EXHIBIT 10.1







LOAN AND SECURITY AGREEMENT



among



SUN HEALTHCARE GROUP, INC., et. al
as Borrowers,



HELLER HEALTHCARE FINANCE, INC.,
as Collateral Agent and Lender



CITICORP USA, INC.
as Administrative Agent and Lender,



and

The Financial Institution(s) Listed
on the Signature Pages Hereof,

as Lenders









Dated as of February 28, 2002



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TABLE OF CONTENTS

|           |                                                                  | Page
|---------- | ---------------------------------------------------------------- | ----
|SECTION 1. | DEFINITIONS AND ACCOUNTING TERMS                                 | 1   
|1.1        | Certain Defined Terms                                            | 1   
|1.2        | Interpretation                                                   | 2   
|SECTION 2. | LOANS AND COLLATERAL                                             | 2   
|2.1        | Revolving Credit Facility                                        | 2   
|           | (A)  Revolving Loan                                              | 2   
|           | (B)  Borrowing Base                                              | 3   
|           | (C)  Eligible Collateral                                         | 3   
|           | (D)  Borrowing Mechanics                                         | 4   
|           | (E)  Payments with Respect to the
    Settlement Agreement       | 5   
|           | (F)  Notes                                                       | 5   
|           | (G)  Letters of Credit                                           | 5   
|           | (1)  Maximum
    Amount                                          | 5   
|           | (2)  Reminbursement                                              | 6   
|           | (3)  Request
    for Letters of Credit                           | 6   
|           | (4)  Renewal                                                     | 6   
|           | (H)  Other Letter of Credit
    Provisions                       | 6   
|           | (1)  Obligations
    Absolute                                    | 6   
|           | (2)  Nature
    of Lender's Duties                               | 7   
|           | (3)  Liability                                                   | 8   
|           | (I)  Availability of a Lender's Pro
    Rata Share               | 8   
|           | (1)  Lender's
    Amounts Available on a Funding Date            | 8   
|           | (2)  Lender's
    Failure to Fund                                | 8   
|           | (3)  Payments
    to a Defaulting Lender                         | 8   
|           | (4)  Defaulting
    Lender's Right to Vote                       | 8   
|           | (J)  Pricing and Structural Changes
    Required for Syndication | 9   
|2.2        | Interest                                                         | 9   
|           | (A)  Rate of Interest                                            | 9   
|           | (B)  Computation and Payment of
    Interest                     | 10  
|           | (C)  Interest Laws                                               | 10  
|           | (D)  Conversion or Continuation                                  | 11  
|2.3        | Fees                                                             | 12  
|           | (A)  Unused Line Fee                                             | 12  
|           | (B)  Letter of Credit Fees                                       | 12  
|           | (C)  Prepayment Fees                                             | 12  
|           | (D)  Collateral Management and
    Administrative Agent Fees     | 12  
|           | (E)  Audit Fees                                                  | 13  
|           | (F)  Other Fees and Expenses                                     | 13  
|           | (G)  Fee Letter                                                  | 13  

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|2.4        | Payments and Prepayments                                                                      | 13
|---------- | --------------------------------------------------------------------------------------------- | --
|           | (A)  Matters Relating to Cash
    Management                                                  | 13
|           | (B)  Mandatory Prepayments                                                                    | 16
|           | (1)  Overadvance                                                                              | 16
|           | (2)  Prepayments
    from Proceeds of Asset Dispositions                                      | 16
|           | (3)  Prepayments
    for Issuance of Securities                                               | 16
|           | (4)  Prepayments
    from Tax Refunds                                                         | 16
|           | (5)  Prepayments
    from Proceeds of Casualty or Condemnation                                | 16
|           | (6)  Repayment
    from Sale of SunScript                                                     | 16
|           | (C)  Collateralization of Lender
    Letters of Credit; Termination of
           Commitments | 17
|           | (D)  Payments on Business Days                                                                | 17
|           | (E)  Application of Prepayment
    Proceeds                                                   | 17
|2.5        | Term of this Agreement                                                                        | 17
|2.6        | Statements                                                                                    | 18
|2.7        | Grant of Security Interest                                                                    | 18
|           | (A)  Grant of Liens in the
    Collateral                                                     | 18
|           | (B)  Borrowers Remain Liable                                                                  | 18
|           | (C)  Security Agreement                                                                       | 19
|2.8        | Yield Protection                                                                              | 19
|           | (A)  Capital Adequacy and other
    Adjustments                                               | 19
|           | (B)  Increased LIBOR Funding Costs                                                            | 19
|2.9        | Taxes                                                                                         | 20
|           | (A)  No Deductions                                                                            | 20
|           | (B)  Changes in Tax Laws                                                                      | 20
|           | (C)  Foreign Leaders                                                                          | 21
|2.10       | Required Termination and Prepayment                                                           | 21
|2.11       | Replacement of Lenders                                                                        | 21
|           | (A)  Replacement of an Affected
    Lender                                                    | 22
|           | (B)  Prepayment of an Affected
    Lender                                                     | 22
|2.12       | Compensation                                                                                  | 22
|2.13       | Booking of LIBOR Loans                                                                        | 22
|2.14       | Assumptions Concerning Funding of LIBOR Loans                                                 | 22
|SECTION 3. | CONDITIONS TO LOANS                                                                           | 23
|SECTION 4. | REPRESENTATIONS, WARRANTIES AND CERTAIN
    COVENANTS                                         | 23
|4.1        | Organizations, Powers, Capitalization                                                         | 23
|           | (A)  Organization and Powers                                                                  | 23
|           | (B)  Capitalization                                                                           | 23
|4.2        | Authorization of Borrowing, No Conflict                                                       | 23

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|4.3  | Financial Condition                                               | 24
|---- | ----------------------------------------------------------------- | --
|4.4  | Indebtedness and Liabilities                                      | 24
|4.5  | Collateral Warranties and
    Covenants                           | 24
|     | (A)  Accounts                                                     | 24
|     | (B)  Inventory
    Warranties and Covenants                       | 27
|     | (C)  Equipment
    Warranties and Covenants                       | 27
|     | (D)  Chattel Paper
    Warranties and Covenants                   | 27
|     | (E)  Instruments
    Warranties and Covenants                     | 27
|     | (F)  Investment Property
    Warranties and Covenants             | 28
|     | (G)  Letter-of-Credit
    Rights Warranties and Covenants         | 28
|     | (H)  General Intangibles
    Warranties and Covenants             | 28
|     | (I)  Intellectual
    Property Warranties and Covenants           | 28
|     | (J)  Commercial Tort
    Claims Warranties and Covenants          | 29
|     | (K)  Deposit Accounts;
    Bank Accounts Warranties and Covenants | 29
|     | (L)  Bailees                                                      | 29
|     | (M)  Collateral
    Description; Use of Collateral                | 30
|     | (N)  Collateral Filing
    Requirements; Collateral Records       | 30
|     | (O)  Federal Claims                                               | 30
|4.6  | Names and Locations                                               | 30
|4.7  | Title to Properties; Liens                                        | 31
|4.8  | Litigation; Adverse Facts                                         | 31
|4.9  | Payment of Taxes                                                  | 31
|4.10 | Performance of Agreements                                         | 31
|4.11 | Employee Benefit Plans                                            | 32
|4.12 | Broker's Fees                                                     | 32
|4.13 | Environmental Compliance                                          | 32
|4.14 | Solvency                                                          | 32
|4.15 | Disclosure                                                        | 32
|4.16 | Insurance                                                         | 32
|4.17 | Compliance with Laws; Government
    Authorizations; Consents     | 34
|4.18 | Employee Matters                                                  | 34
|4.19 | Governmental Regulation                                           | 34
|4.20 | Access to Accountants and
    Management                          | 34
|4.21 | Inspection                                                        | 35
|4.22 | Borrower's Receipt of Payments                                    | 35
|4.23 | Recoupments; Overpayments                                         | 35
|4.24 | Reports                                                           | 35
|4.25 | Compliance with Health Care Laws                                  | 36

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|4.26       | Funds from Restricted Grants                                    | 36
|---------- | --------------------------------------------------------------- | --
|4.28       | HIPAA Compliance                                                | 36
|4.29       | Licenses                                                        | 37
|4.30       | Certificate of Need                                             | 37
|4.31       | Inactive Entities                                               | 37
|4.32       | Supplemental Schedules                                          | 37
|Section 5. | REPORTING AND OTHER AFFIRMATIVE COVENANTS                       | 37
|5.1        | Financial Statements and Other Reports                          | 37
|5.2        | Endorsement; Insurance Claims                                   | 37
|5.3        | Maintenance of Properties                                       | 38
|5.4        | Further Assurances                                              | 38
|5.5        | Mortgages; Title Reports                                        | 38
|           | (A)  Title                                                      | 38
|           | (B)  Mortgages                                                  | 38
|           | (C)  Other Real Property                                        | 38
|5.6        | Use of Proceeds and Margin Security                             | 38
|5.7        | Licensure; Medicaid/Medicare Cost Reports                       | 39
|5.8        | Termination/Default of Contracts                                | 39
|5.9        | Notice of Event of Default and Other Matters                    | 39
|5.10       | Inactive Entities                                               | 39
|5.11       | Letters of Credit                                               | 39
|SECTION 6. | FINANCIAL COVENANTS                                             | 40
|SECTION 7. | NEGATIVE COVENANTS                                              | 40
|7.1        | Indebtedness                                                    | 40
|7.2        | Guaranties                                                      | 40
|7.3        | Transfers, Liens and Related Matters                            | 41
|           | (A)  Transfers                                                  | 41
|           | (B)  Liens                                                      | 41
|           | (C)  No Negative Pledges                                        | 41
|           | (D)  No Restrictions on Borrower
    Distributions to Borrowers | 42
|7.4        | Investments and Loans                                           | 42
|7.5        | Restricted Junior Payments                                      | 42
|7.6        | Restriction on Fundamental Changes                              | 42
|7.7        | Changes Relating to Term Loan Documents                         | 43

iv

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|7.8        | Transactions with Affiliates                                    | 43
|---------- | --------------------------------------------------------------- | --
|7.9        | Conduct of Business                                             | 43
|7.10       | Tax Consolidations                                              | 43
|7.11       | Subsidiaries                                                    | 43
|7.12       | Fiscal Year; Tax Designation                                    | 43
|7.13       | Use of Lenders' Name                                            | 43
|7.14       | Bank Accounts                                                   | 43
|7.15       | IRS Form 8821                                                   | 43
|7.16       | Certificates of Need                                            | 44
|7.17       | Sale Lease-back Transactions                                    | 44
|7.18       | Plan and Confirmation Order                                     | 44
|SECTION 8. | DEFAULT, RIGHTS AND REMEDIES                                    | 44
|8.1        | Event of Default                                                | 44
|           | (A)  Payment                                                    | 44
|           | (B)  Default in Other Agreements                                | 44
|           | (C)  Breach of Certain Provisions                               | 44
|           | (D)  Breach of Warranty                                         | 44
|           | (E)  Other Defaults Under Loan
    Documents                    | 45
|           | (F)  Change in Control                                          | 45
|           | (G)  Involuntary Bankruptcy;
    Appointment of Receiver, etc.  | 45
|           | (H)  Voluntary Bankruptcy;
    Appointment of Receiver, etc.    | 45
|           | (I)  Liens                                                      | 45
|           | (J)  Judgement and Attachments                                  | 46
|           | (K)  Dissolution                                                | 46
|           | (L)  Solvency                                                   | 46
|           | (M)  Injunction                                                 | 46
|           | (N)  Invalidity of Loan Documents                               | 46
|           | (O)  Failure of Security                                        | 46
|           | (P)  Damage, Strike, Casualty                                   | 46
|           | (Q)  Licenses and Permits                                       | 46
|           | (R)  Forfeiture                                                 | 47
|           | (S)  Default Under Plan and/or
    Confirmation Order           | 47
|           | (T)  Alteration or Revocation of
    Plan or Confirmation Order | 47
|           | (U)  Term Loan Documents                                        | 47
|           | (V)  Material Contracts                                         | 47
|8.2        | Suspension of Commitments                                       | 47
|8.3        | Acceleration                                                    | 47
|8.4        | Remedies                                                        | 48
|8.5        | Appointment of Attorney-in-Fact                                 | 48

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|8.6        | Limitation on Duty of Agents and Lenders with
    Respect to Collateral                | 49
|---------- | -------------------------------------------------------------------------------------- | --
|8.7        | Application of Proceeds                                                                | 49
|8.8        | License of Intellectual Property                                                       | 50
|8.9        | Waivers; Non-Exclusive Remedies                                                        | 50
|SECTION 9. | AGENT                                                                                  | 50
|9.1        | Agent                                                                                  | 50
|           | (A)  Appointment                                                                       | 50
|           | (B)  Nature of Duties                                                                  | 51
|           | (C)  Rights, Exculpation, Etc.                                                         | 51
|           | (D)  Reliance                                                                          | 52
|           | (E)  Indemnification                                                                   | 52
|           | (F)  Lenders Includes Agents                                                           | 52
|           | (G)  Successor Agent                                                                   | 52
|           | (1)  Resignation                                                                       | 52
|           | (2)  Appointment
    of Successor                                                      | 53
|           | (3)  Successor
    Agent                                                               | 53
|           | (H)  Collateral Matters                                                                | 53
|           | (1)  Release
    of Collateral                                                         | 53
|           | (2)  Confirmation
    of Authority; Execution of Releases                              | 53
|           | (3)  Absence
    of Duty                                                               | 54
|           | (I)  Agency for Perfection                                                             | 54
|           | (J)  Exercise of Remedies                                                              | 54
|9.2        | Notice of Default                                                                      | 55
|9.3        | Action by Agent                                                                        | 55
|9.4        | Amendments, Waivers and Consents                                                       | 55
|           | (A)  Percentage of Lenders Required                                                    | 55
|           | (B)  Specific Purpose or Intent                                                        | 55
|           | (C)  Failure to Give Consent;
    Replacement of Non-Consenting
           Lender      | 56
|9.5        | Assignments and Participations in Loans                                                | 56
|           | (A)  Assignments                                                                       | 56
|           | (B)  Participations                                                                    | 56
|           | (C)  No Relief of Obligations;
    Cooperation; Ability to Make LIBOR
           Loans | 57
|           | (D)  Security Interests; Assignment
    to Affiliates                                  | 57
|           | (E)  Recording of Assignments                                                          | 57
|9.6        | Set Off and Sharing of Payments                                                        | 58
|9.7        | Disbursement of Funds                                                                  | 58
|9.8        | Settlements, Payments and Information                                                  | 58
|           | (A)Revolving Advances and
    Payments; Fee Payments                                   | 58
|           | (1)  Fluctuation
    of Revolving Loan Balance                                         | 58

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|            | (2)  Settlement
    Dates                                               | 59
|----------- | ----------------------------------------------------------------------- | --
|            | (3)  Settlement
    Definitions                                         | 59
|            | (4)  Settlement
    Payments                                            | 59
|            | (B)  Return of Payments                                                 | 60
|            | (1)  Recovery
    after Non-Receipt of Expected Payment                 | 60
|            | (2)  Recovery
    of Returned Payment                                   | 60
|9.9         | Discretionary Advances                                                  | 60
|SECTION 10. | MISCELLANEOUS                                                           | 60
|10.1        | Expenses and Attorneys' Fees                                            | 60
|10.2        | Indemnity                                                               | 61
|10.3        | Notices                                                                 | 62
|10.4        | Survival of Representations and Warranties and
    Certain Agreements   | 63
|10.5        | Indulgence Not Waiver                                                   | 63
|10.6        | Marshaling; Payments Set Aside                                          | 63
|10.7        | Entire Agreement                                                        | 63
|10.8        | Severability                                                            | 63
|10.9        | Lenders' Obligations Several; Independent
    Nature of Lenders' Rights | 64
|10.10       | Headings                                                                | 64
|10.11       | APPLICABLE LAW                                                          | 64
|10.12       | Successors and Assigns                                                  | 64
|10.13       | No Fiduciary Relationship; No Duty; Limitation
    of Liabilities       | 64
|            | (A)  No Fiduciary Relationship                                          | 64
|            | (B)  No Duty                                                            | 64
|            | (C)  Limitation of Liabilities                                          | 64
|10.14       | CONSENT TO JURISDICTION                                                 | 65
|10.15       | WAIVER OF JURY TRIAL                                                    | 65
|10.16       | Construction                                                            | 65
|10.17       | Counterparts; Effectiveness                                             | 65
|10.18       | Confidentiality                                                         | 66
|10.19       | Publication                                                             | 66
|10.20       | Intercreditor Agreement                                                 | 66
|SECTION 11. | DEFINITIONS AND ACCOUNTING TERMS                                        | 66
|11.1        | Certain Defined Terms                                                   | 66
|11.2        | Accounting Terms                                                        | 83
|11.3        | Other Definitional Provisions                                           | 84

vii

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EXHIBITS
SCHEDULES
RIDERS













viii

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LOAN AND SECURITY AGREEMENT

This LOAN
AND SECURITY AGREEMENT is dated as of February 28, 2002 and entered into among SUN
HEALTHCARE GROUP, INC., a Delaware corporation (the "Company") and each direct
or indirect Subsidiary of the Company identified on the signature pages of this Agreement
as a borrower (individually "Borrower"; all Borrowers together with the Company,
collectively, "Borrowers"), the financial institution(s) listed on the signature
pages hereof, and their respective successors and Eligible Assignees (each a
"Lender" and, collectively, "Lenders"), CITICORP USA, INC., a Delaware
corporation (in its individual capacity as a Lender, "CITICORP", and in its
capacity as an administrative agent, "Administrative Agent"), and HELLER
HEALTHCARE FINANCE, INC., a Delaware corporation (in its individual capacity as a Lender,
"Heller", and in its capacity as a collateral agent "Collateral
Agent"; Administrative Agent and Collateral Agent, collectively, "Agents"
or "Joint Bookrunners").

RECITALS

WHEREAS,
on October 14, 1999, Borrowers filed voluntary petitions under Chapter 11 of the
Bankruptcy Code and became debtors in jointly administered Chapter 11 bankruptcy cases
pending in the United States Bankruptcy Court for the District of Delaware (the
"Bankruptcy Court") as Case No. 99-3657 (MFW) (Jointly Administered) (each a
"Case" and, collectively, the "Cases");

WHEREAS,
after a hearing held by the Bankruptcy Court on February 4-5, 2002 (the "Confirmation
Hearing"), and by its "Findings Of Fact, Conclusions Of Law, And Order Under
11 U.S.C. Section 1129(a) and (b) and Fed. R. Bankr. P. 3020 Confirming Debtors' Joint
Plan Of Reorganization" dated February 6, 2002 (the "Confirmation
Order"), the Bankruptcy Court confirmed the "Debtors' Joint Plan Of
Reorganization Under Chapter 11 Of The Bankruptcy Code", dated as of December 8,
2001 (as amended) (as confirmed by the Confirmation Order, the "Plan");

WHEREAS,
Borrowers desire that Lenders extend a revolving credit facility of up to ONE HUNDRED
FIFTY MILLION DOLLARS ($150,000,000.00), in accordance with the material terms of the term
sheet entered into evidence at the Confirmation Hearing and approved by the Bankruptcy
Court in the Confirmation Order, to enable Borrowers to fund their obligations under the
Plan and to provide working capital financing funds for other general corporate purposes;
and

WHEREAS,
to secure Borrowers' obligations under the Loan Documents, Borrowers shall grant to
Collateral Agent, for the benefit of the Agents and Lenders, a first priority security
interest in and lien upon all of Borrowers' personal property (except the SunScript Stock,
as to which Borrower shall grant a second priority security interest and lien) and certain
of the Borrowers' real property.

NOW,
THEREFORE, in consideration of the premises and the agreements, provisions and covenants
herein contained, Borrowers, Agents and Lenders agree as follows:

SECTION 1. DEFINITIONS AND ACCOUNTING TERMS

1.1     Certain
Defined Terms. Capitalized terms not otherwise defined in this Agreement and the
accounting terms used in this Agreement shall have the meanings set forth in Section 11 of
this Agreement.

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1.2     Interpretation.

(A)     The
definitions in this Agreement shall apply equally to both the singular and plural forms of
the terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. All references herein to Articles,
Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of,
and Exhibits and Schedules to, this Agreement unless the context shall otherwise require.

(B)     Except
as otherwise expressly provided herein, all terms of an accounting or financial nature
shall be construed in accordance with GAAP, as in effect from time to time.

SECTION 2. LOANS AND COLLATERAL

2.1     Revolving
Credit Facility.

(A)     Revolving
Loan.

(1)     Each
Lender, severally, but not jointly, agrees to lend to Borrowers from time to time such
Lender's Pro Rata Share of each advance under the Revolving Loan Commitment. The aggregate
amount of the Revolving Loan Commitment shall not exceed at any time ONE HUNDRED FIFTY
MILLION DOLLARS ($150,000,000). Subject to subsection 2.1(A)(2), amounts borrowed under
this Agreement may be borrowed, repaid and reborrowed at any time prior to the Termination
Date.

(2)     The
Borrowers may elect to permanently reduce or partially terminate the Revolving Loan
Commitment by written notice to the Agents and payments of any amounts due in accordance
with subsection 2.3(C). In addition, the Borrowers may at any time prepay amounts owing
pursuant to this Agreement, with no corresponding reduction or termination of the
Revolving Loan Commitment, in which case all such prepaid amounts may be reborrowed by the
Borrowers in accordance with the terms of this Agreement.

(3)     Each
of the Borrowers, jointly and severally, will be obligated in respect of the aggregate
principal amount of all Loans, and the aggregate amount of credit available hereunder to
any of the Borrowers at any time shall be determined taking into account all Loans
outstanding and all outstanding Lender Letters of Credit, regardless of which of the
Borrowers may have received the proceeds of the Loans or the benefit of any of the Lender
Letters of Credit. By executing this Agreement, each of the Borrowers confirms to the
other parties to this Agreement that the Company shall (and has been duly appointed by
each of the Borrowers to) act as agent for the Borrowers for all purposes of the Loan
Documents, including, without limitation, (i) requesting Loans, (ii) requesting
the issuance of Lender Letters of Credit, (iii) allocating (to the extent permitted
herein) the proceeds of Loans, and (iv) taking any other action or receiving any
communication on behalf of such Borrower in connection with the Loan Documents. Each of
the Lenders and the Agents shall be entitled to deal with any Borrower through the Company
and to rely on any instructions or other communications from the Company on behalf of any
Borrower. None of the Lenders or Agents shall have any responsibility to any Borrower for
dealing with the Borrowers as provided in this subsection 2.1(A)(3), and the Obligations
of each of the Borrowers to the Lenders shall not be affected by any matter relating to
acts or omissions of the Company relating to the Loans, requests for Lender Letters of
Credit or otherwise as agent for the

2

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Borrowers hereunder. Notwithstanding the appointment of the Company as
agent for the Borrowers hereunder, the Agents and the Lenders shall in their sole
discretion be entitled to deal directly with any Borrower for all purposes of the Loan
Documents.

(B)     Borrowing
Base. Except as otherwise provided herein, no Lender shall have any obligation to make a
Revolving Advance to the extent such Revolving Advance would cause the Revolving Loans
(after giving effect to any immediate application of the proceeds of such Revolving
Advance) to exceed the Maximum Revolving Loan Amount.

"Maximum
Revolving Loan Amount" means, as of any date of determination, the lesser of (a) the
Revolving Loan Commitments of all Lenders less the sum of the Letter of Credit Reserve and
(b) the Borrowing Base less the sum of the Letter of Credit Reserve.

"Borrowing
Base" shall mean on any day an amount that is equal to the sum of
(a) eighty-five percent (85%) of the then outstanding Eligible Accounts plus
(b) the lesser of (1) $10,000,000 and (2) fifty percent (50%) of the aggregate
value of Eligible Inventory, less (c) such reserves as the Agents, in their
reasonable business discretion, may deem appropriate from time to time, including, without
limitation, reserves with respect to all recoupments and overpayments whether or not
disclosed pursuant to subsection 4.23.

(C)     Eligible
Collateral.

"Eligible
Accounts" shall mean the net aggregate amount of the Accounts of Borrowers that
(1) are generated in the ordinary course of business of the Borrowers arising or
resulting from the sale of goods or the rendition of Medical Services, (2) conform to
the representations, warranties and covenants contained herein and (3) at all times
continue to be acceptable to Collateral Agent, less, without duplication, the sum
of the following: (i) any Account or any portion of an Account that is payable
(A) by an individual beneficiary, recipient or subscriber and not directly to a
Borrower by a Medicaid/Medicare Account Debtor, an insurer, a managed care organization or
the Veterans Administration or (B) by an Insurer that is not acceptable to Collateral
Agent in its sole discretion; (ii) any Account that remains unpaid more than the
Exclusion Level Number of Days (as defined below) past the claim or invoice date;
(iii) any Account that is subject to any defense, set-off, counterclaim, deduction,
discount, credit, chargeback, freight claim, allowance, or adjustment of any kind (whether
issued, owing, granted or outstanding); (iv) any Account arising from a sale of
goods, if (A) any of such goods have been returned, rejected, lost, or damaged or
have not been shipped to the Account Debtor or its designee or (B) the sale was not
an absolute sale, or the sale was made on consignment or on approval or on a
sale-or-return basis, or the sale was made subject to any other repurchase or return
agreement; (v) any Account arising from the performance of services, if the services
have not been actually performed or the services were undertaken in violation of any law;
(vi) any Account that is subject to a Lien other than those certain Permitted
Encumbrances described in clauses (a), (b), (c), (d), (g) and (i) of the definition of
Permitted Encumbrances; (vii) except to the extent the Account Debtor is acceptable
to Collateral Agent in its sole discretion, any Account due from an Account Debtor that is
(A)  the debtor in any bankruptcy, insolvency, arrangement, reorganization,
receivership or similar proceedings under any federal or state law, (B) negotiating,
or has called a meeting of its creditors for purposes of negotiating, a compromise of its
debts or (C) financially unacceptable to Collateral Agent or has a credit rating
unacceptable to Collateral Agent; (viii) any Account that is evidenced by chattel
paper or an instrument of any kind, or that has been reduced to judgment; (ix) any
Account due from an Account Debtor with a

3

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principal place of business or chief executive office outside the
United States; (x) any Account due from an Account Debtor that is an Affiliate or
Subsidiary of any Borrower; (xi) all Accounts due from any Account Debtor other than
a Medicaid/Medicare Account Debtor if (A) fifty percent (50%) or more of the Accounts
due from such Account Debtor are not Eligible Accounts at the relevant time or
(B) twenty percent (20%) of the aggregate Dollar amount of all Accounts due from such
Account Debtor are unpaid more than the Exclusion Level Number of Days from the invoice
date; (xii) all of the Accounts due from any Account Debtor other than a
Medicaid/Medicare Account Debtor, if such Accounts exceed twenty percent (20%) of the net
amount of all Eligible Accounts at the time (including Medicaid/Medicare Account Debtors);
(xiii) any Account or any portion of an Account arising from the performance of
Medical Services performed by or for any Borrower prior to the transfer or other
disposition of, or of the management of, any of its Facilities or lease or other interest
therein, unless Collateral Agent, in its sole discretion is satisfied that the terms of
such transfer or disposition are sufficiently protective of the interests of the Agents
and the Lenders in such Account that such Accounts may continue to be considered for
purposes of the Borrowing Base; (xiv) contras; and (xv) such reserves as the
Agents (in their reasonable business discretion) may deem appropriate from time to time.
For purposes of the foregoing, "Exclusion Level Number of Days" shall mean, in
relation to Accounts for Medical Services, accounts aged less than or equal to the number
of days specified below for the Facilities in the business segments of the Facilities
identified below, and in relation to all other Accounts, ninety (90) days:

SunBridge
- 120 days
                       SunDance
- 120 days
                       SunScript
- 60 days

"Eligible
Inventory" shall mean, at any time, the gross amount of the inventory of the
Borrowers that conforms to the representations, warranties and covenants contained herein
and continues to be acceptable to Collateral Agent in its reasonable discretion, less
any (1) work-in-progress, (2) supplies other than raw material, (3) goods
not present in one of the locations identified in Schedule 2.01,
(4) goods that are not, or within six (6) months will cease to be, salable in
accordance with generally accepted criteria applicable to such goods at the time,
(5) goods returned or rejected by the customers of any Borrower other than goods that
are undamaged and resalable in the ordinary course of business, (6) goods to be
returned to the suppliers of any Borrower, (7) goods in transit to third parties
(other than the agents or any such distribution center) and (8) reserves as the
Collateral Agent, in its reasonable business discretion, may deem appropriate from time to
time. Eligible Inventory shall be valued at the lower of cost or market on a first-in
first-out basis or another basis acceptable to Collateral Agent in its sole discretion.

(D)     Borrowing
Mechanics. (1) LIBOR Loans made on any Funding Date shall be in an aggregate minimum
amount of $1,000,000 and integral multiples of $100,000 in excess of such amount. (2) On
any day when any Borrower desires a Revolving Advance under this subsection 2.1, such
Borrower shall give Administrative Agent written or telephonic notice of the proposed
borrowing by 12:00 p.m. (noon) New York time on the Funding Date of a Base Rate Loan less
than $10,000,000, written or telephonic notice by 12:00 p.m. (noon) New York time one (1)
Business Day prior to the Funding Date of a Base Rate Loan equal to or greater than
$10,000,000, and three (3) Business Days in advance of the Funding Date of a LIBOR Loan,
which notice shall specify the proposed Funding Date (which shall be a Business Day),
whether such Loans shall consist of Base Rate Loans or LIBOR Loans, and, for LIBOR Loans,
the Interest Period applicable thereto. Any such telephonic notice shall be confirmed with
a Notice of Borrowing on the same day as such request. Neither Administrative Agent

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nor Lender shall incur any liability to any Borrower for acting upon
any telephonic notice or a Notice of Borrowing that Administrative Agent believes in good
faith to have been given by a duly authorized officer or other person authorized to borrow
on behalf of such Borrower or for otherwise acting in good faith under this subsection
2.1(D). Neither Administrative Agent nor Lender will be required to make any advance
pursuant to any telephonic or written notice or a Notice of Borrowing, unless all of the
terms and conditions set forth in Section 3 (including the Conditions Rider, attached
hereto and made a part hereof, have been satisfied and Administrative Agent has also
received the most recent Borrowing Base Certificate and other documents required under
Section 5 and the Reporting Rider, attached hereto and made a part hereof, by 12:00 p.m.
(noon) New York time on or prior to the date of such funding request. Each Advance shall
be deposited by wire transfer in immediately available funds in such account as such
Borrower may from time to time designate to Administrative Agent in writing. The becoming
due of any amount required to be paid under this Agreement or any of the other Loan
Documents as principal, Lender Letter of Credit reimbursement obligation, accrued
interest, fees, compensation or any other amounts shall be deemed irrevocably to be an
automatic request by Borrowers for a Revolving Advance, which shall be a Base Rate Loan on
the due date of, and in the amount required to pay (as set forth on Agent's books and
records), such principal, Lender Letter of Credit reimbursement obligation, accrued
interest, fees, compensation or any other amounts unless such amount shall have been paid
by Borrowers on or prior to the date thereof.

(E)     Payments
with Respect to the Settlement Agreement. If an Event of Default exists and during such
time a default under the Settlement Agreement shall exist, thereafter Lenders shall have
the right, but not the obligation, exercisable in their sole and absolute discretion, to
make Revolving Advances at the time and in the amounts of the payments Borrowers are
obligated to make under the Settlement Agreement, and to deliver the proceeds of any such
Revolving Advance directly to the payees under the Settlement Agreement. Any Revolving
Advances made by Lenders under this subsection 2.1 (E) shall be treated for all
purposes as a Revolving Advance under this Agreement. Lender's rights under this
subsection 2.1 (E) are in addition to, and do not affect or limit, any of the other
rights of Lenders or the obligations of Borrowers under this Agreement.

(F)     Notes.
Borrowers shall execute and deliver to each Lender Notes with appropriate insertions to
evidence such Lender's Commitments. In the event of an assignment under subsection 9.5,
Borrowers shall, upon surrender and cancellation of the assigning Lender's Notes, issue
new Notes to reflect the interest held by the assigning Lender and its Eligible Assignee.

(G)     Letters
of Credit. The Revolving Loan Commitments may, in addition to Revolving Advances, be
utilized, upon the request of any Borrower, for (1) the issuance of Letters of Credit by
Administrative Agent or its Affiliates, or (2) the issuance by Administrative Agent of
risk participations to banks to induce such banks to issue Bank Letters of Credit for the
account of such Borrower (each of (1) and (2) above a "Lender Letter of
Credit"). Each Lender shall be deemed to have purchased a participation in each
Lender Letter of Credit issued on behalf of any Borrower in an amount equal to its Pro
Rata Share thereof. In no event shall any Lender Letter of Credit be issued to the extent
that the issuance of such Lender Letter of Credit would cause the sum of the Letter of
Credit Reserve (after giving effect to such issuance), plus the Revolving Loan to exceed
the lesser of (1) the Borrowing Base and (2) the Revolving Loan Commitments.

(1)     Maximum
Amount. The aggregate amount of Letter of Credit Liability with respect to all Lender
Letters of Credit outstanding at any time shall not exceed $50,000,000.

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(2)     Reimbursement.
Borrowers shall be irrevocably and unconditionally obligated forthwith without
presentment, demand, protest or other formalities of any kind, to reimburse Administrative
Agent or the issuer for any amounts paid with respect to a Lender Letter of Credit
including all fees, costs and expenses paid to any bank that issues a Bank Letter of
Credit. Each Borrower hereby authorizes and directs Administrative Agent, at
Administrative Agent's option, to debit such Borrower's account (by increasing the
Revolving Loan) in the amount of any payment made with respect to any Lender Letter of
Credit. In the event that Administrative Agent elects not to debit such Borrower's account
and such Borrower fails to reimburse Administrative Agent in full on the date of any
payment under a Lender Letter of Credit, Administrative Agent shall promptly notify each
Lender of the unreimbursed amount of such payment together with accrued interest thereon
and each Lender, on the next Business Day, shall deliver to Administrative Agent an amount
equal to its respective participation in same day funds. The obligation of each Lender to
deliver to Administrative Agent an amount equal to its respective participation pursuant
to the foregoing sentence shall be absolute and unconditional and such remittance shall be
made notwithstanding the occurrence or continuation of an Event of Default or Default or
the failure to satisfy any condition set forth in Section 3. In the event any Lender fails
to make available to Administrative Agent the amount of such Lender's participation in
such Lender Letter of Credit, Administrative Agent shall be entitled to recover such
amount on demand from such Lender together with interest on such amount calculated at the
Base Rate.

(3)     Request
for Letters of Credit. Any Borrower desiring the issuance of a Letter of Credit shall give
Administrative Agent at least two (2) Business Days prior notice specifying the date a
Lender Letter of Credit is to be issued, identifying the beneficiary and describing the
nature of the transactions proposed to be supported thereby. The notice shall be
accompanied by the form of the Letter of Credit being requested. Any Letter of Credit
which such Borrower requests must be in such form, be for such amount, contain such terms
and support such transactions as are reasonably satisfactory to Administrative Agent. The
expiration date of each Lender Letter of Credit shall be on a date which is at least
thirty (30) days prior to the Termination Date, unless otherwise agreed to by
Administrative Agent.

(4)     Renewal.
Except for any letters of credit outstanding on the Closing Date, no Lender Letter of
Credit or Bank Letter of Credit may be issued containing any provision allowing for
automatic renewal unless the provisions of subsection 5.11 shall have been met.

(H)     Other
Letter of Credit Provisions.

