Exhibit 10.9(A)


 


EXECUTION VERSION


 


SEVENTH


AMENDED AND RESTATED


CREDIT AGREEMENT


 


dated as of August 31, 2009


 


by and among


 


NOVAMED, INC.


 


as the Borrower,


 


CERTAIN COMMERCIAL LENDING INSTITUTIONS,


 


as the Lenders,


 


and


 


NATIONAL CITY BANK,


 


as the Agent for the Lenders,


Sole Bookrunner and Sole Lead Arranger


 


with


 


BANK OF AMERICA, N.A.,


 


as Syndication Agent


 


and


 


TD BANKNORTH and SIEMENS FINANCIAL SERVICES, INC.,


 


as Co-Documentation Agents


 

















 


SEVENTH AMENDED AND RESTATED
CREDIT AGREEMENT


 


THIS SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of August 31, 2009, by and among NOVAMED, INC., a Delaware
corporation (the “Borrower”), the
various financial institutions from time to time party hereto (collectively,
the “Lenders”), NATIONAL CITY
BANK, as Sole Bookrunner, Sole Lead Arranger and as Agent (the “Agent”) for the Lenders, BANK OF AMERICA,
N.A., as Syndication Agent and TD BANKNORTH and SIEMENS FINANCIAL
SERVICES, INC., as Co-Documentation Agents;


 


W I T N E S S E T H:


 


WHEREAS, the Borrower, the Lenders and the Agent
entered into that certain Credit Agreement dated as of June 28, 2000 (the “Original Credit Agreement”) which Original
Credit Agreement was amended and restated as of August 29, 2001 pursuant
to an Amended and Restated Credit Agreement, was again amended and restated as
of October 23, 2001 pursuant to that certain Second Amended and Restated
Credit Agreement, was again amended and restated as of June 26, 2003
pursuant to that certain Third Amended and Restated Credit Agreement, was again
amended and restated as of October 15, 2004 pursuant to that certain
Fourth Amended and Restated Credit Agreement, was again amended and restated as
of June 29, 2006 pursuant to that certain Fifth Amended and Restated
Credit Agreement and was again amended and restated as of February 7, 2007
pursuant to that certain Sixth Amended and Restated Credit Agreement (the “Sixth Amended and Restated Credit Agreement”);
and


 


WHEREAS, the Borrower has requested that the Lenders
and the Agent amend and restate the Sixth Amended and Restated Credit
Agreement; and


 


WHEREAS, the Lenders are willing, on the terms and
subject to the conditions hereinafter set forth (including Article V),
to amend and restate the Sixth Amended and Restated Credit Agreement; and


 


WHEREAS, the proceeds of the Loans hereunder will be
used (i) to refinance existing indebtedness, (ii) for working capital
purposes and (iii) for general corporate purposes, including to finance
Permitted Acquisitions and Capital Expenditures.


 


NOW, THEREFORE, the parties hereto agree as follows:


 


ARTICLE I


 


DEFINITIONS AND ACCOUNTING
TERMS


 


SECTION 1.1  Defined Terms.  The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof).


 

















 


“Affected
Lender” is defined in Section 4.12.


 


“Affiliate” of any Person
means any other Person which, directly or indirectly, controls, is controlled
by or is under common control with such Person (excluding any trustee under, or
any committee with responsibility for administering, any Plan).  A Person shall be deemed to be “controlled
by” any other Person if such other Person possesses, directly or indirectly,
power


 


(a)                                  to vote 10% or
more of the securities (on a fully diluted basis) having ordinary voting power
for the election of directors or managing general partners; or


 


(b)                                 to direct or
cause the direction of the management and policies of such Person whether by
contract or otherwise.


 


“Agent” means National
City Bank and its successors and assigns.


 


“Agreed EBITDA FORM” is defined in Schedule
1.


 


“Agreement” means, on any
date, this Seventh Amended and Restated Credit Agreement as originally in
effect on the Closing Date and as thereafter from time to time amended,
supplemented, amended and restated, or otherwise modified and in effect on such
date.


 


“ASC Facility” means an
ambulatory surgery center, surgical facility or other form of outpatient
surgical treatment center (including, without limitation, vision correction or
laser vision correction center), or any business primarily in the business of
owning, operating and/or managing one or more thereof.


 


“ASC Startup”
means any Capital Expenditure or other amount expended the Borrower or any
other Credit Party in an ASC Facility which Capital Expenditure would not by
definition constitute an Investment or Permitted Acquisition hereunder.


 


“ASC Subsidiary” means a
Subsidiary of the Borrower that is primarily engaged in the business of being
an ASC Facility.


 


“ASC Subsidiary Capital Event” means the
purchase by the Borrower or a Wholly-Owned Subsidiary of the Borrower of all or
a portion of the equity interests in a Non-Wholly-Owned ASC Subsidiary or
Controlled Minority ASC Entity or the redemption by a Non-Wholly-Owned ASC
Subsidiary or Minority ASC Entity of all or a portion of the equity interests
in such Non-Wholly-Owned ASC Subsidiary or Minority ASC Entity, as applicable.


 


“Asset
Disposition” means any sale, transfer or other disposition of
any property of the Borrower or any Subsidiary in a single transaction or in a
series of related transactions (other than the sale of inventory and of
equipment that is obsolete, worn-out or no longer useable by the Borrower or
any of its Subsidiaries, in each case in the ordinary course of business and
Permitted Equity Ownership Sales).


 


“Assignee Lender” is defined in Section 10.11.1.


 


2

















 


“Authorized Officer” means, relative to any
Credit Party, those of its officers whose signatures and incumbency shall have
been certified to the Agent and the Lenders pursuant to Section 5.1.1.


 


“Available
Revolving Commitment”: means at any time, an amount equal to the
excess, if any, of (a) the Revolving Commitment Amount then in effect over
(b) the sum of all Revolving Extensions of Credit then outstanding.


 


“Base Rate”  means, for any
day, a fluctuating per annum rate of interest equal to the highest of
(i) the interest rate per annum announced from time to time by the Agent
at its principal office as its then prime rate, which rate may not be the
lowest rate then being charged commercial borrowers by the Agent, (ii) the
Federal Funds Effective Rate plus 1⁄2 of 1% and (iii) the 1 month LIBOR Rate
plus 200 basis points (2%).


 


“Base Rate Loan” means a Loan
bearing interest at a fluctuating rate determined by reference to the Base
Rate.


 


“Borrower” is defined in
the preamble.


 


“Borrowing” means the
Revolving Loans of the same type and, in the case of LIBO Rate Loans, having
the same Interest Period made by all Lenders on the same Business Day and
pursuant to the same Borrowing Request in accordance with Section 2.2.


 


“Borrowing Request” means a loan
request and certificate duly executed by an Authorized Officer of the Borrower,
substantially in the form of Exhibit B hereto.


 


“Business Day” means


 


(a)                                  any day which
is neither a Saturday or Sunday nor a legal holiday on which banks are authorized
or required to be closed in Chicago, Illinois; and


 


(b)                                 relative to the
making, continuing, prepaying or repaying of any LIBO Rate Loans, any day on
which dealings in Dollars are carried on in the London interbank market.


 


“Call Option”
means the call options, purchase rights or similar rights with respect to the
common stock of the Borrower purchased by the Borrower on the issuance date of
the Convertible Notes in connection with such issuance (including any rights of
any counterparty to put any shares of common stock of the Borrower to the
Borrower thereunder or any similar rights thereunder).


 


“Capital Expenditures” means, for any
period, the aggregate amount of all expenditures of the Borrower and its
Subsidiaries for fixed or capital assets made during such period which, in
accordance with GAAP, would be classified as capital expenditures.


 


“Capitalized Lease Liabilities” means all
monetary obligations of any Credit Party under any leasing or similar
arrangement which, in accordance with GAAP, would be classified as capitalized
leases, and, for purposes of this Agreement and each other Loan Document, the 


 


3

















 


amount
of such obligations shall be the capitalized amount thereof, determined in
accordance with GAAP, and the stated maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the
first date upon which such lease may be terminated by the lessee without
payment of a penalty.


 


“Cash Equivalent Investment” means, at any
time:


 


(a)  any evidence of Indebtedness,
maturing not more than eighteen months after such time, issued or guaranteed by
the United States Government;


 


(b)  commercial paper, maturing not more
than nine months from the date of issue, which is issued by:


 


(i)  a corporation
(other than an Affiliate of any Credit Party) organized under the laws of any
state of the United States or of the District of Columbia and rated A-l by
Standard & Poor’s Corporation or P-l by Moody’s Investors Service, Inc.,
or


 


(ii)  any Lender (or
its holding company);


 


(c)  any certificate of deposit or
bankers acceptance, maturing not more than one year after such time, which is
issued by either:


 


(i)  a commercial
banking institution that is a member of the Federal Reserve System and has a
combined capital and surplus and undivided profits of not less than
$500,000,000, or


 


(ii)  any Lender; or


 


(d)  any repurchase agreement entered
into with any Lender (or other commercial banking institution of the stature
referred to in clause (c)(i)) which:


 


(i)  is secured by a
fully perfected security interest in any obligation of the type described in
any of clauses (a) through (c); and


 


(ii)  has a market
value at the time such repurchase agreement is entered into of not less than
100% of the repurchase obligation of such Lender (or other commercial banking
institution) thereunder.


 


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


 


“CERCLIS” means the
Comprehensive Environmental Response Compensation Liability Information System
List.


 


“Change of Control” means
(a) any Person or any two or more Persons acting in concert acquiring
beneficial ownership (within the meaning of Rule 13d-3 of the Securities
and Exchange Commission under the Exchange Act), directly or indirectly, of
capital stock (or other 


 


4

















 


securities
convertible into such capital stock) of the Borrower representing 35% or more
of the combined voting power of all capital stock of the Borrower entitled to
vote in the election of directors, (b) during any period of 12 consecutive
calendar months, the ceasing of those individuals (the “Continuing Directors”) who (i) were
directors of the Borrower, on the first day of each such period or
(ii) subsequently became directors of the Borrower, and whose initial
election or initial nomination for election subsequent to that date was
approved either by (A) a majority of the Continuing Directors then on the
board of directors of the Borrower or (B) the shareholders who, in
accordance with the provisions of the Articles of Incorporation of the
Borrower, are entitled to elect such director, to constitute a majority of the
board of directors of the Borrower or (c) the occurrence of any
“Fundamental Change” (or comparable term) under, as defined in, the Convertible
Note Documents.


 


“Closing Date” means
August 31, 2009.


 


“CMS” shall mean the
Centers for Medicare and Medicaid Services and any successor thereto.


 


“Code” means the
Internal Revenue Code of 1986, and regulations promulgated thereunder.


 


“Collateral” means all
property and interests in property and proceeds thereof now owned or hereafter
acquired by any Credit Party in or upon which a Lien now or hereafter exists in
favor of the Agent on behalf of the Lenders, whether under this Agreement,
Collateral Document or under any other documents executed by any such Credit
Party and delivered to the Agent.


 


“Collateral Documents” means,
collectively, (a) the Guarantee and Collateral Agreement, the Intellectual
Property Assignments and all other security agreements, pledge agreements,
assignments, guarantees and other similar agreements between a Credit Party and
the Agent for the benefit of the Lenders now or hereafter delivered to the
Lenders or the Agent pursuant to or in connection with the transactions
contemplated hereby, and all financing statements (or comparable documents now
or hereafter filed in accordance with the Uniform Commercial Code or comparable
law) against a Credit Party as debtor in favor of the Agent, for the benefit of
the Lenders, as secured party and (b) any amendments, restatements,
supplements, modifications, renewals, replacements, consolidations,
substitutions and extensions of any of the foregoing.


 


“Consideration” means with
respect to any Permitted Acquisition, the aggregate of (i) the cash paid
by the Borrower or any of its Subsidiaries, directly or indirectly, to the
seller in connection therewith, (ii) the Indebtedness incurred or assumed
by the Borrower or any of its Subsidiaries (including, without
limitation, Indebtedness of a person becoming a Credit Party in connection
with a Permitted Acquisition, which Indebtedness continues to exist following
the consummation of such Permitted Acquisition), whether in favor of the seller
or otherwise and whether fixed or contingent, in connection therewith,
(iii) any guaranty given or incurred by the Borrower or any of its
Subsidiaries in connection therewith, (iv) the fair market value of any equity
issued by the Borrower, in connection therewith, and (v) any other
consideration given or obligation incurred by the Borrower or any of its
Subsidiaries in connection therewith.


 


5

















 


“Consolidated Interest Expenses” means, for any
period, the total interest expense (including that attributable to capital
leases) of the Borrower and its Subsidiaries on a consolidated basis with
respect to all outstanding Indebtedness of the Borrower and its Subsidiaries,
including, without limitation, all commissions, discounts and other fees and
charges owed with respect to letters of credit and unused line fees but
excluding any of the foregoing to the extent it constitutes a non-cash item.


 


“Contingent Liability” means any
agreement, undertaking or arrangement which would be reflected in a footnote to
a balance sheet as a contingent liability in accordance with GAAP.


 


“Continuation/Conversion Notice” means a notice
of continuation or conversion and certificate duly executed by an Authorized
Officer of the Borrower, substantially in the form of Exhibit C
hereto.


 


“Controlled Group” means all
members of a controlled group of corporations and all members of a controlled
group of trades or businesses (whether or not incorporated) under common
control which, together with the Borrower, are treated as a single employer
under Section 414(b) or 414(c) of the Code or Section 4001
of ERISA.


 


“Controlled Minority ASC Entity” means, as of
any date of determination, any Minority ASC Entity in which the Borrower or any
Credit Party as of such date has operational control over the day to day
business decisions of such Minority ASC Entity including, without limitation,
veto power over the disposition of the assets of such Minority ASC Entity and
operational control over the disbursement of funds held by such Minority ASC
Entity.


 


“Convertible Note Documents”
means the Convertible Notes, the Indenture dated as of June 17, 2007
between Borrower, as issuer and LaSalle Bank National Association, as trustee
(including the First Supplemental Indenture dated as of June 27, 2007
between Borrower, as issuer and LaSalle Bank National Association, as trustee),
the Call Options, the Warrants and all other definitive documents, instruments
and agreements relating thereto, as amended, modified, supplemented, refinanced
and replaced in accordance with the provisions hereof.


 


“Convertible Notes”
means the Borrower’s $75,000,000 in original principal amount of unsecured
convertible senior subordinated notes due 2012, as amended, modified,
supplemented, refinanced or replaced in accordance with the provisions hereof.


 


“Credit Party” means the
Borrower and any Subsidiary of the Borrower party to a Loan Document.


 


“Credit
Party Intercompany Loans” is defined in Section 7.2.2.


 


“Credit Party Intercompany Notes” is defined in Section 7.2.2.


 


“Default” means any
condition, occurrence or event which, after notice or lapse of time or both,
would constitute an Event of Default.


 


“Dollar” and the sign “$” mean lawful money of the United States.


 


6

















 


“Domestic Office” means,
relative to any Lender, the office of such Lender designated as such below its
signature hereto or designated in the Lender Assignment Agreement or such other
office of a Lender (or any successor or assign of such Lender) within the
United States as may be designated from time to time by notice from such
Lender, as the case may be, to each other Person party hereto.  A Lender may have separate Domestic Offices
for purposes of making, maintaining or continuing, as the case may be, Base
Rate Loans.


 


“EBITDA” means,
for any applicable computation period, the sum of (i) the Borrower’s Net
Income on a consolidated basis from continuing operations, plus
(ii) income and franchise taxes paid or accrued during such period,
(iii) interest expense paid or accrued during such period,
(iv) amortization and depreciation deducted in determining Net Income for
such period, (v) non-cash, non-recurring losses, and (vi) non-cash
expenses for capital stock-based compensation related to capital stock-based
compensation plans that do not represent a cash item in any future period.  For
the purpose of determining compliance with Section 7.2.4(b) and
(c), “EBITDA” shall be as adjusted pursuant to the formula described in Schedule
1.


 


“Environmental Laws” means all
applicable federal, state or local statutes, laws, ordinances, codes, rules,
regulations and guidelines (including consent decrees and administrative
orders) relating to public health and safety and protection of the environment.


 


“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended, and any successor
statute of similar import, together with the regulations thereunder, in each
case as in effect from time to time. 
References to sections of ERISA also refer to any successor sections.


 


“Event of
Default” is defined in Section 8.1.


 


“Federal Funds Effective Rate” means, for any
day, an interest rate per annum equal to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published for such day (or,
if such day is not a Business Day, for the immediately preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations at
approximately 11:00 a.m. (EST) on such day on such transactions received
by Agent from three Federal funds brokers of recognized standing selected by
the Agent in its sole discretion.


 


“Fiscal Quarter” means any
quarter of a Fiscal Year.


 


“Fiscal Year” means any
period of twelve consecutive calendar months ending on December 31;
references to a Fiscal Year with a number corresponding to any calendar year (e.g.
the “2006 Fiscal Year”) refer to the Fiscal Year ending on the December 31
occurring during such calendar year.


 


“Fixed Charges” means, with respect to the
Borrower and its Subsidiaries on a consolidated basis, as of any date of
determination, (a) Consolidated Interest Expenses (including any interest
expense with respect to the Convertible Note Documents) for the period of four
fiscal quarters ending on the date of determination plus (b) scheduled
principal payments on Indebtedness required to be made in such period plus
(c) rent expenses incurred by the Borrower 


 


7

















 


and
its Subsidiaries.  Notwithstanding the
foregoing, for the Fiscal Quarters ending September 30, 2009,
December 31, 2009, March 31, 2010 and June 30, 2010, scheduled
principal payments on the Term Loans for purposes of clause (b) above
shall be deemed to be an annualized amount equal to $1,000,000 per Fiscal
Quarter.


 


“Fraud and Abuse Laws” means the
federal Anti-kickback Statute, Section 1128B(b) of the Social
Security Act, 42 U.S.C. Section 1320a-7b(b) (the “Anti-kickback
Statue”), the federal Self-Referral Prohibition, Section 1877 of the
Social Security Act, 42 U.S.C. Section 1395nn (“Stark II”), the federal
False Claims Act, 31 U.S.C. Section 3729 et
seq. (“False Claims Act”), and the federal civil monetary penalties
act, Section 1128A of the Social Security Act, 42 U.S.C.
Section 1320a-7a (“CMPA”), each as from time to time amended; any
successor statute(s) thereto; all rules and regulations promulgated
thereunder; other similar federal and state laws and regulations; and, all
other federal or state laws concerning illegal remuneration, referral of
patients, kickbacks, fee splitting, reassignment of claims, and false or fraudulent
billing for medical items or services.


 


“F.R.S. Board” means the
Board of Governors of the Federal Reserve System or any successor thereto.


 


“GAAP”  means generally accepted accounting
principles set forth from time to time in the opinions and pronouncements of
the Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and
authority within the U.S. accounting profession), which are applicable to the
circumstances as of the date of determination.


 


“Guarantee
and Collateral Agreement” means the Guarantee and Collateral Agreement
dated as of the Closing Date by each Credit Party signatory thereto in favor of
Agent and Lenders, as amended, supplemented, restated or otherwise modified
from time to time.


 


“Guarantor” means each
Person (other than Borrower) party to the Guarantee and Collateral Agreement.


 


“Hazardous Material” means


 


(a)                                  any “hazardous
substance”, as defined by CERCLA;


 


(b)                                 any “hazardous
waste”, as defined by the Resource Conservation and Recovery Act, as amended;


 


(c)                                  any petroleum
product; or


 


(d)                                 any pollutant
or contaminant or hazardous, dangerous or toxic chemical, material or substance
within the meaning of any other applicable federal, state or local law,
regulation, ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of
conduct concerning any medical, hazardous, toxic or dangerous waste, substance
or material, all as amended or hereafter amended.


 


8

















 


“Hedging Agreements” means any
Interest Rate Agreement, foreign currency exchange agreement, commodity price
protection agreement or other interest or currency exchange rate or commodity
price hedging agreement, provided that such agreement is not entered into for
speculative purposes, is entered into with the Agent or a Lender.


 


“herein”, “hereof”, “hereto”,
“hereunder” and similar terms
contained in this Agreement or any other Loan Document refer to this Agreement
or such other Loan Document, as the case may be, as a whole and not to any
particular Section, paragraph or provision of this Agreement or such other Loan
Document.


 


“HIPAA” means the
Health Insurance Portability and Accountability Act of 1996 and its
implementing administrative simplification regulations, specifically, the
“Standards for Electronic Transactions,” 65 Fed.
Reg. 50,312 (Aug. 17, 2000); “Standards for Privacy of
Individually Identifiable Health Information,” 65  Fed. Reg. 82,462
(Dec. 28, 2000), modified at 67 Fed.
Reg. 53,182 (Aug. 14, 2002); and the “Security Standards,” 68 Fed. Reg. 8334 (Feb. 20, 2003), each
as from time to time amended.


 


“Impermissible Qualification” means,
relative to the opinion or certification of any independent public accountant
as to any financial statement of any Credit Party, any qualification or
exception to such opinion or certification:


 


(a)                                  which is of a
“going concern” or similar nature;


 


(b)                                 which relates
to the limited scope of examination of matters relevant to such financial
statement; or


 


(c)                                  which relates
to the treatment or classification of any item in such financial statement and
which, as a condition to its removal, would require an adjustment to such item
the effect of which would be to cause such Credit Party to be in default of any
of its obligations under Section 7.2.4.


 


“including” means
including without limiting the generality of any description preceding such
term, and, for purposes of this Agreement and each other Loan Document, the
parties hereto agree that the rule of ejusdem  generis shall
not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.


 


“Indebtedness” of any Person
means, without duplication:


 


(a)                                  all obligations
of such Person for borrowed money and all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments; provided, for
purposes of clarification, all obligations of the Borrower under the
Convertible Note Documents will be considered Indebtedness hereunder;


 


(b)                                 all
obligations, contingent or otherwise, relative to the face amount of all
letters of credit (including Letters of Credit), whether or not drawn, and
banker’s acceptances issued for the account of such Person;


 


9
















 


(c)                                  all obligations
of such Person as lessee under leases which have been or should be, in
accordance with GAAP, recorded as Capitalized Lease Liabilities;


 


(d)                                 all other
liabilities for borrowed money in accordance with GAAP included on the
liability side of the balance sheet of such Person as of the date at which
Indebtedness is to be determined;


 


(e)                                  net liabilities
of such Person under all Hedging Agreements;


 


(f)                                    whether or not
so included as liabilities in accordance with GAAP, all obligations of such
Person to pay the deferred purchase price of property or services, and
indebtedness (excluding prepaid interest thereon) secured by a Lien on property
owned or being purchased by such Person (including indebtedness arising under
conditional sales or other title retention agreements), whether or not such
indebtedness shall have been assumed by such Person or is limited in recourse;
and


 


(g)                                 all Contingent
Liabilities of such Person in respect of any of the foregoing.


 


For all purposes of this Agreement, 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 payments have been made or are required to be made with respect
to such Indebtedness solely by a general partner or a joint venture partner
other than a Subsidiary.


 


“Indemnified
Liabilities” is defined in Section 10.4.


 


“Indemnified
Parties” is defined in Section 10.4.


 


“Intellectual Property Assignment” means that
certain Intellectual Property Assignment in form and substance satisfactory to
the Agent, duly executed and delivered by a Credit Party in favor of the Agent,
for the benefit of itself and the Lenders, as the same may be amended,
supplemented or otherwise modified from time to time.


 


“Interest Period” means,
relative to any LIBO Rate Loans, the period beginning on (and including) the
date on which such LIBO Rate Loan is made or continued as, or converted into, a
LIBO Rate Loan pursuant to Section 2.4 or 2.5 and shall end
on (but exclude) either (i) the day one week subsequent to such day, or
(ii) the day which numerically corresponds to such date one, two, three,
six or twelve  months thereafter, if available
from all Lenders (or, if such month has no numerically corresponding day, on
the last Business Day of such month), as the Borrower may select in its
relevant notice pursuant to Section 2.4 or 2.5; provided,
however, that


 


(a)                                  the Borrower
shall not be permitted to select Interest Periods to be in effect at any one
time which have expiration dates occurring on more than six  (including
the Base Rate tranche) different  dates;


 


(b)                                 Interest
Periods commencing on the same date for Revolving Loans comprising part of the
same Borrowing shall be of the same duration;


 


10

















 


(c)                                  if such
Interest Period would otherwise end on a day which is not a Business Day, such
Interest Period shall end on the next following Business Day (unless such next
following Business Day is the first Business Day of the immediately succeeding
calendar month, in which case such Interest Period shall end on the Business
Day next preceding such numerically corresponding day);


 


(d)                                 no Interest
Period with respect to Loans made prior to the Revolving Commitment Termination
Date may end later than the date set forth in clause (a) of the
definition of “Revolving Commitment Termination Date”;


 


(e)                                  no Interest
Period for any Loan outstanding on and after the Revolving Commitment
Termination Date shall extend beyond the Maturity Date; and


 


(f)                                    no Interest
Period applicable to a Loan outstanding on and after the Revolving Commitment
Termination Date, or portion thereof, shall extend beyond any date upon which
is due any scheduled principal payment in respect of the Loans unless the
aggregate principal amount of Loans represented by LIBO Rate Loans having
Interest Periods that will expire on or before such date, equals or exceeds the
amount of such principal payment.


 


“Interest Rate Agreement” means any
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement or other similar agreement or arrangement designed to protect the
Borrower or any of its Subsidiaries against fluctuations in interest rates.


 


“Investment” means,
relative to any Person,


 


(a)                                  any loan or
advance made by such Person to any other Person (excluding commission, travel
and similar advances to officers and employees of the Borrower and any other
Credit Party made in the ordinary course of business);


 


(b)                                 any Contingent
Liability of such Person; and


 


(c)                                  any ownership
or similar interest held by such Person in any other Person.


 


The amount of any Investment shall be the original
principal or capital amount thereof less all returns of principal or equity
thereon (and without adjustment by reason of the financial condition of such
other Person) and shall, if made by the transfer or exchange of property other
than cash, be deemed to have been made in an original principal or capital
amount equal to the fair market value of such property.


 


“LC Notice” has the
meaning specified in Section 2.8.


 


“Lender Assignment Agreement” means a Lender
Assignment Agreement substantially in the form of Exhibit D hereto.


 


“Lenders” is defined in
the preamble.


 


“Letter of Credit” shall mean a
Letter of Credit that is issued pursuant to Section 2.8.


 


11

















 


“Letter of Credit Cash Collateral
Account” has the meaning specified in Section 8.4.


 


“Letter of Credit Expiry Date” shall mean the
date which is five Business Days prior to the Revolving Commitment Termination
Date.


 


“Letter of Credit Issuer” shall mean
National City.


 


“Letter of Credit Obligations” shall mean, as
at the time of determination thereof, the sum of (a) the aggregate amount
of all unpaid and outstanding reimbursement obligations and (b) without
duplication, the aggregate stated amount at such time of Letters of Credit then
outstanding and undrawn (as such aggregate stated amount shall be adjusted,
from time to time, as a result of drawings, the issuance of Letters of Credit,
or otherwise).


 


“Letter of
Credit Sublimit” shall mean an aggregate amount of $5,000,000.


 


“LIBO Rate” is defined in Section 3.2.1.


 


“LIBO Rate
Loan” means a Loan bearing interest, at all times during an Interest Period
applicable to such Loan, at a fixed rate of interest determined by reference to
the LIBO Rate (Reserve Adjusted).


 


“LIBO Rate (Reserve Adjusted)” is defined in Section 3.2.1.


 


“LIBOR
Office” means, relative to any Lender, the office of such Lender designated as
such below its signature hereto or designated in the Lender Assignment
Agreement or such other office of a Lender as designated from time to time by
notice from such Lender to the Borrower and the Agent, whether or not outside
the United States, which shall be making or maintaining LIBO Rate Loans of such
Lender hereunder.


 


“LIBOR Reserve Percentage” is defined in Section 3.2.1.


 


“Lien” means any
security interest, mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or otherwise), charge against or
interest in property to secure payment of a debt or performance of an
obligation or other priority or preferential arrangement of any kind or nature
whatsoever.


 


“Loan Document” means this
Agreement, the Notes, each Collateral Document, each Hedging Agreement and each
other document delivered pursuant to Section 7.1.12.


 


“Loans” means
the Revolving Loans and Term Loans.


 


“Material Adverse Effect” means a
material adverse effect on the financial condition, operations, assets,
business, properties or prospects of the Borrower, its Subsidiaries and
Minority ASC Entities taken as a whole.


 


“Maturity
Date” means the earliest of:


 


(a)                                  August 30,
2012; or


 


12

















 


(b)                                 the date on which
any Termination Event occurs.


 


“Medicaid” means the
medical assistance program established by Title XIX of the Social Security Act.


 


“Medicaid Certification” means a
certification by a state agency or other entity responsible for certifying
Medicaid providers and suppliers that a health care provider or supplier is in
compliance with all the conditions of participation set forth in the Medicaid
Regulations.


 


“Medicaid Provider Agreement” means an
agreement entered into between CMS or a state agency or other such entity
administering the Medicaid program and a health care provider or supplier under
which the health care provider or supplier agrees to provide services for
Medicaid patients in accordance with the terms of the agreement and Medicaid
Regulations.


 


“Medicaid Regulations” means,
collectively, (i) all federal statutes (whether set forth in Title XIX of
the Social Security Act or elsewhere) affecting the medical assistance program
established by Title XIX of the Social Security Act and any successor
statute(s); (ii) all applicable provisions of all federal rules,
regulations, manuals and orders of all governmental authorities promulgated
pursuant to or in connection with the statutes described in clause
(i) above and all federal administrative, reimbursement and other
guidelines of all governmental authorities having the force of law promulgated
pursuant to or in connection with the statutes described in clause
(i) above; (iii) all state statutes and plans for medical assistance
enacted in connection with the statutes and provisions described in clauses
(i) and (ii) above; and (iv) all applicable provisions of all
rules, regulations, manuals and orders of all governmental authorities
promulgated pursuant to or in connection with the statutes described in clause
(iii) above and all state administrative, reimbursement and other
guidelines of all governmental authorities having the force of law promulgated
pursuant to or in connection with the statutes described in clause
(iii) above, in each case as may be amended, supplemented or other wise
modified from time to time.


 


“Medicare”
means the health insurance program for the aged and disabled established by
Title XVIII of the Social Security Act.


 


“Medicare Certification” means
certification by CMS or a state agency or entity under contract with CMS that
the health care operation is in compliance with all the conditions of
participation set forth in the Medicare Regulation.


 


“Medicare Provider Agreement” means an
agreement entered into between CMS or a state agency or other such entity
administering the Medicare program and a health care provider or supplier under
which the health care provider or supplier agrees to provide services for
Medicare patients in accordance with the terms of the agreement and Medicare
Regulations.


 


“Medicare Regulations” means,
collectively, all federal statutes (whether set forth in Title XVIII of the
Social Security Act or elsewhere) affecting the health insurance program for
the aged and disabled established by Title XVIII of the Social Security Act and
any successor statute(s); together with all applicable provisions of all rules,
regulations, manuals and orders and administrative, reimbursement and other
guidelines of all governmental authorities (including without limitation, the
United States Department of Health and Human Services (“HHS”), CMS, 


 


13

















 


the
Office of the Inspector General for HHS, or any person succeeding to the
functions of any of the foregoing) promulgated pursuant to or in connection
with any of the foregoing having the force of law, as each may be amended,
supplemented or otherwise modified from time to time.


 


“Minority ASC
Entity” means any ASC Facility which is not a Subsidiary into which
the Borrower or a Subsidiary of the Borrower has made an Investment, including,
without limitation, by way of a Permitted Acquisition.


 


“Minority ASC Investments”
has the meaning set forth in Section 7.2.5(l).


 


“National City” means National
City Bank, acting in its individual capacity.


 


“Net Available Proceeds” means
(a) with respect to any Asset Disposition, the sum of cash or readily
marketable cash equivalents received (including by way of a cash generating
sale or discounting of a note or account receivable) therefrom, whether at the
time of such disposition or subsequent thereto, or (b) with respect to any
sale or issuance of any debt or equity securities of the Borrower or any
Subsidiary, cash or readily marketable cash equivalents received therefrom,
whether at the time of such disposition or subsequent thereto, net, in either
case, of all legal, title and recording tax expenses, commissions and other
fees and all costs and expenses incurred and all federal, state, local and
other taxes required to be accrued as a liability as a consequence of such
transactions and, in the case of an Asset Disposition, net of all payments made
by the Borrower or any of its Subsidiaries, including any prepayment premiums,
on any Indebtedness which is secured by such assets pursuant to a Permitted
Lien upon or with respect to such assets or which must, by the terms of such
Lien, in order to obtain a necessary consent to such Asset Disposition, or by
applicable law, be repaid out of the proceeds from such Asset Disposition.


 


“Net Income” means, for any
computation period, with respect to the Borrower, on a consolidated basis,
cumulative net income earned during such period as determined in accordance
with GAAP (other than net income from any Minority ASC Entity which is
restricted from declaring or paying dividends, distributions or otherwise
advancing funds to its equityholders whether by contract or otherwise, except
to the extent of any such net income actually received which is not in
violation of the applicable restriction); provided,
however, there shall not be included for purposes of calculating Net
Income of the Borrower, net income attributable to Minority ASC Entities in
excess of 25% of total Net Income.


 


“Net Worth” means, for any computation
period, the consolidated shareholders’ equity of the Borrower determined in
accordance with GAAP, which consolidated shareholders’ equity shall be deemed
to include the preferred stock of the Borrower and the value of Borrower’s
treasury stock, at cost.


 


“Non-Credit
Party Intercompany Loans” is defined in Section 7.2.2.


 


“Non-Credit Party Intercompany
Notes” is defined in Section 7.2.2.


 


“Non-Wholly-Owned ASC Subsidiary” means an ASC
Subsidiary in which the Borrower or a Subsidiary of the Borrower owns less than
100% of the equity interests but at least 50.1% of the equity interests.


