) in excess of
$12,500,000 individually (or, together with any related non-consensual judgment
or order, in the aggregate) shall be rendered against the Issuer or any of its
Subsidiaries, and either (i) enforcement proceedings shall have been commenced
by any creditor upon such non-consensual judgment or order or (ii) such
non-consensual judgment or order remains unvacated, unbounded or unstayed for a
period of 30 consecutive days; or

 

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(l)          any final non-monetary judgment or order shall be rendered against
the Issuer or any of its Subsidiaries that would reasonably be expected, either
individually or in the aggregate, to have a Material Adverse Effect, and there
shall be a period of 30 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect; or

 

(m)          a Change in Control shall occur or exist; or

 

(n)          all or any material portion or provision of the Guaranty and
Security Agreement, the ABDC Intercreditor Agreement, the First Lien/Second Lien
Intercreditor Agreement, or any other Note Document shall for any reason (other
than (x) solely as a result of any action or inaction on the part of the
Collateral Agent or any Purchaser, or (y) in accordance with its terms) cease to
be valid and binding on, or enforceable against, any Note Party, or any Note
Party shall so state in writing, or any Note Party shall seek to terminate its
obligation under the Guaranty and Security Agreement, the ABDC Intercreditor
Agreement, the First Lien/Second Lien Intercreditor Agreement, or any other Note
Document (other than the release of any guaranty or collateral in accordance
with Section 9.11 or any other release in accordance with the terms of such
document or otherwise in accordance with the terms hereof); or

 

(o)          any Lien purported to be created under any Collateral Document
shall fail or cease to be, or shall be asserted by any Note Party not to be, a
valid and perfected, and, except for Specified Permitted Liens, first priority
Lien on any Collateral (other than, in each case, solely as a result of any
action or inaction on the part of any Purchaser); or

 

(p)          (i) the commencement by any Governmental Authority of any
proceeding or hearing relating to the criminal and/or civil violation of any
Governmental Payor Arrangement or License of the Issuer or any of its
Subsidiaries, to the extent such proceeding or hearing would reasonably be
expected to have a Material Adverse Effect; (ii) there shall have occurred the
involuntary termination of, or the receipt by the Issuer or any of its
Subsidiaries of notice of the involuntary termination of, or the occurrence of
any event or condition which would, with the passage of time or the giving of
notice or both, constitute an event of default under or permit the involuntary
termination of, any Governmental Payor Arrangement, Third Party Payor
Arrangement, License, or Company Accreditation of the Issuer or any of its
Subsidiaries, except for involuntary terminations that would not be expected to
have a Material Adverse Effect; or (iii) the imposition of any overpayment in an
amount in excess of $5,000,000 by any Governmental Authority or Third Party
Payor under any Healthcare Law or pursuant to any Governmental Payor Arrangement
or Third Party Payor Arrangement, as applicable; or

 

(q)          the Issuer or any of its Subsidiaries or any of their respective
directors or officers is criminally convicted under any law or Requirement of
Law that would reasonably be expected to lead to (i) a forfeiture of a portion
of Collateral or (ii) exclusion from participation in any federal or state
health care program, including Medicare or Medicaid, and such exclusion would
reasonably be expected to result in a Material Adverse Effect;

 

then, and in every such event (other than an event with respect to the Issuer
described in clause (g) or (h) of this Section) and at any time thereafter
during the continuance of such event, the Required Purchasers may, by notice to
the Issuer, take any or all of the following actions, at the same or different
times: (i) terminate the Commitments, whereupon the Commitment of each Purchaser
shall terminate immediately, (ii) declare the principal of and any accrued
interest on the Notes, and all other Obligations owing hereunder, to be,
whereupon the same shall become, due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Issuer, (iii) exercise all remedies contained in any other
Note Document, and (iv) exercise any other remedies available at law or in
equity; provided that, if an Event of Default specified in either clause (g) or
(h) shall occur, the Commitments shall automatically terminate and the principal
of the Notes then outstanding, together with accrued interest thereon, and all
fees and all other Obligations shall automatically become due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Issuer.

 

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If the Notes are accelerated or otherwise become due prior to their maturity
date, in each case, as a result of an Event of Default (including, but not
limited to, upon the occurrence of an Event of Default specified in clause (g)
or (h) of Section 8.1 (including the acceleration of claims by operation of
law)), the amount of principal of and premium on the Notes that becomes due and
payable shall equal 100% of the principal amount of the Notes plus the
Prepayment Premium in effect on the date of such acceleration or such other
prior due date, as if such acceleration or other occurrence were a voluntary
prepayment of the Notes accelerated or otherwise becoming due. Without limiting
the generality of the foregoing, it is understood and agreed that if the Notes
are accelerated or otherwise become due prior to their maturity date, in each
case, in respect of any Event of Default (including, but not limited to, upon
the occurrence of an Event of Default specified in clause (g) or (h) of Section
8.1 (including the acceleration of claims by operation of law)), the Prepayment
Premium applicable with respect to a voluntary prepayment of the Notes will also
be due and payable on the date of such acceleration or such other prior due date
as though the Notes were voluntarily prepaid as of such date and shall
constitute part of the Obligations, in view of the impracticability and extreme
difficulty of ascertaining actual damages and by mutual agreement of the parties
as to a reasonable calculation of each Purchaser’s lost profits as a result
thereof.

 

Section 8.2           Application of Proceeds from Collateral. All proceeds from
each sale of, or other realization upon, all or any part of the Collateral by
any Secured Party after an Event of Default arises shall be applied as follows:

 

(a)          first, to the reimbursable expenses of the Collateral Agent
incurred in connection with such sale or other realization upon the Collateral,
until the same shall have been paid in full;

 

(b)          second, to all amounts owed to the Collateral Agent then due and
payable pursuant to any of the Note Documents, until the same shall have been
paid in full;

 

(c)          third, to all reimbursable expenses, if any, of the Purchasers then
due and payable pursuant to any of the Note Documents, until the same shall have
been paid in full;

 

(d)          fourth, to the fees, interest, Prepayment Premiums and premiums
then due and payable under the terms of this Agreement, until the same shall
have been paid in full;

 

(e)          fifth, to the aggregate outstanding principal amount of the Notes,
the Bank Product Obligations and the Net Mark-to-Market Exposure of the Hedging
Obligations that constitute Obligations, until the same shall have been paid in
full, allocated pro rata among the Secured Parties based on their respective pro
rata shares of the aggregate amount of such Notes, Bank Product Obligations and
Net Mark-to-Market Exposure of such Hedging Obligations; provided, however, that
no amount received from any Guarantor (including any proceeds of any sale of, or
other realization upon, all or any part of the Collateral owned by such
Guarantor) shall be applied to any Excluded Swap Obligation of such Guarantor;
and

 

(f)          sixth, to the extent any proceeds remain, to the Issuer or as
otherwise provided by a court of competent jurisdiction.

 

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All amounts allocated pursuant to the foregoing clauses third through fifth to
the Purchasers as a result of amounts owed to the Purchasers under the Note
Documents shall be allocated among, and distributed to, the Purchasers pro rata
based on their respective Pro Rata Shares.

 

Notwithstanding the foregoing, Bank Product Obligations and Hedging Obligations
shall be excluded from the application described above if the Collateral Agent
has not received written notice thereof (to the extent required by the terms
hereof), together with such supporting documentation as the Collateral Agent may
request, from the Bank Product Provider or the Purchaser-Related Hedge Provider,
as the case may be. Each Bank Product Provider or Purchaser-Related Hedge
Provider that has given the notice contemplated by the preceding sentence shall,
by such notice, be deemed to have acknowledged and accepted the appointment of
the Collateral Agent pursuant to the terms of Article IX hereof for itself and
its Affiliates as if a “Purchaser” party hereto.

 

ARTICLE IX

THE COLLATERAL AGENT

 

Section 9.1           Appointment of the Collateral Agent.

 

(a)          Each Purchaser irrevocably appoints Wells Fargo Bank, National
Association as the Collateral Agent and authorizes it to take such actions on
its behalf and to exercise such powers as are delegated to the Collateral Agent
under this Agreement and the other Note Documents. The Collateral Agent may
perform any of its duties hereunder or under the other Note Documents by or
through any one or more sub-agents or attorneys-in-fact appointed by the
Collateral Agent, and the Collateral Agent shall not be liable for the
negligence or misconduct of such sub-agents or attorneys-in-fact appointed with
due care. The Collateral Agent and any such sub-agent or attorney-in-fact may
perform any and all of its duties and exercise its rights and powers through
their respective Related Parties. The exculpatory provisions set forth in this
Article shall apply to any such sub-agent, attorney-in-fact or Related Party.
Without limiting the generality of the foregoing, each Secured Party (other than
the Collateral Agent) acknowledges that it has received a copy of the First
Lien/Second Lien Intercreditor Agreement, consents to and authorizes the
Collateral Agent’s execution and delivery thereof on behalf of such Secured
Party and agrees to be bound by the terms and provisions thereof, including any
purchase option contained therein.