(1)     Obligations
Absolute. The obligation of any Borrower to reimburse Administrative Agent or any Lender
for payments made under, and other amounts payable in connection with, any Lender Letter
of Credit shall be unconditional and irrevocable and shall be paid under all circumstances
strictly in accordance with the terms of this Agreement including, without limitation, the
following circumstances:

(a)     any
lack of validity or enforceability of any Lender Letter of Credit, or any other agreement;

(b)     the
existence of any claim, set-off, defense or other right which Borrower, any of its
Subsidiaries or Affiliates or any other Person may at any time have against any
beneficiary or

6

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transferee of any Lender Letter of Credit (or any Persons for whom any
such transferee may be acting), Agents, any Lender, Issuing Lender, or any other Person,
whether in connection with this Agreement, any other Loan Document, or any other related
or unrelated agreements or transactions;

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

(d)     any
adverse change in the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Borrowers or any of their Subsidiaries;

(e)     any
breach of this Agreement or any other Loan Document by any party thereto;

(f)     the
occurrence and continuance of an Event of Default (it being understood and agreed that any
such payment by the Borrowers of their obligations hereunder in respect of any such Lender
Letter of Credit shall be without prejudice to, and shall not constitute a waiver of, any
rights any of the Borrowers may have or may acquire against the issuer or the beneficiary
of such Lender Letter of Credit); or

(g)     payment
under any Lender Letter of Credit against presentation of a demand, draft or certificate
or other document which does not comply with the terms of such Lender Letter of Credit;
provided that, in the case of any such payment by Administrative Agent or a Lender under
any Lender Letter of Credit, Administrative Agent or such Lender has not acted with gross
negligence or willful misconduct in determining that the demand for payment under such
Lender Letter of Credit complies on its face with any applicable requirements for a demand
for payment under such Lender Letter of Credit.

(2)     Nature
of Lender's Duties. As between any Lender that issues a Lender Letter of Credit (an
"Issuing Lender"), on the one hand, and all Lenders on the other hand, all
Lenders assume all risks of the acts and omissions of, or misuse of any Lender Letter of
Credit by the beneficiary thereof. In furtherance and not in limitation of the foregoing,
neither Agents nor any Issuing Lender shall be responsible: (a) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document by any party in
connection with the application for and issuance of any Lender Letter of Credit, even if
it should in fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (b) for the validity or sufficiency of any instrument transferring
or assigning or purporting to transfer or assign any Lender Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (c) for failure of the beneficiary of any Lender
Letter of Credit to comply fully with conditions required in order to demand payment
thereunder; provided that, in the case of any payment under any such Lender Letter of
Credit, any Issuing Lender has not acted with gross negligence or willful misconduct in
determining that the demand for payment under any such Lender Letter of Credit complies on
its face with any applicable requirements for a demand for payment thereunder; (d) for
errors, omissions, interruptions or delays in transmission or delivery of any messages, by
mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (e) for
errors in interpretation of technical terms; (f) for any loss or delay in the transmission
or otherwise of any document required in order to make a payment under any such Lender
Letter of Credit; (g) for the credit

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of the proceeds of any drawing under any such Lender Letter of Credit;
and (h) for any consequences arising from causes beyond the control of Agents or any
Lender as the case may be.

(3)     Liability.
In furtherance and not in limitation of the specific provisions hereinabove set forth, any
action taken or omitted by either Administrative Agent or any Lender under or in
connection with any Lender Letter of Credit, if taken or omitted in good faith (and not as
a result of gross negligence or willful misconduct of the Administrative Agent or such
Lender), shall not put Administrative Agent or any Lender under any resulting liability to
Borrowers or any other Lender.

(I)     Availability
of a Lender's Pro Rata Share

(1)     Lender's
Amounts Available on a Funding Date. Unless Administrative Agent receives written notice
from a Lender on or prior to any Funding Date that such Lender will not make available to
Administrative Agent as and when required such Lender's Pro Rata Share of any requested
Loan or Advance, Administrative Agent may assume that each Lender will make such amount
available to Administrative Agent in immediately available funds on the Funding Date and
Administrative Agent shall, in reliance upon such assumption, make available to the
requesting Borrower(s) on such date a corresponding amount.

(2)     Lender's
Failure to Fund. A Defaulting Lender shall pay interest to Administrative Agent at the
Federal Funds Effective Rate on the Defaulted Amount from the Business Day following the
applicable Funding Date of such Defaulted Amount until the date such Defaulted Amount is
paid to Administrative Agent. A notice of Administrative Agent submitted to any Lender
with respect to amounts owing under this subsection shall be conclusive, absent manifest
error. If such amount is not paid when due to Administrative Agent, Administrative Agent,
at its option, may notify Borrowers of such failure to fund and, in the event that
Administrative Agent shall have funded such Defaulted Amount on behalf of such defaulting
Lender, upon demand by Administrative Agent, Borrowers shall pay such Lenders unpaid
amount to Administrative Agent for Administrative Agent's account, together with interest
thereon for each day elapsed since the date of such borrowing, at a rate per annum equal
to the interest rate applicable at the time to the Loan made by the other Lenders on such
Funding Date. The failure of any Lender to make available any portion of its Commitment on
any Funding Date or to fund its participation in a Lender Letter of Credit shall not
relieve any other Lender of any obligation hereunder to fund such Lender's Commitment on
such Funding Date or to fund any such participation, but no Lender shall be responsible
for the failure of any other Lender to honor its Commitment on any Funding Date or to fund
any participation to be funded by any other Lender.

(3)     Payments
to a Defaulting Lender. Notwithstanding any provision to the contrary contained in this
Agreement or the other Loan Documents, Administrative Agent shall not be obligated to
transfer to a Defaulting Lender any payment made by Borrowers to Administrative Agent or
any amount otherwise received by Administrative Agent for application to the Obligations
nor shall a Defaulting Lender be entitled to the sharing of any interest, fees or payments
hereunder.

(4)     Defaulting
Lender's Right to Vote. Notwithstanding any provision to the contrary contained in this
Agreement or the other Loan Documents for purposes of voting or consenting to matters with
respect to (a) the Loan Documents or (b) any other matter concerning the Loans, a
Defaulting Lender shall be deemed not to be a "Lender" and such Lender's
Commitments and outstanding Loans and Advances shall be deemed to be zero.

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(J)     Pricing
and Structural Changes Required for Syndication. Notwithstanding anything to the contrary
set forth herein (but subject to compliance with Section 3.1 of the Intercreditor
Agreement), Joint Bookrunners may change pricing, terms or make structural changes to the
Loans and this Agreement (without affecting the total amount of Commitments hereunder)
within one hundred twenty (120) days after the Closing Date if Joint Bookrunners determine
that such changes are reasonably required in order to ensure successful syndication of the
credit facility on terms that are acceptable to Joint Bookrunners, and each Borrower
agrees to execute such amendments and other agreements as Joint Bookrunners may request to
modify this Agreement for such purposes; provided, however, that (i) no such
change shall reduce the maximum aggregate amount of the Revolving Loan Commitment as set
forth in subsection 2.1(A) and (ii) no such change shall increase the Base Rate Margin or
the LIBOR Margin by more than one-half of one percent (0.50%) per annum or require the
payment of additional fees.

2.2     Interest.

(A)     Rate
of Interest. From the date the Loans are made and the date the other Obligations become
due the Loans and the other Obligations shall bear interest at the applicable rates set
forth below (collectively, the "Interest Rate"):

(1)     The
Revolving Loan and all other Obligations for which no other interest rate is specified
shall bear interest as follows:

(a)     If
a Base Rate Loan, then at the sum of the Base Rate plus the Base Rate Margin applicable to
Revolving Loans.

(b)     If
a LIBOR Loan, then at the sum of the LIBOR plus the LIBOR Margin applicable to Revolving
Loans.

All
Loans made on the Closing Date shall be either Base Rate Loans or LIBOR Loans with an
Interest Period of one (1) month, and shall remain so until the earlier of ninety (90)
days after the Closing Date or the date Collateral Agent notifies Borrowers that it has
completed the primary syndication of the Loans. Thereafter, subject to the provisions of
subsection 2.1(D), Borrowers shall designate to Administrative Agent whether a Loan shall
be a Base Rate or LIBOR Loan at the time a Notice of Borrowing is given pursuant to
subsection 2.1(D). Such designation by Borrowers may be changed from time to time pursuant
to subsection 2.2(D). If on any day a Loan or a portion of any Loan is outstanding with
respect to which notice has not been delivered to Administrative Agent in accordance with
the terms of this Agreement specifying the basis for determining the rate of interest or
if LIBOR has been specified and no LIBOR quote is available, then for that day that Loan
or portion thereof shall bear interest determined by reference to the Base Rate.

"Base
Rate Margin" shall mean (1) as of the Closing Date, two and three-quarters percent
(2.75%) per annum, and (2) thereafter, as of September 30, December 31, March 31,
June 30 of each year (each, an "Adjustment Date"), commencing on
September 30, 2002, the Base Rate Margin shall be adjusted, if necessary, to the
applicable percent per annum set forth in the pricing table set forth on Schedule 2.2(A)
hereto corresponding to the Total Indebtedness to EBITDA Ratio for the trailing twelve
(12) month period ending on the last day of the most recently completed calendar quarter
prior to the

9

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applicable Adjustment Date (each such period, a "Calculation
Period") calculated in the manner described in the Financial Covenants Rider, hereto
attached and made a part hereof.

"LIBOR
Margin" shall mean (1) as of the Closing Date, three and three-quarters percent
(3.75%) per annum, and (2) thereafter, as of each Adjustment Date, commencing on
September 30, 2002, the LIBOR Margin shall be adjusted, if necessary, to the
applicable percent per annum set forth in the pricing table set forth on Schedule 2.2(A)
hereto corresponding to the Total Indebtedness to EBITDA Ratio for the applicable
Calculation Period.

If
Borrowers shall fail to deliver a Compliance and Pricing Certificate within ten (10)
Business Days of the date required pursuant to the Reporting Rider, effective as of the
tenth (10th) Business Day following the date on which such Compliance and
Pricing Certificate was due pursuant to the Reporting Rider, each applicable Base Rate
Margin and each applicable LIBOR Margin shall be conclusively presumed to equal the
highest applicable Base Rate Margin and the highest applicable LIBOR Margin specified in
the pricing table set forth on Schedule 2.2(A) hereto until the date of
receipt by the Agents of the Compliance and Pricing Certificate.

After
the occurrence and during the continuance of an Event of Default (1) the Loans and all
other Obligations shall, at the election of Administrative Agent or Requisite Lenders,
bear interest at a rate per annum equal to two percent (2%) plus the applicable Interest
Rate (the "Default Rate"), (2) each LIBOR Loan shall automatically convert to a
Base Rate Loan at the end of any applicable Interest Period and (3) no Loans may be
converted to LIBOR Loans. If an Event of Default has occurred and is continuing on an
Adjustment Date, no reduction in the Base Rate Margin or LIBOR Margin shall occur on such
Adjustment Date.

(B)     Computation
and Payment of Interest. Interest on the Loans and all other Obligations shall be computed
on the daily principal balance on the basis of a three hundred sixty (360) day year for
the actual number of days elapsed. In computing interest on any Loan, the date of funding
of the Loan or the first day of an Interest Period applicable to such Loan or, with
respect to a Base Rate Loan being converted from a LIBOR Loan, the date of conversion of
such LIBOR Loan to such Base Rate Loan, shall be included; and the date of payment of such
Loan or the expiration date of an Interest Period applicable to such Loan, or with respect
to a Base Rate Loan being converted to a LIBOR Loan, the date of conversion of such Base
Rate Loan to such LIBOR Loan, shall be excluded; provided that if a Loan is repaid on the
same day on which it is made, one (1) day's interest shall be paid on that Loan. Interest
on Base Rate Loans and all other Obligations other than LIBOR Loans shall be payable to
Administrative Agent for the benefit of Lenders monthly in arrears on the first day of
each month, on the date of any prepayment of Loans, and at maturity, whether by
acceleration or otherwise. Interest on LIBOR Loans shall be payable to Administrative
Agent for the benefit of Lenders on the last day of the applicable Interest Period for
such Loan, on the date of any prepayment of the Loans, and at maturity, whether by
acceleration or otherwise.

(C)     Interest
Laws. Notwithstanding any provision to the contrary contained in this Agreement or any
other Loan Document, Borrowers shall not be required to pay, and neither Agent nor any
Lender shall be permitted to collect, any amount of interest in excess of the maximum
amount of interest permitted by applicable law ("Excess Interest"). If any
Excess Interest is provided for or determined by a court of competent jurisdiction to have
been provided for in this Agreement or in any other Loan Document, then in such event:
(1) the provisions of this subsection shall govern and control;

10

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(2) Borrowers shall not be obligated to pay any Excess Interest;
(3) any Excess Interest that Administrative Agent or any Lender may have received
hereunder shall be, at such Lender's option, (a) applied as a credit against the
outstanding principal balance of the Obligations or accrued and unpaid interest (not to
exceed the maximum amount permitted by law), (b) refunded to the payor thereof, or
(c) any combination of the foregoing; (4 ) the interest rate(s) provided for
herein shall be automatically reduced to the maximum lawful rate allowed from time to time
under applicable law (the "Maximum Rate"), and this Agreement and the other Loan
Documents shall be deemed to have been and shall be, reformed and modified to reflect such
reduction; and (5) no Borrowers shall have any action against any Agent or any Lender
for any damages arising out of the payment or collection of any Excess Interest.
Notwithstanding the foregoing, if for any period of time interest on any Obligations is
calculated at the Maximum Rate rather than the applicable rate under this Agreement, and
thereafter such applicable rate becomes less than the Maximum Rate, the rate of interest
payable on such Obligations shall remain at the Maximum Rate until each Lender shall have
received the amount of interest which such Lender would have received during such period
on such Obligations had the rate of interest not been limited to the Maximum Rate during
such period.

(D)     Conversion
or Continuation. Subject to the other provisions of this Agreement, including, without
limitation, satisfying the Conditions set forth in Section 3, Borrowers shall have the
option to (1) convert at any time all or any part of outstanding Loans equal to $1,000,000
and integral multiples of $100,000 in excess of that amount from Base Rate Loans to LIBOR
Loans or (2) upon the expiration of any Interest Period applicable to a LIBOR Loan, to (a)
continue all or any portion of such LIBOR Loan equal to $1,000,000 and integral multiples
of $100,000 in excess of that amount as a LIBOR Loan or (b) convert all or any
portion of such LIBOR Loan to a Base Rate Loan. The succeeding Interest Period(s) of such
continued or converted Loan shall commence on the last day of the Interest Period of the
Loan to be continued or converted; provided that no outstanding Loan may be continued as,
or be converted into, a LIBOR Loan, when any Event of Default or Default has occurred and
is continuing.

Borrowers
shall deliver a Notice of Borrowing with respect to any such conversion/continuation to
Administrative Agent no later than 12 p.m. (noon) New York time at least three (3)
Business Days in advance of the proposed conversion/continuation date. The Notice of
Borrowing with respect to such conversion/continuation shall certify: (1) the proposed
conversion/continuation date which shall be a Business Day; (2) the amount of the Loan to
be converted/continued; (3) the nature of the proposed conversion/continuation; (4) in the
case of conversion to, or a continuation of, a LIBOR Loan, the requested Interest Period;
(5) that no Default or Event of Default has occurred and is continuing or would result
from the proposed conversion/continuation; and (6) that all conditions to make Loans as
set forth in Section 3 and in the Conditions Rider have been satisfied.

In
lieu of delivering a Notice of Borrowing with respect to any such conversion/continuation,
the Company may give Administrative Agent telephonic notice by the required time of any
proposed conversion/continuation under this subsection 2.2(D) (in such telephonic notice
such Borrower shall certify to the items set forth above with respect to the Notice of
Borrowing); provided that such telephonic notice shall be promptly confirmed in writing by
delivery of a Notice of Borrowing (in form and substance described herein) with respect to
such conversion/continuation to Administrative Agent on or before the proposed
conversion/continuation date. Once given, such Borrower shall be bound by such telephonic
notice. Upon the expiration of an Interest Period for a LIBOR Loan, in the absence of a
new

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Notice of Borrowing or a telephonic notice submitted to Administrative
Agent not less than three (3) Business Days prior to the end of such Interest Period, the
LIBOR Loan then maturing shall be automatically converted to a Base Rate Loan.

No
Agent or any Lender shall incur any liability to any Borrower in acting upon any
telephonic notice or a Notice of Borrowing referred to above that Administrative Agent
believes in good faith to have been given by an officer or other person authorized to act
on behalf of such Borrower or for otherwise acting in good faith under this subsection
2.2(D).

2.3     Fees.

(A)     Unused
Line Fee. Borrowers shall pay to Agent, for the benefit of Lenders, an annual fee in an
amount equal to the Unused Daily Balance multiplied by one-half of one percent (0.50%) per
annum. Such fee shall be calculated on the basis of a three hundred sixty (360) day year
for the actual number of days elapsed and shall be payable monthly in arrears on the first
day of each month following the Closing Date.

(B)     Letter
of Credit Fees. Borrowers shall pay to Administrative Agent a fee with respect to the
Lender Letters of Credit (1) for the benefit of all Lenders with a Revolving Loan
Commitment (based on their respective Pro Rata Share) in the amount of the average daily
amount of Letter of Credit Liability outstanding during such month multiplied by three and
one-half percent (3.50%) per annum,until the first Adjustment Date and thereafter
by the applicable percentage specified as the "Letter of Credit Fee Rate" in the
pricing table on Schedule 2.2(A) hereto as in effect on the date on which the
fee is payable and (2) for the account of Administrative Agent a fronting fee for each
Lender Letter of Credit issued or obtained by Administrative Agent from the date of
issuance to the date of termination equal to the average daily amount of Letter of Credit
Liability with respect to such Lender Letters of Credit outstanding during such month
multiplied by one-half of one percent (0.50%) per annum. Such fees will be calculated on
the basis of a three hundred sixty (360) day year for the actual number of days elapsed
and will be payable monthly in arrears on the first day of each month. Borrowers shall
also reimburse Administrative Agent for any and all fees and expenses, if any, paid by
Administrative Agent or any Lender to the issuer of any Bank Letter of Credit.

(C)     Prepayment
Fees. If Borrowers prepay the Obligations and permanently reduce or partially terminate
the Revolving Loan Commitment pursuant to and in accordance with subsection 2.1(A)(2)
prior to the end of the second Loan Year, then at the time of such prepayment and
permanent reduction or partial termination, as the case may be, Borrowers shall pay to the
Administrative Agent, for the benefit of all Lenders with an outstanding principal balance
due or Commitment outstanding under the Loan being prepaid at the time of such prepayment,
as compensation for the costs of being prepared to make funds available to Borrowers under
this Agreement, and not as a penalty, an amount determined by multiplying the amount of
the Revolving Loan Commitment that is then being permanently reduced or terminated on such
date by two percent (2%) upon such termination or reduction during the first Loan Year;
and one percent (1%) upon such termination or reduction during the second Loan Year.

(D)     Collateral
Management and Administrative Agent Fees.

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(1)     Borrowers
shall pay to Collateral Agent, for its own account, a fully earned, nonrefundable
collateral management fee in an amount equal to FOUR HUNDRED THOUSAND DOLLARS ($400,000)
per annum (the "Collateral Management Fee"). Such Collateral Management Fee
shall be payable in twelve (12) equal monthly installments in advance beginning on the
Closing Date, next on April 1, 2002 and thereafter on the first (1st) day of
each calendar month until all of the Obligations shall have been paid in full and the
Revolving Loan Commitment shall have been completely terminated in accordance with the
provisions of this Agreement.

(2)     Borrowers
shall pay to Administrative Agent, for the account of Administrative Agent, an annual fee
in an amount equal to ONE HUNDRED THOUSAND DOLLARS ($100,000) per annum (the
"Administrative Agent Fee"). Such Administrative Agent Fee shall be paid
annually in advance beginning on the Closing Date and thereafter on each anniversary of
the Closing Date until all Obligations shall have been paid in full and the Revolving Loan
Commitment shall have been completely terminated in accordance with the provisions of this
Agreement.

(E)     Audit
Fees. Borrowers agree to pay all reasonable out-of-pocket expenses of Collateral Agent and
any firm or individual(s) engaged by Collateral Agent in connection with any audit of
Borrowers' operations or records undertaken pursuant to this Agreement.

(F)     Other
Fees and Expenses. Borrowers shall pay to Administrative Agent, for its own account, all
charges for returned items and all other bank charges incurred by Administrative Agent, as
well as Administrative Agent's standard wire transfer charges for each wire transfer made
under this Agreement.

(G)     Fee
Letter. Borrowers shall pay to Heller and CITICORP, each individually, the fees specified
in that certain letter agreement, dated on or about February 27, 2002, by and among
the Company, the Collateral Agent and the Administrative Agent in the amounts and at the
times specified therein.

2.4     Payments
and Prepayments.

(A)     Matters
Relating to Cash Management.

(1)     Borrowers
shall establish and maintain at their expense the following accounts, which Borrowers
hereby represent are in existence as of the Closing Date:

(a)     depository
accounts into which collections of Accounts of any Facility are paid directly or deposited
manually by any Borrower (collectively, the "Facility Deposit Accounts"), which
Facility Deposit Accounts (including the bank at which such Facility Deposit Accounts are
maintained) are identified on Schedule 2.4(A)(1);

(b)     depository
accounts into which certain collections of Accounts, including Accounts of Medicare
Account Debtors, are paid directly by electronic funds transfer (collectively, the
"Medicare Deposit Accounts"), which Medicare Deposit Accounts (including the
bank at which such Medicare Deposit Accounts are maintained) are identified on Schedule
2.4(A)(1);

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(c)     depository
accounts into which certain collections of Accounts, including Accounts of Medicaid and
TRICARE Account Debtors, are paid directly by electronic funds transfer (collectively, the
"Medicaid Deposit Accounts" ), which Medicaid Deposit Accounts (including the
bank at which such Medicaid Deposit Accounts are maintained) are identified on Schedule
2.4(A)(1);

(d)     depository
accounts into which certain collections of Accounts of or with respect to CareerStaff
Unlimited, Inc. (and its Subsidiaries) (collectively, "CareerStaff") are paid
directly by electronic funds transfer or deposited manually (collectively, the
"CareerStaff Deposit Accounts"), which CareerStaff Deposit Accounts (including
the bank at which such CareerStaff Deposit Accounts are maintained) are identified on Schedule
2.4(A)(1); and

(e)     that
certain collection account with First Union National Bank ("Collecting Bank")
into which collections of Accounts paid or deposited into the depository accounts
described in subparagraph (a) above are transferred on a daily basis on each business day
of the Collecting Bank (such collection account, the "Primary Collection
Account)."

In addition, Borrowers shall establish and maintain at their expense
any other depository account that shall be required by Collateral Agent for the purpose of
collecting payments or deposits relating to any other Accounts of Borrower, which
additional Accounts, if any, shall also be subject to the provisions of this subsection
2.4(A) (any such Accounts, collectively with the Accounts described in subsection
2.4(A)(1)(a), (b), (c) and (d), the "Borrower Deposit Accounts" and the bank(s)
at which any such Borrower Deposit Accounts are maintained, collectively, the
"Depository Banks").

(2)     Borrowers
shall ensure that all collections of Accounts (a) that are paid by the applicable Account
Debtor electronically (by electronic funds transfer, wire transfer or otherwise) are paid
directly into one of the Borrower Deposit Accounts or a Collection Account (as defined
below), (b) that are paid by check are (i) in the case of checks sent by any Medicaid
or other Account Debtor which are required by law, rule or regulation to be sent directly
to Borrower, sent to the applicable Borrower and immediately deposited by such Borrower in
one of the Borrower Deposit Accounts or (ii) in the case of checks sent by any Account
Debtor that are not required by law, rule or regulation to be sent directly to Borrower,
sent directly to a Depository Bank for deposit in a Borrower Deposit Account. Borrowers
will not accept nor direct any payment of any Account of Borrowers in any manner other
than as described above.

(3)     On
each Business Day of the applicable Depository Banks, Borrowers shall ensure that all
collections of Accounts on deposit in the Borrower Deposit Accounts described in
subsection 2.4(A)(1)(a), are transferred into the Collection Account. Borrowers shall
further ensure that, on each Business Day of the Collecting Bank, all collections of
Accounts (x) then on deposit having then been transferred to the Primary Collection
Account and (y) on deposit in the Borrower Deposit Accounts described in subsections
2.4(A)(1)(c) and 2.4(A)(1)(d) are, in each case, transferred into a collection account
maintained by Borrower with the Collecting Bank (such account, the "Intermediate
Collection Account" and, together with the Primary Collection Account, the
"Collection Accounts"). Borrower shall further ensure that, on each Business Day
of the Collecting Bank, all collections of Accounts then on deposit or having then been
transferred to the Intermediate Collection Account are transferred to a depository account
maintained by Collateral Agent at First Union National Bank or such other financial
institution as may be determined by Agents from time to time in their reasonable
discretion, by written notices to the Borrowers and the Collecting Bank (the
"Concentration Account").

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(4)     Borrowers
shall execute, with each of the Depository Banks and the Collecting Bank, three party
lockbox agreements substantially in the applicable form(s) attached to this Agreement as Exhibit A
(collectively, the "Lockbox Agreements") and such other agreements, forms or
documents as Agents or any Depository Bank or the Collecting Bank may require; provided,
that Borrowers shall in any event execute Lockbox Agreements with (a) the Collecting Bank,
and each of the Depository Banks identified on Part 2 of Schedule 2.4(A)(1) prior
to and as a condition to the Closing, and (b) with all other Depository Banks by the date
that is no later than thirty (30) days after the Closing. Such Lockbox Agreements,
including but not limited to the instructions to the applicable Depository Bank or
Collecting Bank set forth therein, may be modified only as expressly set forth in such
Lockbox Agreements, and Borrowers shall not (a) close or modify the arrangements regarding
the Collection Accounts; (b) close or modify the arrangements regarding any Borrower
Deposit Account, except Borrowers may close a Borrower Deposit Account so long as (i)
Borrowers shall have notified Agents and (ii) Borrowers shall have arranged that, if such
Borrower Deposit Account was subject to a Lockbox Agreement, all Accounts previously paid
to such Borrower Deposit Account shall be paid to a newly established or existing Borrower
Deposit Account that is subject to a Lockbox Agreement, or to one of the Collection
Accounts; or (c) establish or open any Deposit Account into which collections of Accounts
are deposited or directed to be deposited, other than as permitted by subsection (b)
immediately above or as directed, or consented to by Collateral Agent in writing.

(5)     Administrative
Agent shall apply, on a daily basis, all collections of Accounts transferred into the
Concentration Account pursuant to this subsection 2.4(A) towards amounts owing by the
Borrowers under this Agreement. Such transfers will (solely for purposes of computing
interest) be credited against the relevant Obligations of the Borrowers on the (a) second
Business Day after receipt of such collections of Accounts if received no later than 1:00
p.m. (New York City time) or (b) third Business Day after receipt of such collections of
Accounts if received after 1:00 p.m. (New York City time).

(6)     Except
as otherwise expressly provided in this Agreement, Administrative Agent shall, for value
at the time specified above in this provision, apply the funds credited to the
Concentration Account, first, to any expenses, indemnification or Fees owing pursuant to
Article 2 or Article 10, second, to interest on the Loans that has become due and remains
unpaid, and, third, to reduce the outstanding balance of the Loans (to the Base Rate Loans
first), pro rata among the Loans of all the Lenders; provided, however, that any interest
which is paid by Borrowers on funds which have been transferred from the Collecting
Account to the Concentration Account but not yet credited against the relevant Obligations
pursuant to the provisions of this subsection shall be retained by Administrative Agent
and Collateral Agent and shared equally between them as compensation for their services.

(7)     If
as the result of collections of Accounts pursuant to the terms and conditions of this
subsection 2.4(A), a credit balance exists with respect to the Concentration Account, such
credit balance shall accrue interest in favor of the Borrowers for each day following the
first Business Day after its deposit thereto until the date of its application or release
pursuant to this Agreement at a rate per annum equal to the Base Rate for such day minus a
spread equal to three and one-half percent (3.5%) (but such interest shall accrue only if
an Event of Default has not occurred and is continuing in each such day). Such interest
shall be calculated on the basis of a three hundred sixty (360) day year for the actual
number of days elapsed. All such interest, when credited to the Concentration Account from
time to

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time, shall be held therein and applied pursuant to this Agreement as
Collateral. If any interest in excess of the interest referred to in this provision is
actually paid on the funds held in the Concentration Account

from time to time, it shall be retained by Collateral Agent for its own
benefit as compensation for its services.

(B)     Mandatory
Prepayments.

(1)     Overadvance.
At any time that the Revolving Loan exceeds the Maximum Revolving Loan Amount, Borrowers
shall immediately repay the Revolving Loan to the extent necessary to reduce the aggregate
principal balance to an amount equal to or less than the Maximum Revolving Loan Amount.

(2)     Prepayments
from Proceeds of Asset Dispositions. Immediately upon receipt by any Borrower or any of
its Subsidiaries of proceeds of any Asset Disposition (in one or a series of related
transactions), which proceeds exceed $2,000,000 (it being understood that if the proceeds
exceed $2,000,000, the entire amount and not just the portion above $2,000,000 shall be
subject to this subsection 2.4(B)(2)), Borrowers shall prepay the Obligations in an amount
equal to such proceeds. All such prepayments shall be applied to the Loans in accordance
with subsection 2.4(E). Notwithstanding anything to the contrary in the foregoing, the
Borrowers shall not be required to prepay the Obligations in the event that any Borrower
receives proceeds in respect of the Campus Transaction or the THCI Turnover.

(3)     Prepayments
from Issuance of Securities. Immediately upon the receipt by any Borrower of the proceeds
of the issuance of equity securities in excess of $1,000,000 individually or in the
aggregate (other than the issuance of equity securities in connection with any conversion
of indebtedness under and in accordance with the Plan or Confirmation Order), Borrowers
shall prepay the Loans in an amount equal to such excess proceeds, net of underwriting
discounts and commissions and other reasonable costs associated therewith. All such
prepayments shall be applied to the Loans in accordance with subsection 2.4(E).

(4)     Prepayments
from Tax Refunds. Immediately upon the receipt by any Borrower or any of their
Subsidiaries of the proceeds of any federal, state or local tax refund in excess of
$1,000,000 individually or in the aggregate, Borrowers shall prepay the Loans in an amount
equal to such excess proceeds. All such prepayments shall be applied to the Loans in
accordance with subsection 2.4(E).

(5)     Prepayments
from Proceeds of Casualty or Condemnation. Immediately upon receipt by any Borrower of any
insurance proceeds arising from damage or casualty, or any proceeds arising from any
condemnation, which proceeds exceed $1,000,000 individually or in the aggregate, Borrowers
shall prepay the Loans in an amount equal to such excess proceeds, net of any reasonable
costs incurred in connection therewith. All such prepayments shall be applied to the Loans
in accordance with subsection 2.4(E).

(6)     Repayments
from Sale of SunScript.

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a.     Immediately
upon receipt by Lenders of the proceeds of the Option Price such proceeds shall be applied
to prepay the Loans, to permanently reduce the Commitment, and to pay the prepayment fee
in accordance with subsection 2.3(C).

b.     Immediately
upon the sale of the SunScript Stock (and, following the proper completion of the Partial
Purchase Option, to the extent Term Collateral Agent may elect to sell or otherwise
transfer all or any portion of the SunScript Assets following the execution upon such
Assets), then to the extent that the aggregate proceeds of any such sale(s) or transfer(s)
are in excess of the amount necessary to repay the obligations owing under the Term Loan
Agreement in full, such excess proceeds shall be paid immediately to the Collateral Agent
and such proceeds shall be applied to prepay the Loans in accordance with subsection
2.4(E)

(C)     Collateralization
of Lender Letters of Credit; Termination of Commitments. In the event that the entire
Revolving Loan Commitment is terminated at a time that any Lender Letters of Credit are
outstanding, Borrowers shall immediately cause the Administrative Agent and each Lender to
be released from all liability under any Lender Letters of Credit or, at Borrowers'
option, Borrowers shall (1) deposit with Administrative Agent for the benefit of all
Lenders with a Revolving Loan Commitment cash or a back-to-back letter of credit
satisfactory to the Administrative Agent in an amount equal to one hundred and five
percent (105%) of the aggregate outstanding Letter of Credit Reserve to be available to
Administrative Agent to reimburse payments of drafts drawn under such Lender Letters of
Credit and pay any fees and expenses related thereto and (2) prepay the fees payable under
subsection 2.3(B) with respect to such Lender Letters of Credit for the full remaining
terms of such Lender Letters of Credit. Upon termination of any such Lender Letter of
Credit, the unearned portion of such prepaid fee attributable to such Lender Letter of
Credit shall be refunded to Borrowers.

(D)     Payments
on Business Days. Whenever any payment to be made hereunder shall be stated to be due on a
day that is not a Business Day, the payment may be made on the next succeeding Business
Day and such extension of time shall be included in the computation of the amount of
interest or fees due hereunder.

(E)     Application
of Prepayment Proceeds. With respect to the prepayments described in subsections
2.4(B)(2), 2.4(B)(3), 2.4(B)(4), 2.4(B)(5), and 2.4(B)(6)(b) such prepayments shall be
applied, at the election of the Company on written notice to the Agents, (i) to
reduce the outstanding principal balance of the Revolving Loans but not as a permanent
reduction of the Revolving Loan Commitment or (ii) in accordance with subsection
2.1(A)(2), to permanently reduce the Revolving Commitment with respect to such mandatory
prepayment in accordance with subsection 2.1. Considering each type of Loan being prepaid
separately, any such prepayment shall be applied first to Base Rate Loans of the type
required to be prepaid before application to LIBOR Loans of the type required to be
prepaid.

2.5     Term
of this Agreement. This Agreement shall be effective from the Closing Date to and
including the Termination Date. To the extent not terminated earlier in accordance with
this Agreement, the outstanding Commitments hereunder shall terminate upon the Termination
Date and all Obligations shall become immediately due and payable without notice or
demand. Notwithstanding any termination, until all Obligations have been fully paid and
satisfied, Collateral Agent, on behalf of itself and Lenders, shall be entitled to retain
security interests in and liens upon all Collateral, and following such termination,
Borrowers shall secure any outstanding Lender Letter of Credit in accordance with

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subsection 2.4(C). Even after payment of all Obligations hereunder,
Borrowers' obligation to indemnify Collateral Agent and each Lender in accordance with the
terms hereof shall continue.

2.6     Statements.
Administrative Agent shall render a monthly statement of account to Borrowers within
twenty (20) days after the end of each month. Such statement of account shall be deemed
conclusive unless Borrowers make written objection thereto within forty-five (45) days
from the date such statement is mailed to Borrowers. Administrative Agent shall record in
its books and records, including computer records, (a) all Loans, interest charges and
payments thereof, (b) all Letter of Credit Liability, (c) the charging and payment of all
fees, costs and expenses and (d) all other debits and credits pursuant to this Agreement.
The balance in the loan accounts shall constitute presumptive evidence, absent manifest
error, of the accuracy of the information contained therein; provided, however,
that any failure by Administrative Agent to so recordshall not limit or affect the
Borrowers' obligation to pay.

2.7     Grant
of Security Interest.

(A)     Grant
of Liens in the Collateral.

(B)     Borrowers
Remain Liable. Anything herein to the contrary notwithstanding: (1) Borrowers shall
remain liable under the contracts and agreements included in the Collateral to the extent
set forth therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement or the other Loan Documents had not been executed;
(2) the exercise by Agents of any of the rights under this Agreement or the other
Loan Documents shall not release Borrowers from any of their duties or obligations to the
parties under the contracts and agreements included in the Collateral; (3) neither
Agents nor any Lender shall have any obligation or liability under the contracts and
agreements included in the Collateral by reason of this Agreement or the other Loan
Documents, nor shall Agents nor any Lender be obligated to perform any of the obligations
or duties of Borrowers thereunder or to take any action to collect or enforce any claim
for payment assigned under this Agreement or the other Loan Documents; and (4) neither
Agents nor any Lender shall have any liability

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in contract or tort for Borrowers' acts or omissions with respect to
the agreements included in the Collateral, unless such acts or omissions occur under
protest by the applicable Borrower pursuant to written direction of any Agent or Lender,
which direction constitutes gross negligence or willful misconduct on the part of such
Agent or Lender.