 


14

















 


“Note” means a
promissory note of the Borrower payable to any Lender, in the form of Exhibit A
hereto (as such promissory note may be amended, endorsed or otherwise modified
from time to time), evidencing the aggregate Indebtedness of the Borrower to
such Lender resulting from outstanding Loans, and also means all other
promissory notes accepted from time to time in substitution therefor or renewal
thereof.


 


“Obligations” means all
obligations (monetary or otherwise) of each Credit Party arising under or in
connection with this Agreement, the Notes, the Letters of Credit and each other
Loan Document.


 


“Organizational
Document” means, relative to any Subsidiary, its certificate
of incorporation, its by-laws, its limited liability company agreement,
partnership agreement and all shareholder agreements, voting trusts and similar
arrangements applicable to any of its authorized shares of capital stock,
partnership interests, or membership interests, as the case may be.


 


“Original Credit Agreement” has the meaning
specified in the Recitals hereto.


 


“Participant” is defined in Section 10.11.


 


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


 


“Pension Plan” means a
“pension plan”, as such term is defined in section 3(2) of ERISA, which is
subject to Title IV of ERISA (other than a multiemployer plan as defined in
section 4001(a)(3) of ERISA), and to which the Borrower or any
corporation, trade or business that is, along with the Borrower, a member of a
Controlled Group, may have liability, including any liability by reason of
having been a substantial employer within the meaning of section 4063 of ERISA
at any time during the preceding five years, or by reason of being deemed to be
a contributing sponsor under section 4069 of ERISA.


 


“Percentage” means,
relative to any Lender, the percentage set forth opposite its name on Schedule
10.1 hereto or set forth in the Lender Assignment Agreement, as such
percentage may be adjusted from time to time pursuant to Lender Assignment
Agreement(s) executed by such Lender and its Assignee Lender(s) and
delivered pursuant to Section 10.11.


 


“Permitted Acquisition” means the
purchase (by asset purchase, stock purchase, membership interest purchase,
other equity interest purchase, merger or otherwise, subject to the other
requirements of this definition set forth below) by the Borrower or a
Wholly-Owned Subsidiary of the Borrower (or, in the case of the purchase of an
ASC Facility, by the Borrower or a Subsidiary of the Borrower) of the assets,
stock, membership interests or other equity interests of a Target or Practice
(it being acknowledged that medical records and certain other professional
assets that are required by law to be owned by a Provider are not acquired in
these transactions), which purchase meets the following criteria:


 


(a)  no Default or Event of Default
shall have occurred or be continuing both before and after giving effect to
such acquisition;


 


15

















 


(b)  the Borrower’s Senior Leverage
Ratio on a pro forma basis (after giving effect to the Permitted Acquisition)
is less than 2.25:1.0;


 


(c)  the aggregate Consideration
(including any Indebtedness pursuant to Section 7.2.2(g), (h),
(i) and (j) relating to such Permitted Acquisitions) in
connection with such Permitted Acquisition shall not exceed (unless otherwise
consented to by the Required Lenders) $25,000,000 individually and $40,000,000
for all Permitted Acquisitions consummated during the term of this Agreement;


 


(d)  the acquisition shall have been of
substantially all of the assets and/or working capital of a Target or, if for
stock or other equity interests in a Target, shall be for not less than 20.0%
of the equity interests therein, shall either, to the extent permitted by
applicable law, be merged with and into the Borrower or a Wholly-Owned
Subsidiary of the Borrower, or be a Wholly-Owned Subsidiary of the Borrower; provided,
however ̧ with respect to an ASC Facility which is not merged with or
into a Borrower or a Wholly-Owned Subsidiary of the Borrower, the stock or
other equity interests of the ASC Facility so acquired shall be pledged to the
Agent on behalf of the Lenders (and, in the case of any equity interest in a
limited liability company or limited partnership, the agreement governing such
Person shall not prohibit a collateral assignment of such equity interest);


 


(e)                                  the acquired
Target, on a pro forma basis shall have positive EBITDA for the period of four
fiscal quarters ending on the date of any such acquisition;


 


(f)  the Borrower shall have delivered
to the Agent, (i) not later than 5 Business Days prior to the closing of
the acquisition pro forma financial statements or certificates demonstrating
(in reasonable detail and with appropriate calculations and computations in all
respects satisfactory to Agent) continued compliance with all covenants in this
Agreement following the inclusion of the target in the Borrower’s consolidated
enterprise and (ii) not later than 30 days after the closing of the
acquisition a copy of the related acquisition agreement;


 


(g) the Borrower shall have delivered to
the Agent, not later than 5 Business Days prior to the closing of the
acquisition a fully executed Agreed EBITDA Form; and


 


(h) after giving effect to such
acquisition, the sum of the Available Revolving Commitments shall not be less
than $10,000,000.


 


“Permitted Asset Disposition” has the meaning specified
on Exhibit F hereto.


 


“Permitted Equity Ownership Sale” means the
sale, transfer or other disposition of the outstanding capital stock,
membership interest or other equity interests in an ASC Subsidiary (or Minority
ASC Entity) or the issuance of additional equity interests in an ASC Subsidiary
(or Minority ASC Entity), so long as:


 


(i)                                     after giving
effect to such sale, a Credit Party shall own not less than 20.0% of the equity
interests (including securities convertible into equity interests) of such ASC Facility;


 


16

















 


(ii)                                  the equity
interests in such ASC Subsidiary (or Minority ASC Entity) which are held by the
Borrower or a Subsidiary of the Borrower after such sale continue to be pledged
to the Lenders pursuant to the Guarantee and Collateral Agreement;


 


(iii)                               the chief
financial officer or chief executive officer of the Borrower shall have
delivered a certificate, dated the date of such sale, to the Agent certifying
(a) that no Default or Event of Default exists or would result from such
sale and (b) pro forma financial statements demonstrating compliance with Section 7.2.4
for the trailing twelve-month period prior to such sale; and


 


(iv)                              the proceeds
(other than any proceeds received by a Person who is not the Borrower or a
Subsidiary of the Borrower) of any such sale are applied in the manner set
forth in Section 2.3.2.


 


Upon
the consummation of any Permitted Equity Ownership Sale and at the request of
the Borrower (to comply with a requirement in the purchase and sale documents
evidencing such Permitted Equity Ownership Sale), the ASC Subsidiary or
Minority ASC Entity which has become a Non-Wholly Owned ASC Subsidiary or
Minority ASC Entity as a result of such Permitted Equity Ownership Sale shall
be released from the Guarantee and Collateral Agreement and the liens of the
Lenders on the assets of such ASC Subsidiary shall be released (except to the
extent of the pledge to the Lenders of the equity interests of such ASC
Subsidiary retained by the Borrower or a Subsidiary of the Borrower) and the
Agent is hereby authorized to execute and file the necessary release
documentation to reflect such release.


 


“Permitted Liens” means those
liens listed in Section 7.2.3.


 


“Permitted Seller Debt” means
Indebtedness owed to the Borrower which is incurred by purchasers of the
Borrower’s assets in connection with a Permitted Asset Disposition.


 


“Permitted Seller Equity” means common stock of the
Borrower that is used as consideration payable to the Borrower or any of its
Subsidiaries by any party to a Permitted Asset Disposition.


 


“Person” means any
natural person, corporation, partnership, limited liability company, firm,
association, trust, government, governmental agency or any other entity,
whether acting in an individual, fiduciary or other capacity.


 


“Plan” means any
Pension Plan or Welfare Plan.


 


“Pledged Collateral” has the
meaning specified in the Guarantee and Collateral Agreement.


 


“Practice” means any
medical or ophthalmology practice, optometry practice or optical dispensary at
a single location or various locations.


 


“Provider” means any
Person who performs professional medical services for a Practice that is either
managed by a Subsidiary or the assets of which are owned by a Subsidiary.


 


17

















 


“Quarterly Payment Date” means the last
Business Day of each March, June, September, and December.


 


“Release” means a
“release”, as such term is defined in CERCLA.


 


“Replacement Lender” is defined in Section 4.12.


 


“Required Lenders” means any three
or more Lenders holding at least 51.0% of the Revolving Commitments (or, if the
Revolving Commitments have terminated, outstanding Revolving Loans) and
outstanding Term Loans, collectively; provided, if there are only two
Lenders then Required Lenders shall mean both Lenders.


 


“Resource Conservation and Recovery
Act” means the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et  seq., as in effect from time to time.


 


“Revolver Increase”
has the meaning set forth in Section 2.2.3.


 


“Revolver Increase
Notice” has the meaning set forth in Section 2.2.3.


 


“Revolving Commitment” means,
relative to any Lender, such Lender’s obligation to make Revolving Loans
pursuant to Section 2.2.1.


 


“Revolving Commitment Amount” means $50,000,000
plus the amount, if any, of any increase permitted by Section 2.2.3.
(after which increase, the Revolving Commitment Amount shall not exceed
$95,000,000).  The Revolving Commitment
Amount at any time in effect may also be reduced from time to time pursuant to Section 2.3.


 


“Revolving Commitment Termination
Date” means the earliest of


 


(a)                                  August 30,
2012;


 


(b)                                 the date on
which the Revolving Commitment Amount is terminated in full or reduced to zero
pursuant to Section 2.3; and


 


(c)                                  the date on which
any Termination Event occurs;


 


Upon the occurrence of any event described in clause
(b) or (c), the Revolving Commitments shall terminate
automatically and without further action.


 


“Revolving
Extensions of Credit”  as to
any Revolving Lender at any time, an amount equal to the sum, without
duplication, of (a) the aggregate principal amount of all Revolving Loans
held by such Lender then outstanding and (b) an amount equal to such
Lender’s Percentage of the Letter of Credit Obligations then outstanding.


 


“Revolving Loan” is defined in Section 2.2.1.


 


“Senior Debt” shall mean
Indebtedness of the type described in clauses (a), (b), (c),
and (d) of the definition Indebtedness (other than Subordinated
Debt) of the Borrower on a consolidated basis.


 


18

















 


“Senior Leverage Ratio” means, as of any date of
determination, the ratio of (a) Senior Debt (including Letters of Credit)
to (b) EBITDA, as measured on a rolling four quarter basis.


 


“Solvent” means, when
used with respect to a Person, that (a) the fair saleable value of the
assets of such Person is in excess of the total amount of the present value of
its liabilities (including for purposes of this definition all liabilities
whether or not reflected on a balance sheet prepared in accordance with GAAP
and whether direct or indirect, fixed or contingent, secured or unsecured,
disputed or undisputed), (b) such Person is able to pay its debts or
obligations in the ordinary course as they mature and (c) such Person does
not have unreasonably small capital to carry out its business as conducted and
as proposed to be conducted.  “Solvency”
shall have a correlative meaning.


 


“Subordinated Debt” means all
Indebtedness the repayment of which is subordinated, upon terms satisfactory to
the Required Lenders, in right of payment to the payment in full in cash of all
Obligations.


 


“Subsidiary” of a Person
means any corporation, association, partnership, limited liability company,
joint venture or other business entity of which more than 50% of the voting
stock, membership interests or other equity interests (in the case of Persons
other than corporations), is owned or controlled directly or indirectly by the
Person, or one or more of the Subsidiaries of the Person, or a combination
thereof.


 


“Target” means
(i) any business that sells, leases or provides medical equipment to
doctors, hospitals or other health organizations, (ii) ambulatory surgery
centers, surgical facilities or other form of outpatient surgical treatment
centers (including, without limitation, vision correction or laser vision
correction centers), regardless of the specialty or specialties involved
therein, or any business that owns, operates and/or manages one or more
thereof, (iii) any management service center, optical laboratory, buying
group or group purchasing organization, companies that own, operate and/or
manage vision correction centers (including, without limitation, laser vision
correction centers), marketing products and services organization (including providing
marketing and lead tracking software, websites, call center services and other
marketing services to health care providers and manufacturers), or reasonable
extensions thereof (including any company which leases or sells equipment or
provides services to any of the foregoing), at a single location or various
locations, or (iv) reasonable extensions of any of the foregoing.  Whenever in this Agreement “Target” is used
in describing an acquisition by the Borrower or a Subsidiary of the Borrower of
equity interests, such reference is to the acquisition of the assets used in
the operation of the Target that can lawfully be acquired by the Borrower or a
Subsidiary of the Borrower or to the acquisition of the equity interests of a
Person that owns, as of the time of purchase, only those assets that can be
lawfully acquired by the Borrower or a Subsidiary of the Borrower.


 


“Taxes” is defined in Section 4.6.


 


“Termination Event” means


 


(a)                                  the occurrence
of any Default described in clauses (a) through (e) of Section 8.1.9;


 


19
















 


(b)                                 the occurrence
and continuance of any other Event of Default and either


 


(i)                                     the declaration
of the Loans to be due and payable pursuant to Section 8.3, or


 


(ii)                                  in the absence
of such declaration, the giving of notice by the Agent, acting at the direction
of the Required Lenders, to the Borrower that the Revolving Commitments have
been terminated;


 


(c)                                  the failure to
repay or refinance the Convertible Notes due June 15, 2012 on or prior to
December 15, 2011.


 


“Term Loan Commitment” means,
relative to any Lender, such Lender’s obligation to make Term Loans pursuant to
Section 2.1.


 


“Term Loan Commitment Amount” means
$30,000,000.


 


“Term Loans” has the meaning set forth in Section 2.1.


 


“Total Funded Debt” of any Person
means all Indebtedness of such Person except Indebtedness specified in clause
(g) of the definition of Indebtedness; provided, with respect to
Indebtedness of any Non-Wholly Owned ASC Subsidiary guaranteed by a Person or
Persons other than a Subsidiary, ASC Subsidiary, Minority ASC Entity or
Affiliate of a Credit Party, the amount of outstanding Indebtedness of such
Non-Wholly Owned ASC Subsidiary included in the calculation of this definition
shall equal the greater of (x) the actual amount of such Indebtedness
guaranteed by the Borrower or any Subsidiary of the Borrower and (y) an
amount equal to the principal amount of such Indebtedness multiplied by that
percentage of the outstanding equity interests owned by the Borrower or any
Subsidiary of the Borrower.


 


“Total Leverage Ratio” has the
meaning assigned to it in Section 3.2.1.


 


“Type” means,
relative to any Loan, the portion thereof, if any, being maintained as a Base
Rate Loan or a LIBO Rate Loan.


 


“United States” or “U.S.” means the United States of America,
its fifty States and the District of Columbia.


 


“Warrants” means
any call options, warrants, purchase rights or similar rights with respect to
the common stock of the Borrower sold by the Borrower on the issuance date of
the Convertible Notes in connection with such issuance.


 


“Welfare Plan” means a
“welfare plan”, as such term is defined in Section 3(1) of ERISA.


 


“Wholly-Owned
Subsidiary” means any Person in which (other than directors’
qualifying shares required by law) 100% of the equity interests of each class
having ordinary voting power, and 100% of the equity interests of every other
class, in each case, at the time as of 


 


20

















 


which any determination is being made, is owned,
beneficially and of record, by the Borrower or by one or more of the other
Wholly-Owned Subsidiaries, or both.


 


SECTION 1.2  Use of Defined Terms.  Unless otherwise defined or the context
otherwise requires, terms for which meanings are provided in this Agreement
shall have such meanings when used in the Schedules and in each Note, Borrowing
Request, Continuation/Conversion Notice, Loan Document, notice and other
communication delivered from time to time in connection with this Agreement or
any other Loan Document.


 


SECTION 1.3  Cross-References. Unless otherwise
specified, references in this Agreement and in each other Loan Document to any
Article or Section are references to such Article or
Section of this Agreement or such other Loan Document, as the case may be,
and, unless otherwise specified, references in any Article, Section or
definition to any clause are references to such clause of such Article,
Section or definition.


 


SECTION 1.4  Accounting Principles.  Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied. 
For purposes of clarification, it shall be understood that the financial
results of Non-Wholly Owned Subsidiaries and Minority ASC Entities will be
reflected in Borrower’s consolidated financial statements in accordance with
GAAP.


 


ARTICLE II


 


COMMITMENTS, BORROWING
PROCEDURES AND NOTES


 


SECTION 2.1  Term Loan Commitment. On the terms and
subject to the conditions of this Agreement, each Lender severally agrees to
make a loan to Borrower (relative to such Lender, and of any type, its “Term
Loan”) on the Closing Date
equal to such Lender’s Percentage of the Term Loan Commitment.  Amounts borrowed as a Term Loan which are
repaid or prepaid may not be reborrowed. 
Each Lender’s Term Loan Commitment shall expire concurrently with the
making of the Term Loans on the Closing
Date.


 


SECTION 2.2  Revolving Commitments.  On the terms and subject to the conditions of
this Agreement (including Article V), each Lender severally agrees
to make loans pursuant to the Revolving Commitments described in this Section 2.2.


 


SECTION 2.2.1  Revolving Commitment of Each Lender.  From time to time on any Business Day
occurring prior to the Revolving Commitment Termination Date, each Lender will
make loans (relative to such Lender, and of any type, its “Revolving Loans”) to the Borrower, which,
when added to the Letter of Credit Obligations at such time, equal to such
Lender’s Percentage of the aggregate amount of the Borrowing requested by the
Borrower to be made on such day.  The
commitment of each Lender described in this Section 2.2.1 is herein
referred to as its “Revolving Commitment”.  On the terms and subject to the conditions
hereof, the Borrower may from time to time borrow, prepay and reborrow Loans.


 


SECTION 2.2.2  Lenders Not Permitted or Required To Make
Loans.  No Lender shall be permitted
or required to make any Revolving Loan if, after giving effect thereto, the 


 


21

















 


aggregate outstanding
principal amount of all Revolving Loans plus Letter of Credit Obligations then
outstanding:


 


(a)                                  of all Lenders
would exceed the Revolving Commitment Amount, or


 


(b)                                 of such Lender
would exceed such Lender’s Percentage of the Revolving Commitment Amount.


 


SECTION 2.2.3  Revolver Increase.  On and after the Closing Date, Borrower may,
at its option at any time in increments of not less than $5,000,000, seek to
increase (the “Revolver Increase”) the Revolving Commitment Amount by up
to an aggregate of $45,000,000 (after giving effect to all such increases the
Revolving Commitment Amount shall not exceed $95,000,000) upon at least 30 days
(but not more than 45 days) written notice (“Revolver Increase Notice”)
to the Agent (which notice Agent shall promptly deliver to the Lenders).  The Revolver Increase Notice shall
(a) specify the date upon which the Revolver Increase is requested to
occur, (b) be delivered at a time when no Default or Event of Default has
occurred and is continuing (and the effectiveness of the Revolver Increase
shall be subject to no Default or Event of Default existing of the time of the
Revolver Increase) and (c) certify that the Revolver Increase will not
violate or conflict with the terms of any Indebtedness or any other contract,
agreement, instrument or obligation of any Credit Party. Borrower shall, after
giving a Revolver Increase Notice, offer the Revolver Increase (i) first
on a pro-rata basis to the Lenders, which each Lender may in its sole and
absolute discretion accept or decline (it being understood that any Lender not
affirmatively committing in writing to its pro-rata portion shall be deemed to
have declined), (ii) second, if any Lender has declined its pro rata share
or any part thereof, such remaining amounts on a non pro-rata basis to the
Lenders accepting their pro rata share of the Revolver Increase and
(iii) third, to other commercial banks or financial institutions.   No increase in the Revolving Commitment Amount
shall become effective until all existing and new Lenders committing to the
Revolver Increase have delivered to the Agent a writing in form reasonably
satisfactory to the Agent pursuant to which such existing Lenders state the
amount of their Revolver Increase and any such new Lenders state the amount of
their Revolver Commitment and agree to assume and accept the obligations and
rights of a Lender hereunder and any such new and increasing Lenders agree to
make a Revolving Loan such that the outstanding Revolving Loans of such new
Lender or increasing Lender constitute a proportional amount of the aggregate
outstanding Revolving Loans and Letter of Credit Obligations based on the
Revolver Commitment of such new Lender. 
Any Revolving Loan as a result of an increase to the Revolver Commitment
pursuant to this Section 2.2.3 shall be subject to the terms and
conditions contained in this Agreement. 
Upon the increase of the Revolving Commitment Amount pursuant to this Section 2.2.3,
Schedule 10.1 shall be deemed amended and replaced with a new Schedule
10.1 reflecting the new Revolver Commitments hereunder.  Notwithstanding the foregoing, in the event
that Borrower elects to permanently reduce or terminate the Revolving
Commitment Amount pursuant to Section 2.3.1, the Revolver Increase,
to the extent not already utilized by the Borrower, shall be terminated and
cease to be available to the Borrower. 
Unless otherwise agreed to by the Borrower, Agent and Lenders providing
any Revolver Increase, no closing fees or other transaction costs (other than
those expressly called for under this Agreement) shall be required by the
Lender in connection with a Revolver Increase.


 


22

















 


SECTION 2.3  Reduction of Revolving Commitment Amount.  The Revolving Commitment Amount is subject to
reduction from time to time pursuant to this Section 2.3.


 


SECTION 2.3.1  Optional Reductions.  The Borrower may, from time to time on any
Business Day occurring after the time of the initial Borrowing hereunder,
voluntarily reduce the Revolving Commitment Amount; provided, however,
that all such reductions shall require at least three Business Days’ prior
notice to the Agent and be permanent, and any partial reduction of the
Revolving Commitment Amount shall be in a minimum amount of $3,000,000 and in
an integral multiple of $1,000,000.


 


SECTION 2.3.2  Mandatory Reductions and Prepayments.  The Revolving Commitment Amount shall,
without any further action, automatically and permanently be reduced to zero on
the Revolving Commitment Termination Date and:


 


(a)                                  The Borrower
shall prepay the Loans in an amount equal to 100% of the insurance proceeds
received by the Borrower or any Subsidiary following a casualty or condemnation
involving such Person’s Property, to the extent not applied (or intended to be
applied) within 90 days after the consummation or receipt thereof, as
applicable, to the purchase of replacement assets or repair of damaged assets;


 


(b)                                 The Borrower
shall prepay Loans in an amount equal to 100% of the sum of the Net Available
Proceeds realized upon all Asset Dispositions to the extent not applied (or
committed to be applied) within 180 days of such Asset Disposition to the
purchase of other assets that are not classified as current assets under GAAP
and are used or useful in the business of the Company and its Subsidiaries;


 


(c)                                  The Borrower
shall prepay Loans in an amount equal to 100% of the sum of the Net Available
Proceeds realized upon all debt issuances (other than in connection with a
Permitted Acquisition) by the Borrower and its Subsidiaries;


 


(d)                                 The Borrower
shall prepay Loans in an amount equal to 80% of the sum of the Net Available
Proceeds realized upon all equity issuances (other than in connection with a
Permitted Acquisition or any issuance of equity in connection with a redemption
of the Convertible Notes permitted by clause (f) of Section 7.2.6
hereof) by the Borrower;


 


(e)                                  The Borrower
shall notify the Agent of the amount of any required prepayment at least three
(3) Business Days before it is made. 
The Borrower shall pay any accrued interest on the Loans which are being
prepaid pursuant to this Section 2.3.2 and shall pay any break
funding costs associated with such required prepayment; and


 


(f)                                    Notwithstanding
anything contained herein to the contrary, Borrower shall prepay Loans in an
amount equal to 100% of the sum of the Net Available Proceeds realized upon all
Permitted Asset Dispositions.


 


Any prepayments pursuant to Section 2.3.2
shall be applied in the following order: first, to payment of that
portion of the Obligations constituting fees, indemnities and other amounts
(other than principal and interest) payable to Agent or a Lender; second,
to payment of that portion of the Obligations constituting Term Loans; third,
to payment of that portion of the 


 


23

















 


Obligations
constituting Revolving Loans; fourth, to payment of any remaining
Obligations.  Prepayments of principal
will be applied to the Obligations in inverse order of maturity.


 


Any prepayments pursuant to Sections 2.3.1 or
2.3.2 hereof shall be without penalty or premium of any kind other than
break funding and other charges expressly provided by this Agreement with
respect to LIBOR breakage costs; provided, however, at the
reasonable request of the Borrower and to avoid any break funding charges with
respect to LIBOR breakage costs associated with any prepayment, any amounts to
be prepaid pursuant to Section 2.3.2 shall be deposited by the
Borrower in an escrow account under the control of the Agent to return an
interest rate equal to the average deposit rate payable by the Agent for
commercial deposits of like size and duration as determined by the Agent in its
sole discretion, such amounts to be applied in the manner set forth in this Section 2.3.2
at the expiration of the Interest Period for the Loans as to which break
funding charges would otherwise have applied.


 


SECTION 2.4  Borrowing Procedure.  By delivering a Borrowing Request to the
Agent on or before 12:00 noon (EST), on a Business Day, the Borrower may from
time to time irrevocably request, on the date of the requested Borrowing in the
case of Base Rate Loans and on not less than three nor more than five Business
Days’ notice in the case of LIBO Rate Loans, that a Borrowing be made in a
minimum amount of (i)  $500,000  if
such Loan is a LIBO Rate Loan or (ii) the lesser of the unused amount of
the Revolving Commitments or $100,000, if such Loan is a Base Rate Loan and an
integral multiple of $100,000, to the extent such additional amount is
permitted to be borrowed hereunder.  On
the terms and subject to the conditions of this Agreement, each Borrowing shall
be comprised of the type of Revolving Loans, and shall be made on the Business
Day, specified in such Borrowing Request. 
On or before 2:00 p.m. (EST ) on such Business Day, each Lender
shall deposit with the Agent same day funds in an amount equal to such Lender’s
Percentage of the requested Borrowing. 
Such deposit will be made to an account which the Agent shall specify
from time to time by notice to the Lenders. 
To the extent funds are received from the Lenders, the Agent shall make
such funds available to the Borrower by wire transfer to the accounts the Borrower
shall have specified in its Borrowing Request. 
No Lender’s obligation to make any Revolving Loan shall be affected by
any other Lender’s failure to make any Revolving Loan.


 


SECTION 2.5  Continuation and Conversion Elections.  By delivering a Continuation/Conversion
Notice to the Agent on or before 10:00 a.m., Chicago time, on a Business
Day, the Borrower may from time to time irrevocably elect, on not less than
three and not more than five Business Days’ notice that all, or any portion in
an aggregate minimum amount of $500,000 and an integral multiple of $100,000,
of any Loans be, in the case of Base Rate Loans, converted into LIBO Rate Loans
or, in the case of LIBO Rate Loans, be converted into a Base Rate Loan or
continued as a LIBO Rate Loan (in the absence of delivery of a Continuation/
Conversion Notice with respect to any LIBO Rate Loan at least three Business
Days before the last day of the then current Interest Period with respect
thereto, such LIBO Rate Loan shall, on such last day, automatically convert to
a Base Rate Loan); provided, however, that (i) each such
conversion or continuation shall be pro rated among the applicable outstanding
Loans of all Lenders, and (ii) no portion of the outstanding principal
amount of any Loans may be continued as, or be converted into, LIBO Rate Loans
when any Event of Default has occurred and is continuing.


 


24

















 


SECTION 2.6  Funding.  Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing
one of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided,
however, that such LIBO Rate Loan shall nonetheless be deemed to have
been made and to be held by such Lender, and the obligation of the Borrower to
repay such LIBO Rate Loan shall nevertheless be to such Lender for the account
of such foreign branch, Affiliate or international banking facility.  In addition, the Borrower hereby consents and
agrees that, for purposes of any determination to be made for purposes of Sections
4.1, 4.2, 4.3 or 4.4, it shall be conclusively assumed
that each Lender elected to fund all LIBO Rate Loans by purchasing Dollar
deposits in its LIBOR Office’s interbank eurodollar market.


 


SECTION 2.7  Notes. 
Each Lender’s Loans under its Revolving Commitment and Term Loan
Commitment shall be evidenced by a Note payable to the order of such Lender in
a maximum principal amount equal to such Lender’s Percentage of the original Revolving
Commitment Amount and Term Loan Commitment Amount, as applicable.  The Borrower hereby irrevocably authorizes
each Lender to make (or cause to be made) appropriate notations on the grid
attached to such Lender’s Note (or on any continuation of such grid), which
notations, if made, shall evidence, inter  alia, the date of, the
outstanding principal of, and the interest rate and Interest Period applicable
to the Loans evidenced thereby.  Such
notations shall be conclusive and binding on the Borrower absent manifest
error; provided, however, that the failure of any Lender to make
any such notations shall not limit or otherwise affect any Obligations of the
Borrower or any other Credit Party.


 


SECTION 2.8  Letters of Credit.


 


SECTION 2.8.1  Issuance of Letters of Credit.  From and after the date hereof, the Letter of
Credit Issuer agrees, upon the terms and conditions set forth in this
Agreement, and subject to the satisfaction of such policy standards and
conditions relating to the issuance of standby letters of credit generally as
may be established by the Letter of Credit Issuer from time to time, to issue
standby letters of credit, for the account of the Borrower, from time to time
from the Closing Date  to the Letter
of Credit Expiry Date; provided that the Borrower shall not request and
the Letter of Credit Issuer shall not issue, any Letter of Credit which would
cause the aggregate Letter of Credit Obligations (after giving effect to the
issuance of such Letter of Credit) to exceed the amount of the lesser of
(i) the Letter of Credit Sublimit and (ii) the unused aggregate
Revolving Commitment.


 


SECTION 2.8.2  Participating Interests.  Immediately upon the issuance by the Letter
of Credit Issuer of a Letter of Credit, each Lender shall be deemed to have
irrevocably and unconditionally purchased and received from the Letter of
Credit Issuer, without recourse, representation or warranty, an undivided
participation interest equal to its Percentage of the face amount of such
Letter of Credit and each draw paid by the Letter of Credit Issuer
thereunder.  Each Lender’s obligation to
pay its proportionate share of all draws under the Letters of Credit, absent
gross negligence or willful misconduct by the Letter of Credit Issuer in
honoring any such draw, shall be absolute, unconditional and irrevocable and in
each case shall be made without counterclaim or set-off by such Lender.


 


25

















 


SECTION 2.8.3  Reimbursement Upon Drawing.  (a) The Borrower agrees to reimburse the
Letter of Credit Issuer for the amount of each draft drawn on a Letter of
Credit within one Business Day after the date such draft is so drawn.  The Borrower agrees to reimburse the Letter
of Credit Issuer immediately when due, under all circumstances, including,
without limitation, any of the following circumstances:  (w) any lack of validity or
enforceability of this Agreement or any instrument executed pursuant hereto;
(x) the existence of any claim, set-off, defense or other right which the
Borrower may have at any time against a beneficiary named in a Letter of
Credit, any transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), any Lender or any other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any underlying
transaction between the Borrower and the beneficiary named in any Letter of
Credit); (y) the validity, sufficiency or genuineness of any document which
the Letter of Credit Issuer reasonably has determined in good faith complies on
its face with the terms of the applicable Letter of Credit, even if such
document should later prove, without the knowledge of the Letter of Credit
Issuer, to have been forged, fraudulent, invalid or insufficient in any respect
or any statement therein shall have been untrue or inaccurate in any respect;
or (z) the surrender or material impairment of any security for the
performance or observance of any of the terms hereof.


 


(b)                                 If the Borrower
does not pay any such reimbursement obligations when due, the Borrower shall be
deemed to have immediately requested that the Lenders make a Base Rate Loan
under this Agreement in a principal amount equal to such unreimbursed
reimbursement obligations.  The Agent
shall promptly notify the Lenders of such deemed request and, without the
necessity of compliance with the requirements of Sections 2.2 and 5.2,
each Lender shall make available to the Agent its Loan.  The proceeds of such Loans shall be paid over
by the Agent to the Letter of Credit Issuer for the account of the Borrower in
satisfaction of such unreimbursed reimbursement obligations, which shall
thereupon be deemed satisfied by the proceeds of, and replaced by, such Loan.


 


(c)                                  If the Letter
of Credit Issuer makes a payment on account of any Letter of Credit and is not
concurrently reimbursed therefor by the Borrower and if for any reason a Loan
may not be made pursuant to Section 2.8.3(b), then as promptly as
practical during normal banking hours on the date of its receipt of such notice
or, if not practicable on such date, not later than 1:00 p.m. (EST) on the
Business Day immediately succeeding such date of notification, each Lender
shall deliver to the Agent for the account of the Letter of Credit Issuer, in
immediately available funds, the purchase price for such Lender’s interest in
such unreimbursed reimbursement obligations, which shall be an amount equal to
such Lender’s pro-rata share of such payment. 
Each Lender shall, upon demand by the Letter of Credit Issuer, pay the
Letter of Credit Issuer interest on such Lender’s pro-rata share of such draw
from the date of payment by the Letter of Credit Issuer on account of such
Letter of Credit until the date of delivery of such funds to the Letter of
Credit Issuer by such Lender at a rate per annum, computed for actual days
elapsed based on a 360-day year, equal to the Federal Funds Effective Rate for
such period; provided, that such payments shall be made by the Lenders
only in the event and to the extent that the Letter of Credit Issuer is not
reimbursed in full by the Borrower for interest on the amount of any draw on
the Letters of Credit.


 


26

















 


SECTION 2.8.4  Request for Letter of Credit.  Each Letter of Credit shall be issued upon
receipt by the Letter of Credit Issuer and the Agent from the Borrower of an
irrevocable request thereof (an “LC Notice”)
not later than 12:00 noon (EST) three (3) Business Days prior the issuance
date.  Each LC Notice for a Letter of
Credit issued shall be in form and substance satisfactory to the Letter of
Credit Issuer.


 


ARTICLE III


 


REPAYMENTS,
PREPAYMENTS, INTEREST AND FEES


 


SECTION 3.1  Repayments and Prepayments.


 


SECTION 3.1.1  Prepayment of Loans.  The Borrower


 


(a)                                  may, from time
to time on any Business Day prior to the Maturity Date, make a voluntary
prepayment, in whole or in part, of the outstanding principal amount of any
Loans; provided, however, that:


 


(i)  in the case of any
partial prepayment of the Term Loan, such prepayment shall be applied to the
remaining amortization payments on the Term Loan in the inverse order of
maturity;


 


(ii)  unless the
Borrower complies with Section 4.4, no such prepayment of any LIBO
Rate Loan may be made on any day other than the last day of the Interest Period
for such Loan; and


 


(b)                                 shall,
immediately upon any acceleration of the Maturity Date of any Loans pursuant to
Section 8.2 or Section 8.3, repay all Loans, unless,
pursuant to Section 8.3, only a portion of all Loans is so
accelerated.