 

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Section 9.2           Nature of Duties of the Collateral Agent. The Collateral
Agent shall not have any duties or obligations except those expressly set forth
in this Agreement and the other Note Documents. Without limiting the generality
of the foregoing, (a) the Collateral Agent shall not be subject to any fiduciary
or other implied duties, regardless of whether a Default or an Event of Default
has occurred and is continuing, (b) the Collateral Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
those discretionary rights and powers expressly contemplated by the Note
Documents that the Collateral Agent is directed to exercise in writing by the
Required Purchasers (or such other number or percentage of the Purchasers as
shall be necessary under the circumstances as provided in Section 10.2), and the
Collateral Agent shall, subject to the immediately following proviso, take any
action as directed by the Required Purchasers (or such other number or
percentage of the Purchasers as shall be necessary under the circumstances as
provided in Section 10.2), provided that the Collateral Agent shall not be
required to take any action that, in its opinion or the opinion of its counsel,
may expose the Collateral Agent to liability or that is contrary to any Note
Document or applicable law, including for the avoidance of doubt any action that
may be in violation of the automatic stay under any Debtor Relief Law or that
may effect a forfeiture, modification or termination of property of a Defaulting
Purchaser in violation of any Debtor Relief Law; and (c) except as expressly set
forth in the Note Documents, the Collateral Agent shall not have any duty to
disclose (unless required by a court or regulatory body), and shall not be
liable for the failure to disclose, any information relating to the Issuer or
any of its Subsidiaries that is communicated to or obtained by the Collateral
Agent or any of its Affiliates in any capacity. The Collateral Agent shall not
be liable for any action taken or not taken by it, its sub-agents or its
attorneys-in-fact with the consent or at the request of the Required Purchasers
(or such other number or percentage of the Purchasers set forth herein or in the
other Note Documents). The Collateral Agent shall not be deemed to have
knowledge of any Default or Event of Default unless a Responsible Officer of the
Collateral Agent (i) has actual knowledge thereof or (ii) receives written
notice thereof (which notice shall include an express reference to such event
being a “Default” or “Event of Default” hereunder), and the Collateral Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with any Note
Document, (ii) the contents of any certificate, report or other document
delivered hereunder or thereunder or in connection herewith or therewith, (iii)
the performance or observance of any of the covenants, agreements, or other
terms and conditions set forth in any Note Document, (iv) the validity,
enforceability, effectiveness or genuineness of any Note Document or any other
agreement, instrument or document, (v) the satisfaction of any condition set
forth in Article III or elsewhere in any Note Document, other than to confirm
receipt of items expressly required to be delivered to the Collateral Agent, or
(vi) any other matter hereunder or under the other Note Documents. The
Collateral Agent may consult with legal counsel (including counsel for the
Issuer) concerning all matters pertaining to such duties. In the event that the
Collateral Agent receives any notice or other communication pursuant to the
First Lien/Second Lien Intercreditor Agreement, the ABDC Intercreditor Agreement
or any other intercreditor agreement or subordination agreement, the Collateral
Agent shall promptly deliver a copy of such notice or other communication to
each of the Purchasers.

 

Section 9.3           Lack of Reliance on the Collateral Agent. Each of the
Purchasers acknowledges that it has, independently and without reliance upon the
Collateral Agent or any other Purchaser and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement, and that the Collateral Agent has not
been, and will not be, acting as an advisor, agent or fiduciary for such
Purchaser. Each of the Purchasers also acknowledges that it will, independently
and without reliance upon the Collateral Agent or any other Purchaser and based
on such documents and information as it has deemed appropriate, continue to make
its own decisions in taking or not taking any action under or based on this
Agreement, any related agreement or any document furnished hereunder or
thereunder.

 

Section 9.4           Certain Rights of the Collateral Agent.

 

(a)          Notwithstanding anything else to the contrary herein, whenever
reference is made in this Agreement to any discretionary action by, consent,
designation, specification, requirement or approval of, notice, request or other
communication from, or other direction given or action to be undertaken or to be
(or not to be) suffered or omitted by the Collateral Agent or to any election,
decision, opinion, acceptance, use of judgment, expression of satisfaction,
reasonable satisfaction or other exercise of discretion, rights or remedies to
be made (or not to be made) by the Collateral Agent, it is understood that in
all cases the Collateral Agent shall be acting at the direction of the Required
Purchasers. In all cases, the Collateral Agent shall be fully justified in
failing or refusing to take any such action under this Agreement if it shall not
have received such written instruction, advice or concurrence of the Required
Purchasers, as it deems appropriate. Without limiting the foregoing, no
Purchaser shall have any right of action whatsoever against the Collateral Agent
as a result of the Collateral Agent acting or refraining from acting hereunder
in accordance with the instructions of the Required Purchasers where required by
the terms of this Agreement. If instructed to take action outside of the scope
of its duties set forth herein, the Collateral Agent shall not be required to
act until it shall have received such indemnity or security from the Purchasers
as it may reasonably require for all costs, claims, losses, expenses (including
reasonable legal fees and expenses) and liabilities which it will or may expend
or incur in complying or continuing to comply with such instructions.

 

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(b)          For purposes of clarity, phrases such as “satisfactory to the
Collateral Agent”, “approved by the Collateral Agent”, “acceptable to the
Collateral Agent”, “in the Collateral Agent’s discretion”, and phrases of
similar import, except as otherwise expressly provided herein, authorize and
permit the Collateral Agent to act or decline to act in its discretion.

 

Section 9.5           Reliance by the Collateral Agent. The Collateral Agent
shall be entitled to rely upon, and shall not incur any liability for relying
upon, any notice, request, certificate, consent, statement, instrument, document
or other writing (including any electronic message, posting or other
distribution) believed by it to be genuine and to have been signed, sent or made
by the proper Person. The Collateral Agent may also rely upon any statement made
to it orally or by telephone and shall not incur any liability for relying
thereon. The Collateral Agent may consult with legal counsel (including counsel
for the Issuer), independent public accountants and other experts selected by it
and shall not be liable for any action taken or not taken by it in accordance
with the advice of such counsel, accountants or experts.

 

Section 9.6           The Collateral Agent in its Individual Capacity. The
Person serving as the Collateral Agent shall have the same rights and powers
under this Agreement and any other Note Document in its capacity as a Purchaser
(if such Person is a Purchaser) as any other Purchaser and may exercise or
refrain from exercising the same as though it were not the Collateral Agent; and
the terms “Purchasers”, “Required Purchasers”, or any similar terms shall,
unless the context clearly otherwise indicates, include the Collateral Agent in
its individual capacity (if the Collateral Agent in its individual capacity is a
Purchaser). The Person acting as the Collateral Agent and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Issuer or any Subsidiary or Affiliate of the Issuer as if it
were not the Collateral Agent hereunder.

 

Section 9.7           No Filing Obligation. For the avoidance of doubt, nothing
herein shall require the Collateral Agent to file financing statements,
termination statements or continuation statements, or be responsible for
maintaining the security interests purported to be created as described herein
(except for the safe custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder or under any other Note
Documents) and such responsibility shall be solely that of the Note Parties;
provided that, upon the written direction of the Required Purchasers, the
Collateral Agent shall file financing statements, termination statements or
continuation statements. The Collateral Agent shall not be responsible for and
makes no representation as to the existence, genuineness, value or protection of
any Collateral, for the legality, effectiveness or sufficiency of any Note
Document, or for the creation, perfection (or maintenance of such perfection),
priority, sufficiency or protection of any liens securing the Obligations.

 

Section 9.8           Successor Collateral Agent.

 

(a)          The Collateral Agent may resign at any time by giving notice
thereof to the Purchasers and the Issuer. Upon any such resignation, the
Required Purchasers shall have the right to appoint a successor Collateral
Agent, subject to approval by the Issuer provided that no Default or Event of
Default shall exist at such time. If no successor Collateral Agent shall have
been so appointed, and shall have accepted such appointment within 30 days after
the retiring Collateral Agent gives notice of resignation, then the retiring
Collateral Agent may, on behalf of the Purchasers, appoint a successor
Collateral Agent which shall be organized under the laws of the United States or
any state thereof or maintain an office in the United States.