(C)     Security
Agreement. This Agreement shall constitute a security agreement as that term is used in
the UCC in effect in the jurisdiction(s) in which Borrowers are organized and in the
jurisdiction(s) in which the Collateral is situated.

Borrowers
hereby irrevocably authorize Lender to file, in applicable UCC jurisdictions initial
financing statements or amendments or continuations thereto relating to the Collateral as
described in this Agreement at any time and from time to time in accordance with this
Agreement and subject to the Intercreditor Agreement. Borrowers agree to furnish promptly
upon request all information required for the sufficiency or filing office acceptance of
any such initial financing statement or amendment thereto by the UCC of such jurisdiction.
The Borrowers hereby ratify all UCC filings relating to the Collateral as described in
this Agreement made prior to the date hereof and authorizes such filings as if made as of
the date of this Agreement.

2.8     Yield
Protection.

(A)     Capital
Adequacy and Other Adjustments. In the event any Lender shall have determined that the
adoption after the date hereof of any law, treaty, governmental (or quasi-governmental)
rule, regulation, guideline or order regarding capital adequacy, reserve requirements or
similar requirements or compliance by such Lender or any corporation controlling such
Lender with any request or directive regarding capital adequacy, reserve requirements or
similar requirements (whether or not having the force of law and whether or not failure to
comply therewith would be unlawful), from any central bank or governmental agency or body
having jurisdiction, does or shall have the effect of increasing the amount of capital,
reserves or other funds required to be maintained by such Lender or any corporation
controlling such Lender and thereby reducing the rate of return on such Lender's or such
corporation's capital as a consequence of its obligations hereunder, then Borrowers shall
within fifteen (15) days after notice and demand from such Lender (together with the
certificate referred to in the next sentence and with a copy to Administrative Agent) pay
to Administrative Agent, for the account of such Lender, additional amounts sufficient to
compensate such Lender for such reduction. A certificate as to the amount of such cost and
showing the basis of the computation of such cost submitted by such Lender to Borrowers
shall, absent manifest error, be final, conclusive and binding for all purposes.

(B)     Increased
LIBOR Funding Costs. If, after the date hereof, the introduction of, change in or
interpretation of any law, rule, regulation, treaty or directive would impose or increase
reserve requirements (other than as taken into account in the definition of LIBOR) or
otherwise increase the cost to any Lender of making or maintaining a LIBOR Loan, then
Borrowers shall from time to time within fifteen (15) days after notice and demand from
such affected Lenders (together with the certificate referred to in the next sentence and
with a copy to Administrative Agent) pay to Administrative Agent, for the account of such
affected Lenders, additional amounts sufficient to compensate such Lenders for such
increased cost. A certificate as to the amount of such cost and showing the basis of the
computation of such cost submitted by such affected Lenders to Borrowers and
Administrative Agent shall, absent manifest error, be final, conclusive and binding for
all purposes.

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2.9     Taxes.

(A)     No
Deductions. Any and all payments or reimbursements made hereunder shall be made free and
clear of and without deduction for any and all taxes, levies, imposts, deductions, charges
or withholdings, and all liabilities with respect thereto (all such taxes, levies,
imposts, deductions, charges or withholdings and all liabilities with respect thereto
referred to herein as "Tax Liabilities"; excluding, however, taxes
imposed on the net income of any Lender or any Agent by the jurisdiction under the laws of
which such Agent or such Lender is organized or doing business or any political
subdivision thereof and taxes imposed on its net income by the jurisdiction of such
Agent's or such Lender's applicable lending office or any political subdivision). If
Borrowers shall be required by law to deduct any such Tax Liabilities from or in respect
of any sum payable hereunder to any Agent or any Lender, then the sum payable hereunder
shall be increased as may be necessary so that, after making all required deductions, such
Agent or such Lender receives an amount equal to the sum it would have received had no
such deductions been made.

(B)     Changes
in Tax Laws. In the event that, subsequent to the Closing Date, (1) any changes in any
existing law, regulation, treaty or directive or in the interpretation or application
thereof, (2) any new law, regulation, treaty or directive enacted or any interpretation or
application thereof, or (3) compliance by Lender with any request or directive
(whether or not having the force of law) from any governmental authority, agency or
instrumentality:

(a)     does
or shall subject any Agent or Lender to any tax of any kind whatsoever with respect to
this Agreement, the other Loan Documents or any Loans made or Lender Letters of Credit
issued hereunder, or change the basis of taxation of payments to such Agent or Lender of
principal, fees, interest or any other amount payable hereunder (except for net income
taxes, or franchise taxes imposed in lieu of net income taxes, imposed generally by
federal, state or local taxing authorities with respect to interest or commitment or other
fees payable hereunder or changes in the rate of tax on the overall net income of such
Agent or Lender); or

(b)     does
or shall impose on any Agent or Lender any other condition or increased cost in connection
with the transactions contemplated hereby or participations herein; and the result of any
of the foregoing is to increase the costs to such Agent or Lender of issuing any Lender
Letter of Credit or making or continuing any Loan hereunder, as the case may be, or to
reduce any amount receivable hereunder;

then, in any such case, Borrowers shall promptly pay to such Agent or
Lender, upon its notice and demand, any additional amounts necessary to compensate such
Agent or Lender, on an after-tax basis, for such additional cost or reduced amount
receivable, as determined by such Agent or Lender with respect to this Agreement or the
other Loan Documents; provided that if any such Lender or Agent has a lending office in a
jurisdiction that does not impose such taxes, then, upon the Company's request, such Agent
or Lender agrees to use commercially reasonable efforts to cause such payments or
reimbursement to be made to such office. If any Agent or Lender becomes entitled to claim
any additional amounts pursuant to this subsection, it shall promptly notify Borrowers of
the event by reason of which such Agent or Lender shall become so entitled (with any such
Lender concurrently notifying such Agent). A certificate as to any additional amounts
payable pursuant to the foregoing sentence, together with supporting documentation,
submitted by any Agent or Lender to Borrowers shall, absent manifest error, be final,
conclusive and binding for all purposes.

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(C)     Foreign
Lenders. Each Lender organized under the laws of a jurisdiction outside the United States
(a "Foreign Lender") as to which payments to be made under this Agreement are
exempt from United States withholding tax or are subject to United States withholding tax
at a reduced rate under an applicable statute or tax treaty shall provide to Borrowers and
Administrative Agent (1) a properly completed and executed Internal Revenue Service Form
W-8BEN or Form W-8ECI or other applicable form, certificate or document prescribed by the
Internal Revenue Service of the United States of America certifying as to such Foreign
Lender's entitlement to such exemption or reduced rate of withholding with respect to
payments to be made to such Foreign Lender under this Agreement, (a "Certificate of
Exemption"), or (2) a letter from any such Foreign Lender stating that it is not
entitled to any such exemption or reduced rate of withholding (a "Letter of
Non-Exemption"). Prior to becoming a Lender under this Agreement and within fifteen
(15) days after a reasonable written request of Borrowers or Administrative Agent from
time to time thereafter, each Foreign Lender that becomes a Lender under this Agreement
shall provide a Certificate of Exemption or a Letter of Non-Exemption to Borrowers and
Administrative Agent. If the form provided by a Lender at the time such Lender first
becomes a party to this Agreement indicates a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered excluded from
"Tax Liabilities" as defined in subsection 2.9(A).

If
a Foreign Lender is entitled to an exemption with respect to payments to be made to such
Foreign Lender under this Agreement (or to a reduced rate of withholding) and does not
provide a Certificate of Exemption to Borrowers and Administrative Agent within the time
periods set forth in the preceding paragraph, Borrowers shall withhold taxes from payments
to such Foreign Lender at the applicable statutory rates, and Borrowers shall not be
required to pay any additional amounts as a result of such withholding; provided, however,
that all such withholding shall cease upon delivery by such Foreign Lender or a
Certificate of Exemption to Borrowers and Administrative Agent.

2.10     Required
Termination and Prepayment. If on any date any Lender shall have reasonably determined
(which determination shall be final and conclusive and binding upon all parties) that the
making or continuation of its LIBOR Loans has become unlawful or impossible by compliance
by such Lender in good faith with any law, governmental rule, regulation or order (whether
or not having the force of law and whether or not failure to comply therewith would be
unlawful), then, and in any such event, that Lender shall promptly give written notice (or
by telephone if confirmed in writing within one (1) Business Day) to Borrowers and Agents
of that determination. Subject to prior withdrawal of a Notice of Borrowing or prepayment
of LIBOR Loans, the obligation of such Lender to make or maintain its LIBOR Loans during
any such period shall be terminated at the earlier of the termination of the Interest
Period then in effect or when required by law and Borrowers shall no later than the
termination of the Interest Period in effect at the time any such determination pursuant
to this subsection 2.10 is made or, earlier when required by law, repay or prepay LIBOR
Loans together with all interest accrued thereon or convert LIBOR Loans to Base Rate
Loans.

2.11     Replacement
of Lenders. Within fifteen (15) days after receipt by any Borrower of: (a) written
notice and demand from any Lender for payment of additional costs as provided in
subsection 2.8 or subsection 2.9, or (b) written notice of any Lender's inability to make
LIBOR Loans as provided in subsection 2.10, (any such Lender demanding such payment or
having such inability being referred to herein as an "Affected Lender"),
Borrowers may, at their option notify Administrative Agent and such Affected Lender of its
intention to take one of the actions set forth herein in subparagraphs (A) or (B) below.

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(A)     Replacement
of an Affected Lender. Borrowers may obtain, at Borrowers' expense, a replacement Lender
("Replacement Lender") for an Affected Lender, which Replacement Lender shall be
reasonably satisfactory to Agents. In the event Borrowers obtain a Replacement Lender that
will purchase all outstanding Obligations owed to such Affected Lender and assume its
Commitments hereunder within ninety (90) days following notice of Borrowers' intention to
do so, the Affected Lender shall sell and assign its Loans and Commitments to such
Replacement Lender in accordance with the provisions of subsection 9.5; provided, however,
Borrowers have in any case where such replacement occurs as the result of a demand for
payment of certain costs pursuant to subsection 2.8 or subsection 2.9, paid all increased
costs for which such Affected Lender is entitled to under subsection 2.8 or subsection 2.9
through the date of such sale and assignment; or

(B)     Prepayment
of an Affected Lender. Borrowers may prepay in full all outstanding Obligations owed to an
Affected Lender and terminate such Affected Lender's Commitments. Borrowers shall, within
ninety (90) days following notice of their intention to do so, prepay in full all
outstanding Obligations owed to such Affected Lender, including such Affected Lender's
increased costs for which it is entitled to reimbursement under this Agreement through the
date of such prepayment, and terminate such Affected Lender's Commitments.

2.12     Compensation.
Borrowers shall promptly compensate Administrative Agent for the benefit of Lenders
(Administrative Agent's calculation of such amounts shall, absent manifest error, be
conclusive and binding upon all parties hereto), for any losses, expenses and liabilities
including, without limitation, any loss (including interest paid) sustained by such Lender
in connection with the re-employment of funds: (a) if for any reason (other than a default
by any Lender) a borrowing of any LIBOR Loan does not occur on a date specified therefor
in a Notice of Borrowing or a telephonic request of borrowing (confirmed in writing) by
Borrowers; (b) if any prepayment of any of its LIBOR Loans occurs on a date that is
not the last day of an Interest Period applicable to that Loan (regardless of the source
of such prepayment and whether voluntary, by acceleration or otherwise); (c) if any
prepayment of any of its LIBOR Loans is not made on any date specified in a notice of
prepayment given by Borrowers; or (d) as a consequence of any other failure by Borrowers
to repay its LIBOR Loans when required by the terms of this Agreement; provided, however,
during the period while any such amounts have not been paid, Administrative Agent may, in
its sole discretion, (i) in accordance with subsection 2.4(A), elect to make a Revolving
Advance for such amount pursuant to subsection 2.1(D) or (ii) reserve an equal amount from
amounts otherwise available to be borrowed under the Revolving Loan.

2.13     Booking
of LIBOR Loans. Each Lender may make, carry or transfer LIBOR Loans at, to, or for the
account of, any of its branch offices or the office of an affiliate of such Lender.

2.14     Assumptions
Concerning Funding of LIBOR Loans. Calculation of all amounts payable to each Lender under
subsection 2.12 shall be made as though each Lender had actually funded its relevant LIBOR
Loan through the purchase of a LIBOR deposit bearing interest at LIBOR in an amount equal
to the amount of that LIBOR Loan and having maturity comparable to the relevant Interest
Period and through the transfer of such LIBOR deposit from an offshore office to a
domestic office in the United States of America; provided, however, each
Lender may fund each of its LIBOR Loans in any manner it sees fit and the foregoing
assumption shall be utilized only for the calculation of amounts payable under subsection
2.12.

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SECTION 3. CONDITIONS TO LOANS

The
obligations of Agents and each Lender to make Loans and the obligation of Administrative
Agent or any Lender to issue Lender Letters of Credit on the Closing Date and on each
Funding Date are subject to satisfaction of all of the terms and conditions set forth in
this Agreement and in the Conditions Rider, attached hereto and incorporated herein by
reference.

SECTION 4. REPRESENTATIONS, WARRANTIES AND CERTAIN COVENANTS

To induce
Agents and each Lender to enter into the Loan Documents, to make and to continue to make
Loans and to issue and to continue to issue Lender Letters of Credit or risk
participations to the banks that issue Bank Letters of Credit, the Company represents,
warrants and covenants on behalf of itself and the other Borrowers (and each of the other
Borrowers, jointly and severally, accepts responsibility for such representations and
warranties) to each Agent and Lender that the following statements are and will be true,
correct and complete and, unless specifically limited, shall remain so for so long as any
of the Commitments hereunder shall be in effect and until indefeasible payment in full, in
cash, of all Obligations and termination of all Lender Letters of Credit:

4.1     Organization,
Powers, Capitalization.

(A)     Organization
and Powers. Each of the Borrowers is an entity duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization and qualified to do
business in each jurisdiction where such qualification is required except where failure to
be so qualified could not reasonably be expected to have a Material Adverse Effect. Each
Borrower has all requisite power and authority to own and operate its properties, to carry
on its business as now conducted and proposed to be conducted and to enter into each Loan
Document to which it is a party.

(B)     Capitalization.
Except as set forth on Schedule 4.1(B), each Borrower (other than the Company)
is a direct or indirect Subsidiary of the Company. The authorized and the issued capital
stock of each of the Borrowers and each of their respective Subsidiaries (except for the
Inactive Entities) is as set forth on Schedule 4.1(B), including all
preemptive or other outstanding rights, options, warrants, conversion rights or similar
agreements or understandings for the purchase or acquisition from any Borrower of any
shares of capital stock or other securities of any such entity. All issued and outstanding
shares of capital stock of each of the Borrowers are duly authorized and validly issued,
fully paid, nonassessable, free and clear of all Liens other than (1) as to the
Company only, any pledge of the Company's capital stock by its shareholders,
(2) Liens granted in favor of the Collateral Agent for the benefit of Agents and
Lenders and (3) Liens granted in favor of the Term Administrative Agent for the
benefit of the Term Administrative Agent and the Term Creditors (as defined in the
Intercreditor Agreement), and such shares were issued in compliance with all applicable
state and federal laws concerning the issuance of securities. Each Borrower will promptly
notify Lender of any change in its ownership or corporate structure.

4.2     Authorization
of Borrowing, No Conflict. Each of the Borrowers has the power and authority to incur the
Obligations and to grant security interests in the Collateral. On the Closing Date, the
execution, delivery and performance of the Loan Documents by each Borrower signatory
thereto will have been duly authorized by all necessary corporate and shareholder action.
The execution, delivery and performance by each Borrower of each Loan Document to which it
is a party and the consummation

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of the transactions contemplated thereby do not contravene any
applicable law, the corporate charter or bylaws or other organizational documents of any
Borrower or any material agreement or order by which any Borrower or any Borrower's
property is bound. This Agreement and the other Loan Documents are the legal, valid and
binding obligations of the applicable Borrowers respectively, each enforceable against the
Borrowers, as applicable, in accordance with their respective terms.

4.3     Financial
Condition. All financial statements concerning the Company and its Subsidiaries
(a) furnished on or before the Closing Date to any Agent or any Lender by the Company
in connection with this Agreement (except for the financial statements or financial
reports dated February 11, 2002), and (b) furnished subsequent to the Closing Date to
any Agent or any Lender pursuant to this Agreement have been prepared in accordance with
GAAP consistently applied throughout the periods involved (except as disclosed therein)
and present fairly the financial condition of Persons covered thereby as at the dates
thereof and the results of their operations for the periods then ended. The Pro Forma was
prepared by Borrowers based on the unaudited consolidated balance sheet of Borrowers dated
October 31, 2001. The Projections delivered by Borrowers will be prepared in light of the
past operations of the business of Borrowers and their Subsidiaries, and such Projections
will represent the good faith estimate of Borrowers concerning the most probable course of
their business as of the date such Projections are delivered.

4.4     Indebtedness
and Liabilities. As of the Closing Date, except as set forth on Schedule 4.4, no
Borrower has any (a) Indebtedness or other obligations for borrowed money except as
reflected on the Pro Forma; or (b) Liabilities other than as reflected on the Pro
Forma or otherwise as incurred in the ordinary course of business following the date of
the Pro Forma. The Company, or if applicable the other Borrowers, shall promptly deliver
copies of all notices given or received by any Borrower with respect to noncompliance with
any term or condition of the Term Loan Documents or other Indebtedness in a principal
amount in excess of $5,000,000, and shall promptly notify Administrative Agent of any
default or event of default with respect to any Term Loan Document or other Indebtedness
in a principal amount in excess of $5,000,000 which default or event of default gives the
holders of such Indebtedness the right to accelerate the maturity thereof.

4.5     Collateral
Warranties and Covenants.

(A)     Accounts.
Lenders may rely, in determining which Accounts are Eligible Accounts, on all statements
and representations made by Borrowers in writing with respect to any Accounts. Unless
otherwise indicated in writing to Lenders, with respect to each Eligible Account,
Borrowers represent that:

(1)     the
Account is genuine and in all respects what it purports to be, and is not evidenced by a
judgment.

(2)     the
Account arises from an actual, completed and bona fide sale and delivery of goods or
rendition of Medical Services and other services to patients or customers, made by a
Borrower in the ordinary course of its business, in accordance with the terms and
conditions of all purchase orders, contracts, certifications, participations, certificates
of need, provider or supplier agreements, or other documents relating thereto and forming
a part of the contract between the relevant Borrower and Account Debtor;

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(3)     the
Account is for a liquidated amount maturing as stated in a claim or invoice covering the
sale or rendition of Medical Services or other services that give rise to the Account, a
copy of which has been furnished or is available to the Collateral Agent;

(4)     except
as previously disclosed in writing by the Borrowers to the Agents, none of the Borrowers
has knowledge of any information that would lead it to believe that any of the following
statements is incorrect: (i) the Account Debtor under the Account had the capacity to
contract at the time any contract or other document giving rise to the Account was
executed and (ii) such Account Debtor under the Account is solvent;

(5)     except
as previously disclosed in writing by the Borrowers to the Agents, none of the Borrowers
has knowledge of any information that would lead it to believe that any of the following
statement is incorrect: there are no proceedings or actions which are threatened or
pending against any Account Debtor under the Account which might result in any material
adverse change in such Account Debtor's financial condition or the collectibility of any
account owed by such Account Debtor;

(6)     the
Account has been billed and forwarded to the Account Debtor for payment in accordance with
applicable laws and in compliance and conformity with any and all requisite procedures,
requirements and regulations governing payment by such Account Debtor with respect to such
Account, and such Account if due from a Medicaid/Medicare Account Debtor, TRICARE or the
Veterans Administration is properly payable directly to a Borrower in the amount stated as
the balance of such Account;

(7)     the
goods, services and inventory sold giving rise to the Account are the exclusive property
of the Borrowers owed such Accounts and are not and will not be subject to any lien,
consignment arrangement, encumbrance, security interest or financing statement whatsoever,
other than Liens in Accounts in favor of any landlord that has entered into a
subordination agreement or estoppel certificate in form and substance satisfactory to the
Agents;

(8)     the
invoices evidencing the Account are in the name of the Borrower to which such Account is
owed;

(9)     the
patients or customers of the Borrowers have accepted the goods or services the sale or
rendition of which gave rise to the Account, owe and are obligated to pay the full amounts
stated the related invoices according to their terms, without dispute, offset, defense,
counterclaim or contra, except for disputes and other matters arising in the ordinary
course of business of which the Borrowers have advised the Agents;

(10)     to
the Borrower's knowledge, there are no facts, events or occurrences which in any material
way impair the validity or enforceability of any Accounts or reduce the amount payable
thereunder from the face amount of the claim or invoice and statements delivered or made
available to the Collateral Agent with respect thereto; and

(11)     Borrowers
have obtained and currently have all certificates of need, Medicaid, Medicare and TRICARE
provider numbers, licenses, permits and authorizations that are necessary in the
generation of such Accounts.

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(12)     Such
Account does not represent a sale to any Borrower, Subsidiary of any Borrower, or
Affiliate of any Borrower, or a consignment, sale or return or a bill and hold
transaction.

The
Borrowers shall, at their own expense: (i) keep accurate and complete records of its
Accounts and all payments and collections thereon; (ii) cause all invoices evidencing
such Accounts and all copies thereof to bear a notice that such invoices are payable to
the Borrower Deposit Accounts and to the extent requested by the Collateral Agent, (A)
provide written notice to each private indemnity, managed care or other Insurer who is an
Account Debtor on any Account of such Borrower, and, thereafter, promptly after any such
Insurer becomes an Account Debtor on any such Account, provide written notice to such
Insurer, that the Collateral Agent has been granted a first priority lien and security
interest in, upon and to all Accounts applicable to such Insurer and directs such Account
Debtor to make payments into the appropriate Blocked Account and (B) do anything further
that may be reasonably requested by the Collateral Agent to preserve or protect the
security interests in the Collateral contemplated in this Agreement and the Plan and
effectuate the intentions and objects of this Agreement, including, but not limited to,
the execution and delivery of agreements relating to the Blocked Accounts, continuation
statements, amendments to financing statements, and any other documents required under
this Agreement and (iii) use its reasonable best efforts to assure prompt payment of all
amounts due or to become due under Accounts. Except in the ordinary course of business
consistent with past practices, no discounts, credits or allowances will be issued,
granted or allowed by any Borrower to customers and no returns will be accepted without
Collateral Agent's prior written consent.

Borrowers
will promptly notify Collateral Agent in the event that any (x) Account Debtor (or
any other Person obligated on such Account) alleges dispute or claim with respect to such
Account or of any other circumstances known to Borrowers, in each case to the extent not
previously disclosed to the Collateral Agent, that may materially impair the validity or
collectibility of any such Account, (y) Account becomes evidenced or secured by an
instrument or chattel paper and upon request of the Collateral Agent, promptly deliver
such instrument or chattel paper to the Collateral Agent, or (z) Account in an
aggregate face amount in excess of $250,000 ceases, to such Borrowers' knowledge, to
qualify as an Eligible Account and, in which case Borrowers shall promptly describe the
circumstances of such event. Collateral Agent shall have the right, at any time or times
hereafter, to verify the validity, amount or any other matter relating to any Account by
mail, telephone or in person and Borrowers shall take such actions as are requested by
Collateral Agent to enable Collateral Agent to perform such verification.

After
the occurrence of an Event of Default: (i) no Borrower shall, without the prior consent of
Collateral Agent, adjust, settle or compromise the amount or payment of any Account, or
release wholly or partly any Account Debtor (or any other Person obligated on such
Account), or allow any credit or discount thereon, except in the ordinary course of
business consistent with past practices, and (ii) Collateral Agent shall have the right at
any time (A) to exercise the rights of any Borrower, with respect to the obligation of the
Account Debtor (or any other Person obligated on such Account) to make payment or
otherwise render performance to such Borrower, and with respect to any property that
secures the obligations of the Account Debtor or of any such other Person obligated on
such Account; and (B) to adjust, settle or compromise the amount or payment of any such
Account or release wholly or partly any Account Debtor or obligor thereunder or allow any
credit or discount thereon. Each Borrower shall issue credit memoranda promptly (with
copies to Collateral Agent after the occurrence of an Event of Default)

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upon accepting returns or granting allowances, until Collateral Agent
has notified such Borrower that an Event of Default has occurred and that all future
credits or allowances are to be made only after prior written approval from Collateral
Agent.

(B)     Inventory
Warranties and Covenants. All of Borrowers' Inventory is of good and merchantable quality,
free from any material defects. The completion, manufacture and sale of such Inventory is
permitted under the applicable Borrower's contracts and other agreements to which the
Inventory is subject. None of Borrowers' Inventory has been or will be produced in
violation of the Fair Labor Standards Act and subject to the so-called "hot
goods" provisions contained in 29 U.S.C. 215 or in violation of any other law.
Borrowers will use their reasonable best efforts to cause all inventory and products owned
by Persons other than Borrowers and located on any premises owned, leased or controlled by
Borrowers, to be separately and conspicuously identified as such and to be segregated from
Borrowers' own Inventory located at such premises.

(C)     Equipment
Warranties and Covenants. Borrowers have maintained and shall cause all of their Equipment
to be maintained and preserved in good working condition, repair and working order,
ordinary wear and tear excepted, and shall promptly make or cause to be made all repairs,
replacements, and other improvements in connection therewith that are necessary or
desirable to such end. None of Borrowers' Equipment (other than motor vehicles not having
a market value in excess of $10,000 individually) is covered by any certificate of title
and Borrowers shall promptly notify Collateral Agent to the extent any Borrower obtains
any Equipment (other than motor vehicles not having a market value in excess of $10,000
individually) covered by any certificate of title. After the occurrence and continuance of
an Event of Default, upon request of Collateral Agent, Borrowers shall promptly deliver to
Collateral Agent any and all certificates of title, applications for title or similar
evidence of ownership of all of its Equipment and shall cause Collateral Agent to be named
as lienholder on any such certificate of title or other evidence of ownership. Borrowers
shall promptly inform Collateral Agent of any material additions to or material deletions
from the Equipment unless such additions or deletions are promptly disclosed by Borrowers
as "Capital Expenditures" in the quarterly financial statements required to be
delivered pursuant to this Agreement.

(D)     Chattel
Paper Warranties and Covenants. As of the Closing Date, no Borrower holds any Chattel
Paper and does not anticipate holding any Chattel Paper in the ordinary course of its
business. Schedule 4.5(D) sets forth a list of all Chattel Paper held by each
Borrower immediately prior to the Closing Date, all of which has been delivered to (and,
where appropriate, duly endorsed to) Collateral Agent. To the extent any Borrower shall
hold or obtain any Chattel Paper, such Borrower will promptly (i) deliver to
Collateral Agent all Tangible Chattel Paper duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
Collateral Agent and (ii) provide Collateral Agent with Control of all Electronic Chattel
Paper, by having Collateral Agent identified as the assignee of the Records(s) pertaining
to the single authoritative copy thereof and otherwise complying with the applicable
elements of Control set forth in the UCC. Borrowers will mark conspicuously all Chattel
Paper with a legend, in form and substance satisfactory to Collateral Agent, indicating
that such Chattel Paper is subject to the Lien of Collateral Agent. At the request of the
Collateral Agent, Borrowers shall take all actions reasonably necessary to ensure
Collateral Agent has a perfected security interest in such Chattel Paper.

(E)     Instruments
Warranties and Covenants. Borrowers have delivered to Collateral Agent all promissory
notes (duly endorsed) made by SHS to the order of the Company. At the request of

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Collateral Agent, each Borrower will deliver to Collateral Agent all
Instruments it holds or obtains duly endorsed and accompanied by duly executed instruments
of transfer or assignment, all in form and substance satisfactory to Collateral Agent. At
the request of Collateral Agent, Borrowers will also deliver to Collateral Agent copies of
all security agreements securing any such Instruments.

(F)     Investment
Property Warranties and Covenants. Each Borrower will use its reasonable best efforts (or
otherwise take such actions as are required or requested by Collateral Agent), from time
to time, to (i) enable Collateral Agent to obtain control of any Investment Property
owned by such Borrower in a manner acceptable to Collateral Agent and (ii) obtain
from any issuers of such Investment Property and such other Persons, for the benefit of
Collateral Agent, written confirmation of Collateral Agent's control over such Investment
Property upon terms and conditions acceptable to Collateral Agent; provided, however, that
the foregoing shall not apply to Investment Property in respect of certain de minimis
investments in other Persons by Borrowers in an aggregate amount not to exceed $50,000.

(G)     Letter-of-Credit
Rights Warranties and Covenants. Each Borrower will deliver to Collateral Agent all
Letters of Credit under which it is the beneficiary or is otherwise entitled to receive
proceeds duly endorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to Collateral Agent. Each Borrower will
also deliver to Collateral Agent all security agreements securing any such Letters of
Credit and execute UCC financing statement amendments evidencing the collateral assignment
of Borrowers' letter-of-credit rights to Collateral Agent in connection with such security
agreements. Borrowers will take any and all actions necessary (or required or requested by
Agent), from time to time, to cause Collateral Agent to obtain Control of such Borrower's
Letter-of-Credit Rights.

(H)     General
Intangibles Warranties and Covenants. If an Event of Default shall have occurred and be
continuing, upon request of Collateral Agent, Borrowers shall use their reasonable best
efforts to obtain any consents, waivers or agreements necessary to enable Collateral Agent
to exercise its remedies hereunder and under the other Loan Documents with respect to any
of Borrowers' rights under any material contractual obligations constituting General
Intangibles, including Borrowers' rights as a licensee of computer software.

(I)     Intellectual
Property Warranties and Covenants. Each Borrower and each of its Subsidiaries owns, is
licensed to use or otherwise has the right to use, all Intellectual Property the loss of
which ownership, license or right could reasonably be expected to have a Material Adverse
Effect, and all such Intellectual Property is identified on Schedule 4.5(I).
Except as set forth on Schedule 4.5(I), there are no restrictions on any
Borrower's nor any of its Subsidiaries' right to create a Lien in such Intellectual
Property nor in Collateral Agent's right to perfect and enforce such Lien. Each Borrower
shall concurrently herewith deliver to Collateral Agent each Copyright Security Agreement
and Trademark Security Agreement and all other documents, instruments and other items as
may be reasonably necessary for Collateral Agent to file such agreements with the U.S.
Copyright Office and the U.S. Patent and Trademark Office, as applicable. If, before the
Obligations are indefeasibly paid in full, in cash, any Borrower acquires or becomes
entitled to any new or additional registered Patents, Trademarks or federally registered
Copyrights, or rights thereto, such Borrower shall give to Collateral Agent prompt written
notice thereof, and if requested by the Collateral Agent following such Borrower's
delivery of such notice, shall amend the schedules to the respective security agreements
or enter into new or additional security agreements to include any such Patents,
Trademarks or Copyrights. With respect to

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all Intellectual Property, the loss of which could reasonably be
expected to have a Material Adverse Effect, each Borrower shall: (a) prosecute
diligently any copyright, patent or trademark application at any time pending;
(b) preserve and maintain all rights in such Intellectual Property; (c) use its
best efforts to obtain any consents, waivers or agreements necessary to enable Collateral
Agent to exercise its remedies with respect to such Intellectual Property; (d) not
abandon any material right to file a copyright, patent or trademark application nor
abandon any pending copyright, patent or trademark application, or Copyright, Patent or
Trademark without the prior written consent of Collateral Agent. All government registered
Intellectual Property, the loss of which could reasonably be expected to have a Material
Adverse Effect, is owned by Borrowers, is valid, subsisting and enforceable and all
filings necessary to maintain the effectiveness of such registrations have been made. With
respect to all Intellectual Property, the loss of which could reasonably be expected to
have a Material Adverse Effect, is the execution, delivery and performance of this
Agreement by Borrowers will not violate or cause a default under any of such Intellectual
Property or any agreement with respect thereto.

(J)     Commercial
Tort Claims Warranties and Covenants. Except for matters disclosed on Schedule 2.7(A),
no Borrower owns any commercial tort claims. Borrowers shall advise Collateral Agent
promptly upon any Borrower becoming aware that it owns any additional Commercial Tort
Claims. With respect to any new commercial tort claim, Borrowers will execute and deliver
such documents as Collateral Agent deems necessary to create, perfect and protect
Collateral Agent's security interest in such commercial tort claim.

(K)     Deposit
Accounts; Bank Accounts Warranties and Covenants.

(1)     Schedule
4.5(K) sets forth the account numbers and locations, and the name of the depository
bank, of all Deposit Accounts of Borrowers (other than the Borrower Deposit Accounts and
the Collection Account) that are subject to a lockbox, blocked account or similar
agreement or arrangement, or the collections or deposits in which are pledged to any third
party (not including the Agents or the Lenders) (any such accounts, collectively, the
"Blocked Accounts"), as well as a brief description of the terms of any lockbox,
blocked account or similar agreement or arrangement regarding any Blocked Account.

(2)     Borrowers
shall not (a) transfer or direct the transfer of any collections from any Borrower Deposit
Account or any Collection Account into any Blocked Account or other bank account of
Borrowers or any Subsidiary of Borrowers or (b) close any Blocked Account or modify
the terms of any lockbox, blocked account or similar agreement or arrangement, in either
case without the prior written consent of Collateral Agent, except as otherwise expressly
permitted by subsection 2.4(A)(4).

(L)     Bailees.
Except as disclosed on Schedule 4.5(L), none of the Collateral is in the
possession of any consignee, bailee, warehouseman, agent or processor. No Collateral
having an aggregate value in excess of $50,000 shall at any time be in the possession or
control of any warehouse, bailee or any of Borrowers' agents or processors (other than
(i) patient medical records required to be retained under applicable law and
(ii) Equipment that is obsolete or that is being recalibrated or refurbished) without
Collateral Agent's prior written consent and unless Collateral Agent, if Collateral Agent
has so requested, has received warehouse receipts or bailee lien waivers satisfactory to
Collateral Agent prior to the commencement of such possession or control. If any such
Collateral is at any time in the possession or control of any warehouse, bailee or any of
Borrowers' agents or processors, Borrowers

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shall, upon the request of Collateral Agent, notify such warehouse,
bailee, agent or processor of the Liens in favor of Collateral Agent, for the benefit of
Collateral Agent and Lenders, created hereby, shall instruct such Person to hold all such
Collateral for Collateral Agent's account subject to Collateral Agent's instructions, and
shall obtain such Person's acknowledgement that it is holding the Collateral for
Collateral Agent's benefit.

(M)     Collateral
Description; Use of Collateral. Borrowers will furnish to Collateral Agent, from time to
time upon request but, so long as no Event of Default shall have occurred and be
continuing, no more than once per calendar month, statements and schedules further
identifying, updating, and describing the Collateral (not including the Borrowing Base
Certificate, which shall in any event be furnished to Agents on a weekly basis) and such
other information, reports and evidence concerning the Collateral, as Collateral Agent may
reasonably request, all in reasonable detail. No Borrower will use or permit any
Collateral to be used unlawfully or in violation of any provision of applicable law, or
any policy of insurance covering any of the Collateral.

(N)     Collateral
Filing Requirements; Collateral Records. Borrowers shall keep full and accurate books and
records relating to the Collateral and shall stamp or otherwise mark such books and
records in such manner as Collateral Agent may reasonably request to indicate Collateral
Agent's Liens in the Collateral for the benefit of Agents and Lenders.