 


Each prepayment of any Loans made pursuant to this Section 3.1.1
shall be without premium or penalty, except as may be required by Section 4.4.  No voluntary prepayment of principal of any
Revolving Loans pursuant to this Section 3.1.1 shall cause a
reduction in the Revolving Commitment Amount.


 


SECTION 3.1.2  Repayment of Revolving Loans.  On the Maturity Date, the Borrower shall
repay the principal of the Revolving Loans then outstanding.


 


SECTION 3.1.3  Repayment of Term Loans. The Term
Loans shall be paid, for the account of each Lender according to its Percentage
thereof, in the installments and on the dates set forth below:


 


	
  Date

  	
   

  	
  Installment

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  March 31, 2010

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  June 30, 2010

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  September 30, 2010

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  December 31, 2010

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
  March 31, 2011

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
  June 30, 2011

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
  September 30, 2011

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
  December 31, 2011

  	
   

  	
  $

  	
  1,500,000

  	
   

  
	
  March 31, 2012

  	
   

  	
  $

  	
  1,500,000

  	
   

  
	
  June 30, 2012

  	
   

  	
  $

  	
  1,500,000

  	
   

  
	
  Maturity Date

  	
   

  	
  Outstanding
  principal balance of the Term Loan

  	
   

  



 


27

















 


SECTION 3.2  Interest Provisions.  Interest on the outstanding principal amount
of Loans shall accrue and be payable in accordance with this Section 3.2.


 


SECTION 3.2.1  Interest Rates.  Borrower promises to pay interest on the
unpaid principal amount of each Loan for the period commencing on the date of
such Loan until such Loan is paid in full as follows:  (a) at all times while such Loan is a
Base Rate Loan, at a rate per annum equal to the sum of the Base Rate from time
to time in effect plus the Applicable Margin from time to time in effect for
Base Rate Loans; and (b) at all times while such Loan is a LIBO Rate Loan,
at a rate per annum equal to the sum of the LIBO Rate (Reserve Adjusted)
applicable to each Interest Period for such Loan plus the Applicable Margin
from time to time in effect for LIBO Rate Loans; provided that (i) at any
time an Event of Default exists, if requested by Required Lenders, the
Applicable Margin corresponding to each Loan shall be increased by 2% (and, in
the case of Obligations not subject to an Applicable Margin, such Obligations
shall bear interest at the Base Rate plus 2%), (ii) any such increase may
thereafter be rescinded by Required Lenders, notwithstanding Section 10.1,
and (iii) upon the occurrence of an Event of Default under Section 8.1.1or
8.1.9, any such increase shall occur automatically. In no event shall
interest payable by Borrower to Agent and Lenders hereunder exceed the maximum
rate permitted under applicable law, and if any provision of this Agreement is
in contravention of any such law, such provision shall be deemed modified to
limit such interest to the maximum rate permitted under such law.


 


The “LIBO Rate
(Reserve Adjusted)” means, relative to any Loan to be made,
continued or maintained as, or converted into, a LIBO Rate Loan for any
Interest Period, a rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) determined pursuant to the following formula:


 


	
         LIBO Rate

  	
  =

  	
  LIBO Rate

  	
   

  
	
  (Reserve Adjusted)

  	
   

  	
  1.00
  - LIBOR Reserve Percentage

  



 


The LIBO Rate (Reserve Adjusted) for any Interest
Period for LIBO Rate Loans will be determined by the Agent on the basis of the
LIBOR Reserve Percentage in effect on, and the applicable rates furnished to
and received by the Agent from National City, two Business Days before the
first day of such Interest Period.


 


“LIBO Rate” means,
relative to any Interest Period for LIBO Rate Loans, the rate of interest
published each Business Day in The Wall Street Journal “Money Rates” listing
under the caption “London Interbank Offered Rates” for the applicable Interest
Period (or, if no such rate is 


 


28

















 


published
therein for any reason, then the LIBO Rate shall be the Eurodollar rate for the
applicable Interest Period as published in another publication determined by
the Agent two Business Days prior to the beginning of such Interest Period.


 


“LIBOR Reserve Percentage” means,
relative to any Interest Period for LIBO Rate Loans, the reserve percentage
(expressed as a decimal) equal to the maximum aggregate reserve requirements
(including all basic, emergency, supplemental, marginal and other reserves and
taking into account any transitional adjustments or other scheduled changes in
reserve requirements) specified under regulations issued from time to time by
the F.R.S. Board and then applicable to assets or liabilities consisting of and
including “Eurocurrency Liabilities”, as currently defined in Regulation D of
the F.R.S. Board.


 


All LIBO Rate Loans shall bear interest from and
including the first day of the applicable Interest Period to (but not
including) the last day of such Interest Period at the interest rate determined
as applicable to such LIBOR Rate Loan.


 


“Applicable Margin” means on any
date the applicable percentage set forth below based upon the Level as shown in
the certificate then most recently delivered to the Lenders pursuant to Section 7.1.1(d):


 


	
  Level

  	
   

  	
  Base Rate Margin

  	
   

  	
  LIBO Rate Margin

  	
   

  	
  Revolver Commitment Fee

  	
   

  
	
  V

  	
   

  	
  3.00

  	
  %

  	
  5.00

  	
  %

  	
  . 500%

  	
   

  
	
  IV

  	
   

  	
  2.50

  	
  %

  	
  4.50

  	
  %

  	
  .500

  	
  %

  
	
  III

  	
   

  	
  2.00

  	
  %

  	
  4.00

  	
  %

  	
  .375

  	
  %

  
	
  II

  	
   

  	
  1.25

  	
  %

  	
  3.25

  	
  %

  	
  .375

  	
  %

  
	
  I

  	
   

  	
  0.75

  	
  %

  	
  2.75

  	
  %

  	
  .250

  	
  %

  



 


; provided, however that if the Borrower
shall have failed to deliver to the Lenders by the date required hereunder any
certificate pursuant to Section 7.1.1(d), then from the date such
certificate was required to be delivered until the date of such delivery the
Applicable Margin shall be deemed to be Level V.  Each change in the Applicable Margin shall
take effect with respect to all outstanding Loans on the first Business Day of
the month immediately succeeding the day on which such certificate is received
by the Agent.  Notwithstanding the
foregoing, no reduction in the Applicable Margin shall be effected if a Default
or an Event of Default shall have occurred and be continuing on the date when
such change would otherwise occur, it being understood that on the first
Business Day of the month immediately succeeding the day on which such Default
or Event of Default is either waived or cured (assuming no other Default or
Event of Default shall be then pending), the Applicable Margin shall be reduced
(on a prospective basis) in accordance with the then most recently delivered
certificate.


 


If,
as a result of any restatement of or other adjustment to the financial
statements of the Borrower or for any other reason (other than as a result of a
change in accounting rules), Agent determines that (i) the Total Leverage
Ratio as calculated in any certificate delivered by Borrower after the Closing
Date pursuant to Section 7.1.1(d), as of any applicable date was
inaccurate in any material respect and (ii) a proper calculation of the
Total Leverage Ratio would have resulted in a different Applicable Margin for
any period, then (A) if the proper calculation of the Total
Leverage Ratio would have resulted in a higher Applicable Margin for such
period, 


 


29
















 


Borrower
shall automatically and retroactively be obligated to pay to Agent for the
benefit of the applicable Lenders, promptly on written demand by Agent, an
amount equal to the excess of the amount of interest and fees that should have
been paid for such period over the amount of interest and fees actually paid
for such period; and (B) if the proper calculation of the Total Leverage
Ratio would have resulted in a lower Applicable Margin for such period, neither
the Agent nor the Lenders shall have any obligation to repay any interest or
fees to Borrower or any other Credit Party; provided that if, as a
result of any restatement or other event a proper calculation of the Total
Leverage Ratio would have resulted in a higher Applicable Margin for one or
more periods and a lower Applicable Margin for one or more other periods (due
to the shifting of income or expenses from one period to another period or any
similar reason), then the amount payable by Borrower pursuant to clause (A) above
shall be based upon the excess, if any, of the amount of interest and fees that
should have been paid for all applicable periods over the amount of interest
and fees paid for all such periods.


 


“Level” means, and includes, Level
I, Level II, Level III, Level IV or Level V, whichever is in effect at the
relevant time.


 


“Level I” shall exist at
any time the Total Leverage Ratio is less than 3.00:1.0.


 


“Level II” shall exist at
any time the Total Leverage Ratio is greater than or equal to 3.00:1.0 but less
than 3.50:1.0.


 


“Level III” shall exist at
any time the Total Leverage Ratio is greater than or equal to 3.50:1.0 but less
than 4.00:1.0.


 


“Level IV” shall exist at
any time the Total Leverage Ratio is greater than or equal to 4.00:1.0 but less
than 4.50:1.0.


 


“Level V” shall exist at
any time the Total Leverage Ratio is greater than or equal to 4.50:1.0.


 


“Total
Leverage Ratio” means, with respect to any period, the ratio of
(i) Total Funded Debt to (ii) EBITDA, as of the end of the relevant
period.


 


SECTION 3.2.2  Payment Dates.  Interest accrued on each Loan shall be
payable, without duplication:


 


(a)                                  on the
Revolving Commitment Termination Date;


 


(b)                                 on the Maturity
Date;


 


(c)                                  on the date of
any payment or prepayment, in whole or in part, of principal outstanding on
such Loan;


 


(d)                                 with respect to
Base Rate Loans, on each Quarterly Payment Date occurring after the Closing
Date;


 


30

















 


(e)                                  with respect to
LIBO Rate Loans, the last day of each applicable Interest Period and, in the
case of an Interest Period in excess of three months, on the dates which are
successively three months after the commencement of such Interest Period;


 


(f)                                    with respect to
any Base Rate Loans converted into LIBO Rate Loans on a day when interest would
not otherwise have been payable pursuant to clause (c), on the date of
such conversion; and


 


(g)                                 on that portion
of any Loans the Maturity Date of which is accelerated pursuant to Section 8.2
or Section 8.3, immediately upon such acceleration.


 


Interest accrued on Loans or other monetary
Obligations arising under this Agreement or any other Loan Document after the
date such amount is due and payable (whether on the Maturity Date, upon
acceleration or otherwise) shall be payable upon demand.


 


SECTION 3.3  Fees. 
The Borrower agrees to pay the fees set forth in this Section 3.3.  All such fees shall be non-refundable.


 


SECTION 3.3.1  Revolving Commitment Fee.  The Borrower agrees to pay to the Agent for
the account of each Lender, for the period (including any portion thereof when
its Revolving Commitment is suspended by reason of the Borrower’s inability to
satisfy any condition of Article V) commencing on the Closing Date
and continuing through the Revolving Commitment Termination Date, a commitment
fee at the rate equal to the Applicable Margin for Commitment Fees per annum
(computed on the basis of a 360-day year for the actual days elapsed) on such
Lender’s Percentage of the sum of the average daily unused portion of the
Revolving Commitment Amount.  Such commitment
fees shall be payable by the Borrower in arrears on each Quarterly Payment
Date, commencing with the first such day following the Closing Date and on the
Revolving Commitment Termination Date.


 


SECTION 3.3.2  Letter of Credit Fees.  (a) The Borrower agrees to pay the
Agent, for the account of each Lender pro-rata on the basis of its Revolving
Commitment, a fee in respect of each Letter of Credit computed at the
Applicable Margin for LIBO Rate Loans on the average daily stated amount of
such Letter of Credit (computed on the basis of a 360-day year for the actual
days elapsed), such fee to be due and payable quarterly in arrears on each
Quarterly Payment Date and on the Revolving Commitment Termination Date.


 


(b) The Borrower shall pay to the Letter of
Credit Issuer a letter of credit fronting fee for each Letter of Credit issued
by the Letter of Credit Issuer equal to 1/8 of 1% of the face amount (or
increased face amount) of such Letter of Credit.  Such Letter of Credit fronting fee shall be
due and payable on each date of issuance (or date of increase) of a Letter of
Credit.


 


(c)  The Borrower
agrees to pay directly to the Letter of Credit Issuer upon each issuance of,
drawing under, and/or amendment of, a Letter of Credit issued by it in such
amount as shall at the time of such issuance, drawing or amendment be the
administrative charge which the Letter of Credit Issuer is customarily charging
for issuances of, drawing under or amendments of, letters of credit issued by
it.


 


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SECTION 3.3.3  Agency Fees.  The Borrower shall pay to the Agent the fees
agreed to by Agent and the Borrower in a fee letter dated May 7, 2009, or
as otherwise agreed to in writing by the Borrower and the Agent, when and as
due.


 


ARTICLE IV


 


LIBO RATE AND OTHER
PROVISIONS


 


SECTION 4.1  LIBO Rate Lending Unlawful.  If any Lender shall determine (which
determination shall, upon notice thereof to the Borrower and the Lenders, be
conclusive and binding on the Borrower) that the introduction of or any change
in or in the interpretation of any law makes it unlawful, or any central bank
or other governmental authority asserts that it is unlawful, for such Lender to
make, continue or maintain any Loan as, or to convert any Loan into, a LIBO
Rate Loan of a certain type, subject to the provisions of Section 4.11
hereof, the obligations of all Lenders to make, continue, maintain or convert
any such Loans shall, upon such determination, forthwith be suspended until
such Lender shall notify the Agent that the circumstances causing such
suspension no longer exist, and all LIBO Rate Loans of such type shall
automatically convert into Base Rate Loans at the end of the then current
Interest Periods with respect thereto or sooner, if required by such law or
assertion.


 


SECTION 4.2  Deposits Unavailable.  If the Agent shall have determined that


 


(a)                                  Dollar
certificates of deposit or Dollar deposits, as the case may be, in the relevant
amount and for the relevant Interest Period are not available to a Lender in
its relevant market; or


 


(b)                                 by reason of
circumstances affecting a Lender’s relevant market, adequate means do not exist
for ascertaining the interest rate applicable hereunder to LIBO Rate Loans of
such type,


 


then, upon notice from the Agent to the Borrower and
the Lenders, subject to the provisions of Section 4.11 hereof, the
obligations of all Lenders under Section 2.4 and Section 2.5
to make or continue any Loans as, or to convert any Loans into, LIBO Rate Loans
of such type shall forthwith be suspended until the Agent shall notify the
Borrower and the Lenders that the circumstances causing such suspension no
longer exist.


 


SECTION 4.3  Increased LIBO Rate Loan Costs, etc.  The Borrower agrees to reimburse each Lender
for any increase in the cost to such Lender of, or any reduction in the amount
of any sum receivable by such Lender in respect of, making, continuing or
maintaining (or of its obligation to make, continue or maintain) any Loans as,
or of converting (or of its obligation to convert) any Loans into, LIBO Rate
Loans, subject to the provisions of Section 4.11 hereof.  Such Lender shall promptly notify the Agent
and the Borrower in writing of the occurrence of any such event, such notice to
state, in reasonable detail, the reasons therefor and the additional amount
required fully to compensate such Lender for such increased cost or reduced
amount.  Such additional amounts shall be
payable by the Borrower directly to such Lender within five days of its receipt
of such notice, and such notice shall, in the absence of manifest error, be
conclusive and binding on the Borrower; provided, however, in no
event shall Borrower be 


 


32

















 


obligated to pay increased
costs for a period greater than 180 days prior to the date of receipt of such
notice.


 


SECTION 4.4  Funding Losses.  In the event any Lender shall incur any loss
or expense (including any loss or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Lender to make,
continue or maintain any portion of the principal amount of any Loan as, or to
convert any portion of the principal amount of any Loan into, a LIBO Rate Loan)
as a result of;


 


(a)                                  any conversion
or repayment or prepayment of the principal amount of any LIBO Rate Loans on a
date other than the scheduled last day of the Interest Period applicable
thereto, whether pursuant to Section 3.1 or otherwise;


 


(b)                                 any Loans not
being made as LIBO Rate Loans in accordance with the Borrowing Request
therefor; or


 


(c)                                  any Loans not
being continued as, or converted into, LIBO Rate Loans in accordance with the
Continuation/ Conversion Notice therefor;


 


then, subject to the provisions of Section 4.11
hereof, upon the written notice of such Lender (which notice shall be delivered
within thirty days of the incurrence thereof by such Lender) to the Borrower
(with a copy to the Agent), the Borrower shall, within five days of its receipt
thereof, pay directly to such Lender such amount as will (in the reasonable
determination of such Lender) reimburse such Lender for such loss or
expense.  Such written notice (which
shall include calculations in reasonable detail) shall, in the absence of
manifest error, be conclusive and binding on the Borrower.


 


SECTION 4.5  Increased Capital Costs.  If any change in, or the introduction,
adoption, effectiveness, interpretation, reinterpretation or phase-in of, any
law or regulation, directive, guideline, decision or request (whether or not
having the force of law) of any court, central bank, regulator or other
governmental authority affects or would affect the amount of capital required
or expected to be maintained by any Lender or any Person controlling such
Lender, and such Lender determines (in its sole and absolute discretion) that
the rate of return on its or such controlling Person’s capital as a consequence
of its Revolving Commitment or the Loans made by such Lender is reduced to a
level below that which such Lender or such controlling Person could have
achieved but for the occurrence of any such circumstance, then, in any such
case upon notice from time to time by such Lender to the Borrower, subject to
the provisions of Section 4.11 hereof, the Borrower shall
immediately pay directly to such Lender additional amounts sufficient to
compensate such Lender or such controlling Person for such reduction in rate of
return.  A statement of such Lender as to
any such additional amount or amounts (including calculations thereof in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
the Borrower.  In determining such
amount, such Lender may use any method of averaging and attribution that it (in
its sole and absolute discretion) shall deem applicable; provided, however,
in no event shall Borrower be obligated to pay increased costs for a period
greater than 180 days prior to the date of receipt of the notice required by
this Section 4.5.


 


33

















 


SECTION 4.6  Taxes. 
All payments by the Borrower of principal of, and interest on, the Loans
and all other amounts payable hereunder shall be made free and clear of and
without deduction for any present or future income, excise, stamp or franchise
taxes and other taxes, fees, duties, withholdings or other charges of any
nature whatsoever imposed by any taxing authority, but excluding franchise
taxes and taxes imposed on or measured by any Lender’s net income or receipts
(such non-excluded items being called “Taxes”).  In the event that any withholding or deduction
from any payment to be made by the Borrower hereunder is required in respect of
any Taxes pursuant to any applicable law, rule or regulation, then the
Borrower will:


 


(a)                                  pay directly to
the relevant authority the full amount required to be so withheld or deducted;


 


(b)                                 promptly
forward to the Agent an official receipt or other documentation satisfactory to
the Agent evidencing such payment to such authority; and


 


(c)                                  pay to the
Agent for the account of the Lenders such additional amount or amounts as is
necessary to ensure that the net amount actually received by each Lender will
equal the full amount such Lender would have received had no such withholding
or deduction been required.


 


Moreover, if any Taxes are directly asserted against
the Agent or any Lender with respect to any payment received by the Agent or
such Lender hereunder, the Agent or such Lender may pay such Taxes and the
Borrower will promptly pay such additional amounts (including any penalties,
interest or expenses, other than those penalties, interest or expenses which
are due to any delay by Agent or any Lender) as is necessary in order that the
net amount received by such person after the payment of such Taxes (including
any Taxes on such additional amount) shall equal the amount such person would
have received had not such Taxes been asserted.


 


If the Borrower fails to pay any Taxes when due to
the appropriate taxing authority or fails to remit to the Agent, for the
account of the respective Lenders, the required receipts or other required
documentary evidence, the Borrower shall indemnify the Lenders for any
incremental Taxes, interest or penalties that may become payable by any Lender
as a result of any such failure.  For
purposes of this Section 4.6, a distribution hereunder by the Agent
or any Lender to or for the account of any Lender shall be deemed a payment by
the Borrower.


 


Upon the request of the
Borrower or the Agent, each Lender that is organized under the laws of a
jurisdiction other than the United States shall, prior to the due date of any
payments under the Notes, execute and deliver to the Borrower and the Agent, on
or about the first scheduled payment date in each Fiscal Year, one or more (as
the Borrower or the Agent may reasonably request) United States Internal Revenue
Service Forms 4224 or Forms 1001 or such other forms or documents (or successor
forms or documents), appropriately completed, as may be applicable to establish
the extent, if any, to which a payment to such Lender is exempt from
withholding or deduction of Taxes.


 


SECTION 4.7  Payments, Computations, etc.  Unless otherwise expressly provided, all
payments by the Borrower pursuant to this Agreement, the Notes or any other
Loan Document 


 


34

















 


shall be made by the
Borrower to the Agent for the pro  rata account of the Lenders
entitled to receive such payment.  All
such payments required to be made to the Agent shall be made, without setoff,
deduction or counterclaim, not later than 11:00 a.m., Chicago time, on the
date due, in same day or immediately available funds, to such account as the
Agent shall specify from time to time by notice to the Borrower.  Funds received after that time shall be
deemed to have been received by the Agent on the next succeeding Business
Day.  The Agent shall promptly remit in
same day funds to each Lender its share, if any, of such payments received by
the Agent for the account of such Lender. 
All interest and fees shall be computed on the basis of the actual
number of days (including the first day but excluding the last day) occurring
during the period for which such interest or fee is payable over a year
comprised of 360 days (or, in the case of interest on a Base Rate Loan, 365
days or, if appropriate, 366 days). 
Whenever any payment to be made shall otherwise be due on a day which is
not a Business Day, such payment shall (except as otherwise required by clause
(c) of the definition of the term “Interest Period” with
respect to LIBO Rate Loans) be made on the next succeeding Business Day and
such extension of time shall be included in computing interest and fees, if
any, in connection with such payment.


 


SECTION 4.8  Sharing of Payments.  If any Lender shall obtain any payment or
other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan (other than pursuant to the terms of Sections
4.3, 4.4 and 4.5) in excess of its pro  rata
share of payments then or therewith obtained by all Lenders, such Lender shall
purchase from the other Lenders such participations in Loans made by them as
shall be necessary to cause such purchasing Lender to share the excess payment
or other recovery ratably with each of them; provided, however,
that if all or any portion of the excess payment or other recovery is
thereafter recovered from such purchasing Lender, the purchase shall be
rescinded and each Lender which has sold a participation to the purchasing
Lender shall repay to the purchasing Lender the purchase price to the ratable
extent of such recovery together with an amount equal to such selling Lender’s
ratable share (according to the proportion of:


 


(a)                                  the amount of
such selling Lender’s required repayment to the purchasing Lender


 


to


 


(b)                                 the total
amount so recovered from the purchasing Lender);


 


of any interest or other amount paid or payable by
the purchasing Lender in respect of the total amount so recovered.  The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this
Section may, to the fullest extent permitted by law, exercise all its
rights of payment (including pursuant to Section 4.9) with respect
to such participation as fully as if such Lender were the direct creditor of
the Borrower in the amount of such participation.  If under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim in lieu of
a setoff to which this Section applies, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders entitled under this Section to
share in the benefits of any recovery on such secured claim.


 


35

















 


SECTION 4.9  Setoff.  Each Lender shall, upon the occurrence of any
Default described in clauses (a) through (d) of Section 8.1.9  or, with the consent of the Required Lenders,
upon the occurrence of any other Event of Default, have the right to
appropriate and apply to the payment of the Obligations owing to it (whether or
not then due), and (as security for such Obligations) the Borrower hereby
grants to each Lender a continuing security interest in, any and all balances,
credits, deposits, accounts or moneys of the Borrower then or thereafter
maintained with such Lender; provided, however, that any such
appropriation and application shall be subject to the provisions of Section 4.8.  Each Lender agrees promptly to notify the
Borrower and the Agent after any such setoff and application made by such
Lender; provided, however, that the failure to give such notice
shall not affect the validity of such setoff and application.  The rights of each Lender under this
Section are in addition to other rights and remedies (including other
rights of setoff under applicable law or otherwise) which such Lender may have.


 


SECTION 4.10  Use of Proceeds.  The Borrower shall apply the proceeds of each
Borrowing in accordance with the fourth  recital; without limiting
the foregoing, no proceeds of any Loan will be used to acquire any equity
security of a class which is registered pursuant to Section 12 of the
Securities Exchange Act of 1934 or any “margin stock”, as defined in F.R.S.
Board Regulation U.


 


SECTION 4.11  Changes to Other Branches; Equal Treatment
of Borrower.  If a Lender claims any
additional amounts payable or that its is unable to make LIBO Rate Loans
available, as described more fully in Sections 4.1 through 4.5
hereof, such Lender shall (i) use its reasonable efforts (consistent with
legal and regulatory restrictions) to avoid the need for paying such additional
amounts or such unavailability, including changing the jurisdiction of its
applicable lending office or moving the applicable Loan(s) to an Affiliate
or Subsidiary; provided, that the taking of any such action would not,
in the reasonable judgment of such Lender, be disadvantageous to such Lender
and (ii) treat the Borrower, with respect to all such issues, in a manner
consistent with the treatment of other similarly situated borrowers with
respect to such issues.


 


SECTION 4.12  Replacement of Lenders.  Within fifteen (15) days after receipt by
Borrower of written notice and demand from any Lender for payment pursuant to Section 4.5
or 4.6 (any such Lender demanding such payment being referred to herein as
an “Affected Lender”), Borrower may,
at its option, notify Agent and such Affected Lender of its intention to
obtain, at Borrower’s expense, a replacement Lender (“Replacement Lender”) for such Affected Lender, which
Replacement Lender shall be reasonably satisfactory to Agent.  In the event Borrower obtains a Replacement
Lender that will refinance all outstanding Obligations owed to such Affected
Lender and assume its Commitments hereunder within ninety (90) days following
notice of Borrower’s intention to do so, the Affected Lender shall sell and
assign all of its rights and delegate all of its obligations under this
Agreement to such Replacement Lender in accordance with the provisions of Section 10.11.1,
provided that Borrower has reimbursed such Affected Lender for any
administrative fee payable pursuant to Section 10.11.1 and, in any
case where such replacement occurs as the result of a demand for payment
pursuant to Section 4.5 or 4.6, paid all amounts required to be
paid to such Affected Lender pursuant to subsection 4.5 or 4.6 through
the date of such sale and assignment.


 


36

















 


ARTICLE V


 


CONDITIONS TO BORROWING


 


SECTION 5.1  Initial Borrowing.  The obligations of the Lenders to fund the
initial Borrowing and the Term Loan and the Letter of Credit Issuer to issue,
and the Lenders to participate in, any letter of Credit, shall be subject to
the prior or concurrent satisfaction of each of the conditions precedent set
forth in this Section 5.1. The parties hereto acknowledge and agree
that the date of this Agreement and the other Loan Documents shall be
August 31, 2009, provided, the conditions set forth in Sections
5.1.9 and 5.1.16 shall occur on September 1, 2009.


 


SECTION 5.1.1  Authorization Documents.  For each Credit Party, such Person’s
(i) charter (or similar formation document), certified by the appropriate
governmental authority, (ii) good standing certificates in its state of
incorporation (or formation) and in each other state requested by Agent,
(iii) bylaws (or similar governing document), (iv) resolutions of its
board of directors (or similar governing body) approving and authorizing such
Person’s execution, delivery and performance of this Agreement, the Notes and
each other Loan Documents to which it is party and the transactions
contemplated thereby, and (v) the incumbency and signatures of those of
its officers authorized to act with respect to this Agreement, the Notes and
each other Loan Document, all certified by its secretary or an assistant
secretary (or similar officer) as being in full force and effect without
modification.  Each Lender may
conclusively rely upon such certification until it shall have received a
further certificate of the secretary or assistant secretary (or similar
officer) of such Credit Party canceling or amending such prior certificate.


 


SECTION 5.1.2  Executed Signature Pages to Agreement.  Execution of this Agreement and delivery of
executed signature pages to this Agreement by the Borrower, each Lender
and the Agent.


 


SECTION 5.1.3  Delivery of Notes.  The Agent shall have received, for the
account of each Lender, its Notes duly executed and delivered by the Borrower.


 


SECTION 5.1.4  Applicable Margin.  The Agent shall receive a certificate,
executed by an Authorized Officer of the Borrower, delineating the Applicable
Margin after giving pro forma effect to the Loans to be incurred on the Closing Date.


 


SECTION 5.1.5  Guarantee and Collateral Agreement.  The Agent shall have received the Guarantee
and Collateral Agreement, dated the date hereof, duly executed by each Credit
Party thereto, together with:


 


(a)                                  acknowledgment
copies of properly filed Uniform Commercial Code financing statements naming
the relevant Credit Party as the debtor and the Agent as the secured party, or
other similar instruments or documents, filed under the Uniform Commercial Code
of all jurisdictions as may be necessary or, in the opinion of the Agent,
desirable to perfect the security interest of the Agent pursuant to the
Guarantee and Collateral Agreement;


 


37

















 


(b)                                 executed copies
of proper Uniform Commercial Code Form UCC-3 termination statements, if
any, necessary to release all Liens and other rights of any Person:


 


(i)  in any collateral
described in the Guarantee and Collateral Agreement previously granted by any
Person, and


 


(ii)  securing any of
the Indebtedness identified in Part A of Schedule 6.17, together
with such other Uniform Commercial Code Form UCC-3 termination statements
as the Agent may reasonably request from such Credit Party;


 


(c)                                  copies of
Uniform Commercial Code Requests for Information or Copies (Form UCC-11),
or a similar search report certified by a party acceptable to the Agent, dated
a date reasonably near to the date of the initial Borrowing, listing all
effective financing statements which name each Credit Party (under its present
name and any previous names) as the debtor and which are filed in the
jurisdictions in which filings were made pursuant to clause (a) above,
together with copies of such financing statements (none of which (other than
those described in clause (a), if such Form UCC-11 or search
report, as the case may be, is current enough to list such financing statements
described in clause (a)) shall cover any collateral described in the Guarantee
and Collateral Agreement); and


 


(d)                                 to the extent
certificated, stock certificates, accompanied by undated stock powers duly
executed in blank, and promissory notes, duly endorsed in blank, required to be
delivered to the Agent pursuant to the Guarantee and Collateral Agreement.


 


SECTION 5.1.6  Intellectual Property Assignment.  The Agent shall have received executed
counterparts of an Intellectual Property Assignment, dated the date hereof,
duly executed by each Credit Party.


 


SECTION 5.1.7  Opinions of Counsel.  The Agent shall have received opinions, dated
the date of the initial Borrowing and addressed to the Agent and all Lenders,
from DLA Piper LLP (US), counsel to the Borrower and its Subsidiaries,
substantially in the form of Exhibit E hereto.


 


SECTION 5.1.8  Agreements.  The Agent shall have received true and
correct copies, certified as such by an Authorized Officer of the Borrower, of
each agreement governing Indebtedness listed on Schedule 6.17.


 


SECTION 5.1.9  Closing Fees, Expenses, etc.  The Agent shall have received for its own
account, or for the account of each Lender, as the case may be, all fees, costs
and expenses due and payable on the Closing
Date pursuant to Section 3.3 and, to the extent invoiced on
such date, Section 10.3 (including, without limitation, the
reasonable fees and expenses of Winston & Strawn).


 


38

















 


SECTION 5.1.10  Certificate. A certificate signed by
the chief financial officer or chief executive officer of the Borrower, dated
as of the Closing Date and after giving effect to this Agreement:


 


(i)                                     stating that
the representations and warranties contained in Article VI are true
and correct on and as of such date as though made on and as of such date; and


 


(ii)                                  stating that no
Default or Event of Default exists.


 


SECTION 5.1.11  Disclosure Schedules. Copies of the
Schedules to this Agreement.


 


SECTION 5.1.12  Insurance.  Certificates or other evidence of insurance
in effect as required by Section 7.1.4, with endorsements naming
Agent and Lenders as lenders’ loss payee and/or additional insured, as
applicable.


 


SECTION 5.1.13  Financials. The Agent shall have
received (i) unaudited financial statements for the Borrower through
June 30, 2009, (ii) financial projections through the Maturity Date
in form and substance satisfactory to the Agent and (iii) a pro forma
consolidated balance sheet of the Borrower as of June 30, 2009 but giving
pro forma effect to the Term Loan and Borrowings.


 


SECTION 5.1.14  No Material Adverse Change. There
shall have been no material adverse change in the business, assets,
liabilities, operations, condition (financial or otherwise) or prospects of the
Borrower, together with its Subsidiaries, taken as a whole.


 


SECTION 5.1.15  Consents.  Evidence that all necessary consents,
permits, licenses and approvals (governmental or otherwise) required for the
execution, delivery and performance by each Credit Party of this Agreement, the
Notes and each other Loan Document have been duly obtained and are in full
force and effect.


 


SECTION 5.1.16  Repayment of Exiting Lenders.  Each Person which was a lender under the
Sixth Amended and Restated Credit Agreement and which is not a Lender hereunder
shall have been paid any amounts due and owing to such Person under the Sixth
Amended and Restated Credit Agreement as of the date hereof.


 


SECTION 5.1.17  No Material Litigation. As of the
Closing Date, no Credit Party shall be party to any litigation which would be
material to the Credit Parties take as a whole.


 


SECTION 5.1.18  Other Documents. Such other customary
approvals, opinions, documents or materials as the Agent may reasonably
request.


 


SECTION 5.2  All Borrowings and Letters of Credit.  The obligation of each Lender to fund the
Term Loan and any Loan on the occasion of any Borrowing (including the initial
Borrowing) and the obligation of the Letter of Credit Issuer to issue any
Letter of Credit shall be subject to the satisfaction of each of the conditions
precedent set forth in this Section 5.2.