 

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(b)          Upon the acceptance of its appointment as the Collateral Agent
hereunder by a successor, such successor Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Collateral Agent, and the retiring Collateral Agent shall be
discharged from its duties and obligations under this Agreement and the other
Note Documents. If, within 45 days after written notice is given of the retiring
Collateral Agent’s resignation under this Section, no successor Collateral Agent
shall have been appointed and shall have accepted such appointment, then on such
45th day (i) the retiring Collateral Agent’s resignation shall become effective
(except the retiring Collateral Agent shall continue to hold such collateral
security as nominee until such time as a successor Collateral Agent is appointed
or the Collateral Agent can apply to a court of competent jurisdiction to
deposit funds with such court), (ii) the retiring Collateral Agent shall
thereupon be discharged from its duties and obligations under the Note Documents
and (iii) the Required Purchasers shall thereafter perform all duties of the
retiring Collateral Agent under the Note Documents until such time as the
Required Purchasers appoint a successor Collateral Agent as provided above.
After any retiring Collateral Agent’s resignation hereunder, the rights,
protections and indemnities afforded to the Collateral Agent in the Note
Documents shall continue in effect for the benefit of such retiring or removed
Collateral Agent and its representatives and agents in respect of any actions
taken or not taken by any of them while it was serving as the Collateral Agent.

 

(c)          Any corporation into which the Collateral Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Collateral Agent shall
be a party, or any corporation succeeding to all or substantially all of the
Collateral Agent’s business, shall be the successor of the Collateral Agent
hereunder, provided such corporation shall be otherwise qualified and eligible
under this Article, without the execution or filing of any paper or any further
act on the part of any of the parties hereto.

 

Section 9.9           The Collateral Agent May File Proofs of Claim.

 

(a)          In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to any Note Party, the Collateral Agent
(irrespective of whether the principal of any Note shall then be due and payable
as herein expressed or by declaration or otherwise and irrespective of whether
the Collateral Agent shall have made any demand on the Issuer) shall be entitled
and empowered, by intervention in such proceeding or otherwise:

 

(i)          to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Notes 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 Purchasers and the Collateral Agent
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Purchasers and the Collateral Agent and its agents and
counsel and all other amounts due the Purchasers and the Collateral Agent
hereunder or in connection herewith) allowed in such judicial proceeding; and

 

(ii)         to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same.

 

(b)          Any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is hereby
authorized by each Purchaser to make such payments to the Collateral Agent and,
if the Collateral Agent shall consent to the making of such payments directly to
the Purchasers, to pay to the Collateral Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of the Collateral Agent and
its agents and counsel, and any other amounts due the Collateral Agent under
this Agreement.

 

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Nothing contained herein shall be deemed to authorize the Collateral Agent to
authorize or consent to or accept or adopt on behalf of any Purchaser any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Purchaser or to authorize the Collateral Agent
to vote in respect of the claim of any Purchaser in any such proceeding.

 

Section 9.10         Authorization to Execute Other Note Documents. Each
Purchaser hereby authorizes the Collateral Agent to execute on behalf of all
Purchasers all Note Documents (including, without limitation, the First
Lien/Second Lien Intercreditor Agreement, the Collateral Documents and any
subordination agreements) other than this Agreement.

 

Section 9.11         Collateral and Guaranty Matters. The Purchasers irrevocably
authorize the Collateral Agent, at its option and in its discretion:

 

(a)          to release any Lien on any property granted to or held by the
Collateral Agent under any Note Document (i) upon the payment in full of all
Obligations (other than Hedging Obligations owed by any Note Party to any
Purchaser-Related Hedge Provider, Bank Product Obligations and indemnities and
other contingent obligations not then due and payable and as to which no claim
has been made), (ii) that is sold or to be sold as part of or in connection with
any sale permitted hereunder or under any other Note Document, or (iii) if
approved, authorized or ratified in writing in accordance with Section 10.2; and

 

(b)          to release any Note Party from its obligations under the applicable
Collateral Documents if such Person ceases to be a Subsidiary as a result of a
transaction permitted hereunder.

 

Upon confirmation in writing from the Required Purchasers of the Collateral
Agent’s authority to release its interest in particular types or items of
property, or to release any Note Party from its obligations under the applicable
Collateral Documents pursuant to this Section, the Collateral Agent will so
release its interest such types or items of property, or release such Note Party
from its obligations under the applicable Collateral Documents. In each case as
specified in this Section, the Collateral Agent is authorized, at the Issuer’s
expense, to execute and deliver to the applicable Note Party such documents as
such Note Party may reasonably request to evidence the release of such item of
Collateral from the Liens granted under the applicable Collateral Documents, or
to release such Note Party from its obligations under the applicable Collateral
Documents, in each case in accordance with the terms of the Note Documents and
this Section.

 

Section 9.12         Right to Realize on Collateral and Enforce Guarantee.
Anything contained in any of the Note Documents to the contrary notwithstanding,
the Issuer, the Collateral Agent and each Purchaser hereby agree that (i) no
Purchaser shall have any right individually to realize upon any of the
Collateral or to enforce the Collateral Documents, it being understood and
agreed that all powers, rights and remedies under the Collateral Documents may
be exercised solely by the Collateral Agent, and (ii) in the event of a
foreclosure by the Collateral Agent on any of the Collateral pursuant to a
public or private sale or other disposition, the Collateral Agent or any
Purchaser may be the purchaser or licensor of any or all of such Collateral at
any such sale or other disposition and the Collateral Agent, as agent for and
representative of the Purchasers (but not any Purchaser or Purchasers in its or
their respective individual capacities unless the Required Purchasers shall
otherwise agree in writing), shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Obligations
as a credit on account of the purchase price for any collateral payable by the
Collateral Agent at such sale or other disposition.

 

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Section 9.13         Secured Bank Product Obligations and Hedging Obligations.
No Bank Product Provider or Purchaser-Related Hedge Provider that obtains the
benefits of Section 8.2, the Collateral Documents or any Collateral by virtue of
the provisions hereof or of any other Note Document shall have any right to
notice of any action or to consent to, direct or object to any action hereunder
or under any other Note Document or otherwise in respect of the Collateral
(including the release or impairment of any Collateral) other than in its
capacity as a Purchaser and, in such case, only to the extent expressly provided
in the Note Documents. Notwithstanding any other provision of this Article to
the contrary, the Collateral Agent shall not be required to verify the payment
of, or that other satisfactory arrangements have been made with respect to, Bank
Product Obligations and Hedging Obligations unless the Collateral Agent has
received written notice of such Obligations, together with such supporting
documentation as the Collateral Agent may request, from the applicable Bank
Product Provider or Purchaser-Related Hedge Provider, as the case may be.

 

Section 9.14         ABDC INTERCREDITOR AGREEMENT. EACH PURCHASER (A) AGREES
THAT IT WILL BE BOUND BY, AND WILL TAKE NO ACTIONS CONTRARY TO, THE PROVISIONS
OF THE ABDC INTERCREDITOR AGREEMENT, (B) AUTHORIZES AND INSTRUCTS THE COLLATERAL
AGENT TO ENTER INTO THE ABDC INTERCREDITOR AGREEMENT AS COLLATERAL AGENT ON
BEHALF OF SUCH PURCHASER, AND TO TAKE ALL ACTIONS (AND EXECUTE ALL DOCUMENTS)
REQUIRED (OR DEEMED ADVISABLE) IN ACCORDANCE WITH THE TERMS OF THE ABDC
INTERCREDITOR AGREEMENT, AND (C) ACKNOWLEDGES THAT A COPY OF THE ABDC
INTERCREDITOR AGREEMENT WAS MADE AVAILABLE TO SUCH PURCHASER AND THAT SUCH
PURCHASER REVIEWED THE ABDC INTERCREDITOR AGREEMENT. NOT IN LIMITATION OF THE
FOREGOING, EACH PURCHASER HEREBY AGREES THAT THE COLLATERAL AGENT SHALL EXERCISE
ALL RIGHTS AND REMEDIES UNDER THE ABDC INTERCREDITOR AGREEMENT ON BEHALF OF SUCH
PURCHASER.