(O)     Federal
Claims. Except for Accounts of Medicare/Medicaid Account Debtors, Accounts of the
Veteran's Administration and claims relating to refunds of federal or state taxes, none of
the Collateral constitutes a claim against the United States of America, or any State or
municipal government or any department, instrumentality or agency thereof, the assignment
of which claim is restricted by law. Borrowers shall notify Collateral Agent of any
Collateral (other than such Accounts or tax refund claims) which constitutes a claim
against the United States of America, or any State or municipal government or any
department, instrumentality or agency thereof, the assignment of which claim is restricted
by law. Upon the request of Collateral Agent, to the extent permitted by applicable law,
Borrowers shall take such steps as may be necessary to comply with any applicable federal
assignment of claims laws and other comparable laws.

4.6     Names
and Locations. Schedule 4.6 sets forth (a) all legal names and all other names
(including trade names, fictitious names and business names) under which each Borrower
currently conducts business, or has at any time since October 14, 1999 conducted
business, (b) the location of each Borrower's principal place of business,
(c) the state or other jurisdiction of organization for each Borrower and each
Borrower's organizational identification number or specifically designates that one does
not exist, (d) the location of each Borrower's books and records, (e) the
location of all other Facilities and pharmacy locations of each Borrower and (f) all
other Collateral locations not set forth with respect to clause (e) of this subsection 4.6
(designating Inventory and Equipment locations and indicating between owned, leased,
warehouse, storage, and processor locations). The locations designated on Schedule 4.6
are Borrowers' sole locations for their respective businesses and the Collateral.
Borrowers will give Collateral Agent at least thirty (30) days advance written notice of
any: (a) change of name of any Borrower, (b) change of principal place of business of
any Borrower, (c) change in the location of each Borrower's books and records,
(d) change in the location of any Collateral which would require the Collateral Agent
to file additional UCC financing statements to maintain a perfected security interest in
such Collateral and (e) change in any Borrower's state or other jurisdiction of
organization or its organizational identification number.

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4.7     Title
to Properties; Liens. Each Borrower has good, sufficient and legal title to all of the
Collateral (and any other material properties and assets, if any) and will have good,
sufficient and legal title of all after-acquired Collateral (and any other after-acquired
material properties and assets, if any), in each case, free and clear of all Liens except
for the Permitted Encumbrances. Collateral Agent has a valid, perfected and, first
priority Liens in the Collateral (subject only to the Permitted Encumbrances), securing
the payment of the Obligations, and such Liens are entitled to all of the rights,
priorities and benefits afforded by the UCC or other applicable law as enacted in any
relevant jurisdiction which relates to perfected Liens.

4.8     Litigation;
Adverse Facts. There are no judgments outstanding against any Borrower or affecting any
property of any Borrower nor are there any actions, suits, proceedings, governmental
investigations or arbitrations now pending or, to the best knowledge of any Borrower after
due inquiry, threatened against or affecting any Borrower or any of its property which, if
adversely determined, could reasonably be expected to result in a Material Adverse Effect.
Promptly upon any Borrower obtaining knowledge of (a) the institution of any action, suit,
proceeding, governmental investigation or arbitration against or affecting any Borrower or
any of its property, not previously disclosed by Borrowers to Collateral Agent, which if
adversely determined could reasonably be expected to have a Material Adverse Effect or (b)
any development in any action, suit, proceeding, governmental investigation or arbitration
at any time pending or affecting any Borrower or any of its property which could
reasonably be expected to have a Material Adverse Effect, Borrowers will promptly give
notice thereof to Collateral Agent and provide such other information as may be reasonably
available to enable Collateral Agent and its counsel to evaluate such matter.

4.9     Payment
of Taxes. Except as disclosed on Schedule 4.9, all material tax returns and reports
of each Borrower required to be filed by any of them have been timely filed and are
complete and accurate in all material respects. All taxes, assessments, fees and other
governmental charges which are due and payable by each Borrower have been paid when due
(except as otherwise permitted by the terms of the Plan, in which case Borrowers have
complied with and shall comply with the Plan in all material respects; provided that no
such tax need be paid if such Borrower is contesting same in good faith by appropriate
proceedings promptly instituted and diligently conducted and if such Borrower has
established appropriate reserves as required in conformity with GAAP. As of the Closing
Date, except as set forth in Schedule 4.9, none of the income tax returns of any
Borrower are under audit. Other than tax liens filed prior to October 14, 1999, and
other than those tax liens filed after October 14, 1999 and prior to the date of this
Agreement, that have been or will be discharged pursuant to the Plan, no other tax liens
have been against any Borrower with respect to payroll taxes, and to Borrower's knowledge,
no other tax liens have been filed against any Borrower since October 14, 1999 that
are in excess of $250,000, individually or in the aggregate. The charges, accruals and
reserves on the books of each Borrower in respect of any taxes or other governmental
charges are in accordance with GAAP. Each Borrower has executed United States of America
Internal Revenue Service ("IRS") Form 8821 designating Collateral Agent as
Borrower's appointee to receive directly from the IRS, on an on-going basis, certain tax
information, notices and other written communication and Borrower authorizes Collateral
Agent to file such Form 8821 with the IRS. Each Borrower's federal tax identification
number is listed on Schedule 4.9.

4.10     Performance
of Agreements. None of the Borrowers is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any Material

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Contract, and no condition exists that, with the giving of notice or
the lapse of time or both, would constitute such a default.

4.11     Employee
Benefit Plans. Each of the Borrowers, their Subsidiaries and their ERISA Affiliates are in
compliance, and will continue to remain in compliance, in all material respects with all
applicable provisions of ERISA, the IRC and all other applicable laws and the regulations
and interpretations thereof with respect to all Employee Benefit Plans. No material
liability has been incurred by any of the Borrowers, their Subsidiaries or their ERISA
Affiliates which remains unsatisfied for any funding obligation, taxes or penalties with
respect to any Employee Benefit Plan. No Borrower nor any of its Subsidiaries shall
establish any new Employee Benefit Plan or amend any existing Employee Benefit Plan if the
liability or increased liability resulting from such establishment or amendment is
material.

4.12     Broker's
Fees. No broker's or finder's fee or commission will be payable with respect to this
Agreement.

4.13     Environmental
Compliance. Each Borrower is and shall continue to remain in compliance with all
applicable Environmental Laws except where failure to be in such compliance could not
reasonably be expected to result in a Material Adverse Effect. To the Borrowers'
knowledge, there are no claims, liabilities, Liens, investigations, litigation,
administrative proceedings, whether pending or threatened, or judgments or orders relating
to any Hazardous Materials asserted or threatened against any Borrower or relating to any
real property currently or formerly owned, leased or operated by any Borrower.

4.14     Solvency.
From and after the date of this Agreement, the Company and its Subsidiaries, on a
consolidated basis, (a) own assets the fair salable value of which are greater than
the total amount of its liabilities (including contingent liabilities), (b) have
capital that is not unreasonably small in relation to its business as presently conducted
or any contemplated or undertaken transaction, and (c) does not intend to incur and
does not believe that it will incur debts beyond its ability to pay such debts as they
become due.

4.15     Disclosure.
No representation or warranty of any Borrower contained in this Agreement, the other Loan
Documents, or any other document, certificate or written statement furnished to Collateral
Agent or any Lender by or on behalf of any such Person for use in connection with the Loan
Documents contains any untrue statement of a material fact or omitted, omits or will omit
to state a material fact necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which the same were made. There is
no material fact known to any Borrower that has had or could reasonably be expected to
have a Material Adverse Effect and that has not been disclosed herein or in such other
documents, certificates and statements furnished to any Agent or Lender for use in
connection with the transactions contemplated hereby.

4.16     Insurance.
Each Borrower and each of its Subsidiaries maintains and shall continue to maintain
adequate insurance policies and shall provide Collateral Agent with evidence of such
insurance coverage for public liability, professional liability, property damage and
product liability with respect to its business and properties and the business and
properties of its Subsidiaries against loss or damage commensurate with the kinds and
amounts customarily carried or maintained by corporations of similar size, established
reputation and engaged in similar businesses and in amounts acceptable to Collateral

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Agent in its reasonable discretion. Each Borrower shall cause
Collateral Agent at all times to be named as additional loss payee, as its interests may
appear, on all property damage insurance policies and shall cause Collateral Agent at all
times to be named as additional insured under all general and professional liability
policies relating to the Collateral, in each case pursuant to appropriate endorsements in
form and substance satisfactory to Collateral Agent. No notice of cancellation has been
received with respect to such policies and each Borrower and each of its Subsidiaries is
in compliance with all material conditions contained in such policies. Any proceeds
received from any policies of insurance relating to any Collateral shall be applied to the
Obligations as set forth in subsection 2.4(B)(2). Each Borrower shall provide Collateral
Agent evidence of the insurance coverage and of the assignments and endorsements required
by this Agreement promptly upon request by Collateral Agent and upon renewal of any
existing policy. If any Borrower elects to change insurance carriers, policies or coverage
amounts, such Borrower shall notify Collateral Agent and provide Collateral Agent with
evidence of the updated insurance coverage and of the assignments and endorsements
required by this Agreement, except that such notice shall not be required (a) if such
change does not materially reduce the coverage amounts or materially and adversely affect
the terms or provisions of the coverage in existence on the Closing Date or (b) if such
change does materially reduce the coverage amounts or does materially and adversely affect
the terms or provisions of such coverage in existence on the Closing Date, such Borrower
shall have obtained the highest amount of coverage and the most favorable terms and
provisions that are then commercially available. In the event such Borrower fails to
provide Collateral Agent with evidence of the insurance coverage required by this
Agreement, Collateral Agent may, but is not required to, purchase insurance at such
Borrower's expense to protect Collateral Agent's and the Lender's interests in the
Collateral. This insurance may, but need not, protect such Borrower's interests. The
coverage purchased by Collateral Agent may not pay any claim made by such Borrower or any
claim that is made against such Borrower in connection with the Collateral. Such Borrower
may later cancel any insurance purchased by Collateral Agent, but only after providing
Collateral Agent with evidence that such Borrower has obtained insurance as required by
this Agreement. If Collateral Agent purchases insurance for the Collateral, such Borrower
will be responsible for the costs of that insurance, including interest thereon and other
charges imposed on Collateral Agent in connection with the placement of the insurance,
until the effective date of the cancellation or expiration of the insurance, and such
costs may be added to the Obligations. The costs of the insurance may be more than the
cost of insurance such Borrower is able to obtain on its own.



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4.17     Compliance
with Laws; Government Authorizations; Consents. Except as set forth on Schedule 4.17,
no Borrower is in violation of any law, ordinance, rule, regulation, order, policy,
guideline or other requirement of or obligation under (a) any governmental authority
in all jurisdictions in which such Borrower or any of its Subsidiaries is now doing
business, (b) that certain Corporate Integrity Agreement, dated as of July 12,
2001 between the Office of the Inspector General of the Department of Health and Human
Services and the Company ("the Corporate Integrity Agreement") and (c) any
government authority otherwise having jurisdiction over the conduct of such Borrower or
any of its Subsidiaries or any of its respective businesses, or the ownership of any of
its respective properties, which violation would subject such Borrower or any of its
Subsidiaries, or any of their respective officers to criminal liability or, in each case,
could reasonably be expected to result in a Material Adverse Effect and, to the Borrowers'
knowledge, no such violation has been alleged. Borrowers will and will cause each of their
Subsidiaries to comply with the requirements of all applicable laws, ordinances, rules,
regulations, orders, policies, guidelines or other requirements of (a) any governmental
authority as now in effect and which may be imposed in the future in all jurisdictions in
which any Borrower or any of its Subsidiaries is now doing business or may hereafter be
doing business, (b) any government authority otherwise having jurisdiction over the
conduct of any Borrower or any of its Subsidiaries or any of its respective businesses, or
the ownership of any of its respective properties, and (c) the Corporate Integrity
Agreement, in each case, except to the extent the noncompliance with which could not
reasonably be expected to have a Material Adverse Effect. No authorization, approval or
other action by, and no notice to or filing with, any domestic or foreign governmental
authority or regulatory body or consent of any other Person is required for (a) the grant
by any Borrower of the Liens granted hereby or for the execution, delivery or performance
of this Agreement or the other Loan Documents by any Borrower; (b) the perfection of
the Liens granted hereby and pursuant to any other Loan Documents (except for filing UCC
financing statements with the appropriate jurisdiction and filing any Patent Security
Agreement, Trademark Security Agreement and Copyright Security Agreement with the U.S.
Patent and Trademark Office or the U.S. Copyright Office, as applicable); or (c) the
exercise by Collateral Agent of its rights and remedies hereunder (except as may have been
taken by or at the direction of any Borrower or Collateral Agent).

4.18     Employee
Matters. Except as set forth on Schedule 4.18, (a) no Borrower nor any of
such Borrower's employees is subject to any collective bargaining agreement, (b) no
petition for certification or union election is pending with respect to the employees of
any Borrower and no union or collective bargaining unit has sought such certification or
recognition with respect to the employees of any Borrower and (c) there are no
strikes, slowdowns, work stoppages or controversies pending or, to the knowledge of any
Borrower after due inquiry, threatened between any Borrower and its respective employees,
other than employee grievances arising in the ordinary course of business, which could
reasonably be expected to have, either individually or in the aggregate, a Material
Adverse Effect. Except as set forth on Schedule 4.18, no Borrower is party to
an employment contract or collective bargaining agreement.

4.19     Governmental
Regulation. No Borrower is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act or the Investment Company Act of 1940 or to any federal
or state statute or regulation limiting its ability to incur indebtedness for borrowed
money.

4.20     Access
to Accountants and Management. Borrowers authorize Agents and Lenders to discuss the
financial condition and financial statements of any Borrower and its Subsidiaries with the
Company's Accountants upon reasonable notice to the Company and, if no Event of Default
shall have

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occurred and be continuing, in the Company's presence, either in person
or, if Agents elect, by telephone. Borrowers authorize the Company's Accountants to
respond to all of Collateral Agent's inquiries. Collateral Agent and each Lender may, with
the consent of Collateral Agent, which will not be unreasonably denied, confer with each
Borrower's management directly regarding such Borrower's business, operations and
financial condition.

4.21     Inspection.
Subject to subsection 10.18, the Borrowers shall permit Collateral Agent and any
authorized representatives designated by Collateral Agent to visit and inspect any of the
properties of any Borrower or any of its Subsidiaries, including their financial and
accounting records, and, in conjunction with such inspection, to make copies and take
extracts therefrom, and to discuss their affairs, finances and business with their
officers and such Borrower's Accountants, at such reasonable times during normal business
hours and as often as may be reasonably requested but no more than six (6) times per year
; provided, however, that upon the occurrence and during the continuance of
an Event of Default, the number of visits and inspections per year shall not be limited.
Each Lender may, with the consent of Collateral Agent which consent will not be
unreasonably denied, accompany Collateral Agent on any such visit or inspection. All
actual out-of-pocket expenses of Collateral Agent in connection with such visits and
inspections shall be paid by Borrowers.

4.22     Borrowers'
Receipt of Payments. If any Borrower, or any of its Subsidiaries, Affiliates, employees,
agents or any other Persons acting for or in concert with any Borrower, shall receive any
monies, checks, notes, drafts or any other payments relating to and/or proceeds of any
Borrower's Accounts or other Collateral (other than pursuant to an Asset Disposition or
other dispositions permitted hereunder as to which Borrowers are expressly permitted to
retain such payments and proceeds for its own account) such Borrower or such Person shall
hold such instrument or funds in trust for Collateral Agent, and, immediately upon receipt
thereof, shall remit the same or cause the same to be remitted, in kind, to the Borrower
Deposit Accounts, to the Collection Account or to Administrative Agent at its address set
forth in subsection 10.3 below.

4.23     Recoupments;
Overpayments. On each Borrowing Base Certificate given to Lenders in connection with a
request for a Revolving Advance, Borrowers have disclosed to Lenders the amount of any
(a) Medicare, Medicaid or TRICARE recoupments or overpayments in excess of $500,000
and (b) recoupments or overpayments of any other third-party payor in excess of
$100,000, in each case being sought, requested, claimed, or, to any Borrower's knowledge,
threatened against any Borrower or any of its Affiliates.

4.24     Reports.
Borrowers have timely filed or caused to be timely filed all cost reports and other
reports of every kind whatsoever required by law or by written or oral contracts or
otherwise to have been filed or made with respect to the Facilities, except for such
reports of which the failure to file individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. There are no claims, actions or
appeals pending (and no Borrower has filed any claims or reports which should result in
any such claims, actions or appeals) before any commission, board or agency including
without limitation any intermediary or carrier, the Provider Reimbursement Review Board or
the Administrator of the Centers for Medicare and Medicaid Services, with respect to any
state or federal Medicare or Medicaid cost reports or claims filed by any Borrower, or any
disallowance by any commission, board or agency in connection with any audit of such cost
reports, which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. As of the Closing Date, and thereafter, no validation review or
program integrity review related to any Borrower, or the

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consummation of the transactions contemplated herein, or related to the
Facilities or the Collateral, are being conducted by any commission, board or agency in
connection with the Medicare or Medicaid programs, and to the knowledge of Borrowers, no
such reviews are scheduled, pending or threatened against or affecting any of the
providers, or any of the Facilities or the Collateral, or the consummation of the
transactions contemplated hereby except those reviews that could not reasonably be
expected to have a Material Adverse Effect.

4.25     Compliance
With Health Care Laws. Without limiting the generality of subsection 4.17 or any other
representation or warranty made herein, to Borrowers' knowledge, each of the Facilities,
and each of its licensed employees and contractors (other than contracted agencies) in the
exercise of their respective duties on behalf of each of the Facilities, is in compliance
with all applicable statutes, laws, ordinances, rules and regulations of any governmental
authority (including without limitation Section 1128B(b) of the Social Security Act, as
amended, 42 U.S.C. Section 1320a-7(b) (Criminal Penalties Involving Medicare or State
Health Care Programs), commonly referred to as the "Federal Anti-Kickback
Statute," and the Social Security Act, Section 1877, (Prohibition Against Certain
Referrals), commonly referred to as "Stark Statute" (collectively, "Healthcare
Laws")). Borrowers have maintained in all material respects all records required
to be maintained by the Joint Commission on Accreditation of Healthcare Organizations, the
Food and Drug Administration, the Drug Enforcement Agency, the State Boards of Pharmacy
and, to the extent required by Healthcare Laws, the federal and state Medicare, Medicaid
and TRICARE programs and, to the knowledge of Borrowers, there are no presently existing
circumstances which would result or likely would result in material violations of the
Healthcare Laws. Each Borrower and its Affiliates and the owners of the facilities and
other businesses managed by any Borrower or its Affiliates have such permits, licenses,
franchises, certificates and other approvals or authorizations of governmental or
regulatory authorities as are necessary under applicable law to own their respective
properties and to conduct their respective business (including without limitation such
permits as are required under such federal, state and other health care laws, and under
such HMO or similar licensure laws and such insurance laws and regulations, as are
applicable thereto), and with respect to those facilities and other businesses that
participate in Medicare, Medicaid and/or TRICARE to receive reimbursement under Medicare,
Medicaid and TRICARE. To Borrowers' knowledge, there currently exist no restrictions,
deficiencies, required plans of corrective actions or other such remedial measures with
respect to federal and state Medicare, Medicaid and TRICARE certifications or licensure
that could reasonably be expected to have a Material Adverse Effect.

4.26     Funds
from Restricted Grants. None of the Facilities or other Collateral is subject to, and
Borrowers shall indemnify and hold Lenders harmless from and against, any liability in
respect of amounts received by Borrower or others for the purchase or improvement of the
Facilities or other Collateral or any part thereof under restricted or conditioned grants
or donations, including, without limitation, monies received under the Public Health
Service Act, 42 U.S.C. Section 291 et seq.

4.27     Intentionally
Deleted.

4.28     HIPAA
Compliance. To the extent that and for so long as any Borrower is a "covered
entity" within the meaning of HIPAA, such Borrower (i) has undertaken or will
promptly undertake all necessary surveys, audits, inventories, reviews, analyses and/or
assessments (including any necessary risk assessments) of all areas of its business and
operations required by HIPAA and/or that could be adversely affected by the failure of
such Borrower to be HIPAA Compliant (as defined below); (ii) has developed or will
promptly develop a detailed plan and time line for becoming HIPAA Compliant (a "HIPAA

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Compliance Plan"); and (iii) has implemented or will implement
those provisions of such HIPAA Compliance Plan in all material respects necessary to
ensure that such Borrower is or becomes HIPAA Compliant. For purposes hereof, "HIPAA
Compliant" shall mean that such Borrower is or will be in compliance with each of the
applicable requirements of the so-called "Administrative Simplification"
provisions of HIPAA on and as of each date that any part thereof, or any final rule or
regulation thereunder, becomes effective in accordance with its or their terms, as the
case may be, except where failure to be in compliance could not reasonably be expected to
result in a Material Adverse Effect or otherwise materially adversely affect the rights
and remedies of the Agents and Lenders hereunder.

4.29     Licenses.
Except as disclosed in Schedule 4.29, each of the Borrowers has all necessary
licenses, permits, franchises, certificates of need, rights to participate in (or the
benefit of valid agreements to participate in) Medicare, Medicaid, TRICARE and other
material third party payor programs participated in by it, and has all Medicaid, TRICARE
and Medicare provider numbers, provider agreements and other rights necessary for the
generation of its Accounts and otherwise for the conduct of its business and for the
intended use of its properties and assets to the extent necessary or appropriate to ensure
no material interruption in cash flow.

4.30     Certificates
of Need. Borrowers are the lawful owner of any certificates of need or other required
license for the operation of each of the Facilities.

4.31     Inactive
Entities. Except as set forth on Schedule 4.31, as of the Closing Date, none of the
Inactive Entities (a) has Total Assets valued at greater than $260,000, (b) had
Total Revenues during the fourth calendar quarter of 2001 in excess of $3,000 or
(c) is currently conducting any business operations.

4.32     Supplemental
Schedules. Borrowers may amend any one or more of the Schedules referred in this Section 4
by notice to the Collateral Agent. Any representation, warranty, or covenant contained
herein which refers to any such Schedule shall from and after the date of any such
amendment refer to such Schedule as so amended; provided, however, that in
no event shall the amendment of any such Schedule constitute a waiver by Collateral Agent
or Lenders of any Event of Default that has occurred and is continuing at the time of such
amendment unless such Event of Default has been cured by the amendment of such Schedule
and has been expressly waived by the Collateral Agent and Requisite Lenders.

SECTION 5. REPORTING AND OTHER AFFIRMATIVE COVENANTS

Each of the
Borrowers covenants and agrees that, so long as any of the Commitments hereunder shall be
in effect and until payment in full, in cash, of all Obligations and termination of all
Lender Letters of Credit, Borrowers shall perform and shall cause each of its Subsidiaries
to perform, all covenants in this Section 5.

5.1     Financial
Statements and Other Reports. The Company will deliver to Collateral Agent and each Lender
(unless specified to be delivered solely to Collateral Agent) the financial statements and
other reports contained in the Reporting Rider attached hereto.

5.2     Endorsement;
Insurance Claims. Borrowers hereby constitute and appoint Collateral Agent and all Persons
designated by Collateral Agent for that purpose as Borrowers' true and lawful attorney-in-

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fact, with power in the place and stead of each Borrower and in the
name of each Borrower (a) to endorse such Borrower's name to any of the items of payment
or proceeds described in subsection 4.22 above and all proceeds of Collateral that come
into Collateral Agent's possession or under Collateral Agent's control, including, without
limitation, with respect to any drafts, Instruments, Documents and Chattel Paper, and (b)
during the continuance of an Event of Default, to obtain, adjust and settle insurance
claims, which are required to be paid to Collateral Agent. Borrowers hereby ratify and
approve all acts of Collateral Agent made or taken in accordance with this subsection 5.2
Both the appointment of Collateral Agent as Borrowers' attorney and Collateral Agent's
rights and powers hereunder are coupled with an interest and are irrevocable.

5.3   Maintenance
of Properties. Borrowers will maintain or cause to be maintained in good repair, working
order and condition all material properties used in the business of Borrowers and its
Subsidiaries and will make or cause to be made all appropriate repairs, renewals and
replacements thereof.

5.4    Further
Assurances. Borrowers shall from time to time, execute such financing or continuation
statements, documents, security agreements, reports and other documents or deliver to
Collateral Agent such instruments, certificates of title, mortgages, deeds of trust, or
other documents as Collateral Agent at any time may reasonably request to evidence,
perfect or otherwise implement the security for repayment of the Obligations provided for
in the Loan Documents.

5.5    Mortgages;
Title Reports.

(A)     Title
Reports. Within sixty (60) days following the Closing Date, Borrower shall deliver or
cause to be delivered to Collateral Agent, title reports or title commitments prepared by
title insurance companies reasonably satisfactory to Collateral Agent in form and
substance reasonably satisfactory to Collateral Agent so that Collateral Agent can
determine that the Mortgages shall create first priority mortgage liens on the respective
Mortgaged Property, free and clear of all mortgages, deeds of trust and other Liens
arising from Indebtedness.

(B)     Mortgages.
Borrowers shall as promptly as possible (and in any event within sixty (60) days after the
Closing Date) deliver to Collateral Agent fully executed Mortgages, in form and substance
satisfactory to Collateral Agent.

(C)     Other
Real Property. If Borrowers intend to acquire any real property after the Closing Date (i)
Borrowers shall comply with all provisions of this Agreement, (ii) Borrowers shall grant
to Collateral Agent a first priority mortgage or deed of trust upon such real property,
and (iii) Borrowers shall obtain such lender's title insurance, ALTA surveys,
environmental reports, structural and engineering inspection reports and other documents
in form and substance satisfactory to Collateral Agent.

5.6     Use
of Proceeds and Margin Security. Borrowers shall use the proceeds of all Loans for proper
business purposes (as described in the recitals to this Agreement) consistent with all
applicable laws, statutes, rules and regulations. No portion of the proceeds of any Loan
shall be used for the purpose of purchasing or carrying margin stock within the meaning of
Regulation U, or in any manner that might cause the borrowing or the application of such
proceeds to violate Regulation T or Regulation

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X or any other regulation of the Board of Governors of the Federal
Reserve System or to violate the Securities Act.

5.7     Licensure;
Medicaid/Medicare Cost Reports. Borrowers will maintain all certificates of need, provider
numbers, provider agreements and licenses necessary to conduct their business as currently
conducted. Borrowers will take any steps required to comply with any new or additional
requirements that may be imposed on providers of medical products and Medical Services
except where failure to maintain or comply could not reasonably be expected to result in a
Material Adverse Effect. All Medicaid, Medicare and TRICARE cost reports required by law
and all claims for reimbursement will be properly filed.

5.8     Termination/Default
of Contracts. Borrowers shall notify Collateral Agent of any (a) default or event of
default under, (b) termination of, (c) modification or amendment of, or
(d) failure of any party to renew, any Material Contract as soon as reasonably
possible (other than with respect to any notice of default, termination or failure to
renew that originates with Borrowers, which notice shall be sent concurrently to
Collateral Agent). Notwithstanding anything in this subsection 5.8 to the contrary,
no provision in this subsection 5.8 shall modify, reduce or otherwise affect Collateral
Agent's or any Lender's rights hereunder or under any other Loan Document.

5.9     Notice
of Event of Default and Other Matters. Promptly after any of the following, give notice
of:

(A)     any
Default or Event of Default;

(B)     any
change in the business, assets, liabilities, financial condition, results of operations or
business prospects of the Borrowers taken as a whole which has had or could reasonably,
individually or in the aggregate, be expected to have a Material Adverse Effect; and

(C)     any
material amendment of the articles of incorporation or by-laws of any Borrower or any of
its Subsidiaries which could reasonably be expected to materially adversely affect the
interests, rights and remedies of the Agents and Lenders under this Agreement.

5.10     Inactive
Entities. Each Inactive Entity shall be merged into or consolidated with a Borrower (or
with another Inactive Entity that is promptly merged into or consolidated with a Borrower)
as promptly as practicable and in any event by January 31, 2003 or such later date to
which Collateral Agent may consent in writing; provided, however, that any
Inactive Entity that has Total Assets valued at greater than zero and less than $10,000
may be dissolved without being merged or consolidated into a Borrower provided that prior
notice of such dissolution is given to the Collateral Agent. The financial statements
relating to each Inactive Entity shall be maintained in accordance with GAAP, including
the financial records relating to the merger or consolidation of such Inactive Entity as
required hereunder. In the event that any Inactive Entity shall remain in existence after
January 31, 2003 (or such later date to which Collateral Agent shall have consented in
writing), an Event of Default pursuant to this subsection 5.10 shall immediately occur
without further action or notice by Agents or Lenders unless by such date the
Borrowers shall have caused such Inactive Entity to become a Borrower hereunder.

5.11     Letters
of Credit.

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(A)     Borrowers
shall use commercially reasonable efforts to cause the beneficiary of any Lender Letters
of Credit or Bank Letters of Credit to accept such letters of credit without provisions
for automatical renewal.

(B)     With
respect to any Lender Letter of Credit or Bank Letter of Credit, issued at the request of,
or on behalf of any Borrower, that contains an automatic renewal provision, if Borrowers
desire to permit the renewal of such letter of credit, Borrowers shall notify Agents not
later than fifteen (15) days prior to the earlier of (i) the expiration date of such
letter of credit or (ii) the date by which notice must be given by the issuer of such
letter of credit that it is not being renewed.

SECTION 6. FINANCIAL COVENANTS

Each of the
Borrowers covenants and agrees that so long as any of the Commitments remain in effect and
until indefeasible payment in full, in cash, of all Obligations and termination of all
Lender Letters of Credit, Borrowers shall comply with and shall cause each of their
Subsidiaries to comply with all covenants contained in the Financial Covenant Rider.

SECTION 7. NEGATIVE COVENANTS

Each of the
Borrowers covenants and agrees that so long as any of the Commitments remain in effect and
until indefeasible payment in full, in cash, of all Obligations and termination of all
Lender Letters of Credit, Borrowers shall not and will not permit any of their
Subsidiaries to:

7.1     Indebtedness.
Directly or indirectly create, incur, assume, guaranty, or otherwise become or remain
directly or indirectly liable, on a fixed or contingent basis, with respect to any
Indebtedness except: (a) the Obligations; (b) intercompany Indebtedness among
the Borrowers, incurred in the ordinary course of business; (c) Indebtedness owing by
SHS to the Company or another Borrower in an aggregate principal amount not to exceed the
sum of (i) the principal balance of such Indebtedness as of the Closing Date and
(ii) $1,500,000; (d) Indebtedness incurred after the Closing Date in connection
with Capital Leases or purchases secured by purchase money Liens, in both cases together
not to exceed $5,000,000 in outstanding principal amount in the aggregate; (e)Indebtedness
under the Term Loan Documents but only to the extent permitted under the terms of the
Intercreditor Agreement; (f) Indebtedness existing on the Closing Date and identified
on Schedule 7.1; (g) Indebtedness incurred in connection with refinancing
of those certain mortgages existing on the date hereof that encumber certain real property
owned by the Borrowers on the date hereof, as set forth in Schedule 7.1, which
Indebtedness shall not exceed the principal balance secured by such mortgages on the
Closing Date; (h) Indebtedness incurred in connection with the Sumitomo Transaction
and the SunTrust Transaction; and (i) unsecured Indebtedness not to exceed $2,000,000 in
outstanding principal amount in the aggregate. No Borrower will, and will not permit any
of its Subsidiaries to, incur any Liabilities except for Indebtedness permitted herein and
trade payables and normal accruals in the ordinary course of business not yet due and
payable or with respect to which any Borrower or any of its Subsidiaries is contesting in
good faith the amount or validity thereof by appropriate proceedings and then only to the
extent that such Borrower or any of its Subsidiaries has established adequate reserves
therefor under GAAP.

7.2     Guaranties.
Except for endorsements of instruments or items of payment for collection in the ordinary
course of business, guaranty, endorse, or otherwise in any way become or be responsible
for

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any obligations of any other Person (unless such obligation constitutes
Indebtedness permitted by subsection 7.1), whether directly or indirectly by agreement to
purchase the indebtedness of any other Person or through the purchase of goods, supplies
or services, or maintenance of working capital or other balance sheet covenants or
conditions, or by way of stock purchase, capital contribution, advance or loan for the
purpose of paying or discharging any indebtedness or obligation of such other Person or
otherwise; provided, however, that any Borrower may guarantee any obligation of any other
Borrower so long as such obligation is otherwise not prohibited under this Agreement.

7.3     Transfers,
Liens and Related Matters.

(A)     Transfers.
Sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any
option with respect to any of the Collateral, except that (1) Borrowers may permit
the Inactive Entities to sell or transfer their respective assets in connection with any
dissolution or liquidation permitted under subsection 5.10 of this Agreement;
(2) Borrowers may (a) sell Inventory to a buyer in the ordinary course of
business and license a General Intangible to a licensee in the ordinary course of
business; (b) make Asset Dispositions, if all of the following conditions are met:
(i) the market value of assets sold or otherwise disposed of in any single
transaction or series of related transactions does not exceed $2,000,000 or, if such
market value exceeds $2,000,000, (A) the Borrowers shall have complied with
subsections 2.4(B)(2) and (B) at least ninety percent (90%) of the consideration
received is in the form of (x) cash, (y) an assumption of then existing Indebtedness
or (z) a combination of cash and assumption of then existing Indebtedness;
(ii) the consideration received is at least equal to the fair market value of such
assets; (iii) after giving effect to the sale or other disposition of the assets
included within the Asset Disposition and the repayment of the Obligations with the
proceeds thereof, Borrowers are in compliance on a pro forma basis with the covenants set
forth in the Financial Covenant Rider recomputed for the most recently ended calendar
quarter for which information is available as if such Asset Disposition occurred at the
beginning of such calendar quarter and are in compliance with all other terms and
conditions contained in this Agreement, as determined by Collateral Agent in its
reasonable discretion upon receipt of information it deems adequate for such purposes; and
(iv) no Default or Event of Default shall then exist or result from such sale or
other disposition; and (3) if no Event of Default shall then exist or result from
such sale or disposition, consummate the Permitted Divestitures, the Campus Transaction
and/or the THCI Turnover.

(B)     Liens.
Except for Permitted Encumbrances and Liens incurred in connection with Indebtedness
permitted under clauses (f), (g) and (h) of subsection 7.1 (provided that such Liens
shall not encumber Accounts or Inventory unless the grantee in respect of such Liens have
entered into a subordination agreement in form and substance satisfactory to the Agents),
directly or indirectly create, incur, assume or permit to exist any Lien on or with
respect to any of the Collateral or any proceeds, income or profits therefrom.

(C)     No
Negative Pledges. Except for the Term Loan Agreement and agreements in connection with
Indebtedness permitted under clauses (f), (g) and (h) of subsection 7.1 (provided
that such agreements shall not restrict encumbrances on Accounts or Inventory unless the
parties benefitting from such agreements have entered into subordination agreements or
other agreements in form and substance satisfactory to the Agents), enter into or assume
any agreement (other than the Loan Documents and the Term Loan Documents) prohibiting the
creation or assumption of any Lien upon its properties or assets, whether now owned or
hereafter acquired except if such agreement is entered into or assumed in connection with
Capital Leases, or purchases secured by purchase money Liens, in either

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case (i) permitted by subsection 7.1 and (ii) not restricting
the creation or assumption of any Lien upon its Accounts or Inventory.

(D)     No
Restrictions on Borrower Distributions to Borrowers. Except as provided herein or in the
Term Loan Documents, directly or indirectly create or otherwise cause or suffer to exist
or become effective any consensual encumbrance or restriction of any kind on the ability
of any Borrower to: (1) pay dividends or make any other distribution on any of such
Borrower's capital stock owned by any Borrower; (2) pay any indebtedness owed to any
Borrower; (3) make loans or advances to any Borrower; or (4) transfer any of its property
or assets to any Borrower other than property, or assets subject to Capital Leases or
purchase money Liens permitted by this Agreement.