 


SECTION 5.2.1  Compliance with Warranties, No
Default, etc.  Both before and
after giving effect to any Borrowing (but, if any Default of the nature
referred to in Section 8.1.5  


 


39
















 


shall have occurred with
respect to any other Indebtedness, without giving effect to the application,
directly or indirectly, of the proceeds thereof) the following statements shall
be true and correct:


 


(a)                                  the
representations and warranties set forth in Article VI shall be
true and correct with the same effect as if then made (unless stated to relate
solely to an early date, in which case such representations and warranties
shall be true and correct as of such earlier date); and


 


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


 


SECTION 5.2.2  Borrowing Request; LC Notice.  The Agent shall have received a Borrowing
Request for such Borrowing or LC Notice for the issuance of a Letter of
Credit.  Each of the delivery of a Borrowing
Request or LC Notice, as the case may be, and the acceptance by the Borrower of
the proceeds of such Borrowing or the issuance of such Letter of Credit, as the
case may be, shall constitute a representation and warranty by the Borrower
that on the date of such Borrowing or the issuance of such Letter of Credit, as
the case may be (both immediately before and after giving effect to such
Borrowing and the application of the proceeds thereof or the issuance of such
Letter of Credit, as the case may be,) the statements made in Section 5.2.1
are true and correct.


 


SECTION 5.2.3  Satisfactory Legal Form.  All documents executed or submitted pursuant
hereto by or on behalf of each Credit Party shall be reasonably satisfactory in
form and substance to the Agent and its counsel; the Agent and its counsel
shall have received all information, approvals, opinions, documents or
instruments as the Agent or its counsel may reasonably request.


 


ARTICLE VI


 


REPRESENTATIONS AND
WARRANTIES


 


In order to induce the
Lenders and the Agent to enter into this Agreement and to make Loans hereunder,
the Borrower represents and warrants unto the Agent and each Lender as set
forth in this Article VI.


 


SECTION 6.1  Organization, etc.  The Borrower and each of its Subsidiaries is
validly organized and existing and in good standing under the laws of the State
of its organization, is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction where the nature of its business
requires such qualification, and has full power and authority and holds all
requisite governmental licenses, permits and other approvals to enter into and
perform its Obligations under this Agreement, the Notes and each other Loan
Document to which it is a party and to own and hold under lease its property
and to conduct its business substantially as currently conducted by it.


 


SECTION 6.2 
Due Authorization, Non-Contravention, etc.  The execution, delivery and
performance by the Borrower and each of its Subsidiaries of this Agreement, the
Notes and each 


 


40

















 


other Loan Document executed
or to be executed by it, are within each such Credit Party’s powers, have been
duly authorized by all necessary corporate action, and do not:


 


(a)                                  contravene such
Credit Party’s Organizational Documents;


 


(b)                                 contravene any
contractual restriction, law or governmental regulation or court decree or
order binding on or affecting such Credit Party, which contravention reasonably
would be expected to have a Material Adverse Effect; or


 


(c)                                  result in, or
require the creation or imposition of, any Lien on any of such Credit Party’s
properties other than a Permitted Lien.


 


SECTION 6.3  Government Approval, Regulation, etc.  No authorization or approval or other action
by, and no notice to or filing with, any governmental authority or regulatory
body or other Person is required for the due execution, delivery or performance
by any Credit Party, including, without limitation, the Borrower, of this
Agreement, the Notes or any other Loan Document to which it is a party, other
than as described in Schedule 6.3 which have been obtained or delivered
on or prior to the Closing Date.  Neither
the Borrower nor any of its Subsidiaries, is an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.


 


SECTION 6.4  Validity, etc.  This Agreement constitutes, and the Notes and
each other Loan Document executed by each Credit Party thereto will, on the due
execution and delivery thereof, constitute, the legal, valid and binding
obligations of such Credit Party enforceable in accordance with their
respective terms, except that the validity or enforceability of any such Loan
Document may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforceability of creditors’ rights
generally or by equitable principles, whether enforcement thereof is sought in
a court of law or equity.


 


SECTION 6.5  Financial Information.  The audited financial statements of the
Borrower and its Subsidiaries on a consolidated basis as of December 31,
2008, and the unaudited financial statements of the Borrower and its
Subsidiaries on a consolidated basis as of June 30, 2009, copies of which
have been furnished to the Agent and each Lender, have been prepared in
accordance with GAAP consistently applied (subject to ordinary, good faith year
end audit adjustments), and present fairly the consolidated financial position
of the Persons covered thereby as at the dates thereof and the results of their
operations for the periods then ended.


 


SECTION 6.6  No Material Adverse Change. Since
December 31, 2008, there has been no material adverse change in the
financial condition, operations, assets, business, properties or prospects of the
Borrower and its Subsidiaries taken as a whole.


 


SECTION 6.7  Litigation, Labor Controversies, etc.  There is no pending or, to the knowledge of
the Borrower, threatened litigation, action, proceeding, or labor controversy
affecting any Credit Party, or any of their respective properties, businesses,
assets or revenues, or any Person who provided health care services under
contract with any Credit Party, which reasonably would be expected to have a
Material Adverse Effect or which purports to affect the legality, validity or
enforceability of this Agreement, the Notes or any other Loan Document.


 


41

















 


SECTION 6.8  Subsidiaries.


 


The Borrower has no
Subsidiaries, except those Subsidiaries:


 


(i)                                     which are identified
in Schedule 6.8; or


 


(ii)                                  which are
permitted to have been formed or acquired by the Borrower in accordance with Section 7.1.12,
7.2.5 or 7.2.8.


 


SECTION 6.9  Ownership of Properties.  The Borrower and each of its Subsidiaries
owns good and marketable title (or valid leasehold title, with respect to
leasehold estates) to all of its properties and assets, real and personal,
tangible and intangible, of any nature whatsoever (including patents,
trademarks, trade names, service marks and copyrights), free and clear of all
Liens, charges or claims (including infringement claims with respect to
patents, trademarks, copyrights and the like) except as permitted pursuant to Section 7.2.3.


 


SECTION 6.10  Taxes. 
Except as described on Schedule 6.10, the Borrower and each of
its Subsidiaries has filed all tax returns and reports required by law to have
been filed by it and has paid all taxes and governmental charges thereby shown
to be owing, except any such taxes or charges which are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books.


 


SECTION 6.11  Pension and Welfare Plans.  During the twelve-consecutive-month period
prior to the Closing Date and prior to the date of any Borrowing hereunder, no
steps have been taken to terminate any Pension Plan, and no contribution
failure has occurred with respect to any Pension Plan sufficient to give rise
to a Lien under Section 302(f) of ERISA.  No condition exists or event or transaction
has occurred with respect to any Pension Plan which reasonably would be
expected to result in the incurrence by the Borrower or any member of the
Controlled Group of any material liability, fine or penalty.  Neither the Borrower nor any member of the
Controlled Group has any contingent liability with respect to any
post-retirement benefit under a Welfare Plan, other than liability for
continuation coverage described in Part 6 of Title I of ERISA.


 


SECTION 6.12  Environmental Warranties.


 


(a) All facilities and
property (including underlying groundwater) owned or leased by the Borrower or
any of its Subsidiaries have been, and continue to be, owned or leased by the
Borrower and its Subsidiaries in material compliance with all applicable
Environmental Laws.


 


(b)                                 There have been
no past (which have not been remedied or resolved), and there are no pending
or, to the best knowledge of the Borrower, threatened:


 


(i)  claims,
complaints, notices or requests for information received by the Borrower or any
of its Subsidiaries with respect to any alleged material violation of any
Environmental Law, or


 


42

















 


(ii)  complaints,
notices or inquiries to the Borrower or any of its Subsidiaries regarding potential
material liability under any Environmental Law.


 


(c)                                  There have been
no Releases of Hazardous Materials at, on or under any property now or
previously owned or leased by the Borrower or any of its Subsidiaries that,
singly or in the aggregate, have, or would reasonably be expected to have, a
Material Adverse Effect.


 


(d)                                 The Borrower
and its Subsidiaries have been issued and are in material compliance with all
material permits, certificates, approvals, licenses and other material
authorizations relating to environmental matters and necessary or desirable for
their businesses.


 


(e)                                  No property now
or previously owned or leased by the Borrower or any of its Subsidiaries is
listed or proposed for listing (with respect to owned property only) on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any similar state list
of sites requiring investigation or clean-up.


 


(f)                                    There are no
underground storage tanks, active or abandoned, including petroleum storage
tanks, on or under any property now or previously owned or leased by the
Borrower or any of its Subsidiaries.


 


(g)                                 Neither the
Borrower nor any of its Subsidiaries has directly transported or directly
arranged for the transportation of any Hazardous Material to any location which
is listed or proposed for listing on the National Priorities List pursuant to
CERCLA, on the CERCLIS or on any similar state list or which is the subject of
federal, state or local enforcement actions or other investigations which
reasonably would be expected to lead to material claims against the Borrower or
such Subsidiary thereof for any remedial work, damage to natural resources or
personal injury, including claims under CERCLA.


 


(h)                                 To the best of
the Borrower’s knowledge after due inquiry, there are no polychlorinated
biphenyls or friable asbestos present at any property now or previously owned
or leased by the Borrower or any of its Subsidiaries.


 


(i)                                     No conditions
exist at, on or under any property now or previously owned or leased by the
Borrower or any of its Subsidiaries which, with the passage of time, or the
giving of notice or both, reasonably would be expected to give rise to any
material liability under any Environmental Law.


 


SECTION 6.13  Regulations T, U and X.  Neither the Borrower nor any of its
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock, and no proceeds of any Loans or any Letter
of Credit will be used for a purpose which violates, or would be inconsistent
with, F.R.S. Board Regulation U or X. 
Terms for which meanings are provided in F.R.S. Board Regulation T, U or
X or any regulations substituted therefor, as from time to time in effect, are
used in this Section with such meanings.


 


SECTION 6.14  Accuracy of Information.  All factual information heretofore or
contemporaneously furnished by or on behalf of any Credit Party in writing to
the Agent or any 


 


43

















 


Lender for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all other such factual information hereafter furnished by or on behalf of any
Credit Party to the Agent or any Lender will be, true and accurate in every
material respect on the date as of which such information is dated or certified
and as of the date of execution and delivery of this Agreement by the Agent and
such Lender, and such information is not, or shall not be, as the case may be,
incomplete by omitting to state any material fact necessary to make such information
not misleading.


 


SECTION 6.15  Solvency.  As of the Closing Date, after giving effect
to the consummation of the transaction contemplated by the Loan Documents and
the payment of all fees, costs and expenses payable by the Borrower with
respect to the transactions contemplated by the Loan Documents, the Borrower
and its Subsidiaries are Solvent on a consolidated basis.


 


SECTION 6.16  Collateral Documents.


 


(a)  Subject to the
provisions of clause (b) below with respect to the requirement of the
Agent to maintain possession as the Pledged Collateral, the provisions of each
of the Collateral Documents are effective to create in favor of the Agent for
the benefit of the Lenders and the Agent, a legal, valid and enforceable first
priority security interest in all right, title and interest of each Credit
Party in the Collateral described therein; and financing statements have been
filed in the offices in all of the jurisdictions listed in the schedule to the
Guarantee and Collateral Agreement, and each Intellectual Property Assignment
has been filed in the U.S. Patent and Trademark Office and the U.S. Copyright
Office.


 


(b)                                 The provisions
of the Guarantee and Collateral Agreement are effective to create, in favor of
the Agent for the benefit of the Lenders and the Agent, a legal, valid and
enforceable first priority security interest in all of the Collateral described
therein; and the Pledged Collateral was delivered to the Agent or its nominee
in accordance with the terms thereof. 
The Lien on the Pledged Collateral granted pursuant to the Guarantee and
Collateral Agreement constitutes a perfected, first priority security interest
in all right, title and interest of each applicable Credit Party in the Pledged
Collateral described therein, prior and superior to all other Liens and
interests, provided the Agent maintains possession of the Pledged Collateral
for the term of the Guarantee and Collateral Agreement.


 


(c)                                  All
representations and warranties of each Credit Party contained in the Collateral
Documents are true and correct as of the date on which made, except to the
extent such representations pertain to a prior date, in which case such
representations and warranties are true and correct as of such prior date.


 


SECTION 6.17  Indebtedness.  Attached hereto as Schedule 6.17 is a
complete and correct list of all Indebtedness of the Borrower and its
Subsidiaries outstanding on the Closing Date, showing the aggregate principal
amount which was outstanding as of July 31, 2009.  The Borrower has delivered or caused to be
delivered to the Agent a true and complete copy of each instrument evidencing
any Indebtedness listed on Schedule 6.17 and of each document pursuant
to which any of such Indebtedness was issued.


 


44

















 


SECTION 6.18  Other Agreements/Program Eligibility.  Neither the Borrower nor any of its
Subsidiaries (and to the knowledge of the Borrower’s officers, no Minority ASC
Entity) is in default in the performance, observance or fulfillment of any
obligation, covenant or condition contained in or applicable with respect to
any Medicaid Provider Agreement, Medicare Provider Agreement, other agreement
or instrument to which the Borrower or a Subsidiary is a party with a third
party payor, or participation in Medicare, Medicaid or any other third-party
payor program in which the Borrower or a Subsidiary participates, which
default, if not remedied within any applicable grace period, reasonably would
be expected to (A) in the case of any Medicaid Provider Agreement or third
party payor agreement other than a national third party payor agreement
(i) result in the revocation, termination, cancellation, suspension or
non-renewal of Medicaid Certification, any similar certification of a material
third party not involved in a national third party payor agreement, if any, a
Medicaid Provider Agreement or agreement with a third party payor which is not
party to a national third party payor program with the Borrower or any
Subsidiary of the Borrower, or eligibility to participate, directly or
indirectly, in Medicaid or material third party payor programs which are not
national third party payor programs of the Borrower and its Subsidiaries, and
(ii) have a Material Adverse Effect, or (B) in the case of any
Medicare Provider Agreement or material national third party payor agreement,
(i) result in the revocation, termination, cancellation, suspension or
non-renewal of Medicare Certification, any similar certification of a material
national third party payor contract or agreement, a Medicare Provider Agreement
or material national agreement with a third party payor, or eligibility to
participate, directly or indirectly, in Medicare or material national third
party payor programs and (ii) have a Material Adverse Effect.


 


SECTION 6.19
 Reimbursement from Third Party Payors.  The accounts receivable of the Borrower and
each of its Subsidiaries (and to the knowledge of the Borrower’s officers, each
Minority ASC Entity) have been and will continue to be adjusted reasonably to
reflect reimbursement experiences with and policies of third party payors such
as Medicare, Medicaid, Blue Cross/Blue Shield, private insurance companies,
health maintenance organizations, preferred provider organizations, alternative
delivery systems, managed care systems, government contracting agencies and
other third party payors.  In particular,
accounts receivable relating to such third party payors do not and shall not
exceed amounts any obligee is entitled to receive under any capitation
arrangement, fee schedule, discount formula, cost-based reimbursement or other
adjustment or limitation to its usual charges.


 


SECTION 6.20  Legal Compliance.  The Borrower and each of its Subsidiaries
(and to the knowledge of the Borrower’s officers, each Minority ASC Entity) have
duly complied and are in compliance with all Fraud and Abuse Laws; all
applicable state laws and regulations regarding certificate of need and state
licensure; HIPAA and state laws and regulations regarding privacy; and all
other requirements, restrictions and prohibitions of law, including, without
limitation, any statute, law, treaty, rule, regulation, manual, guideline,
rule of professional conduct, or order, decree, writ, injunction or other
determination of an arbitrator, court or other governmental authority, in each
case applicable to or binding upon such Person or any of its property or to
which such person or its property is subject and having the force of law, other
than those noncompliance with which would not reasonably be expected to have a
Material Adverse Effect.


 


45

















 


SECTION 6.21  Licensing and Accreditation.  Each of the Borrower and each of its
Subsidiaries (and to the knowledge of the Borrower’s officers, each Minority
ASC Entity) has, to the extent applicable (A), (i) obtained (or been duly
assigned) all required certificates of need (other than as described on Schedule
6.21) or determinations of need, as required by the relevant state
governmental authority, for the acquisition, construction, expansion of,
investment in or operation of its businesses or facilities as currently
operated; (ii) obtained and maintains in good standing all required
licenses; (iii) to the extent customary in the industry and geographic
market in which it is engaged, obtained and maintains accreditation from all
generally recognized accrediting agencies; (iv) obtained and maintains
Medicaid Certification, Medicare Certification and any similar third party
payor certification, if any; and (v) entered into and maintains in good
standing, if applicable, its Medicaid Provider Agreement and its agreements
with third party payors, the failure of any of which has, or could reasonably
be expected to have, a Material Adverse Effect; and (B), (i) obtained and
maintains Medicare Certification where the failure to obtain or maintain could
reasonably be expected to have a Material Adverse Effect and (ii) entered
into and maintains in good standing its Medicare Provider Agreement where the
failure to enter into and maintain has, or could reasonably be expected to have
a Material Adverse Effect.


 


SECTION 6.22  Insurance.  Except as set forth on Schedule 6.22,
Borrower and each other Credit Party and their respective properties are
insured with financially sound and reputable insurance companies which are not
Affiliates of Borrower, in such amounts, with such deductibles and covering
such risks as are customarily carried by companies engaged in similar
businesses and owning similar properties in localities where Borrower or such
other Credit Party operates.


 


SECTION 6.23  Intellectual Property.  Borrower and each other Credit Party owns and
possesses or has a license or other right to use all patents, patent rights,
trademarks, trademark rights, trade names, trade name rights, service marks,
service mark rights and copyrights as are necessary for the conduct of the
business of Borrower and the other Credit Parties, without any infringement
upon rights of others which could reasonably be expected to have a Material
Adverse Effect.


 


SECTION 6.24  Subordination Provisions.  The (A) subordination provisions
contained in all notes, debentures and other instruments entered into or issued
in respect of Subordinated Debt are enforceable against the issuer of the
respective security and the holders thereof in accordance with their respective
terms, and the Loans and all other Obligations are within the definitions of
“Senior Indebtedness”, or other comparable definition, included in such
provisions and (B) subordination provisions contained in the Convertible
Note Documents are enforceable against the holders thereof and the Loans and
all other Obligations are “Senior Debt” (or other comparable definition) as
defined in the Convertible Note Documents and there is no Indebtedness other
than the Loans and Obligations which is “Designated Senior Indebtedness” (or
other comparable definition) of the Borrower outstanding.


 


SECTION 6.25  RICO. 
None of the Borrower nor any of its Subsidiaries is engaged in or has
engaged in any course of conduct that reasonably would be expected to subject
any of their respective properties to any Lien, seizure or other forfeiture
under any criminal law, racketeer influenced and corrupt organizations law,
civil or criminal, or other similar laws.


 


46

















 


SECTION 6.26  No Default.  (A) No Event of Default or Default
exists or would result from the incurrence by any Credit Party of any
Indebtedness hereunder or under any other Loan Document and (B) no Default
(as defined in the Convertible Note Documents) currently exists.


 


SECTION 6.27  Full Disclosure.  No information contained in this Agreement,
any of the other Loan Documents, financial statements or other reports from
time to time delivered hereunder or any written statement furnished by or on
behalf of any Credit Party to Agent or any Lender pursuant to the terms of this
Agreement contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to make the statements contained
herein or therein not misleading in light of the circumstances under which they
were made.  The Liens granted to Agent,
on behalf of itself and Lenders, pursuant to the Collateral Documents are
currently fully perfected first priority Liens in and to the Collateral
described therein, subject, as to priority, only to Permitted Liens.


 


SECTION 6.28  Capitalization.  All issued and outstanding equity securities
of the Credit Parties (other than Borrower) are duly authorized and validly
issued, fully paid, non-assessable, and free and clear of all Liens other than
those in favor of Agent, and such securities were issued in compliance with all
applicable state and federal laws concerning the issuance of securities.  Schedule  6.28  sets forth the authorized equity securities of each Credit
Party as of the Closing Date.  As of the
Closing Date, except as set forth on Schedule 6.28, there are no
pre-emptive or other outstanding rights, options, warrants, conversion rights
or other similar agreements or understandings for the purchase or acquisition
of any equity interests of Borrower or any other Credit Party.


 


ARTICLE VII


 


COVENANTS


 


SECTION 7.1 
Affirmative Covenants.  The Borrower
agrees with the Agent and each Lender that, until all Revolving Commitments
have terminated and all Obligations have been paid and performed in full, each
Credit Party will perform the obligations set forth in this Section 7.1
applicable to such Credit Party.


 


SECTION 7.1.1 
Financial Information, Reports, Notices, etc.  The Borrower will furnish,
or will cause to be furnished, to each Lender and the Agent copies of the
following financial statements, reports, notices and information:


 


(a)                                  as soon as
available and in any event within 45 days (i) after the end of each of the
first three Fiscal Quarters of each Fiscal Year of the Borrower, to the extent
prepared to comply with SEC requirements, a copy of the SEC Form 10-Qs
filed by the Borrower with the SEC for each such quarterly period, or if no
such Form 10-Q was so filed by the Borrower with respect to any such
quarterly period, consolidated balance sheets of the Borrower and its
Subsidiaries as of the end of such Fiscal Quarter and consolidated statements
of earnings and cash flow of the Borrower and its Subsidiaries for such Fiscal
Quarter and for the period commencing at the end of the previous Fiscal Year
and ending with the end of such Fiscal Quarter, certified by the Authorized
Officer of the Borrower and (ii) after
the end of each Fiscal Year of the Borrower, a summary 


 


47

















 


profit and loss
statement of each ASC Subsidiary which shows actual results compared to budget
and prior year;


 


(b)                                 as soon as
available and in any event within 90 days after the end of each Fiscal Year of
the Borrower, to the extent prepared to comply with SEC requirements, a copy of
the SEC Form 10-K filed by the Borrower with the SEC for such Fiscal Year,
or, if no such Form 10-K was so filed by the Borrower for such Fiscal
Year, a copy of the annual audit report for such Fiscal Year for the Borrower
and its Subsidiaries including therein consolidated balance sheets of the
Borrower and its Subsidiaries as of the end of such Fiscal Year and
consolidated statements of earnings and cash flow of the Borrower and its
Subsidiaries for such Fiscal Year, certified (without any Impermissible
Qualification) by Borrower’s independent public accountants;


 


(c)                                  within five
business days of becoming available, a copy of any management letter (or other
correspondence from Borrower’s independent public accountants reasonably
satisfactory to Agent) delivered to Borrower by Borrower’s independent public
accountants in connection with the audit of Borrower’s financial statements for
such previous Fiscal Year;


 


(d)                                 as soon as
available and in any event within 45 days after the end of each of the first
three Fiscal Quarters during a Fiscal Year, and within 90 days after the end of
each Fiscal Year, a certificate, executed by the chief financial officer and/or
principal accounting officer of the Borrower, showing (in reasonable detail and
with appropriate calculations and computations in all respects satisfactory to
the Agent) compliance with the financial covenants set forth in Section 7.2.4.;


 


(e)                                  as soon as
practicable, and in any event not later than 30 days following the commencement
of each Fiscal Year, consolidated financial projections for Borrower and its
Subsidiaries for such Fiscal Year prepared in a manner consistent with the
projections delivered by Borrower to Lenders prior to the Closing Date or
otherwise in a manner reasonably satisfactory to Agent.


 


(f)                                    as soon as
possible and in any event within three Business Days after the occurrence of
each Default, a statement of the chief financial officer and/or principal
accounting officer of the Borrower setting forth details of such Default and
the action which the Borrower has taken and proposes to take with respect
thereto;


 


(g)                                 as soon as
possible and in any event within three Business Days after (x) the
occurrence of any adverse development with respect to any litigation, action,
proceeding, or labor controversy described in Section 6.7 or
(y) the commencement of any labor controversy, litigation, action,
proceeding of the type described in Section 6.7, any of which
reasonably would be expected to have a Material Adverse Effect, notice thereof
and copies of all documentation relating thereto;


 


(h)                                 promptly, but
not later than five days after the date of filing with the SEC, copies of all
financial statements and reports that Borrower sends to its shareholders, and
copies of all financial statements and regular, periodical or special reports
(including 


 


48

















 


Forms 10-K and 10-Q) that Borrower or any of
its Subsidiaries may make to, or file with, the SEC (including, without
limitation, pursuant to Section 7.2.9(b)) or any national
securities exchange;


 


(i)                                     immediately
upon becoming aware of the institution of any steps by the Borrower or any
other Person to terminate any Pension Plan, or the failure to make a required
contribution to any Pension Plan if such failure is sufficient to give rise to
a Lien under Section 302(f) of ERISA, or the taking of any action
with respect to a Pension Plan which reasonably would be expected to result in
the requirement that the Borrower furnish a bond or other security to the PBGC
or such Pension Plan, or the occurrence of any event with respect to any
Pension Plan which reasonably would be expected to result in the incurrence by
the Borrower of any material liability, fine or penalty, or any material
increase in the contingent liability of the Borrower with respect to any
post-retirement Welfare Plan benefit, notice thereof and copies of all
documentation relating thereto;


 


(j)                                     immediately
upon becoming aware of any dispute, litigation or other proceedings being
instituted against any Credit Party to suspend, revoke or terminate any
Medicaid Provider Agreement, Medicaid Certification, Medicare Provider
Agreement, Medicare Certification, eligibility to participate in Medicare or
Medicaid, or agreement with or certification by, if any, or eligibility to
participate in a program of a third party payor, or any subpoena or
investigation by a governmental authority, including without limitation CMS,
the Office of Inspector General of the Department of Health and Human Services,
and the Department of Justice, which suspension, revocation, termination or the
results of such subpoena or investigation reasonably would be expected to have
a Material Adverse Effect, promptly deliver to the Agent written notice thereof
stating the nature and status of such litigation, dispute, proceeding, levy,
execution, subpoena or investigation or other process; or any proceeding
instituted against any Credit Party, or any of their respective officers,
directors, members or managers to exclude any of them from participation in any
Federal or State healthcare program; and


 


(k)                                  such other
information respecting the condition or operations, financial or otherwise, of
the Borrower or any of its Subsidiaries as any Lender through the Agent may
from time to time reasonably request.  To
the extent that any information to be disclosed hereunder is “protected health
information” as defined under HIPAA, the Borrower and its Subsidiaries shall
disclose such information pursuant to the Business Associate Agreement between
it and the Lenders to which it is a party and under its “health care
operations” (as defined in HIPAA) and no Credit Party that is a “covered
entity” under HIPAA shall by contract prohibit disclosure of its protected
Health Information to Lenders that is not otherwise prohibited by HIPAA.


 


SECTION 7.1.2  Compliance with Laws, etc.  The Borrower will, and will cause each of its
Subsidiaries to, comply in all material respects with all Fraud and Abuse Laws;
all applicable laws, rules, regulations and orders (including, without
limitation, Medicare Regulations, Medicaid Regulations and the rules and
regulations established by any third party payor), and all applicable corporate
laws including without limitation:


 


49
















 


(i)                                     the maintenance
and preservation of its corporate existence and qualification as a foreign
corporation, except to the extent no longer necessary within the reasonable
business judgment of the Borrower or such Subsidiary, as applicable, or if
otherwise terminated pursuant to a transaction consummated in accordance with
the provisions of Section 7.2.8; and


 


(ii)                                  the payment,
before the same become delinquent, of all taxes, assessments and governmental
charges imposed upon it or upon its property except to the extent being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books.


 


(iii)                               compliance in
all material respects with all federal and state laws and regulations
applicable to health care including, all Fraud and Abuse Laws, all laws
relating to licensure, certificate of need, state privacy laws and HIPAA.


 


(b) the Borrower will
further use its commercially reasonable efforts, subject to applicable laws to
assure the compliance in all material respects by all Minority ASC Entities
with all applicable laws, including, but not limited to all federal and state
laws and regulations applicable to health care including, all Fraud and Abuse
Laws, all laws relating to licensure, certificate of need and HIPAA.


 


SECTION 7.1.3  Maintenance of Properties.  The Borrower will, and will cause each of its
Subsidiaries to, maintain, preserve, protect and keep its properties in good
repair, working order and condition, and make necessary and proper repairs,
renewals and replacements so that its business carried on in connection
therewith may be properly conducted at all times unless the Borrower determines
in good faith that the continued maintenance of any of its properties is no
longer economically desirable.


 


SECTION 7.1.4  Insurance.


 


(a) Schedule 7.1.4
sets forth as of the date of this Agreement a true and complete listing of all
insurance maintained by the Borrower and each of its Subsidiaries and each
Minority ASC Entity.   The Borrower will,
and will cause each of its Subsidiaries to, maintain or cause to be maintained
with responsible insurance companies insurance with respect to its properties
and business (including professional liability insurance, comprehensive liability
insurance and business interruption insurance) against at least such casualties
and contingencies and of at least such types and in at least such amounts as
are commercially reasonable which insurance shall name the Agent as loss payee
and an additional insured, and will, upon request of the Agent, furnish to each
Lender at reasonable intervals (provided that, so long as no Event of Default
shall have occurred and be continuing, no such certification shall be required
to be delivered more than once in any Fiscal Year) a certificate of an
Authorized Officer of the Borrower setting forth the nature and extent of all
insurance maintained by the Borrower and its Subsidiaries in accordance with
this Section.


 


(b)  The Borrower will
use commercially reasonable efforts to cause each Practice to maintain medical
malpractice insurance at commercially reasonable levels.


 


50

















 


SECTION 7.1.5  Books and Records.  The Borrower will, and will cause each of its
Subsidiaries to, keep books and records which accurately reflect all of its
business affairs and transactions and permit the Agent and each Lender or any
of their respective representatives, at reasonable times and intervals, upon,
so long as no Event of Default shall exist and be continuing, reasonable prior
notice delivered during regular business hours, to visit all of its offices, to
discuss its financial matters with its officers and independent public
accountant (and the Borrower hereby authorizes such independent public
accountant to discuss the Borrower’s financial matters with each Lender or its
representatives, provided, so long as no Event of Default shall exist or be
continuing, a representative of the Borrower is present) and to examine (and,
at the expense of the Borrower, photocopy extracts from) any of its books or
other corporate records.  The Borrower
shall pay any fees of such independent public accountant incurred in connection
with the Agent’s or any Lender’s exercise of its rights pursuant to this
Section provided, however, that so long as no Event of Default shall exist
and be continuing, the Borrower shall not be liable for the fees and expenses
of such independent public accountant related to more than one visit during any
Fiscal Year.  All visits conducted
pursuant to this Section 7.1.5 shall be conducted in such a manner
so as not to disrupt the business operations of the applicable office.  All information obtained during any such
visit shall be subject to the provisions of Section 10.11.3.


 


SECTION 7.1.6  Environmental Covenant.  The Borrower will, and will cause each of its
Subsidiaries to:


 


(a)                                  use and operate
all of its facilities and properties in material compliance with all
Environmental Laws, keep all necessary material permits, approvals,
certificates, licenses and other authorizations relating to environmental
matters in effect and remain in material compliance therewith, and handle all
Hazardous Materials in material compliance with all applicable Environmental
Laws;


 


(b)                                 immediately
notify the Agent and provide copies upon receipt of all written material
claims, complaints, notices or inquiries relating to, the condition of its
facilities and properties or compliance with Environmental Laws, and shall
promptly cure and have dismissed with prejudice to the reasonable satisfaction
of the Agent any actions and proceedings relating to compliance with
Environmental Laws; and


 


(c)                                  provide such
information and certifications which the Agent may reasonably request from time
to time to evidence compliance with this Section 7.1.6.


 


SECTION 7.1.7  Changes to Certain Agreements.  Without the prior written consent of the
Required Lenders, no Credit Party shall make any amendment, supplement or
modification to any agreements evidencing Subordinated Debt; provided, however,
that any such amendment which conforms with applicable law in all material
respects and is not materially adverse to the interests of the Lenders as
Lenders under the Loan Documents shall be permitted without any consent.  Copies of such amended agreements shall be
delivered promptly to the Agent by the Borrower.


 


SECTION 7.1.8  Governmental Licenses.  The Borrower will, and will cause each of its
Subsidiaries to, obtain and maintain all material licenses, certificates of
need, other applicable 


 


51

















 


permits, agreements,
certifications and approvals of all applicable governmental authorities as are
required for the conduct of its business as currently conducted and herein
contemplated, Medicaid Certifications and Medicaid Provider Agreements and
Medicare Certifications and Medicare Provider Agreements and certifications of
third party payors the failure of which has, or could reasonably be expected to
have, a Material Adverse Effect.


 


SECTION 7.1.9  Covenants Extending to Other Persons.  The Borrower will, and will cause each of its
Subsidiaries to, use its commercially reasonable efforts, in accordance with
applicable law (which shall include, without limitation, the exercise of contractual
rights and remedies available to the Borrower and its Subsidiaries) to cause
each Non-Wholly Owned ASC Subsidiary, Minority ASC Entity, Practice or
Provider, as appropriate to do with respect to itself, its business and its
assets, each of the things required of a Credit Party in Sections 7.1.2
through 7.1.8 inclusive, subject, however, in the case of Section 7.1.5
to any laws, rules or regulations concerning the confidentiality of
medical records.


 


SECTION 7.1.10  Solvency.  The Borrower and its Subsidiaries on a
consolidated basis shall at all times be Solvent.


 


SECTION 7.1.11  Further Assurances.


 


(a) The Borrower shall
ensure that all written information, exhibits and reports furnished to the
Agent or the Lenders do not and will not contain any untrue statement of a
material fact and do not and will not omit to state any material fact or any
fact necessary to make the statements contained therein not misleading in light
of the circumstances in which made, and will promptly disclose to the Agent and
the Lenders and correct any defect or error that may be discovered therein or
in any Loan Document or in the execution, acknowledgment or recordation
thereof.