 

Section 9.15         FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT. EACH
PURCHASER (A) AGREES THAT IT WILL BE BOUND BY, AND WILL TAKE NO ACTIONS CONTRARY
TO, THE PROVISIONS OF THE FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT, (B)
AUTHORIZES AND INSTRUCTS THE COLLATERAL AGENT TO ENTER INTO THE FIRST
LIEN/SECOND LIEN INTERCREDITOR AGREEMENT AS COLLATERAL AGENT ON BEHALF OF SUCH
PURCHASER, AND TO TAKE ALL ACTIONS (AND EXECUTE ALL DOCUMENTS) REQUIRED (OR
DEEMED ADVISABLE) IN ACCORDANCE WITH THE TERMS OF THE FIRST LIEN/SECOND LIEN
INTERCREDITOR AGREEMENT, AND (C) ACKNOWLEDGES THAT A COPY OF THE FIRST
LIEN/SECOND LIEN INTERCREDITOR AGREEMENT WAS MADE AVAILABLE TO SUCH PURCHASER
AND THAT SUCH PURCHASER REVIEWED THE FIRST LIEN/SECOND LIEN INTERCREDITOR
AGREEMENT. EACH PURCHASER IS RESPONSIBLE FOR MAKING ITS OWN ANALYSIS OF THE
FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT AND THE TERMS AND PROVISIONS
THEREOF, AND NEITHER THE COLLATERAL AGENT NOR ANY OF ITS AFFILIATES MAKES ANY
REPRESENTATION TO ANY PURCHASER AS TO THE SUFFICIENCY OR THE ADVISABILITY OF THE
PROVISIONS CONTAINED THEREIN. NOT IN LIMITATION OF THE FOREGOING, EACH PURCHASER
HEREBY AGREES THAT THE COLLATERAL AGENT SHALL EXERCISE ALL RIGHTS AND REMEDIES
UNDER THE FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT ON BEHALF OF SUCH
PURCHASER AND IN THE EVENT OF AN INCONSISTENCY BETWEEN THIS AGREEMENT AND THE
TERMS OF THE FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT, THE TERMS OF THE
FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT SHALL GOVERN. THE FOREGOING
PROVISIONS ARE INTENDED AS AN INDUCEMENT TO THE PURCHASERS UNDER THE SECOND LIEN
NOTE PURCHASE AGREEMENT TO PURCHASE NOTES PURSUANT THERETO AND SUCH PURCHASERS
ARE THE INTENDED THIRD PARTY BENEFICIARIES OF SUCH PROVISIONS AND THE PROVISIONS
OF THE FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT.

 

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ARTICLE X

MISCELLANEOUS

 

Section 10.1         Notices.

 

(a)           Written Notices.

 

(i)          Except in the case of notices and other communications expressly
permitted to be given by telephone, all notices and other communications to any
party herein to be effective 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:

 

To the Issuer: BioScrip, Inc.   1600 Broadway, Suite 700   Denver, CO 80202  
Attn:  Stephen Deitsch, Senior Vice President, Chief Financial Officer &
Treasurer   Telecopy Number: (720) 468-4040     With a copy to (for Information
purposes only): Dechert LLP   1095 Avenue of the Americas   New York, New York
10036   Attention: Scott M. Zimmerman   Telecopy Number: (212) 698-3599     To
the Collateral Agent: Wells Fargo Bank, National Association   9062 Old
Annapolis Road   Columbia, Maryland 21045   Attention: Jason Prisco – BioScrip,
Inc. First Lien NPA   Email: CTSBankDebtAdministrationTeam@wellsfargo.com     To
any other Purchaser: the address set forth on the applicable signature page
hereto

 

Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All such notices
and other communications shall be effective upon actual receipt by the relevant
Person or, if delivered by overnight courier service, upon the first Business
Day after the date deposited with such courier service for overnight (next-day)
delivery or, if sent by telecopy, upon transmittal in legible form by facsimile
machine or, if mailed, upon the third Business Day after the date deposited into
the mail or, if delivered by hand, upon delivery; provided that notices
delivered to the Collateral Agent or any Purchaser shall not be effective until
actually received by such Person at its address specified in this Section.

 

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(ii)         Any agreement of the Collateral Agent or any Purchaser herein to
receive certain notices by telephone or facsimile is solely for the convenience
and at the request of the Issuer. The Collateral Agent and each Purchaser shall
be entitled to rely on the authority of any Person purporting to be a Person
authorized by the Issuer to give such notice and the Collateral Agent and the
Purchasers shall not have any liability to the Issuer or other Person on account
of any action taken or not taken by the Collateral Agent or any Purchaser in
reliance upon such telephonic or facsimile notice. The obligation of the Issuer
to repay the Notes and all other Obligations hereunder shall not be affected in
any way or to any extent by any failure of the Collateral Agent or any Purchaser
to receive written confirmation of any telephonic or facsimile notice or the
receipt by the Collateral Agent or any Purchaser of a confirmation which is at
variance with the terms understood by the Collateral Agent and such Purchaser to
be contained in any such telephonic or facsimile notice.

 

(b)           Electronic Communications.

 

(i)          Notices and other communications to the Collateral Agent and each
Purchaser hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
approved by such Person. The Issuer 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.

 

(ii)         Unless the Collateral Agent or any Purchaser otherwise prescribes,
(i) notices and other communications sent to an e-mail address of such Person
shall be deemed received upon the sender’s receipt of an acknowledgement from
the intended recipient (such as by the “return receipt requested” function, as
available, return e-mail or other written acknowledgement); provided that if
such notice or other communication is not sent during the normal business hours
of the recipient, such notice or communication shall be deemed to have been sent
at the opening of business on the next Business Day for the recipient, and (ii)
notices or communications posted to an Internet or intranet website shall be
deemed received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification that such
notice or communication is available and identifying the website address
therefor.

 

Section 10.2         Waiver; Amendments.

 

(a)          No failure or delay by the Collateral Agent or any Purchaser in
exercising any right or power hereunder or under any other Note Document, and no
course of dealing between the Issuer and the Collateral Agent or any Purchaser,
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 right or power, preclude any other or further exercise thereof or
the exercise of any other right or power hereunder or thereunder. The rights and
remedies of the Collateral Agent and the Purchasers hereunder and under the
other Note Documents are cumulative and are not exclusive of any rights or
remedies provided by law. No waiver of any provision of this Agreement or of any
other Note Document or consent to any departure by the Issuer or any other Note
Party therefrom shall in any event be effective unless the same shall be
permitted by clause (b) of this Section, 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 purchase of a Note shall
not be construed as a waiver of any Default or Event of Default, regardless of
whether the Collateral Agent or any Purchaser may have had notice or knowledge
of such Default or Event of Default at the time.

 

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(b)           No amendment or waiver of any provision of this Agreement or of
the other Note Documents (other than the Fee Letters), nor consent to any
departure by the Issuer or any other Note Party therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Issuer and the
Required Purchasers, or the Issuer and the Collateral Agent with the consent of
the Required Purchasers, and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided that, in addition to the consent of the Required Purchasers, no
amendment, waiver or consent shall:

 

(i)          increase the Commitment of any Purchaser without the written
consent of such Purchaser;

 

(ii)         reduce the principal amount of any Note or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written
consent of each Purchaser affected thereby (except that any waiver of
post-default rates of interests shall not constitute a reduction in the rate of
interest or fees for purposes of this clause (ii));

 

(iii)        postpone or extend the date fixed for any payment of any principal
of, or interest on, any Note or any fees hereunder or reduce the amount of,
waive or excuse any such payment, or postpone the scheduled date for the
termination or reduction of any Commitment, without the written consent of each
Purchaser affected thereby (it being understood that a waiver of any condition
precedent or the waiver of any Default, Event of Default or mandatory prepayment
shall not constitute a postponement, extension or increase of any Note or
Commitment hereunder);

 

(iv)        change Section 8.2 without the written consent of each Purchaser
affected thereby;

 

(v)         change Section 2.18 in a manner that would alter the pro rata
sharing of payments required thereby, without the written consent of each
Purchaser;

 

(vi)        change any of the provisions of this clause (b) or the definition of
“Required Purchasers” or any other provision hereof specifying the number or
percentage of Purchasers which are required to waive, amend or modify any rights
hereunder or make any determination or grant any consent hereunder, without the
consent of each Purchaser;

 

(vii)       except in connection with a transaction otherwise not prohibited by
this Agreement or any other Note Document, release all or substantially all of
the value of any Guarantee guarantying any of the Obligations, or release all or
substantially all of the guarantors, or limit the liability of such guarantors,
under any guaranty agreement guaranteeing any of the Obligations, in each case,
without the written consent of each Purchaser; or

 

(viii)      release all or substantially all of the Collateral securing the
Obligations, without the written consent of each Purchaser;

 

provided, further, that no such amendment, waiver or consent shall amend, modify
or otherwise affect the rights, duties or obligations of the Collateral Agent
without the prior written consent of the Collateral Agent.