7.4     Investments
and Loans. Make or permit to exist investments in, loans to or distributions to any other
Person, except: (a) Cash Equivalents held by a Borrower; (b) loans and advances
to employees of Borrowers for moving, entertainment, travel and other similar expenses in
the ordinary course of business in an aggregate outstanding amount not in excess of
$250,000 at any time; (c) loans in respect of intercompany Indebtedness permitted in
subsection 7.1 of this Agreement; (d) investments by any Borrower in the capital
stock of any Subsidiary that is a Borrower on the Closing Date or in any Person that has
become a Subsidiary and a Borrower after the Closing Date in accordance with the terms of
subsection 7.11 of this Agreement or otherwise with the prior written consent of the
Agents; (e) investments after Closing Date by the Company or any other Borrower in
SHS in an aggregate amount not to exceed $1,500,000; and (f) the investments
disclosed on Schedule 7.4 existing on the date hereof. Notwithstanding any contrary
provision contained in this Agreement (including, without limitation, the provisions of
subsection 7.1 of this Agreement), Borrowers shall not permit any Inactive Entity to
acquire any assets, incur any Indebtedness or Liabilities of any kind, conduct any
business, perform any operations (other than those specifically required for liquidation
or dissolution), receive any distributions from any Borrower or from any Subsidiary of any
Borrower, make any investments or issue any stock or other equity interests.

7.5     Restricted
Junior Payments. Directly or indirectly declare, order, pay, make or set apart any sum for
any Restricted Junior Payment, except payments in respect of the Indebtedness owing in
connection with the Term Loan Documents, but only to the extent permitted under the terms
of the Intercreditor Agreement.

7.6     Restriction
on Fundamental Changes. (a) Enter into any transaction of merger or consolidation;
(b) liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution);
(c) convey, sell, lease, sublease, transfer or otherwise dispose of, in one
transaction or a series of transactions, all or any substantial part of its business or
assets, or the capital stock of any of its Subsidiaries, whether now owned or hereafter
acquired; or (d) acquire by purchase or otherwise all or any substantial part of the
business or assets of, or stock or other beneficial ownership of, any Person; provided,
however, that notwithstanding anything in the foregoing to the contrary, so long as
no Event of Default shall have occurred and be continuing (or otherwise with the prior
written consent of the Collateral Agent (which consent shall not be unreasonably
withheld)), the following shall be permitted under this Agreement upon notice to the
Collateral Agent: (x) the merger, consolidation or dissolution of any Inactive Entity in
accordance with subsection 5.10 and (y) the mergers and consolidations of Borrowers with
other Borrowers.

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7.7     Changes
Relating to Term Loan Documents. Without the prior written consent of the Collateral
Agent, change or amend the terms of the Term Loan Documents other than to the extent
permitted by the Intercreditor Agreement.

7.8     Transactions
with Affiliates. Directly or indirectly, enter into or permit to exist any transaction
(including the purchase, sale or exchange of property or the rendering of any service)
with any Affiliate or with any officer, director or employee of any Borrower, except for
transactions among Borrowers or transactions in the ordinary course of business and upon
fair and reasonable terms which are fully disclosed to Agents and Lenders and which are no
less favorable to Borrowers than they would obtain in a comparable arm's length
transaction with an unaffiliated Person.

7.9     Conduct
of Business. From and after the Closing Date, engage in any business other than businesses
of the type engaged in by Borrowers or any of their Subsidiaries on the Closing Date.

7.10     Tax
Consolidations. File or consent to the filing of any consolidated income tax return with
any Person other than any of its Subsidiaries.

7.11     Subsidiaries.
Other than the Subsidiaries set forth on Schedule 7.11, establish, create or
acquire, subject to subsection 7.4, any new Subsidiaries without the written consent
of the Collateral Agent. Notwithstanding anything in this subsection 7.11 to the
contrary, Borrowers may, without the consent of the Collateral Agent establish any new
domestic Subsidiary that, immediately upon its establishment, becomes a Borrower hereunder
and thus becomes obligated in the same manner and to the same extent of any other Borrower
under this Agreement. Borrowers shall cause each new Subsidiary to execute and deliver any
and all agreements or modifications, revisions or amendments to the Loan Documents,
necessary to evidence the addition of such new Subsidiary as a Borrower.

7.12     Fiscal
Year; Tax Designation. Change its Fiscal Year; or elect to be designated as an entity
other than a C corporation as defined in the IRC.

7.13     Use
of Lenders' Name. Borrowers will not and will not permit its Affiliates to, in the future,
issue any press release or other public disclosure using the name of Lenders, General
Electric Capital Corporation or any of their respective Affiliates or referring to this
Agreement or the other Loan Documents without at least two (2) Business Days prior written
notice to Lenders and without the prior written consent of Lenders unless (and only to the
extent that) such Borrower or Affiliate are required to so disclose under law and then, in
any event, such Borrower or Affiliate will consult with Lender before issuing such press
release or other public disclosure. Borrowers consents to the publication by Lenders of a
tombstone or similar advertising material relating to the financing transactions
contemplated by this Agreement.

7.14     Bank
Accounts. Establish any new bank accounts, or attempt to amend or terminate any Lockbox
Agreement or other agreement required under subsection 2.4(A) or relating to the
Collection Account or any Borrower Deposit Account, except as expressly permitted by
Section 2.4(A)(4), without Collateral Agent's prior written consent.

7.15     IRS
Form 8821. Revoke IRS Form 8821 designating Collateral Agent as Borrowers' appointee to
receive directly from the IRS, on an on-going basis, certain tax information, notices and

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other written communication or fail to take actions necessary to renew
such Form 8821 prior to its expiration for all time periods prior to the Termination Date.

7.16     Certificates
of Need. Except in the ordinary course of its business, amend, alter or suspend or
terminate or make provisional in any material way, any certificate of need, provider
number or provider agreement without the prior written consent of Collateral Agent, which
consent shall not be unreasonably withheld.

7.17     Sale
Lease-back Transactions. Directly or indirectly, enter into any arrangement whereby any
Borrower sells or transfers all or any of its assets and, within one (1) year thereafter,
rents or leases such assets so sold or transferred, without the prior consent of
Collateral Agent; provided that the Borrowers may enter into any such arrangements
so long as the aggregate fair market value of all property subject to such arrangements
does not exceed $5,000,000 (based on the fair market value at the time of the
transaction). Notwithstanding anything in the foregoing to the contrary, the Borrowers may
enter into sale and lease back transactions (i) in connection with the THCI Turnover and
(ii) in respect of the Campus Transaction.

7.18     Plan
and Confirmation Order. Without the prior written consent of the Agents, Borrowers will
not (i) make any material change to the Plan, (ii) seek to revise or amend the
Confirmation Order, or (iii) fail to fully implement or fail to perform any duty or other
obligation under the Plan or the Confirmation Order, including, but not limited to, making
any payment(s) to creditor(s) when due under the terms of the Plan and the Confirmation
Order, including, but not limited to, any agreement(s) or document(s) approved or
incorporated therein or executed pursuant thereto.

SECTION 8. DEFAULT, RIGHTS AND REMEDIES

8.1     Event
of Default. "Event of Default" shall mean the occurrence or existence of any one
or more of the following (for each subsection a different grace or cure period may be
specified, if no grace or cure period is specified, such occurrence or existence
constitutes an immediate Event of Default):

(A)     Payment.
Failure to make payment of any of the Obligations when due and in the case of interest,
such failure shall not be cured within five (5) days of the applicable due date; or

(B)     Default
in Other Agreements. (1) Failure of any Borrower to pay when due any principal or
interest on any Indebtedness (other than Obligations) or (2) breach or default of any
Borrower with respect to any Indebtedness (other than the Obligations), in each case, only
if such failure to pay, breach or default entitles the holder to cause such Indebtedness
having an individual principal amount in excess of $1,000,000 or having an aggregate
principal amount in excess of $3,000,000 to become or be declared due prior to its stated
maturity; or

(C)     Breach
of Certain Provisions. Failure of any Borrower to perform or comply with any term or
condition contained in subparagraphs (A), (B), (C), (D), (E), (F) and (M) of the Reporting
Rider in subsection 5.3, in subsection 5.4, in subsection 5.10, in Section 6, or in
Section 7; or

(D)     Breach
of Warranty. Any representation, warranty, certification or other statement made by any
Borrower in any Loan Document or in any statement or certificate at any time given by such

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Person in writing pursuant or in connection with any Loan Document is
false in any material respect on the date made; or

(E)     Other
Defaults Under Loan Documents. Any Borrower defaults in the performance of or compliance
with any term contained in this Agreement other than those otherwise set forth in this
subsection 8.1, or defaults in the performance of or compliance with any term contained in
the other Loan Documents and such default is not remedied or waived within fifteen (15)
days after notice from Administrative Agent to Borrowers of such default; provided that if
such default is not capable of being cured within such fifteen (15) day period and
Borrowers have and continue to diligently, continuously and in good faith pursue a cure,
Borrowers shall have an additional period of fifteen (15) days to cure such default; or

(F)     Change
in Control (1) Any Person or group (as defined in the Securities Exchange Act of
1934, as amended), other than the holders of the voting stock of the Company as of the
Closing Date, shall acquire for the first time direct or indirect ownership (constructive
or otherwise), or the direct or indirect power to vote more than forty percent (40%) of
the outstanding voting stock of the Company, or (2) individuals who, as of the
Closing Date, were members of the board of directors of the Company (together with any new
director whose election by the Company's board of directors or whose nomination for
election by the Company's shareholders were approved by a vote of at least a majority of
the directors then in office who themselves were either directors as of the Closing Date
or whose election or nomination for election was previously so approved) cease for any
reason to constitute at least a majority of the members of the board of directors of the
Company then in office; or

(G)     Involuntary
Bankruptcy; Appointment of Receiver, etc. (1) A court enters a decree or order for relief
with respect to the Company or any of its Subsidiaries in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in effect, which
decree or order is not stayed or other similar relief is not granted under any applicable
federal or state law; or (2) the continuance of any of the following events for sixty (60)
days unless dismissed, bonded or discharged: (a) an involuntary case is commenced against
the Company or any of its Subsidiaries, under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect; or (b) a receiver, liquidator, sequestrator,
trustee, custodian or other fiduciary having similar powers over the Company or any of its
Subsidiaries, or over all or a substantial part of their respective property, is
appointed; or

(H)     Voluntary
Bankruptcy; Appointment of Receiver, etc.

(I)     Liens.
Any lien, levy or assessment is filed or recorded with respect to or otherwise imposed
upon all or any part of the Collateral or the assets of the Company or any of its
Subsidiaries by the United States or any department or instrumentality thereof or by any
state, county, municipality or other governmental agency (other than Permitted
Encumbrances) and such lien, levy or assessment is not stayed, vacated, paid or discharged
within ten (10) days; or

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(J)     Judgment
and Attachments. Any money judgment, writ or warrant of attachment, or similar process
involving (1) an amount in any individual case in excess of $500,000 or (2) an amount
in the aggregate at any time in excess of $1,000,000 (in either case not adequately
covered by insurance as to which the insurance company has acknowledged coverage) is
entered or filed against the Company or any of its Subsidiaries or any of their respective
assets and remains undischarged, unvacated, unbonded or unstayed for a period of
forty-five (45) consecutive days; or

(K)     Dissolution.
Any order, judgment or decree is entered against the Company or any of its Subsidiaries
decreeing the dissolution or split up of the Company or such Subsidiary, and such order
remains undischarged or unstayed for a period in excess of twenty (20) consecutive days,
but in any event not later than five (5) days prior to the date of any proposed
dissolution or split up; provided that in the case of a dissolution or split up of a
Subsidiary that is not a Borrower, such dissolution or split up could reasonably be
expected to result in a Material Adverse Effect; or

(L)     Solvency.
The Borrowers, on a consolidated basis, cease to be solvent (as such term is used in
subsection 4.14) or any Borrower admits in writing its present or prospective inability to
pay its debts as they become due; or

(M)     Injunction.
The Company or any of its Subsidiaries is enjoined, restrained or in any way prevented by
the order of any court or any administrative or regulatory agency from conducting all or
any material part of its business and such order continues for thirty (30) consecutive
days or more; or

(N)     Invalidity
of Loan Documents. Any of the Loan Documents for any reason, other than a partial or full
release in accordance with the terms thereof, ceases to be in full force and effect or is
declared to be null and void, or any Borrower denies that it has any further liability
under any Loan Documents to which it is party, or gives notice to such effect (in each
case prior to such respective partial or full release); or

(O)     Failure
of Security. Collateral Agent, on behalf of itself and Lenders, does not have or ceases to
have a valid and perfected first priority security interest in the Collateral (subject to
Permitted Encumbrances), in each case, for any reason other than the failure of any Agent
or Lender to take any action within its control; or

(P)     Damage,
Strike, Casualty. Any damage to, or loss, theft or destruction of, any Collateral, whether
or not insured, or any strike, lockout, labor dispute, embargo, condemnation, act of God
or public enemy, or other casualty which causes, for more than ten (10) consecutive days,
the cessation or substantial curtailment of revenue producing activities at any Facility
of any Borrower or any of its Subsidiaries, if any such event or circumstance could
reasonably be expected to have a Material Adverse Effect; or

(Q)     Licenses
and Permits. The loss, suspension or revocation of, or failure to renew, any license,
permit or other governmental authorization now held or hereafter acquired by the Borrowers
that is required for either the Borrowers to conduct their business as presently conducted
or for the Borrowers to receive reimbursements, which loss, suspension, revocation or
failure to renew could reasonably be expected to have a Material Adverse Effect; or

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(R)     Forfeiture.
There is filed against any Borrower any civil or criminal action, suit or proceeding under
any federal or state racketeering statute (including, without limitation, the Racketeer
Influenced and Corrupt Organization Act of 1970), which action, suit or proceeding (1) is
not dismissed within one hundred twenty (120) days; and (2) could reasonably be expected
to result in the confiscation or forfeiture of any material portion of the Collateral; or

(S)     Default
Under Plan and/or Confirmation Order. The default by Borrowers (or any of them) under any
of Borrowers' duties under the Plan or the Confirmation Order, including, but not limited
to the failure of Borrowers (or any of them) to make any payment(s) to creditor(s) when
due under the terms of the Plan or the Confirmation Order, including, but not limited to,
any agreement(s) or document(s) approved or incorporated therein or executed pursuant
thereto and subject to any applicable grace periods; or

(T)     Alteration
Or Revocation Of Plan Or Confirmation Order. Any change to the Plan or Confirmation Order
requested by Borrowers without the prior written consent of the Agents and any change to,
or the revocation or change of the terms of the Plan or the Confirmation Order approved by
the Bankruptcy Court on any basis, including, but not limited to orders of the Bankruptcy
Court entered under Bankruptcy Code Section 1127(b), Bankruptcy Code Section 1144, and
Federal Rule of Civil Procedure 60, as incorporated by Bankruptcy Rule 9024 in each case
which could reasonably be expected to have a Material Adverse Effect; or

(U)     Term
Loan Documents. The occurrence of an event of default by any Borrower under the Term Loan
Documents which event of default gives the holders of the obligations under such Term Loan
Documents the right to accelerate the Indebtedness thereunder prior to the stated maturity
thereof; or

(V)     Material
Contracts. The termination of, expiration (without renewal or replacement on then market
terms) of, or occurrence of an event of default by any Borrower under any Material
Contract that could reasonably be expected to have a Material Adverse Effect.

Notwithstanding
the foregoing, Borrowers' failure to comply with any same provision of this Agreement two
(2) times in any twelve (12) month period shall effect an immediate Event of Default
(without the expiration of any applicable cure period) with respect to all subsequent
failures by Borrowers to comply with such provision of this Agreement, and Lenders
thereupon may exercise any remedy set forth in this Section 8 without affording Borrowers
any opportunity to cure such Event of Default.

8.2     Suspension
of Commitments. Upon the occurrence of any Default or Event of Default, notwithstanding
any grace period or right to cure, Administrative Agent may or upon demand by Requisite
Lenders shall, without notice or demand, immediately cease making additional Loans and the
Commitments shall be suspended; provided that, in the case of a Default, if the subject
condition or event is waived or cured within any applicable grace or cure period, the
Commitments shall be reinstated.

8.3     Acceleration.
Upon the occurrence of any Event of Default described in the foregoing subsections 8.1(G)
or 8.1(H), all Obligations shall automatically become immediately due and payable, without
presentment, demand, protest or other requirements of any kind, all of which are hereby

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expressly waived by Borrower, and the Commitments shall thereupon
terminate. Upon the occurrence and during the continuance of any other Event of Default,
Administrative Agent may, and upon demand by Requisite Lenders shall, by written notice to
Borrowers, (a) declare all or any portion of the Obligations to be, and the same shall
forthwith become, immediately due and payable and the Commitments shall thereupon
terminate and (b) demand that Borrowers immediately comply with the obligations set
forth in subsection 2.4(C).

8.4     Remedies.
If any Event of Default shall have occurred and be continuing, in addition to and not in
limitation of any other rights or remedies available to Agents and Lenders at law or in
equity, Collateral Agent may, and shall upon the request of Requisite Lenders, exercise in
respect of the Collateral, in addition to all other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a secured party on
default under the UCC (whether or not the UCC applies to the affected Collateral) and may
also (a) require Borrowers to, and Borrowers hereby agree that they will, at their expense
and upon request of Collateral Agent forthwith, assemble all or part of the Collateral as
directed by Collateral Agent and make it available to Collateral Agent at a place to be
designated by Collateral Agent which is reasonably convenient to both parties; (b)
withdraw all cash in the Blocked Accounts to the extent permitted by law and the
Concentration Account and apply such monies in payment of the Obligations in the manner
provided in subsection 8.7; and (c) without notice or demand or legal process, enter upon
any premises of any Borrower and take possession of the Collateral. Borrowers agree that,
to the extent notice of sale of the Collateral or any part thereof shall be required by
law, at least ten (10) business days notice to Borrowers of the time and place of any
public disposition or the time after which any private disposition (which notice shall
include any other information required by law) is to be made shall constitute reasonable
notification. At any disposition of the Collateral (whether public or private), if
permitted by law, any Agent or any Lender may bid (which bid may be, in whole or in part,
in the form of cancellation of indebtedness) for the purchase, lease, or licensing of the
Collateral or any portion thereof for the account of such Agent or Lender. Collateral
Agent shall not be obligated to make any disposition of Collateral regardless of notice of
disposition having been given. Borrowers shall remain liable for any deficiency to the
extent the proceeds of the Collateral is insufficient to satisfy the payment in full of
the Obligations hereunder. Collateral Agent may adjourn any public or private disposition
from time to time by announcement at the time and place fixed therefor, and such
disposition may, without further notice, be made at the time and place to which it was so
adjourned. Collateral Agent is not obligated to make any representations or warranties in
connection with any disposition of the Collateral. To the extent permitted by law,
Borrowers hereby specifically waives all rights of redemption, stay or appraisal, which it
has or may have under any law now existing or hereafter, enacted. Collateral Agent shall
not be required to proceed against any Collateral but may proceed against Borrowers
directly.

8.5     Appointment
of Attorney-in-Fact. Borrowers hereby constitute and appoint Collateral Agent as
Borrowers' attorney-in-fact with full authority in the place and stead of any Borrower and
in the name of any Borrower, Collateral Agent or otherwise, from time to time in
Collateral Agent's discretion while an Event of Default is continuing to take any action
and to execute any instrument that Collateral Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including: (a) to ask, demand, collect, sue
for, recover, compound, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral; (b) to enforce the
obligations of any Account Debtor or other Person obligated on the Collateral and enforce
the rights of any Borrower with respect to such obligations and to any property that
secures such obligations; (c) to file any claims or take any action or institute any
proceedings that Collateral Agent may deem necessary or desirable for the

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collection of or to preserve the value of any of the Collateral or
otherwise to enforce the rights of Agents and Lenders with respect to any of the
Collateral; (d) to pay or discharge taxes or Liens levied or placed upon or
threatened against the Collateral, the legality or validity thereof and the amounts
necessary to discharge the same to be determined by Collateral Agent in its sole
discretion, and such payments made by Collateral Agent to become Obligations, due and
payable promptly on demand; (e) to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, assignments, verifications and
notices in connection with Accounts, Chattel Paper or General Intangibles and other
Documents relating to the Collateral; and (f) generally to take any act required of
any Borrower under this Agreement, and to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and completely as though
Collateral Agent were the absolute owner thereof for all purposes, and to do, at
Collateral Agent's option and Borrowers' expense, at any time or from time to time, all
acts and things that Collateral Agent deems necessary to protect, preserve or realize upon
the Collateral. Without limiting the foregoing, each Borrower hereby irrevocably
authorizes the Collateral Agent to send to each Insurer that is an Account Debtor on any
Account of such Borrower any notice that such Borrower is required to deliver hereunder if
such Borrower has failed to deliver any such notice within five (5) Business Days after
such Borrower was required to deliver such notice. In addition, if any Borrower breaches
its obligation hereunder to direct payments of the proceeds of the Collateral to the
appropriate Blocked Account, the Collateral Agent, as the true and lawful attorney for
such Borrower pursuant to this subsection 8.5 and subject to any applicable law or
regulation, may, by the signature or other act of any of the Collateral Agent's officers
(without requiring any of them to do so), direct any federal, state or private payor or fiscal intermediary to pay proceeds of the Collateral to such
Borrower by directing payment to the appropriate Blocked Account to the extent permitted
by law.

Borrowers
hereby ratify and approve all acts of Collateral Agent made or taken pursuant to and in
accordance with this subsection 8.5. The appointment of Collateral Agent as Borrowers'
attorney-in-fact and Collateral Agent's rights and powers are coupled with an interest and
are irrevocable, so long as any of the Commitments hereunder shall be in effect and until
indefeasible payment in full, in cash, of all Obligations and termination of all Lender
Letters of Credit.

8.6     Limitation
on Duty of Agents and Lenders with Respect to Collateral. Beyond the safe custody thereof,
no Agent or Lender shall have any duty with respect to any Collateral in its possession
(or in the possession of any agent or bailee) or with respect to any income thereon or the
preservation of rights against prior parties or any other rights pertaining thereto.
Collateral Agent shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which Collateral Agent accords its own property. No Agent or
Lender shall be liable or responsible for any loss or damage to any of the Collateral, or
for any diminution in the value thereof, by reason of the act or omission of any
warehouse, carrier, forwarding agency, consignee, broker or other agent or bailee selected
by Borrowers or selected by Collateral Agent in good faith.

8.7     Application
of Proceeds. Notwithstanding anything to the contrary contained in this Agreement, upon
the occurrence and during the continuance of an Event of Default, (a) Borrowers
irrevocably waive the right to direct the application of any and all payments at any time
or times thereafter received by Administrative Agent from or on behalf of Borrower, and
such Agent shall have the continuing and exclusive right to apply and to reapply any and
all payments received at any time or times after the occurrence and during the continuance
of an Event of Default against the Obligations until such time that the Event of Default
shall have been cured or otherwise waived by the Administrative

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Agent in writing in such manner as Administrative Agent may deem
advisable notwithstanding any previous application by Administrative Agent and (b) in the
absence of a specific determination by Administrative Agent with respect thereto, the
proceeds of any sale of, or other realization upon, all or any part of the Collateral
shall be applied: first, to all fees, costs and expenses incurred by or owing to Agents
and then any Lender with respect to this Agreement, the other Loan Documents or the
Collateral; second, to accrued and unpaid interest on the Obligations (including any
interest which but for the provisions of any bankruptcy or insolvency law would have
accrued on such amounts); third, to the principal amounts of the Obligations outstanding;
and fourth, to any other Obligations of Borrowers owing to any Agent or Lender under the
Loan Documents. Any balance remaining shall be delivered to Borrowers or to whomever may
be lawfully entitled to receive such balance or as a court of competent jurisdiction may
direct.

8.8     License
of Intellectual Property. Borrowers hereby assign, transfer and convey to Collateral
Agent, for the benefit of Agents and Lenders, effective upon the occurrence of any Event
of Default hereunder, the non-exclusive right and license to use all Intellectual Property
owned or used by Borrowers together with any goodwill associated therewith, all to the
extent necessary to enable Collateral Agent to realize on the Collateral and any successor
or assign to enjoy the benefits of the Collateral. This right and license shall inure to
the benefit of all successors, assigns and transferees of Collateral Agent and its
successors, assigns and transferees, whether by voluntary conveyance, operation of law,
assignment, transfer, foreclosure, deed in lieu of foreclosure or otherwise. Such right
and license is granted free of charge and does not require the consent of any other
person.

8.9     Waivers;
Non-Exclusive Remedies. No failure on the part of any Agent or Lender to exercise, and no
delay in exercising and no course of dealing with respect to, any right under this
Agreement or the other Loan Documents shall operate as a waiver thereof; nor shall any
single or partial exercise by any Agent or Lender of any right under this Agreement or any
other Loan Document preclude any other or further exercise thereof or the exercise of any
other right. The rights in this Agreement and the other Loan Documents are cumulative and
shall in no way limit any other remedies provided by law.

SECTION 9. AGENT

9.1     Agent.

(A)     Appointment.
Each Lender hereto and, upon obtaining an interest in any Loan, any participant,
transferee or other assignee of any Lender irrevocably appoints, designates and authorizes
Heller as Collateral Agent and CITICORP as Administrative Agent to take such actions or
refrain from taking such action as its agent on its behalf and to exercise such powers
hereunder and under the other Loan Documents as are delegated by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto. Neither the
Agents nor any of their directors, officers, employees or agents shall be liable for any
action so taken. The provisions of this subsection 9.1 are solely for the benefit of
Agents and Lenders and no Borrower shall have any rights as a third party beneficiary of
any of the provisions hereof. In performing its functions and duties under this Agreement
and the other Loan Documents, Agents shall act solely as agents of Lenders and do not
assume and shall not be deemed to have assumed any obligation toward or relationship of
agency or trust with or for Borrowers. Agents may perform any of their duties hereunder,
or under the Loan Documents, by or through its agents or employees.

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(B)     Nature
of Duties. Agents shall have no duties, obligations or responsibilities except those
expressly set forth in this Agreement or in the Loan Documents. The duties of Agents shall
be mechanical and administrative in nature. No Agent shall have by reason of this
Agreement a fiduciary, trust or agency relationship with or in respect of any Lender or
Borrowers. Nothing in this Agreement or any of the Loan Documents, express or implied, is
intended to or shall be construed to impose upon any Agent any obligations in respect of
this Agreement or any of the Loan Documents except as expressly set forth herein or
therein. Each Lender shall make its own appraisal of the credit worthiness of Borrowers,
and shall have independently taken whatever steps it considers necessary to evaluate the
financial condition and affairs of Borrowers, and Agents shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Lender with any
credit or other information with respect thereto (other than as expressly required
herein), whether coming into its possession before the Closing Date or at any time or
times thereafter. If any Agent seeks the consent or approval of any Lenders to the taking
or refraining from taking any action hereunder, then such Agent shall send notice thereof
to each Lender. Agents shall promptly notify each Lender any time that the Requisite
Lenders have instructed Agents to act or refrain from acting pursuant hereto.

(C)     Rights,
Exculpation, Etc. No Agent or any of their officers, directors, employees or agents shall
be liable to any Lender for any action taken or omitted by them hereunder or under any of
the Loan Documents, or in connection herewith or therewith, except that Agents shall be
liable to the extent of their own gross negligence or willful misconduct as determined by
a court of competent jurisdiction. Agents shall not be liable for any apportionment or
distribution of payments made by it in good faith and if any such apportionment or
distribution is subsequently determined to have been made in error, the sole recourse of
any Lender to whom payment was due but not made, shall be to recover from other Lenders
any payment in excess of the amount to which they are determined to be entitled (and such
other Lenders hereby agree to return to such Lender any such erroneous payments received
by them). In performing its functions and duties hereunder, Agents shall exercise the same
care which they would in dealing with loans for their own account, but no Agent or any of
its agents or representatives shall be responsible to any Lender for any recitals,
statements, representations or warranties herein or for the execution, effectiveness,
genuineness, validity, enforceability, collectibility, or sufficiency of this Agreement or
any of the Loan Documents or the transactions contemplated thereby, or for the financial
condition of any Borrower. No Agent shall be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or conditions of this
Agreement or any of the Loan Documents or the financial condition of any Borrower, or the
existence or possible existence of any Default or Event of Default. Any Agent may at any
time request instructions from Lenders with respect to any actions or approvals which by
the terms of this Agreement or of any of the Loan Documents such Agent is permitted or
required to take or to grant, and if such instructions are promptly requested, such Agent
shall be absolutely entitled to refrain from taking any action or to withhold any approval
and shall not be under any liability whatsoever to any Person for refraining from any
action or withholding any approval under any of the Loan Documents until it shall have
received such instructions from Requisite Lenders or all or such other portion of the
Lenders as shall be prescribed by this Agreement. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against any Agent as a result of such
Agent acting or refraining from acting under this Agreement or any of the other Loan
Documents in accordance with the instructions of Requisite Lenders in the absence of an
express requirement for a greater percentage of Lender approval hereunder for such action.

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(D)     Reliance.
No Agent shall be under any duty to examine, inquire into, or pass upon the validity,
effectiveness or genuineness of this Agreement, any other Loan Document, or any
instrument, document or communication furnished pursuant hereto or in connection herewith.
Agents shall be entitled to rely, and shall be fully protected in relying, upon any
written or oral notices, statements, certificates, orders or other documents or any
telephone message or other communication (including any writing, fax, telecopy or
telegram) believed by it in good faith to be genuine and correct and to have been signed,
sent or made by the proper Person, and with respect to all matters pertaining to this
Agreement or any of the Loan Documents and its duties hereunder or thereunder. Agents
shall be entitled to rely upon the advice of legal counsel, independent accountants, and
other experts selected by such Agent in its sole discretion.

(E)     Indemnification.
Lenders will reimburse and indemnify Agents for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses
(including, without limitation, attorneys' fees and expenses), advances or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against
such Agent in any way relating to or arising out of this Agreement or any of the Loan
Documents or any action taken or omitted by Agents under this Agreement or any of the Loan
Documents, in proportion to each Lender's Pro Rata Share, but only to the extent that any
of the foregoing is not promptly reimbursed by Borrowers; provided, however,
no Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, advances or disbursements
resulting from Agents' gross negligence or willful misconduct. If any indemnity furnished
to any Agent for any purpose shall, in the opinion of such Agent, be insufficient or
become impaired, such Agent may call for additional indemnity and cease, or not commence,
to do the acts indemnified against, even if so directed by Lenders or Requisite Lenders,
until such additional indemnity is furnished. The obligations of Lenders under this
subsection 9.1(E) shall survive the payment in full of the Obligations and the termination
of this Agreement.

(F)     Lenders
Includes Agents. With respect to its Commitments and the Loans made by it, Heller and
CITICORP, each in its capacity as a Lender and not as an Agent hereunder, shall have and
may exercise the same rights and powers hereunder and is subject to the same obligations
and liabilities as and to the extent set forth herein for any other Lender. The terms
"Lenders" or "Requisite Lenders" or any similar terms shall, unless
the context clearly otherwise indicates, include each of Heller and CITICORP in its
individual capacity as a Lender or one of the Requisite Lenders. Each Lender acknowledges
and agrees that each of Heller and CITICORP, either directly or through strategic
affiliations, may lend money to, acquire equity or other ownership interests in, provide
advisory services to and generally engage in any kind of banking, trust or other business
with any Borrower as if it were not acting as an Agent pursuant hereto and without any
duty to account therefor to Lenders. Each of Heller and CITICORP, either directly or
through strategic affiliations, may accept fees and other consideration from any Borrower
for services in connection with this Agreement or otherwise without having to account for
the same to Lenders except as otherwise provided in this Agreement.

(G)     Successor
Agent.

(1)     Resignation.
Any Agent may resign from the performance of all its agency functions and duties hereunder
at any time by giving at least thirty (30) Business Days' prior written notice to
Borrowers and the Lenders. Such resignation shall take effect upon the acceptance by a
successor Agent of appointment as provided below.

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(2)     Appointment
of Successor. Upon any such notice of resignation pursuant to subsection 9.1(G)(1) above,
Requisite Lenders shall appoint a successor Agent which, unless an Event of Default has
occurred and is continuing, shall be reasonably acceptable to Borrowers. If a successor
Agent shall not have been so appointed within said thirty (30) Business Day period, the
retiring Agent, upon notice to Borrowers, shall then appoint a successor Agent who shall
serve as Agent until such time, if any, as Requisite Lenders appoint a successor Agent as
provided above.

(3)     Successor
Agent. Upon the acceptance of any appointment as Agent under the Loan Documents by a
successor Agent, such successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under the Loan Documents. After
any retiring Agent's resignation as Agent, the provisions of this Section 9 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was Agent.

(H)     Collateral
Matters.

(1)     Release
of Collateral. Lenders hereby irrevocably authorize Collateral Agent, at its option and in
its discretion, to release any Lien granted to or held by Collateral Agent upon any
Collateral (a) upon termination of the Commitments and upon payment and satisfaction of
all Obligations (other than contingent indemnification obligations to the extent no claims
giving rise thereto have been asserted and Letter of Credit obligations for which
Borrowers have provided cash collateral or back-to-back Letters of Credit); (b) upon
exercise of the Partial Purchase Option and receipt by Collateral Agent of the Option
Price; or (c) constituting property being sold or disposed of by a Borrower if such
Borrower certifies to Collateral Agent that the sale or disposition is made in compliance
with the provisions of this Agreement (and Collateral Agent may rely in good faith
conclusively on any such certificate, without further inquiry). In addition, with the
consent of Requisite Lenders, Collateral Agent may release Liens granted to or held by
Collateral Agent upon any Collateral having a book value of not greater than ten percent
(10%) of the total book value of all Collateral, as determined by Collateral Agent, provided,
however, in no event will Collateral Agent, acting under the authority granted to
it pursuant to this sentence, release during any calendar year Liens granted to or held by
Collateral Agent upon any Collateral having a total book value in excess of twenty percent
(20%) of the total book value of all Collateral, as determined by Collateral Agent.

(2)     Confirmation
of Authority; Execution of Releases. Without in any manner limiting Collateral Agent's
authority to act without any specific or further authorization or consent by Lenders (as
set forth in subsection 9.1(H)(1) above), each Lender agrees to confirm in writing, upon
request by Collateral Agent or Borrowers, the authority to release any Collateral
conferred upon Collateral Agent under clauses (a), (b) and (c) of subsection 9.1(H)(1). To
the extent Collateral Agent agrees to release any Lien granted to or held by Collateral
Agent as authorized under subsection 9.1(H)(1), (a) Collateral Agent is hereby irrevocably
authorized by Lenders to execute and/or authorize the filing of such documents, including,
without limitation, UCC-3 partial release statements as may be necessary to evidence the
release of the Liens granted to Collateral Agent for the benefit of Agents and Lenders,
upon such Collateral; provided, however, that Collateral Agent shall not be
required to execute any such document on terms which, in Collateral Agent's opinion, would
expose Collateral Agent to liability or create upon Collateral Agent any obligation or
entail any consequence other than the release of such Liens without recourse or warranty,
and (b) Borrowers shall provide at least five (5) Business

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Days prior written notice of any request for any document evidencing
such release of the Liens and Borrowers agree that any such release shall not in any
manner discharge, affect or impair the Obligations or any Liens granted to Collateral
Agent on behalf of the Agents and Lenders upon (or obligations of any Borrower, in respect
of) all interests retained by any Borrower, including, without limitation, the proceeds of
any sale, all of which shall continue to constitute part of the property covered by this
Agreement or the Loan Documents.

(3)     Absence
of Duty. The Agents shall have no obligation whatsoever to any Lender or any other Person
to assure that the property covered by this Agreement or the Loan Documents exists or is
owned by Borrowers or is cared for, protected or insured or has been encumbered or that
the Liens granted to Collateral Agent on behalf of Collateral Agent and Lenders herein or
pursuant hereto have been properly or sufficiently or lawfully created, perfected,
protected or enforced or are entitled to any particular priority, or to exercise at all or
in any particular manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to Collateral
Agent in this Agreement or in any of the Loan Documents, it being understood and agreed
that in respect of the property covered by this Agreement or the Loan Documents or any
act, omission or event related thereto, Collateral Agent may act in any manner it may deem
appropriate, in its reasonable discretion, given Collateral Agent's own interest in
property covered by this Agreement or the Loan Documents as one of the Lenders and that
Collateral Agent shall have no duty or liability whatsoever to any of the other Lenders; provided,
however, that Collateral Agent shall exercise the same care which it would in
dealing with loans for its own account.