 


(b)                                 Promptly upon
request of the Agent or the Required Lenders, the Borrower shall (and shall
cause any of its Subsidiaries to) execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register, any and all such further
acts, deeds, conveyances, security agreements, mortgages, assignments, estoppel
certificates, financing statements and continuations thereof, termination
statements, notices of assignment, transfers, certificates, assurances and
other instruments the Agent or such Lenders, as the case may be, may reasonably
require from time to time in order (i) to carry out more effectively the
purposes of this Agreement or any other Loan Document, (ii) to subject any
of the properties, rights or interests covered by any of the Collateral
Documents to the Liens intended to be created by any of the Collateral
Documents, (iii) to perfect and maintain the validity, effectiveness and
priority of any of the Collateral Documents and the Liens intended to be
created thereby, and (iv) to better assure, convey, grant, assign,
transfer, preserve, protect and confirm to the Agent and the Lenders the rights
granted or now or hereafter intended to be granted to the Agent and the Lenders
under any Loan Document or under any other document executed in connection
therewith.


 


SECTION 7.1.12  New Subsidiaries.  Within 30 Business Days after the date of the
acquisition or creation of any Subsidiary by the Borrower or a Subsidiary of
the Borrower or in 


 


52

















 


the case of a Minority ASC
Entity or Non-Wholly Owned ASC Subsidiary which becomes a Wholly-Owned
Subsidiary, such Person will cause to be delivered to the Agent for the benefit
of the Lenders each of the following:


 


(i)  in the case of a Subsidiary other
than a Non-Wholly-Owned ASC Subsidiary, a joinder to the Guarantee and
Collateral Agreement;


 


(ii)  in the case of a Subsidiary other
than a Non-Wholly-Owned ASC Subsidiary, if such Subsidiary is a corporation, a
limited liability company or a partnership that has issued certificates
evidencing ownership of interests therein, the capital stock or, if applicable,
certificates of ownership of such limited liability company or partnership, as
the case may be, of such Person pertaining thereto, together with duly executed
stock powers or powers of assignment in blank affixed thereto;


 


(iii)  in the case of a Subsidiary other
than a Non-Wholly-Owned ASC Subsidiary, if such Subsidiary is a limited
liability company or a partnership not described in clause
(ii) immediately above, an acknowledgment of security interest of such
limited liability company or partnership, as the case may be, with respect to
the registration of the Lien on membership or partnership interests in such
Subsidiary, as the case may be, of such Person which acknowledgment shall be in
form and substance satisfactory to the Agent;


 


(iv)  a supplement to the appropriate
schedules attached to the Collateral Documents to reflect the acquisition by
the Borrower or, a Subsidiary (other than a Non-Wholly-Owned ASC Subsidiary) of
the Borrower, of such Subsidiary, certified as true, correct and complete by
the Authorized Officer of the relevant Credit Party (provided that the failure
to deliver such supplement shall not impair the rights conferred under the
Collateral Documents in after acquired Collateral and Pledged Collateral);


 


(v)  to the extent requested by Agent in
its reasonable discretion, an opinion or opinions of counsel to the Borrower
and such Subsidiary (other than a Non-Wholly-Owned ASC Subsidiary), dated as of
the date of delivery of any of the documents provided in the foregoing clause
(i) and addressed to the Agent and the Lenders, in form and substance
reasonably acceptable to the Agent (which opinion may include assumptions and
qualifications of similar effect to those contained in the opinions of counsel
delivered pursuant to Section 5.1.7), to the effect that:


 


(A)  such Subsidiary is
duly organized, validly existing and in good standing in the jurisdiction of
its organization, has the requisite power and authority to own its properties
and conduct its business as then owned and then proposed to be conducted and is
duly qualified to transact business and is in good standing in each
jurisdiction listed on the schedule attached to such opinion;


 


(B)  the execution,
delivery and performance of the Guarantee and Collateral Agreement, described
in clause (i) of this Section 7.1.12, have been duly
authorized by all requisite action (including any required shareholder, member
or partner approval), such agreement has been duly executed and delivered and
constitutes the valid and binding obligation of such Subsidiary,


 


53

















 


enforceable against such Subsidiary in accordance
with its terms, except to the extent such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to creditors’ rights and remedies generally, or to general principles
of equity, whether enforcement thereof is considered in a court of law or
equity; and


 


(C)  all financing
statements, instruments and documents are in a form which is sufficient to
create a security interest in favor of the Agent in the Pledged Collateral and
the Collateral, as the case may be;


 


(vi)  in the case of any Non-Wholly
Owned ASC Subsidiary or Minority ASC Entity that has issued certificates
evidencing ownership of interests therein, the capital stock or, if applicable,
certificates of ownership of such limited liability company or partnership, as
the case may be, of such Person owned by the Borrower or any Subsidiary of the
Borrower pertaining thereto, together with duly executed stock powers or powers
of assignment in blank affixed thereto;


 


(vii) current copies of
the charter documents, including, limited liability agreements and certificates
of formation, partnership agreements and certificates of limited partnership,
if applicable, and bylaws of such Subsidiary, minutes of duly called and
conducted meetings (or duly effected consent actions) of the Board of
Directors, members, partners, or appropriate committees thereof (and, if
required by such charter documents, bylaws or by applicable laws, of the
shareholders, members or partners) of such Subsidiary authorizing the actions
and the execution and delivery of documents described in this Section 7.1.12
and evidence satisfactory to the Agent (confirmation of the receipt of which
will be provided by the Agent to the Lenders) that such Subsidiary is Solvent
as of such date and after giving effect to the execution of any of the
documents required by clause (i) above.


 


SECTION 7.1.13  Deposit Accounts.  As soon as possible and, in any event, not
later than thirty (30) days following the Closing Date, the Credit Parties
shall have entered into tri-party blocked account agreements with respect to
the accounts listed on Schedule 6 of the Guarantee and Collateral
Agreement, in form and substance reasonably acceptable to Agent.


 


SECTION 7.2  Negative Covenants.  The Borrower agrees with the Agent and each
Lender that, until all Revolving Commitments have terminated and all
Obligations have been paid and performed in full, each Credit Party will
perform the obligations set forth in this Section 7.2.


 


SECTION 7.2.1  Business Activities.  The Borrower will not, and will not permit
any of its Subsidiaries, including, without limitation, any New Subsidiary, to,
engage in any business activity, except in (a) the fields of enterprise
that fall within the definition of “Target” herein; and (b) reasonable
extensions of the businesses being engaged in by the Borrower and its
Subsidiaries on the Closing Date.


 


54

















 


SECTION 7.2.2  Indebtedness.  The Borrower will not, and will not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist or
otherwise become or be liable in respect of any Indebtedness, other than,
without duplication, the following:


 


(a)                                  Indebtedness in
respect of the Loans and other Obligations;


 


(b)                                 Indebtedness,
including Subordinated Debt, existing as of the Closing Date which is
identified in Part B of Schedule 6.17, and refinancings thereof or
amendments or modifications that do not have the effect of increasing the
principal amount thereof or changing the amortization thereof (other than to
extend the same) and that are otherwise on terms and conditions no less
favorable to any Credit Party, Agent or any Lender in any material respect, as
determined by Agent, than the terms of the Indebtedness being refinanced,
amended or modified;


 


(c)                                  Indebtedness in
respect of Liens to the extent permitted in Section 7.2.3(b);


 


(d)                                 unsecured Indebtedness
incurred in the ordinary course of business (including open accounts extended
by suppliers on normal trade terms in connection with purchases of goods and
services, but excluding Indebtedness incurred through the borrowing of money or
Contingent Liabilities);


 


(e)                                  Indebtedness,
in respect of Capitalized Lease Liabilities, at any one time not to exceed in
the aggregate $5,000,000 less the amount of any Indebtedness which is
outstanding and permitted solely under subsection 7.2.3(b);


 


(f)                                    Indebtedness
consisting of intercompany loans, guarantees and advances made by the Borrower
to any Credit Party or by such Credit Party to the Borrower or another Credit
Party (“Credit Party Intercompany Loans”),
provided that (i) if requested by the Agent, the payor Credit Party
shall have executed and delivered to the payee Credit Party a demand note (the
“Credit Party Intercompany Note”)
to evidence any such Credit Party Intercompany Loan, which Credit Party
Intercompany Note shall be in form and substance satisfactory to Agent pledged
to the Agent pursuant to the relevant Collateral Documents as additional
collateral security for the Obligations, (ii) the payee Credit Party shall
record all Credit Party Intercompany Loans on its books and records in a manner
satisfactory to Agent, and (iii) at the time any such Credit Party
Intercompany Loan is made by a payee Credit Party and after giving effect
thereto, each of the payee Credit Party and the payor Credit Party shall be
Solvent;


 


(g)                                 Subordinated
Debt of the Borrower issued to the seller of a Target in connection with a
Permitted Acquisition, such Indebtedness to be on terms and conditions
reasonably satisfactory to the Agent (the Agent hereby acknowledges and agrees
that the subordination provisions contained in the Subordinated Debt existing
as of the date hereof are satisfactory);


 


(h)                                 Subordinated
Debt of the Borrower, such Subordinated Debt to mature no earlier than one year
after the Maturity Date and shall otherwise be on terms and conditions
reasonably satisfactory to the Agent (the Agent hereby acknowledges and 


 


55

















 


agrees that the subordination provisions
contained in the Subordinated Debt existing as of the date hereof are
satisfactory);


 


(i)                                     Indebtedness of
the Borrower constituting unpaid minority interests to a Provider in connection
with a Permitted Acquisition, such Indebtedness to be on terms and conditions
reasonably satisfactory to the Agent;


 


(j)                                     Indebtedness of
a Target which exists at the time such Target is the subject of a Permitted
Acquisition, which Indebtedness is assumed by the Credit Party which is a party
to such Permitted Acquisition and is otherwise permitted pursuant to this Section 7.2.2;


 


(k)                                  Indebtedness in
an amount not to exceed $8,000,000 in the aggregate at any one time outstanding
and $2,000,000 to any individual Minority ASC Entity or Non-Wholly Owned
Subsidiary at any one time outstanding, in each case when aggregated with
amounts outstanding pursuant to clause (m) below, consisting of
intercompany loans and advances made by the Borrower or any Subsidiary to any
Minority ASC Entity or Non-Wholly Owned Subsidiary or by a Minority ASC Entity
or Non-Wholly Owned Subsidiary to the Borrower or any other Subsidiary (“Non-Credit Party Intercompany Loans”), provided
that (i) the payor shall have executed and delivered to the payee a note
(the “Non-Credit Party Intercompany Note”)
to evidence any such Non-Credit Party Intercompany Loan, which Non-Credit Party
Intercompany Note shall be in form and substance satisfactory to Agent pledged
to the Agent pursuant to the relevant Collateral Documents as additional
collateral security for the Obligations, (ii) the payee shall record all
Non-Credit Party Intercompany Loans on its books and records in a manner
satisfactory to Agent, and (iii) at the time any such Non-Credit Party
Intercompany Loan is made by a payee and after giving effect thereto, each of
the payee and the payor shall be Solvent;


 


(l)                                     Indebtedness
consisting of Non-Credit Party Intercompany Loans in excess of the amounts
permitted by clauses (k) or (m) of this Section 7.2.2,
but in any event not to exceed $10,000,000 in the aggregate when aggregated
with amounts outstanding and permitted by clauses (k) or (m) of
this Section 7.2.2; provided, that any such Non-Credit Party
Intercompany Note permitted pursuant to this clause (l) shall be
secured by a perfected first priority lien on the assets of such Minority ASC
Entity or Non-Wholly Owned Subsidiary, as applicable, the scope of which Lien
shall be satisfactory to the Agent and which lien shall be assigned to the
Agent;


 


(m) Indebtedness
consisting of guarantees by the Borrower or any Credit Party of the obligations
of any Non-Wholly Owned Subsidiary or Minority ASC Entity, in any event not to
exceed $10,000,000 in the aggregate at any one time outstanding and $3,000,000  to any individual Non-Wholly Owned Subsidiary or Minority
ASC Entity, in each case when aggregated with Indebtedness outstanding under clause
(k) above;


 


(n) Indebtedness of Borrower or any ASC
Subsidiary owing to the seller of the equity interests of a Non-Wholly-Owned
ASC Subsidiary or Minority ASC Subsidiary of 


 


56

















 


the Borrower as part of the purchase price with respect to an ASC
Subsidiary Capital Event otherwise permitted hereunder; and


 


(o) unsecured
Indebtedness of Borrower evidenced by the Convertible Notes as in effect on the
date of their issuance or as permitted to be amended pursuant to the terms
hereof; provided, that: the aggregate principal amount of all
such Indebtedness evidenced by the Convertible Notes shall not exceed
$75,000,000 less the aggregate amount of all repayments or redemptions, whether
optional or mandatory, in respect thereof, plus interest thereon calculated in
the manner provided for in the Convertible Note Documents as in effect on the
date of the issuance thereof; provided, further that no
Subsidiary of the Borrower or other Person in which the Borrower has any direct
or indirect equity interest shall have any Contingent Liability with respect to
or shall otherwise guarantee or pledge its assets to secure any Indebtedness
under the Convertible Notes;


 


provided, however, that no
Indebtedness otherwise permitted by clauses (c) through (n) shall
be permitted if, after giving effect to the incurrence thereof, any Default
shall have occurred and be continuing.


 


SECTION 7.2.3  Liens. 
The Borrower will not, and will not permit any of its Subsidiaries to,
create, incur, assume or suffer to exist any Lien upon any of its property,
revenues or assets, whether now owned or hereafter acquired, except:


 


(a)                                  Liens securing
payment of the Obligations, granted pursuant to any Loan Document;


 


(b)                                 purchase money
security interests, in addition to, and not in limitation of, the Capitalized
Lease Liabilities described in clause (j) hereof, on any property acquired
or held by any Subsidiary in the ordinary course of business, securing
Indebtedness incurred or assumed for the purpose of financing all or any part
of the cost of acquiring such property; provided  that
(i) any such Lien attaches to such property concurrently with or within 20
days after the acquisition thereof, (ii) such Lien attaches solely to the
property so acquired in such transaction, and (iii) the principal amount
of the Indebtedness which is outstanding and which is secured by any and all
such purchase money security interests shall not at any time exceed $5,000,000
less the amount of Indebtedness outstanding and permitted solely under subsection
7.2.2(e);


 


(c)                                  Liens for
taxes, assessments or other governmental charges or levies not at the time
delinquent or thereafter payable without penalty or being diligently contested
in good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books;


 


(d)                                 Liens of
carriers, warehousemen, mechanics, materialmen and landlords incurred in the
ordinary course of business for sums not overdue or being diligently contested
in good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books;


 


(e)                                  Liens (other
than any Lien imposed by ERISA) incurred in the ordinary course of business in
connection with workmen’s compensation, unemployment 


 


57

















 


insurance or other forms of governmental
insurance or benefits, or to secure performance of tenders, statutory
obligations, leases and contracts (other than for borrowed money) entered into
in the ordinary course of business or to secure obligations on surety or appeal
bonds;


 


(f)                                    judgment Liens
in existence less than 30 days after the entry thereof or with respect to which
execution has been stayed or the payment of which is bonded or covered in full (subject
to a customary deductible) by insurance maintained with responsible insurance
companies;


 


(g)                                 Liens in
existence on the Closing Date and listed on Schedule 7.2.3, but without
giving effect to any extensions or renewals thereof; and


 


(h)                                 easements,
rights-of-way, restrictions and other similar encumbrances incurred in the
ordinary course of business which, in the aggregate, do not materially detract
from the value of the property subject thereto or interfere with the ordinary
conduct of the business of the property of the Person which is subject thereto;


 


(i)                                     Liens in
connection with Capitalized Lease Liabilities in the amount and to the extent
permitted by subsection 7.2.2(e);


 


(j)                                     Liens on
property leased by the Borrower or any Subsidiary or other interest or title of
the lessor under operating leases securing obligations of the Borrower or such
Subsidiary to the lessor under such leases; and


 


(k)                                  Liens on
property of a Target which exist at the time such Target becomes the subject of
a Permitted Acquisition to the extent such Liens are otherwise permitted
pursuant to this Section 7.2.3.


 


SECTION 7.2.4  Financial Condition.  The Borrower will not permit:


 


(a)                                  its Net Worth
as of the last day of each Fiscal Quarter to be less than 75% of the amount of
its Net Worth existing on June 30, 2009, plus 50% of Net Income
(without giving effect to any losses) for each Fiscal Quarter occurring after
June 30, 2009, plus 50% of the net proceeds from any equity
issuance by the Borrower or any of its Subsidiaries occurring since
June 30, 2009, plus 50% of any incremental additive equity
associated with any Permitted Acquisition;


 


(b)                                 (x) the
Total Leverage Ratio as of the end of each Fiscal Quarter for the twelve month
period preceding such date to be greater than (i) for each Fiscal Quarter
from and including September 30,
2009 through and including December 30, 2009, 5.00:1.00;
(ii) for each Fiscal Quarter from and including December 31, 2009 through and including December 30,
2010, 4.75:1.00; (iii) for each Fiscal Quarter from and including December 31, 2010 through and
including December 30, 2011, 4.25:1.00; and (iv) for the Fiscal
Quarter ended December 31, 2011 and for each Fiscal Quarter thereafter,
4.00:1.00 and (y) the Senior Leverage Ratio as of the end of each Fiscal
Quarter for the twelve month period preceding such date to be greater than
(i) for each Fiscal Quarter from and including September 30, 2009 through and including December


 


58

















 


30, 2010, 2.50:1.00 and (ii) for the
Fiscal Quarter ended December 31, 2010 and for each Fiscal Quarter
thereafter, 2.25:1.00.


 


(c)                                  as of the last
day of any Fiscal Quarter the ratio of (a) EBITDA plus rent
expenses incurred by the Borrower and its Subsidiaries, minus Capital
Expenditures incurred by the Borrower and its Subsidiaries, minus cash
taxes paid by the Borrower and its Subsidiaries, in each case for the period of
four fiscal quarters then ending, to (b) Fixed Charges for such four
fiscal quarter period to be less than 1.40:1.00.


 


SECTION 7.2.5  Investments. The Borrower will not,
and will not permit any of its Subsidiaries to, make, incur, assume or suffer
to exist any Investment in any other Person, except:


 


(a)                                  Investments
existing on the Closing Date and identified in Schedule 7.2.5(a);


 


(b)                                 Cash Equivalent
Investments and cash, provided, however, that the balance
maintained in any deposit account other than a deposit account listed on Schedule
7.2.5(b) hereto not subject to a Lien of the Agent shall (i) not
exceed $100,000 for a period of seven consecutive days with respect to deposit
accounts of Borrower and any other Credit Party and (ii) in the case of
deposit accounts of any Non-Wholly Owned Subsidiary or Minority ASC Entity, be,
in an amount equal to the Borrower or any Subsidiary’s rights therein,
transferred to a deposit account subject to a Lien of the Agent as frequently
as practicable but on a no less frequent basis than monthly;


 


(c)                                  without
duplication, Investments permitted as Indebtedness pursuant to Section 7.2.2;


 


(d)                                 without
duplication, Investments permitted as Capital Expenditures in the Borrower
and its Subsidiaries which are Credit Parties;


 


(e)                                  in the ordinary
course of business, (1) Investments by the Borrower in any of its
Wholly-Owned Subsidiaries, or in any new Wholly-Owned Subsidiary created or
acquired after the Closing Date in connection with a Permitted Acquisition,
(2) Investments by the Borrower or any Wholly-Owned Subsidiary in any
Non-Wholly-Owned ASC Subsidiary in the form of Indebtedness permitted by Section 7.2.2(k) and
(l) and (3) other cash investments in Non-Wholly-Owned ASC
Subsidiaries in the aggregate at any time outstanding not to exceed $5,000,000
when aggregated with Investments outstanding and permitted by Section 7.2.5(l);


 


(f)                                    Permitted
Acquisitions by the Borrower or a Wholly-Owned Subsidiary of the Borrower (or,
in the case of the purchase of an ASC Facility, by the Borrower or a Subsidiary
of the Borrower);


 


(g)                                 the acquisition
by the Borrower or a Wholly-Owned Subsidiary of the Borrower of 100% of the
minority interests held by a Provider in a non-Wholly-Owned Subsidiary, provided
that any such acquisition is made solely in connection with the 


 


59
















 


merger of such non-Wholly-Owned Subsidiary
into the Borrower or a Wholly-Owned Subsidiary of the Borrower as permitted by Section 7.2.8;


 


(h)                                 Investments
constituting Hedging Agreements of the Borrower;


 


(i)                                     Investments by
a Target which exist at the time such Target is the subject of a Permitted
Acquisition to the extent such Investments are otherwise permitted pursuant to
this Section 7.2.5;


 


(j)                                     Investments
(other than Permitted Acquisitions) by the Borrower or a Subsidiary of the
Borrower pursuant to ASC Subsidiary Capital Events provided that (1) no
Default or Event of Default shall have occurred or be continuing both before
and after giving effect to such ASC Subsidiary Capital Event, (2) the
Borrower must be able to comply on a pro forma basis after giving effect to
such ASC Subsidiary Capital Event with all of the covenants of this Agreement;
and (3) in the event that the Borrower’s Senior Leverage Ratio on a pro
forma basis (after giving effect to the ASC Subsidiary Capital Event) is
greater than 2.25:1.0 the aggregate consideration in connection with such ASC
Subsidiary Capital Event shall not exceed $25,000,000 individually and
$40,000,000 for all ASC Subsidiary Capital Events consummated following the
Closing Date when aggregated with the Consideration paid for Permitted
Acquisitions permitted by Section 7.2.5(f) during such period,
without duplication;


 


(k)                                  Permitted
Seller Debt in connection with Part A of Exhibit F;


 


(l)                                     Investments
(not including Investments constituting Permitted Acquisitions) by the Borrower
or a Subsidiary of the Borrower in Minority ASC Entities in an amount not to
exceed (a) $1,000,000 in any individual Minority ASC Entity and
(b) $5,000,000 in the aggregate; provided, that the Borrower is in
compliance on a pro forma basis after giving effect to such Investment with all
of the covenants contained in this Agreement provided that in the case of all
such Investments pursuant to this clause (l)  (“Minority ASC Investments”), (i) the
Minority ASC Entity shall have executed and delivered to the Person making the
Investment a demand note (the “Minority ASC
Intercompany Note”) to evidence any such Minority ASC Investment,
which Minority ASC Intercompany Note shall be in form and substance
satisfactory to Agent and pledged to the Agent, (ii) the payee shall
record all Minority ASC Investments on its books and records in a manner
satisfactory to Agent, (iii) at the time any such Minority ASC Investment
is made and after giving effect thereto, each of the Person making the Investment
and the payor shall be Solvent; (iv) such Minority ASC Investments shall
be secured by a perfected first priority lien on the assets of such Minority
ASC Entity, the scope of which lien shall be satisfactory to the Agent and
which lien shall be assigned to the Agent;


 


(m) Investments by the
Borrower and its Subsidiaries in ASC Startups in an amount not to exceed
$6,000,000 at any one time outstanding; provided, once the Borrower has
sold an equity interest in an ASC Startup as permitted under Section 7.2.9(c),
the Investment in the ASC Startup shall no longer be considered as
“outstanding” for purposes of this clause (m);


 


60

















 


provided, however, that


 


(n)                                 any Investment
which when made complies with the requirements of the definition of the term “Cash Equivalent Investment” may continue
to be held notwithstanding that such Investment if made thereafter would not
comply with such requirements; and


 


(o)                                 no Investment
otherwise permitted by clauses (e), (f), (g), (h), (i),
(j), (l) or (m) shall be permitted to be made
if, immediately before or after giving effect thereto, any Default shall exist
and be continuing.


 


SECTION 7.2.6  Restricted Payments, etc.  On and at all times after the Closing Date:


 


(a)                                  The Borrower
will not, and will not permit any of its Subsidiaries to, declare, pay or make
any dividend or distribution (in cash, property or obligations) on any shares
of any class of capital stock (now or hereafter outstanding) of the Borrower or
such Subsidiary or on any warrants, options or other rights with respect to any
shares of any class of capital stock (now or hereafter outstanding) of the
Borrower or such Subsidiary (other than in the case of (I) the Borrower
(x) dividends or distributions payable in its common stock or warrants to
purchase its common stock or splitups or reclassifications of its stock into
additional or other shares of its common stock, (y) distributions payable
other than in cash in connection with a stockholders’ rights offering plan and
(z) distributions to any Subsidiary which is a limited liability company
of the Borrower solely to permit the members thereof to make payment of its
federal and state income tax liability attributable to such limited liability
company’s taxable income, whether or not a Default or an Event of Default then
exist or (II) any Subsidiary which is a limited liability company or
limited partnership, distributions to members of any such Subsidiary solely to
permit such members to make payment of their federal and state income tax
liability attributably to such member’s taxable income of such Subsidiary
whether or not a Default or an Event of Default then exists) or apply, or
permit any of its Subsidiaries to apply, any of its funds, property or assets
to the purchase, redemption, sinking fund or other retirement of, or agree or
permit any of its Subsidiaries to purchase or redeem, any shares of any class
of capital stock (now or hereafter outstanding) of the Borrower, or warrants,
options or other rights with respect to any shares of any class of capital
stock (now or hereafter outstanding) of the Borrower, except that, (A), in
addition to distributions permitted pursuant to clause (a)(II) above,
any Subsidiary of the Borrower may declare and pay cash dividends and
distributions to its equity holders and (B) so long as no Default or Event
of Default then exists or would result therefrom and so long as the Borrower
would be able to comply on a pro forma basis, assuming such redemption or
purchase occurred, with all of the covenants contained in this Agreement, the
Borrower may redeem or purchase shares of its stock (i) held by former
employees of the Borrower or any of its Subsidiaries following their death,
disability or the termination of their employment in an aggregate amount in any
Fiscal Year not to exceed $3,000,000 or (ii) as otherwise permitted
pursuant to the stock-based compensation plans of Borrower or any of its
Subsidiaries;


 


(b)                                 Borrower will
not, and will not permit any of its Subsidiaries to:


 


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(i)  make any payment
or prepayment of principal of, or make any payment of interest on, any
Subordinated Debt or on any put option granted to a holder of Subordinated Debt
on any day other than the stated, scheduled date for such payment or prepayment
set forth in the documents and instruments memorializing such Subordinated Debt
or such put option, or which would violate the subordination provisions of such
Subordinated Debt or such put option, or while any Default or Event of Default
exists and is continuing both before and after giving effect to such payment;
or


 


(ii)  redeem, purchase
or defease any Subordinated Debt other than Subordinated Debt held by a Target,
so long as no Default or Event of Default exists or is continuing both before
and after giving effect to such redemption, purchase or defeasance;  and


 


(c)                                  Borrower will
not, and will not permit any Subsidiary to, make any sinking fund payment or
deposit for any of the foregoing purposes.


 


(d)                                 Notwithstanding
anything else herein to the contrary, Borrower may redeem or receive Permitted
Seller Equity in connection with a Permitted Asset Disposition.


 


(e)                                  The Borrower
will not and will not permit any Subsidiary to directly or indirectly make any
payment, prepayment, redemption, conversion to cash, defeasance or acquisition
for value of (including by way of depositing money or securities with the
trustee with respect thereto before due for the purpose of paying when due), or
refund, refinance or exchange of, any Convertible Notes or Convertible Note
Documents other than (A) fees and expenses paid by Borrower on the date of
issuance of the Convertible Notes; (B) subject to the subordination
provisions of the Convertible Notes, regularly scheduled payments of interest
and fees on the Convertible Notes at rates and in amounts not to exceed the
rates and amounts required by the Convertible Note Documents on the date
hereof, (C) subject to the subordination provisions of the Convertible
Notes, payments of contingent interest or additional amounts (not including
principal) payable upon any default or event of default or similar event under
the Convertible Note Documents and payments of principal in respect of the
Convertible Notes upon any conversion or required repurchase of the Convertible
Notes as required by the terms of the Convertible Note Documents so long as, in
the case of any payment prior to February 6, 2012, (x) no Default or
Event of Default then exists or would result therefrom and (y) the
Borrower shall have delivered to the Agent a certificate demonstrating that
after giving effect to such conversion or payment (and the incurrence of any
Indebtedness in connection therewith) (i) Borrower would have been in
compliance with the financial covenants in Section 7.2.4 for the most
recent Fiscal Quarter for which Borrower has delivered financial statements to
the Agent on a pro forma basis deeming such payments to have been made on the
last day of such Fiscal Quarter, (ii) the Senior Leverage Ratio for the most
recent Fiscal Quarter for which Borrower has delivered financial statements to
the Agent on a pro forma basis deeming such payments to have been made on the
last day of such Fiscal Quarter shall not be greater than 2.25:1.00 and
(iii) the Available Revolving Commitment shall be greater than $5,000,000
and (D) subject to the 


 


62

















 


subordination provisions of
the Convertible Notes payments of principal in respect of the Convertible Notes
upon their scheduled maturity (which scheduled maturity shall not be prior to
June 1, 2012).


 


(f)                                    Subject to the
subordination provisions of the Convertible Notes, the Borrower may make
repurchases (at par value or below par value) of the Convertible Note Documents
using cash or common stock of Borrower, provided that, (x) no Default or
Event of Default then exists or would result therefrom and (y) the
Borrower shall have delivered to the Agent a certificate demonstrating that
after giving effect to such repurchase (and the incurrence of any Indebtedness
in connection therewith) (i) Borrower would have been in compliance with
the financial covenants in Section 7.2.4 for the most recent Fiscal
Quarter for which Borrower has delivered financial statements to the Agent on a
pro forma basis deeming such payments to have been made on the last day of such
Fiscal Quarter, (ii) the Senior Leverage Ratio for the most recent Fiscal
Quarter for which Borrower has delivered financial statements to the Agent on a
pro forma basis deeming such payments to have been made on the last day of such
Fiscal Quarter shall not be greater than 2.25:1.00 and (iii) the Available
Revolving Commitment shall be greater than $5,000,000.


 


Notwithstanding
anything else in this Section 7.2.6 of the Credit Agreement, Borrower may
issue its common stock (and pay cash in lieu of issuing fractional shares) as
required by the Convertible Note Documents including the Call Option and
Warrants.


 


SECTION 7.2.7  Intentionally Omitted.


 


SECTION 7.2.8  Consolidation, Merger, etc.  The Borrower will not, and will not permit
any of its Subsidiaries to, liquidate or dissolve, consolidate with, or merge
into or with, any other corporation, or purchase or otherwise acquire all or
substantially all of the assets of any Person (or of any division thereof)
except:


 


(a)                                  any such
Subsidiary may liquidate or dissolve voluntarily into, and may merge with and
into, the Borrower or any Wholly-Owned Subsidiary of the Borrower or any
Guarantor, and the assets or stock of any Subsidiary may be purchased or
otherwise acquired by the Borrower or any Wholly-Owned Subsidiary of the
Borrower or any Guarantor provided, however, that the
Subsidiaries listed on Schedule 7.2.8 hereto may dissolve to the extent
that the assets and liabilities of such Subsidiaries are de-minimus;


 


(b)                                 so long as no
Default or Event of Default exists and is continuing or would occur after
giving effect thereto, the Borrower or any Wholly-Owned Subsidiary of the
Borrower (or in the case of the purchase of an ASC Facility, the Borrower or
any Subsidiary of the Borrower) may consummate a Permitted Acquisition; and


 


(c)                                  any Subsidiary
may liquidate or dissolve into or merge with or into any other Person, provided
that, after giving effect thereto (i) no Default or Event of Default shall
exist or be continuing; (ii) the Net Worth of the surviving Person shall
be at least equal to the Net Worth of the applicable Subsidiary immediately
prior to the consummation of any such liquidation, dissolution or merger and
(iii) the surviving 


 


63

















 


Person shall assume all
Obligations of the applicable Subsidiary under the Loan Documents.


 


SECTION 7.2.9  Asset and Capital Stock
Dispositions, etc.


 


(a) The
Borrower will not, and will not permit any of its Subsidiaries to, sell,
transfer, lease, contribute or otherwise convey, or grant options, warrants or
other rights with respect to, all or any substantial part of its assets
(including accounts receivable and capital stock of Subsidiaries) to any Person,
unless:


 


(i)  such sale,
transfer, lease, contribution or conveyance is in the ordinary course of its
business or is permitted by Section 7.2.9(b);


 


(ii)  the net book
value of such assets, together with the net book value of all other assets
sold, transferred, leased, contributed or conveyed otherwise than in the
ordinary course of business by the Borrower or any of its Subsidiaries pursuant
to this clause since the Closing Date, does not exceed $3,000,000  (exclusive of the value of any transaction
described in the preceding clause (i)); or


 


(iii)  the Borrower or
any Subsidiary of the Borrower may consummate a Permitted Asset Disposition.


 


(b)                                 the Borrower
will not, and will not permit any of its Subsidiaries to, issue, sell, assign,
pledge or otherwise encumber or dispose of any shares of capital stock or other
equity securities in the Borrower or any such Subsidiary (other than pursuant
to this Agreement or any other Loan Document), including warrants, rights or
options to acquire shares or other equity securities of the Borrower or any of
its Subsidiaries; provided that, notwithstanding the foregoing, and so
long as no Default or Event of Default will result therefrom:


 


(i)   (x) the Borrower may issue capital stock
(or warrants, rights or options to purchase capital stock) of the Borrower in
connection with a Permitted Acquisition and (y) a Subsidiary of the
Borrower may undertake a Permitted Equity Ownership Sale;


 


(ii)  the Borrower may
issue common stock of the Borrower to a Provider upon the conversion of
Subordinated Debt held by such Provider into common stock of the Borrower
pursuant to the terms and conditions contained in the documentation governing
such Subordinated Debt;


 


(iii)  the Borrower may
issue common stock of the Borrower in connection with a registered offering,
provided, however, that the Borrower shall have delivered a certified copy of
each agreement, document or other instrument (including, without limitation,
any registration statement and underwriting agreement) entered into by the
Borrower in connection with such registered offering;


 


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(iv)   the Borrower may issue capital stock, and
related options, of the Borrower to any permitted participant under Borrower’s
stock incentive plans or to any permitted participant under any future stock
incentive plans established by the Borrower and reasonably acceptable to the
Agent;


 


(v)  the Borrower may
issue capital stock (or warrants, rights or options to purchase capital stock)
of the Borrower so long as in connection with a private placement of its
capital stock the consideration received by the Borrower in connection with
such sale is (x) for fair market value (as determined by the Board of
Directors of the Borrower) and (y) paid in immediately available funds;


 


(vi)                              the Borrower or
any Subsidiary may consummate a Permitted Asset Disposition.