 

Notwithstanding anything to the contrary herein, no Defaulting Purchaser shall
have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Commitment of such Purchaser may not be increased or
extended, and amounts payable to such Purchaser hereunder may not be permanently
reduced, without the consent of such Purchaser (other than reductions in fees
and interest in which such reduction does not disproportionately affect such
Purchaser).

 

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Section 10.3         Expenses; Indemnification.

 

(a)          The Issuer shall pay (i) the expenses required to be reimbursed
pursuant to the Commitment Letter, (ii) all fees agreed to from time to time
between the Issuer and the Collateral Agent and the reasonable and documented
costs and expenses of the Collateral Agent and its Affiliates in connection with
the preparation and administration of the Note Documents and all reasonable and
documented costs and expenses of the Collateral Agent, the Purchasers and their
respective Affiliates in connection with any amendments, modifications or
waivers thereof (whether or not the transactions contemplated in this Agreement
or any other Note Document shall be consummated), and the due diligence relating
thereto (including the reasonable and documented fees, disbursements, and
expenses of one outside counsel to the Collateral Agent and one outside counsel
to each Purchaser (and any required special or local counsel)), and (iii) all
documented costs and expenses incurred by the Collateral Agent or any Purchaser
(including the documented fees, disbursements, and expenses of one outside
counsel to each such party (and any required special or local counsel to each
such party)) in connection with the enforcement or protection of its rights, and
the discharge of its duties, in connection with the Note Documents, including
its rights under this Section, or in connection with the Notes purchased
hereunder, including all such documented costs and expenses incurred during any
workout, restructuring or negotiations in respect of such Notes.

 

(b)          The Issuer shall indemnify the Collateral Agent and each Purchaser,
and each Related Party of any of the foregoing Persons (each such Person and
Related Party being called an “Indemnitee”) against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and expenses
(including the fees, disbursements, and expenses of any counsel for any
Indemnitee), and shall reimburse each Indemnitee upon demand for any legal or
other expenses incurred in connection with investigating or defending any of the
following, incurred by any Indemnitee or asserted against any Indemnitee by any
third party or by the Issuer or any other Note Party or any of their
Subsidiaries or Affiliates arising out of, in connection with, or as a result of
(i) the execution or delivery of this Agreement, any other Note Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby, (ii) any Note
or the use or proposed use of the proceeds therefrom, (iii) any actual or
alleged presence or Release of Hazardous Materials on or from any property owned
or operated by the Issuer or any of its Subsidiaries, or any Environmental
Liability related in any way to the Issuer or any of its Subsidiaries, or (iv)
any actual or prospective suit, claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory, whether brought by a third party or by the Issuer or any other Note
Party or by the Issuer’s equity holders, Affiliates or creditors, and regardless
of whether any Indemnitee or the Issuer 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 other expenses are determined by a court
of competent jurisdiction by final and non-appealable judgment to have resulted
from (A) the gross negligence or willful misconduct of such Indemnitee or (B)
other than with respect to the Collateral Agent and its Related Parties, a
material breach by such Indemnitee of any of its undertakings, obligations or
commitments under this Agreement or any other Note Documents (except that,
regardless of its action or inaction, the Collateral Agent shall have no
liability in connection with (iii) above). No Indemnitee shall be responsible or
liable for any damages arising from the use by others of any information or
other materials obtained through Syndtrak, Intralinks, any other Internet or
intranet website, or any other electronic, telecommunications or other
information transmission systems, except to the extent that such damages are
determined by a court of competent jurisdiction by final and non-appealable
judgment to have resulted from (A) the gross negligence or willful misconduct of
such Indemnitee or (B) other than with respect to the Collateral Agent and its
Related Parties, a material breach by such Indemnitee of any of its
undertakings, obligations or commitments under this Agreement or any other Note
Documents.

 

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(c)          This Section 10.3 shall not apply with respect to Taxes other than
any Taxes that represent losses, claims, damages, liabilities and related
expenses arising from any non-Tax claim.

 

(d)          To the extent that the Issuer fails to pay any amount required to
be paid to the Collateral Agent under clause (a), (b) or (c) hereof, each
Purchaser severally agrees to pay to the Collateral Agent such Purchaser’s pro
rata share (in accordance with the aggregate outstanding principal amount of the
Note(s) held by it determined as of the time that the unreimbursed expense or
indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified payment, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the Collateral
Agent in its capacity as such. Additionally, each Purchaser shall not assert any
claim against the Collateral Agent on any theory of liability for special,
consequential, exemplary or punitive damages arising out of or in connection
with any Note Document.

 

(e)          To the extent permitted by applicable law, the Issuer shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential, exemplary or punitive damages
(as opposed to actual or direct damages) arising out of, in connection with or
as a result of this Agreement, any other Note Document or any agreement or
instrument contemplated hereby, the transactions contemplated therein, any Note
or the use of proceeds thereof.

 

(f)          All amounts due under this Section shall be payable promptly after
written demand therefor.

 

Section 10.4         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 the Issuer may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
the Collateral Agent and each Purchaser, and no Purchaser may assign or
otherwise transfer any of its rights or obligations hereunder except (i) to an
assignee in accordance with the provisions of clause (b) of this Section, (ii)
by way of participation in accordance with the provisions of clause (d) of this
Section or (iii) by way of pledge or assignment of a security interest subject
to the restrictions of clause (f) of this Section (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 clause (d) of this
Section and, to the extent expressly contemplated hereby, the Related Parties of
each of the Collateral Agent and the Purchasers) any legal or equitable right,
remedy or claim under or by reason of this Agreement.

 

(b)          Any Purchaser may at any time assign to one or more assignees all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Commitments and Notes at the time owing to it); provided
that any such assignment shall be subject to the following conditions:

 

(i)            Minimum Amounts.

 

(A)         in the case of an assignment of the entire remaining amount of the
assigning Purchaser’s Commitments and Notes at the time owing to it or in the
case of an assignment to a Purchaser, an Affiliate of a Purchaser or an Approved
Fund, no minimum amount need be assigned; and

 

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(B)         in any case not described in clause (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Notes
outstanding thereunder) or, if the applicable Commitment is not then in effect,
the outstanding principal balance of the Notes of the assigning Purchaser
subject to each such assignment (determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Issuer or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date) shall not be less than $1,000,000 and in minimum increments of $1,000,000,
unless, so long as no Event of Default has occurred and is continuing, the
Issuer otherwise consents (each such consent not to be unreasonably withheld or
delayed).

 

(ii)           Proportionate Amounts. Each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Purchaser’s rights
and obligations under this Agreement with respect to the Notes or the
Commitments assigned.

 

(iii)          Required Consents. No consent shall be required for any
assignment except to the extent required by clause (b)(i)(B) of this Section
and, in addition:

 

(A)         the consent of the Issuer (such consent not to be unreasonably
withheld or delayed) shall be required unless (x) an Event of Default has
occurred and is continuing at the time of such assignment or (y) such assignment
is to a Purchaser, an Affiliate of such Purchaser or an Approved Fund of such
Purchaser; provided, that the Issuer shall be deemed to have consented to any
such assignment unless it objects thereto by written notice to the assigning
Purchaser within five (5) Business Days after having received notice thereof;
provided, further, that any refusal by the Issuer to consent to an assignment to
a Disqualified Institution shall not be deemed unreasonable.

 

(iv)          Assignment and Assumption. The parties to each assignment shall
deliver to the Issuer (A) a duly executed Assignment and Assumption, together
with any Note subject to such assignment, (B) unless the assignee is already a
Purchaser, a designation of one or more contacts to whom all Note information
(which may contain material non-public information about the Issuer and its
Subsidiaries and their Related Parties or their securities) will be made
available and who may receive such information in accordance with the assignee’s
compliance procedures and applicable law, Federal, state and foreign securities
laws and (C) the documents required under Section 2.17(f), and the Issuer shall
record such assignment in the Register.

 

(v)           No Assignment to the certain Persons. No such assignment shall be
made to (A) the Issuer or any of the Issuer’s Affiliates or Subsidiaries, (B)
any Defaulting Purchaser or any of its Subsidiaries, or any Person who, upon
becoming a Purchaser hereunder, would constitute any of the foregoing Persons
described in this clause (B), (C) so long as no Event of Default is in
existence, any Disqualified Institution or (D) any Person (other than an
existing Purchaser or an Affiliate or Approved Fund of an existing Purchaser)
that is not an “accredited investor” (as defined in Regulation D of the
Securities Act).