(I)     Agency
for Perfection. Each Agent and each Lender hereby appoint each other Lender as agent for
the purpose of perfecting Collateral Agent's security interest in assets which, in
accordance with the UCC in any applicable jurisdiction, can be perfected by possession or
Control. Should any Lender (other than Collateral Agent) obtain possession of any such
assets, such Lender shall notify Collateral Agent thereof, and, promptly upon Collateral
Agent's request therefor, shall deliver such assets to Collateral Agent or in accordance
with Agent's instructions. The Collateral Agent may file such proofs of claim or documents
as may be necessary or advisable in order to have the claims of the Agents and the Lenders
(including any claim for the reasonable compensation, expenses, disbursements and advances
of the Collateral Agent and the Lenders, their respective agents, financial advisors and
counsel), allowed in any judicial proceedings relative to Borrowers and/or their
Subsidiaries, or any of their respective creditors or property, and shall be entitled and
empowered to collect, receive and distribute any monies, securities or other property
payable or deliverable on any such claims. Any custodian in any judicial proceedings
relative to Borrowers and/or their Subsidiaries are hereby authorized by each Lender to
make payments to the Collateral Agent and, in the event that the Collateral Agent shall
consent to the making of such payments directly to the Lenders, to pay to the Collateral
Agent any amount due for the reasonable compensation, expenses, disbursements and advances
of the Collateral Agent, its agents, financial advisors and counsel, and any other amounts
due the Collateral Agent. Nothing contained in this Agreement or the other Loan Documents
shall be deemed to authorize the Collateral Agent to authorize or consent to or accept or
adopt on behalf of any Lender any plan of reorganization, or revision thereto,
arrangement, adjustment or composition affecting the Loans, or the rights of any holder
thereof, or to authorize the Collateral Agent to vote in respect of the claim of any
Lender in any such proceeding, except as specifically permitted herein.

(J)     Exercise
of Remedies. Each Lender agrees that it will not have any right individually to enforce or
seek to enforce this Agreement or any Loan Document or to realize upon any collateral

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security for the Loans, unless instructed to do so by Collateral Agent,
it being understood and agreed that such rights and remedies may be exercised only by
Collateral Agent.

9.2     Notice
of Default.

No
Agent shall be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default except with respect to defaults in the payment of principal, interest and
fees required to be paid to the Administrative Agent for the account of Lenders, unless
such Agent shall have received written notice from a Lender or a Borrower referring to
this Agreement, describing such Default or Event of Default and stating that such notice
is a "notice of default". Any Agent will notify each Lender of its receipt of
any such notice.

9.3     Action
by Agent.

Agents
shall take such action with respect to any Default or Event of Default as may be requested
by Requisite Lenders in accordance with Section 8. Unless and until an Agent has received
any such request, such Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to any Default or Event of Default as it
shall deem advisable or in the best interests of Lenders.

9.4     Amendments,
Waivers and Consents.

(A)     Percentage
of Lenders Required. Except as otherwise provided herein or in any of the other Loan
Documents, no amendment, modification, termination or waiver of any provision of this
Agreement or any other Loan Document, or consent to any departure by any Borrower
therefrom, shall in any event be effective unless the same shall be in writing and signed
by (i) the Requisite Lenders and the Agents or (ii) the Agents, with the consent and on
behalf of the Requisite Lenders (or, Agents, if expressly set forth herein or in any of
the other Loan Documents) and the applicable Borrower; provided however, no amendment,
modification, termination, waiver or consent shall be effective, unless in writing and
signed by all Lenders and the Agents, or by the Agents, with the consent on behalf of all
Lenders, to do any of the following: (1) increase any of the Commitments; (2) reduce the
principal of or the rate of interest on any Loan or reduce the fees payable with respect
to any Loan or Lender Letter of Credit; (3) extend the Termination Date or the scheduled
due date for all or any portion of principal of the Loans or any interest or fees due
hereunder; (4) amend the definition of the term "Requisite Lenders" or the
percentage of Lenders which shall be required for Lenders to take any action hereunder;
(5) amend or waive this subsection 9.4 or the definitions of the terms used in this
subsection 9.4 insofar as the definitions affect the substance of this subsection 9.4; or
(6) consent to the assignment, delegation or other transfer by any Borrower of any of
its rights and obligations under any Loan Document; provided, further, that no
amendment, modification, termination, waiver or consent affecting the rights or duties of
any Agent under this Section 9 or under any Loan Document shall in any event be effective,
unless in writing and signed by such Agent, in addition to the Lenders required to take
such action. Any amendment, modification, termination, waiver or consent effected in
accordance with this Section 9 shall be binding upon each Lender or future Lender.

(B)     Specific
Purpose or Intent. Each amendment, modification, termination, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which it was

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given. No amendment, modification, termination, waiver or consent shall
be required for Agent to take additional Collateral.

(C)     Failure
to Give Consent; Replacement of Non-Consenting Lender. In the event any Agent requests the
consent of a Lender and does not receive a written consent or denial thereof within ten
(10) Business Days or such earlier date as may be specified in such request after such
Lender's receipt of such request, then such Lender will be deemed to have denied the
giving of such consent. If, in connection with any proposed amendment, modification,
termination or waiver of any of the provisions of this Agreement requiring the consent or
approval of all Lenders under this subsection 9.4, the consent of the Requisite Lenders is
obtained but the consent of one or more other Lenders whose consent is required is not
obtained, then Borrowers shall have the right, so long as all such non-consenting Lenders
are either replaced or prepaid as described in clauses (1) or (2) below, to either (1)
replace the non-consenting Lenders with one or more Replacement Lenders pursuant to
subsection 2.11(A), as if such Lender were an Affected Lender thereunder, but only so long
as each such Replacement Lender consents to the proposed amendment, modification,
termination or waiver, or (2) prepay in full the Obligations of the non-consenting Lenders
and terminate the non-consenting Lenders' Commitments pursuant to subsection 2.11(B), as
if such Lender were an Affected Lender thereunder.

Notwithstanding
anything in this subsection 9.4, Collateral Agent and Borrowers, without the consent of
either Requisite Lenders or all Lenders, may execute amendments to this Agreement and the
Loan Documents, which consist solely of the making of typographical corrections.

9.5     Assignments
and Participations in Loans.

(A)     Assignments.
Each Lender may assign its rights and delegate its obligations under this Agreement to an
Eligible Assignee; provided, however, (1) such Lender (other than
Heller and CITICORP) shall first obtain the written consent of Joint Bookrunners,
(2) the amount of Commitments and Loans of the assigning Lender being assigned shall
in no event be less than the lesser of (a) $10,000,000 or (b) the entire amount
of the Commitments and Loans of such assigning Lender, and (3)(a) each such assignment
shall be of a pro rata portion of all such assigning Lender's Loans and Commitments
hereunder, and (b) the parties to such assignment shall execute and deliver to
Administrative Agent, with a copy of Collateral Agent, for acceptance and recording a
Assignment and Acceptance Agreement together with (i) a processing and recording fee of
$3,500 payable by the assigning Lender equally to Agents and (ii) each of the Notes
originally delivered to the assigning Lender for cancellation. The administrative fee
referred to in clause (3) of the preceding sentence shall not apply to an assignment of a
security interest in all or any portion of a Lender's rights under this Agreement or the
other Loan Documents, to another Related Fund (as defined below) or Participant or as
described in clause (1) of subsection 9.5(D) below. Upon receipt of all of the foregoing,
Joint Bookrunners shall notify Borrowers of such assignment and Borrowers shall comply
with its obligations under the last sentence of subsection 2.1(I). In the case of an
assignment authorized under this subsection 9.5 and otherwise in accordance with the terms
of this Agreement , the assignee shall be considered to be a "Lender" hereunder
and Borrowers hereby acknowledge and agree that any assignment will give rise to a direct
obligation of Borrowers to the assignee. The assigning Lender shall be relieved of its
obligations to make Loans hereunder with respect to the assigned portion of its
Commitment.

(B)     Participations.
Each Lender may sell participations in all or any part of any Loans or Commitments made by
it to another Person; provided, however, such Lender shall first obtain the
prior

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written consent of Joint Bookrunners, which consent shall not be
unreasonably withheld. All amounts payable by Borrowers hereunder shall be determined as
if that Lender had not sold such participation and the holder of any such participation
shall not be entitled to require such Lender to take or omit to take any action hereunder
except action directly effecting (1) any reduction in the principal amount or an interest
rate on any Loan in which such holder participates; (2) any extension of the Termination
Date or the date fixed for any payment of interest or principal payable with respect to
any Loan in which such holder participates; and (3) any release of substantially all of
the Collateral. Borrowers hereby acknowledge and agree that the participant under each
participation shall for purposes of subsections 2.8, 2.9, 2.10, 9.6 and 10.2 be considered
to be a "Lender".

(C)     No
Relief of Obligations; Cooperation; Ability to Make LIBOR Loans. Except as otherwise
provided in subsection 9.5(A) no Lender shall, as between any Borrower and that Lender, be
relieved of any of its obligations hereunder as a result of any sale, assignment, transfer
or negotiation of, or granting of participation in, all or any part of the Loans or other
Obligations owed to such Lender. Each Lender may furnish any information concerning
Borrowers and their Subsidiaries in the possession of that Lender from time to time to
Eligible Assignees and participants (including prospective assignees and participants
provided that such prospective assignees and participants agree to be bound by the
confidentiality provisions hereof). Borrowers agree that they will use their reasonable
best efforts to assist and cooperate with Joint Bookrunners and any Lender in any manner
reasonably requested by Joint Bookrunners or such Lender to effect the sale of a
participation or an assignment described above, including without limitation assistance in
the preparation of appropriate disclosure documents or placement memoranda provided that
the recipient of such information agrees to comply with the confidentiality provisions
hereof. Notwithstanding anything contained in this Agreement to the contrary, so long as
the Requisite Lenders shall remain capable of making LIBOR Loans, no Person shall become a
Lender hereunder unless such Person shall also be capable of making LIBOR Loans.

(D)     Security
Interests; Assignment to Affiliates. Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time following written notice to Agent (1) pledge the
Obligations held by it or create a security interest in all or any portion of its rights
under this Agreement or the other Loan Documents to secure obligations to any Federal
Reserve Bank pursuant to Regulation A of the Federal Reserve Board or any Related Fund and
the provisions of subsection 9.5(A) shall not apply to such pledge or security interest; provided,
however, (a) no such pledge or grant of security interest to any Person shall
release such Lender from its obligations hereunder or under any other Loan Document and
(b) the acquisition of title to such Lender's Obligations pursuant to any foreclosure or
other exercise of remedies by such Person shall be subject to the provisions of this
Agreement and the other Loan Documents in all respects including, without limitation, any
consent required by subsection 9.5; and (2) subject to complying with the provisions of
subsection 9.5 (A), assign all or any portion of its funded loans to an Eligible Assignee
which is a Subsidiary of such Lender or its parent company, to one or more other Lenders,
or to a Related Fund. For purposes of this paragraph, a "Related Fund" shall
mean, with respect to any Lender, a fund or other investment vehicle that invests in
commercial loans and is managed by such Lender or by the same investment advisor that
manages such Lender or by an Affiliate of such investment advisor.

(E)     Recording
of Assignments. Administrative Agent shall maintain at its office in New York, New York, a
copy of each Assignment and Acceptance Agreement delivered to it, with a copy to
Collateral Agent, and a register for the recordation of the names and addresses of
Lenders, and the commitments of, and principal amount of the Loans owing to each Lender
pursuant to the terms hereof

57

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from time to time (the "Register"). The entries in the
Register shall be presumptive evidence of the amounts due and owing to Lender in the
absence of manifest error. Each Borrower, Agent and Lender may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement. The Register shall be available for inspection by any
Borrower and any Lender, at any reasonable time upon reasonable prior notice.

9.6     Set
Off and Sharing of Payments. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the occurrence and
during the continuance of any Event of Default, each Lender is hereby authorized by
Borrowers at any time or from time to time, with reasonably prompt subsequent notice to
Borrowers (any prior or contemporaneous notice being hereby expressly waived) to set off
and to appropriate and to apply any and all (a) balances held by such Lender or any of its
Affiliates at any of its offices for the account of any Borrower or any of its
Subsidiaries (regardless of whether such balances are then due to a Borrower or its
Subsidiaries), and (b) other property at any time held or owing by such Lender or any of
its Affiliates to or for the credit or for the account of any Borrower against and on
account of any of the Obligations; except that no Lender shall exercise any such right
without the prior written consent of Joint Bookrunners. Any Lender exercising its right to
set off shall purchase for cash (and the other Lenders shall sell) interests in each of
such other Lender's Pro Rata Share of the Obligations as would be necessary to cause all
Lenders to share the amount so set off with each other Lender in accordance with their
respective Pro Rata Shares. Borrowers agree, to the fullest extent permitted by law, that
any Lender may exercise its right to set off with respect to amounts in excess of its Pro
Rata Share of the Obligations and upon doing so shall deliver such amount so set off to
Administrative Agent for the benefit of Agents and of all Lenders in accordance with their
Pro Rata Shares.

9.7     Disbursement
of Funds. Administrative Agent may, on behalf of Lenders, disburse funds to Borrowers for
Loans requested. Each Lender shall reimburse Administrative Agent on demand for all funds
disbursed on its behalf by Administrative Agent, or if Administrative Agent so requests,
each Lender will remit to Administrative Agent its Pro Rata Share of any Loan or Advance
before Administrative Agent disburses same to Borrowers. If Administrative Agent elects to
require that each Lender make funds available to Administrative Agent prior to a
disbursement by Administrative Agent to Borrowers, Administrative Agent shall advise each
Lender by telephone, telex, fax or telecopy of the amount of such Lender's Pro Rata Share
of the Loan requested by Borrowers no later than 1:00 p.m. New York time on the Funding
Date applicable thereto, and each such Lender shall pay Administrative Agent such Lender's
Pro Rata Share of such requested Loan, in same day funds, by wire transfer to
Administrative Agent's account on such Funding Date.

9.8     Settlements,
Payments and Information.

(A)     Revolving
Advances and Payments; Fee Payments.

(1)     Fluctuation
of Revolving Loan Balance. The Revolving Loan balance may fluctuate from day to day
through Administrative Agent's disbursement of funds to, and receipt of funds from,
Borrowers. In order to minimize the frequency of transfers of funds between Agent and each
Lender notwithstanding terms to the contrary set forth in Section 2 and subsection 9.7,
Revolving Advances and repayments, except as set forth in subsection 2.1, will be
settled according to the procedures described in this subsection 9.8. Notwithstanding
these procedures, each Lender's obligation to fund its portion of any advances made by
Administrative Agent to Borrowers will commence on the date such advances are

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made by Administrative Agent. Such payments will be made by each Lender
without set-off, counterclaim or reduction of any kind.

(2)     Settlement
Dates. Once each week for the Revolving Loan or if an Event of Default shall have occurred
and be continuing more frequently (including daily), if Administrative Agent so elects
(each such day being a "Settlement Date"), Administrative Agent will advise each
Lender by telephone, fax or telecopy of the amount of each such Lender's Pro Rata Share of
the Revolving Loan. In the event payments are necessary to adjust the amount of such
Lender's required Pro Rata Share of the Revolving Loan balance to such Lender's actual Pro
Rata Share of the Revolving Loan balance as of any Settlement Date, the party from which
such payment is due will pay the other, in same day funds, by wire transfer to the other's
account not later than 3:00 p.m. New York time on the Business Day following the
Settlement Date.

(3)     Settlement
Definitions. For purposes of this subsection 9.8(A), the following terms and conditions
will have the meanings indicated:

(a)     "Daily
Loan Balance" means an amount calculated as of the end of each calendar day by
subtracting (i) the cumulative principal amount paid by Administrative Agent to a Lender
on a Loan from the Closing Date through and including such calendar day, from (ii) the
cumulative principal amount on a Loan advanced by such Lender to Administrative Agent on
that Loan from the Closing Date through and including such calendar day.

(b)     "Daily
Interest Rate" means an amount calculated by dividing the interest rate payable to a
Lender on a Loan (as set forth in subsection 2.2) as of each calendar day by three hundred
sixty (360).

(c)     "Daily
Interest Amount" means an amount calculated by multiplying the Daily Loan Balance of
a Loan by the associated Daily Interest Rate on that Loan.

(d)     "Interest
Ratio" means a number calculated by dividing the total amount of the interest on a
Loan received by Administrative Agent with respect to the immediately preceding month by
the total amount of interest on that Loan due from Borrowers during the immediately
preceding month.

(4)     Settlement
Payments. On the first Business Day of each month ("Interest Settlement Date"),
Administrative Agent will advise each Lender by telephone, fax or telecopy of the amount
of such Lender's share of interest and fees on each of the Loans as of the end of the last
day of the immediately preceding month. Provided that such Lender has made all payments
required to be made by it under this Agreement, Administrative Agent will pay to such
Lender, by wire transfer to such Lender's account (as specified by such Lender on the
signature page of this Agreement or the applicable Assignment and Acceptance Agreement, as
amended by such Lender from time to time after the date hereof or in the applicable
Assignment and Acceptance Agreement) not later than 3:00 p.m. Chicago time on the next
Business Day following the Interest Settlement Date, such Lender's share of interest and
fees on each of the Loans. Such Lender's share of interest on each Loan will be calculated
for that Loan by adding together the Daily Interest Amounts for each calendar day of the
prior month for that Loan and

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multiplying the total thereof by the Interest Ratio for that Loan. Such
Lender's share of the Unused Line Fee described in subsection 2.3(A) shall be an amount
equal to (a)(i) such Lender's average Revolving Loan Commitment during such month, less
(ii) the sum of (x) such Lender's average Daily Loan Balance of the Revolving Loans, plus
(y) such Lender's Pro Rata Share of the average daily aggregate amount of Letter of Credit
Reserve, in each case for the preceding month, multiplied by (b) the percentage required
by subsection 2.3(A). Such Lender's share of all other fees paid to Administrative Agent
for the benefit of Lenders hereunder shall be paid and calculated based on such Lender's
Commitment with respect to the Loans on which such fees are associated. To the extent
Administrative Agent does not receive the total amount of any fee owing by Borrowers under
this Agreement, each amount payable by Administrative Agent to a Lender under this
subsection 9.8(A)(4) with respect to such fee shall be reduced on a pro rata basis. The
Administrative Agent and the Lenders hereby acknowledge and agree that in no event shall
the aggregate fee payments received by such Lenders pursuant to this subsection 9.8(A)(4)
exceed the total amount of fees pursuant to subsection 2.3.

(B)     Return
of Payments.

(1)     Recovery
after Non-Receipt of Expected Payment. If any Agent pays an amount to a Lender under this
Agreement in the belief or expectation that a related payment has been or will be received
by such Agent from Borrowers and such related payment is not received by such Agent, then
such Agent will be entitled to recover such amount from such Lender without set-off,
counterclaim or deduction of any kind together with interest thereon, for each day from
and including the date such amount is made available by such Agent to such Lender to but
excluding the date of repayment to such Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by such Agent in accordance with banking industry
rules on interbank compensation.

(2)     Recovery
of Returned Payment. If any Agent determines at any time that any amount received by such
Agent under this Agreement must be returned to Borrowers or paid to any other Person
pursuant to any requirement of law, court order or otherwise, then, notwithstanding any
other term or condition of this Agreement, such Agent will not be required to distribute
any portion thereof to any Lender. In addition, each Lender will repay to such Agent on
demand any portion of such amount that such Agent has distributed to such Lender, together
with interest at such rate, if any, as such Agent is required to pay to Borrowers or such
other Person, without set-off, counterclaim or deduction of any kind.

9.9     Discretionary
Advances. Notwithstanding anything contained herein to the contrary, Collateral Agent may,
in its sole discretion, make Revolving Advances in an aggregate amount of not more than
$1,000,000 in excess of the limitations set forth in the Borrowing Base for the purpose of
preserving or protecting the Collateral or for incurring any costs associated with
collection or enforcing rights or remedies against the Collateral, or incurred in any
action to enforce this Agreement or any other Loan Document.

SECTION 10. MISCELLANEOUS

10.1     Expenses
and Attorneys' Fees. Whether or not the transactions contemplated hereby shall be
consummated, Borrowers agree to promptly pay all reasonable fees and actual costs and
expenses incurred in connection with any matters contemplated by or arising out of this
Agreement or the other Loan Documents including the following, and all such reasonable
fees and actual costs and expenses shall be part of the Obligations, payable on demand and
secured by the Collateral: (a) reasonable fees and

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actual costs and expenses incurred by any Agent (including reasonable
attorneys' fees and expenses, the allocated costs of such Agent's internal legal staff and
fees of environmental consultants, accountants and other professionals retained by such
Agent) incurred in connection with the examination, review, due diligence investigation,
documentation and closing of the financing arrangements evidenced by the Loan Documents;
(b) reasonable fees and actual costs and expenses incurred by any Agent (including
attorneys' fees and expenses, the allocated costs of such Agent's internal legal staff and
fees of environmental consultants, accountants and other professionals retained by such
Agent) incurred in connection with the review, negotiation, preparation, documentation,
execution, syndication and administration of the Loan Documents, the Loans, and any
amendments, waivers, consents, forbearances and other modifications relating thereto or
any subordination or intercreditor agreements, including reasonable documentation charges
assessed by such Agent for amendments, waivers, consents and any other documentation
prepared by such Agent's internal legal staff; (c) reasonable fees and actual costs
and expenses (including reasonable attorneys' fees and allocated costs of internal legal
staff) incurred by any Agent or Lender in creating, perfecting and maintaining perfection
of Liens in favor of Agents, on behalf of Agents and Lenders; (d) reasonable fees and
actual costs and expenses incurred by any Agent in connection with forwarding to any
Borrower the proceeds of Loans including such Agent's or any Lenders' standard wire
transfer fee; (e) reasonable fees and actual costs and expenses and bank charges,
including bank charges for returned checks, incurred by any Agent or any Lender in
establishing, maintaining and handling lock box accounts, blocked accounts or other
accounts for collection of the Collateral; and (f) reasonable fees and actual costs
and expenses (including reasonable attorneys' fees and allocated costs of internal legal
staff) of any Agent or any Lender and costs of settlement incurred in collecting upon or
enforcing rights against the Collateral or incurred in any action to enforce this
Agreement or the other Loan Documents or to collect any payments due from any Borrower
under this Agreement or any other Loan Document or incurred in connection with any
refinancing or restructuring of the credit arrangements provided under this Agreement,
whether in the nature of a "workout" or in connection with any insolvency or
bankruptcy proceedings or otherwise.

10.2     Indemnity.
In addition to the payment of expenses pursuant to subsection 10.1, whether or not the
transactions contemplated hereby shall be consummated, each Borrower agrees to indemnify,
pay and hold each Agent and Lender, and the officers, directors, employees, agents,
consultants, auditors, persons engaged by any Agent or Lender, to evaluate or monitor the
Collateral, affiliates of any Agent, or Lender and permitted holders of any Note
(collectively called the "Indemnitees") harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including the
reasonable fees and disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened, whether or
not such Indemnity shall be designated a party thereto) that may be imposed on, incurred
by, or asserted against that Indemnitee, in any manner relating to or arising out of this
Agreement or the other Loan Documents, the consummation of the transactions contemplated
by this Agreement, the statements contained in that certain letter to the Company dated
December 21, 2001, containing a summary of proposed terms for this Agreement, each Agent's
and Lender's agreement to make the Loans hereunder, the use or intended use of the
proceeds of any of the Loans or the exercise of any right or remedy hereunder or under the
other Loan Documents (the "Indemnified Liabilities"); provided that Borrowers
shall have no obligation to an Indemnity hereunder with respect to Indemnified Liabilities
arising from the gross negligence or willful misconduct of such Indemnitee.

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10.3     Notices.
Unless otherwise specifically provided herein, all notices shall be in writing addressed
to the respective party as set forth below and may be personally served, faxed, telecopied
or sent by overnight courier service or United States mail and shall be deemed to have
been given: (a) if delivered in person, when delivered; (b) if delivered by fax or
telecopy, on the date of transmission if transmitted on a Business Day before 4:00 p.m.
New York time or, if not, on the next succeeding Business Day; (c) if delivered by
overnight courier, the next succeeding Business Day after delivery to such courier
properly addressed; or (d) if by U.S. Mail, four (4) Business Days after depositing in the
United States mail, with postage prepaid and properly addressed.
                                           If
to any
Borrower:                c/o
SUN HEALTHCARE GROUP, INC.
                                                                                        101
Sun Avenue NE
                                                                                        Albuquerque,
New Mexico 87109
                                                                                        Attn:
Treasurer
                                                                                        Fax/Telecopy
No.: (505) 468-6635
                                                With
a copy
to:                 c/o
SUN HEALTHCARE GROUP, INC.
                                                                                        101
Sun Avenue NE
                                                                                        Albuquerque,
New Mexico 87109
                                                                                        Attn:
General Counsel
                                                                                        Fax/Telecopy
No.: (505) 468-4747
                    If
to Collateral Agent or to
Heller:                 HELLER
HEALTHCARE FINANCE, INC.
                                                                                        2
Wisconsin Circle, Fourth Floor
                                                                                        Chevy
Chase, Maryland 20815
                                                                                        Attn:  Loan
Officer Portfolio Management Group,
                                                                                                 Sun
Healthcare
                                                                                        Fax/Telecopy
No.: (301) 664-9890
                                               With
a copy
to:                  HELLER
HEALTHCARE FINANCE, INC.
                                                                                        2
Wisconsin Circle, Fourth Floor
                                                                                        Chevy
Chase, Maryland 20815
                                                                                        Attn:
Katherine Lofft, Esquire
                                                                                        Fax/Telecopy
No.: (301) 664-9866
       If to Administrative Agent or
CITICORP:                  Citicorp
USA, Inc.
                                                                                        388
Greenwich Street
                                                                                        19th
Floor
                                                                                        New
York, New York 10013
                                                                                        Attn:
William Washburn
                                                                                        Fax/Telecopy
No.: (212) 816-2613







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With
a copy
to:               Citicorp
USA, Inc.
                                                                                        2
Penn's Way
                                                                                        Suite
200
                                                                                        New
Castle, Delaware 19720
                                                                                        Attn:
Robert Partee
                                                                                        Fax/Telecopy
No.: (302) 894-6120
               If
to any Lender: Its address indicated on the signature page hereto, in an Assignment and
Acceptance Agreement or in a notice to Agents and Borrowers or to such other address as
the party addressed shall have previously designated by written notice to the serving
party, given in accordance with this subsection 10.3.

10.4     Survival
of Representations and Warranties and Certain Agreements. All agreements, representations
and warranties made herein shall survive the execution and delivery of this Agreement and
the making of the Loans hereunder. Notwithstanding anything in this Agreement or implied
by law to the contrary, the agreements of Borrowers, Agents, and Lenders set forth in
subsections 9.1(E), 10.1, 10.2, 10.6, 10.11, 10.14, and 10.15 shall survive the payment of
the Loans and the termination of this Agreement.

10.5     Indulgence
Not Waiver. No failure or delay on the part of any Agent, Lender or permitted holder of
any Note in the exercise of any power, right or privilege hereunder or under any Note
shall impair such power, right or privilege or be construed to be a waiver of any default
or acquiescence therein, nor shall any single or partial exercise of any such power, right
or privilege preclude other or further exercise thereof or of any other right, power or
privilege.

10.6     Marshaling;
Payments Set Aside. No Agent or Lender shall be under any obligation to marshal any assets
in favor of any Borrower or any other party or against or in payment of any or all of the
Obligations. To the extent that any Borrower makes a payment or payments to any Agent
and/or Lender or any Agent and/or Lender enforces its security interests or exercises its
rights of setoff, and such payment or payments or the proceeds of such enforcement or
setoff or any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or any other
party under any applicable bankruptcy law, state or federal law, common law or equitable
cause, then to the extent of such recovery, the Obligations or part thereof originally
intended to be satisfied, and all Liens, rights and remedies therefor, shall be revived
and continued in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.

10.7     Entire
Agreement. This Agreement and the other Loan Documents embody the entire agreement among
the parties hereto and supersede all prior commitments, agreements, representations, and
understandings, whether written or oral, relating to the subject matter hereof, and may
not be contradicted or varied by evidence of prior, contemporaneous, or subsequent oral
agreements or discussions of the parties hereto.

10.8     Severability.
The invalidity, illegality or unenforceability in any jurisdiction of any provision in or
obligation under this Agreement or the other Loan Documents shall not affect or impair

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the validity, legality or enforceability of the remaining provisions or
obligations under this Agreement, or the other Loan Documents.

10.9     Lenders'
Obligations Several; Independent Nature of Lenders' Rights. The obligation of each Lender
hereunder is several and not joint and no Agent or Lender shall be responsible for the
obligation or Commitment of any other Lender hereunder. In the event that any Lender at
any time should fail to make a Loan as herein provided, the Lenders, or any of them, at
their sole option, may make the Loan that was to have been made by the Lender so failing
to make such Loan. Nothing contained in any Loan Document and no action taken by any Agent
or Lender pursuant hereto or thereto shall be deemed to constitute Lenders to be a
partnership, an association, a joint venture or any other kind of entity. The amounts
payable at any time hereunder to each Lender shall be a separate and independent debt,
and, provided the responsible Agent fails or refuses to exercise any remedies against
Borrowers after receiving the direction of the Requisite Lenders, each Lender shall be
entitled to protect and enforce its rights arising out of this Agreement and it shall not
be necessary for any other Lender to be joined as an additional party in any proceeding
for such purpose.

10.10     Headings.
Section and subsection headings in this Agreement are included herein for convenience of
reference only and shall not constitute a part of this Agreement for any other purpose or
be given any substantive effect.

10.11     APPLICABLE
LAW. This Agreement shall be governed by, and construed in accordance with, the law of the
State of New York excluding (to the greatest extent a New York court would permit) any
rule of law that would cause the application of the law of any jurisdiction other than the
State of New York.

10.12     Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, provided, however, no
Borrower may assign its rights or obligations hereunder without the written consent of
Lenders unless such assignment is to another Borrower, in which event assignor Borrower
shall remain liable for all the Obligations under this Agreement.

10.13     No
Fiduciary Relationship; No Duty; Limitation of Liabilities.

(A)     No
Fiduciary Relationship. No provision in this Agreement or in any of the other Loan
Documents and no course of dealing between the parties shall be deemed to create any
fiduciary duty by any Agent or Lender to Borrowers.

(B)     No
Duty. All attorneys, accountants, appraisers, and other professional Persons and
consultants retained by any Agent or Lender shall have the right to act exclusively in the
interest of such Agent or Lender and shall have no duty of disclosure, duty of loyalty,
duty of care, or other duty or obligation of any type or nature whatsoever to any Borrower
or any Borrowers' shareholders or any other Person.

(C)     Limitation
of Liabilities. Neither any Agent nor any Lender, nor any affiliate, officer, director,
shareholder, employee, attorney, or agent of any Agent or any Lender shall have any
liability with respect to, and Borrowers hereby waive, release, and agree not to sue any
of them upon, any claim for any special, indirect, incidental, or consequential damages
suffered or incurred by any Borrower in

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connection with, arising out of, or in any way related to, this
Agreement or any of the other Loan Documents, or any of the transactions contemplated by
this Agreement or any of the other Loan Documents. Borrowers hereby waive, release, and
agree not to sue any Agent or Lender or any of Agents' or any Lenders' affiliates,
officers, directors, employees, attorneys, or agents for punitive damages in respect of
any claim in connection with, arising out of, or in any way related to, this Agreement or
any of the other Loan Documents, or any of the transactions contemplated by this Agreement
or any of the transactions contemplated hereby. Notwithstanding anything in the foregoing
in this subsection 10.13, the Agents and Lenders hereby acknowledge and agree that
Borrowers shall not be deemed to waive or release, or agree not to sue any Indemnitee
upon, any claim against any Indemnitee for direct or actual damages that is the direct
result of the gross negligence or willful misconduct of such Indemnitee.

10.14     CONSENT
TO JURISDICTION. BORROWERS HEREBY CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL
COURT LOCATED WITHIN THE STATE OF NEW YORK AND IRREVOCABLY AGREE THAT, SUBJECT TO ANY
AGENT'S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. BORROWERS EXPRESSLY SUBMIT
AND CONSENT TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVE ANY DEFENSE OF FORUM NON
CONVENIENS. BORROWERS HEREBY WAIVE PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT
ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON THE COMPANY BY CERTIFIED OR REGISTERED MAIL,
RETURN RECEIPT REQUESTED, ADDRESSED TO THE COMPANY, AT THE ADDRESS SET FORTH IN THIS
AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN
POSTED.

10.15     WAIVER
OF JURY TRIAL. EACH BORROWER, AGENT AND LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS. EACH BORROWER, AGENT AND LENDER ACKNOWLEDGE THAT THIS WAIVER IS
A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE
WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THAT EACH WILL
CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH BORROWER, AGENT AND
LENDER WARRANT AND REPRESENT THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY
WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS.

10.16     Construction.
Each Borrower, Agent and Lender acknowledge that it has had the benefit of legal counsel
of its own choice and has been afforded an opportunity to review this Agreement and the
other Loan Documents with its legal counsel. This Agreement and the other Loan Documents
shall be construed as if jointly drafted by each Borrower, Agent and Lender.

10.17     Counterparts;
Effectiveness. This Agreement and any amendments, waivers, consents, or supplements may be
executed via telecopier or facsimile transmission in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all of which counterparts together shall
constitute one and the same

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instrument. This Agreement shall become effective upon the execution
and delivery of an executed counterpart hereof by each of the parties hereto.

10.18     Confidentiality.
Each Agent and Lender agree to exercise its best efforts to keep confidential any
non-public information delivered pursuant to the Loan Documents and identified as such by
Borrowers and not to disclose such information to Persons other than to: its respective
affiliates, officers, directors and employees and in each case, on a need-to-know basis
and provided that such recipient complies with the confidentiality provisions hereof; or
its potential assignees or participants; or Persons employed by or engaged by an Agent, a
Lender or a Lender's assignees or participants including, without limitation, attorneys,
auditors, professional consultants, rating agencies and portfolio management services and
in each case, on a need-to-know basis and provided that such recipient complies with the
confidentiality provisions hereof. The confidentiality provisions contained in this
subsection shall not apply to disclosures (a) required to be made by any Agent or Lender
to any regulatory or governmental agency or pursuant to legal process or
(b) consisting of general portfolio information that does not identify any Borrower.
The obligations of Agents and Lenders under this subsection 10.18 shall supersede and
replace the obligations of Agents and Lenders under any confidentiality agreement in
respect of this financing executed and delivered by any Agent or Lender prior to the date
hereof. In no event shall any Agent or Lender be obligated or required to return any
materials furnished by any Borrower; provided, however, each potential
assignee or participant shall be required to agree that if it does not become an assignee
(or participant) it shall return all materials furnished to it by such Borrower in
connection herewith.

10.19     Publication.
Borrowers consent to the publication by Agents of a tombstone or similar advertising
material relating to the financing transactions contemplated by this Agreement; provided,
however, Agents shall provide a draft of any such tombstone or similar advertising
material to Borrowers for review prior to the publication thereof. Agents and Lenders
reserve the right to provide industry trade organizations information necessary and
customary for inclusion in league table measurements.

10.20     Intercreditor
Agreement. Notwithstanding any contrary provision in any Loan Document, each Loan Document
is subject to the provisions of the Intercreditor Agreement, and Agents and Lenders
acknowledge and agree to be bound by the provisions of the Intercreditor Agreement.