 


Notwithstanding
anything else in this Section 7.2.9(b) of the Credit Agreement,
Borrower may issue its common stock (and pay cash in lieu of issuing fractional
shares) as required by the Convertible Note Documents including the Call Option
and Warrants.


 


(c) The Borrower or any
Subsidiary may consummate Permitted Equity Ownership Sales consisting of
interests in ASC Startups.


 


To
the extent the provisions of this Section 7.2.9 are waived with
respect to the sale of any Collateral, or any Collateral is sold as permitted
by this Section 7.2.9, such Collateral shall be sold free and clear
of the Liens created by the Collateral Documents and, if requested by the
Borrower, the Guarantor owner of such Collateral shall be released from the
Guarantee and Collateral Agreement, and the portion of the Collateral owned by
such Guarantor shall be released from the Guarantee and Collateral Agreement
and the Agent shall be authorized to take any actions deemed appropriate in
order to effect the foregoing.


 


SECTION 7.2.10  Modification of Certain Agreements.
Except as otherwise permitted pursuant to a Permitted Asset Disposition or Section 7.1.7
hereof, the Borrower will not, and will not permit any of its Subsidiaries to,
consent to any amendment, supplement or other modification of any of the terms
or provisions contained in, or applicable to, its Organizational Documents, any
document, once entered into, relating to a Permitted Acquisition, other than
any amendment, supplement or other modification that conforms with applicable
laws in all material respects and is not material or does not have an adverse
effect on the Lenders as Lenders under the Loan Documents, or any document or
instrument evidencing or applicable to any Subordinated Debt or any put option
granted to the holders of Subordinated Debt, other than any amendment,
supplement or other modification which extends the date or reduces the amount
of any required repayment or redemption. 
Notwithstanding anything else in this Section 7.2.10 to the
contrary, the Borrower and its Subsidiaries may terminate or make any necessary
modification to the Organizational Documents which is the subject of a
Permitted Asset Disposition. Except as expressly permitted pursuant to Section 7.2.6(f) with
respect to offers to repurchase (at par value or below par value) the
Convertible Note Documents, Borrower shall not, directly or indirectly, amend,
modify, alter or change in any material respect any terms of any of the
Convertible Note Documents or any related agreements, documents and 


 


65

















 


instruments without the
consent of the Required Lenders, except that Borrower may, after prior written
notice to Agent, amend, modify, alter or change the terms thereof to extend the
maturity thereof or to reduce the interest rate or any fees in connection
therewith.


 


SECTION 7.2.11  Transactions with Affiliates.  The Borrower will not, and will not permit
any of its Subsidiaries to, enter into, or cause, suffer or permit to exist any
arrangement or contract with any of its other Affiliates (other than a
Subsidiary Guarantor) unless such arrangement or contract is (i) is
entered into in connection with a Permitted Asset Disposition or (ii) fair
and equitable to the Borrower or such Subsidiary and is an arrangement or
contract of the kind which would be entered into by a prudent Person in the
position of the Borrower or such Subsidiary with a Person which is not one of
its Affiliates.


 


SECTION 7.2.12  Negative Pledges, Restrictive
Agreements, etc.  The Borrower
will not, and will not permit any of its Subsidiaries to, enter into any
agreement (excluding this Agreement, any other Loan Document and any agreement
governing any Indebtedness permitted by clause (c) of Section 7.2.2
as to the assets financed with the proceeds of such Indebtedness) prohibiting:


 


(a)                                  the creation or
assumption of any Lien upon the properties, revenues or assets of Borrower or
any of its Wholly-Owned Subsidiaries, whether now owned or hereafter acquired,
or the ability of any Credit Party to amend or otherwise modify this Agreement
or any other Loan Document; or


 


(b)                                 the ability of
any Subsidiary to make any payments, directly or indirectly, to the Borrower by
way of dividends, distributions, advances, repayments of loans or advances,
reimbursements of management and other intercompany charges, expenses and
accruals or other returns on investments, or any other agreement or arrangement
which restricts the ability of any such Subsidiary to make any payment,
directly or indirectly, to the Borrower.


 


ARTICLE VIII


 


EVENTS OF DEFAULT


 


SECTION 8.1  Listing of Events of Default.  Each of the following events or occurrences
described in this Section 8.1 shall constitute an “Event of Default”.


 


SECTION 8.1.1  Non-Payment of Obligations.  The Borrower shall (a) default in the
payment when due of the principal of any Loan or (b) default, and such
default shall continue uncured for three days, in the payment when due of any
interest on any Loan or any reimbursement obligation, or any commitment fee or
other fee or of any other Obligation.


 


SECTION 8.1.2  Breach of Warranty.  Any representation or warranty of any Credit
Party made or deemed to be made hereunder or in any other Loan Document
executed by it, any Letter of Credit or any other writing or certificate
furnished by or on behalf of any Credit Party to the Agent or any Lender for
the purposes of or in connection with this Agreement or any such 


 


66

















 


other Loan Document or
Letter of Credit (including any certificates delivered pursuant to Article V)
is or shall be incorrect when made in any material respect.


 


SECTION 8.1.3  Non-Performance of Certain Covenants and
Obligations. Any Credit Party shall default in the due performance and
observance of any of its obligations under Sections 7.1.1, 7.1.7,
7.1.8, 7.1.11, 7.1.12 or Section 7.2.


 


SECTION 8.1.4  Non-Performance of Other Covenants and Obligations.  Any Credit Party shall default in the due
performance and observance of any other agreement contained herein or in any
other Loan Document executed by it, and such default shall continue unremedied
for a period of 30 days after notice thereof shall have been given to the
Borrower by the Agent or any Lender.


 


SECTION 8.1.5  Default on Other Indebtedness.  (a) A default shall occur in the payment
when due (subject to any applicable grace period), whether by acceleration or
otherwise, of any Indebtedness (other than Indebtedness described in Section 8.1.1)
of the Borrower or any Subsidiary having a principal amount, individually or in
the aggregate, in excess of $750,000, or a default shall occur in the
performance or observance of any obligation or condition with respect to such
Indebtedness if the effect of such default is to accelerate the maturity of any
such Indebtedness or such default shall continue unremedied for any applicable
period of time sufficient to permit the holder or holders of such Indebtedness,
or any trustee or agent for such holders, to cause such Indebtedness to become
due and payable prior to its expressed maturity, or (b) a Default (as
defined in the Convertible Note Documents) shall occur under the Convertible
Note Documents and any applicable grace period relating to such Default shall
have expired.


 


SECTION 8.1.6  Judgments.  Any judgment or order for the payment of
money in excess of $1,000,000 shall be rendered against the Borrower or any
Subsidiary (which judgment is not covered by insurance and with respect to such
judgment an insurance carrier has not accepted responsibility for coverage) and
either:


 


(a)                                  enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order; or


 


(b)                                 there shall be any
period of 10 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.


 


SECTION 8.1.7  Pension Plans.  Any of the following events shall occur with
respect to any Pension Plan:


 


(a)                                  the institution
of any steps by the Borrower, any member of its Controlled Group or any other
Person to terminate a Pension Plan if, as a result of such termination, the
Borrower or any such member reasonably would be expected to be required to make
a contribution to such Pension Plan, or would reasonably expect to incur a
liability or obligation to such Pension Plan, in excess of $1,000,000; or


 


67

















 


(b)                                 a contribution
failure occurs with respect to any Pension Plan sufficient to give rise to a
Lien under Section 302(f) of ERISA.


 


SECTION 8.1.8  Change of Control.  Any Change of Control shall occur.


 


SECTION 8.1.9  Bankruptcy, Insolvency, etc.  The Borrower or any Subsidiary shall:


 


(a)                                  become
insolvent or generally fail to pay, or admit in writing its inability or
unwillingness to pay, its debts as they become due;


 


(b)                                 apply for,
consent to, or acquiesce in, the appointment of a trustee, receiver,
sequestrator or other custodian for such Person or any property of such Person,
or make a general assignment for the benefit of creditors;


 


(c)                                  in the absence
of such application, consent or acquiescence, permit or suffer to exist the
appointment of a trustee, receiver, sequestrator or other custodian for such
Person or for a substantial part of the property of such Person, and such
trustee, receiver, sequestrator or other custodian shall not be discharged
within 60 days, provided that the Borrower hereby expressly authorizes
the Agent and each Lender to appear in any court conducting any relevant
proceeding during such 60-day period to preserve, protect and defend their
rights under the Loan Documents;


 


(d)                                 permit or
suffer to exist the commencement of any bankruptcy, reorganization, debt
arrangement or other case or proceeding under any bankruptcy or insolvency law,
or any dissolution, winding up or liquidation proceeding, in respect of such
Person, and, if any such case or proceeding is not commenced by such Person,
such case or proceeding shall be consented to or acquiesced in by such Person
or shall result in the entry of an order for relief or shall remain for 60 days
undismissed, provided that the Borrower hereby expressly authorizes the
Agent and each Lender to appear in any court conducting any such case or
proceeding during such 60-day period to preserve, protect and defend their
rights under the Loan Documents; or


 


(e)                                  take any action
authorizing, or in furtherance of, any of the foregoing.


 


SECTION 8.1.10  Impairment of Security, etc.  Any Loan Document, or any Lien granted
thereunder, shall (except in accordance with its terms or pursuant to Section 7.2.9),
in whole or in part, terminate, cease to be effective or cease to be the
legally valid, binding and enforceable obligation of any Credit Party thereto;
any Credit Party or any other party shall, directly or indirectly, contest in
any manner the effectiveness, validity, binding nature or enforceability of any
Loan Document or Lien granted thereunder; or any Lien securing any Obligation
shall, in whole or in part, cease to be a perfected first priority Lien,
subject only to those exceptions expressly permitted by such Loan Document.


 


SECTION 8.1.11  Fraud and Abuse Laws.  Receipt by the Borrower or any Subsidiary of
a notice from a governmental authority or third party payor that it intends to
disallow requested reimbursements, or intends to demand or demands adjustment
or repayment of past reimbursements in excess of, either individually or in the
aggregate with any other disallowed 


 


68

















 


reimbursements, ten percent
(10%) of the net revenues of the Borrower for the previous fiscal quarter
respecting amounts submitted for reimbursement or collected by such Person from
participation in the Medicare, Medicaid or third party payor programs.


 


SECTION 8.1.12  Certifications.  (i) Revocation, suspension or
involuntary cancellation or termination of any Medicare Certification, Medicare
Provider Agreement, Medicaid Certification, Medicaid Provider Agreement or
third party payor certification, if any, or agreement of or affecting the
Borrower or any Subsidiary or notice of any investigation or notice of any
proceeding being instituted against any Credit Party, any of the Minority ASC
Entities, or any of their respective officers, directors, members or managers
by any governmental authority which could reasonably be expected to result in
any of the foregoing actions, or (ii) the loss of any other permits,
licenses, authorizations, certifications or approval from any federal, state or
local governmental authority or termination of any contract with any such
authority by the Borrower or any Subsidiary, in either case which cancellation,
revocation, suspension or termination, (x) continues for a period greater
than 60 days and (y) results in the suspension or termination of
operations of the Borrower or any Subsidiary or in the failure of the Borrower
or any Subsidiary to be eligible to participate in Medicare, Medicaid or third
party payor programs or to accept assignments of rights to reimbursement under
Medicaid Regulations, Medicare Regulations or guidelines established by a third
party payor; or (z) results in the exclusion of Borrower, or any
Subsidiary, or any Minority ASC Entities, or any of their respective officers,
directors, members or managers from participation in any Federal or State
healthcare program, provided that any such events described in this Section 8.1.12
shall result or reasonably be expected to, either singly or in the aggregate,
in the termination, cancellation, revocation, suspension or material impairment
of operations or rights to reimbursement which produce ten percent (10%) or
more of the Borrower’s net revenues (determined in accordance with GAAP).


 


SECTION 8.1.13  Subordination Provisions of Convertible
Notes.  (a) Any of the
Obligations shall fail to be “Senior Debt” (or any comparable term) under and
as defined in, the Convertible Note Documents; (b) any Indebtedness, other
than the Obligations, shall constitute “Designated Senior Debt” (or any
comparable term) under, and as defined in, the Convertible Note Documents; or
(c) the subordination provisions of the Convertible Note Documents shall,
in whole or in part, terminate, cease to be effective or cease to be legally
valid, binding and enforceable against any holder of such Convertible Notes.


 


SECTION 8.2  Action if Bankruptcy.  If any Event of Default described in clauses
(a) through (e) of Section 8.1.9 shall occur,
the Revolving Commitments (if not theretofore terminated) and the obligation of
the Letter of Credit Issuer to issue Letters of Credit shall automatically
terminate and the outstanding principal amount of all outstanding Loans and all
other Obligations shall automatically be and become immediately due and
payable, without notice or demand.


 


SECTION 8.3  Action if Other Event of Default.  If any Event of Default (other than any Event
of Default described in clauses (a) through (e) of Section 8.1.9)
shall occur for any reason, whether voluntary or involuntary, and be continuing,
the Agent, upon the direction of the Required Lenders, shall by notice to the
Borrower declare all or any portion of the outstanding principal amount of the
Loans and other Obligations to be due and payable and/or 


 


69
















 


the Revolving Commitments
(if not theretofore terminated) and/or the obligation of the Letter of Credit
Issuer to issue Letters of Credit to be terminated, whereupon the full unpaid
amount of such Loans and other Obligations which shall be so declared due and
payable shall be and become immediately due and payable, without further
notice, demand or presentment, and/or, as the case may be, the Revolving
Commitments shall terminate.


 


SECTION 8.4  Letters of Credit.  In addition to the foregoing, following the
occurrence and during the continuance of an Event of Default, so long as any
Letter of Credit has not been fully drawn and has not been canceled or expired
by its terms, upon demand by the Lenders, the Borrower shall deposit in an
account (the “Letter of Credit Cash
Collateral Account”) maintained with National City in the name of
the Agent, for the benefit of itself and the Lenders, cash in an amount equal
to the aggregate undrawn face amount of all outstanding Letters of Credit and
all fees and other amounts due or which may become due with respect
thereto.  The Borrower shall have no
control over funds in the Letter of Credit Cash Collateral Account, which funds
shall be invested by the Agent from time to time in its discretion in
certificates of deposit of National City having a maturity not exceeding thirty
days.  Such funds shall be promptly
applied by the Agent to reimburse the Letter of Credit Issuer for drafts drawn
from time to time under the Letters of Credit. 
Such funds, if any, remaining in the Letter of Credit Cash Collateral
Account following the payment of all Obligations in full or the earlier
termination of all Events of Default shall, unless the Agent is otherwise
directed by a court of competent jurisdiction, be promptly paid over to the
Borrower.


 


ARTICLE IX


 


THE AGENT


 


SECTION 9.1  Actions.  Each Lender hereby appoints National City as
its Agent under and for purposes of this Agreement, the Notes and each other
Loan Document.  Each Lender authorizes
the Agent to act on behalf of such Lender under this Agreement, the Notes and
each other Loan Document and, in the absence of other written instructions from
the Required Lenders received from time to time by the Agent (with respect to
which the Agent agrees that it will comply, except as otherwise provided in
this Section or as otherwise advised by counsel), to exercise such powers
hereunder and thereunder as are specifically delegated to or required of the
Agent by the terms hereof and thereof, together with such powers as may be reasonably
incidental thereto.  Each Lender hereby
indemnifies (which indemnity shall survive any termination of this Agreement)
the Agent, pro  rata according to such Lender’s Percentage, from
and against any and all liabilities, obligations, losses, damages, claims,
costs or expenses of any kind or nature whatsoever which may at any time be
imposed on, incurred by, or asserted against, the Agent in any way relating to
or arising out of this Agreement, the Notes and any other Loan Document,
including reasonable attorneys’ fees, and as to which the Agent is not
reimbursed by the Borrower; provided, however, that no Lender
shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, claims, costs or expenses which are determined by
a court of competent jurisdiction in a final proceeding to have resulted solely
from the Agent’s gross negligence or willful misconduct.  The Agent shall not be required to take any
action hereunder, under the Notes or under any other Loan Document, or to prosecute
or defend any suit in respect of this Agreement, the Notes or any other Loan
Document, unless it is indemnified hereunder to its satisfaction.  If any indemnity in favor of the Agent shall
be or 


 


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become, in the Agent’s
determination, inadequate, the Agent may call for additional indemnification
from the Lenders and cease to do the acts indemnified against hereunder until
such additional indemnity is given.


 


SECTION 9.2  Funding Reliance, etc.  Unless the Agent shall have been notified by
telephone, confirmed in writing, by any Lender by 5:00 p.m. (EST), on the
day prior to a Borrowing that such Lender will not make available the amount
which would constitute its Percentage of such Borrowing on the date specified
therefor, the Agent may assume that such Lender has made such amount available
to the Agent and, in reliance upon such assumption, make available to the
Borrower a corresponding amount.  If and
to the extent that such Lender shall not have made such amount available to the
Agent, such Lender and the Borrower severally, without duplication, agree to
repay the Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date the Agent made such amount
available to the Borrower to the date such amount is repaid to the Agent, at
the interest rate applicable at the time to Loans comprising such Borrowing.


 


SECTION 9.3  Exculpation.  Neither the Agent nor any of its directors,
officers, employees or agents shall be liable to any Lender for any action
taken or omitted to be taken by it under this Agreement or any other Loan
Document, or in connection herewith or therewith, except for its own willful
misconduct or gross negligence, nor responsible for any recitals or warranties
herein or therein, nor for the effectiveness, enforceability, validity or due
execution of this Agreement or any other Loan Document, nor for the creation,
perfection or priority of any Liens purported to be created by any of the Loan
Documents, or the validity, genuineness, enforceability, existence, value or
sufficiency of any collateral security, nor to make any inquiry respecting the
performance by the Borrower of its obligations hereunder or under any other
Loan Document.  Any such inquiry which
may be made by the Agent shall not obligate it to make any further inquiry or
to take any action.  The Agent shall be
entitled to rely upon advice of counsel concerning legal matters and upon any notice,
consent, certificate, statement or writing which the Agent believes to be
genuine and to have been presented by a proper Person.


 


SECTION 9.4  Successor.  The Agent may resign as such at any time upon
at least 30 days’ prior notice to the Borrower and all Lenders.  If the Agent at any time shall resign, the
Required Lenders, with, so long as no Default or Event of Default exists and is
continuing, the consent of the Borrower, may appoint another Lender as a
successor Agent which shall thereupon become the Agent hereunder.  If no successor Agent shall have been so
appointed by the Required Lenders, and shall have accepted such appointment,
within 30 days after the retiring Agent’s giving notice of resignation, then
the retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which
shall be one of the Lenders or a commercial banking institution organized under
the laws of the U.S. (or any State thereof) or a U.S. branch or agency of a
commercial banking institution, and having a combined capital and surplus of at
least $500,000,000.  Upon the acceptance
of any appointment as Agent hereunder by a successor Agent, such successor
Agent shall be entitled to receive from the retiring Agent such documents of
transfer and assignment as such successor Agent may reasonably request, and shall
thereupon succeed to and become vested with all rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations under this Agreement.  After any retiring Agent’s resignation hereunder
as the Agent, the provisions of


 


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(i)                                     this Article IX
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Agent under this Agreement; and


 


(ii)                                  Section 10.3 and Section 10.4
shall continue to inure to its benefit.


 


SECTION 9.5  Loans by National City.  National City shall have the same rights and
powers with respect to (x) the Loans made by it or any of its Affiliates,
and (y) the Notes held by it or any of its Affiliates as any other Lender
and may exercise the same as if it were not the Agent.  National City and its Affiliates may accept
deposits from, lend money to, and generally engage in any kind of business with
the Borrower or any Subsidiary or Affiliate of Borrower as if National City
were not the Agent hereunder.


 


SECTION 9.6  Credit Decisions.  Each Lender acknowledges that it has,
independently of the Agent and each other Lender, and based on such Lender’s
review of the financial information of each Credit Party, this Agreement, the
other Loan Documents (the terms and provisions of which being satisfactory to
such Lender) and such other documents, information and investigations as such
Lender has deemed appropriate, made its own credit decision to extend its
Revolving Commitment and Term Loan Commitment. 
Each Lender also acknowledges that it will, independently of the Agent
and each other Lender, and based on such other documents, information and
investigations as it shall deem appropriate at any time, continue to make its
own credit decisions as to exercising or not exercising from time to time any
rights and privileges available to it under this Agreement or any other Loan
Document.


 


SECTION 9.7  Copies, etc.  The Agent shall give prompt notice to each
Lender of each notice or request required or permitted to be given to the Agent
by any Credit Party pursuant to the terms of this Agreement (unless
concurrently delivered to the Lenders by such Credit Party).  The Agent will distribute to each Lender each
document or instrument received for its account and copies of all other
communications received by the Agent from any Credit Party for distribution to
the Lenders by the Agent in accordance with the terms of this Agreement.


 


SECTION 9.8  Designation of Additional Agents.  No Lender identified in this Agreement as a
“Syndication Agent” or “Documentation Agent” shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing, none
of such Lenders shall have or be deemed to have a fiduciary relationship with
any Lender.


 


ARTICLE X


 


MISCELLANEOUS PROVISIONS


 


SECTION 10.1 
Waivers, Amendments, etc. 
The provisions of this Agreement and of each other Loan Document may
from time to time be amended, modified or waived, if such amendment,
modification or waiver is in writing and consented to by the Borrower and the
Required Lenders; provided, however, that no such amendment,
modification or waiver which would:


 


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(a)                                 modify any
requirement hereunder that any particular action be taken by all the Lenders or
by the Required Lenders shall be effective unless consented to by each Lender;


 


(b)                                 modify this Section 10.1,
change the definition of “Required Lenders”,
increase the Revolving Commitment Amount, Term Loan Commitment Amount or the
Percentage of any Lender, reduce the rate of interest or any fees described in Article III,
change the schedule of repayments of Loans provided for in Section 3.1.2
and 3.1.3, release any Guarantor from its obligations pursuant to the
Guarantee and Collateral Agreement (except in connection with a Permitted Asset
Disposition or as otherwise permitted hereby, in which such cases no consent of
any Lender is required), release all or substantially all of the collateral
security (except in connection with a Permitted Asset Disposition or as
otherwise permitted hereby, in which such cases no consent of any Lender is
required) or except as otherwise specifically provided in any Loan Document,
permit any payment, prepayment, redemption, conversion to cash, defeasance or
acquisition for value, refund, refinance or exchange of any Convertible Notes
or Convertible Note Documents except as otherwise permitted by
Section 7.2.6(f) hereof without the consent of each Lender, or extend
the Revolving Commitment Termination Date or Maturity Date shall be made
without the consent of each Lender;


 


(c)                                  extend the due
date for, or reduce the amount of, any scheduled repayment or prepayment of
principal of or interest on any Loan or any fee payable to a Lender (or reduce
the principal amount of or rate of interest on any Loan) shall be made without
the consent of the holder of that Note evidencing such Loan or Lender entitled
to such fee;


 


(d)                                 affect
adversely the interests, rights or obligations of the Agent qua the
Agent shall be made without consent of the Agent; or


 


(e)                                  modify Section 2.8
or 8.4 shall be made without the consent of the Letter of Credit Issuer.


 


No failure or delay on the part of the Agent, any
Lender or the holder of any Note in exercising any power or right under this
Agreement or any other Loan Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power or right preclude any
other or further exercise thereof or the exercise of any other power or
right.  No notice to or demand on any
Credit Party in any case shall entitle it to any notice or demand in similar or
other circumstances.  No waiver or
approval by the Agent, any Lender or the holder of any Note under this
Agreement or any other Loan Document shall, except as may be otherwise stated
in such waiver or approval, be applicable to subsequent transactions.  No waiver or approval hereunder shall require
any similar or dissimilar waiver or approval thereafter to be granted
hereunder.


 


If, in connection with any proposed amendment,
modification, waiver or termination (a “Proposed Change”) requiring the
consent of a specific Lender, the consent of Required Lenders is obtained, but
the consent of the specific Lenders whose consent is required is not obtained
(any such Lender whose consent is not obtained being referred to as a “Non
Consenting Lender”), then, so long as Agent is not a Non Consenting Lender,
at Borrowers request Agent, or a Person reasonably acceptable to Agent, shall
have the right with Agent’s consent and in 


 


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Agent’s sole discretion (but shall have no
obligation) to purchase from such Non Consenting Lenders, and such Non
Consenting Lenders agree that they shall, upon Agent’s request, sell and assign
to Agent or such Person, all of the Revolving Commitments of such Non
Consenting Lenders for an amount equal to the principal balance of all Loans
held by the Non Consenting Lenders and all accrued interest and Fees with
respect thereto through the date of sale, such purchase and sale to be
consummated pursuant to an executed Assignment Agreement.


 


SECTION 10.2  Notices.  All notices and other communications provided
to any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile transmission and addressed, delivered or transmitted to
such party at its address, facsimile number transmission set forth below in Schedule
10.2 hereto or set forth in the Lender Assignment Agreement or at such
other address, or facsimile transmission number as may be designated by such
party in a notice to the other parties. 
Any notice, if mailed and properly addressed with postage prepaid or if
properly addressed and sent by pre-paid courier service, shall be deemed given
when received; any notice, if transmitted by facsimile transmission, shall be
deemed given when transmitted, provided such notice is delivered or facsimile
transmitted during regular business hours on a Business Day.


 


SECTION 10.3  Payment of Costs and Expenses.  The Borrower agrees to pay on demand all
reasonable expenses of the Agent (including the reasonable fees and
out-of-pocket expenses of counsel to the Agent and of local counsel, if any,
who may be retained by counsel to the Agent) in connection with:


 


(i)                                     the
negotiation, preparation, execution and delivery of this Agreement and of each
other Loan Document, including schedules and exhibits, and any amendments,
waivers, consents, supplements or other modifications to this Agreement or any
other Loan Document as may from time to time hereafter be required, whether or
not the transactions contemplated hereby are consummated, and


 


(ii)                                  the filing, recording,
refiling or rerecording of any Collateral Document and/or any Uniform
Commercial Code financing statements relating thereto and all amendments,
supplements and modifications to any thereof and any and all other documents or
instruments of further assurance required to be filed or recorded or refiled or
rerecorded by the terms hereof or of such Collateral Document, and


 


(iii)                               the preparation
and review of the form of any document or instrument required by this Agreement
or any other Loan Document.


 


The Borrower further agrees to pay, and to save the
Agent and the Lenders harmless from all liability for, any stamp or other taxes
which may be payable in connection with the execution or delivery of this
Agreement, the borrowings hereunder, or the issuance of the Notes or any other
Loan Documents.  The Borrower also agrees
to reimburse the Agent and each Lender upon demand for all reasonable
out-of-pocket expenses (including reasonable attorneys’ fees and legal expenses)
incurred by the Agent or such Lender in connection with (x) the
negotiation of any restructuring or “work-out”, whether or not consummated, of
any Obligations and (y) the enforcement of any Obligations.  Notwithstanding anything contained herein to
the contrary, the 


 


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Borrower shall not be responsible for any costs or
expenses incurred by the Agent or any Lender in connection with the
transactions contemplated by either of Section 10.11.1 or 10.11.2
hereof.


 


SECTION 10.4  Indemnification.  In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the Revolving
Commitments and Term Loan Commitments and the making of the Loans, the Borrower
hereby indemnifies, exonerates and holds the Agent and each Lender and each of
their respective officers, directors, employees and agents (collectively, the “Indemnified Parties”) free and harmless
from and against any and all actions, causes of action, suits, losses, costs,
liabilities and damages, and expenses incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the action
for which indemnification hereunder is sought), including reasonable attorneys’
fees and disbursements (collectively, the “Indemnified
Liabilities”), incurred by the Indemnified Parties or any of them as
a result of, or arising out of, or relating to:


 


(i)                                     any transaction
financed or to be financed in whole or in part, directly or indirectly, with
the proceeds of any Loan;


 


(ii)                                  the entering
into and performance of this Agreement and any other Loan Document by any of
the Indemnified Parties (including any action brought by or on behalf of the
Borrower as the result of any determination by the Required Lenders pursuant to
Article V not to fund any Borrowing);


 


(iii)                               any
investigation, litigation or proceeding related to any acquisition or proposed
acquisition by the Borrower of all or any portion of the stock or assets of any
Person, whether or not the Agent or such Lender is party thereto;


 


(iv)                              any investigation,
litigation or proceeding related to any environmental cleanup, audit,
compliance or other matter relating to the protection of the environment or the
Release by Borrower or any of its Subsidiaries of any Hazardous Material; or


 


(v)                                 the presence on
or under, or the escape, seepage, leakage, spillage, discharge, emission,
discharging or releases from, any real property owned or operated by the
Borrower or any Subsidiary thereof of any Hazardous Material (including any
losses, liabilities, damages, injuries, costs, expenses or claims asserted or
arising under any Environmental Law), regardless of whether caused by, or
within the control of, the Borrower or such Subsidiary,


 


except for any such Indemnified Liabilities arising
for the account of a particular Indemnified Party by reason of the relevant
Indemnified Party’s gross negligence or willful misconduct.  If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Borrower hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.


 


SECTION 10.5  Survival.  The obligations of the Borrower under Sections
4.3, 4.4, 4.5, 4.6 and 10.3 and 10.4,
and the obligations of the Lenders under Section 9.1, shall in each
case survive any termination of this Agreement, the payment in full of all
Obligations and the termination of all Revolving Commitments.  The representations and warranties made by
the 


 


75

















 


Borrower in this Agreement
and in each other Loan Document shall survive the execution and delivery of
this Agreement and each such other Loan Document.


 


SECTION 10.6  Severability.  Any provision of this Agreement or any other
Loan Document which is prohibited or unenforceable in any jurisdiction shall,
as to such provision and such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.


 


SECTION 10.7  Headings.  The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.


 


SECTION 10.8  Execution in Counterparts,
Effectiveness, etc.  This
Agreement may be executed by the parties hereto in several counterparts, each
of which shall be executed by the Borrower and the Agent and be deemed to be an
original and all of which shall constitute together but one and the same
agreement.  This Agreement shall become
effective when counterparts hereof executed on behalf of the Borrower and each
Lender (or notice thereof satisfactory to the Agent) shall have been received
by the Agent and notice thereof shall have been given by the Agent to the
Borrower and each Lender.


 


SECTION 10.9  Governing Law; Entire Agreement.  THIS AGREEMENT, THE NOTES AND EACH OTHER LOAN
DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF ILLINOIS. 
This Agreement, the Notes and the other Loan Documents constitute the
entire understanding among the parties hereto with respect to the subject
matter hereof and supersede any prior agreements, written or oral, with respect
thereto.


 


SECTION 10.10  Successors and Assigns.  This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:


 


(i)                                     the Borrower
may not assign or transfer its rights or obligations hereunder without the
prior written consent of the Agent and all Lenders; and


 


(ii)                                  the rights of
sale, assignment and transfer of the Lenders are subject to Section 10.11.


 


SECTION 10.11  Sale and Transfer of Loans and Note;
Participations in Loans and Note. 
Each Lender may assign, or sell participations in, its Loans and
Revolving Commitment to one or more other Persons in accordance with this Section 10.11.


 


SECTION 10.11.1  Assignments.  Any Lender:


 


(i)                                     with the
written consent of the Agent and, provided no Event of Default then shall exist
or be continuing, the Borrower (which consent shall not be unreasonably delayed
or withheld (it is agreed that it shall not be unreasonable for Borrower to 


 


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withhold consent to
institutions that have higher reserve costs or withholding taxes which would
result in increased costs to the Borrower)) may at any time assign and delegate
to one or more commercial banks or other financial institutions, and


 


(ii)                                  with notice to
the Borrower and the Agent, but without the consent of the Borrower or the
Agent, may assign and delegate to any of its Affiliates or to any other Lender,


 


(each Person described in either of the foregoing
clauses as being the Person to whom such assignment and delegation is to be
made, being hereinafter referred to as an “Assignee
Lender”), all or any fraction of such Lender’s total Loans and
Revolving Commitment (which assignment and delegation shall be of a constant,
and not a varying, percentage of all the assigning Lender’s Loans and Revolving
Commitment) in a minimum aggregate amount of $2,500,000 (or such lesser amount
to the extent that after giving effect to such assignment such Lender’s total
Loans and Revolving Commitment is reduced to zero); provided, however,
that any such Assignee Lender will comply, if applicable, with the provisions
contained in the penultimate sentence of Section 4.6, and provided
further, however, that, the Borrower and the Agent shall be
entitled to continue to deal solely and directly with such Lender in connection
with the interests so assigned and delegated to an Assignee Lender until:


 


(i)                                     written notice
of such assignment and delegation, together with payment instructions,
addresses and related information with respect to such Assignee Lender, shall
have been given to the Borrower and the Agent by such Lender and such Assignee
Lender,


 


(ii)                                  such Assignee
Lender shall have executed and delivered to the Borrower and the Agent a Lender
Assignment Agreement, accepted by the Agent, and


 


(ii)                                  the processing
fees described below shall have been paid.