 

(vi)          No Assignment to Natural Persons. No such assignment shall be made
to a natural person.

 

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Subject to acceptance and recording thereof by the Issuer pursuant to clause (c)
of this Section, from and after the effective date specified in each Assignment
and Assumption, the 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 Purchaser under this Agreement, and the
assigning Purchaser 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 Purchaser’s rights and obligations under this Agreement, such
Purchaser shall cease to be a party hereto) but shall continue to be entitled to
the benefits of Sections 2.15, 2.16, 2.17 and 10.3 with respect to facts and
circumstances occurring prior to the effective date of such assignment; provided
that, except to the extent otherwise expressly agreed by the affected parties,
no assignment by a Defaulting Purchaser will constitute a waiver or release of
any claim of any party hereunder arising from such Purchaser’s having been a
Defaulting Purchaser. Any assignment or transfer by a Purchaser of rights or
obligations under this Agreement that does not comply with this clause shall be
treated for purposes of this Agreement as a sale by such Purchaser of a
participation in such rights and obligations in accordance with clause (d) of
this Section. If the consent of the Issuer to an assignment is required
hereunder (including a consent to an assignment which does not meet the minimum
assignment thresholds specified above), the Issuer shall be deemed to have given
its consent unless it shall object thereto by written notice to assigning
Purchaser within five (5) Business Days after notice thereof has actually been
delivered by the assigning Purchaser to the Issuer.

 

(c)          The Issuer shall maintain at one of its offices in Denver, CO a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Purchasers, and the Commitments
of, and principal and interest amount of the Notes owing to, each Purchaser
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive absent manifest error, and the Issuer, the
Collateral Agent and the Purchasers shall treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Purchaser hereunder
for all purposes of this Agreement. Information contained in the Register with
respect to any Purchaser shall be available for inspection by such Purchaser at
any reasonable time and from time to time upon reasonable prior notice. The
Collateral Agent shall have the right, at any time, to request a copy of the
Register.

 

(d)          Any Purchaser may at any time, without the consent of, or notice
to, the Issuer, sell participations to any Person (other than a natural person,
the Issuer, any of the Issuer’s Affiliates or Subsidiaries, or any Competitor)
(each, a “Participant”) in all or a portion of such Purchaser’s rights and/or
obligations under this Agreement (including all or a portion of its Commitment
and/or the Notes owing to it); provided that (i) such Purchaser’s obligations
under this Agreement shall remain unchanged, (ii) such Purchaser shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (iii) the Issuer, the Collateral Agent and the other Purchasers
shall continue to deal solely and directly with such Purchaser in connection
with such Purchaser’s rights and obligations under this Agreement.

 

Any agreement or instrument pursuant to which a Purchaser sells such a
participation shall provide that such Purchaser shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Purchaser will not, without the consent of the Participant,
agree to any amendment, modification or waiver with respect to the following to
the extent affecting such Participant: (i) increase the Commitment of such
Purchaser; (ii) reduce the principal amount of any Note or reduce the rate of
interest thereon, or reduce any fees payable hereunder; (iii) postpone the date
fixed for any payment of any principal of, or interest on, any Note or any fees
hereunder or reduce the amount of, waive or excuse any such payment, or postpone
the scheduled date for the termination or reduction of any Commitment; (iv)
change Section 2.18 in a manner that would alter the pro rata sharing of
payments required thereby; (v) change any of the provisions of Section 10.2(b)
or the definition of “Required Purchasers” or any other provision hereof
specifying the number or percentage of Purchasers which are required to waive,
amend or modify any rights hereunder or make any determination or grant any
consent hereunder; (vi) release all or substantially all of the guarantors, or
limit the liability of such guarantors, under any guaranty agreement
guaranteeing any of the Obligations; or (vii) release all or substantially all
collateral (if any) securing any of the Obligations. Subject to clause (e) of
this Section, the Issuer agrees that each Participant shall be entitled to the
benefits of Sections 2.15, 2.16, and 2.17 to the same extent as if it were a
Purchaser and had acquired its interest by assignment pursuant to clause (b) of
this Section; provided that such Participant agrees to be subject to Section
2.19 as though it were a Purchaser. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 10.7 as though it
were a Purchaser; provided that such Participant agrees to be subject to Section
2.18 as though it were a Purchaser.

 

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Each Purchaser that sells a participation shall, acting solely for this purpose
as an agent of the Issuer, maintain a register in the United States 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 Notes or other
obligations under the Note Documents (the “Participant Register”). The entries
in the Participant Register shall be conclusive, absent manifest error, and such
Purchaser shall treat each person whose name is recorded in the Participant
Register as the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary. The Issuer shall have inspection
rights to such Participant Register (upon reasonable prior notice to the
applicable Purchaser) solely for purposes of demonstrating that such Notes or
other obligations under the Note Documents are in “registered form” for purposes
of the Code.

 

(e)          A Participant shall not be entitled to receive any greater payment
under Sections 2.15 and 2.17 than the applicable Purchaser would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Issuer’s prior written consent. A Participant shall not be entitled to the
benefits of Section 2.17 unless the Issuer is notified of the participation sold
to such Participant and such Participant agrees, for the benefit of the Issuer,
to comply with Section 2.17(e) and (f) as though it were a Purchaser.

 

(f)          Any Purchaser may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Purchaser, including, without limitation, any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Purchaser from any of its obligations hereunder or
substitute any such pledgee or assignee for such Purchaser as a party hereto.

 

Section 10.5         Governing Law; Jurisdiction; Consent to Service of Process.

 

(a)          This Agreement and the other Note Documents and any claims,
controversy, dispute or cause of action (whether in contract or tort or
otherwise) based upon, arising out of or relating to this Agreement or any other
Note Document (except, as to any other Note Document, as expressly set forth
therein) and the transactions contemplated hereby and thereby shall be construed
in accordance with and be governed by the law of the State of New York.

 

(b)          The Issuer hereby irrevocably and unconditionally submits, for
itself and its property, to the exclusive jurisdiction of the United States
District Court for the Southern District of New York, and of the Supreme Court
of the State of New York sitting in New York county, and of any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Note Document or the transactions contemplated hereby or
thereby, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
District Court or New York state court or, to the extent permitted by applicable
law, such appellate 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 Note Document shall
affect any right that the Collateral Agent or any Purchaser may otherwise have
to bring any action or proceeding relating to this Agreement or any other Note
Document against the Issuer or its properties in the courts of any jurisdiction.

 

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(c)          The Issuer irrevocably and unconditionally waives any objection
which it may now or hereafter have to the laying of venue of any such suit,
action or proceeding described in clause (b) of this Section and brought in any
court referred to in clause (b) of this Section. Each of the parties hereto
irrevocably waives, to the fullest extent permitted by applicable 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 the service of
process in the manner provided for notices in Section 10.1. Nothing in this
Agreement or in any other Note Document will affect the right of any party
hereto to serve process in any other manner permitted by law.

 

Section 10.6         WAIVER OF JURY TRIAL. EACH PARTY HERETO IRREVOCABLY 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 THIS
AGREEMENT OR ANY OTHER NOTE DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (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 AND THE OTHER NOTE DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

Section 10.7         Right of Set-off. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, each Purchaser shall have the right, at any time or from time to time
upon the occurrence and during the continuance of an Event of Default, without
prior notice to the Issuer, any such notice being expressly waived by the Issuer
to the extent permitted by applicable law, to set off and apply against all
deposits (general or special, time or demand, provisional or final) of the
Issuer at any time held or other obligations at any time owing by such Purchaser
to or for the credit or the account of the Issuer against any and all
Obligations held by such Purchaser, irrespective of whether such Purchaser shall
have made demand hereunder and although such Obligations may be unmatured;
provided that in the event that any Defaulting Purchaser shall exercise any such
right of setoff, (x) all amounts so set off shall be applied in accordance with
the provisions of Section 2.21(a) and, pending such application, shall be
segregated by such Defaulting Purchaser from its other funds and deemed held in
trust for the benefit of the applicable recipients, and (y) the Defaulting
Purchaser shall provide promptly to the Collateral Agent and the other
Purchasers a statement describing in reasonable detail the Obligations owing to
such Defaulting Purchaser as to which it exercised such right of setoff. Each
Purchaser agrees promptly to notify the Issuer after any such set-off and any
application made by such Purchaser; provided that the failure to give such
notice shall not affect the validity of such set-off and application. Each
Purchaser agrees to apply all amounts collected from any such set-off to the
Obligations before applying such amounts to any other Indebtedness or other
obligations owed by the Issuer and any of its Subsidiaries to such Purchaser.