SECTION 11. DEFINITIONS AND ACCOUNTING TERMS

11.1     Certain
Defined Terms. The following terms used in this Agreement shall have the respective
meanings provided for in the UCC: "Accounts", "Buyer in ordinary course of
business", "Chattel Paper", "commercial tort claim",
"Control", "Deposit Account", "Documents", "Electronic
Chattel Paper", "Equipment", "Fixtures", "General
Intangibles", "Goods", "Instruments", "Inventory",
"Investment Property", "Letter of Credit", "Letter-of-Credit
Rights", "Lessee", "Lessee in ordinary course of business",
"Payment Intangibles", "Proceeds", "Record",
"Software", "Supporting Obligations" and "Tangible Chattel
Paper".

The following terms used in this Agreement shall have the following
meanings:

"Account
Debtor" means any Person obligated on any Account of any Borrower, including without
limitation, any Insurer and any Medicaid/Medicare Account Debtor.

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"Administrative
Agent" has the meaning assigned to that term in the Recitals section of this
Agreement.

"Administrative
Agent Fee" has the meaning assigned to that term in subsection 2.3(D)

"Advance"
shall mean an advance under the Revolving Loan.

"Affected
Lender" has the meaning assigned to that term in subsection 2.11.

"Affiliate"
means, as to any Person (other than any Agent, Lender or Borrower): (a) directly or
indirectly controlling, controlled by, or under common control with, such Person,
provided, however, that no individual shall be an Affiliate of any Person solely by reason
of his or her being a director, officer or employee of such Person; (b) directly or
indirectly owning or holding five percent (5%) or more of any equity interest in Borrower;
(c) five percent (5%) or more of whose stock or other equity interest having ordinary
voting power for the election of directors or the power to direct or cause the direction
of management, is directly or indirectly owned or held by Borrower; or (d) which has a
senior officer who is also a senior officer of Borrower; provided, however, that for
purposes of this Agreement a Borrower shall not be deemed an "Affiliate" of any
other Borrower. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by" and
"under common control with") means the possession directly or indirectly of the
power to direct or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities or other equity interest, or by contract or
otherwise.

"Agents"
mean, collectively, Heller in its capacity as Collateral Agent for the Lenders, together
with CITICORP in its capacity as Administrative Agent under the Loan Documents and any
successor in either such capacity appointed pursuant to subsection 9.1(G).

"Agreement"
means this Loan and Security Agreement as it may be amended, restated, supplemented or
otherwise modified from time to time.

"Asset
Disposition" means the disposition, whether by sale, lease, transfer, loss, damage,
destruction, condemnation or otherwise, of any or all of the assets of any Borrower or any
of its Subsidiaries other than (i) sales of Inventory to a Buyer in Ordinary Course of
Business, (ii) disposition of worn out or obsolete equipment, (iii) transfers or other
dispositions of assets or property by a Borrower to another Borrower, (iv) Permitted
Divestitures, (v) the Campus Transaction and (vi) the THCI Turnover.

"Assignment
and Acceptance Agreement" shall mean an Assignment and Acceptance Agreement
substantially in the form of Exhibit B.

"Bank
Letter of Credit" means each Letter of Credit issued by a bank acceptable to and
approved by Administrative Agent for the account of Borrower and supported by a risk
participation agreement issued by Administrative Agent.

"Bankruptcy
Code" shall mean The Bankruptcy Reform Act of 1978, as amended, and codified as 11
U.S.C. Sections 101 et seq.

"Bankruptcy
Court" has the meaning assigned to that term in the Recitals to this Agreement.

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"Base
Rate" means a variable rate of interest per annum equal to the higher of (a) the rate
of interest from time to time published by the Board of Governors of the Federal Reserve
System as the "Bank Prime Loan" rate in Federal Reserve Statistical Release
H.15(519) entitled "Selected Interest Rates" or any successor publication of the
Federal Reserve System reporting the Bank Prime Loan rate or its equivalent, or (b) the
Federal Funds Effective Rate plus fifty (50) basis points. The statistical release
generally sets forth a Bank Prime Loan rate for each Business Day. The applicable Bank
Prime Loan rate for any date not set forth shall be the rate set forth for the last
preceding date. In the event the Board of Governors of the Federal Reserve System ceases
to publish a Bank Prime Loan rate or its equivalent, the term "Base Rate" shall
mean a variable rate of interest per annum equal to the highest of the "prime
rate", "reference rate", "base rate", or other similar rate
announced from time to time by any of the three largest banks (based on combined capital
and surplus) headquartered in New York, New York (with the understanding that any such
rate may merely be a reference rate and may not necessarily represent the lowest or best
rate actually charged to any customer by any such bank).

"Base
Rate Loans" means Loans bearing interest at rates determined by reference to the Base
Rate.

"Base
Rate Margin" has the meaning assigned to that term in subsection 2.2 (A).

"Blocked
Accounts" has the meaning assigned to that term in subsection 4.5(K)(1).

"Borrower"
has the meaning assigned to that term in the Recitals section of this agreement.

"Borrowing
Base" has the meaning assigned to the term in subsection 2.1(B).

"Borrowing
Base Certificate" means each certificate and schedules duly executed by the Financial
Officer, appropriately completed and in substantially the form of Exhibit C.

"Borrowing
Deposit Accounts" has the meaning assigned to that term in subsection 2.4(A)(1).

"Business
Day" means any day excluding Saturday, Sunday and any day which is a legal holiday
under the laws of the City of New York, or is a day on which banking institutions located
in such city are closed, or for the purposes of LIBOR Loans only, "Business Day"
means a London Banking Day.

"Calculation
Period" has the meaning assigned to that term in subsection 2.2(A).

"Campus
Transaction" means the sale of the headquarters office complex of the Company,
located in Albuquerque, NM pursuant to the Plan.

"Capital
Expenditures" shall mean, for any period, the aggregate of all expenditures (whether
paid in cash or accrued as liabilities during such period and excluding that portion of
Capital Leases (except any cash down payment) which is capitalized on the consolidated
balance sheet of the Company and its Subsidiaries) net of cash amounts received by the
Borrowers from other Persons during such period in reimbursement of Capital Expenditures
made by the Borrowers, excluding interest capitalized during construction by the Borrowers
during such period, that, in conformity with GAAP, are required to be

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included in or reflected by the property, plant, equipment or
intangibles or similar fixed asset accounts reflected in the consolidated balance sheet of
the Company and its Subsidiaries (including equipment which is purchased simultaneously
with the trade-in of existing equipment owned by any Borrower to the extent of the gross
amount of such purchase price less the book value of the equipment being traded in at such
time), but excluding expenditures made in connection with the replacement or restoration
of assets, to the extent reimbursed or financed from insurance proceeds paid on account of
the loss of or the damage to the assets being replaced or restored, or from awards of
compensation arising from the taking by condemnation or eminent domain of such assets
being replaced.

"Capital
Lease" means any lease of any property (whether real, personal or mixed) that, in
conformity with GAAP, should be accounted for as a capital lease.

"Case"
has the meaning assigned to that term in the Recitals to this Agreement.

"CareerStaff"
has the meaning assigned to that term in subsection 2.4(A)(1)(d)

"CareerStaff
Deposit Accounts" has the meaning assigned to that term in subsection 2.4(A)(1)(d).

"Cash
Equivalents" means: (a) marketable direct obligations issued or unconditionally
guaranteed by the United States Government or issued by any agency thereof and backed by
the full faith and credit of the United States, in each case maturing within six (6)
months from the date of acquisition thereof; (b) commercial paper maturing no more than
six (6) months from the date issued and, at the time of acquisition, having a rating of at
least A-1 from Standard & Poor's Corporation or at least P-1 from Moody's Investors
Service, Inc.; (c) certificates of deposit or bankers' acceptances maturing within six (6)
months from the date of issuance thereof issued by, or overnight reverse repurchase
agreements from any commercial bank organized under the laws of the United States of
America, or any state thereof or the District of Columbia, having combined capital and
surplus of not less than $250,000,000 and not subject to setoff rights in favor of such
bank; and (d) any money market fund registered under the Investment Company Act of
1940, as amended, investing in the above described securities or commercial paper if such
fund holds investments in excess of $100,000,000 and the Borrowers' aggregate investment
in such funds is less than ten percent (10%) of the total amount invested in such fund.

"Certificate
of Exemption" has the meaning assigned to that term in subsection 2.9(C).

"CITICORP"
has the meaning assigned to that term in the Recitals section of this Agreement.

"Closing
Balance Sheet" means that consolidated balance sheet of the Borrowers, and delivered
by Borrowers to Collateral Agent in accordance with the Reporting Rider.

"Closing
Date" means February 28, 2002.

"Collateral"
has the meaning assigned to that term in subsection 2.7(A).

"Collateral
Agent" has the meaning assigned to that term in the Recitals section of this
Agreement.

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"Collateral
Management Fee" has the meaning assigned to that term in subsection 2.3(D).

"Collecting
Bank" has the meaning assigned to that term in subsection 2.4(A)(3).

"Collection
Account" has the meaning assigned to that term in subsection 2.4(A)(3).

"Commitment"
means the commitment or commitments of Lenders to make Loans and to provide Lender Letters
of Credit as set forth in Section 2.

"Company"
has the meaning assigned to such term in the Recitals to this Agreement.

"Company's
Accountants" means the independent certified public accountants selected by the
Company and its Subsidiaries and reasonably acceptable to Collateral Agent, which
selection shall not be modified during the terms of this Agreement (except if the Company
retains another of the so-called "Big Five" accounting firms) without the
Collateral Agent's prior written consent, which consent shall not be unreasonably
withheld.

"Compliance
and Pricing Certificate" means a certificate duly executed by the chief executive
officer or chief financial officer of the Company appropriately completed and in
substantially the form of Exhibit D.

"Concentration
Account" has the meaning assigned to that term in subsection 2.4(A).

"Confirmation
Hearing" has the meaning assigned to that term in the Recitals to this Agreement.

"Confirmation
Order" has the meaning assigned to that term in the Recitals to this Agreement.

"Copyright
Security Agreement" means any Copyright Security Agreement executed and delivered by
certain of the Borrowers to Agent, as the same may be amended and in effect from time to
time.

"Copyrights"
means collectively all of the following (a) all U.S. copyrights, rights and interests in
copyrights, works protectable by copyright, copyright registrations and copyright
applications, includingthose listed in the schedules to any Copyright
Security Agreement; (b) all renewals of any of the foregoing; (c) all income, royalties,
damages and payments now or hereafter due and/or payable under any of the foregoing or
with respect to any of the foregoing, including damages or payments for past, present or
future infringements of any of the foregoing; (d) the right to sue for past, present and
future infringements of any of the foregoing; and (e) all rights corresponding to any of
the foregoing throughout the world.

"Daily
Interest Amount" has the meaning assigned to that term in subsection 9.8(A)(3).

"Daily
Interest Rate" has the meaning assigned to that term in subsection 9.8(A)(3).

"Daily
Loan Balance" has the meaning assigned to that term in subsection 9.8(A)(3).

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"Default"
means a condition, act or event that, after notice or lapse of time or both, would
constitute an Event of Default if that condition, act or event were not waived, cured or
removed within any applicable grace or cure period.

"Default
Rate" has the meaning assigned to that term in subsection 2.2(A).

"Defaulted
Amount" means, with respect to any Lender at any time, any amount required to be paid
hereunder or under any other Loan Document by such Lender to the Administrative Agent or
any other Lender which has not been so paid.

"Defaulting
Lender" means, at any time, any Lender that owes a Defaulted Amount.

"Depository
Banks" has the meaning assigned to that term in subsection 2.4(A)(1).

"Dollars"
and "$" shall mean lawful money of the United States of America.

"EBITDA"
means, for any period, without duplication, the total of the following for the Borrowers
on a consolidated basis, each calculated for such period: (a) net income determined
in accordance with GAAP; plus, to the extent included in the calculation of net income,
(b) the sum of (i) income and franchise taxes paid or accrued;
(ii) interest expenses, net of interest income, paid or accrued;
(iii) amortization and depreciation and (iv) other non-cash charges (excluding
accruals for cash expenses made in the ordinary course of business); less, to the extent
included in the calculation of net income, (c) the sum of (i) the income of any
Person in which any Borrower has a direct or indirect ownership interest except to the
extent such income is received by such Borrower in a cash distribution during such period;
(ii) gains or losses from sales or other dispositions of assets (other than Inventory
in the normal course of business); and (iii) extraordinary or non-recurring gains and
non-recurring losses.

"Eligible
Accounts" has the meaning assigned to that term in subsection 2.1(B).

"Eligible Assignee" shall mean (a) a commercial bank
organized under the laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000 (or $250,000,000 in the case of an assignment
of a Revolving Loan Commitment); (b) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic Cooperation and
Development (the "OECD"), or a political subdivision of any such country, and
having a combined capital and surplus of at least $100,000,000 (or $250,000,000 in the
case of an assignment of a Revolving Loan Commitment), provided that such bank is acting
through a branch or agency located in the country in which it is organized or another
country which is also a member of the OECD; (c) any other entity which is an
"accredited investor" (as defined in Regulation D under the Securities Act)
which extends credit or buys loans as one of its businesses, including but not limited to,
insurance companies, mutual funds and lease financing companies, (d) a Related Fund (as
such term is defined in subsection 9.5(D)), and (e) a Person that is primarily engaged in
the business of lending that is (i) a Subsidiary of a Lender, (ii) a Subsidiary
of a Person of which a Lender is a Subsidiary, or (iii) a Person of which a Lender is
a Subsidiary; provided, however, that no Affiliate of any Borrower shall be
an Eligible Assignee.

"Employee
Benefit Plan" means any employee benefit plan within the meaning of Section 3(3) of
ERISA which (a) is maintained for employees of any Borrower or any ERISA Affiliate or (b)
has at any

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time within the preceding 6 years been maintained for the employees of
any Borrower or any current or former ERISA Affiliate.

"Environmental
Claims" means claims, liabilities, investigations, litigation, administrative
proceedings, judgments or orders relating to Hazardous Materials.

"Environmental
Laws" means any present or future federal, state or local law, rule, regulation or
order relating to pollution, waste, disposal or the protection of human health or safety,
plant life or animal life, natural resources or the environment, including, without
limitation (a) the Comprehensive Environmental Response, Compensation and Liability Act of
1980, the Resource Conservation and Recovery Act, the Solid Waste Disposal Act, the Oil
Pollution Act of 1990, the Rivers and Harbors Act of 1899, the Federal Water Pollution
Control Act, the Clean Water Act, the Occupational Safety and Health Act
("OSHA"), the Clean Air Act, the Coastal Zone Management Act of 1972, the
Emergency Planning and Community Right to Know Act, and (b) those relating to or
addressing (i) the introduction into commerce, use, handling, transportation,
treatment, storage, disposal, release or threatened release, removal or remediation of, or
response, abatement, or corrective action with respect to, any Hazardous Material, or
(ii) personal injury, sickness, disease, death, public welfare or property damage
relating to Hazardous Materials.

"ERISA"
means the Employee Retirement Income Security Act of 1974, as amended from time to time,
and any successor statute and all rules and regulations promulgated thereunder.

"ERISA
Affiliate", as applied to any Borrower, means any Person who is a member of a group
which is under common control with any Borrower, who together with any Borrower is treated
as a single employer within the meaning of Section 414(b) and (c) of the IRC.

"Event
of Default" has the meaning assigned to that term in subsection 8.1.

"Excess
Interest" has the meaning assigned to that term in subsection 2.2(C).

"Facilities"
shall mean any hospital, outpatient clinic, long term care facility, nursing home or
rehabilitation center and related medical office building or other facility owned or used
by any Borrower in its business.

"Facility
Deposit Accounts" has the meaning assigned to that term in subsection 2.4(A)(1)(a).

"Federal
Funds Effective Rate" means, for any day, the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the immediately following Business Day by the
Board of Governors of the Federal Reserve System as the Federal Funds Rate or Federal
Reserve Statistical Release H.15(519) entitled "Selected Interest Rates" or any
successor publication of the Federal Reserve System reporting the Federal Funds Effective
Rate or its equivalent or, if such rate is not published for any Business Day, the average
of the quotations for the day of the requested Loan received by Agent from three Federal
funds brokers of recognized standing selected by Agent.

"Financial
Officer" shall mean the Chief Financial Officer or the Treasurer of the Company or
such other person as designated in writing to the Agents and reasonably satisfactory to
such Agents.

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"Fiscal
Year" means each twelve (12) month period ending on the last day of December in each
year.

"Fixed
Charge Coverage" means, for any period, Operating Cash Flow divided by Fixed Charges.

"Fixed
Charges" means, for any period, and each calculated for such period (without
duplication), (a) Interest Expense of the Company and its Subsidiaries; plus (b) scheduled
payments of principal with respect to all Indebtedness of the Company and its Subsidiaries
payable during such period; plus (c) any provision for (to the extent it is greater
than zero) income or franchise taxes included in the determination of net income,
excluding any provision for deferred taxes; plus (d) payment of deferred taxes accrued in
any prior period; plus (e) Restricted Junior Payments made in cash.

"Foreign
Lender" has the meaning assigned to that term in subsection 2.9(C).

"Funding
Date" means the date of each funding of a Loan or issuance of a Lender Letter of
Credit.

"GAAP"
means generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial Accounting Standards
Board that are applicable to the circumstances as of the date of determination.

"Hazardous
Material" means all or any of the following: (a) substances that are defined or
listed in, or otherwise classified pursuant to, any Environmental Laws or regulations as
"hazardous substances", "hazardous materials", "hazardous
wastes", "toxic substances" or any other formulation intended to define,
list or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, or toxicity; (b) oil, petroleum or petroleum
derived substances, natural gas, natural gas liquids or synthetic gas and drilling fluids,
produced waters and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (c) any flammable substances
or explosives or any radioactive materials; (d) asbestos in any form or electrical
equipment which contains any oil or dielectric fluid containing polychlorinated biphenyls,
and (e) mold of any form or type arising from any moisture source.

"Healthcare
Laws" has the meaning assigned to that term in subsection 4.25.

"Heller"
has the meaning assigned to that term in the Recitals section of this agreement.

"HIPAA"
means the Health Insurance Portability and Accountability Act of 1996 and the federal
standard for privacy of individually identifiable health information promulgated
thereunder, and any and all rules or regulations promulgated from time to time thereunder
including the regulations set forth at 45 CFR parts 160 and 164 as such provisions are
currently drafted and, if applicable, updated, amended, or revised.

"Inactive
Entity" shall mean each entity listed on Schedule 4.31.

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"Indebtedness",
as applied to any Person, means without duplication: (a) all indebtedness for borrowed
money; (b) obligations under leases which in accordance with GAAP constitute Capital
Leases; (c) notes payable and drafts accepted representing extensions of credit whether or
not representing obligations for borrowed money; (d) any obligation owed for all or any
part of the deferred purchase price of property or services if the purchase price is due
more than six (6) months from the date the obligation is incurred or is evidenced by a
note or similar written instrument; (e) all indebtedness secured by any Lien on any
property or asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is non-recourse to the credit of
that Person; (f) obligations in respect of Letters of Credit (g) any advances under
any factoring arrangement; and (h) obligations under the Settlement Agreement.

"Indemnified
Liabilities" has the meaning assigned to that term in subsection 10.2.

"Indemnitees"
has the meaning assigned to that term in subsection 10.2.

"Insurer"
shall mean a Person that insures a Patient against certain of the costs incurred in the
receipt by such Patient of Medical Services, or that has an agreement with any Borrower to
compensate such Borrower for providing services to a Patient.

"Intangible
Assets" means all intangible assets (determined in conformity with GAAP) including,
without limitation, goodwill, Intellectual Property, Software, licenses, organizational
costs, deferred amounts, covenants not to compete, unearned income and restricted funds.

"Intellectual
Property" means, collectively, all of the foregoing: Copyrights, Patents and
Trademarks.

"Intercreditor
Agreement" means that certain Intercreditor Agreement dated of even date herewith by
and among the Borrowers, Term Administrative Agent and Agents.

"Interest
Expense" means, without duplication, for any period, the following, for Borrowers and
their Subsidiaries each calculated for such period: interest expenses deducted in the
determination of net income (excluding (a) the amortization of fees and costs with respect
to the transactions contemplated by this Agreement which have been capitalized as
transaction costs in accordance with the provisions of subsection 11.2; and (b) interest
paid in kind).

"Interest
Period" means, in connection with each LIBOR Loan, an interest period which Borrowers
shall elect to be applicable to such Loan, which Interest Period shall be either a one
(1), two (2) or three (3) month period; provided that:

(1)     the
initial Interest Period for any LIBOR Loan shall commence on the Funding Date of such
Loan;

(2)     in the case of successive Interest Periods, each
successive Interest Period shall commence on the day on which the immediately preceding
Interest Period expires;

(3)     if
an Interest Period expiration date is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day; provided that if any Interest Period
expiration date is not a

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Business Day but is a day of the month after which no further Business
Day occurs in such month, such Interest Period shall expire on the immediately preceding
Business Day;

(4)     any
Interest Period that begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to part (5) below, end on the last Business Day of a
calendar month;

(5)     no
Interest Period shall extend beyond the Termination Date; and

(6)     there
shall be no more than four (4) Interest Periods relating to LIBOR Loans outstanding at any
time.

"Interest
Rate" has the meaning assigned to that term in subsection 2.2(A).

"Interest
Ratio" has the meaning assigned to that term in subsection 9.8(A)(3).

"Interest
Settlement Date" has the meaning assigned to that term in subsection 9.8(A)(4).

"IRC"
means the Internal Revenue Code of 1986, as amended from time to time, and any successor
statute and all rules and regulations promulgated thereunder.

"IRS"
has the meaning assigned to that term in subsection 4.9.

"Issuing
Lender" has the meaning assigned to that term in subsection 2.1(H)(2)

"Joint
Bookrunners" has the meaning assigned to that term in the Recitals section of this
Agreement.

"Lender"
or "Lenders" has the meaning assigned to that term in the Recitals section of
this agreement.

"Lender
Letter of Credit" has the meaning assigned to that term in subsection 2.1(F).

"Letter
of Credit Liability" means, all reimbursement and other liabilities of any Borrower
with respect to each Lender Letter of Credit, whether contingent or otherwise, including:
(a) the amount available to be drawn or which may become available to be drawn;
(b) all amounts which have been paid or made available by any Lender issuing a Lender
Letter of Credit or any bank issuing a Bank Letter of Credit to the extent not reimbursed;
and (c) all unpaid interest, fees and expenses related thereto.

"Letter
of Credit Reserve" means, at any time, an amount equal to the sum of (a) the
aggregate amount of Letter of Credit Liability with respect to all Lender Letters of
Credit outstanding at such time plus, without duplication (b) the aggregate amount
theretofore paid by Agent or any Lender under Lender Letters of Credit and not debited to
the Revolving Loan pursuant to subsection 2.1(G)(2) or otherwise reimbursed by Borrower.

"Letter
of Non-Exemption" has the meaning assigned to that term in subsection 2.9(C).

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"Liabilities"
shall have the meaning given that term in accordance with GAAP and shall include
Indebtedness.

"LIBOR"
means, for each Interest Period, a rate per annum equal to:

(1)     the
offered rate for deposits in U.S. dollars in an amount comparable to the amount of the
applicable Loan in the London interbank market for the relevant Interest Period which is
published by the British Bankers' Association and currently appears on Telerate Page 3750
as of 11:00 a.m. (London time) on the day which is two (2) Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period; provided,
however, that if such a rate ceases to be available to Agent on that or any other
source from the British Bankers' Association, LIBOR shall be equal to a rate per annum
equal to the average rate (rounded upwards, if necessary, to the nearest 1/100 of 1%) at
which Agent determines that U.S. dollars in an amount comparable to the amount of the
applicable Loans are being offered to prime banks at approximately 11:00 a.m. (London
time) on the day which is two (2) Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period for settlement in immediately
available funds by leading banks in the London interbank market selected by Agent; divided
by

(2)     a
number equal to one (1.0) minus the maximum reserve percentages (expressed as a decimal
fraction) (including, without limitation, basic, supplemental, marginal and emergency
reserves under any regulations of the Board of Governors of the Federal Reserve System or
other governmental authority having jurisdiction with respect thereto, as now and from
time to time in effect) for Eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) which are required to
be maintained by any Lender by the Board of Governors of the Federal Reserve System; such
rate to be rounded upward to the next whole multiple of one-sixteenth of one percent
(.0625%). LIBOR shall be adjusted automatically on and as of the effective date of any
change in any such reserve percentage.

"LIBOR
Loans" means at any time that portion of the Loans bearing interest at rates
determined by reference to LIBOR.

"LIBOR
Margin" has the meaning assigned to that term in subsection 2.2(A).

"Lien"
means any lien, mortgage, pledge, security interest, charge or encumbrance of any kind,
whether voluntary or involuntary (including any conditional sale or other title retention
agreement, any lease in the nature thereof, and any agreement pursuant to which a Borrower
grants any security interest).

"Loan"
or "Loans" means an advance or advances under the Revolving Loan Commitment.

"Loan
Documents" means this Agreement, the Notes, the Borrowing Base Certificates and all
other documents, instruments and agreements executed by or on behalf of any Borrower, any
Borrower's Subsidiaries and delivered concurrently herewith or at any time hereafter to or
for Agent or any Lender in connection with the Loans, any Lender Letter of Credit, and any
other transaction contemplated by this Agreement, all as amended, restated, supplemented
or modified from time to time.

"Loan
Year" means each period of twelve (12) consecutive months commencing on the Closing
Date and on each anniversary thereof.

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"Lockbox
Agreements" has the meaning assigned to that term in subsection 2.4(A)(4).

"London
Banking Day" means any day on which dealings in deposits in U.S. dollars are
transacted in the London Interbank market.

"Material
Adverse Change" means a change that results in or causes, or has a reasonable
likelihood of resulting in or causing, a Material Adverse Effect.

"Material
Adverse Effect" means a material adverse effect upon (a) the business,
operations, prospects, properties, assets or condition (financial or otherwise) of the
Borrowers taken as a whole, (b) the ability of any Borrower to perform its
obligations under any Loan Document to which it is a party, (c) the validity or
enforceability of this Agreement or any Loan Document or (d) the Collateral, the
liens of Lenders in the Collateral or the priority of such liens.

"Material
Contracts" means a contract or agreement (including, without limitation, a provider
agreement) the default (or event of default) under, termination of, or expiration of
which, individually or in the aggregate, could reasonably be expected to have a Material
Adverse Effect.

"Maximum
Rate" has the meaning assigned to that term in subsection 2.1(C).

"Maximum
Revolving Loan Amount" has the meaning assigned to that term in subsection 2.1(A)(3).

"Medicaid
Deposit Account" has the meaning assigned to that term in subsection 2.4(A)(1)(c).

"Medicaid/Medicare
Account Debtor" shall mean any Account Debtor which is (i) the United States of
America acting under the Medicaid or Medicare program established pursuant to the Social
Security Act, or under the TRICARE program, (ii) any state or the District of
Columbia acting pursuant to a health plan adopted pursuant to Title XIX of the Social
Security Act (or any successor legislation) or (iii) any agent, carrier, administrator or
intermediary for any of the foregoing.

"Medical
Services" shall mean medical and health care services provided to a Patient,
including, but not limited to, medical, pharmacy and health care services provided to a
Patient and performed by any Borrower which are covered by a policy of insurance issued by
an Insurer, and includes physician services, nurse and therapist services, dental
services, hospital services, skilled nursing facility services, comprehensive outpatient
rehabilitation services, home health care services, residential and out-patient behavioral
healthcare services, and medicine or health care equipment provided by any Borrower to a
Patient for a necessary or specifically requested valid and proper medical or health
purpose.

"Medicare
Deposit Accounts" has the meaning assigned to that term in subsection 2.4(A)(1)(b).

"Mortgage"
means each of the mortgages, deeds of trust, leasehold mortgages, leasehold deeds of
trust, collateral assignments of leases or other real estate security documents delivered
by any Borrower to Collateral Agent, on behalf of the Lenders, with respect to the
Mortgaged Property, all in form and substance satisfactory to Collateral Agent.

77

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"Mortgaged
Property" means that certain real property owned by certain Borrowers and described
on Schedule 11.1(B).

"Net
Income" means, as of any date, net income calculated in accordance with GAAP.

"Net
Worth" means, as of any date, the sum of the capital stock and additional paid-in
capital plus retained earnings (or less accumulated deficit) calculated in conformity with
GAAP.

"Note"
means, individually, Revolving Note, and "Notes" means collectively, all of the
Revolving Notes.

"Notice
of Borrowing" means a notice duly executed by an authorized representative of
Borrowers appropriately completed and in the form of Exhibit E.

"Obligations"
means all obligations, liabilities and indebtedness of every nature of each Borrower from
time to time owed to Agents or to any Lender under the Loan Documents (whether incurred
before or after the Termination Date) including the principal amount of all debts, claims
and indebtedness, accrued and unpaid interest and all fees, costs and expenses, whether
primary, secondary, direct, contingent, fixed or otherwise, heretofore, now and/or from
time to time hereafter owing, due or payable including, without limitation, all interest,
fees, cost and expenses accrued or incurred after the filing of any petition under any
bankruptcy or insolvency law.

"Operating
Cash Flow" means, for any period, (a) EBITDA; plus (b) the net change in the
accrued general and professional insurance liability as set forth in the cash flow
statement delivered from time to time by the Company; less (c) Capital Expenditures.

"Option
Price" has the meaning assigned to that term in the Intercreditor Agreement.

"paid
in full" shall mean payment in full in cash or, with respect to letters of credit,
delivery to Administrative Agent of cash or a back-to-back letter of credit, from an
issuer and in form and substance satisfactory to Agents, in their sole discretion, and in
each case, in an amount equal to 105% of the aggregate outstanding amount of the Letter of
Credit Reserve.

"Partial
Purchase Option" has the meaning assigned to that term in the Intercreditor
Agreement.

"Patents"
means collectively all of the following (a) all U.S. patents and patent applications
including those listed on any schedule to any Patent Security Agreement and the inventions
and improvements described and claimed therein, and patentable inventions; (b) the
reissues, divisions, continuations, renewals, extensions and continuations-in-part of any
of the foregoing; (c) all income, royalties, damages and payments now or hereafter due
and/or payable under any of the foregoing or with respect to any of the foregoing,
including, without limitation, damages and payments for past, present and future
infringements of any of the foregoing; (d) the right to sue for past, present and future
infringements of any of the foregoing; and (e) all rights corresponding to any of the
foregoing throughout the world.

78

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"Patient"
shall mean any Person receiving Medical Services from any Borrower and all Persons legally
liable to pay any Borrower for such Medical Services other than Insurers.

"Permitted
Divestitures" means the disposition on commercially reasonable terms and conditions
of (i) the mobile x-ray business formerly known as TLC Mobile Medical and operated by
SunAlliance Healthcare Services, Inc. and (ii) the respiratory services supplies and
equipment business operated by SunCare Respiratory Services, each of which shall have
occurred on or before May 31, 2002.

"Permitted
Encumbrances" means the following types of Liens: (a) Liens (other than Liens
relating to Environmental Claims or ERISA) for taxes, assessments or other governmental
charges not yet due and payable; (b) statutory Liens of landlords, carriers, warehousemen,
mechanics, materialmen and other similar liens imposed by law, which are incurred in the
ordinary course of business for sums not more than thirty (30) days delinquent; (c) Liens
(other than any Lien imposed by ERISA) incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and other types
of social security, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, trade contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed money); (d)
easements, rights-of-way, restrictions, and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the business of any
Borrower; (e) Liens for purchase money obligations, provided that (i) the purchase of the
asset subject to any such Lien is permitted under subsection 7.1(d) and subparagraph D of
the Financial Covenants Rider, (ii) the Indebtedness secured by any such Lien is permitted
under subsection 7.1, and (iii) such Lien encumbers only the asset so purchased;
(f) Liens in respect of Indebtedness permitted under subsection 7.1(d); provided that
such Liens encumber only the asset which is subject to a Capital Lease; (g) Liens in
favor of the Collateral Agent, on behalf of itself and Lenders; (h) Liens on or
security interests in certain accounts granted by a Borrower to the lessor of certain
nursing home facilities, all as set forth on Schedule 11.1(C) or otherwise
consented to in writing by the Agents; (i) Liens granted to the Term Administrative
Agent pursuant to the Term Loan Documents (including the first priority lien on the
SunScript Stock), (j) Liens with respect to, or hereafter incurred in connection
with, the Sumitomo Transaction and the SunTrust Transaction, in each case, as set forth on
Schedule 11.1(D)., and (k) Liens existing on the date hereof to the
extent set forth on Schedule 11.1(D).

"Person"
means and includes natural persons, corporations, limited partnerships, general
partnerships, limited liability companies, limited liability partnerships, joint stock
companies, joint ventures, associations, companies, trusts, banks, trust companies, land
trusts, business trusts or other organizations, whether or not legal entities, and
governments and agencies and political subdivisions thereof.

"Plan"
has the meaning assigned to that term in the Recitals.

"Primary
Collection Account" has the meaning assigned to that term in subsection 2.4(A)(1)(e).

"Pro
Forma" means the unaudited consolidated balance sheet of the Company and its
Subsidiaries as of the Closing Date after giving effect to the transactions contemplated
by this Agreement.

79

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"Projections"
means Borrowers' forecasted consolidated: (a) balance sheets; (b) capitalization
statements; (c) cash flow statements; and (d) profit and loss statements, all
prepared on a division by division and Subsidiary by Subsidiary basis consistent with the
Company's historical financial statements and based upon good faith estimates and
assumptions by Borrowers believed to be reasonable at the time made, together with
appropriate supporting details and a statement of underlying assumptions.

"Pro
Rata Share" means (a) with respect to matters relating to a particular Commitment of
a Lender, the percentage obtained by dividing (i) such Commitment of that Lender by (ii)
all such Commitments of all Lenders and (b) with respect to all other matters, the
percentage obtained by dividing (i) the Revolving Loan Commitment of a Lender by (ii) the
Revolving Loan Commitments of all Lenders, in either (a) or (b), as such percentage may be
adjusted by assignments permitted pursuant to subsection 9.5; provided, however,
if any Commitment is terminated pursuant to the terms hereof, then "Pro Rata
Share" means the percentage obtained by dividing (x) the aggregate amount of such
Lender's outstanding Loans related to such Commitment by (y) the aggregate amount of all
outstanding Loans related to such Commitment.

"Register"
has the meaning assigned to that term in subsection 9.5(E).

"Related
Fund" has the meaning assigned to that term in subsection 9.5 (D).

"Replacement
Lender" has the meaning assigned to that term in subsection 2.11(A).

"Requisite
Lenders" means Lenders, (other than a Defaulting Lender), holding or being
responsible for:51% or more of the sum of the (a) outstanding Loans, (b) Letter of
Credit Reserve and (c) unutilized Commitments of all Lenders which are not Defaulting
Lenders.

"Restricted
Junior Payment" means: (a) any dividend or other distribution, direct or indirect, on
account of any shares of any class of stock of the Company, any other Borrower, or any of
their Subsidiaries now or hereafter outstanding, except a dividend payable solely with
shares of the class of stock on which such dividend is declared; (b) any payment or
prepayment of principal of, premium, if any, or interest on, or any redemption,
conversion, exchange, retirement, defeasance, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any Indebtedness under the Term Loan
Documents or any shares of any class of stock of the Company or any of its Subsidiaries,
other than in each case for regularly scheduled payments permitted under the Intercreditor
Agreement now or hereafter outstanding, or the issuance of a notice of an intention to do
any of the foregoing; (c) any payment made to retire, or to obtain the surrender of,
any outstanding warrants, options or other rights to acquire shares of any class of stock
of any Borrower or any of its Subsidiaries now or hereafter outstanding; and (d) any
payment by any Borrower or any of its Subsidiaries of any management, consulting or
similar fees to any Affiliate, whether pursuant to a management agreement or otherwise.