 


From and after the date that the Agent accepts such
Lender Assignment Agreement, (x) the Assignee Lender thereunder shall be
deemed automatically to have become a party hereto and to the extent that
rights and obligations hereunder have been assigned and delegated to such Assignee
Lender in connection with such Lender Assignment Agreement, shall have the
rights and obligations of a Lender hereunder and under the other Loan
Documents, and (y) the assignor Lender, to the extent that rights and
obligations hereunder have been assigned and delegated by it in connection with
such Lender Assignment Agreement, shall be released from such obligations
hereunder and under the other Loan Documents. 
Within five Business Days after its receipt of notice that the Agent has
received an executed Lender Assignment Agreement, the Borrower shall execute
and deliver to the Agent (for delivery to the relevant Assignee Lender) a new
Note evidencing such Assignee Lender’s assigned Loans and Revolving Commitment
and, if the assignor Lender has retained Loans and a Revolving Commitment
hereunder, a replacement Note in the principal amount of the Loans and
Revolving Commitment retained by the assignor Lender hereunder (such Note to be
in exchange for, but not in payment of, that Note then held by such assignor
Lender).  Each such Note shall be dated
the date of the predecessor Note.  The
assignor Lender shall mark the predecessor Note “exchanged” and deliver it to
the Borrower.  Accrued interest on that
part of the predecessor Note evidenced by the new Note, and accrued 


 


77

















 


fees, shall be paid as provided in the Lender
Assignment Agreement.  Accrued interest
on that part of the predecessor Note evidenced by the replacement Note shall be
paid to the assignor Lender.  Accrued
interest and accrued fees shall be paid at the same time or times provided in
the predecessor Note and in this Agreement. 
Such assignor Lender or such Assignee Lender must also pay a processing
fee to the Agent upon delivery of any Lender Assignment Agreement in the amount
of $3,500.  Any attempted assignment and
delegation not made in accordance with this Section 10.11.1 shall
be null and void.


 


SECTION 10.11.2  Participations.  Any Lender may at any time sell to one or
more commercial banks or other Persons (each of such commercial banks and other
Persons being herein called a “Participant”)
participating interests in any of the Loans, its Revolving Commitment, or other
interests of such Lender hereunder; provided, however, that:


 


(i)                                     no participation
contemplated in this Section 10.11 shall relieve such Lender from
its Revolving Commitment or its other obligations hereunder or under any other
Loan Document,


 


(ii)                                  such Lender
shall remain solely responsible for the performance of its Revolving Commitment
and such other obligations,


 


(iii)                               the Borrower
and the Agent shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement and
each of the other Loan Documents,


 


(iv)                              no Participant,
unless such Participant is an Affiliate of such Lender, or is itself a Lender,
shall be entitled to require such Lender to take or refrain from taking any
action hereunder or under any other Loan Document, except that such Lender may
agree with any Participant that such Lender will not, without such
Participant’s consent, take any actions of the type described in clause (b) or
(c) of Section 10.1, and


 


(v)                                 the Borrower
shall not be required to pay any amount under Section 4.6 that is
greater than the amount which it would have been required to pay had no
participating interest been sold.


 


The Borrower acknowledges and agrees that each
Participant, for purposes of Sections 4.3, 4.4, 4.5, 4.6,
4.8, 4.9, 10.3 and 10.4, shall be considered a Lender.


 


SECTION 10.12  Confidentiality.  The Lenders shall hold all non-public
information (which has been identified as such by Borrower) obtained pursuant
to the requirements of this Agreement in accordance with their customary
procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices and in any event may make
disclosure to any of their examiners, Affiliates, outside auditors, counsel and
other professional advisors in connection with this Agreement or as reasonably
required by any bona  fide transferee, participant or assignee or
as required or requested by any governmental agency or representative thereof
or pursuant to legal process; provided, however, that:


 


(i)                                     unless specifically prohibited by
applicable law or court order, each Lender shall notify the Borrower of any
request by any governmental agency or 


 


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representative
thereof (other than any such request in connection with an examination of the
financial condition of such Lender by such governmental agency) for disclosure
of any such non-public information prior to disclosure of such information;


 


(ii)                                  prior to any such disclosure pursuant to
this Section 10.12, each Lender shall require any such bona fide
transferee, participant and assignee receiving a disclosure of non-public
information to agree in writing:


 


(1)                                 to be bound by this Section 10.12;
and


 


(2)                                 to require such Person to require any
other Person to whom such Person discloses such non-public information to be
similarly bound by this Section 10.12; and


 


(iii)                               except as may be required by an order of a court of
competent jurisdiction and to the extent set forth therein, no Lender shall be
obligated or required to return any materials furnished by any Credit Party.


 


(iv)                              to the extent necessary to comply with
HIPAA, the Lenders and Borrower and each of the other Credit Parties that is a
"covered entity" under HIPAA shall execute a Business Associate
Agreement pursuant to HIPAA attached hereto as Exhibit L, to protect the
Borrower’s disclosure of individually identifiable health information to the
Lenders.


 


SECTION 10.13  Other
Transactions.  Nothing contained
herein shall preclude the Agent or any other Lender from engaging in any
transaction, in addition to those contemplated by this Agreement or any other
Loan Document, with the Borrower or any of its Affiliates in which Borrower or
such Affiliate is not restricted hereby from engaging with any other Person.


 


SECTION 10.14  Amendment
and Restatement.


 


(a)                                 On the Closing Date, the Original Credit
Agreement (as previously amended, restated or otherwise modified) shall be
amended, restated and superseded in its entirety.  The parties hereto acknowledge and agree that
(i) this Agreement, any Notes delivered pursuant hereto and the other Loan
Documents executed and delivered in connection herewith do not constitute a
novation, payment and reborrowing, or termination of the
"Obligations" (as defined in the Original Credit Agreement (as previously
amended, restated or otherwise modified) under the Original Credit Agreement
(as previously amended, restated or otherwise modified) as in effect prior to
the Closing Date; (ii) such "Obligations" are in all respects
continuing with only the terms thereof being modified as provided in this
Agreement; (iii) the Liens as granted under the Collateral Documents securing
payment of such "Obligations" are in all respects continuing and in
full force and effect and secure the payment of the Obligations (as defined in
this Agreement) and are hereby fully ratified and affirmed; and (iv) upon the
effectiveness of this Agreement all loans and letters of credit outstanding
under the Original Credit Agreement (as previously amended, restated or
otherwise modified) immediately before the effectiveness of this Agreement will
be part of the Loans and Letters of Credit hereunder on the terms and
conditions set forth in this Agreement. 
Without limitation of the foregoing, Borrower hereby fully and 


 


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unconditionally
ratifies and affirms all Collateral Documents and agrees that all collateral
granted thereunder shall from and after the Closing Date secure all Obligations
hereunder.


 


(b)           Notwithstanding
the modifications effected by this Agreement of the representations, warranties
and covenants of the Credit Parties contained in the Original Credit Agreement
(as previously amended, restated or otherwise modified), Borrower acknowledges
and agrees that any causes of action or other rights created in favor of any
Lender and its successors arising out of the representations and warranties of
any Credit Party contained in or delivered (including representations and
warranties delivered in connection with the making of the loans or other
extensions of credit thereunder) in connection with the Original Credit
Agreement (as previously amended, restated or otherwise modified) or any other
Loan Document executed in connection therewith shall survive the execution and
delivery of this Agreement, provided, further, that the
Obligations under the other Loan Documents shall also continue in full force
and effect including, without limitation, the Obligations of each Credit Party
pursuant to the Collateral Documents. All indemnification obligations of each
Credit Party pursuant to the Original Credit Agreement (as previously amended,
restated or otherwise modified) (including any arising from a breach of the
representations thereunder) shall survive the amendment and restatement of the
Original Credit Agreement (as previously amended, restated or otherwise
modified) pursuant to this Agreement.


 


(c)           On
and after the Closing Date, (i) each reference in the Loan Documents to
the “Credit Agreement”, “thereunder”, “thereof” or similar words referring to
the Credit Agreement shall mean and be a reference to this Agreement and (ii) each
reference in the Loan Documents to a “Note” shall mean and be a Note as defined
in this Agreement.


 


SECTION 10.15  Forum Selection and Consent to
Jurisdiction.  ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS OR ANY CREDIT
PARTY SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF
ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN  DISTRICT OF ILLINOIS; PROVIDED, HOWEVER,
THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE
SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.  BORROWER FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE
WITHIN OR WITHOUT THE STATE OF ILLINOIS. 
THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE
TO THE LAYING OF VENUE OF ANY SUCH


 


80

















 


LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.  TO THE
EXTENT THAT THE BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH SUCH CREDIT PARTY
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.


 


SECTION 10.16  Waiver of Jury Trial.  THE AGENT, THE LENDERS AND THE BORROWER
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT
OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS OR THE BORROWER.  THE BORROWER ACKNOWLEDGES AND AGREES THAT IT
HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH
OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND THE LENDERS ENTERING
INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.


 


SECTION 10.17  USA Patriot Act Notice.


 


Each of the Agent and each Lender hereby notifies
the Borrower that pursuant to the requirements of the USA Patriot Act (Title
III of Pub. L. 107-56 (signed into law on October 26, 2001)) (the “Patriot
Act”), each of the Agent and each Lender is required to obtain, verify and
record information that identifies the Borrower, which information includes the
name and address of the Borrower and other information that will allow the
Lender to identify the Borrower in accordance with the Patriot Act.


 


*    *   
*


 


81

















 


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


 


	
   

  	
  NOVAMED, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Scott T. Macomber

  
	
   

  	
   

  	
  Title:
  EVP and CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NATIONAL
  CITY BANK,

  
	
   

  	
  Individually
  as a Lender, as Letter of Credit

  
	
   

  	
  Issuer
  and as Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  James Kershner

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N.A., Individually as a

  
	
   

  	
  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Sophia Taylor

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TD
  BANKNORTH, Individually as a

  
	
   

  	
  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By
  

  	
  /s/
  Linda Fournier

  
	
   

  	
   

  	
  Title: CLO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SIEMENS
  FINANCIAL SERVICES, INC.,

  Individually as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By
  

  	
  /s/
  Carol Walters

  
	
   

  	
   

  	
  Title: Vice President — Documentation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FIRSTMERIT
  BANK, N.A., Individually as a

  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By
  

  	
  /s/
  Robert G. Morlan

  
	
   

  	
   

  	
  Title: Senior Vice President

  



 

















 


	
  SCHEDULE
  1

  	
  —

  	
  Agreed
  EBITDA Formula

  
	
  SCHEDULE
  6.3

  	
  —

  	
  Approvals

  
	
  SCHEDULE
  6.8

  	
  —

  	
  Subsidiaries

  
	
  SCHEDULE
  6.10

  	
  —

  	
  Tax
  Matters

  
	
  SCHEDULE
  6.17

  	
  —

  	
  Existing
  Indebtedness

  
	
  SCHEDULE
  6.22

  	
  —

  	
  Insurance

  
	
  SCHEDULE
  6.21

  	
  —

  	
  Licensing
  and Accreditation

  
	
  SCHEDULE
  6.28

  	
  —

  	
  Capitalization

  
	
  SCHEDULE
  7.1.4

  	
  —

  	
  Insurance

  
	
  SCHEDULE
  7.2.3

  	
  —

  	
  Existing
  Liens

  
	
  SCHEDULE
  7.2.5(a)

  	
  —

  	
  Existing
  Investments

  
	
  SCHEDULE
  7.2.5(b)

  	
  —

  	
  Deposit
  Accounts

  
	
  SCHEDULE
  7.2.8

  	
  —

  	
  Subsidiaries
  to be Dissolved

  
	
  SCHEDULE
  10.1

  	
  —

  	
  Commitment
  Percentages

  
	
  SCHEDULE
  10.2

  	
  —

  	
  Notice
  Information

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
   

  	
  Form of
  Note

  
	
  EXHIBIT B

  	
  Form of
  Borrowing Request

  
	
  EXHIBIT C

  	
  Form of
  Continuation/Conversion Notice

  
	
  EXHIBIT D

  	
  Form of
  Lender Assignment Agreement

  
	
  EXHIBIT E

  	
  Form of
  Opinion of Counsel to the Borrower

  
	
  EXHIBIT F

  	
  Permitted
  Asset Dispositions

  



 

















 


SCHEDULE 1


 


AGREED EBITDA FORMULA


 


“EBITDA” shall be
defined as an amount equal to Combined EBITDA as of the date of determination
for the twelve-month period preceding the date of determination.


 


“Combined EBITDA” shall mean for
any applicable computation period, (A) EBITDA (as defined in the Agreement
before giving effect to any computations pursuant to this Schedule 1), plus
(B) Acquired EBITDA for each ASC Facility, less (C) Disposed
EBITDA for each ASC Facility.


 


“Acquired EBITDA” shall mean
with respect to each ASC Facility acquired pursuant to a Permitted Acquisition,
the twelve-month pro forma EBITDA of such ASC Facility, broken down in
increments of monthly pro forma EBITDA over such twelve-month period (“Monthly
Pro Forma EBITDA”), as agreed upon by Borrower and Agent; provided, however,
that to the extent Borrower’s EBITDA (as defined in the Agreement before giving
effect to any computations pursuant to this Schedule 1) for any applicable
computation period includes actual results from such ASC Facility, the Acquired
EBITDA of such ASC Facility shall be reduced by the Monthly Pro Forma EBITDA
for the number of months for which such actual results are included in Borrower’s
EBITDA.  As an example only, after three
months following a Permitted Acquisition, an ASC Facility has produced three
months of actual results that are included in Borrower’s EBITDA.  These three months of actual monthly EBITDA
replace the Monthly Pro Forma EBITDA that comprised the first three months of
the twelve-month pro forma amount that was agreed upon by Borrower and Agent as
Acquired EBITDA, and would result in “Acquired EBITDA” being equal to the sum
of Monthly Pro Forma EBITDA amounts for each of the nine remaining months.


 


“Disposed EBITDA” shall mean with
respect to each ASC Facility that is the subject of a Permitted Equity
Ownership Sale, the amount of EBITDA contributed to Borrower by such ASC
Facility during the most recently available twelve-month period preceding the
effective date of such sale that will no longer be available to Borrower as a
result of such sale, as measured on a pro forma basis, broken down in
increments of Monthly Pro Forma EBITDA over such twelve-month period, as agreed
upon by Borrower and Agent; provided, however, that to the extent
Borrower’s EBITDA (as defined in the Agreement before giving effect to any
computations pursuant to this Schedule 1) for any applicable computation period
includes the ASC Facility’s actual results for a period following the closing
of the Permitted Equity Ownership Sale, the Disposed EBITDA of such ASC
Facility shall be adjusted by the Monthly Pro Forma EBITDA for the number of
months for which such actual results are included in Borrower’s EBITDA.


 


Upon an ASC Facility contributing actual results
that are reflected in Borrower’s EBITDA (as defined in the Agreement before
giving effect to any computations pursuant to this Schedule 1) for a
twelve-month period following either a Permitted Acquisition or Permitted
Equity Ownership Sale, as applicable, then this Schedule 1 shall no longer
apply to such ASC Facility.


 

















 


	
  AGREED
  AND ACCEPTED

  	
   

  
	
   

  	
   

  
	
  THIS
             day of
              ,
        :

  	
   

  
	
   

  	
   

  
	
  NATIONAL
  CITY BANK,

  	
   

  
	
  as
  Agent

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  



 

















 


SCHEDULE 6.3


Approvals


 


None.


 

















 


SCHEDULE 6.8


Subsidiaries


 


Wholly Owned Subsidiaries


 


1.               NovaMed Management Services,
LLC, a Delaware limited liability company


 


2.               NovaMed Management of Kansas
City, Inc., a Missouri corporation


 


3.               Blue Ridge NovaMed, Inc.,
a Missouri corporation


 


4.               NovaMed of Louisville, Inc.,
a Kentucky corporation


 


5.               Midwest Uncuts, Inc.,
an Iowa corporation


 


6.               NovaMed Eyecare Research, Inc.,
a Delaware corporation


 


7.               NovaMed Eye Surgery and
Laser Center of St. Joseph, Inc., a Missouri corporation


 


8.               NMGK, Inc., an Illinois
corporation


 


9.               NMLO, Inc., a Kansas
corporation


 


10.         NovaMed Eye Surgery Center
of Cincinnati, LLC, a Delaware limited liability company


 


11.         Patient Education Concepts, Inc.,
a Delaware corporation


 


12.         NMI, Inc., a Georgia
corporation


 


13.         NovaMed Acquisition Company, Inc.,
a Delaware corporation


 


14.         NovaMed of Texas, Inc.,
a Delaware corporation


 


15.         NovaMed Alliance, Inc.,
a Delaware corporation


 


16.         NovaMed of Wisconsin, Inc.,
a Delaware corporation


 


17.         NovaMed of Dallas, Inc.,
a Delaware corporation


 


18.         NovaMed of San Antonio, Inc.,
a Delaware corporation


 


19.         NovaMed of Laredo, Inc.,
a Delaware corporation


 


20.         NovaMed Eye Surgery Center
(Plaza), LLC, a Delaware limited liability company


 


21.         NovaMed Surgery Center of
Laredo, LP, a Delaware limited partnership


 


22.         MDnetSolutions, Inc., a
Delaware corporation


 


23.         NovaMed of Lebanon, Inc.,
a Delaware corporation


 


24.         NovaMed of Bethlehem, Inc.,
a Delaware corporation


 


Wholly Owned Subsidiaries that are ASC Subsidiaries


 


25.         NovaMed Eye Surgery Center
of North County, LLC, a Delaware limited liability company


 


Non-Wholly Owned Subsidiaries that are ASC
Subsidiaries


 


26.         NovaMed Eye Surgery Center
of Overland Park, L.L.C., a Delaware limited liability company


 


27.         NovaMed Eye Surgery Center
of Maryville, L.L.C., a Delaware limited liability company


 


28.         NovaMed Surgery Center of
Richmond, LLC, a Delaware limited liability company


 


29.         NovaMed Surgery Center of
River Forest, LLC, a Delaware limited liability company


 


30.         NovaMed Surgery Center of
Colorado Springs, LLC, a Delaware limited liability company


 


31.         NovaMed Surgery Center of
Tyler, L.P., a Delaware limited partnership


 


32.         NovaMed Surgery Center of
Merrillville, LLC, a Delaware limited liability company


 

















 


33.         NovaMed Surgery Center of
Chicago — Northshore, LLC, a Delaware limited liability company


 


34.         Blue Ridge Surgical Center,
LLC, a Delaware limited liability company


 


35.         NovaMed Eye Surgery Center
of New Albany, L.L.C., a Delaware limited liability company


 


36.         NovaMed Surgery Center of
Chattanooga, LLC, a Delaware limited liability company


 


37.         NovaMed Surgery Center of
Bedford, LLC, a Delaware limited liability company


 


38.         NovaMed Surgery Center of
Nashua, LLC, a Delaware limited liability company


 


39.         NovaMed Surgery Center of
Orlando, LLC, a Delaware limited liability company


 


40.         NovaMed Surgery Center of
Oak Lawn, LLC, a Delaware limited liability company


 


41.         NovaMed Surgery Center of
Palm Beach, LLC, a Delaware limited liability company


 


42.         NovaMed Surgery Center of
Madison, LP, a Wisconsin limited partnership


 


43.         The Cataract Specialty
Surgical Center, LLC, a Michigan limited liability company


 


44.         NovaMed Surgery Center of
Denver, LLC, a Delaware limited liability company


 


45.         NovaMed Surgery Center of
Whittier, LLC, a Delaware limited liability company


 


46.         Surgery Center of Fremont,
LLC, a Delaware limited liability company


 


47.         NovaMed Surgery Center of
Dallas, LP, a Delaware limited partnership


 


48.         NovaMed Surgery Center of
San Antonio, LP, a Delaware limited partnership


 


49.         NovaMed Surgery Center of
Jonesboro, LLC, a Delaware limited liability company


 


50.         NovaMed Pain Management
Center of New Albany, LLC, a Delaware limited liability company


 


51.         NovaMed Surgery Center of
Sandusky, LLC, a Delaware limited liability company


 


52.         Laser and Outpatient Surgery
Center, LLC, a Delaware limited liability company


 


53.         NovaMed Surgery Center of
Cleveland, LLC, a Delaware limited liability company


 


54.         NovaMed Surgery Center of
Warrensburg, LLC, a Delaware limited liability company


 


55.         NovaMed Surgery Center of
Sebring, LLC, a Delaware limited liability company


 


56.         NovaMed Surgery Center of
St. Peters, LLC, a Delaware limited liability company


 


57.         Surgery Center of Kalamazoo,
LLC, a Michigan limited liability company


 


58.         NovaMed Surgery Center of
Baton Rouge, LLC, a Delaware limited liability company


 


59.         The Center for Specialized
Surgery, L.P., a Pennsylvania limited partnership


 


60.         Surgery Center of Lebanon,
L.P., a Pennsylvania limited partnership


 


Other (informational purposes only):


 


61.         NovaMed Surgery Center of
Fort Lauderdale, LLC, a Delaware limited liability company (a Wholly Owned
Subsidiary exercised its option to sell its 25% interest in this entity and
believes it effectuated the sale of this minority interest to the physician
partner effective as of July 31, 2009. 
The physician-partner has disputed the validity of the exercise)


 


62.         Nexus Vision Group, LLC, a
Mississippi limited liability company (NovaMed Alliance, Inc. owns a 12.5%
interest)


 

















 


SCHEDULE 6.10


Tax Matters


 


None


 
















 


SCHEDULE 6.17


Existing Indebtedness


 


As of July 31, 2009


(in 000s)


 


	
  Credit Agreement Borrowings

  	
   

  	
  $

  	
  47,000

  	
   

  
	
  Subordinated Convertible Notes

  	
   

  	
  75,000

  	
   

  
	
  Notes Payable

  	
   

  	
  11,097

  	
   

  
	
  Capital Leases

  	
   

  	
  1,053

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Indebtedness

  	
   

  	
  134,150

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Letters of Credit:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Luxottica

  	
   

  	
  630

  	
   

  
	
  Marchon

  	
   

  	
  203

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Sub-Total - Letters of Credit

  	
   

  	
  833

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Indebtedness and Letters of Credit

  	
   

  	
  $

  	
  134,983

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Part A.

  	
  See
  Part B.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Part B.

  	
  See
  attached Schedule.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Part C.

  	
  Subordinated
  Convertible Notes

  	
   

  	
  $

  	
  75,000

  	
   

  



 

















 


Schedule 6.17 — Part B


 


	
  Lender

  	
   

  	
  Debtor

  	
   

  	
  Loan Type

  	
   

  	
  Current Principal

  Balance

  As of 06/30/09

  	
   

  
	
  Alcon
  Laboratories, Inc

  	
   

  	
  NovaMed
  Eyecare, Inc

  	
   

  	
  Capital Lease

  	
   

  	
  $

  	
  8,158

  	
   

  
	
  AMO

  	
   

  	
  NovaMed
  Surgery Center of Palm Beach, LLC

  	
   

  	
  Capital Lease

  	
   

  	
  $

  	
  22,550

  	
   

  
	
  Alcon
  Laboratories, Inc

  	
   

  	
  NovaMed
  Surgery Center of Merrillville, LLC

  	
   

  	
  Capital Lease

  	
   

  	
  $

  	
  2,316

  	
   

  
	
  GE
  Healthcare

  	
   

  	
  NovaMed
  Surgery Center of St Peters, LLC

  	
   

  	
  Capital Lease

  	
   

  	
  $

  	
  20,413

  	
   

  
	
  Americorp
  Financial

  	
   

  	
  NovaMed
  Surgery Center of Warrensburg, LLC

  	
   

  	
  Capital Lease

  	
   

  	
  $

  	
  84,871

  	
   

  
	
  Olympus

  	
   

  	
  NovaMed
  Surgery Center of Whittier, LLC

  	
   

  	
  Capital Lease

  	
   

  	
  $

  	
  261,514

  	
   

  
	
  Olympus

  	
   

  	
  NovaMed
  Surgery Center of Cleveland, LLC

  	
   

  	
  Capital Lease

  	
   

  	
  $

  	
  184,239

  	
   

  
	
  Bank
  of America

  	
   

  	
  NovaMed, Inc

  	
   

  	
  Capital Lease

  	
   

  	
  $

  	
  493,322

  	
   

  
	
  National
  City

  	
   

  	
  NovaMed
  Surgery Center of Orlando, LLC

  	
   

  	
  Note

  	
   

  	
  $

  	
  3,064,286

  	
   

  
	
  TDBanknorth

  	
   

  	
  The
  Center for Specialized Surgery, LP

  	
   

  	
  Note

  	
   

  	
  $

  	
  2,495,610

  	
   

  
	
  Bank
  of America

  	
   

  	
  Surgery
  Center of Kalamazoo, LLC

  	
   

  	
  Note

  	
   

  	
  $

  	
  1,094,197

  	
   

  
	
  Lebanon
  Valley Bank

  	
   

  	
  Surgery
  Center of Lebanon, LP

  	
   

  	
  Note

  	
   

  	
  $

  	
  1,806,387

  	
   

  
	
  Alcon
  Laboratories, Inc

  	
   

  	
  NovaMed
  Surgery Center of Madison, LP

  	
   

  	
  Note

  	
   

  	
  $

  	
  95,619

  	
   

  
	
  American
  National Bank of Fremont

  	
   

  	
  Surgery
  Center of Fremont, LLC

  	
   

  	
  Note

  	
   

  	
  $

  	
   25,581

  	
   

  
	
  Your
  Community Bank

  	
   

  	
  NovaMed
  Eye Surgery Center of New Albany, LLC

  	
   

  	
  Note

  	
   

  	
  $

  	
   86,741

  	
   

  
	
  National
  City

  	
   

  	
  NovaMed
  Eye Surgery Center of New Albany, LLC

  	
   

  	
  Note

  	
   

  	
  $

  	
  2,545,817

  	
   

  
	
  NovaMed, Inc.

  	
   

  	
  NovaMed
  Surgery Center of Denver, LLC

  	
   

  	
  Note

  	
   

  	
  $

  	
  74,232

  	
   

  
	
  NovaMed, Inc.

  	
   

  	
  Blue
  Ridge Surgical Center, LLC

  	
   

  	
  Note

  	
   

  	
  $

  	
  60,452

  	
   

  
	
  NovaMed, Inc.

  	
   

  	
  NovaMed
  Eye Surgery Center of Overland Park, LLC

  	
   

  	
  Note

  	
   

  	
  $

  	
  67,038

  	
   

  
	
  Ansar
  Kahn

  	
   

  	
  Surgery
  Center of Fremont, LLC

  	
   

  	
  Note

  	
   

  	
  $

  	
  130,000

  	
   

  



 
















 


SCHEDULE 6.21


Licensing and Accreditation


 


The real property lease for the premises used by
NovaMed Surgery Center of Chattanooga, LLC (the “Chattanooga LLC”) expires on December 31,
2009.  The Chattanooga LLC was unable to
negotiate a favorable extension to this lease and has entered into a sublease
at a different location.  As part of this
contemplated relocation, the Chattanooga LLC has filed a certificate of need (“CON”)
application with the Tennessee Health Services and Development Agency.  The CON application will be reviewed by the
Agency at a public hearing on September 23, 2009.


 

















 


SCHEDULE 6.22


Insurance


 


Borrower and its Subsidiaries self-insure their
health benefit plan.  Borrower has a stop
loss policy through Aetna that for 2009 provides coverage for medical and drug
claims paid by Borrower in excess of the following amount:  the number of eligible employees per month,
multiplied by $683, multiplied by 12 months. 
The maximum stop loss payment that Aetna is obligated to pay is
$1,000,000.  Claims paid over that amount
remain the responsibility of Borrower.


 

















 


SCHEDULE 6.28


Capitalization


 


I.                                        Authorized
Equity Securities


 


	
  Credit Party

  	
   

  	
  Authorized Equity

  Securities*

  
	
  1.

  	
   

  	
  NovaMed, Inc.

  	
   

  	
  81,761,465
  shares of common stock, $0.01 par value

   

  1,912,000
  shares of Series E Junior Participating Preferred, $0.01 par value

  
	
  2.

  	
   

  	
  Blue
  Ridge NovaMed, Inc.

  	
   

  	
  550
  Class A common shares, $10 par value, and 550 Class B common
  shares, $10 par value

  
	
  3.

  	
   

  	
  MDnetSolutions, Inc.

  	
   

  	
  1,000
  shares, $.01 par value

  
	
  4.

  	
   

  	
  Midwest
  Uncuts, Inc.

  	
   

  	
  100,000
  shares, no par value

  
	
  5.

  	
   

  	
  NMGK, Inc.

  	
   

  	
  10,000
  shares, $1.00 par value

  
	
  6.

  	
   

  	
  NMI, Inc.

  	
   

  	
  100,000
  shares, $1.00 par value

  
	
  7.

  	
   

  	
  NMLO, Inc

  	
   

  	
  100,000
  shares, $1.00 par value

  
	
  8.

  	
   

  	
  NovaMed
  Acquisition Company, Inc.

  	
   

  	
  10,000
  shares, $.01 par value

  
	
  9.

  	
   

  	
  NovaMed
  Alliance, Inc.

  	
   

  	
  1,000
  shares, $.01 par value

  
	
  10.

  	
   

  	
  NovaMed
  Eye Surgery and Laser Center of St. Joseph, Inc.

  	
   

  	
  30,000
  shares, $1.00 par value

  
	
  11.

  	
   

  	
  NovaMed
  Eye Surgery Center (Plaza), L.L.C.

  	
   

  	
  N/A

  
	
  12.

  	
   

  	
  NovaMed
  Eye Surgery Center of Cincinnati, L.L.C.

  	
   

  	
  N/A

  
	
  13

  	
   

  	
  NovaMed
  Eye Surgery Center of North County, LLC

  	
   

  	
  N/A

  
	
  14.

  	
   

  	
  NovaMed
  Eyecare Research, Inc.

  	
   

  	
  10,000
  shares, $.01 par value

  
	
  15.

  	
   

  	
  NovaMed
  Management of Kansas City, Inc.

  	
   

  	
  30,000
  shares, $1.00 par value

  
	
  16.

  	
   

  	
  NovaMed
  Management Services, LLC

  	
   

  	
  N/A

  
	
  17.

  	
   

  	
  NovaMed
  of Bethlehem, Inc.

  	
   

  	
  1,000
  shares, $.01 par value

  
	
  18.

  	
   

  	
  NovaMed
  of Dallas, Inc.

  	
   

  	
  10,000
  shares, $.01 par value

  



 

















 


	
  Credit Party

  	
   

  	
  Authorized Equity

  Securities*

  
	
  19.

  	
   

  	
  NovaMed
  of Laredo, Inc.

  	
   

  	
  100
  shares, $.01 par value

  
	
  20.

  	
   

  	
  NovaMed
  of Lebanon, Inc.

  	
   

  	
  1,000
  shares, $.01 par value

  
	
  21.

  	
   

  	
  NovaMed
  of Louisville, Inc.

  	
   

  	
  1,000
  shares, no par value

  
	
  22.

  	
   

  	
  NovaMed
  of San Antonio, Inc.

  	
   

  	
  10,000
  shares, $.01 par value

  
	
  23.

  	
   

  	
  NovaMed
  of Texas, Inc.

  	
   

  	
  1,000
  shares, $.01 par value

  
	
  24.

  	
   

  	
  NovaMed
  of Wisconsin, Inc.

  	
   

  	
  10,000
  shares, $.001 par value

  
	
  25.

  	
   

  	
  Patient
  Education Concepts, Inc.

  	
   

  	
  10,000
  shares, $.01 par value

  
	
  26.

  	
   

  	
  NovaMed
  Surgery Center of Laredo, LP

  	
   

  	
  N/A

  



 






*
All common stock unless otherwise noted; limited liability companies not
included.


 


II.                                   Rights,
Options, Warrants, etc.


 


1.                                      Convertible Note Documents
including the Call Options and Warrants


 


2.                                      All options and stock awards
granted or awarded under Borrower’s stock incentive plans and stock purchase
plan


 


3.                                      Borrower’s Shareholder
Rights Plan


 

















 


SCHEDULE 7.1.4


Insurance


 


NovaMed, Inc.


Schedule of Policies


Schedule 7.1.4


 


	
  Policy
  Type

  	
   

  	
  Insured
  Entities

  	
   

  	
  Company

  	
   

  	
  Policy
  Number

  	
   

  	
  Eff.
  Date

  	
   

  	
  Exp.
  Date

  	
   

  	
  Limits

  	
   

  	
  Deductible

  	
   

  	
  Premium

  	
   

  
	
  Prof/Gen
  Liab.

  	
   

  	
  [***]

  	
   

  	
  Darwin
  Select Insurance Company  

  	
   

  	
  [***]

  	
   

  	
  05/01/09

  	
   

  	
  05/01/10

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Prof
  Liability

  	
   

  	
  [***]

  	
   

  	
  Medical
  Assurance

  	
   

  	
  [***]

  	
   

  	
  05/21/09

  	
   

  	
  05/21/10

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Commercial
  Property

  	
   

  	
  [***]

  	
   

  	
  OneBeacon
  America Insurance Company

  	
   

  	
  [***]

  	
   

  	
  12/01/08

  	
   

  	
  12/01/09

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Commercial
  Auto

  	
   

  	
  [***]

  	
   

  	
  OneBeacon
  America Insurance Company

  	
   

  	
  [***]

  	
   

  	
  12/01/08

  	
   

  	
  12/01/09

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Earthquake

  	
   

  	
  [***]

  	
   

  	
  Essex
  Ins. Co.

  	
   

  	
  [***]

  	
   

  	
  12/01/08

  	
   

  	
  12/01/09

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  EPLI

  	
   

  	
  [***]

  	
   

  	
  Federal
  Ins. Co.

  	
   

  	
  [***]

  	
   

  	
  12/01/08

  	
   

  	
  12/01/09

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Fiduciary
  Liab.

  	
   

  	
  [***]

  	
   

  	
  Federal
  Ins. Co.

  	
   

  	
  [***]

  	
   

  	
  12/01/08

  	
   

  	
  12/01/09

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Crime
  Cov.

  	
   

  	
  [***]

  	
   

  	
  National
  Union Fire Insurance Company of Pittsburgh

  	
   

  	
  [***]

  	
   

  	
  12/01/08

  	
   

  	
  12/01/09

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Workers
  Comp

  	
   

  	
  [***]

  	
   

  	
  Liberty
  Mutual

  	
   

  	
  [***]

  	
   

  	
  12/01/08

  	
   

  	
  12/01/09

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  



 






[***]   INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SEC PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED.