 

Section 10.8         Counterparts; Integration. This Agreement may be executed
by one or more of the parties to this Agreement on any number of separate
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. This Agreement, the Fee Letters, the
other Note Documents, and any separate letter agreements relating to any fees
payable to the Collateral Agent and its Affiliates constitute the entire
agreement among the parties hereto and thereto and their affiliates regarding
the subject matters hereof and thereof and supersede all prior agreements and
understandings, oral or written, regarding such subject matters. Delivery of an
executed counterpart to this Agreement or any other Note Document by facsimile
transmission or by electronic mail in pdf format shall be as effective as
delivery of a manually executed counterpart hereof.

 

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Section 10.9         Survival. All covenants, agreements, representations and
warranties made by the Issuer herein and in the certificates, reports, notices
or other instruments delivered in connection with or pursuant to this Agreement
shall be considered to have been relied upon by the other parties hereto and
shall survive the execution and delivery of this Agreement and the other Note
Documents and the issuance and purchase of any Notes, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Collateral Agent or any Purchaser may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Note or any fee or any other amount
payable under this Agreement is outstanding and unpaid and so long as the
Commitments have not expired or terminated. The provisions of Sections 2.15,
2.16, 2.17, and 10.3 and Article IX shall survive and remain in full force and
effect regardless of the consummation of the transactions contemplated hereby,
the repayment of the Notes, the expiration or termination of the Commitments or
the termination of this Agreement or any provision hereof.

 

Section 10.10         Severability. Any provision of this Agreement or any other
Note Document held to be illegal, invalid or unenforceable in any jurisdiction,
shall, as to such jurisdiction, be ineffective to the extent of such illegality,
invalidity or unenforceability without affecting the legality, validity or
enforceability of the remaining provisions hereof or thereof; and the
illegality, invalidity or unenforceability of a particular provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.

 

Section 10.11         Confidentiality. Each of the Collateral Agent and the
Purchasers agrees to take normal and reasonable precautions to maintain the
confidentiality of any information relating to the Issuer or any of its
Subsidiaries or any of their respective businesses, to the extent designated in
writing as confidential and provided to it by the Issuer or any of its
Subsidiaries, other than any such information that is available to the
Collateral Agent or any Purchaser on a non-confidential basis prior to
disclosure by the Issuer or any of its Subsidiaries, except that such
information may be disclosed (i) to any Related Party of the Collateral Agent or
any such Purchaser including, without limitation, accountants, legal counsel and
other advisors (and to other persons authorized by the Collateral Agent or a
Purchaser to organize, present or disseminate such information in connection
with disclosures otherwise made in accordance with this Section 10.11), (ii) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (iii) to the extent requested by any regulatory agency or
authority purporting to have jurisdiction over it (including any self-regulatory
authority such as the National Association of Insurance Commissioners), (iv) to
the extent that such information becomes publicly available other than as a
result of a breach of this Section, or which becomes available to the Collateral
Agent, any Purchaser or any Related Party of any of the foregoing on a
non-confidential basis from a source other than the Issuer or any of its
Subsidiaries, (v) in connection with the exercise of any remedy hereunder or
under any other Note Documents or any suit, action or proceeding relating to
this Agreement or any other Note Documents or the enforcement of rights
hereunder or thereunder, (vi) subject to execution by such Person of an
agreement containing provisions substantially the same as those of this Section,
to (A) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, or (B)
any actual or prospective party (or its Related Parties) to any swap or
derivative or other transaction under which payments are to be made by reference
to the Issuer and its obligations, this Agreement or payments hereunder, (vii)
to any rating agency, (viii) to the CUSIP Service Bureau or any similar
organization, (ix) to any Purchaser’s financing sources; provided that, prior to
any disclosure, such financing source is informed of the confidential nature of
such information, or (x) with the consent of the Issuer. Any Person required to
maintain the confidentiality of any information as provided for in this Section
shall be considered to have complied with its obligation to do so if such Person
has exercised the same degree of care to maintain the confidentiality of such
information as such Person would accord its own confidential information.
Furthermore, the Note Parties and the Purchasers shall not, without the prior
written consent of the applicable Purchaser, in each instance, (a) use in
advertising, publicity, or otherwise the name of such Purchaser or any of its
Affiliates, or any partner or employee of such Purchaser or any of its
Affiliates, or (b) represent that any product or any service provided has been
approved or endorsed by any Purchaser, or any of its Affiliates. In the event of
any conflict between the terms of this Section and those of any other
Contractual Obligation entered into with any Note Party (whether or not a Note
Document), the terms of this Section shall govern.

 

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Section 10.12         Interest Rate Limitation. Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Note,
together with all fees, charges and other amounts which may be treated as
interest on such Note under applicable law (collectively, the “Charges”), shall
exceed the maximum lawful rate of interest (the “Maximum Rate”) which may be
contracted for, charged, taken, received or reserved by a Purchaser holding such
Note in accordance with applicable law, the rate of interest payable in respect
of such Note hereunder, together with all Charges payable in respect thereof,
shall be limited to the Maximum Rate and, to the extent lawful, the interest and
Charges that would have been payable in respect of such Note but were not
payable as a result of the operation of this Section shall be cumulated and the
interest and Charges payable to such Purchaser in respect of other Notes or
periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Rate to
the date of repayment (to the extent permitted by applicable law), shall have
been received by such Purchaser.

 

Section 10.13         Waiver of Effect of Corporate Seal. The Issuer represents
and warrants that neither it nor any other Note Party is required to affix its
corporate seal to this Agreement or any other Note Document pursuant to any
Requirement of Law, agrees that this Agreement is delivered by the Issuer under
seal and waives any shortening of the statute of limitations that may result
from not affixing the corporate seal to this Agreement or such other Note
Documents.

 

Section 10.14         Patriot Act. The Collateral Agent and each Purchaser
hereby notifies the Note Parties that, pursuant to the requirements of the
Patriot Act, it is required to obtain, verify and record information that
identifies each Note Party, which information includes the name and address of
such Note Party and other information that will allow such Purchaser or the
Collateral Agent, as applicable, to identify such Note Party in accordance with
the Patriot Act. The Note Parties agree to cooperate with the Collateral Agent
and each Purchaser and provide the information required in this Section.

 

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Section 10.15         No Advisory or Fiduciary Responsibility.

 

(a)          In connection with all aspects of each transaction contemplated
hereby (including in connection with any amendment, waiver or other modification
hereof or of any other Note Document), the Issuer and each other Note Party
acknowledges and agrees and acknowledges its Affiliates’ understanding that (i)
(A) the services regarding this Agreement provided by the Collateral Agent
and/or the Purchasers are arm’s-length commercial transactions between the
Issuer, each other Note Party and their respective Affiliates, on the one hand,
and the Collateral Agent and the Purchasers, on the other hand, (B) each of the
Issuer and the other Note Parties have consulted their own legal, accounting,
regulatory and tax advisors to the extent they have deemed appropriate, and (C)
the Issuer and each other Note Party is capable of evaluating and understanding,
and understands and accepts, the terms, risks and conditions of the transactions
contemplated hereby and by the other Note Documents; (ii) (A) each of the
Collateral Agent and the Purchasers is and has been acting solely as a principal
and, except as expressly agreed in writing by the relevant parties, has not
been, is not, and will not be acting as an advisor, agent or fiduciary for the
Issuer, any other Note Party or any of their respective Affiliates, or any other
Person, and (B) neither the Collateral Agent nor any Purchaser has any
obligation to the Issuer, any other Note Party or any of their Affiliates with
respect to the transaction contemplated hereby except those obligations
expressly set forth herein and in the other Note Documents; and (iii) the
Collateral Agent, the Purchasers and their respective Affiliates may be engaged
in a broad range of transactions that involve interests that differ from those
of the Issuer, the other Note Parties and their respective Affiliates, and each
of the Collateral Agent and the Purchasers has no obligation to disclose any of
such interests to the Issuer, any other Note Party or any of their respective
Affiliates.  To the fullest extent permitted by law, each of the Issuer and the
other Note Parties hereby waives and releases any claims that it may have
against the Collateral Agent or any Purchaser with respect to any breach or
alleged breach of agency or fiduciary duty in connection with any aspect of any
transaction contemplated hereby.