"Revolving
Advance" means each advance made by Lender(s) under the Revolving Loan Commitment
pursuant to subsection 2.1 (B).

"Revolving
Loan" means the outstanding balance of all Revolving Advances and any amounts added
to the principal balance of the Revolving Loan pursuant to this Agreement.

80

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"Revolving
Loan Commitment" means (a) as to any Lender, the commitment of such Lender to make
Revolving Advances pursuant to subsection 2.1 (B), and to purchase participations in
Lender Letters of Credit pursuant to subsection 2.1(G) in the aggregate amount set forth
on the signature page of this Agreement opposite such Lender's signature or in the most
recent Assignment and Acceptance Agreement, if any, executed by such Lender and (b) as to
all Lenders, the aggregate commitment of all Lenders to make Revolving Advances and to
purchase participations in Lender Letters of Credit.

"Revolving
Note" means each promissory note of Borrower, issued to evidence the Revolving Loan
Commitments substantially in the form attached hereto as Exhibit F.

"Securities
Act" means the Securities Act of 1933, as the same may be amended, modified or
supplemented from time to time, and any successor statute thereto, and any and all rules
or regulations promulgated from time to time thereunder.

"Settlement
Agreement" means the "Settlement Agreement Entered Into Among the United
States Of America, acting through the United States Department of Justice and Centers for
Medicare and Medicaid Services, the TRICARE Management Activity Support Office, Sun
Healthcare Group, Inc. and its subsidiaries who filed bankruptcy in the District of
Delaware on October 14, 1999 and Stephen Beaujon, Renee Lundgren, Thomas DeLay, David
Junga, K.G. Simmons, JudithR. Barry, Saul Epstein, Vida M. Melton and Diane Lind",
date on or about February 1, 2002, which is the subject of Sections 4.3 and 5.12 of
the Plan and which was incorporated into the Plan and approved by the Bankruptcy Court as
part of the Confirmation Order.

"Settlement
Date" has the meaning assigned to that term in subsection 9.8(A)(2).

"SHS"
means Shared Healthcare Systems, Inc., a Delaware corporation.

"Social
Security Act" shall mean the Social Security Act as codified at 42 U.S.C. Section
1395 et seq., as amended.

"Subsidiary"
means, with respect to any Person, any corporation, association or other business entity
of which more than fifty percent (50%) of the total voting power of shares of stock (or
equivalent ownership or controlling interest) entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or trustees thereof is
at the time owned or controlled, directly or indirectly, by that Person or one or more of
the other subsidiaries of that Person or a combination thereof.

"Sumitomo
Transaction" means the conversion of the Sumitomo synthetic leases to mortgages as
described in Schedule 11.1(D).

"SunBridge"
means SunBridge Healthcare Corporation and its Subsidiaries.

"SunDance"
means SunDance Rehabilitation Corporation and its Subsidiaries.

"SunPlus"
means SunPlus Home Health Services, Inc. and its Subsidiaries.

"SunScript"
means SunScript Pharmacy Corporation, SunFactors, Inc., Pharmacy Factors of Florida, Inc.,
Pharmacy Factors of Texas, Inc., Pharmacy Factors of California, Inc., Advantage Health

81

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Services, Inc., Homed Convalescent Equipment, Inc., SunScript/HRA LLC,
First Class Pharmacy, Inc., and Executive Pharmacy Services, Inc.

"SunScript
Stock" means the stock or other equity interests of SunScript.

"SunTrust
Transaction" means the conversion of the SunTrust synthetic leases to mortgages as
described in Schedule 11.1(D).

"Tangible
Net Worth" of any Person means as of any date, an amount equal to: (a) Net Worth of
such Person; less (b) Intangible Assets of such Person; less (c) prepaid expenses of such
Person; less (d) all obligations owed to such Person by any Affiliate of such Person or
any of its Subsidiaries; (determined in each case in conformity with GAAP).

"Tax
Liabilities" has the meaning assigned to that term in subsection 2.9(A).

"Term
Administrative Agent" means U.S. Bank National Association, in its capacity as
administrative agent under the Term Loan Agreement.

"Term
Loan Agreement" means the Term Loan and Note Purchase Agreement, dated as of the date
hereof, between the Borrowers, the lenders party thereto and Term Administrative Agent, as
the same may be amended, restated, supplemented or otherwise modified from time to time in
accordance with the Intercreditor Agreement.

"Term
Loan Documents" means the Term Loan Agreement, the notes (if any) and all other
documents, instruments and agreements executed by or on behalf of any Borrower or
Subsidiary of such Borrower and delivered concurrently therewith or at any time hereafter
to or for the Term Administrative Agent or any lender in connection with the loans and any
other transaction contemplated by the Term Loan Agreement, as the same may be amended,
restated, supplemented or otherwise modified from time to time in accordance with the
Intercreditor Agreement.

"Termination
Date" means the date that is the earlier of (1) the third anniversary of Closing
Date and (2) the termination of the Revolving Loan Commitments in accordance with this
Agreement.

"THCI
Transfer Facilities" means, collectively, the following nursing home facilities: (a)
Mediplex Rehab. of Denver, located in Denver, CO, (b) Mediplex of Stamford, located in
Stamford, CT, (c) SunBridge Care and Rehabilitation for Brookline, located in Brookline,
MA and (d) SunBridge Care and Rehabilitation for East Boston, located in East Boston, MA.

"THCI
Turnover" means the going concern transfer of the THCI Transfer Facilities by the
Borrowers to THCI Mortgage Holdings Company LLC.

"Total
Assets" means the "Total Assets" as reflected on the Consolidated Legal
Entities report, dated February 11, 2002 (11:18 AM) prepared by the Company and
previously provided to Collateral Agent.

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"Total
Revenues" means the "4th Qtr Total Revenue" as reflected on the
Consolidated Legal Entities report, dated February 11, 2002 (11:18 AM) prepared by
the Company and previously provided to Collateral Agent.

"Trademark
Security Agreement" means any Trademark Security Agreement executed and delivered by
certain of the Borrowers to Collateral Agent, as the same may be amended and in effect
from time to time.

"Trademarks"
means collectively all of the following: (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service marks,
logos, other business identifiers, prints and labels on which any of the foregoing have
appeared or appear, all registrations and recordings thereof, and all applications in
connection therewith including those listed on any schedule to any Trademark Security
Agreement; (b) all renewals thereof; (c) all income, royalties, damages and payments now
or hereafter due and/or payable under any of the foregoing or with respect to any of the
foregoing including damages and payments for past, present and future infringements of any
of the foregoing; (d) the right to sue for past, present and future infringements of any
of the foregoing; (e) all rights corresponding to any of the foregoing throughout the
world; and (f) all goodwill associated with and symbolized by any of the foregoing.

"TRICARE"
means, collectively, a program of medical benefits covering former and active members of
the uniformed services and certain of their dependents, financed and administered by the
United States Departments of Defense, Health and Human Services and Transportation, which
program was formerly known as the "Civilian Health and Medical Program of the
Uniformed Services (CHAMPUS)".

"UCC"
means the Uniform Commercial Code as in effect from time to time in the State of New York;
provided, however, to the extent the law of any other state or other
jurisdiction applies to the attachment, perfection, priority or enforcement of any Lien
granted to Agent in any of the Collateral, "UCC" means, as applicable, the
Uniform Commercial Code as in effect in such other state or jurisdiction for purposes of
the provisions hereof relating to such attachment, perfection, priority or enforcement of
a Lien in such Collateral. To the extent this Agreement defines the term
"Collateral" by reference to terms used in the UCC, each of such terms shall
have the broadest meaning given to such terms under the UCC as in effect in any state or
other jurisdiction.

"Unused
Daily Balance" means the Revolving Loan Commitment less the sum of (1) the average
daily balance of the Revolving Loan during the preceding month plus (2) the average daily
face amount of the Letter of Credit Reserve during the preceding month.

"Veterans
Administration" shall mean the Department of Veterans Affairs.

11.2     Accounting
Terms. For purposes of this Agreement, all accounting terms not otherwise defined herein
shall have the meanings assigned to such terms in conformity with GAAP. Financial
statements and other information furnished to Agent or any Lender pursuant to subsection
5.1 shall be prepared in accordance with GAAP (as in effect at the time of such
preparation) on a consistent basis. In the event any "Accounting Changes" (as
defined below) shall occur and such changes affect financial covenants, standards or terms
in this Agreement, then Borrower and Lenders agree to enter into good faith negotiations
in order to amend such provisions of this Agreement so as to equitably reflect such

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Accounting Changes with the desired result that the criteria for
evaluating the financial condition of Borrower shall be the same after such Accounting
Changes as if such Accounting Changes had not been made, and until such time as such an
amendment shall have been executed and delivered by Borrower and Requisite Lenders, (A)
all financial covenants, standards and terms in this Agreement shall be calculated and/or
construed as if such Accounting Changes had not been made, and (B) Borrower shall prepare
footnotes to each Compliance and Pricing Certificate and the financial statements required
to be delivered hereunder that show the differences between the financial statements
delivered (which reflect such Accounting Changes) and the basis for calculating financial
covenant compliance (without reflecting such Accounting Changes). "Accounting
Changes" means: changes in accounting principles required by GAAP and implemented by
Borrower. All such adjustments resulting from expenditures made subsequent to the Closing
Date (including, but not limited to, capitalization of costs and expenses or payment of
pre-Closing Date liabilities) shall be treated as expenses in the period the expenditures
are made and deducted as part of the calculation of EBITDA in such period.

11.3     Other
Definitional Provisions. References to "Sections", "subsections",
"Riders", "Exhibits", "Schedules" and "Addendum's"
shall be to Sections, subsections, Riders, Exhibits, Schedules and Addendum's,
respectively, of this Agreement unless otherwise specifically provided. Any of the terms
defined in subsection 11.1 may, unless the context otherwise requires, be used in the
singular or the plural depending on the reference. In this Agreement, words importing any
gender include the other genders; the words "including," "includes"
and "include" shall be deemed to be followed by the words "without
limitation"; references to agreements and other contractual instruments shall be
deemed to include subsequent amendments, assignments, and other modifications thereto, but
only to the extent such amendments, assignments and other modifications are not prohibited
by the terms of this Agreement or any other Loan Document; references to Persons include
their respective permitted successors and assigns or, in the case of governmental Persons,
Persons succeeding to the relevant functions of such Persons; and all references to
statutes and related regulations shall include any amendments of same and any successor
statutes and regulations.



[SIGNATURES BEGIN ON FOLLOWING PAGES]



84

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Witness
the due execution hereof by the respective duly authorized officers of the undersigned as
of the date first written above.**Sun Healthcare Group, Inc.**By:/s/ Robert K.
Schneider****Name:  Robert K. Schneider****Title:    Vice President and Treasurer****Advantage Health Services, Inc.****Americare Health Services Corp.****Americare of West Virginia, Inc.****Atlantic Medical Supply Holding****Company, Inc.****Beckley Health Care Corp.****Bergen Eldercare, Inc.****Bibb Health & Rehabilitation, Inc.****BioPath Clinical Laboratories, Inc.****Braswell Enterprises, Inc.****Brent-Lox Hall Nursing Home, Inc.****Brittany Rehabilitation Center, Inc.****Cal-Med, Inc.****Care Enterprises West****Care Enterprises, Inc.****Care Home Health Services****CareerStaff Management, Inc.****CareerStaff Services Corporation****CareerStaff Unlimited, Inc.****Carmichael Rehabilitation Center****Charlton Healthcare, Inc.****Circleville Health Care Corp.****Clipper Home of North Conway, Inc.****Clipper Home of Portsmouth, Inc.****Clipper Home of Rochester, Inc.****Clipper Home of Wolfeboro, Inc.****Coalinga Rehabilitation Center****Contour Medical, Inc.****Correctional Care Corp.****Covina Rehabilitation Center****Dunbar Health Care Corp.****Duval Healthcare Center, Inc.****[SIGNATURE APPEARS ON PAGE S-4]

S-1

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****Executive Pharmacy Services, Inc.****Facility Supply, Inc.****Fairfield Rehabilitation Center****First Class Pharmacy, Inc.****Fullerton Rehabilitation Center****Gainesville Healthcare Center, Inc.****Gardendale Health Care Center, Inc.****Glendora Rehabilitation Center****Glenville Health Care, Inc.****Goodwin Nursing Home, Inc.****Grand Terrace Rehabilitation Center****Hallmark Health Services, Inc.****Harbor View Rehabilitation Center****HC, Inc.****Heritage Rehabilitation Center****HoMed Convalescent Equipment, Inc.****HTA of New York, Inc.****Huntington Beach Convalescent****Hospital****Jeff Davis Healthcare, Inc.****Lake Forest Healthcare Center, Inc.****Libbie Rehabilitation Center, Inc.****Manatee Springs Nursing Center, Inc.****Maplewood Health Care Center of
                                                                                               
   Jackson, Tennessee, Inc.****Marion Health Care Corp.****Masthead Corporation****Meadowbrook Rehabilitation Center****Mediplex Management of Palm Beach****County, Inc.****Mediplex Management, Inc.****Mediplex of Concord, Inc.****Mediplex of Connecticut, Inc.****Mediplex of Kentucky, Inc.****Mediplex of Maryland, Inc.****Mediplex of Massachusetts, Inc.****Mediplex of New Hampshire, Inc.****Mediplex of New Jersey, Inc.****Mediplex Rehabilitation of****Massachusetts, Inc.****Mid-Florida, Inc.****Mountain Care Management, Inc.****New Bedford Nursing Center, Inc.****Newport Beach Rehabilitation Center****Nursing Home, Inc.****[SIGNATURE APPEARS ON PAGE S-4]

S-2

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****Orange Rehabilitation Hospital, Inc.****P.M.N.F. Management, Inc.****Pacific Health Care, Inc.****Paradise Rehabilitation Center, Inc.****Pharmacy Factors of California, Inc.****Pharmacy Factors of Florida, Inc.****Pharmacy Factors of Texas, Inc.****PRI, Inc.****Putnam Health Care Corp.****Quality Care Holding Corporation****Quality Nursing Care of****Massachusetts, Inc.****Regency Health Services, Inc.****Regency High School, Inc.****Regency Rehab Hospitals, Inc.****Regency-North Carolina, Inc.****Regency-Tennessee, Inc.****Retirement Care Associates, Inc.****Rose Rehabilitation Center****Salem Health Care Corp.****San Bernardino Rehabilitation****Hospital, Inc.****San Joaquin G.P. Corporation****Shandin Hills Rehabilitation Center****Southside Health Care Center, Inc.****Spofford Land, Inc.****SRT, Inc.****Statesboro Health Care Center, Inc.****Stockton Rehabilitation Center, Inc.****Summers Landing, Inc.****Sun Lane Purchase Corporation****SunAlliance Healthcare Services, Inc.****(successor by merger with SunDelta****Corporation)****SunBridge G.P. Corporation****SunBridge Healthcare Corporation****SunBridge Healthcare of Colorado,****Inc.****SunBridge Rehab of Colorado, Inc.****SunBridge, Inc.****SunCare Respiratory Services, Inc.****SunCare Services Corporation****SunChoice Medical Supply, Inc.****SunDance Rehabilitation Corporation****SunDance Services Corporation****SunFactors, Inc.****SunHealth Specialty Services, Inc.                                                                                            
[SIGNATURE APPEARS ON PAGE S-4]

S-3

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****SunMark Nevada, Inc.****SunMark of New Mexico, Inc.****SunPlus Home Health Services, Inc.****SunScript Pharmacy Corporation****SunSolution, Inc.****The Mediplex Group, Inc.****U.S. Laboratory Corp.****Vista Knoll Rehabilitation Center, Inc.****West Tennessee, Inc.****Willow Way, Inc.****Worcester Nursing Center, Inc.************By:/s/ Robert K.
Schneider****Name:  Robert K. Schneider****Title:   Vice President and Treasurer

S-4

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****Accelerated Care Plus, L.L.C.****By:  Cal-Med, Inc.,****       Member of Accelerated Care Plus,****       L.L.C.****By:/s/ Robert K. Schneider****Name:  Robert K. Schneider****Title:****By:  HC, Inc.,
 ****      Member of Accelerated Care Plus,****            
L.L.C.****By:/s/ Robert K. Schneider****Name:  Robert K. Schneider****Title:****SunDance Rehabilitation Texas,****Limited Partnership****By:  SRT, Inc., its general partner****By:/s/ Robert K. Schneider****Name:  Robert K. Schneider****Title:****West Jersey/Mediplex Rehabilitation****Limited Partnership****By:  Mediplex of New Jersey, Inc., ****      its general partner****By:/s/ Robert K. Schneider****Name:  Robert K. Schneider****Title:

S-5

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****HSR Partners, L.P.****Therapists Unlimited - Baltimore/****Washington, D.C., L.P.****Therapists Unlimited - Chicago, L.P.****(II)****Therapists Unlimited - Detroit II, L.P.****Therapists Unlimited - Fresno, L.P.****Therapists Unlimited - Indianapolis,****L.P.****Therapists Unlimited - Seattle, L.P.****By:  CareerStaff Management, Inc., 
 ****        its general partner****By:/s/ Robert K. Schneider****Name:  Robert K. Schneider****Title:

S-6

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****LENDERS****CITICORP USA, INC.****By:/s/ James J.
McCarthy****Title:Director****Revolving Loan Commitment:****$50,000,000****HELLER HEALTHCARE FINANCE,
                                                                                               
   INC.****By:/s/****Title:****Revolving Loan Commitment:****$50,000,000

S-7

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****FOOTHILL INCOME TRUST, L.P.****By:  FIT GP, LLC, Its General Partner****By:/s/ M. E.
Stearns****Name:M. E.
Stearns****Title:   Managing Member****Revolving Loan Commitment****$25,000,000

S-8

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EXHIBITS



A.          Lockbox Agreements
B.          Assignment and Acceptance
Agreement
C.          Borrowing Base Certificate
D.          Compliance and Pricing
Certificate
E.          Notice of Borrowing
F.          Revolving Note
G.          Inventory Report
H.          Reconciliation Report

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SCHEDULES

2.01              
Inventory Locations
2.2(A)           Base Rate Margins,
LIBOR Margins and Letter of Credit Fees
2.4(A)(1)       Banks with Blocked Accounts
2.7(A)           Commercial Tort Claims
4.1(B)           Capitalization of
Borrowers
4.4
               
Indebtedness and Liabilities
4.5(D)           List of Chattel Paper
4.5(I)            Intellectual
Property
4.5(K)          Bank Accounts
4.5(L)           Bailees
4.6
               
Names and Locations
4.9
               
Borrowers' Federal Tax Identification Numbers and Returns Under Audit
4.17              
Compliance with Laws
4.18              
Employee Matters
4.29              
Licenses
4.31              
Inactive Entities
7.1
               
Existing Indebtedness
7.4
               
Existing Investments and Loans
7.11              
Subsidiaries
11.1(B)         Mortgaged Property
11.1(C)         Liens or Security Interests in
Certain Accounts
11.1(D)         Other Liens

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SCHEDULE 2.2(A)

Base Rate Margins, LIBOR Margins and Letter of Credit Fees



|Fixed Charge Coverage                       | Base Rate Margin | LIBOR Margin | Letter of Credit Fee
|------------------------------------------- | ---------------- | ------------ | --------------------
|Less than or equal to 1.75                  | 275              | 375          | 350                 
|Greater than 1.75 to
    and including 2.00 | 250              | 350          | 325                 
|Greater than 2.00                           | 225              | 325          | 300                 

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RIDERS

A.          Conditions Rider 
B.          Reporting Rider
C.          Financial Covenants Rider



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CONDITIONS RIDER

This
Conditions Rider is attached to and made a part of that certain Loan and Security
Agreement dated as of February 28, 2002 and entered into among Borrowers, the Collateral
Agent, the Administrative Agent and Lenders.

(A)     Closing
Deliveries. Agents shall have received, in form and substance satisfactory to the Agents,
all documents, instruments and information identified on the Sun Healthcare Loan Closing
Checklist, dated as of February 28, 2002 as it may updated and amended from time to time
and all other agreements, notes, certificates, orders, authorizations, financing
statements, pledges, mortgages, security agreement and other documents which Agents may at
any time reasonably request.

(B)     Security
Interests. Collateral Agent shall have received satisfactory evidence that all security
interests and liens granted to Collateral Agent for the benefit of Agents and Lenders
pursuant to this Agreement or the other Loan Documents have been duly perfected, and to
the extent set forth in subsection 4.7, constitute first priority liens on the Collateral,
subject only to Permitted Encumbrances.

(C)     
Closing Date Availability. After giving effect to the consummation of the transactions
contemplated hereunder on the Closing Date and the payment by Borrowers of all costs, fees
and expenses relating thereto, the Maximum Revolving Loan Amount on the Closing Date shall
exceed the Revolving Loan by at least $25,000,000

(D)     Representations
and Warranties. The representations and warranties contained herein and in the Loan
Documents shall be true, correct and complete in all material respects on and as of that
Funding Date to the same extent as though made on and as of that date, except for any
representation or warranty limited by its terms to a specific date and taking into account
any amendments to the Schedules or Exhibits as a result of any disclosures made by
Borrowers to Agents after the Closing Date and approved by Agents.

(E)     Fees.
With respect to Loans or Lender Letters of Credit to be made or issued on the Closing
Date, Borrowers shall have paid all fees due to Agents or any Lender and payable on the
Closing Date.

(F)     No
Default. No event shall have occurred and be continuing or would result from funding a
Loan or issuing a Lender Letter of Credit requested by any Borrower that would constitute
an Event of Default or a Default.

(G)     Performance
of Agreements. Each Borrower shall have performed in all material respects all agreements
and satisfied all conditions which any Loan Document provides shall be performed by it on
or before the Funding Date.

(H)     No
Prohibition. No order, judgment or decree of any court, arbitrator or governmental
authority shall purport to enjoin or restrain Agents or any Lender from making any Loans
or issuing any Lender Letters of Credit.

(I)     No
Litigation. There shall not be pending or to the knowledge of Borrowers, threatened, any
action, charge, claim, demand, suit, proceeding, petition, governmental investigation or
arbitration by,

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against or affecting any Borrowers or any property of any Borrower or
any of its Subsidiaries that has not been disclosed to Collateral Agent by Borrower in
writing, and there shall have occurred no development in any such action, charge, claim,
demand, suit, proceeding, petition, governmental investigation or arbitration that could
reasonably be expected to have a Material Adverse Effect.

(J)     Business
Condition. Since the December 31, 2001 financial statements, there shall not have been any
Material Adverse Change.

(K)     Lenders'
Audit. Lenders shall have completed an audit to determine the liquidity of Borrowers'
Accounts and the general financial and operational condition of Borrowers, the results of
which are satisfactory to Lenders in their sole and absolute discretion.

(L)     Reorganization
Plan. The Plan (i) shall have been confirmed by a final order of the United States
Bankruptcy Court for the District of Delaware without appeal or application for
reconsideration, (ii) is acceptable to Lenders in their sole discretion, (iii) shall have
become effective, and (iv) the Agents shall be satisfied, in their sole discretion, that
documents implementing or related to the Plan, are in form and substance consistent with
the Loan Documents.

(M)     Updated
Schedules. Borrower shall have revised, updated and delivered to the Collateral Agent all
Schedules to the Loan Documents to (a) reflect updated and accurate information with
respect to any new Borrower, and (b) to update all other information as necessary to make
the Schedules previously delivered correct. Borrowers hereby represent and warrant that
the information set forth on the attached Schedules is true and correct as of the date of
this Agreement. The attached Schedules are hereby incorporated into this Agreement as if
originally set forth therein.

(N)     The
Borrower Deposit Accounts and the Collection Accounts shall have been established to the
satisfaction of the Agents in their sole discretion.



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REPORTING RIDER



This
Reporting Rider is attached and made a part of that certain Loan and Security Agreement,
dated as of February 28 , 2002 and entered into among Borrowers, Agents and Lenders.

(A)     Monthly
Financials. As soon as available and in any event within thirty (30) days after the end of
each month, The Company will deliver to Agents and Lenders (1) the consolidated
balance sheet of the Company and its Subsidiaries as at the end of such month and the
related consolidated statements of income and stockholders' equity for such month and for
the period from the beginning of the then current Fiscal Year to the end of such month,
and (2) a schedule of the outstanding Indebtedness for borrowed money of the Company and
its Subsidiaries describing in reasonable detail each such debt issue or loan outstanding
and the principal amount and amount of accrued and unpaid interest with respect to each
such debt issue or loan.

(B)     Quarterly
Financials. As soon as available and in any event within fifth-five (55) days of the end
of each of the first three calendar quarters of each Fiscal Year, the Company will deliver
to Agents and Lenders (1)  the consolidated balance sheet and cash flow sttement of
the Company and its Subsidiaries as at the end of each such calendar quarter and the
related consolidated statements of income, stockholders' equity and cash flow for each
such calendar quarter and for the period from the beginning of the then current Fiscal
Year to the end of each such calendar quarter and (2) a reasonably detailed schedule
of the Capital Expenditures incurred during such calendar quarter.

(C)     Year-End
Financials. As soon as available and in any event within one hundred five (105) days after
the end of each Fiscal Year, the Company will deliver to Agents and Lenders: (1) the
consolidated balance sheet and cash flow statement of the Company and its Subsidiaries as
at the end of such year and the related consolidated statements of income, stockholders'
equity and cash flow for such Fiscal Year; (2) a detailed schedule of the Capital
Expenditures incurred during such fiscal year; and (3) report with respect to the
financial statements from the Company's Accountants, which report shall be unqualified as
to going concern and scope of audit of the Company and its Subsidiaries and shall provide
in substance that (a) such consolidated financial statements present fairly the
consolidated financial position of the Company and its Subsidiaries as at the dates
indicated and the results of their operations and cash flow for the periods indicated in
conformity with GAAP and (b) that the examination by Company's' Accountants in connection
with such consolidated financial statements has been made in accordance with generally
accepted auditing standards; and (5) copies of the consolidating financial statements
of Borrowers and their Subsidiaries, including (a) consolidating balance sheets of
the Company and its Subsidiaries as at the end of such Fiscal Year showing intercompany
elimination's and (b) related consolidating statements of income of Borrowers and their
Subsidiaries showing intercompany elimination's.

(D)     Compliance
and Pricing Certificate. Together with the delivery of each set of financial statements
referenced in subparagraphs (A), (B) and (C) above, Borrowers will deliver to Agents and
Lenders a Compliance and Pricing Certificate, together with copies of the calculations and
work-up employed to determine Borrowers' compliance or noncompliance with the financial
covenants set forth in the Financial Covenants Rider.

(E)     Borrowing
Base Certificates, Registers and Journals. On no less than a weekly basis, Borrowers shall
deliver to Administrative Agent: (1) a Borrowing Base Certificate updated to reflect the
most recent sales and collections of Borrowers and an assignment schedule of all of
Accounts created by

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Borrowers; (2) an invoice register or sales journal describing all
sales of Borrowers, in form and substance satisfactory to Administrative Agent, and, if
Administrative Agent so requests, copies of invoices evidencing such sales and proofs of
delivery relating thereto; (3) a cash receipts journal; (4) a credit memo journal;
and (5) an adjustment journal, setting forth all adjustments to Accounts.

(F)     Reconciliation
Reports, Inventory Reports and Listings and Agings. On the Closing Date and within twenty
(20) days after the end of each calendar month and, if an Event of Default shall have
occurred and be continuing, from time to time upon the request of Collateral Agent,
Borrowers will deliver to Collateral Agent: (1) an aged trial balance of all then existing
Accounts; and (2) an Inventory Report duly executed by an officer of each Borrower and
substantially in the form of Exhibit G as of the last day of such period. As
soon as available and in any event within five (5) Business Days after both the fifteenth
and the last day of each month, and from time to time upon the request of Collateral
Agent, Borrowers will deliver to Collateral Agent: (1) a Reconciliation Report duly
executed by the Financial Officer and substantially in the form of Exhibit H
as at the last day of such period; (2) an aged trial balance of all then existing accounts
payable; and (3) a detailed inventory listing and cover summary report. All such
reports shall be in form and substance satisfactory to Collateral Agent.

(G)     Management
Report. Together with each delivery of financial statements of Borrowers and their
Subsidiaries pursuant to subparagraph (A) above, Borrowers will deliver to Agents and
Lenders a management report: (1) describing the operations and financial condition of the
Borrowers (by business segment) for the month then ended and the portion of the current
Fiscal Year then elapsed; (2) setting forth in comparative form the corresponding figures
for the corresponding periods of the previous Fiscal Year and the corresponding figures
from the most recent Projections for the current Fiscal Year delivered to Collateral Agent
and Lenders pursuant to subparagraph (L) below; and (3) discussing the reasons for
any significant variations. The information above shall be presented in reasonable detail
and shall be certified by the chief financial officer of the Company to the effect that
such information fairly presents the results of operations and financial condition of
Borrowers and their Subsidiaries as at the dates and for the periods indicated.

(H)     Appraisals.
From time to time, upon the request of Collateral Agent, Borrowers will obtain and deliver
to Collateral Agent, at Borrowers' expense, appraisal reports in form and substance and
from appraisers satisfactory to Collateral Agent, stating the then current fair market and
orderly liquidation values of all or any portion of the Collateral; provided, however,
so long as no Default or Event of Default is continuing, Collateral Agent shall not
request an appraisal as to any particular category of Collateral to be performed more than
once every Loan Year at Borrowers' expense.

(I)     Government
Notices. Borrowers will deliver to Collateral Agent promptly following receipt copies of
all notices, requests, subpoenas, inquiries or other writings received from any
governmental agency concerning the violation or alleged violation of ERISA, the violation
or alleged violation of any Environmental Laws or the violation or alleged violation of
the Fair Labor Standards Act, Borrowers shall deliver to Collateral Agent an update to
Schedule 4.9 no less frequently than on a quarterly basis.

(J)     Notice
of Default, etc. Promptly upon a Borrower obtaining knowledge of any of the following
events or conditions, such Borrower shall deliver to Administrative Agent a certificate of
such Borrower's chief executive officer or a Financial Officer specifying the nature and
period of existence of such condition or event and what action such Borrower has taken, is
taking and proposes to take with

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respect thereto: (1) any condition or event that constitutes an
Event of Default or Default; (2) any notice of default that any Person has given to
such Borrower or any of its Subsidiaries, which default if unremedied could reasonably be
expected to result in a Material Adverse Effect; or (3) any Material Adverse Effect.

(K)     Projections.
As soon as available and in any event no later than sixty (60) days after the end of each
Fiscal Year of the Company, Borrowers, will deliver to Collateral Agent and Lenders
consolidated Projections of the Company and its Subsidiaries for the forthcoming three
Fiscal Years, year by year, and for the forthcoming Fiscal Year, month by month.

(L)     Other
Information. With reasonable promptness, Borrowers will deliver such other information and
data as any Agent or any Lender may reasonably request from time to time.

(M)     Opening
Balance Sheet. As soon as available and in any event within ninety (90) days after the
Closing Date, Borrowers will deliver to Agents and Lenders a consolidated Closing Date
balance sheet reviewed and reported on by the Company's Accountants.



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FINANCIAL COVENANTS RIDER

This
Financial Covenants Rider is attached and made a part of that certain Loan and Security
Agreement, dated as of February 28, 2002 and entered into among Borrowers, Agents and
Lenders.

A.     Tangible
Net Worth. The Borrowers, on a consolidated basis, shall maintain Tangible Net Worth of at
least the amounts set forth below at the end of each quarter of a Fiscal Year set forth
below.

First Quarter
    AmountMarch 31, 2002
    As set forth on Closing
    Balance SheetJune 30, 2002
    Amount as of March 31,
    2002, plus $500,000September 30, 2002
    Amount as of June 30, 2002,
    plus $3,300,000December 31, 2002
    Amount as of September 30,
    2002, plus $5,000,000Each Quarter Thereafter
    (e.g. March 31, 2003,
       June 30, 2003 and so on)
    Amount of as of the end of
    the immediately prior calendar quarter plus 50% of the Net Income earned for the calendar
    quarter at issue


B.     Minimum
Operating Cash Flow. The Borroowers, on a consolidated basis, shall at all times maintain
a minimum Operating Cash Flow of at least the amounts set forth below at the end of each
quarter of a Fiscal Year set forth below.

Fiscal Quarter Ending
    AmountMarch 31, 2002
    $48,000,000June 30, 2002
    $42,000,000September 30, 2002
    $36,800,000December 31, 2002
    $44,600,000March 31, 2003
    $45,200,000June 30, 2003
    $45,900,000September 30, 2003
    $46,600,000December 31, 2003
    $47,300,000March 31, 2004
    $48,500,000June 30, 2004
    $49,800,000September 30, 2004
    $51,000,000December 31, 2004
    $52,200,000


C.     Capital
Expenditure Limits. The aggregate amount of all Capital Expenditures, Capital Leases with
respect to fixed assets of Borrowers and their Subsidiaries (which shall be considered to
be expended in full on the date such Capital Lease is entered into) and other contracts
with respect to fixed assets initially capitalized on the Borrowers' or any of their
Subsidiaries' balance sheet prepared in accordance with GAAP (which shall be considered to
be expended in full on the date such contract is entered into) (excluding, in each case,
expenditures for trade-ins and replacement of assets to the extent



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funded with casualty insurance proceeds) will not exceed the amount set
forth below for each period set forth below.

Fiscal Quarter Ending
    AmountMarch 31, 2002
    $11,600,000June 30, 2002
    $11,600,000September 30, 2002
    $11,100,000December 31, 2002
    $10,900,000March 31, 2003
    $12,300,000June 30, 2003
    $12,300,000September 30, 2003
    $12,300,000December 31, 2003
    $12,300,000March 31, 2004
    $13,000,000June 30, 2004
    $13,000,000September 30, 2004
    $13,000,000December 31, 2004
    $13,000,000




D.     Fixed
Charge Coverage. Borrowers, on a consolidated basis, shall not permit its Fixed Charge
Coverage for the rolling twelve (12) month period ending on the last day of each fiscal
quarter set forth below to be less than the ratio set forth below for such periods.

Fiscal Quarter Ending
    Ratio for Rolling
    Twelve MonthsMarch 31, 2002
    2.45June 30, 2002
    1.70September 30, 2002
    1.25December 31, 2002
    1.15March 31, 2003
    1.15June 30, 2003
    1.15September 30, 2003
    1.15December 31, 2003
    1.15March 31, 2004
    1.15June 30, 2004
    1.15September 30, 2004
    1.15December 31, 2004
    1.15




E.     Indebtedness
to EBITDA Ratio. Borrowers, on a consolidated basis, shall not permit the ratio of
(a) Indebtedness of the Borrowers, on a consolidated basis, to (b) EBITDA of the
Borrowers, on a consolidated basis, each calculated as of the last day of each fiscal
quarter set forth below to be greater than the ratio set forth below for such periods:



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Fiscal Quarter Ending
    Ratio for Rolling
    Twelve Months
    Ratio for Rolling
    Twelve Months
    If SumitomoTransaction
    Is Not CompletedMarch 31, 2002
    4.50
    4.04June 30, 2002
    4.15
    3.69September 30, 2002
    3.75
    3.32December 31, 2002
    3.00
    2.63March 31, 2003
    2.81
    2.46June 30, 2003
    2.63
    2.29September 30, 2003
    2.44
    2.12December 31, 2003
    2.25
    1.95March 31, 2004
    2.25
    1.95June 30, 2004
    2.25
    1.95September 30, 2004
    2.25
    1.95December 31, 2004
    2.25
    1.95




F.     Census.
Borrowers, on a consolidated basis, shall not allow the Patient census for any period of
four (4) consecutive weeks for the skilled nursing and hospital Facilities, when taken as
a whole, to fall below eighty-seven percent (87%) of the number of licensed available beds
in such Facilities taken as a whole (computed in a manner consistent with reporting
practices existing on the date of this Agreement); provided that during the period from
December 1st to January 1st of each year, the Borrowers shall not
allow such census to fall below eighty-six percent (86%).



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