 

















 


	
  Workers
  Comp

  	
   

  	
  [***]

  	
   

  	
  Liberty
  Mutual

  	
   

  	
  [***]

  	
   

  	
  12/01/08

  	
   

  	
  12/01/09

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Workers
  Comp

  	
   

  	
  [***]

  	
   

  	
  Liberty
  Mutual

  	
   

  	
  [***]

  	
   

  	
  12/01/08

  	
   

  	
  12/01/09

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Workers
  Comp

  	
   

  	
  [***]

  	
   

  	
  Ohio
  Bureau of Workers Compensation

  	
   

  	
  [***]

  	
   

  	
  Perpetual

  	
   

  	
   

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Umbrella
  

  	
   

  	
  [***]

  	
   

  	
  Darwin
  Select Insurance Company  

  	
   

  	
  [***]

  	
   

  	
  05/01/09

  	
   

  	
  05/01/10

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Flood

  	
   

  	
  [***]

  	
   

  	
  Hartford
  Flood

  	
   

  	
  [***]

  	
   

  	
  02/11/09

  	
   

  	
  02/11/10

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Flood

  	
   

  	
  [***]

  	
   

  	
  Hartford
  Flood

  	
   

  	
  [***]

  	
   

  	
  02/03/09

  	
   

  	
  02/03/10

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Workers
  Comp

  	
   

  	
  [***]

  	
   

  	
  Hartford
  U/W Ins

  	
   

  	
  [***]

  	
   

  	
  10/01/08

  	
   

  	
  10/01/09

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  D&O
  Liability

  	
   

  	
  [***]

  	
   

  	
  Allied
  World National

  	
   

  	
  [***]

  	
   

  	
  07/28/09

  	
   

  	
  07/28/10

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Medical
  Professional

  	
   

  	
  [***]

  	
   

  	
  MedPro

  	
   

  	
  [***]

  	
   

  	
  11/01/08

  	
   

  	
  11/01/09

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Medical
  Professional

  	
   

  	
  [***]

  	
   

  	
  MedPro

  	
   

  	
  [***]

  	
   

  	
  11/01/08

  	
   

  	
  11/01/09

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Medical
  Professional

  	
   

  	
  [***]

  	
   

  	
  MedPro

  	
   

  	
  [***]

  	
   

  	
  11/01/08

  	
   

  	
  11/01/09

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Medical
  Professional

  	
   

  	
  [***]

  	
   

  	
  MedPro

  	
   

  	
  [***]

  	
   

  	
  11/01/08

  	
   

  	
  11/01/09

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Medical
  Professional

  	
   

  	
  [***]

  	
   

  	
  MedPro

  	
   

  	
  [***]

  	
   

  	
  11/01/08

  	
   

  	
  11/1/2009

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Medical
  Professional

  	
   

  	
  [***]

  	
   

  	
  Zurich
  - Maryland Casualty

  	
   

  	
  [***]

  	
   

  	
  8/1/2009

  	
   

  	
  8/1/2010

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Medical
  Professional

  	
   

  	
  [***]

  	
   

  	
  Zurich
  - Maryland Casualty

  	
   

  	
  [***]

  	
   

  	
  7/3/2009

  	
   

  	
  7/3/2010

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Medical
  Professional

  	
   

  	
  [***]

  	
   

  	
  Zurich
  - Maryland Casualty

  	
   

  	
  [***]

  	
   

  	
  5/1/2009

  	
   

  	
  5/1/2010

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Prof
  Liability

  	
   

  	
  [***]

  	
   

  	
  American
  Casualty Co. of Reading, PA (NSO Administered

  	
   

  	
  [***]

  	
   

  	
  5/1/2009

  	
   

  	
  5/1/2010

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  



 






[***]   INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SEC PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.


 

















 


	
  Prof
  Liability

  	
   

  	
  [***]

  	
   

  	
  American
  Casualty Co. of Reading, PA (HPSO Administered

  	
   

  	
  [***]

  	
   

  	
  9/15/2009

  	
   

  	
  9/15/2010

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Prof
  Liability

  	
   

  	
  [***]

  	
   

  	
  American
  Casualty Co. of Reading, PA (NSO Administered)

  	
   

  	
  [***]

  	
   

  	
  7/1/2009

  	
   

  	
  7/1/2010

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Prof
  Liability

  	
   

  	
  [***]

  	
   

  	
  American
  Casualty Co. of Reading, PA (NSO Administered)

  	
   

  	
  [***]

  	
   

  	
  2/19/2009

  	
   

  	
  2/19/2010

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Prof
  Liability

  	
   

  	
  [***]

  	
   

  	
  American
  Casualty Co. of Reading, PA (HPSO Administered)

  	
   

  	
  [***]

  	
   

  	
  11/30/2008

  	
   

  	
  11/30/2009

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Prof
  Liability

  	
   

  	
  [***]

  	
   

  	
  American
  Casualty Co. of Reading, PA (HPSO Administered)

  	
   

  	
  [***]

  	
   

  	
  5/1/2009

  	
   

  	
  5/1/2010

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Prof
  Liability

  	
   

  	
  [***]

  	
   

  	
  American
  Casualty Co. of Reading, PA (NSO Administered)

  	
   

  	
  [***]

  	
   

  	
  5/1/2009

  	
   

  	
  5/1/2010

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Prof
  Liability

  	
   

  	
  [***]

  	
   

  	
  American
  Casualty Co. of Reading, PA (NSO Administered)

  	
   

  	
  [***]

  	
   

  	
  5/1/2009

  	
   

  	
  5/1/2010

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Prof
  Liability

  	
   

  	
  [***]

  	
   

  	
  American
  Casualty Co. of Reading, PA (NSO Administered)

  	
   

  	
  [***]

  	
   

  	
  5/1/2009

  	
   

  	
  5/1/2010

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Prof
  Liability

  	
   

  	
  [***]

  	
   

  	
  American
  Casualty Co. of Reading, PA (HPSO Administered)

  	
   

  	
  [***]

  	
   

  	
  9/1/2008

  	
   

  	
  9/1/2009

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Prof
  Liability

  	
   

  	
  [***]

  	
   

  	
  American
  Casualty Co. of Reading, PA (HPSO Administered)

  	
   

  	
  [***]

  	
   

  	
  9/1/2008

  	
   

  	
  9/1/2009

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  



 






[***]   INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SEC PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.


 

















 


	
  Prof
  Liability

  	
   

  	
  [***]

  	
   

  	
  American
  Casualty Co. of Reading, PA (HPSO Administered)

  	
   

  	
  [***]

  	
   

  	
  11/1/2008

  	
   

  	
  11/1/2009

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Prof
  Liability

  	
   

  	
  [***]

  	
   

  	
  American
  Casualty Co. of Reading, PA (NSO Administered)

  	
   

  	
  [***]

  	
   

  	
  7/1/2009

  	
   

  	
  7/1/2010

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Key
  Man Life Insurance

  	
   

  	
  [***]

  	
   

  	
  West
  Coast Life Insurance Company

  	
   

  	
  [***]

  	
   

  	
  12/13/2004

  	
   

  	
  12/13/2014

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Key
  Man Life Insurance

  	
   

  	
  [***]

  	
   

  	
  The
  Hartford

  	
   

  	
  [***]

  	
   

  	
  5/19/2009

  	
   

  	
  5/19/2019

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Key
  Man Disability Policy

  	
   

  	
  [***]

  	
   

  	
  Petersen
  International Underwriters (Lloyd’s)

  	
   

  	
  [***]

  	
   

  	
  6/12/2009

  	
   

  	
  6/12/2012

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Key
  Man Life Insurance

  	
   

  	
  [***]

  	
   

  	
  Banner
  Life

  	
   

  	
  [***]

  	
   

  	
  11/14/2006

  	
   

  	
  11/14/2016

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Key
  Man Life Insurance

  	
   

  	
  [***]

  	
   

  	
  The
  Hartford

  	
   

  	
  [***]

  	
   

  	
  10/28/2006

  	
   

  	
  10/28/2016

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  



 






[***]   INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SEC PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.


 

















 


SCHEDULE 7.2.3


Existing
Liens


 


	
  Lender

  	
   

  	
  Debtor

  	
   

  	
  Loan Type

  	
   

  	
  Location

  	
   

  	
  Collateral

  	
   

  	
  Current

  Principal

  Balance

  As of 06/30/09

  	
   

  
	
  Alcon
  Laboratories, Inc

  	
   

  	
  NovaMed,
  Inc

  	
   

  	
  Capital Lease

  	
   

  	
  Chattanooga,
  TN

  	
   

  	
  Infiniti
  Phaco System

  	
   

  	
  $

  	
  8,158

  	
   

  
	
  AMO

  	
   

  	
  NovaMed
  Surgery Center of Palm Beach, LLC

  	
   

  	
  Capital Lease

  	
   

  	
  Lake
  Worth, FL

  	
   

  	
  2
  Sovereign Compacts

  	
   

  	
  $

  	
  22,550

  	
   

  
	
  Alcon
  Laboratories, Inc

  	
   

  	
  NovaMed
  Surgery Center of Merrillville, LLC

  	
   

  	
  Capital Lease

  	
   

  	
  Merrillville,
  IN

  	
   

  	
  Sovereign
  Phaco Upgrade

  	
   

  	
  $

  	
  2,316

  	
   

  
	
  GE
  Healthcare

  	
   

  	
  NovaMed
  Surgery Center of St Peters, LLC

  	
   

  	
  Capital Lease

  	
   

  	
  St.
  Peters, MO

  	
   

  	
  C-Arm

  	
   

  	
  $

  	
  20,413

  	
   

  
	
  Americorp
  Financial

  	
   

  	
  NovaMed
  Surgery Center of Warrensburg, LLC

  	
   

  	
  Capital Lease

  	
   

  	
  Warrensburg,
  MO

  	
   

  	
  2
  WhiteStar Phacos

  	
   

  	
  $

  	
  84,871

  	
   

  
	
  Olympus

  	
   

  	
  NovaMed
  Surgery Center of Whittier, LLC

  	
   

  	
  Capital Lease

  	
   

  	
  Whittier,
  CA

  	
   

  	
  11
  GI Endoscopes

  	
   

  	
  $

  	
  261,514

  	
   

  
	
  Olympus

  	
   

  	
  NovaMed
  Surgery Center of Cleveland, LLC

  	
   

  	
  Capital Lease

  	
   

  	
  Cleveland,
  TN

  	
   

  	
  8
  GI Endoscopes

  	
   

  	
  $

  	
  184,239

  	
   

  
	
  Bank
  of America

  	
   

  	
  NovaMed,
  Inc

  	
   

  	
  Capital Lease

  	
   

  	
  Midwest
  Lab Iowa

  	
   

  	
  Satisloh
  Coating System

  	
   

  	
  $

  	
  493,322

  	
   

  
	
  National
  City

  	
   

  	
  NovaMed
  Surgery Center of Orlando, LLC

  	
   

  	
  Note

  	
   

  	
  Orlando,
  FL

  	
   

  	
  substantially
  all assets

  	
   

  	
  $

  	
  3,064,286

  	
   

  
	
  TDBanknorth

  	
   

  	
  The
  Center for Specialized Surgery, LP

  	
   

  	
  Note

  	
   

  	
  Bethlehem,
  PA

  	
   

  	
  substantially
  all assets

  	
   

  	
  $

  	
  2,495,610

  	
   

  
	
  Bank
  of America

  	
   

  	
  Surgery
  Center of Kalamazoo, LLC

  	
   

  	
  Note

  	
   

  	
  Kalamazoo,
  MI

  	
   

  	
  substantially
  all assets

  	
   

  	
  $

  	
  1,094,197

  	
   

  
	
  Lebanon
  Valley Bank

  	
   

  	
  Surgery
  Center of Lebanon, LP

  	
   

  	
  Note

  	
   

  	
  Lebanon,
  PA

  	
   

  	
  substantially
  all assets

  	
   

  	
  $

  	
  1,806,387

  	
   

  
	
  Alcon
  Laboratories, Inc

  	
   

  	
  NovaMed
  Surgery Center of Madison, LP

  	
   

  	
  Note

  	
   

  	
  Madison,
  WI

  	
   

  	
  2
  Infiniti Phacos

  	
   

  	
  $

  	
  95,619

  	
   

  
	
  American
  National Bank of Fremont

  	
   

  	
  Surgery
  Center of Fremont, LLC

  	
   

  	
  Note

  	
   

  	
  Fremont,
  NE

  	
   

  	
  1
  Primus Steam Sterilizer

  	
   

  	
  $

  	
   25,581

  	
   

  
	
  Your
  Community Bank

  	
   

  	
  NovaMed
  Eye Surgery Center of New Albany, LLC

  	
   

  	
  Note

  	
   

  	
  New
  Albany, IN

  	
   

  	
  2
  Infiniti Phacos

  	
   

  	
  $

  	
   86,741

  	
   

  
	
  National
  City

  	
   

  	
  NovaMed
  Eye Surgery Center of New Albany, LLC

  	
   

  	
  Note

  	
   

  	
  New
  Albany, IN

  	
   

  	
  substantially
  all assets

  	
   

  	
  $

  	
  2,545,817

  	
   

  



 
















 


SCHEDULE 7.2.5(a)


Existing
Investments


 


	
  Name

  	
   

  	
  Credit Party

  	
   

  	
  Loan Date

  	
   

  	
  Original Principal Balance

  	
   

  
	
  Dr. Laurent Cowling

  	
   

  	
  NovaMed, Inc.

  	
   

  	
  12/22/98

  	
   

  	
  $

  	
  18,000

  	
   

  
	
  American Eye Institute, P.C.

  	
   

  	
  NovaMed, Inc.

  	
   

  	
  04/01/00

  	
   

  	
  $

  	
  1,190,541

  	
   

  
	
  NovaMed Surgery Center of Denver, LLC

  	
   

  	
  NovaMed, Inc.

  	
   

  	
  07/01/06

  	
   

  	
  $

  	
  185,581

  	
   

  
	
  NovaMed Eye Surgery Center of Overland Park,
  LLC      

  	
   

  	
  NovaMed, Inc.

  	
   

  	
  02/19/08

  	
   

  	
  $

  	
  100,557

  	
   

  
	
  Blue Ridge Surgical Center, LLC

  	
   

  	
  NovaMed, Inc.

  	
   

  	
  02/20/08

  	
   

  	
  $

  	
  108,814

  	
   

  



 

















 


SCHEDULE 7.2.5(b)


Deposit Accounts not subject to Lien


 


National
City Bank depository accounts:


NovaMed Eye Surgery Center
of New Albany, L.L.C. — Acct # 978815731


The Cataract Specialty
Surgical Center, LLC — Acct # 981049425


NovaMed Surgery Center of
Cleveland, LLC — Acct # 985107530


NovaMed Surgery Center of
Warrensburg, LLC — Acct # 985219022


 


Bank of
America depository accounts:


NovaMed Eye Surgery Center
of Overland Park, LLC — Acct # 34748-29018


NovaMed Surgery Center of
Dallas, L.P. — Acct # 34906-69278


NovaMed Surgery Center of
River Forest, LLC — Acct # 34748-29034


 

















 


SCHEDULE 7.2.8


Subsidiaries to
be Dissolved


 


The
Borrower may elect to dissolve or merge into other Subsidiaries the following:


 


1.               Blue Ridge
NovaMed, Inc., a Missouri corporation


 


2.               NovaMed of
Louisville, Inc., a Kentucky corporation


 


3.               NovaMed Eyecare
Research, Inc., a Delaware corporation


 


4.               NovaMed Eye
Surgery and Laser Center of St. Joseph, Inc., a Missouri corporation


 


5.               NMGK, Inc., an
Illinois corporation


 


6.               NMLO, Inc., a
Kansas corporation


 


7.               NovaMed Eye
Surgery Center of Cincinnati, LLC, a Delaware limited liability company


 


8.               NMI, Inc., a
Georgia corporation


 


9.               NovaMed Surgery
Center (Plaza), LLC, a Delaware limited liability company


 


10.         NovaMed of
Laredo, Inc., a Delaware corporation


 


11.         NovaMed Surgery
Center of Laredo, LP, a Delaware limited partnership


 

















 


Schedule 10.1


 


COMMITMENT PERCENTAGES


 


	
  Lender

  	
   

  	
  Revolving

  Commitment

  	
   

  	
  Percentage of

  aggregate

  Revolving

  Commitment

  Amount

  	
   

  	
  Term Loan

  Commitment

  	
   

  	
  Percentage of

  aggregate Term

  Loan

  Commitment

  Amount

  	
   

  
	
  National City Bank 

  	
   

  	
  $

  	
  11,875,000

  	
   

  	
  23.75

  	
  %

  	
  $

  	
  7,125,000

  	
   

  	
  23.75

  	
  %

  
	
  Bank of America, N.A.

  	
   

  	
  $

  	
  11,562,500

  	
   

  	
  23.125

  	
  %

  	
  $

  	
  6,937,500

  	
   

  	
  23.125

  	
  %

  
	
  TD Banknorth

  	
   

  	
  $

  	
  10,937,500

  	
   

  	
  21.875

  	
  %

  	
  $

  	
  6,562,500

  	
   

  	
  21.875

  	
  %

  
	
  Siemens Financial
  Services, Inc.

  	
   

  	
  $

  	
  9,375,000

  	
   

  	
  18.75

  	
  %

  	
  $

  	
  5,625,000

  	
   

  	
  18.75

  	
  %

  
	
  FirstMerit Bank, N.A.

  	
   

  	
  $

  	
  6,250,000

  	
   

  	
  12.50

  	
  %

  	
  $

  	
  3,750,000

  	
   

  	
  12.50

  	
  %

  
	
  Total

  	
   

  	
  $

  	
  50,000,000

  	
   

  	
  100

  	
  %

  	
  $

  	
  30,000,000

  	
   

  	
  100

  	
  %

  



 
















 


EXHIBIT A


 


Schedule 10.2


 


NOTICE INFORMATION


 


The
following is the notice information for Borrower and its Subsidiaries:


 


Until
December 18, 2009:


 


	
  NovaMed, Inc.

  
	
  980 North Michigan Avenue,
  Suite 1620

  
	
  Chicago, Illinois
  60611

  
	
  Attention:

  	
  Scott T. Macomber

  
	
   

  	
  John W. Lawrence, Jr.

  
	
  Telephone:

  	
  (312) 664-4100

  
	
  Facsimile:

  	
  (312) 664-4250

  
	
   

  
	
  After December 18,
  2009:

  
	
   

  
	
  NovaMed, Inc.

  
	
  333 West Wacker Drive,
  Suite 1010

  
	
  Chicago, Illinois
  60606

  
	
  Attention:

  	
  Scott T. Macomber

  
	
   

  	
  John W. Lawrence, Jr.

  
	
  Telephone:

  	
  (312) 664-4100

  
	
  Facsimile:

  	
  (312) 664-4250

  
	
   

  
	
  In either event with a
  copy to:

  
	
   

  
	
  DLA Piper LLP (US)

  
	
  203 North LaSalle Street,
  Suite 1900

  
	
  Chicago, Illinois
  60601

  
	
  Attention:

  	
  Steven V. Napolitano, Esq.

  
	
  Telephone:

  	
  (312) 368-4000

  
	
  Facsimile:

  	
  (312) 236-7516

  
	
   

  
	
  The following is the
  notice information for Agent:

  
	
   

  
	
  National City Bank

  
	
  One North Franklin, 20th Floor

  
	
  Chicago, IL 60606

  
	
  Attention:

  	
  James
  Kershner – NovaMed Account Manager

  
	
  Telephone:

  	
  (312)
  384-4652

  
	
  Facsimile:

  	
  (312)
  384-4666

  



 

















 


	
  with
  a copy to:

  
	
   

  
	
  Winston &
  Strawn LLP

  
	
  35
  West Wacker Drive

  
	
  Chicago, IL
  60601

  
	
  Attention:

  	
  Matthew O’Meara

  
	
  Telephone:

  	
  (312) 558-7504

  
	
  Facsimile:

  	
  (212) 558-5700

  
	
   

  
	
  The following is the
  notice information for Bank of America, N.A.:

  
	
   

  
	
  Bank of America, N.A.

  
	
  135 S. LaSalle Street, IL4-135-05-15

  
	
  Chicago, IL 60603

  
	
  Attention:

  	
  Sophia E. Taylor

  
	
  Telephone:

  	
  (312) 992-3771

  
	
  Facsimile:

  	
  (312) 453-4864

  
	
   

  
	
  The following is the
  notice information for TD Banknorth:

  
	
   

  
	
  TD Banknorth

  
	
  1441 Main Street

  
	
  Springfield, MA 01103

  
	
  Attention:

  	
  Linda Fournier

  
	
  Telephone:

  	
  (413) 748-8027

  
	
  Facsimile:

  	
  (413) 748-8037

  
	
   

  
	
  The following is the
  notice information for Siemens Financial Services, Inc.:

  
	
   

  
	
  Siemens Financial
  Services, Inc

  
	
  170 Wood Ave South

  
	
  Iselin, NJ, 08830

  
	
  Attention:

  	
  Ernest Errigo

  
	
  Telephone:

  	
  (732) 476-3427

  
	
  Facsimile:

  	
  (732) 476-3411

  
	
   

  
	
  The following is the
  notice information for First Merit Bank, N.A.:

  
	
   

  
	
  FirstMerit Bank, N.A.

  
	
  106 South Main Street

  
	
  Akron, Ohio 44308

  
	
  Attention:

  	
  Robert G. Morlan

  
	
  Telephone:

  	
  (330) 996-6420

  
	
  Facsimile:

  	
  (330)
  996-6394

  



 

















 


REVOLVING NOTE


 


	
  $

  	
  August 31, 2009

  



 


FOR VALUE RECEIVED, the undersigned, NOVAMED, INC.,
a Delaware corporation (the “Borrower”), promises to pay to the order of
                                
(the “Lender”) at the principal office of National City Bank in Chicago, Illinois,
the aggregate principal amount of all Revolving Loans made to Borrower by
Lender pursuant to that certain Seventh Amended and Restated Credit Agreement,
dated as of August 31, 2009 among the Borrower, National City Bank, as Agent,
and the various commercial lending institutions (including the Lender) as are,
or may from time to time become, parties thereto (as the same may be amended,
restated or otherwise modified from time to time, the “Credit Agreement”),
such principal amount to be payable on the dates set forth in the Credit
Agreement.


 


The Borrower also promises to pay interest on the
unpaid principal amount of each Revolving Loan from the date of such Revolving
Loan until such Revolving Loan is paid in full, payable at the rates per annum
and on the dates specified in the Credit Agreement.


 


Payments of both principal and interest are to be
made in lawful money of the United States of America in same day or immediately
available funds to the account designated by the Agent pursuant to the Credit
Agreement.


 


This Revolving Note is one of the Notes referred to
in the Credit Agreement and evidences Indebtedness incurred under the Credit
Agreement, to which reference is made for a description of the security for
this Revolving Note and for a statement of the terms and conditions on which
the Borrower is permitted and required to make prepayments and repayments of
principal of the Indebtedness evidenced by this Revolving Note and on which
such Indebtedness may be declared to be immediately due and payable.  Unless otherwise defined, terms used herein
have the meanings provided in the Credit Agreement.


 


All parties hereto, whether as makers, endorsers, or
otherwise, severally waive presentment for payment, demand, protest and notice
of dishonor.


 


THIS REVOLVING NOTE HAS BEEN DELIVERED IN CHICAGO, ILLINOIS AND
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS
OF THE STATE OF ILLINOIS.


 


	
   

  	
  NOVAMED, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 

















 


TERM NOTE


 


	
  $

  	
  August 31, 2009

  



 


FOR VALUE RECEIVED, the undersigned, NOVAMED, INC.,
a Delaware corporation (the “Borrower”), promises to pay to the order of
                                
(the “Lender”) at the principal office of National City Bank in Chicago, Illinois,
the aggregate principal amount of the Term Loan made to Borrower by Lender
pursuant to that certain Seventh Amended and Restated Credit Agreement, dated
as of August 31, 2009 among the Borrower, National City Bank, as Agent,
and the various commercial lending institutions (including the Lender) as are,
or may from time to time become, parties thereto (as the same may be amended,
restated or otherwise modified from time to time, the “Credit Agreement”),
such principal amount to be payable on the dates set forth in the Credit
Agreement.


 


The Borrower also promises to pay interest on the
unpaid principal amount of the Term Loan from the date of such Term Loan until
such Term Loan is paid in full, payable at the rates per annum and on the dates
specified in the Credit Agreement.


 


Payments of both principal and interest are to be
made in lawful money of the United States of America in same day or immediately
available funds to the account designated by the Agent pursuant to the Credit
Agreement.


 


This Term Note is one of the Notes referred to in
the Credit Agreement and evidences Indebtedness incurred under the Credit
Agreement, to which reference is made for a description of the security for
this Term Note and for a statement of the terms and conditions on which the Borrower
is permitted and required to make prepayments and repayments of principal of
the Indebtedness evidenced by this Term Note and on which such Indebtedness may
be declared to be immediately due and payable. 
Unless otherwise defined, terms used herein have the meanings provided
in the Credit Agreement.


 


All parties hereto, whether as makers, endorsers, or
otherwise, severally waive presentment for payment, demand, protest and notice
of dishonor.


 


THIS TERM NOTE HAS BEEN DELIVERED IN CHICAGO, ILLINOIS AND SHALL
BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF ILLINOIS.


 


	
   

  	
  NOVAMED, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 

















 


EXHIBIT B


 


BORROWING REQUEST


 


National
City Bank,


as
Agent


[address]


 


Attention:


 


Gentlemen
and Ladies:


 


This Borrowing Request is delivered to you pursuant
to Section 2.4 of the Seventh Amended and Restated Credit Agreement, dated
as of August 31, 2009 (as the same may be amended, restated or otherwise
modified from time to time, the “Credit Agreement”), among NovaMed, Inc.
(the “Borrower”), certain commercial lending institutions and National
City Bank, as agent  (the “Agent”).  Unless otherwise defined herein or the
context otherwise requires, terms used herein have the meanings provided in the
Credit Agreement.


 


The Borrower hereby requests that a Revolving Loan
be made in the aggregate principal amount of
$                    
on                     ,
20         as a [LIBO Rate Loan having
an Interest Period of
              
months] [Base Rate Loan].


 


The Borrower hereby acknowledges that, pursuant to Section 5.2.2
of the Credit Agreement, each of the delivery of this Borrowing Request and the
acceptance by the Borrower of the proceeds of the Revolving Loans requested
hereby constitute a representation and warranty by the Borrower that, on the
date of such Revolving Loans, and before and after giving effect thereto and to
the application of the proceeds therefrom, all statements set forth in Section 5.2.1
are true and correct in all material respects.


 


The Borrower agrees that if prior to the time of the
Borrowing requested hereby any matter certified to herein by it will not be
true and correct at such time as if then made, it will immediately so notify
the Agent.  Except to the extent, if any,
that prior to the time of the Borrowing requested hereby the Agent shall
receive written notice to the contrary from the Borrower, each matter certified
to herein shall be deemed once again to be certified as true and correct at the
date of such Borrowing as if then made.


 


Please wire transfer the proceeds of the Borrowing
to the accounts of the following persons at the financial institutions
indicated respectively:


 


	
  Amount to be Transferred

  	
   

  	
  Person to be Paid

  Name and Account No.

  	
   

  	
  Name, Address, etc. of

  Transferee Lender

  	
   

  
	
  $

  	
   

  	
  Name: 

  Account No.:

  	
   

  	
  Name:
  

  Address:
  

  Telephone:
  

  Fax:

  	
   

  



 

















 


	
  Balance
  of

  	
  The
  Borrower

  	
   

  
	
  such
  proceeds

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  



 


 


The Borrower has caused this Borrowing Request to be
executed and delivered, and the certification and warranties contained herein
to be made, by its duly Authorized Officer this
       day of
                      ,
20      .


 


	
   

  	
  NOVAMED, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  



 
















 


EXHIBIT C


 


CONTINUATION/CONVERSION NOTICE


 


National
City Bank,


as
Agent


[address]


 


Attention:


 


Gentlemen
and Ladies:


 


This Continuation/Conversion Notice is delivered to
you pursuant to Section 2.5 of the Seventh Amended and Restated Credit
Agreement, dated as of August 31, 2009 (as the same may be amended,
restated or otherwise modified from time to time, the “Credit Agreement”),
among NovaMed, Inc. (the “Borrower”), certain commercial lending
institutions and National City Bank, as agent 
(the “Agent”).  Unless
otherwise defined herein or the context otherwise requires, terms used herein
have the meanings provided in the Credit Agreement.


 


The Borrower hereby requests that on
                        ,
20      ,


 


(1)           $                      
of the presently outstanding principal amount of the [Term Loans/Revolving
Loans] originally made on
                    ,
20       [and $                    
of the presently outstanding principal amount of the  [Term Loans/Revolving Loans] originally made
on                     ,
20      ],


 


(2)           and all presently being maintained as (1)[Base Rate Loans]
[LIBO Rate Loans],


 


(3)           be [converted into] [continued as],


 


(4)           [LIBO Rate Loans having an Interest Period of
            
months] [Base Rate Loans].


 


The
Borrower hereby:


 


(a)           certifies and warrants that no Event of Default exists and
is continuing; and


 






*                 Select appropriate interest rate option.


 

















 


(b)           agrees that if prior to the time of such continuation or
conversion any matter certified to herein by it will not be true and correct at
such time as if then made, it will immediately so notify the Agent.


 


Except to the extent, if any, that prior to the time
of the continuation or conversion requested hereby the Agent shall receive
written notice to the contrary from the Borrower, each matter certified to
herein shall be deemed to be certified at the date of such continuation or
conversion as if then made.


 


The Borrower has caused this Continuation/Conversion
Notice to be executed and delivered, and the certification and warranties
contained herein to be made, by its Authorized Officer this
       day of
                  ,
20      .


 


	
   

  	
  NOVAMED, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  



 

















 


EXHIBIT D


 


LENDER ASSIGNMENT AGREEMENT


 


To:          NovaMed, Inc.


 


To:          National City Bank,


as
the Agent


 


Gentlemen
and Ladies:


 


We refer to Section 10.11.1 of the
Seventh Amended and Restated Credit Agreement, dated as of  August 31, 2009 (as the same may be
amended, restated or otherwise modified from time to time thereafter made
thereto, the “Credit Agreement”), among NovaMed, Inc. (the “Borrower”),
the various financial institutions (the “Lenders”) as are, or shall from
time to time become, parties thereto, and National City Bank, as agent (the “Agent”)
for the Lenders.  Unless otherwise
defined herein or the context otherwise requires, terms used herein have the
meanings provided in the Credit Agreement.


 


This agreement is delivered to you pursuant to Section 10.11.1  of the Credit Agreement and also constitutes notice to each
of you, pursuant to Section 10.11.1  of
the Credit Agreement, of the assignment and delegation to
                              
(the “Assignee”) of       % of the Loans,
Term Loans of
                        ,
and Revolving Commitment of                           
(the “Assignor”) outstanding under the Credit Agreement on the date
hereof.  After giving effect to the
foregoing assignment and delegation, the Assignor’s and the Assignee’s
Percentages for the purposes of the Credit Agreement are set forth opposite
such Person’s name on the signature pages hereof.


 


[Add paragraph dealing with accrued interest and
fees with respect to Loans assigned.]


 


The Assignee hereby acknowledges and confirms that
it has received a copy of the Credit Agreement and the exhibits related
thereto, together with copies of the documents which were required to be
delivered under the Credit Agreement as a condition to the making of the Loans
thereunder.  The Assignee further
confirms and agrees that in becoming a Lender and in making its Revolving
Commitment and Loans under the Credit Agreement, such actions have and will be
made without recourse to, or representation or warranty by the Agent.


 


Except as otherwise provided in the Credit
Agreement, effective as of the date of acceptance hereof by the Agent


 


(a)  the Assignee


 

















 


(i) shall be deemed
automatically to have become a party to the Credit Agreement, have all the
rights and obligations of a “Lender” under the Credit Agreement and the other
Loan Documents as if it were an original signatory thereto to the extent
specified in the second paragraph hereof; and


 


(ii)  agrees to be
bound by the terms and conditions set forth in the Credit Agreement and the
other Loan Documents as if it were an original signatory thereto; and


 


(b)  the Assignor shall be released from
its obligations under the Credit Agreement and the other Loan Documents to the
extent specified in the second paragraph hereof.


 


The Assignor and the Assignee hereby agree that the
[Assignor] [Assignee] will pay to the Agent the processing fee referred to in Section 10.11.1
of the Credit Agreement upon the delivery hereof.


 


The Assignee hereby advises each of you of the
following administrative details with respect to the assigned Loans and
Revolving Commitment and requests the Agent to acknowledge receipt of this
document:


 


(A)                               Address for Notices:


 


Institution
Name:


 


Attention:


 


Domestic
Office:


 


Telephone:


 


Facsimile:


 


LIBOR
Office:


 


Telephone:


 


Facsimile:


 


(B)                               Payment Instructions:


 


The Assignee agrees to furnish the tax form required
by  Section 4.6 (if so
required) of the Credit Agreement no later than the date of acceptance hereof
by the Agent.


 


This Agreement may be executed by the Assignor and
Assignee in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.


 

















 


	
  Commitment/Loan

  	
   

  	
  Revolving Commitment

  	
   

  	
  Term Loan

  	
   

  
	
  Assignor Amount

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
  Amounts Assigned

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
  Assignee Amounts (post assignment)

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  



 


	
   

  	
   

  	
  [ASSIGNOR]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [ASSIGNEE]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
  Accepted
  and Acknowledged

  	
   

  	
   

  
	
  this
         day of
                ,
  20

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NATIONAL
  CITY BANK,

  	
   

  	
   

  
	
    as
  Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [NOVAMED, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:]

  	
   

  	
   

  



 

















 


EXHIBIT E


FORM OF OPINION OF COUNSEL TO BORROWER


 


[ON FILE WITH AGENT]


 

















 


EXHIBIT F


Permitted
Asset Dispositions


 


Borrower or any of its Subsidiaries may
consummate transactions involving any of the following:


 


A. The sale by NovaMed Acquisition Company, Inc.
of 25% interest in NovaMed Surgery Center of Fort Lauderdale, LLC