 

(b)          The Issuer agrees that the relationship between the Collateral
Agent and the Issuer and between each Purchaser and the Issuer is that of
creditor and debtor and not that of partners or joint venturers. This Agreement
does not constitute a partnership agreement or any other association between the
Collateral Agent and the Issuer or between any Purchaser and the Issuer. The
Issuer acknowledges that each Purchaser has acted at all times only as a
creditor to the Issuer within the normal and usual scope of the activities
normally undertaken by a creditor and in no event has the Collateral Agent or
any Purchaser attempted to exercise any control over the Issuer or its business
or affairs. The Issuer further acknowledges that the Collateral Agent and each
Purchaser has not taken or failed to take any action under or in connection with
its respective rights under this Agreement or any of the other Note Documents
that in any way, or to any extent, has interfered with or adversely affected the
Issuer's ownership of Collateral.

 

Section 10.16         First Lien/Second Lien Intercreditor Agreement.
Notwithstanding anything herein to the contrary, the lien and security interest
granted to Collateral Agent or any other Secured Parties pursuant to or in
connection with the Note Documents and the exercise of any right or remedy by
thereby or thereunder are subject to the provisions of the First Lien/Second
Lien Intercreditor Agreement. In the event of any conflict between the terms of
the First Lien/Second Lien Intercreditor Agreement and this Agreement, the terms
of the First Lien/Second Lien Intercreditor Agreement shall govern and control.
Notwithstanding the foregoing, each Note Party expressly acknowledges and agrees
that the First Lien/Second Lien Intercreditor Agreement is solely for the
benefit of the parties thereto, and that notwithstanding the fact that the
exercise of certain of Collateral Agent’s and the Purchasers’ rights under this
Agreement or any other Note Document may be subject to the First Lien/Second
Lien Intercreditor Agreement, no action taken or not taken by Collateral Agent
or any other Purchaser in accordance with the terms of the First Lien/Second
Lien Intercreditor Agreement shall constitute, or be deemed to constitute, a
waiver by Collateral Agent or any other Purchaser of any rights such Person has
with respect to any Note Party under this Agreement or any other Note Document.

 

Section 10.17         Captions. Captions and section headings appearing herein
are included solely for convenience of reference and are not intended to affect
the interpretation of any provision of this Agreement.

 

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Section 10.18         Acknowledgement and Consent to Bail-In of EEA Financial
Institutions. Notwithstanding anything to the contrary in any Note Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto acknowledges that any liability of any EEA Financial
Institution arising under any Note Document, to the extent such liability is
unsecured, may be subject to the write-down and conversion powers of an EEA
Resolution Authority and agrees and consents to, and acknowledges and agrees to
be bound by:

 

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

 

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

 

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

 

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

 

(iii)        the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of any EEA Resolution
Authority.

 

Section 10.19         Force Majeure. In no event shall the Collateral Agent be
responsible or liable for any failure or delay in the performance of its
obligations hereunder arising out of or caused by, directly or indirectly,
forces beyond its control, including, without limitation, strikes, work
stoppages, accidents, acts of war or terrorism, civil or military disturbances,
nuclear or natural catastrophes or acts of God, and interruptions, loss or
malfunctions of utilities, communications or computer (software and hardware)
services; it being understood that the Collateral Agent shall use reasonable
efforts which are consistent with accepted practices in the banking industry to
resume performance as soon as practicable under the circumstances..

 

(remainder of page left intentionally blank)

 

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

 

  BIOSCRIP, INC.         By: /s/ Stephen Deitsch     Name: Stephen Dietsch    
Title: Senior Vice President, Chief Financial Officer and Treasurer

 

[Signature Page to First Lien Note Purchase Agreement]

 

 

 

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION   as the Collateral Agent         By: /s/
Michael Pinzon     Name: Michael Pinzon     Title: Vice President        
Address for Notices:       Wells Fargo Bank, National Association   9062 Old
Annapolis Road   Columbia, Maryland 21045   Attention: Jason Prisco – BioScrip,
Inc. First Lien NPA   Email: CRSBankDebtAdministrationTeam@wellsfargo.com

 

[Signature Page to First Lien Note Purchase Agreement]

 

 

 

 

  ASSF IV AIV B HOLDINGS II, L.P.   as a Purchaser       By: ASSF IV AIV B
Holdings GP LLC, its general partner       By: ASSF IV AIV B, L.P., its sole
member       By: ASSF Management IV, L.P., its general partner       By: ASSF
Management IV GP LLC, its general partner               By: /s/ Scott L. Graves
    Name: Scott L. Graves     Title: Authorized Signatory         Address for
Notices:       c/o Ares Management LLC   2000 Avenue of the Stars, 12th Floor  
Los Angeles, CA 90067       Funding Office:       c/o Ares Management LLC   2000
Avenue of the Stars, 12th Floor   Los Angeles, CA 90067

 

[Signature Page to First Lien Note Purchase Agreement]

 

 

 

 

J.P. MORGAN SECURITIES LLC   as a Purchaser         By: /s/ Jeffrey L. Panzo    
Name: Jeffrey L. Panzo     Title: Attorney in fact         Address for Notices:
      J.P. Morgan Securities LLC   4 New York Plaza, 15th Floor, Mail Code
NY1-E054   New York, New York 10004   Attention: Jeffrey L. Panzo   Email:
Jeffrey.L.Panzo@JPMorgan.com   Phone No.: (212) 499-1435       Funding Office:  
    JPMorgan Chase Bank, N.A.   4 New York Plaza, 15th Floor   New York, New
York 10004

 

[Signature Page to First Lien Note Purchase Agreement]

 

 

 

 

  GOLDMAN SACHS & CO. LLC   as a Purchaser         By: /s/ Daniel Oneglia    
Name: Daniel Oneglia     Title: Managing Director         Address for Notices:  
    Goldman Sachs & Co. LLC   200 West Street, 26th Floor   Attn: Paul
Burningham   New York, New York 10282       Funding Office:       Goldman Sachs
& Co. LLC   200 West Street, 26th Floor   Attn: Paul Burningham and Paige
Cataruozolo   New York, New York 10282   Email: ficc-amssg-mo@gs.com   Phone
No.: (917) 343-8393 (Paul Burningham), (917) 343-3096 (Paige Cataruozolo)

 

[Signature Page to First Lien Note Purchase Agreement]

 

 

 

 

  Verizon Investment Management Corporation - Domestic Fixed Income   Western
Asset Opportunistic US$ High Yield Securities Portfolio, LLC   Stichting
Pensioenfonds DSM Netherland   Western Asset High Yield Fund   CGCM High Yield
Investments   Western Asset Floating Rate High Income Fund, LLC   Legg Mason
Western Asset US High Yield Fund   Employees' Retirement System of the State of
Hawaii   Kern County Employees' Retirement Association   Western Asset High
Income Opportunity Fund Inc.   Western Asset Management Strategic Bond
Opportunities Portfolio   Western Asset Global High Yield Bond Fund   Legg Mason
Western Asset Global High Yield Bond Fund   Western Asset Global High Income
Fund, Inc.   Western Asset High Income Fund II, Inc.   Legg Mason Partners
Variable Income Trust   Western Asset Short Duration High Income Fund   Western
Asset Corporate Bond Fund   Western Asset Global Strategic Income Fund   Bayer
Corporation Master Trust   Western Asset Strategic US$ High Yield Portfolio, LLC
  Western Asset Investment Grade Defined Opportunity Trust Inc.

 

[Signature Page to First Lien Note Purchase Agreement]

 

 

 

 

 

 

WA High Income Corporate Bond (Multi-Currency) Fund   Western Asset High Yield
Defined Opportunity Fund Inc   Western Asset Multi-Asset Credit Portfolio Master
Fund, Ltd.   Russell Long Duration Fixed Income Fund   Western Asset US Bank
Loan (Multi-Currency) Fund   Western Asset Bank Loan (Offshore) Fund   1199 SEIU
Health Care Employees Pension Fund   William Barron Hilton Charitable Remainder
Unitrust   2006 Barron Hilton Charitable Remainder Unitrust   each as a
Purchaser

 

  By: Western Asset Management Company, as its Investment Manager and Agent    
    By: /s/ Adam Wright     Name: Adam Wright     Title: Manager, U.S. Legal
Affairs         Address for Notices:       Western Asset Management Company  
385 East Colorado Boulevard   Pasadena, California 91101   Attention: Legal
Department       Funding Office:       Western Asset Management Company   385
East Colorado Boulevard   Pasadena, California 91101

 

[Signature Page to First Lien Note Purchase Agreement]

 

 

 

 

SCHEDULE II

 

Competitors

 

CVS/Coram

OptionCare

Axelacare/UHC